PRIME MINISTER:
Are there any questions you want to ask me? I think, perhaps I should start, I know the media are interested in the interest rate decision. As I indicated in my remarks, nobody likes interest rates to go up, but there was really no alternative for the Reserve Bank to make this adjustment given the inflationary pressures coming off such things as high fuel prices and the general strength of the economy. And I believe that by acting now in this relatively small amount, the Bank has done the right thing and it has forestalled the need for perhaps even steeper increases in the future.
JOURNALIST:
Prime Minister what do you say to those voters who you promised at the last election to keep interest rates at record lows?
PRIME MINISTER:
What I promised Jim was that interest rates would always be lower under a Coalition Government than they would be under Labor. If you are talking about that ad, I have actually had a look at that ad and that ad, the first thing on that ad says, keep inflation low and what the Reserve Bank has done today is to act in a way that keeps inflation under control.
JOURNALIST:
But it also promised to keep interest rates at record lows?
PRIME MINISTER:
You have a look at everything I said in the election campaign and you will find that I repeatedly said that under a Coalition Government, you asked me what I said in the election campaign.
JOURNALIST:
I asked you what you promised.
PRIME MINISTER:
Well what I promised during the election campaign...
JOURNALIST:
In those advertisements.
PRIME MINISTER:
Well I don't run away from what I said. What I said in the election campaign was that interest rates would always be lower under a Coalition Government than Labor and taking today's increase into account, let me give you the figures. Thirteen years of Labor, housing interest rates averaged 12 and three-quarters per cent and peaked at 17. Under 10 years of a Coalition Government housing interest rates have averaged 7.25 per cent, a five-and-a-half percentage points difference. Judge me on my record, look at the field evidence and that supports the proposition that interest rates will always be lower under the Coalition than under Labor.
JOURNALIST:
Doesn't today's interest rate rise show that you have mismanaged the economy?
PRIME MINISTER:
No it doesn't. It is never the case that interest rates never, no matter what the circumstances are, go up. It is a question of the level of interest rates over a lengthy period of time that is the measure of economic competence and economic management.
JOURNALIST:
Prime Minister do you owe Australia an apology?
PRIME MINISTER:
I don't owe the Australian people anything more than what I have committed to the Australian people and that is to manage the economy well. The idea that because there's one interest rate rise, that economic management collapses in a heap is an absurd proposition. Just remember if we are talking about interest rate increases, there's still a lot of people around remember Mr Keating and Mr Beazley's 17 per cent interest rate.
JOURNALIST:
Prime Minster do you think you will be able to promise the voters interest rates relief before the next election?
PRIME MINISTER:
I am not going to speculate about how they might move between now and the next election, I am not going to do that, I can't do that. What I can do is to commit the Government to following policies that keep inflation low and interest rates low and keep unemployment down. We have been very successful at that. On any measure, even despite today's rise, and nobody likes interest rates going up, but it stands to reason that if there are inflationary pressures in the economy, the Bank has no alternative but to act to respond to them and if they put off making a decision today then it would be worse into the future and they would be rightly condemned for not having done their job.
JOURNALIST:
Do you hope that after three interest rate rises since the election this is the peak in the cycle?
PRIME MINISTER:
Well I am not going to start speculating about the future, I will remind you that interest rates are much lower than they used to be under Labor and that our promise was that they would always be lower under a Coalition and the field evidence supports that. As to what they might be in the future, I am not going to start speculating.
JOURNALIST:
Mr Howard do you support the State Government's idea of a referendum on water in 2008, or should they act now?
PRIME MINISTER:
Well I think the whole debate will have moved on and it should have moved on before 2008. This country has to face the need to change its attitude and its habits in relation to water. I think state governments have been too slow to build new dams and that is not only here in Queensland, but around Australia. I think we have to face the need to recycle water in big cities like Sydney and also to capture the run off when there are storms. We have to completely alter our approach to the use of water and I think younger people understand this and I think growing numbers of people understand it. If you run a referendum in a particular part of the country, it is always easy to whip up concern, but I would have thought by 2008, if governments around Australia are doing their job, the whole debate will have moved on. If we are still arguing in 2008 about the desirability of recycling, then we have a big problem.
JOURNALIST:
Do you support recycled sewerage for drinking water?
PRIME MINISTER:
I support recycling full stop.
JOURNALIST:
So, you would have supported the referendum?
PRIME MINISTER:
If I had been a resident, if I had been a resident of Toowoomba and it is a beautiful city, one of the most beautiful inland cities in Australia, I would have voted yes.
JOURNALIST:
You were also talking there about a referendum in one part of the country, yet it was your Government which insisted on that referendum being held in that place. Was that a mistake to insist on that referendum being held?
PRIME MINISTER:
No I think what it tells us though is that it is very easy to run a fear campaign, that's what it tells us.
JOURNALIST:
But shouldn't you have seen that when you ordered the referendum?
PRIME MINISTER:
Well I think we all learn by experience.
JOURNALIST:
So you're not going to be doing it again?
PRIME MINISTER:
I think the whole country needs to have a big debate on water recycling and I intend to be a big part of it and I think it is long past the time when we should understand what a big problem water is in this country and that includes recycling, it includes dams, it includes a completely new approach, but most importantly of all, a fundamental understanding of how hard the problem is.
JOURNALIST:
Prime Minister, Mark Vaile is giving the Doha round one last shot as it were. How serious would it be for Australia were the multilateral round to fail?
PRIME MINISTER:
Well it would be very bad for our farmers because our farmers are the least heavily protected and subsidised in the world and we continue to lose out to the Europeans and the Americans and the Japanese who have much higher levels of subsidies than we have. The people who will suffer even more, of course, are the poor developing countries that export agriculture to the rich countries and struggle to do so against horrifically high barriers. And I am more angry in a way, or I am as angry on their behalf as I am on behalf on Australian farmers.
JOURNALIST:
What chance do you give this?
PRIME MINISTER:
I think it is very, very hard, but I give Mark Vaile full marks for trying.
JOURNALIST:
Will you be getting on the phone to people like George Bush, Tony Blair, Peter Mandelson?
PRIME MINISTER:
Yes, if that is, well I have of course over the years, in all of the conversations I have probably without exception with both President Bush and Mr Blair, I have argued the case. Unfortunately, with the European Union, every member state, in a sense, hides behind the decision of the collective. They, on an individual basis say, we're in there fighting for you John, but on a collective basis they say, well it is all too hard. I think the greater share of the blame for this latest breakdown has to be sheeted home to the Europeans. The Americans at least made a big offer and the Europeans failed to match it.
JOURNALIST:
Mr Howard what do you make of the situation in Cuba, do you believe there should be a smooth transition of leadership?
PRIME MINISTER:
Cuba? I think the family's got it tied up. I don't think there's much democracy in that place.
JOURNALIST:
I understand that some of the Muslim leadership, Ameer Ali today is calling for, I think it is the Muslim Reference Group, calling for the Government to rethink its proscription of Hezbollah. Is there any chance that you would consider it?
PRIME MINISTER:
Rethink our proscription of it, what as a terrorist organisation? No chance. Full stop. No chance at all.
JOURNALIST:
Prime Minister, on another matter, is it appropriate for those who manage the MCG to be hiring it out to the labour movement for 100,000-strong demonstration on your IR reforms?
PRIME MINISTER:
Well I think the people who run the Melbourne Cricket Ground should make those decisions. I don't presume to tell people who they should let it out to, I think that is entirely a matter for the management of the Melbourne Cricket Ground, it is not for me to say you should not give it to unionists, but you should give it to others. I only hope though that when the unions have this rally, they tell the full story, they tell those who attend that real wages have gone up 16.8 per cent under my government, whereas they went up by a miserable 1.3 per cent under Labor; that unemployment has hit a 30 year low and on top of that, average wage and salary earners are infinitely better off now than they were under a Labor union accord. Now if they tell the full story I think you will get a good rally.
[ends]