BYNER:
Prime Minister, good morning and thanks for joining us.
PRIME MINISTER:
Good morning, very nice to be with you Leon.
BYNER:
Mr Howard, we ought to start with what came up in 5AA news as the lead item this morning and get it out of the way - the front page story of today's Aus. suggests that Ross Lightfoot admits he delivered cash to Halabjae hospital. Will you now be having an inquiry given that that appears to contradict statements made in the Parliament yesterday?
PRIME MINISTER:
No, what I'll be expecting is Ross Lightfoot to reply to that story. I don't know whether that story is true or false. I wasn't there. I have a situation where some claims have been made by journalists about conversations they had with Senator Lightfoot. In reply Senator Lightfoot has provided a detailed statement which he has signed and which I've tabled and does provide a credible response and in the absence of new separate evidence - and I don't regard in a sense a repetition of that claim, albeit from another source, as being new separate evidence - in the absence of that I won't be conducting an independent inquiry but presumably news outlets today will go to Senator Lightfoot and ask him if he has any comment on this report in the Australian newspaper. Bear in mind Leon that I have no direct knowledge of any of these matters. I can only go on what I'm told. Woodside has made it very clear that the foundation at Curtin University, which carries its name but is not, I would assume, controlled by Woodside. There are many university foundations that carry the names of companies and organisations which are not controlled by those companies and organisations. They merely carry the name because an endowment from that company is the reason why the foundation exists. But Woodside has made it clear, that its foundation rather, was the source of the money. Now therefore we have to understand that. And it went to the hospital in Halabjae, the place where that infamous gassing of the Kurds by "Chemical Ali", Saddam Hussein's cousin, took place in the 1980s. So we're dealing here with an act of humanity by the foundation. The debate is about who handed over the money. Senator Lightfoot has given a detailed explanation of that. The fact that he was there doesn't itself raise any questions. There's nothing wrong with being there, there's nothing wrong with displaying an interest in the Kurdish people. He's given a detailed statement. Now as to the precise facts and circumstances I have to, in the absence of evidence to the contrary, I will accept as credible his response.
BYNER:
So, the suggestion that there was an off the record discussion with a journalist from the Australian who says he admitted that he gave the money, doesn't concern you? It must concern you surely?
PRIME MINISTER:
Well I don't know whether that's true or false and surely the reasonable thing to do is for Senator Lightfoot to be asked about that and I'm sure he will be asked about that today by the media and I'll be interested to hear what he's got to say. But when you say does it concern me, a lot of things concern me about a whole range of issues, but when something like this crops up I have to look at the material in front of me and the material in front of me is a version of a conversation with a third party, given by journalists versus an emphatic denial of that signed and verified briefly in a discussion I had with Senator Lightfoot by the third party himself. So in those circumstances, in the absence of new evidence to the contrary, I will continue to regard Senator Lightfoot's response as quite credible.
BYNER:
Prime Minister, we'll stay for a moment with the Middle East and we'll take some calls in a moment on 8223 0000. We've increased our troop commitment and commitment to Iraq - are we going to up the anti again?
PRIME MINISTER:
We don't have any plans to do that. I do not believe it's likely to occur. I have not gone so far as and I will not go so far as to guarantee that it won't occur and to rule it out for all time. But I think it's very unlikely. But I'm not going to get into a situation if circumstances were to change again in the future and the Government were to take a particular decision to then be accused of going against a guarantee I gave. I never said in the past that there were no circumstances under which we would increase our troop commitment - what I said was that the original intention had been to be involved in the sharp end and not to be involved in peacekeeping operations and that continued to be our position until the change of circumstances I've referred to and that occurred well after the election and then those changed circumstances are of course the hugely successful election in Iraq and the great desirability of providing a secure environment for the Japanese who are carrying out humanitarian work in the Al Muthanna province of southern Iraq. Now those two considerations represent the changed circumstances, of course coupled with the decision of the Dutch who have been there for two years to pull out their contingent.
BYNER:
Let's talk to Wayne, Wayne thanks for calling in, you're talking to Prime Minister John Howard.
CALLER:
Good morning Prime Minister Howard and Leon, how are you?
BYNER:
Good thanks.
CALLER:
That's good. I'd like to speak to the Prime Minister about income tax reform. I'm a Liberal voting truck driver, I work 20 to 30 hours overtime every week and I'm like probably millions of others Australians who love to work, who want to work, who want to better themselves and get somewhere and I'd just like to see him go out with a legacy of really making a change for those people who really want to work hard and do something with their lives - just like he's already done with the homeowners grant which has enabled so many Australians to be able to be a homeowner. Mr Howard, if you could go out with an income tax package that makes it more incentive for ordinary Australians to work harder to get somewhere instead of getting taxed more you'd go down in the history pages.
BYNER:
Mr Howard, would you like to respond to that?
PRIME MINISTER:
Well can I just start by putting aside this going out business - I've only just some in.
BYNER:
So you'll be Prime Minister for...
PRIME MINISTER:
Let's not go into that nuance. But I'm focused very much on doing a lot more things and I'm greatly enjoying the position, so let's move on from that. Can I say that we of course in the last budget brought about some significant tax reforms, such that, and there'll be a further reduction in income tax at the 30th of June this year and we've got a situation now where 80 per cent of Australian taxpayers are paying no more than 30 cents in the dollar at the margin. And we have also increased the rate at which, the point at which people will pay the top income tax rate, it was originally in the 60s, we've now pushed it up to $80,000 and of course the point at which you pay to stay on $30,000 will be going to $63,000 a year. Now that's a very significant improvement and it will mean that 80 per cent of all taxpayers in Australia will be on a top rate of no more than 30 cents in the dollar. Now governments would always like to do more in this area and I have said before and I've repeated that our philosophy is that we provide necessary spending in defence, national security, health, education, roads, etc. Now we keep a healthy surplus, that's very necessary and if there is any room after that for tax relief then we're willing to give it. Now that's not a new statement. I noticed earlier in the week when I made that statement people said that I was leaving the door open or giving a hint or so forth - I wasn't doing anything different from what I've done and said now uniformly for the last couple of years. That is the approach we bring to every budget and the approach to this budget.
BYNER:
How do you propose to spend the $10 billion surplus?
PRIME MINISTER:
Well I didn't say - who said there was a $10 billion surplus? That's an estimate from a private sector economist. I'm not for a moment saying there's a $10 billion surplus. I don't know what the surplus finally will be. We don't get final estimates until right on the eve of the budget and it would be wrong of people to run around saying we're definitely having a $10 billion surplus. I would expect the surplus predictions that were made in the mid-year review released last year - I would expect those predictions to be met. Now as to whether we do better than meeting those predictions, I can't tell you at this stage because we won't finally know that until closer to the event.
BYNER:
Prime Minister, let's talk to Jan at Prospect. Jan, good morning, you're talking to John Howard.
CALLER:
Yes, good morning Leon and good morning the Honourable Mr Howard.
PRIME MINISTER:
Good morning.
CALLER:
Good morning, how are you?
PRIME MINISTER:
Very well.
CALLER:
Thank you. Mr Howard, I'd like to speak to you in regard to aid and I'm speaking for all the people of Australia, you hold a big purse and also you pledge aid to certain countries that have devastation. Is that correct?
PRIME MINISTER:
Well we have certainly a generous aid programme and we have (inaudible) with Indonesia, yes.
CALLER:
Yes. And the tsunami one and Timor and Iraq - our men are over there working, building and then they wanted them out in three months. Now they want them to stay on. Now they're asking for (inaudible) and so forth. But I say to you Mr Howard, that big purse, there's a lot of people here in Australia, and I've paid taxes, my forefathers and so forth and so has everybody else, but I have been in a public hospital twice before Christmas and once in the new year and the shortage of nurses, doctors, tea ladies, even people that run around with menus - and I say to you Mr Howard, please, even the pensioners are a forgotten generation and I say Mr Howard that big purse belongs to all of the people of Australia. Yes I believe we should help other people outside of our own country when there are disasters, but please leave some in the purse for us.
BYNER:
Mr Howard, what's your comment on that?
PRIME MINISTER:
Yes, I would say to the lady that we can do both. We gave a very big contribution. We gave about $1 billion over a period of years in aid and concessional loans to Indonesia -the biggest aid package in our history. But our total GDP a year is about $800 billion and our total budget is what; $160-170 billion (inaudible) expenditure, I think from the top of my head. I hope I have got that about right. In those circumstances, you can see the aid is still very much in proportion. We're not spending the great bulk of the revenue we've raised on overseas aid; we're spending a portion of it and many people argue that it's not big enough.
BYNER:
Prime Minister (inaudible) I think that alluded to an issue also with regards to the health system which is both a state and a federal responsibility. Would you be wanting or willing to take over more financial responsibility for the health sectors in South Australia for example?
PRIME MINISTER:
The health system in Australia is a divided responsibility; the Federal Government has responsibility for Medicare and Private Health Insurance and other national health issues and the Pharmaceutical Benefits Scheme. The State Governments have the responsibility for the public hospitals. They get about half their money to run the public hospitals from the Commonwealth and in addition to that of course they have growing GST revenues from the Commonwealth, and our view is that the states should link their responsibilities and we will meet ours. We don't ask the states to contribute to the running of Medicare, we don't ask the states to contribute to the funding of the Private Health Insurance rebates, or the funding of Pharmaceutical Benefits Scheme, we do that out of our revenues and we expect the states to do the public hospital bit out of their revenues and particularly as those revenues are rising.
Now it's a very unsatisfactory situation to have arguments between different levels of Government but we have to defend the proposition that each level of Government should look after its own responsibility. We do not run public hospitals and states run them. We don't own them, we don't control them, we don't administer them, we provide a lot of the money for them but we give that money to the states and in our view the states must look after the public hospitals, just as we must look after Medicare. I mean I don't ring Mr Rann up and say give us a dollar to run Medicare that would be absurd because it's our responsibility.
BYNER:
Do you think the State Government is meeting its responsibility in managing the public hospital system very well?
PRIME MINISTER:
Well there's always going to be debate inside individual states. I don't want to get into slanging match on this. I actually think over the past few years the public hospital system in this country has suffered from the excessively partisan political debate at a state level and both sides in Government or in Opposition have indulged it, so I'm not blaming one anymore than the other.
BYNER:
We have a field shortage too of course?
PRIME MINISTER:
Well that is a separate issue. I actually think we have quite a good health system in Australia. It's not perfect and you can always make it better but it's a much better system than the system in any comparable country and those who've experienced the hospital systems of Britain and America and many of the countries of Asia would tell you that they, if they're going to get ill they'd rather get ill in Australia then anywhere else in the world.
BYNER:
The skills shortage does cover the very thing we're talking about this morning because if you want to do good things for hospitals in any state including ours of course, you've got to have the nurses, the doctors, the orderlies and others to run them and there is a shortage.
PRIME MINISTER:
Look there are and a lot of things have been done to address them. One of the big elements of our Medicare package, going back 18 months ago was to get more doctors into the system, was to introduce the Medicare rebate so you could have practice nurses, which would enable doctors to focus on primary health care. But we have put a lot of extra money into funding more places and changing the rules to enable more people to get into the stream. And I know that the various State Governments have undertaken programmes of recruiting nurses from different parts of the world and we support that. We've changed our immigration policy to encourage that to happen and we continue to look at other ways of enabling people who have skills that are in short supply to come to this country from other parts of the world. We will work very cooperatively with the states on that because we, as the National Government, are responsible for the immigration policy.
BYNER:
Lets talk to John, John good morning - you're talking to Prime Minister John Howard.
CALLER:
Good morning Leon and our Prime Minister, thank you for taking my call. Just a quick one, I'm trying to plan to be a self-funded retiree. I'm working and I've a problem and it's making it one that my health is going desperately and also I'm going to be running out of time to be able to make sure that my goal might be achieved. When the GST came along Sir, we were all under the impression that GST was going to be a wonderful windfall for the states, which they have enjoyed including South Australia. But unfortunately the land tax has gone up over 500 percent of the stroke of a pen, yet my income hasn't gone up by that and also I don't know of too many other things that have gone up 500 percent because the Federal contribution to the states for land tax - it's not as though they have physically given me a commodity; it's just something on paper. It's 500 percent that's going to erode it away and in the future I don't know how I'm going to cope just to be able to make to sure I am going to be able to plan for my retirement. Tax of that nature is not applied to shares or any other form of self-funded planning, so how are we going to plan for the future to make sure that everyone can do it please?
PRIME MINISTER:
Sir, you have property other then your principle place of residence?
CALLER:
Yes.
PRIME MINISTER:
Yes so it's a land tax on your second property?
CALLER:
Correct.
PRIME MINISTER:
It's a... 500 percent certainly sounds a colossal increase. I'm not an expert on land tax in South Australia but the principles are probably the same all over.... I understand that Leon and I sympathise with people who have got big land tax bills but I do have to say, and I don't want to become excessively partisan about this, but I do have to say, as the questioner has just commented, we have increased the money going to the states under the GST. Every state is better off under the GST. Every state is better off and they were told they would be better off when the GST was introduced. So, there is plenty of room for taxation relief consistent with meeting other obligations so far as the states are concerned. And that's the whole idea of the GST, and the last questioner is right to say that when it was introduced we all thought it would be great. See, the GST has produced more revenue than we calculated it would back in 2000 when it started, because the way it worked is that it's harder to evade, and it's resulted in the revenue take being much higher, and that has all gone to the states. See, none of the GST goes to the Federal Government - not a dollar. It's collected under a federal law, which was opposed, incidentally, by the states when it was introduced, or by most of the states, but all of the money does now go back to the states. Now, I don't seek to tell state governments how to run their day to day affairs, but they can't say they don't have the money to meet their constitutional responsibilities, including making sure that things like land tax are not exorbitant.
BYNER:
Let's got to Shannon from Pooraka. Shannon, good morning, you're talking to the Prime Minister.
CALLER:
Good morning Leon and good morning Mr Howard. Thank you very much for answering some of the questions of the South Australian public. I'd like to make the statement followed by a question, if I may. I'll be watching very closely to see how family law is reformed later this year. I'd like to see more shared care introduced. I think it would be beneficial to so many people, but at the moment we have the child support system which is frustrating me immensely. My parental responsibility is to pay my child support which is based on my earning capacity. Now, the Australian Bureau of Statistics tells us that it costs x amount of dollars to care for a child in this country to a comfortable standard of living. To pay a child support which is well in excess of that amount, sometimes double that amount, aren't we in essence being double taxed and paying to support our former partners where that that is the obligation of the welfare system? And if I could ask another questions: is there a fairer, more equitable system other than the child support system that we have at the moment?
PRIME MINISTER:
Shannon, you've fingered something that causes a lot of unhappiness. We acknowledge that the child support system is far from perfect. We also acknowledge a lot of people, a majority of whom are men because the bulk of non-custodial parents, where there have been separations or divorces, tend to be men - not all of them, but a majority - and they don't feel the system is working because they end up, in a majority of cases, being the people who are paying, and they don't sometimes see a lot of their children. So I can understand why a lot of them feel very unhappy. We are going to reform the family law system, and we're a fair way down the track on the establishment of these family relationship centres, and I hope that the Government can make a more detailed announcement about the results of the responses to a discussion paper based on this, and that can probably occur quite soon. We've also carried out some examination of the child support system, and we'll be looking at the results of that soon. It is not easy to reform because whenever you lighten the burden, or seek to lighten to burden on non-custodial parents, the custodial ones will say they will pay for the lightening of that burden. If you take the burden away altogether from both of them, then the rest of the tax paying community picks it up. Trying to strike that balance is quite hard, and I suspect that with the best will in the world, and the greatest sense of fairness in the world, we won't be able to strike the balance to everybody's satisfaction. But we will try because I acknowledge it's a very difficult issue and one that is causing a lot of heartache.
BYNER:
Let's talk to Jackie. Jackie, you're general secretary of the students association at Flinders. What would you like to ask Prime Minister Howard?
CALLER:
Good morning Leon, Mr Howard.
PRIME MINISTER:
Morning.
CALLER:
Mr Howard I'd like to ask you why you are continuing to support Dr Nelson's agenda to cripple students at universities in Australia, first by increasing the HECS fees last year, cutting the text book subsidies, and now this year we see introduction of VSU going to parliament. In South Australia alone almost $11 million will be taken out of the higher education sector. I want to know why you are continuing to support this line that it's about choice when it's really about silence; it's really about killing the services that are in universities in Australia; cutting the vital services to students; cutting vital services like academic representation, welfare advice, employment opportunities, emergency loans, health and counselling - so much more than Dr Nelson is willing to admit.
BYNER:
Prime Minister.
PRIME MINISTER:
Well, we're not trying to cripple students. There were changes to the higher education system last year. They were needed to make the system more sustainable. Even after those changes have been introduced, the average student doing an average sized course, about 72 percent of the total cost of that course is borne by the taxpayer. The HECS system is a very fair system, and I don't think it's unreasonable for people who go to university, who get the advantage of a university education, over time, if they haven't been able to afford their contributions to pay HECS out of the income they earn after they've left university. You don't have to start paying HECS under the new system until your income reaches $35,000 a year, and that means that many people with university degrees who only work part-time don't in fact ever begin paying back any of their HECS liability. Now as far as voluntary student unionism is concerned, there is a principle at stake here, and that is we don't believe anybody should be forced to contribute to organisations, which, amongst other things, spend their money on blatantly political activities. The opposition to compulsory unionism, compulsory fees rather, arose on university campuses decades ago when people found that they were forced, as a condition of going to university, to contribute to student unions only to see the money, in part that they contributed, being spent on political propaganda, pursuing causes that they did not believe in, and the pursuit of which they had no control. Now, as far as the organisations like sporting bodies and drama clubs and so forth are concerned, people can still choose to belong to those and contribute to their operation in the same way that non-university students, if they want to join a football club or a cricket club or a drama club or a debating society, go along and pay their fees. Now why should anything be different? But, this is a very important principle to the Liberal Party, and Dr Nelson is speaking for the Government, he's not speaking for himself, and it's a principle that I strongly support, and I've strongly supported for many years.
BYNER:
Prime Minister, thank you very much for sparing the time to come to the Canberra studio and talk to South Australia. It's greatly appreciated. One question though: will we get meaningful tax reform rather than just cuts or adjustment of the brackets as you go along in this tenure of government? Can we expect...
PRIME MINISTER:
Well Leon...
BYNER:
...tax reform?
PRIME MINISTER:
Well, we've already had a lot of systematic tax reform. One of the reasons why I believe the economy has run well over the last five years has been the introduction of the GST. The GST is an infinitely better tax system than the one that it replaced. We tend to take its benefits for granted and naturally look for more. And I don't rule things out. You never do in an area like this, but I do ask people to bear a couple of facts in mind, and that is the Federal Government's overall tax burden has fallen under this government, and also the share of personal income tax has fallen. And also I'd also point out that the OECD, that released a report last week which got a lot of coverage, has acknowledged that there were errors that report and those errors were pointed out by the Treasurer and myself, and when you make adjustment for those errors you find a picture painted by the OECD of tax rising in this country over the last few years was in fact wrong, and indeed the opposite has occurred.
BYNER:
We are still a very highly taxed country. There's no question of that.
PRIME MINISTER:
Well, no. We are the eighth lowest taxed country in the OECD area. That is not in dispute. That is not to say in an ideal world we shouldn't all pay lower tax, but let me simply point out - your own program will testify to this - most people who ring you up are asking in effect for more money to be spent on certain government services. And it's the responsibility of governments to adjust those pressures. We cannot simultaneously spend more money on health and education and collect less tax and also keep the budget in surplus. We have to strike a balance, and that is what I have always tried to do - to strike a fair balance to support health and education and, of course critically, defence and security where we've had to put more resources in over the last few years because of our changed circumstances, and at the same time provide taxation relief. And there's more coming on the 1st of July because the changes announced in the budget last year were introduced in two stages: one lot from the 1st of July last year, and the second lot from the 1st of July this year.
BYNER:
Prime Minister, thanks for joining us.
PRIME MINISTER:
Thank you.
[ends]