MITCHELL:
First in our Canberra studio, the Prime Minister. Mr Howard, good morning.
PRIME MINISTER:
Good morning Neil.
MITCHELL:
Will there be new tax cuts in your Budget next week?
PRIME MINISTER:
I'm not going to respond to the usual pre-Budget speculation. The Budget will be a good Budget for the Australian economy and a Budget that will continue to contribute to the stability and the strength of that economy. Beyond that I'm not going to say anything in response to particular speculation There always is speculation before budgets - some of it turns out to be right, some of it turns out to be very wrong.
MITCHELL:
I'd suggest there are also strategic leaks on the superannuation changes, they seem to be, there's a certain (inaudible) there.
PRIME MINISTER:
Well look I'm just simply not going to comment in any way on that because that's responding to speculation.
MITCHELL:
What, that includes the superannuation and the changes to welfare recipients?
PRIME MINISTER:
We have indicated in a broad way that we want to increase workforce participation and that we will make changes in relation to people on the disability support pension and sole parents, not designed in any way to penalise them but to give them additional incentives to enter the workforce because the belief of the Government is that people are far better in work than on welfare and the objective of the policy changes, which the Treasurer will talk about, are to increase workforce participation and to help people, not to punish them or to save money.
MITCHELL:
Okay. You have in the past commented on the speculation about the surplus being $10 billion as being wrong, that speculation is there again. Is it still wrong?
PRIME MINISTER:
Well I don't think there's any merit in my, this close to the Budget, responding to speculation as to the specificity of the level of something. I point out that the comments I would have made earlier were in the context I think of some weeks ago.
MITCHELL:
Yes, it was. But you won't respond to that $10 billion...?
PRIME MINISTER:
Well I'm simply not going to respond, just as I wouldn't respond to the other stuff I'm not going to respond to that stuff, except to say this - that we need a good surplus because that's important to the general sense of the economy.
MITCHELL:
Where do you go to the overall thrust of Budget? I mean what does it aim to do?
PRIME MINISTER:
Well it aims to consolidate the strength of the economy. The overall objective of any Budget is to strengthen the economic fundamentals of the country and those fundamentals are impressive. I mean there is no country in the western world that has such a good fiscal position as Australia. We have no debt to speak of and that is the envy of the western world, no debt as a government, we have low inflation, we have still very strong business investment, we have 31 year lows in unemployment and we have historically low interest rates. Now when you put all of those things together, I mean that is a very good story and the aim of the budget is to strengthen and reinforce that because at the end of the day the overall health of the economy is far more important to the average Australian than individual decisions that might be contained in the budget - far, far more important. I mean people remember that over the last 10 years they've had low inflation, real wage rises, low interest rates, low unemployment, they remember that, they remember that far more than they do some individual decisions that may have pushed them up or down in a small monetary sense.
MITCHELL:
Do you agree it's a very crucial one though? Internationally the signs are not good, and even locally there are signs of a downturn. The Budget has to be very cautious in that sense.
PRIME MINISTER:
Well it has to be a very orthodox Budget in the sense that it has to be a Budget that reinforces our strength and you may call that caution. I choose to describe it a little differently, but I think we're both saying the same thing that there are some international challenges and there are some domestic ones; obviously the skills shortage is a problem and we're addressing that in a number of ways - skilled migration changes, the introduction of Australian technical colleges, and labour market changes. I have to say that the need for further labour market reform and the need for a more consistent national system on the labour market has a great deal to do with issues such as skills shortages because the rigidity of the awards system and the consequences of that rigidity, which vary from state to state, are one of the reasons why we do have skills shortages.
MITCHELL:
9696 1278 if you'd like to speak to the Prime Minister, he's in our Canberra studio, 9696 1278. Is it a Costello Budget or a Howard-Costello Budget?
PRIME MINISTER:
Look, the Treasurer is bringing down the Budget and I'm sure he'll do a very good job. But as always other people contribute to it. But the principle responsibility for any Budget is of course that of the Treasurer.
MITCHELL:
We'll take a call on the Budget, Tom, go ahead Tom.
CALLER:
Good morning, good morning Prime Minister, good morning Neil. I am a single male, small businessman and I believe I am subsidising the rates of the country.
PRIME MINISTER:
You're a single what? What was the first...
CALLER:
I am a single.
PRIME MINISTER:
Oh, a single male, I'm sorry, forgive me.
CALLER:
And a small businessman. And frankly I believe I am subsidising everyone else in this country. There's no assistance given to me at all.
PRIME MINISTER:
Well is your business doing well?
CALLER:
Yes, (inaudible) past couple of years but it's getting tougher; I won't lie to you...
PRIME MINISTER:
No, no that's fair enough.
CALLER:
And that's what I believe; I believe all I'm doing is helping everyone else.
MITCHELL:
So what do you look for in the Budget, Tom?
CALLER:
More breaks towards people like me.
MITCHELL:
More breaks?
PRIME MINISTER:
More breaks.
CALLER:
I mean I'm single, I'm male, I run a small business...
PRIME MINISTER:
Well we can't have a male specific tax break. I mean we certainly can't do that. But I would hope you might accept that the generally strong economic conditions this Government's policies have produced are one of the reasons why firstly you're still in business and although you say it's got a bit tougher on the last couple of years it's nonetheless been reasonably good. It is true that we have a tax system that favours people with dependent children and the reason for that is that people with dependent children have more expenses than do single people. I don't mean that offensively. Years ago I was a single male, but I have always held the view that we should have a tax system, which we do and I'm very proud of it, that gives help to low and middle income earners to bear the cost of raising children because they are our future, they're the future of this country and unless we have a tax system such as that we have a tax system without a social vision.
MITCHELL:
You agree we've got a tax system that's still inherently unfair though? Look at the bracket creep figures this week, quite an extraordinary amount in bracket creep.
PRIME MINISTER:
It is less... I guess in a theoretical sense while ever you have any degree of progressivity in the tax system you're going to have bracket creep. I would argue of course that through the introduction of the New Tax System which results in 80 per cent of taxpayers being on no higher tax bracket than 30 cents in the dollar - that's 80 per cent - we have eliminated, we have reduced the impact of bracket creep. We haven't eliminated it; you can only ever eliminate bracket creep completely by having a single flat rate of tax on every dollar of income. And we've been through that debate before and there are inherent unfair elements in that as well.
MITCHELL:
Prime Minister, can I ask you about Douglas Wood, the hostage in Iraq, and on the basis of what's happening there would you be advising civilian Australians not to go and work in Iraq?
PRIME MINISTER:
Well we already have done that. Our travel warnings are very strong on that. Our warnings, I mean we advise people consistently that it's an unsafe place.
MITCHELL:
Aren't these people needed to rebuild? I mean that's the argument...
PRIME MINISTER:
It is a dilemma and on the one hand we have to give people a frank assessment, on the other hand we have to try and assist them and that is the dilemma that we have. I mean it's the dilemma in the sense you have when people go to different parts of the world. To even mark an event like ANZAC Day there is a certain ambivalence or contradiction in the sense that we point out to people that there are certain dangers, yet on the other hand we clearly don't discourage people from going. It's very hard - one of the dilemmas that a government has in this sort of situation. The best thing of course to do is to help the Iraqis stabilise the place so they can get on with rebuilding it and that of course is one of the reasons why we've sent a 450 person task group to Al Muthanna province, not only to help the Japanese but also to train the local Iraqis.
MITCHELL:
In a sense what's happening with Douglas Wood and the other hostages isn't that evidence of why we do need to be there? This sort of lawlessness.
PRIME MINISTER:
I want to choose my words very carefully about Douglas Wood, Neil. It's a very delicate situation. I have no way of knowing how different people will react to different words and I am very conscious of how difficult it is and I'd rather not, beyond answering in a very limited way, in a very general way, factual questions about him. I'd rather not try and draw implications because it may be picked up in a way which is recorded to the poor man's disadvantage and I just don't want to do that.
MITCHELL:
We're dealing with (inaudible) are we, that what the Prime Minister says on a radio programme is being picked up (inaudible)...
PRIME MINISTER:
I just don't know. I just want to exercise extreme caution. We are doing everything we can to secure his release, it's very hard. We believe he's still alive, we do believe that...
MITCHELL:
Is that recent?
PRIME MINISTER:
Well, you know it's, the Foreign Minister made that plain this morning. And we believe, I don't want to say, but that's our current belief, but the problem with this if you talk too much about it you inevitably get into the area of speculation and when, as you will understand, attempts are being made at different levels to try and secure his release it's a case of the less said the better. I do want to express my respect and admiration for the moving appeal made by his two brothers on behalf of the family - I was deeply moved by that, as I'm sure all Australians were. The Government is in regular contact with the family and the Government and the family are working together and sharing whatever information is available and we're all hoping. It's very hard, we haven't given up hope by any means and we won't give up hope and we should be positive, but we should also recognise how very hard it is.
MITCHELL:
Has there been any contact with the kidnappers?
PRIME MINISTER:
I don't want to answer that question.
MITCHELL:
Fair enough. Who are we using as an intermediary?
PRIME MINISTER:
Well, I don't want to answer that question either.
MITCHELL:
Okay. The family of, there's a report the family is willing to pay ransom...
PRIME MINISTER:
I don't have a comment on that.
MITCHELL:
Other countries helping?
PRIME MINISTER:
Yes other countries are helping. The Americans have been very helpful, the Iraqis at different levels have also been very helpful, the British have been very helpful, the Italians - they're Governments that have dealt with this situation in the past. They've all contributed ideas and shared their experiences and all of that is very helpful. We have a very experienced task group in Iraq, lead by Nick Warner, who's a very talented, successful person who of course led the RAMSI task group, or the RAMSI intervention force in the Solomon Islands two years ago. He's a very experienced man and I have a lot of confidence in him.
MITCHELL:
You may not want to answer this but have we come anywhere at all in the days since he was kidnapped? Have we made any ground?
PRIME MINISTER:
I just don't want to answer that.
MITCHELL:
Fair enough. We'll take a break, come back with more for the Prime Minister. I accept entirely it's a very sensitive security issue. More call for the Prime Minister in a moment.
[commercial break]
MITCHELL:
10 to nine, our Prime Minister in our Canberra studio, we'll take another call, Mush, go ahead please Mush.
CALLER:
Prime Minister a very good morning. I run a small business called the Gordon Technology. We have been trying to recruit a, or sponsor a highly skilled person from overseas. On the phone yesterday I was told after filling in almost a book of paperwork over a month ago, I was told there was going to be another three month delay because they've got so much backlog and clearly I will not ever be employing anybody if it takes four months to get an answer from Canberra.
PRIME MINISTER:
That sounds, on the face of it, a fair complaint. Could you provide your telephone number and so forth to the station and I'll get somebody from my office to ring you and get some more details.
MITCHELL:
Hold on Mush we'll get the details from you.
PRIME MINISTER:
I'd be very happy to do that. That does sound a long period of time. You sound as though you've gone through all the hoops, there may be more to it but I'm very happy to follow it up. I can't promise that the result is going to be entirely to your liking. I just don't know, but I will follow it up because on the surface it does sound an unreasonable delay.
MITCHELL:
Hold on Mush, we'll get your details off air. Prime Minister is this Peter Costello's last Budget?
PRIME MINISTER:
Oh look, I answered a lot of questions on this issue last Monday. I went into it in a lot of detail and I'm simply not going to answer any further questions on the issue because whatever response is given then becomes the basis of some further comment and I don't see any reason to promote that.
MITCHELL:
Okay. Can I just make the point there's been a lot of additional reporting since you answered those questions, including widespread comments attributed to supporters of the Treasurer saying he will step down. I would argue that's destabilising, not only to government but to the financial markets in this country.
PRIME MINISTER:
I've got no further comment.
MITCHELL:
You agree it can't help?
PRIME MINISTER:
I have no further comment.
MITCHELL:
Who's responsible for the GST - you or him?
PRIME MINISTER:
The GST was a policy of the Government.
MITCHELL:
Did you see his comments about that?
PRIME MINISTER:
I don't have any comment on comments that I've seen. Okay, get my message?
MITCHELL:
I think it's no comment.
PRIME MINISTER:
I think it is.
MITCHELL:
Okay. Gallipoli, now thank you for taking the time to speak to us at Gallipoli - it was very rushed. I've been trying to find out what that cost, do you know?
PRIME MINISTER:
I don't know. I'll find out for you if you wish and let you know. I'm quite happy to do that. I believe that the cost overall was justified. I thought it was a great event, I know there's been comment about the Bee Gees and rubbish and a number of other things. But the best thing from my point of view was the spirit of the young people and when they began to cop criticism in some of the newspapers about a number of issues I defended them very strongly based on the experience I'd had. I would have met about 1,000 of them I reckon and photographs... the usual handshaking and so on and it was one of the great experiences that I've had as Prime Minister. Here they were, proud as young Australians to be taking part in something that they regarded as an indelible part of their being as Australians, and I thought that was terrific. For years people of your generation and mine have wanted the young to care about our history and to love the things about Australia that we love. Now they are doing it and yet still some people are there to find fault. I thought this was one occasion when the Prime Minister ought to go into bat for the young of Australia.
MITCHELL:
Yes, I agree. Now you had a look at the roadworks and the work that is being done, did you think the damage was significant? Particularly at (inaudible) ?
PRIME MINISTER:
I thought it was more extensive than I might have liked.
MITCHELL:
Is that our fault? Do we wear some of that?
PRIME MINISTER:
Well we asked for road works in other areas and we also accepted that some remedial work was needed on that ANZAC Cove road in order to provide greater safety and greater stability. We didn't ask for it to be done to the extent that it was.
MITCHELL:
Is there more to be done?
PRIME MINISTER:
Not by way of road widening. There's a discussion going on about whether a retaining wall should be built. We are unhappy about that prospect and have made that known and it will be one of the things that will be looked at by the joint group that the Turkish Prime Minister and I agreed should be established when we met in Istanbul on the 26th of April.
MITCHELL:
So it would be fair to say we'll be monitoring it more closely now?
PRIME MINISTER:
Well we'll certainly be following, as a result of the work of this task group, we'll be following what is done in the wake of that.
MITCHELL:
Do you feel that we let it slip past this time?
PRIME MINISTER:
Well I of course, I wouldn't concede that because the simple reason is that it was easier to move on ANZAC Cove, far easier to move this time than it was on the previous occasion I was there five years ago. And I did have the experience, having met all of the people I spoke to on the day, not one person talked about the road. So I'm not sure that some of the criticism of our authorities has been justified.
MITCHELL:
Prime Minister, the Federal Court has been very critical of the Government's treatment of detainees, particularly two who were suffering depression. What's your reaction to that?
PRIME MINISTER:
Well we'll examine, as Peter McGauran said as the acting Minister, we'll examine the Federal Court judgement and if there are things that we can learn from that we will.
MITCHELL:
You must be appalled also by the case of the Australian woman who was deported. I mean does she get an apology?
PRIME MINISTER:
Well I am very sorry if anything unfairly has happened in relation to that. On the face of it that does appear to be the case, but I've asked Mr Palmer, or Senator Vanstone has asked Mr Palmer, who's investigating the Cornelia Rau case, to include that case also.
MITCHELL:
I see that some of your newly elected Members of Parliament want a pay rise. Does that include Malcolm Turnbull?
PRIME MINISTER:
Well nobody has actually spoken to me about it...
MITCHELL:
Have they got a case?
PRIME MINISTER:
Well speaking generally I don't think politicians in this country who work hard are overpaid, I think that certainly applies to people who have heavier responsibilities...
MITCHELL:
I guess the argument is though since the superannuation changes...
PRIME MINISTER:
Well it's just that the old super scheme applies to people who are already there, not to the new people, but that doesn't affect their actual weekly salary, it affects their after parliamentary income. You of course, as a new member, you don't make the same super contributions as older members do.
MITCHELL:
But superannuation benefits are written in commercial, well they're written into any contract (inaudible). Are they entitled to more money?
PRIME MINISTER:
Well I am always ready to listen to a case that my colleagues put to me, but I'm not expressing a view for or against. I'll listen to what my colleagues have got to be put to me.
MITCHELL:
Just want to ask you this - is the Queen definitely coming to the Commonwealth Games?
PRIME MINISTER:
Yes.
MITCHELL:
She is? And you'll be standing there with her?
PRIME MINISTER:
Another one of those interesting, tricky questions that journalists ask.
MITCHELL:
Well it's only March next year. I've heard some people saying this would be a grand farewell for the Prime Minister.
PRIME MINISTER:
I think the Commonwealth Games will be an outstanding success that all Australians and particularly the sports loving Australians who live in Melbourne will support very strongly.
MITCHELL:
Well I haven't had much luck with Peter Costello or the Budget, any surprises in the Budget?
PRIME MINISTER:
Look I think it will be a very good Budget and it'll be a Budget that will give a great deal of confidence to people who want to invest in the Australian economy. It'll reinforce our economy's strengths and it will be good for Australian households. Australian households feel secure and confident and stable and this Budget will do nothing but reinforce those feelings.
MITCHELL:
Thank you for your time.
PRIME MINISTER:
Thank you.
[ends]