JOURNALIST:
Good morning Prime Minister.
PRIME MINISTER:
How are you Matthew, David?
JOURNALIST:
We're very well. Thank you for coming into the studio. You're in Adelaide to...
PRIME MINISTER:
I'm in Adelaide for two or three days. I'm attending the Liberal Party annual State Council meeting and associated activities and I'll be doing a few things for different people - some of my colleagues, some of my newly elected colleagues like David Fawcett, the Member for Kingston, and also Kim Richardson, so... I'm sorry, David's Wakefield and Kim Richardson's Kingston. But it's a good opportunity to spend two or three days in the city. I like when I come to Adelaide and Western Australia and Queensland, rather than just blowing in and out overnight I think it's a good opportunity to spend two or three days because you do have a chance to pick up the feelings of people about federal issues in a way that you don't do if you just come in for one night and make a speech and go out the next morning.
JOURNALIST:
While you were away from Canberra the final piece of the Telstra puzzle appears to have slotted into place, Barnaby Joyce. Your reaction to that? You'd be pleased no doubt?
PRIME MINISTER:
Well I'm very pleased at what I heard this morning. I want to thank Bruce Scott, the President of the Queensland branch of the National Party, and a parliamentary colleague of mine, for his work. I thought Senator Joyce did the right thing in talking to people in Queensland. It's part of the job of a member of parliament to talk to people about the voting decisions he takes and he's done that and I can indicate that the legislation, when it is brought forward, will very fully reflect the Government's policy. Now, we still have a number of things to do before it finally becomes law and I'm one of these people that operates on the principle that until the legislation is actually passed you shouldn't start making assumptions. But I certainly welcome what Senator Joyce has said. I value him as a colleague. He was, along with the extra Liberal elected in Queensland, he was a bit of a bonus out of the last election and I'm very grateful for that. We did better in the Senate than I ever dreamt we would. So I see our situation in the Senate now, as compared to what it might have been, as in every sense a bonus. But I take each bill as it comes along and I don't take the Senate for granted. We have a very slim majority, we don't dominate the Senate, we don't control the Senate, we have a majority of one in the Senate...
JOURNALIST:
Well you do control it.
PRIME MINISTER:
Well we don't, I think that's an exaggeration. I prefer to use the expression a very slim majority and that is exactly what it is. We have a majority of, what, 24 in the House of Representatives, we have a majority of one in the Senate. It is a very big difference and at no stage will we be setting out to abuse that fortuitously slim majority position.
JOURNALIST:
And yet Prime Minister the majority of Australians clearly do not want you to sell the remaining portion of Telstra.
PRIME MINISTER:
The opinion polls say that. That is true. I've always seen my responsibility to listen to the public but providing I'm up-front with the public if I believe something is in the long term good of Australia having listened to the public, having been up-front with them, I should still go ahead with what I believe is right. And surely governments that only follow opinion polls are not good governments. You have to juggle the two, you have to be sensitive to what the public says but it's not a very good government that tests every issue through an opinion poll before taking a decision...
JOURNALIST:
You're not saying that people want you to sell Telstra though?
PRIME MINISTER:
I beg your pardon?
JOURNALIST:
You're not saying that it's your understanding from talking to people that they want you to sell Telstra?
PRIME MINISTER:
No, I think on the surface people are against it because they think it will lead to poorer services. I don't agree with that and for nine and a half years I have argued my case and the Government went to the last election saying that provided services in the bush could be kept up to scratch we would try and sell our remaining share in Telstra. So nobody can say we haven't been completely up-front. And as I say, in the end good government is about considering all the issues, listening to the public and making the decision that you believe is right in the public interest. Now if it wasn't about that, if it were only about finding out where the majority lay on each issue you wouldn't bother going into any research, you wouldn't think about the merits of the issue, you'd just simply commission Newspoll to do a poll on every issue and wherever the majority came out we'd say well let's do that. Now I'd be am terrible Prime Minister if I behaved like that.
JOURNALIST:
You say you listen to the regions and you give evidence of doing that, you're in Adelaide for a few days, you've been in Perth and so on. We've been through this in Adelaide. We were told that if we privatised our power utility we'd get competition, cheaper prices and there'd be a dividend for the little people. And it's incredibly unpopular; the so-called dividends have not been delivered, with the exception of the reduction in debt in this state. So there has been dividend there. What's in it for the little people of Adelaide?
PRIME MINISTER:
Well Matt that's a very different industry - it's a very different issue and you can't compare the two. I would argue all the evidence suggests that compared with 20 years ago when we had virtually no competition in telecommunications, our telecommunications now are infinitely better, they're much cheaper. It is much cheaper now to use telephones and to use mobile phones than it used to be. You think of the cost of ringing overseas now, which is very important to a lot of people here in Adelaide, a lot of people all around Australia. And that is a direct result of two things; it's obviously a direct result of technology and it's also a result of there being competition. And you will find in those areas of the telecommunications market where there is a lot of competition, and mobile phones are a very good example, that our prices have come down and compared with the rest of the world our prices are very low and very competitive.
Now you can't have full and open competition if the biggest telecommunications participant, Telstra, is half owned by the Government. I mean for one very simple reason - if the company wants to raise money by issuing shares it can't because the law says we can't own less - the law at the moment - we can't own less that 51 per cent of the shares in the company and if Telstra makes a new share issue the Government has no intention of spending money buying shares in Telstra when it is our policy to sell shares in Telstra. So what we are doing by maintaining the present law is we are hampering the proper commercial operation of the largest company in Australia. Now that is the reason above all else that I have believed that there should be a full sale of Telstra.
JOURNALIST:
It's almost quarter to nine, you're listening to Matthew Abraham and David Bevan and Prime Minister John Howard. Steve from Redwood has called with a question for the Prime Minister, and just a reminder that we have our web cam as always so we've got a nice clear picture on the web cam as usual courtesy of Anthony our webmaster, so www.abc.net.au/adelaide. And Steve from Redwood Park, you have the Prime Minister's ear.
PRIME MINISTER:
Hello Steve.
CALLER:
Hello. When you sold half of Telstra...
PRIME MINISTER:
Do you mind starting again Steve, I don't think I'm getting much volume here, just try again mate.
CALLER:
When you sold half of Telstra before, you said that a lot of money was going to go to the environment, what happened to that money?
PRIME MINISTER:
Well that money did go to the environment - we've had a Natural Heritage Trust which was funded in part out of the sale of Telstra and we kept our commitment on that. In fact we first made that commitment when seeking election in 1996 and that money has gone to a myriad of environmental programmes. And if you leave your name and address I will arrange for my office to send you details of all the programmes around Australia on which money from the Natural Heritage Trust, funded in part from the sale of Telstra, part sale of Telstra, where that money has gone.
JOURNALIST:
But isn't there a real risk that these sorts of programmes that Steve has shown up and that is you sell an asset and it gets frittered away on what used to be recurrent spending, we really don't know where it's gone...
PRIME MINISTER:
No I am sorry it hasn't been frittered away. The great bulk of the proceeds of Telstra has gone to reduce debt and that has meant that every year we are paying $5 billion less in interest on people who have left the government money to fund earlier deficits and that $5 billion goes on the current spending. It means we can spend more money on defence, more money on education, more money on health and indeed make a contribution to tax reductions as well so there is a huge benefit out of the sale already of Telstra, huge general benefit because we have a much smaller debt.
JOURNALIST:
Tim from the Bugle Ranges.
PRIME MINISTER:
I am still having a bit of trouble with this I am afraid.
JOURNALIST:
Okay we will try and get the volume up as far as we can.
PRIME MINISTER:
It doesn't sound like it is coming through the earpiece at all.
JOURNALIST:
Okay.
PRIME MINISTER:
I will see if the Bugle Ranges are...
JOURNALIST:
Let's see if we can get Tim from Bugle Ranges, Tim?
CALLER:
Can you hear me okay?
PRIME MINISTER:
That is better.
CALLER:
Okay good morning folks, Mr Prime Minister the sale of Telstra concerns me on two fronts, one is I guess services to remote areas which doesn't affect...
PRIME MINISTER:
I am sorry could we lift the volume, I am having real trouble with that I am sorry.
JOURNALIST:
Is that any better.
PRIME MINISTER:
It's a little better, I'll try.
CALLER:
...the services to the bush doesn't concern me directly but I am concerned that market forces will direct funds to where its most profitable, that's a concern I have but what I don't understand is why the Government wants to sell an asset that is actually profitable, that is making the money?
PRIME MINISTER:
Well the reason we want to sell it is largely what I said a few moments ago. We have a situation where Telstra is the largest company in Australia, it's the most powerful player in the telecommunications market but it can't operate like an ordinary company and if it wants to raise capital it has to borrow. It can't issue shares because under the present law the Government shareholding can't fall below 50 per cent and if they have a share issue then if we don't participate in that share issue and others do our existing share holding will fall below 50 per cent and that is forbidden by law so they can't have a share issue. Now that is ludicrous.
JOURNALIST:
But that's only because you don't want to buy the shares.
PRIME MINISTER:
Well I don't think Australians would want us to buy more shares in Telstra.
JOURNALIST:
What you wouldn't want to touch a Telstra share? Are they a bad deal?
PRIME MINISTER:
When [inaudible] it would also be a bad investment for us to do that because government's are not good at running companies and we have this I think quite unreal situation at the present time, quite unreal, where the government is the majority shareholder in the largest commercial enterprise in the country and we're also the regulator. There's a conflict of interest, that's another reason. We are the government, we are the, whoever the regulator is is answerable to the government. So we not only own the company but we also regulate the company and its competitors. Now that is, that in my view is a commercial absurdity and it will produce a very inefficient market and the people who will suffer from that will be the Australian public. Now they are the reasons why I believe in the full sale.
JOURNALIST:
We get calls all the time, and we were getting calls as soon as people knew you were coming into the studio saying I can't get mobile phone reception at Blackwood which is just in the Adelaide Hills. In my street, which is just 10 minutes from the city centre, at night you will see people standing out on their verandas making mobile phone calls, not because they want to get some fresh air but because you can't get a signal inside. We get phone calls from people who are just 5k's from an exchange or 2k's from a metropolitan exchange and can't get broadband connected. I mean, is it going to be any better if we have a private company, who is going to provide the infrastructure?
PRIME MINISTER:
Well it will be more in my view, and evidence for years and years supports it, that the more competition you have the better service you will get. Now there is no telephone system in the world, no mobile phone system in the world that doesn't have black spots and drop outs, I mean I have travelled around a bit and you try and use a mobile phone from different parts of the world, it drops out, some areas are terrific. I mean some months ago I spoke to some of those Australian mountaineers in Nepal and it was like talking to you now, it was unbelieve, the reception and yet I have had the same experience that you do, things occasionally will drop out on me, it's got a lot better. But I don't think you will ever have a situation where it is perfect but the general quality of mobile phone reception around Australia is very high and that is evidenced by the extraordinary take up of mobile phones in this country. But if you're asking for a system that will guarantee there will never be any mobile drop outs, guaranteed perfect service indoors on every occasion in every part of Australia, you won't get that from a fully owned Telstra by the government, you won't get it from anybody but you are more likely to get a superior service if you have more competition and you have more competition if we can take the shackles off Telstra and allow it to operate like a proper company. JOURNALIST: It's nine minutes to nine, you're listening to Matthew Abraham, David Bevan and Prime Minister John Howard. Prime Minister, earlier this week you met with Muslim leaders to try and encourage moderation and to push down extremism. On this programme our listeners have made us aware of a man who've been in the Baxter detention centre for almost six years. He's a Christian gentleman who fled Pakistan because of Muslim extremists, he has a fatwa against him, he's been here, he hasn't got a country to go back to because he fears for his own life. I wonder, I don't expect you to be up to date with every person that's in a detention centre, but I wonder given the comments that you've made and you've stood shoulder to shoulder with Muslim moderates just this week, whether you would ask your Government to take another look at the case of Leonard Peter.
PRIME MINISTER:
Well, you've raised it with me. Of course I will find out about it, I'll inform myself of it and I will respond to you. I think that's the most intelligent thing I can say. I don't know all the details of it and rather than waste your time in talking generalities and venalities I will find out more about it and I will come back to you and if you then want to make a further observation about it please do so.
JOURNALIST:
We wouldn't expect you to know about the details.
PRIME MINISTER:
No, I don't, I don't and it's better that I not pretend otherwise.
JOURNALIST:
Now, the much loved Graeme Morris, a former member of your staff, writing in the media guide of the Australian today talks about well what do you do about "Muslim maddies", to use his (inaudible), that is a Morris-ism. He then goes on to talk about Christians, what do we do about Christian crazies - Christians who preach intolerance of other religions and so on.
PRIME MINISTER:
I haven't heard of any Christians recently running around supporting people who've blown others up.
JOURNALIST:
No, but there are...
PRIME MINISTER:
Look, obviously you will get, in any religion, you'll get people saying that my faith is the one true faith and everybody else is wrong and everybody else is an infidel and this that and the other. That is not the problem...
JOURNALIST:
Is that okay?
PRIME MINISTER:
Well I think it is, how shall I put it, I think it's foolish behaviour but I think there are a lot of things in society you don't agree with people saying but you should tolerate them in the name of free speech. But I think when it comes to praising people who are clearly terrorists, if it comes to justifying terrorism and murder in pursuit of a political cause that is not okay and I think there is a big difference. And if the only worry we had was that from every so often some Islamic people in Australia said Islam was the only true religion and the Jews and the Christians were all wrong and were totally hopeless, if that was the only problem we had then I don't think we'd have a problem. But what I'm worried about is to (inaudible) concerned to do is to penetrate the Islamic community and to try and get to the people who are preaching support for terrorism, comfort for terrorism, excusing terrorism, glorifying terrorism, very importantly make certain that young, especially, in the Islamic community are not influenced by that kind of behaviour. That's what I'm concerned about.
JOURNALIST:
Finally, petrol prices in Adelaide are up to $1.30 a litre at times, certainly now consistently over the $1.20 a litre. We have a caller who wants to know what are you going to do about the federal petrol excise? Are you going to give people a break?
PRIME MINISTER:
Well the petrol excise has not gone up as a result of the petrol price going up. Excise is levied on the volume of petroleum spirit, it's a volumetric excise it's not an Ad Valorem excise. So we are not collecting any extra money as a result of the price of petrol going up. What is being collected more of is the GST which goes to the States, but it is fair to say that as people have to pay more for petrol they can't afford to buy some other things or they can't afford to buy other things in such volume and if GST is charged on those things that they purchase in lesser quantities than the aggregate GST collection may not be going up so much. It's called, by the economists, a substitution effect. I know that's a mind-boggling thing.
JOURNALIST:
Well Wally and Wilmer wage earner would call that oh, okay so we pay more for petrol and we can't afford food, as much food...
PRIME MINISTER:
Come on let's not sort of say silly things. There's no evidence that people can't afford to pay for food in this country. All the evidence is that the economy is still growing very, very strongly. But we may for example - purchasing consumer optional goods which are optional - you know the upgrading of the television set or a fridge or things like that, we may be ever so slowly reducing our expenditure on those because we're spending a bit more on petrol. I'm just putting the general proposition. I don't think any economist can give you the detail of it but there is this principle that you've got a given amount of money each week and you have to pay a bit more for a necessity such as petrol and you continue to buy food and clothing and fees for children and so forth, they're essential necessities. You then cut back on things that aren't quite so essential and if those things have GST attached to them then the total collection of the GST revenue is not as great. So can I just say I hate these high petrol prices but they are due to overseas forces beyond our control, every country in the world is suffering from these high prices.
JOURNALIST:
You could reduce the excise though, because you've done it before.
PRIME MINISTER:
Well we did and we cut the excise before...
JOURNALIST:
Because they're swallowing up the tax cuts are they not?
PRIME MINISTER:
Well let's put it this way - I never accept this theory that something's swallowing up a tax cut because if we didn't have the tax cuts people would be a lot worse off and overall the economy is still growing very strongly. But we cut excise several years ago and we did another very important thing - we abolished the automatic indexation of excise and if we hadn't done that petrol now would be even higher and people would have every right to say well not only do we have to pay these insufferably high prices but each year your proportionate share of what we pay for petrol is rising. Now that is one thing that is not happening as a result of that decision we took four years ago.
JOURNALIST:
You're here to speak to the State Liberal Party, just quickly, it's two to nine, just want to squeeze this one in. What advice have you got for Rob Kerin as he faces Mr 94 per cent?
PRIME MINISTER:
Well to remember that Wayne Goss was on 70 odd per cent and lost in 1995. Mr Beattie, who seemed Mr invincible, has just lost two by-elections with huge swings in Queensland. There is always beneath the surface a volatility, particularly at a state level because people think the big issues are decided by the national government. I mean the strength of the South Australian economy, with great respect, is due to the national economic policies of the Federal Government. I know when the economy is good state governments of both persuasion will go around saying well this is due to our special economic policy, but in reality it's the low interest rates, it's the strong business investment, strong fiscal position, tax reform, industrial relations reform. They are the things that have underpinned what I think is the strongest South Australian economy for years. So you shouldn't assume that just because the approval rating of the Premier is high that it's an impossible task.
JOURNALIST:
Now Prime Minister we're going to ask you in a moment just to sign Kerry O'Keefe's CD, Kerry O'Keefe...
PRIME MINISTER:
I know Kerry.
JOURNALIST:
And no doubt you'll be listening to the cricket on ABC 891 - it'll be on tonight from seven o'clock from Trent Bridge. Do you ever go to sleep listening to the cricket?
PRIME MINISTER:
Well I have to say that the last test, I stayed up to watch it, those last two hours were incredible. I wasn't, I have to confess, I wasn't listening to 891 or even 666 in Canberra, I was actually watching it on SBS and congratulations to SBS for running the cricket.
JOURNALIST:
Well I think we'll finish the interview right now. Prime Minister John Howard, thank you for coming into 891 studios and having a yarn to us this morning.
[ends]