BARTLETT:
Prime Minister good morning to you?
PRIME MINISTER:
Good morning Liam.
BARTLETT:
Nice to see you again.
PRIME MINISTER:
Thank you. Good to be with you.
BARTLETT:
And happy birthday for yesterday.
PRIME MINISTER:
Thank you.
BARTLETT:
Was it a good day?
PRIME MINISTER:
Yeh it was, it was great.
BARTLETT:
(inaudible)
PRIME MINISTER:
Yeh it was a good day personally but pity about the inflation figure in which of course was of concern (inaudible) and you no doubt want to ask me about that.
BARTLETT:
I do, yeh, I'd like to go into that area. But more importantly what did you wife give you for your birthday?
PRIME MINISTER:
Well we haven't exchanged gifts yet. We tend...because my birthday and my wife's birthday and our eldest child's birthday all come within a couple of weeks of each other, we tend to have one day where we all get together and exchange gifts then. And we've found a day that's sort of in about 10 days time and we're going to do that. So that's how we tend to do it.
BARTLETT:
So you still haven't got a pressie?
PRIME MINISTER:
Oh well I spoke to my wife and three kids yesterday, that's enough, that was present enough.
BARTLETT:
Did anyone give you anything interesting?
PRIME MINISTER:
Plenty of advice.
BARTLETT:
You'd get plenty of that. I vowed this morning that I would resist the temptation to ask any questions about turning 67, retirement and Peter Costello and that sort of thing, it would just be too obvious wouldn't it?
PRIME MINISTER:
Yes.
BARTLETT:
You can't keep doing this forever though can you?
PRIME MINISTER:
What?
BARTLETT:
Being Prime Minister.
PRIME MINISTER:
Oh of course not, nobody goes on forever, self evidently no. But as to proximity and all those sorts of things and I don't really have anything to add to what I earlier said.
BARTLETT:
Would we be saying happy birthday, happy 70th birthday, Prime Minister?
PRIME MINISTER:
Oh look, I really don't want to get into that.
BARTLETT:
Let's talk about those inflationary figures yesterday.
PRIME MINISTER:
Yes.
BARTLETT:
Highest in 11 years.
PRIME MINISTER:
Yes, bad figures, there's no point in pretending otherwise, mainly driven by two things beyond the control of any government, world oil prices and a cyclone. The bananas thing is bizarre, but that's how the statistics work and a 250 per cent increase in bananas and this is directly the result of the banana crop around Innisfail being flattened. I've seen it, it was flattened. It is bouncing back and that'll go through the system, that won't happen again, unless we have another cyclone that flattens something else. The petrol thing is a bigger problem. I don't see any early significant reduction in the world price of oil, I really don't, and there's not much point in pretending otherwise. But both of these things are factors beyond the direct control of any government. Nobody around the world has found a solution to high oil prices and nobody around the world has been able to stop that flowing into higher petrol prices.
BARTLETT:
Can you not do anything about that within the structure of what you are in control of?
PRIME MINISTER:
No, you can have tiny influences at the margin. Several years ago, as you know, we got rid of the automatic indexation of petrol excise, if that had still been in operation we'd be paying several cents a litre more for petrol no matter what the world price of oil was and we also cut the excise by one and a half cents.
BARTLETT:
Yes you did, but nevertheless your overall take is still very high.
PRIME MINISTER:
Well look it is, but....
BARTLETT:
Plus the GST.
PRIME MINISTER:
Well the GST goes to the States and some of the GST that people pay to buy petrol, they don't spend on other items because they have to spend more on petrol. So overall the additional GST take by the States may not be as great.
BARTLETT:
But what about the other end, what about the other end, what about any chance of any sort of regulation?
PRIME MINISTER:
Well you mean price control?
BARTLETT:
Well I mean it's biting into the back pocket of virtually every Australian.
PRIME MINISTER:
I know that.
BARTLETT:
But the major oil companies are making record profits, record profits, their refining margins are enormous.
PRIME MINISTER:
Well their refining margins vary, they do bounce around, but that is not the main reason why petrol is...the price of petrol is high. I mean no company is going to invest in refining capacity unless it makes a decent profit.
BARTLETT:
But their profits have never been better.
PRIME MINISTER:
Yes but...
BARTLETT:
They're not turning around and saying 'well the world oil price is high, we're hurting,' they're having a field day.
PRIME MINISTER:
One of the reasons why the world oil price is high is that companies in the past have not invested enough money in building new refineries and you don't invest more money in building new refineries if you don't have a decent profit. I mean we cannot turn the laws of economic arithmetic on their head.
BARTLETT:
But Prime Minister we're not asking that. But the price at the bowser goes up, it goes up at the sniff of a rocket overseas.
PRIME MINISTER:
Well it goes up for a number of reasons. The main reason it goes up is that the price of the product goes up. Now if there were some solution to this Liam then it would have been found by some government around the world. I mean the sort of questions I'm getting asked or asked of...when he does interviews are asked of George Bush, they're asked of Tony Blair, they're asked of the Canadian Prime Minister, and we are all in the same situation. None of us has found the silver bullet. If there were one, I tell you what, I'd grab it. Now there are some things that you can do at the margin. We are right at the moment looking at whether there are any consequences for petrol alternatives of the increase in the price of petrol, I doubt that there are. Because you take something like ethanol, people would say well ethanol is the answer. The actual product cost of ethanol is not much different from that of petrol, and in some circumstances it's higher, but the reason ethanol is cheaper is that the excise on ethanol at the moment is nil and even by 2015 it will only be 50 per cent of the excise on petrol. So it's the revenue break that makes ethanol more attractive, it's not an inherently cheaper product that makes it...
BARTLETT:
That's been the other argument about LPG hasn't it, the fact that (inaudible) slap an excise on LPG?
PRIME MINISTER:
Well, yes, but even once again by 2015 it won't be more than 50 per cent of the excise on petrol, it will still have a huge margin.
BARTLETT:
You've also been accused of not supporting the biofuel industry, the biodiesel, do you think that's right?
PRIME MINISTER:
I've just indicated that right at the moment there's no excise on, on biofuels and that will go slowly from 2008 through to I think 2015 to 50 per cent.
BARTLETT:
Could you be doing more to encourage it in terms of government aid and assistance and that sort of thing?
PRIME MINISTER:
Well if the only reason....it's being used a lot more, I mean the use of ethanol is growing significantly, but in the long run if you create a situation where there's a permanent excise advantage for a product, there's a limit to what a government can do to make people use it.
BARTLETT:
Prime Minister you said during the last election campaign that interest rates would be lower under a Coalition Government.
PRIME MINISTER:
Yes, lower than under a Labor government, yes.
BARTLETT:
Lower than Labor.
PRIME MINISTER:
Yes.
BARTLETT:
Is that looking decidedly shaky if the Reserve Bank puts up the rates?
PRIME MINISTER:
No, I don't think so, I don't know what the Reserve will do, it's an independent body and it's got to make a judgement, it's got to bear in mind the inflation figure, which is higher.
BARTLETT:
All bets are on given that figure yesterday.
PRIME MINISTER:
Well it's got to look at the underlying inflation rate, it's got to realise that in relation to the bananas - if I can put it that way - that will flow through and disappear and it's also got to understand the consequences in relation to the fuel price increases, I mean it's a matter for the Reserve Bank to decide. But what I said in the last election campaign was that interest rates would always be lower under a Coalition Government than a Labor government. I don't recall guaranteeing that there'd never be an interest rate movement, I mean nobody can do that, I can't do that now.
BARTLETT:
So if Labor was in right now, interest rates would be higher? That's what you're saying?
PRIME MINISTER:
Well I certainly believe interest rates would be higher under a Labor government, I mean they were higher under a Labor Government before. We can go on the field evidence. Our interest rates now are percentage points below what they were when we came to office and I mean there's been a dramatic change in the level of interest rates. We all remember 17 per cent interest rates for housing and 21 per cent for small business under Mr Keating. A lot of people remember it, perhaps a diminishing number as the years goes by.
BARTLETT:
But in turn you say that you can't do anything about the petrol prices, you have no control over that, so....
PRIME MINISTER:
But we can do other things because they're not the only things that influence inflation. In a way yesterday's figure is a reminder that it's even more important now to have steady economic management than it was before because what yesterday illustrates is that even in a well-run economy, and I think we do have a well-run economy, there can be sudden unexpected shocks that create a problem. I mean nobody knew the cyclone was coming, and no government, Labor or Liberal, can stop a cyclone, and I don't believe whoever is in office, that we can control the world price of oil. I'm not suggesting that we're better at controlling the world price of oil than the Labor Party; I'm not going to insult people's intelligence by saying that. But I do think the other things that we have done, the fact that we have the Budget in surplus, if we had a deficit budget now there'd be even greater pressure on interest rates, if we had a more centralised wage fixing system, there would be greater pressure on interest rates. So there are a lot of reasons why these developments just underline yet again that people have to make a hard comparison between our economic management and that of the alternative government.
BARTLETT:
15 past nine, we're talking with the Prime Minister, let's take some calls Prime Minister. Mike's first up, hello Mike?
CALLER:
Hello Liam, good morning Prime Minister and welcome to Western Australia.
PRIME MINISTER:
Thank you.
CALLER:
I'm an investor in a small WA company which has developed some technology to produce biodiesel. We're building it in WA, not importing it as a lot of the other people are. Our plan is to use canola, which is an Australian-grown product to produce biodiesel and our target market would be the off-road users, the farmers, the miners etc who use large lumps of diesel. The Fuel Tax Bill has effectively removed that market by interpreting the Cleaner Fuels Grant as a refund of excise, so that those people that normally would be able to buy and then get their excise back as they can on normal diesel can no longer get it back on biodiesel. So any Government support that was in place for the biodiesel industry is not in support there for the off-road users. And I think that's a major concern for all biodiesel producers in Australia. I'm just wondering where or how we can overcome this anomaly?
PRIME MINISTER:
Well I think what's happened is we have provided a concession, an additional concession in one area which is removed the advantage that the concession in another area represented, and partly your situation is that the alternatives to biodiesel are now more attractive to use and therefore the advantages of using biodiesel are not as great. I can't agree that because we make the use of one product more attractive revenue wise, and that removes the advantage of using an alternative that we should reverse that original decision.
BARTLETT:
All right Mike, thanks for your call this morning. Hello John.
CALLER:
Good morning Liam. How are you?
BARTLETT:
Good morning.
CALLER:
Good morning Prime Minister.
PRIME MINISTER:
Good morning.
CALLER:
Prime Minister, you remember a few years back you were saying to people to go and look after their elderly parents? Well I did that for seven years and I'm now in my mature age and when you go for these jobs, you always seem to get the feeling that you're being, because of your age and because you're a bit older, they won't employ you.
PRIME MINISTER:
That is still, John, a problem in our community. I believe it's changing, however there are still many employers wrongly who think older people do not make good workers and they're wrong and a lot of attitudes are changing on this. We have changed the law in the Federal Government, removing retirement ages except in relation to the Defence Forces. But there is still, in the private sector, a certain amount of age discrimination. It is wrong, it's also against the interests of employers because older workers bring stability, maturity and experience that younger workers, of necessity, don't. And I hope, with the passage of more time, it is easier for older workers not only to hold their jobs, albeit on a part-time basis, a more flexible basis as they get older, and also there's more opportunity for people to be reengaged.
BARTLETT:
Good luck with that John. Thanks for your call. 9221 1882 if you'd like to talk to the Prime Minister this morning. 9221 1882. Prime Minister I asked for some email questions too from our listeners and I'll read some of those out for you in just a second.
PRIME MINISTER:
Sure.
BARTLETT:
Still on the economy, economic matters, yesterday we spoke to ACTU President Greg Combet who essentially was responding to the criticism from the OWS about the ads, the IR campaign ads that the Union has been running. He said the OWS was a lackey of the Government.
PRIME MINISTER:
That's ridiculous. That is shooting the messenger. He didn't answer the substance of what the OWS has said, he abused them. Now you always know that when somebody's attacked and some facts are used in the attack and the person attacked doesn't address the facts but abuses the attacker, then he hasn't really got an answer. And what the OWS said was that the ACTU ads were unbalanced, they were misleading, they didn't tell the full story. He quoted an example of a lady who said that she had been sacked because she was too old. It subsequently came out that there was discussion between her employer and she left with a redundancy package and he pointed out, the OWS Director, that in relation to that abattoir, the company was losing money and that was the reason why it let 29 of its staff go, but offered to reemploy them at a lower pay. Because no matter what industrial relations policy you have, if the company is losing money, it often has to let staff go, or say to them I can't keep you at your present wage but I can keep you at a lower wage. Now that's happened since the beginning of time and it will happen into the future no matter who is in office and no matter what industrial relations policy we have.
Now what the Office of Workplace Services did was to present the full story, and instead of proving that the Office of Workplace Services was wrong, and answering the facts, Mr Combet engaged in personal abuse. Now I barely know Mr Wilson, who's the Director of the Office of Workplace Services. I can assure you he is not a lackey of the Liberal Party and he's not a lackey of the Government. He has a statutory office and it does Mr Combet's reputation no harm to attack a public servant. Now Mr Combet has been caught out misrepresenting the position.
These IR changes will not lead to the mass sackings that the Labor Party predicted and we have a perfect right to see the Office of Workplace Services investigate the facts and lay them out before the Australian public. And Mr Combet should stop scaring people and he should stop misrepresenting the position and deal with the facts.
BARTLETT:
The point I made to Greg Combet yesterday though was that the original round of ads that your Government ran were also criticised for using actors rather than real workers.
PRIME MINISTER:
Well most of the ads were not...
BARTLETT:
Is it time to have a look at this sort of advertising overall, do you think? Do you think it's generally misleading when it's selling a policy position?
PRIME MINISTER:
Well you have a dilemma. When you bring in a new policy people want to know something about it, and if you don't advertise you get criticised. If you do, you're blamed for spinning it.
BARTLETT:
Yeah but it seems that both parties have been putting up information, well propaganda dressed up as information.
PRIME MINISTER:
Well we had, in the case of the ACTU ads, you had people who were asserting facts in relation to their own personal circumstances that were demonstrated to be wrong. And instead of answering that criticism, Mr Combet abused the umpire, abused the official.
What's important here is whether these laws have the consequences that the Labor Party is arguing. We say they don't. They are different. We had taken away the unfair dismissal laws that used to exist for firms under one hundred and we don't apologise for that. We think that will create more jobs in small business because small business people told me for years and years and years they were frightened to take on more staff because they thought they'd have to pay an unsatisfactory worker twenty or thirty thousand dollars to go away and they simply couldn't afford to do that. Now that was the problem that we have sought to remedy and I am prepared to debate with anybody, the long-term value of that policy change. And we don't apologise for the fact that we have done that.
BARTLETT:
Prime Minister, let's take some more calls. Michael's on the line. Hello Michael.
CALLER:
Good morning Prime Minister, how are you?
PRIME MINISTER:
Very well.
CALLER:
Happy Birthday by the way.
PRIME MINISTER:
Thank you.
CALLER:
Mr Howard I'd just like to know, what have you done to stop the massive overreaction of Israel and Lebanon? I've got two questions, that's number one. And number two, do you personally, not as the PM, but do you personally think it's fair what they're doing?
PRIME MINISTER:
Well I'm not going to separate my personal view from my Prime Ministerial position because the one obviously influences the other. I believe that Israel has a right to defend herself. It is very difficult once a country is attacked, and Israel was effectively attacked, to, as it were, adjudicate about the level of a response.
CALLER:
Israel were the first ones to attack Lebanon mate.
PRIME MINISTER:
No, I'm sorry, that's not correct sir.
CALLER:
Well Hezbollah kidnapped two soldiers, fair enough, I'd agree with that.
PRIME MINISTER:
They went across the Israeli border.
CALLER:
And in turn Israel bombed the hell out of Lebanon for the kidnap of two soldiers. How is that fair? How is that an attack?
PRIME MINISTER:
Well I think you have to bear in mind that over years and years the Israelis have been subject to rocket attacks, not only from Hezbollah, but also from Hamas. And on top of that, it's the policy of Hezbollah, it's the policy of Hamas, it's the policy of Iran and it's the probably undeclared policy of Syria that Israel should not have the right to exist. The fundamental cause of the problem in the Middle East is the refusal of the entire Arab world to accept Israel's right to exist.
BARTLETT:
Prime Minister there's a question via email from a fellow called Mark who says he's listening to 6PR at the moment on the net from Bristol in England.
PRIME MINISTER:
Oh yes.
BARTLETT:
He says concerning the conflict between Israel and Hezbollah, do you think that Syria and Iran should be involved in ceasefire talks?
PRIME MINISTER:
I think Syria and Iran carry a huge responsibility in this because they have more influence on Hezbollah than anybody else. I would support a situation where you had an international force in southern Lebanon, provided it was a big enough force to effectively disarm Hezbollah. It's no good sending a token force there, and I make it clear that Australian forces will never be part of a token force because it would be too dangerous. If the world community is serious, it will put together a force of tens of thousands and that force will act as an effective buffer, and it will have the power and the will to disarm Hezbollah. And unless that's part of the agreement on an international stabilisation force, you are not going to get an effective international stabilisation force. It's no good sending...
BARTLETT:
It's a peace making force rather than a peace keeping force?
PRIME MINISTER:
Well one would morph into the other. But if the international community is serious about providing a lasting settlement, it's got to have a big enough force with enough capacity to disarm Hezbollah because if it doesn't nothing is going to change.
BARTLETT:
By the way, Mark says PS: Good luck for the Ashes series. I don't think we'll need that much luck, will we? Mike says also on, there's a few on here, Neil, also Peter. I'll just paraphrase for the sake of time. They're all asking questions surrounding the fuel price, the petrol price at the moment and asking well basically the Government does have control over the excise level, what about reducing or cutting excise?
PRIME MINISTER:
Well you could do that. It would cost about $280 million a year to cut excise by one cent. Now with fuel at, sort of hovering around 140, or $1.40, it bounces around a bit, certainly touching that or going over it in some cases, to cut the excise in a way that would make a real difference, you'd probably have to cut it by what, ten or fifteen cents a litre. And that's what, about three...
BARTLETT:
Billion dollars?
PRIME MINISTER:
Three to five billion dollars a year. Now what would happen if the price, world price of oil fell and the cost of fuel fell by ten or fifteen cents. I don't think the public would then like the excise reimposed at its old level. And it's very, very difficult to contemplate doing that. There's no point, in my view, adjust a cent or two, because it can bounce around from Wednesday to Saturday by four or five cents a litre with the surge in demand at the weekend and the effect of discounting during the week.
BARTLETT:
So it's safe to say any idea of an excise cut's off the table?
PRIME MINISTER:
Well I can't see where it can, we can't afford to do it to such an extent to make a difference, and I think everybody would agree that if you cut the excise you'd never be able to increase it again because the public would understandably object to that.
BARTLETT:
They wouldn't cop it.
PRIME MINISTER:
They certainly wouldn't. Do you think they would?
BARTLETT:
I don't think they liked it the first time.
PRIME MINISTER:
Nobody likes paying these high prices.
BARTLETT:
This is not a cheap shot, but do you really think politicians generally, who are driven around town or have the use of a fuel card, that sort of thing, can really appreciate the effects of these prices?
PRIME MINISTER:
I think they can, I think we do talk to a lot of people. I mean, I spend an enormous amount of my time talking to people. If you think I am not aware that people are angry about high fuel prices, then you are wrong. I am very well aware of that and this is the biggest daily bugbear people have. Thank heavens we have a strong economy, thank heavens there were tax cuts for everybody in the last Budget and thank heavens that real wages are going up strongly and that we have low unemployment, because the petrol prices would be inflicting much greater pain on the Australian public if we had a weaker economy, now that is not to say that it is easy.
BARTLETT:
Arguably, arguably some of the things you have just mentioned are also inflation drivers.
PRIME MINISTER:
What's that?
BARTLETT:
The increased wages growth. The tax cuts.
PRIME MINISTER:
No, no, increases in wages are not driving higher inflation if they are based on productivity.
BARTLETT:
What about the tax cuts?
PRIME MINISTER:
Well I think the tax cuts are fully justified and an extra 10, 20, $30 a week in the pocket is of enormous help in defraying the extra cost of petrol.
BARTLETT:
Mikes on the line Prime Minister, last call I think. Hello Mike.
CALLER:
Good morning Prime Minister, welcome to the west.
PRIME MINISTER:
Thank you.
CALLER:
I would like to talk to you about the whales, you and the rest of the world know that the Japanese are hiding behind this scientific bulldust, you know that it is a lie. Senator Campbell seems to be the only person who is interested in any way to protect these, what is slowly becoming a rare species. I mean, for example the Korean crisis, America was advising Japan on what to do in case of, if the crisis extended. Now you, personally, John Howard, you know that that's a lie. Now why...
PRIME MINISTER:
...What do I know is a lie sorry?
CALLER:
Well sir you know that, I mean the whole world knows that the Japanese are hiding...
PRIME MINISTER:
...I don't accept that the Japanese are hunting whales for scientific purposes...
CALLER:
...No exactly...
PRIME MINISTER:
...And nor does the majority of the world community and we have been in the forefront through Senator Campbell, our Minister, in arguing that case before the Whaling Commission and we had some modest success in winning the debate at the last meeting.
BARTLETT:
What is your question Mike?
CALLER:
Well I am just saying, the Prime Minister has just confirmed what I am saying. I mean, there must be some kind of trade agreements, do you actually sit down, not you personally, but do you sit down in front of the Japanese and discuss Toyota cars...
PRIME MINISTER:
...what, trade investment off for whales?
CALLER:
But no, one second, how can you sit down in front of somebody and know that that Government is just giving you a load of bull? I mean, you know, does, do you just completely ignore it? I mean is that the...
PRIME MINISTER:
No I don't completely ignore it sir. My responsibility in all of these things is to do the right thing by Australia and it would not be the right thing for Australia, for me to compromise in any way our strong trading position with Japan because of our annoyance and anger over their policy on whales and that would not help the Australian people. We try other ways, but it would not be in the interests of Australians for me to adopt that approach. But if you think I believe their arguments about scientific use, no, I don't.
BARTLETT:
And a final question, thanks for your call Mike, final question on email Prime Minister from Anne. Anne says, 'Prime Minister following the intervention of Mr Bush into the stem cell research capabilities in America, what are your views on stem cell research in Australia taking into consideration that this research does not concentrate on umbilical stem cells?'
PRIME MINISTER:
Well our position will be determined independently of the American position, there really is no connection. It should never be assumed that on something like this that our policy automatically follows that of any government, American or otherwise. We have taken a preliminary decision as a Cabinet not to change the law that was adopted three years ago following a free vote and that is to maintain the existing prohibitions. We are however going to have a debate in our party room when we come back in a couple of weeks time and I want all of my colleagues to have a say on this. It is quite a hard issue and I don't think anybody should sermonise too much on it on either side, it is quite complicated and it is one of those things where whilst I on balance have a view, which I have expressed before and that is in favour of the status quo, I am prepared to listen to the other argument and I don't think it is quite as cut and dried as many people assert.
BARTLETT:
Anne, thanks for your question and Prime Minister thanks very much for coming in and taking some calls from our listeners and being available for us.
PRIME MINISTER:
Thank you and good luck in your future career with 60 Minutes.
BARTLETT:
Thanks very much, I appreciate that.
PRIME MINISTER:
Thank you.
[ends]