MCKENZIE:
Prime Minister John Howard, good morning.
PRIME MINISTER:
Good morning John.
MCKENZIE:
Tell me about the response. You've heard. I presume this echoed down there too. There is some dissatisfaction. The cane growers however are quite satisfied.
PRIME MINISTER:
Well I guess it's always the case that whatever is done, some people say you can always do more. But let's just take a breath and repeat what the Federal Government has provided. We have provided tax free grants of up to $25,000 to any business, including a farm business, for basic clean up and preliminary restocking. We've also provided loans of up to $500,000, no interest or principle payment for two years and when the interest does start to operate it's only 4% per annum, which in anybody's language is very concessional. And on top of that up to $50,000 of the principle of the loan is a cash grant. So your typical banana grower, if I can put it that way, could well for openers have $75,000 of a cash grant to start with. Then on top of that we are providing wage subsidies for a period of 13 weeks of $200 from the Government and that is effectively, although it's nominally taxed, it's also being paid out as a wage its fully deductible so in net terms it doesn't attract any tax. And anybody who was eligible for the tax free grant of up to $25,000 will qualify for this wage subsidy. Now, the best advice I have at the moment is that when you add everything together, the Commonwealth could well have contributed up to, or could be up for about $250 million already of assistance. And that is, let me say, $250, and to use the colloquialism, and still counting. Because there are still other bills that will inevitably come in and under the Commonwealth/State arrangement with Queensland, some things that Queensland pays we pick up under the Natural Disaster Relief Arrangements, are either 50% or 75%. Now that's an approximation. It's very hard to make a concise estimate. But for example we've had about 2,600 applications for the $10,000 or $25,000 cash grant.
MCKENZIE:
Which astounds me when you see the population Mr Howard, on Innisfail itself, which is I don't know, about 10,000 or something. We're talking about over two and a half thousand businesses.
PRIME MINISTER:
So that means just about, well I don't know, I don't know exactly how many businesses there are there, but 2600 have applied for this grant and as far as I know, virtually all of them are getting it. Some of them at $10,000, some of them the extra amount of $25,000. I'm told, and I've just found a note here in front of me, I'm told that there are about ten and a half thousand businesses in the affected area so 2,600 have applied and let's assume over the next few weeks there may be some more. It might edge up to about 3000. You are looking at more than 25%. Now can I just point out that some of those businesses would have been severely affected, some of them only mildly affected. They all get either the $10,000 or the $25,000. Now that is a massive injection of money into the community and as you will know, and I think most of your listeners will agree, the best way to get a place moving again is to inject money into the private sector and get people spending money. And once people start spending money then things bounce back. Now we at each point have said that we will see how the things that we announce operate and if it's necessary to amend them we do so. Now that continues to be the case. In relation to the $10,000 grant, it was originally $10,000 and after listening to views put to me by a number of people including Warren Entsch and Bob Katter and General Cosgrove, we decided to lift it to $25,000. We did that because we were persuaded that that adjustment was needed. The original ceiling for the loan was $200,000 and after listening to those same people I decided it was appropriate to lift it to half a million.
MCKENZIE:
Yes.
PRIME MINISTER:
But I don't think anybody can fairly say that the Commonwealth has been reluctant to come forward with large amounts of cash, and so we should because this is a huge natural disaster and we want to help. We want the community to get back on its feet. So I would say to those people who rather quickly say "oh this is not enough" in relation to a wage subsidy, that in some cases the damage will be more severe than others and in some cases people whose level of damage is not perhaps as high as others, they will still be able to access the subsidy and they may have been intending to keep the staff on anyway and this will be an extra bit of help for them.
MCKENZIE:
All right. That's my next point actually Prime Minister. A bit of nuts and bolts. The $200 a week for example for a banana worker who no longer will be naturally working bananas for some months, or even six months, or nine months or whatever. How do you envisage he will be employed and what sort of extra money will have to be forthcoming from the employer on top of your $200 a week?
PRIME MINISTER:
It really is going to vary from case to case. I mean I can't, it's just impossible to construct.
MCKENZIE:
No, but just as an example.
PRIME MINISTER:
Well in some cases people will get this subsidy even though they are able to keep their people on the payroll because the damage does not affect them. I mean not everybody who will apply for this is a banana grower. There are other people who can apply. This is available for every small business, not just small business, every business in the affected area. If you've got 3000 businesses that are eligible for the $10,000 or the $25,000 grant they become eligible for this irrespective of the degree to which their business has been affected.
MCKENZIE:
Right.
PRIME MINISTER:
And their capacity to earn a livelihood has been affected. They will get the $200 per week, per head subsidy. Now in some cases, this will be very helpful.
MCKENZIE:
Some will be far more worthy obviously than others.
PRIME MINISTER:
Some will be more worthy than others; that is always the case. But that is the case with everything and I mean the principle is, it's a bit of a mutual obligation principle. If a firm's got any kind of earning capacity and any way in which it can employ its staff and the Government comes along and says we'll give you another $200 a week, a lot of them will think well that not only takes me over the hump but in some cases it's a very welcome additional bonus. I mean bear in mind this applies to everybody who is eligible for either the $10,000 or $25,000 grant. Now that is a very rough and ready way of doing it and it will result in some people who's need is nowhere near as great as others getting a $200 a week subsidy for 13 weeks. Now we will see how it operates. But I have to say that, if you take everything else into account and the totality of what the Federal Government is putting in and I mean the State Government is paying a wage subsidy for local government employees. But they have a strict ceiling of 1000 people, whereas there's no ceiling on this. I mean this could end up subsidising the wages of several thousand people and in fact, I'll just see if I can find the calculation on which our cost estimates have been made. Our wage subsidy we estimate will probably cost somewhere in the order of $75 million or $100 million, $75 million conservative. On the other hand I think the Queensland Government one is in the order of $19 million.
MCKENZIE:
$19 million so far yesterday.
PRIME MINISTER:
Now I'm not criticising the Queensland Government, I'm just pointing out in defence of the Federal Government to those people who say we're not being generous enough, I think that with the deepest of respect, is a little unreasonable. I mean we are effectively saying any small business, any business in the area that's already eligible or will become eligible for the $10,000 or the $25,000 tax free grant and you just have to be able to establish that you have been affected in some way by the cyclone. Any one of those will be able to get this wage subsidy in respect of an unlimited number of employees that it currently has or takes on and they're all paid for a 13 week period. Now we will monitor this operation and if there are features of it that need to be tweaked to accommodate particularly hard cases we'll do so, but if you just stop and think for a moment and look at it across the board, it is a very open ended response, it should be, I am not complaining about that, I mean it's the public's money I am talking about it's not my money and it's there to help people in need and I think when you add all of those things together, when you take into account the cost. I mean this could run to, to $75million or $80 million.
MCKENZIE:
Yes.
PRIME MINISTER:
I don't think that's unreasonable and I am not criticising the Queensland Government, I am simply pointing out...
MCKENZIE:
Well you would have discussed this with the Premier, you would have discussed these measures with the Premier, you would have discussed his $19 million too I presume. Can you help us understand the differentiation? He's got $14 million to provide up to 6 months employment for 1000 displaced workers.
PRIME MINISTER:
Yes but he's just paying what I might call local government and public, really public service employees.
MCKENZIE:
I see.
PRIME MINISTER:
Whereas we are, ours is an across the board the subsidy to a much larger number of people. He's paying a bigger amount to people employed in the public sector, (inaudible) on an individual basis that it's strictly limited to people who are employed as it were by local government or in the public sector. Ours is a small, it's non-government organisation, local, state employees and it's got a strict limit of 1000 so once you get to a thousand that, once again I am not criticising it, I am just describing it as best I can, although he can probably describe it better, it's the Queensland Government's scheme. Now it's a - if you get it as an individual, it's a larger amount than ours, but on the other hand, ours goes to a much larger number of people. If 3000 businesses become eligible for this and say they have an average payroll of four people, that's 12,000 people will get the benefit of this.
MCKENZIE:
Can I ask you if you are taking a personal interest in this. I just want to ask you about a personal interest you may be taking in the recovery of North Queensland, you visited three days after the onslaught, you since have spoken twice on this radio programme, I think you have spoken three times during the period of the cyclone on this radio programme. If for example we're looking at recovery in six months perhaps or 12 months will there be a time when you'll come back up here and say (inaudible) to Peter Cosgrove and say look what we've achieved, I think we are back to where we were and stronger again?
PRIME MINISTER:
Well John I will be back well before 12 months, I can assure you of that. I'll come back to Innisfail in the very near future. I take the view that you've got to allow the people on the ground after the initial visit and the initial assessments to get on with the job. Sometimes visiting caravans from south, either the near south or the far south as Brisbane being the near south and Canberra being the far south, you can sort of get in the way. But I will come back. I have kept a very keen eye on this and we want to see the people back on their feet as quickly as possible and we are there with taxpayers money to help. The nation can afford to help people but of course in the process we always have to try and strike a balance in appropriate assistance and also making sure that it is directed and targeted as effectively as possible.
MCKENZIE:
John Howard did you take a personal hand in the appointment of Peter Cosgrove to head up the recovery?
PRIME MINISTER:
Well the idea came from Mr Beattie but he - it was discussed with me, let me put it that way.
MCKENZIE:
Alright then you'll be back in...
PRIME MINISTER:
I think it's a very good appointment.
MCKENZIE:
Well it's, I think it's been very well received up here, it's been excellent, he's a natural born leader.
PRIME MINISTER:
Well he is and there's been, the other thing I have to say is that there has been complete cooperation with the Premier's Office, between the Premier and myself and Senator Boswell and Bob Katter and Warren Entsch and they've all put politics aside and everybody has worked together in a most effective way and another person who I suggested be added to it was Sandy Hollway who has worked the Sydney Olympics and has been the head of a government department here and good experience at organising things. On occasions like this Australians are very good at just getting in and getting the job done and I would just say to your listeners that I am as I hope I've indicated in this interview, with the detail we've gone into I am taking a very close personal interest in it and continue to do that. If there are further adjustments that are needed then and justified, then those adjustments will be made. I do however think that when you calculate the level of the assistance and the economic impact already of that assistance, there has been a very significant injection of federal government money into the area and without that I don't think the economic recovery which is now beginning will have any real momentum because the only way you can get a community back together again after something like this in an effective way is to get the small business economy moving again. You've got to get people going out and buying things and going to restaurants and going to entertain, you've just got to get normal life restored in a commercial way as much, as quickly as possible and the only way you can do that is to inject some money into the community ready cash and these grants, I mean you multiply what the 2,600 by the 10,000 or 25,000 you start to get a lot of money being spent.
MCKENZIE:
Prime Minister your personal interest in this recovery I am sure is very much appreciated up here. Thanks for your call this morning and we'll speak again soon.
[ends]