KELLY:
Prime Minister welcome to Radio National Breakfast.
PRIME MINISTER:
Nice to be with you Fran.
KELLY:
Prime Minister before we go to those issues, can I ask you about the breaking news from Iraq, an Australian held hostage there, Douglas Wood? The demand is that Australian and US troops pull out. Has there been any negotiation at all with his captors?
PRIME MINISTER:
Can I first say that it does appear that the person in the video is in fact Douglas Wood. He is an Australian citizen married to an American, been working in Iraq as a contractor, been living in California since 1992. We have established a task group but I don't want to go into anything that it might be doing at the present time. Everybody knows the position of the Australian government in relation to hostage demands. This is a very difficult situation. I don't want to make it more trying for his relatives and he does have a brother in Canberra and he's been contacted by DFAT. We will continue to do all we can, consistent with our position on not giving in to hostage takers and we can't alter that position and we won't alter that position. We can't have the foreign policy of this country dictated by terrorists but we've got to do everything we can nonetheless to assist this poor man. It's a reminder of the brutality and the ruthlessness of the group we are dealing with and we just continue to monitor the situation, and do everything we can. I don't want to say anymore at the present time except to say to his family and to his friends in Australia and indeed his wife in America, or she may be in Baghdad, I am not sure - how much we feel for them. I know that doesn't mean anything but I wouldn't want people to think that I take this sort of thing lightly. It has been my great dread for a long long time than an Australian would be taken hostage and I can understand the anguish that people are going through and I feel for them very deeply because this really is the tough end of any kind of difficult and controversial decision but no nation can have its foreign policy dictated by terrorists.
KELLY:
You talk about the dread you feel. Douglas Wood's capture comes or coincides almost with the 450 Australian troops arriving there. Do you feel any kind of responsibility at all?
PRIME MINISTER:
Well Fran, I feel total responsibility for any harm that comes to anybody as a result of the decisions that the government has taken. It doesn't mean that I step back from those decisions but if you imagine for a moment that I don't feel a great sense of personal involvement and responsibility, you'd be wrong.
KELLY:
Will you become personally involved in this or have you already?
PRIME MINISTER:
Well I take the advice of experts, but I will certainly be very closely following it and talking to my advisers and doing anything I can to resolve the situation in a proper way and that is to obtain the release of this man and our objective would be to obtain his release, that's our overriding objective. Now I am not going to go into detail as to how that might be achieved but in trying to achieve it though we will act in accordance with policy that we've consistently enunciated regarding hostage taking.
KELLY:
Prime Minister if we can move on to your trip now which you have just finished, free trade was a dominant theme there. Is it fair to say that a free trade agreement with China looks a good prospect at the end of this trip but with Japan, looks a long shot.
PRIME MINISTER:
Oh I think it's more likely to come off with China than Japan and we have in fact commenced negotiations on a free trade agreement with China. All we've agreed to with Japan is a feasibility study. However, trade relations and volumes of trade with both countries are impressive, in fact they are tremendous. Japan's been our best customer since 1969. Trade with China has quadrupled, or trade flows and investment has quadrupled in the last nine years. So even if we achieved nothing more, they are the pick of the crop along with Korea and the United States and the European Union when it comes to our economic relations. But I think we will achieve more and given the difficulties with Japanese agriculture which are mentioned, it was good to get agreement on a feasibility study.
KELLY:
Okay, if we can turn to the budget now PM
PRIME MINISTER:
Sure.
KELLY:
It's coming up in I think its eight days. The government's signalled its intention to limit the Medicare subsidy for IVF. That's prompted a storm of protests, most of which has occurred when you have been out of the country. Is your mind made up here or could you be convinced to drop these new proposals?
PRIME MINISTER:
Peter Costello yesterday said and we talked about this over the weekend, in advance of his interview and I agree with everything he said yesterday about this. We are not trying to save money with this, it is not a cost cutting exercise and we will be guided in our final decision by medical advice, the advice of experts.
KELLY:
There's been plenty of medical advice telling you, you don't need to do this and its misguided because it will have other impacts.
PRIME MINISTER:
Well there's been a variety of advice that's come through and in the end we will analyse it all and we will be guided by that but this is not a cost cutting exercise. I understand the emotion of it very much and I am sensitive to that, very sensitive indeed and I want to take the right decision but remember when this procedure was first introduced - indeed for quite a long time there was a limit and I notice the Labor Party is criticising any limit, well they had a limit of six cycles a year. Now that is double what has been canvassed but Fran we in the end will be guided by medical advice and that medical advice at this stage indicates that over the age of forty-two, the prospects of success are very low. There are other bits of advice and we're continuing to consider the matter and we'll make a final decision based on the best medical advice that we can get.
KELLY:
Okay, so your mind is not made up in that sense?
PRIME MINISTER:
Well when it comes to budget matters, no government's mind is made up until the Treasurer gets up and actually delivers the budget speech. We are about, what, eight days out from the budget, I've, as Treasurer I went through a few budgets and I've gone through a few as Prime Minister and we make a lot decisions in the last eight days.
KELLY:
Okay so people should keep on agitating (inaudible)
PRIME MINISTER:
We fine tune, I think it's fair to say, we fine tune a lot of the decisions in the last eight days.
KELLY:
Prime Minister can we turn now to the leadership...
PRIME MINISTER:
Sure
KELLY:
...tensions that have arisen from the interview you gave in Athens? Why did you say that you could beat Kim Beazley a third time? Are you thinking of doing just that?
PRIME MINISTER:
I was answering what I thought was a hypothetical question. But let me just make it very clear that my position has been since the middle of 2003 and indeed before, because it is the reality of political life, that I'd remain leader of the party for so long as the party wanted me to. I did not set out in that interview, nor is it my belief that I did in that interview, alter that position. That was not my intention. I don't believe I did. It defies logic that I would choose a foreign capital, an interview with two journalists only, and I am not being disrespectful to them, to suddenly announce a different approach to the leadership of the party. Remember last time when I decided, and its important I say this, 'cause it goes to frame of mind and motive - in 2003 when I decided to stay on, I had a lengthy discussion with Peter Costello about that, the day before I communicated that decision first to the Liberal Party room. If I have anything different to say about my future, the people who will know about it first, are the members of the Parliamentary Liberal Party. They will know about it in advance of any journalist, or indeed of anybody else, because I owe my position to them. I am their servant, I am at their disposal and I have said before that when the party indicated to me two years ago that it wanted me to stay on, that influenced me. I would never have stayed on to fight the last election if the party hadn't wanted me to and I have to say that the judgement of the party then and my decision was correct.
KELLY:
So what would it take then now for you to know that it was time to go. Would it take a delegation of senior Liberals?
PRIME MINISTER:
Fran, Fran, Fran, you don't go into the details of those things. When you've been leader of a political party for as long as I have, you sense its mood. The mood of the Liberal Party at the moment is, they don't want to talk about leadership, the mood of the Liberal Party is that the Prime Minister has just led the government back to a record fourth term, we've increased our majority, we've got the control of the Senate, we have a deputy leader who has been an outstanding Treasurer and is my logical successor when I do go and they really don't want to address this thing at the moment. They just want everybody to get on with their respective jobs ,and they've got plenty of work to do.
KELLY:
But can you imagine how your deputy felt when he read that you said you are not planning on going anywhere. As you say it does defy logic that you would raise this in this way at this point. But you did change your form of words.
PRIME MINISTER:
Yes but Fran, Fran you have to-and you've got the full transcript you know, spread out in front of you...
KELLY:
I have.
PRIME MINISTER:
...and I have no doubt you've read it...
KELLY:
...so I don't misquote you PM.
PRIME MINISTER:
No, exactly. Now if you look-read the totality of that - when you are in an important position, you always speak in the present tense and I mean what ever your thoughts may be about your future with ABC, while you're running this magnificent programme, you know, you're on the job. I mean I am 100% committed to the job we're doing and when I say I am not going anywhere, I am not. I am Prime Minister, I was only re-elected six and a half months ago. I mean the idea, six and half months after being re-elected you would be canvassing departure, is almost insulting to the electorate. They would be entitled to say this is a breach of contract.
KELLY:
Very briefly Prime Minister, we are running into the news, but you've got a meeting with Peter Costello today ...
PRIME MINISTER:
Yes, not a crisis meeting to talk about the leadership.
KELLY:
Will you be talking about this? Will you give him some reassurances?
PRIME MINISTER:
Well I don't know whether this will come up or not but I can tell that the meeting was arranged at my initiative on Friday night before these stories appeared to fine tune some aspects of the budget. Now that was the principal reason for my ringing Mr Costello that is the reason for this meeting and any suggestion it is a crisis meeting is completely wrong and that's been communicated to the newspaper that carried that story.
KELLY:
Prime Minister thanks very much for joining us.
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