HUTCHISON:
I would like to welcome the Prime Minister into the studio. Mr Howard good morning.
PRIME MINISTER:
Good morning. Nice to be here again.
HUTCHISON:
Thank you very much. Mr Howard let's get into it firstly, the Middle East situation, as it deteriorates further, we've heard obviously the news of that Australian citizen dying, with the Israeli Army. You spoke to Israel's Prime Minister last night, what did you say to him?
PRIME MINISTER:
We talked about the state of the conflict. He expressed his gratitude to Australia's diplomatic understanding and support for Israel's position. He indicated that in principle, it would be a good idea if there could be a large stabilisation force, but I underlined and he certainly agreed, that it had to be large.
I did specifically raise with him my concern about Australian citizens in southern Lebanon, who were in areas close to or directly where fighting, fierce fighting was taking place and I asked that he, and the Israeli Army do everything it could to ensure that no harm came to the Australians who are there and he undertook to do that. Bear in mind of course that in a military situation it is very difficult, nigh impossible on some occasions, to prevent what is euphemistically called collateral damage, but I thought it was necessary that I raise the concern I had about the safety of Australian citizens,. There are quite a number, we think up to 500, in this area where a lot of fierce fighting is taking place.
We did have a general discussion about the situation and obviously, nobody wants conflict to go on. Nobody wants innocent people on both sides being killed and that is happening, on both sides, but equally a ceasefire without a proper set of conditions, without a stabilisation force, without a mandate for that force, including the disarming of Hezbollah, would be bound inevitably to reproduce a return to the current conflict, and the current circumstances.
HUTCHISON:
You have said that Israel must defend its right to exist, but given that the situation clearly is deteriorating, at what point do you think the United States might have to step in and request that Israel step back?
PRIME MINISTER:
Well I think it's impossible for me to speculate on that, because that involves a knowledge of how other countries are going to react. It involves a knowledge of the strategic position of the Israelis, but it also assumes that come what may, the Israelis will do what the Americans ask, even if they were to ask that. There's one thing you can be certain of, the Israelis will not be pushed into the sea. The Israelis will stand and fight to preserve their independence and to preserve their existence. Now I have said before, and I repeat it, that the only way you will get a lasting settlement in this area, is an unconditional acceptance by all of the Arab world of Israel's right to exist. Also a recommitment by everybody, including the Israelis to an independent Palestinian state. The two things go together and you can trace so much of this conflict back to the unresolved pursuit, or the unachieved pursuit of a two-state solution.
HUTCHISON:
Prime Minister, the Treasurer was on the 7.30 Report last night, being grilled about the so-called triple whammy of bananas, petrol and an interest rate rise. You won the last election on the basis that your Government could best control those interest rates, how concerned are you that this national economy, fired primarily by WA exports, is running too hot?
PRIME MINISTER:
Well I have to acknowledge that the inflation figure a couple of days ago was bad, it was bigger than I expected. It was caused by this extraordinary increase in food prices, in turn caused by a 250 per cent increase in the price of bananas, which was caused by Cyclone Larry. Now that's a one-off, that will go through the system, but nonetheless fed in. The other problem of course is high petrol prices, and they are beginning to have an inflationary effect and that was the other reason. Now am I worried about this? Yes. Do I see the economy as overheating? I think there is a difference between the rate of growth clearly here in Western Australia and the rate of growth in other parts of the country, but the whole nation is still performing very strongly. It's just that Western Australia is performing more strongly than the rest of the country, because so much of the resource sector is located here in Western Australia, and that's likely to go on for a long time.
I think the rate of expansion is manageable. I don't think you've reached an overheating stage at the present time, I don't believe that. Clearly there's a lot of pressure on house prices here in Western Australia. Clearly the unemployment rate here which is what, 3.9, or 3.5, it's lower than the national figure, although the national figure is very low and we are living in an unprecedentedly prosperous time for the whole country, but it's bigger and better than ever here in Western Australia.
HUTCHISON:
To some extent, I mean one thing Mr Costello conceded last night, was that we're not going to see any immediate relief from petrol prices, so if next week's expected interest rate rise doesn't put the brakes on, then there's also considerable speculation that that rate may yet have to go higher.
PRIME MINISTER:
Well I'm not going to get engaged in commentary on that. There is nothing served by my just musing out aloud about interest rates, where they ought to be, might be, should have been, there's nothing to be achieved and......
HUTCHISON:
But aren't we looking at a scenario.....
PRIME MINISTER:
Look I'm quite happy to address the things that I can address and you say what is my view about petrol? Because of world circumstances, which we don't control, I don't see any early fall in the price of petrol. I agree with Mr Costello about that.
And if you were interviewing George Bush and Tony Blair and Jacques Chirac and Junichiro Koizumi, they would if they were, openly they would say exactly the same thing.
HUTCHISON:
And it's not politically smart to speculate on interest rates.....
PRIME MINISTER:
No I'm simply not going to do that. It's not even helpful for the community.
HUTCHISON:
Well the question I want to ask you, is aren't we looking at a scenario, where middle and low income earners, many of whom voted for you, on the basis of your perceived superior management of the economy and from there interest rates, now face a very uncertain fiscal future, loaded up with debt, as they are?
PRIME MINISTER:
Well Geoff, you're asking me to really give a mixed answer, mixed in the sense that you're asking for a bit of political comment, and you're also asking me to try and give an assessment of people's economic position. Now it is true, that high petrol prices have taken money out of people's pockets. It is also true though, that had it not been for the tax cuts in the last Budget, people would be worse off. So it depends how you approach that tax cut-petrol price trade off. The question of superior economic management is assessed according to a whole lot of things. What I said in the last election was that interest rates, under a Coalition Government, would always be lower than what they would be under a Labor Government and I believe that the Labor Party at the last election had policies that would have put upward pressure on interest rates, particularly their industrial relations policies and I still believe that.
I didn't guarantee in the last election campaign that interest rates would never rise. I was asked that and I declined to give that guarantee, because nobody can do that. What I did say was that we would always run lower interest rates than Labor, and I think the track record of our last 10 years clearly demonstrates that.
HUTCHISON:
Mr Howard, let's take some calls, because it might be more interesting to listen the opinions of others on interest rates rather than mine. Rob, a very good morning to you.
CALLER:
Quick question, while the interest rates were heading down, the Prime Minister on this program, and on a number of occasions, said that was purely due to Australian Government policy, irrespective of the fact that international interest rates were fairly low. Japan was down to almost zero. Now that they appear to be heading up, as inflation is and I think the two go hand in hand, how can the Prime Minister and the Government justify saying that it is due to international affairs? In other words, when things are going well, it's due to the Australian Government and their policy, now that things are going bad, or starting to head that way, it's international influences which are out of the control of the government. And I would appreciate an answer, as probably other people, it's not as simple, concise, comprehensible terms, but a load of politician speak.
HUTCHISON:
Prime Minister? Thanks Rob.
PRIME MINISTER:
Well it is undeniably the case that the rising inflation, a couple of days ago, was due to the rise in fresh food prices, and the rise in petrol. And if you don't believe that, have a look at the statistician's release, so that's just a fact. As to what I said on this program some years ago, and whether your summation of that is accurate, I will take that on board and I will have to check the transcripts. I don't carry photographic recall of everything I may have said on every program I've been on and going back what five or six years, I'm sorry I don't have those skills Rob.
HUTCHISON
Hello Mary. Mary you're speaking to the Prime Minister.
CALLER:
Oh thank you. Mr Prime Minister.
PRIME MINISTER:
Yes.
CALLER:
Mr Prime Minister, my question to you sir is we are Newdegate farmers from Western Australia, but I'm sure I speak on behalf of all of Australia's farmers. Back in 1991, when the Australian farmers sent their wheat to Iraq, you forgave the Iraqi Government, you forgave the debt of the Iraqi Government to the tune of millions of dollars. Now this amount has now incurred to a hundred million. It's been back in 1991, this money has been owed to the Australian farmers. When are you going to reimburse the Australian farmers of this amount, that would be totalling at least $100 million now? Now the Australian farmers are the backbone of this country.
HUTCHISON:
Thanks Mary.
PRIME MINISTER:
Mary, I certainly agree with you that farmers remain the backbone of the country. Of course in 1991 I wasn't Prime Minister, and the arrangement that was entered into then was an arrangement entered into by Mr Hawke, who was then still the Prime Minister. I have been over this time and time again and I believe that the arrangements that have been concluded by the Government, meet the commitment that was made by Mr Hawke. I think the commitment that's been alleged in relation to Mr Hawke misunderstands or misinterprets what was said at that time and I don't think the, either the Australian Government be it Labor or Liberal, has dishonoured that understanding. Bear in mind that when you trade with a country with the support of our export finance corporation and there is a guarantee given by the Government, there is a certain risk that is carried by the farmer and I don't think the extent to which they're out of pocket, is above and beyond that risk.
HUTCHISON:
Good morning to you Simon.
CALLER:
Yes, good morning Geoff. Prime Minister.
PRIME MINISTER:
Good morning.
CALLER:
Yeah I'd appreciate a concise economy of word answer if you're capable of giving me one. Mr Howard, do you remember back in the times when you used speak about weapons of mass destruction, you know you stood up with such hubris and repertoire and you said there are weapons of mass destructions. You said it that many times, it was like everybody took it as fact. Of course it isn't fact, you were wrong, you did stand up in a way, I suppose, as a bit of a puppet for George Bush to be able to sort of come out and say this. And then you've got the AWA. If you could look back on that issue.....
PRIME MINISTER:
I think you mean the AWB, don't you?
CALLER:
I do thank you, well done. When you look back on it, especially the way things are going now in the Middle East, where all right, you're only a small cog, but you certainly played your role in some respects, causing the problems that we've got there now, especially the bitterness amongst the people.
HUTCHISON:
Can we just get to your question please.
CALLER:
Yeah the question was Mr Howard, would you do anything wrong? Did you do anything wrong? If you had it again, would you change the way you did things, would you stand up and say there were weapons of mass destruction on every corner, as you seemed to imply a couple of years back?
PRIME MINISTER:
Well like every other person in public life, I've made my mistakes and done a number of things wrong. As far as weapons of mass destruction were concerned, the intelligence assessments we had at the time, supported the claims we made and the inquiries subsequently made found quite affirmatively that there had been no political manipulation of the intelligence, so I reject that claim. A lot of people accepted intelligence. At the time of the commencement of the Iraq war, the argument between myself and the Labor Party here was not whether there was weapons of mass destruction, everybody said there were; even Jacques Chirac said there were, the argument was how we dealt with it. Some people wanted a further United Nations process, others felt that the resolutions already passed by the United Nations were sufficient.
As far as the AWB is concerned, well let's wait and see what Mr Cole says about that. We're the only country in the world who established a Royal Commission to examine the facts. I appeared before the Royal Commission, and along with my Ministers, gave evidence on oath. As to the current conflict in the Middle East, I don't really think Australia's involvement in Iraq was the reason why Hezbollah is opposed to Israel and captured those Israeli soldiers and went across the Israeli border and caused the understandable response from Israel. I don't think that's got anything to do with George Bush, or me, or Tony Blair, or weapons of mass destruction.
HUTCHISON:
Mr Howard, Federal Resources Minister Ian Macfarlane has totally rejected a West Australian Government plan to siphon off ten to twenty per cent of off-shore gas reserves for domestic use. Why can't we do that here?
PRIME MINISTER:
Can I tell you I'm not quite sure of the context of that proposal.
HUTCHISON:
Well the concern is, ever since the North West Shelf...
PRIME MINISTER:
I do know.
HUTCHISON:
You understand it?
PRIME MINISTER:
Yeah, but I know of a belief on the part of the West Australian Government that there should be some special arrangement, often in relation to revenue for Western Australia. Our view is that these are assets of all of the Australian people and they're not assets just of Australians who live in Western Australia. They are national assets and they should be dealt with in accordance with normal principles of the explorer and the owner of the resource in entitled to sell the resource in whatever manner that person regards as appropriate. Because in the end, if you are to continue to encourage investment, you shouldn't put fetters on what the investor can do with the product that he or she discovers.
HUTCHISON:
I understand the argument here is that the gas makeup of our use here is much higher than it is in the eastern states where more coal is used, so at a time when the economy is booming, there's this question, why shouldn't the Government be able to keep domestic gas prices a little lower in Western Australia?
PRIME MINISTER:
Well I don't think that the principle is so much that. I mean I can understand why Governments like to keep it lower, but I think the principle of governments interfering and telling somebody who's invested their money in finding something and developing something how, and to whom it should be sold.
HUTCHISON:
Prime Minister, you've told State Health Ministers to leave the issue of junk food advertising to the Federal Government. Why shouldn't they have been discussing it with great enthusiasm and concern at their Health Ministers meeting yesterday?
PRIME MINISTER:
Well I have been hideously misrepresented on this issue. What I said in a letter to Mr Beattie was two things. I said that we were working very close with the industry about a new food labelling protocol and we were making progress on that, and secondly; in relation to television advertising of junk foods, the Commonwealth remained of the view that there should not be mandatory restrictions and that a code of practice should be adhered to and developed and therefore we didn't think the issue of restricting TV advertising should be put on the agenda. But people can talk about the issue, I mean we talk about the issue of obesity all the time.
HUTCHISON:
But that argument that they were putting forward was that they think there should be some kind of...
PRIME MINISTER:
Yeah well we don't agree with that, but that doesn't mean to say people can't talk about the issue. And this ridiculous claim being made that I'm trying to stop people, gag people from talking about obesity, what I'm saying is that it's very undesirable for there to be compulsory restrictions on what TV stations can advertise in this area. It's better to have a voluntary code. But we've put hundreds of millions of dollars into fighting obesity. We have an obesity program in the state schools, we have encouraged with money a lot more physical activity in schools, so they really are gilding the lily.
HUTCHISON:
Well the only plus to come out of it was probably Mr Beattie saying he knows you don't have a weight problem, but he does.
PRIME MINISTER:
Well I don't comment ever about anybody's physical appearance, never. That's a matter...I don't have any comment on that.
HUTCHISON:
Okay thank you very much. Let's go to Dick. Good morning Dick.
CALLER:
Good morning.
HUTCHISON:
You're talking to the Prime Minister Dick. Fire away.
CALLER:
Thank you. Prime Minister, good morning and welcome.
PRIME MINISTER:
Thank you.
CALLER:
Many months ago a TV documentary highlighted the impact of poor dental hygiene on health generally.
PRIME MINISTER:
Yes I saw that.
CALLER:
And a conservative estimate was that it costs Medicare at least $2 billion to deal with the conditions that poor dental hygiene contributed to. Why couldn't at least $2 billion be put straight into subsidising dental care on Medicare and hit two birds with one stone?
PRIME MINISTER:
Well the responsibility traditionally for public dental care has been a state one. There was a program introduced by the Keating Government in the last few years it was in office to help the states with the backlog in relation to public dental care, and we think that program made a contribution. But we took the view that it was historically the responsibility of the states.
CALLER:
But who pays for Medicare?
PRIME MINISTER:
Well we pay for Medicare. But I'm getting to the $2 billion thing. I'm not, whilst I do recall that program and I do acknowledge fully that there is a backlog in all state dental clinics for people who can't afford dental treatment. And I think that is a backlog that is deserving of criticism but it is a state responsibility. You've asked me about it, I have to say that. I'm not sure that the $2 billion figure is necessarily accurate. It might be, but I don't have any advice to hand that suggests that it is. What you're saying is you put $2 billion into Medicare and you take over the responsibility of stopping the delayed dental treatment. Well the only difficulty with that of course is that we'd be relieving the states of a responsibility that they've got adequate GST resources to discharge.
HUTCHISON:
Hello Gordon.
CALLER:
Hi. Good morning Prime Minister, Good morning...
PRIME MINISTER:
Good morning.
HUTCHISON:
Good thanks, what's your question.
CALLER:
Firstly I'd like to say how great it is to live in a democracy that I get to ring the Prime Minister on the radio and ask him some difficult questions. They're two questions in one, it's to do with oil and bananas, to do with the tax. One, there is a method you could use to reduce the cost of oil, which is to cap the federal income tax on it, and two; I've had the benefit of going to New Zealand quite a lot in the last few weeks and buying bananas at 88 cents a kilo because they're imported from the Philippines. At what point do, the threshold, do we cross to protect the subsidised industry here, as opposed to feeding people bananas in Australia at a decent price?
PRIME MINISTER:
Well can I answer the first question. The federal income tax, or its excise, is capped. The excise does not go up as the price of petrol goes up, the excise is levied on a volumetric basis, not on an ad valorem basis. In other words it's a fixed amount, no matter what the price per litre petrol is. It's 38 cents a litre.
CALLER:
I guess there's a GST component there.
PRIME MINISTER:
No well hang on, I'll come to that in a moment. All of that of course goes to the states, every last cent of it. It is true that they're collecting more GST on petrol, but they're collecting less GST on other items because people having to pay more for petrol have less money to spend on other things that attract GST. So it is arguable whether the states are that much better off GST-wise in relation to petrol. In relation to, yes you could import cheaper bananas. The only problem with that is there are still some quarantine issues regarding that, and of course there are a lot of people in Australia who are very nervous about import competition in areas such as this. We have a science-based approach to quarantine and we're not going to relax our standards in quarantine just because we have a banana shortage. I think that would be counterproductive.
HUTCHISON:
Our time is running short. Kate, I think you might be our last caller. What's your question to the Prime Minister?
CALLER:
Oh good morning. As a fifth-generation Australian. I'm very nervous.
PRIME MINISTER:
Please don't be.
CALLER:
I'm fed up with people living overseas on dual citizenship and the minute they get into trouble they call on our Government to bail them out. I'd like to know did these people in Lebanon have their return fares to Australia organised before they got into trouble? And if so, is the Government compensated in some way from whoever they had their return fares booked with?
HUTCHISON:
Thanks Kate, we might let the Prime Minister answer that.
PRIME MINISTER:
Well the answer very quickly is that in some cases they did and in those cases where they did a condition of our bringing them back at taxpayers' expense was that if there was a return ticket, they had to refund the money to us to reimburse the Government for the cost of bringing them back. In relation to people who have dual nationality, there are five million Australians, an unbelievable figure, who have two passports, dual nationality. The two largest groups are those from the United Kingdom and from Greece and it's a product of the fact that many countries, including Britain and Greece and many other countries allow their citizens to become citizens of Australia without surrendering their citizenship of their countries of birth. I think, from a practical point of view, it's not something that we should, or would seek to alter in any way. I do understand how you feel though. If people get into a bit of difficulty overseas there's a tendency on the part of some to immediately say you know 'what's the Government doing? They should get us out.' In fairness to the people who we brought back from Lebanon, you might have noticed on television, almost all of them, when they arrived at the airport, expressed their great gratitude to the Government and said how glad they were to be back home in Australia. So I think the people who whinged, if I can use that expression because we know precisely what it means, the people who whinged were the self-appointed spokesmen for the community, rather than the people who were affected.
HUTCHISON:
Mr Howard, I spent a long time last night trying to think of intelligent and clever ways of asking leadership questions of you. I sense you're bored by the question. I sense that our listeners are bored by the question. I sense also that Peter Costello knows the answer. For the benefit of our audience, the Prime Minister is now looking at me with a smile on his face, but with no intention of saying much more. There's speculation in The Australian this morning that you are about to declare your position at a Coalition meeting before Parliament sits again.
PRIME MINISTER:
The one thing I would say about that report in the Australian this morning is that it accurately says that there is a special Joint Party Meeting on the afternoon on the 7th of August and that special meeting was fixed by me weeks ago before certain recent events and comment about the leadership of the Government. And the purpose of that meeting, which incidentally is of both the Coalition Parties, the Liberal Party and the National Party, is to allow members talk in a free-ranging way about the direction of the Government and about Government policy.
HUTCHISON:
Will you be announcing your intention to lead the Party to the next election?
PRIME MINISTER:
I don't have anything to say additional to what I've said on that subject in the past.
HUTCHISON:
Mr Howard, thanks for your company this morning.
PRIME MINISTER:
Thank you.
[ends]