LAWS:
Prime Minister good morning.
PRIME MINISTER:
Good morning John.
LAWS:
And thank you for your time. You've jumped on this idea of a $2000 subsidy for LPG conversion and that's good if you own a motor car that's suited to LPG and is of value that makes it a viable proposition. But to me, it seems discriminatory. What have you got to offer the hundreds and thousands of battlers out there who own a car worth $6,000 to $7,000? It's not worth their while to make the switch. So they're being discriminated against.
PRIME MINISTER:
Well there's no easy solution to this problem and I don't hold out the LPG subsidy as being a silver bullet, as being the answer to high petrol prices. It's doing something at the margins to help, I suspect, a reasonably large number of people. I guess the best way of helping people in relation to high petrol prices generally is to put more money in their pockets through things like tax cuts. I remember at the time of the Budget, there was a debate about whether there should be a cut in the petrol excise. I don't mean a debate within the Government; I mean a debate in the community. And I said at the time, as did Peter Costello, that we both thought the best way of helping people a little with high petrol prices was to make sure everybody got some tax relief, because that's putting money in the pocket, and people can then use that money in whatever way they think fit. Now I'm not representing to the community that what I announced yesterday is an answer to high petrol prices. What I announced yesterday will help at the margins. There is no cure-all answer to high petrol prices, absent a fall in the price of crude oil, which of course is influenced by forces beyond our control.
LAWS:
Yeah well it just seems to me, that like the tax cuts it's higher income earners that have done well here. The battlers with the $6000 or $7000 motorcars, sure they got the tax cuts, but so did the people with the BMWs. So it means that those people who are the real battlers, the people that a Government should be looking after, are not being looked after.
PRIME MINISTER:
Yes but some people, who would regard themselves as battlers will take advantage of the LPG conversion.
LAWS:
But a lot won't be able to.
PRIME MINISTER:
Well some won't be able to. I accept that, but that is the case with lots of these things. And what we have to try and do is find ways where we can help at the margin.
LAWS:
Well how are you going to help those people?
PRIME MINISTER:
Well we did provide them with some assistance in the Budget in relation to tax cuts.
LAWS:
Yeah but everybody got that.
PRIME MINISTER:
Yes I realise that, and so everybody should because people on higher incomes pay a higher level of tax because we have a progressive taxation system, and we think that's justified. John, I don't pretend that what I announced yesterday is a full answer and in a way, yesterday's statement was a work in progress. If there are other ways of providing assistance at the margin, particularly for low income people we will examine them. But short of some further general taxation relief, and I'm not sure, given the strength of the economy and the potential for overheating at the moment that there's a lot of wisdom in that, just at the moment.
LAWS:
Would you agree however that it is discriminatory?
PRIME MINISTER:
No, I wouldn't agree it's discriminatory.
LAWS:
But it is.
PRIME MINISTER:
No, I don't think it's discriminatory to help as many people as you can reach with a particular measure. I think if we said when we're going to have a measure that doesn't reach low income people or a particular section of the community, then that would be discriminatory. But even some people who have cars worth only $6000 or $7000, I mean there's a lot of people who, for any combination of reasons, might have a car. It might be their second car that's only worth $6000 or $7000. It may be a young member of a family who's bought an old car as his or her first investment and they are not, because of their family circumstances, regarded as battlers. And they might decide to, the family might decide to invest in the conversion and pick up the $2000 subsidy. So it's not quite as black and white as all of that.
LAWS:
Yeah, but you agree that it must be discriminatory if some can get it and some can't?
PRIME MINISTER:
Well John, on that definition anything that isn't taken up by everybody in the community because it's not in everybody's financial interest to do so is discriminatory.
LAWS:
Of course it is.
PRIME MINISTER:
But I don't accept that as a reasonable definition. I said on that definition I don't think that is a reasonable definition.
LAWS:
Prime Minister, with great respect, it simply means that some people can get the subsidy of $2000 and other people can't. So the people who can't are being discriminated against.
PRIME MINISTER:
No, I think somebody's being discriminated against if the rules of eligibility disentitle that person.
LAWS:
Well they do in this case.
PRIME MINISTER:
Well I don't. Because we haven't actually said well we're not going to make this available to people with cars at a certain value or people at a certain level of income.
LAWS:
Would you consider providing cash assistance to families who are struggling with the high cost of unleaded and have no alternative but to use it?
PRIME MINISTER:
Well I think trying to administer a scheme of that character, and I have frequently been interviewed by many people, I guess, even yourself about the complexity and the red tape, and the paperwork involved in a system of assistance that has too many ifs, buts and maybes. And those sorts of schemes really are a nightmare. It's one of the reasons why the operation of income tests in relation to many benefits are regarded as a nightmare, although very necessary. We will continue to look at different ways of helping people, but I don't, with respect, accept that this is discriminatory. I acknowledge that not everybody will make a decision to take it up and I also acknowledge...
LAWS:
No, because they can't.
PRIME MINISTER:
But that is true of many things. I mean people who have a, I mean, the first home owners grant is, on that definition, discriminatory because not everybody can afford to buy a home. Does that mean you shouldn't have it?
LAWS:
No, it doesn't mean you shouldn't have it, but it doesn't mean it doesn't discriminate against some.
PRIME MINISTER:
Yes but I don't think it attracts the odium of being regarded as a discriminatory measure. In fact, whenever I hear people talk about it now, they're normally asking that it be increased, not removed.
LAWS:
So these other people are just expected to keep forking out $1.40 or $1.50?
PRIME MINISTER:
Well I accept that some people will not be able to take advantage of it. I accept that. Or will choose not to. The Government will continue to look at other sensible ways of trying to assist those people.
LAWS:
Do you have anything in mind to assist these people, because while they're paying $1.40 or $1.50 a litre, their taxes are used to fund a bloke's LPG tank? I don't think that's fair.
PRIME MINISTER:
Yes, but their taxes are used to fund a lot of things....
LAWS:
But it will now include these LPG tanks.
PRIME MINISTER:
Yes I know, but that is an argument. You could say that people who don't have children pay taxes to fund benefits that go to people who do have children. I mean that is an argument that can employed to describe any number of...
LAWS:
Oh yeh, but having children is a fact of life. LPG gas...
PRIME MINISTER:
Well I think driving a car is a fact of life too and if the Government can provide, not in the same category of your children obviously, that's fundamental to our future, but I accept that, but however, for most people having a car is a fact of life. And I understand your point but I don't accept that because we can't cover every single section of the population with certainty, we shouldn't provide this extra help. Now I'm not representing it to be the solution, there is no solution to high oil prices, high petrol prices, until the world price of oil comes down, and that's having an impact on a hell of a lot of people, it's having an impact on the whole community. But it is something that is driven by forces beyond the Government's control. What we can control is whether at the margin we do different things in different ways to help people in the community and we think this measure will help. I'm not arguing that it's perfect, I'm not arguing it's the only solution, I acknowledge that some people won't be able to afford to take it up, although I suspect that that will not necessarily be governed by the value of the car they have, it could be governed by a number of factors, as I say not everybody who is...you can't directly relate a person's income position to the value of his or her car.
LAWS:
No you certainly can't, but of course somebody who has got a car that's only worth of $6000 or $7000 is hardly going to want to outlay what you say, will only be $500, but I think we're kidding ourselves if we think that these LPG installers aren't going to jack up the price when the demand increases, because they...
PRIME MINISTER:
Well I can't give guarantees about that.
LAWS:
No, I understand.
PRIME MINISTER:
And you will understand that the normal operation of a market and there is no way that you ever have sufficient resources lying dormant in an industry, waiting for a once-in-20-year opportunity to get a whole lot of extra sales. I mean it's obvious that there's going to be an increased demand for LPG units and it's obvious that that will put a strain on the supply. What impact that has on price, we'll wait and see. But, I mean, I accept all of those things, but in a difficult situation like this the Government has to look at ways it can help at the margin, it can't represent to the community that we've found some magic solution, because there's isn't, and I want to stress that to your listeners, and I'm not pretending this is a magical solution, but the public is saying to me, we're being hurt by high petrol prices, we understand that it is driven by world factors, but Prime Minister we want you to try and help in different ways at the margin. And that is what I'm trying to do.
LAWS:
I understand that.
PRIME MINISTER:
And this is a work in progress. We'll continue to examine other ways of trying to help, but I don't want people to think that I'm saying well look, you know, we've made this super duper statement and LPG conversion and a bit more ethanol and a bit more investment here and there in research, and we've found the answer. I'm not pretending that at all because it's a lot more challenging and unfortunately we're going to have to live with quite high petrol prices for quite a while into the future.
LAWS:
Can I ask you, why you couldn't say give a grant of $1000 to battling families to help them with their unleaded costs or a couple of thousand dollars to put an LPG tank in? That way either scenario's going to be of benefit and there's an extra reward for those who wanted to make the switch?
PRIME MINISTER:
Well, we're offering a grant to people irrespective of their circumstances. I mean the $1000 or $2000 is being offered and if you want to convert, we'll give you $2000, and that's available to everybody.
LAWS:
Yeh, but sadly the ones who....anyway we'll get off it...
PRIME MINISTER:
That is available to everybody, that's not limited. I mean the $1000 is when you're buying a new one that's got a factory-fitted LPG alternative, but if you have an old car and you want to convert to LPG we will give you the $2000.
LAWS:
Yeh, and it's still going to cost money, it's still going to cost...
PRIME MINISTER:
There will be something over and above that, yes. We don't think totally subsidising, fully subsidising the cost, we think the worry with that is that it will put even more pressure on price and could lead to a great increase...and what do we keep subsidising the difference? Some of these schemes can get out of hand. And as I say it's not perfect, but it's a genuine effort to try and assist at the margin.
LAWS:
Yeh, my only problem with it is it seems to me that the people who need the help most are not going to be able to get it. Why do you say to Jakarta, which is warning this morning that the decision to scrap the asylum seeker legislation will open the floodgates to more arrivals, you've been called a coward this morning for not choosing to fight for your bill - I saw it as a smart political move on your part to stop it when you did because it was a waste of time to continue with it - is that your belief?
PRIME MINISTER:
What, that is was...
LAWS:
A waste...
PRIME MINISTER:
Oh well it was very clear to me that it was going to be defeated. I spoke to one of our Senators yesterday morning, and I was told that that Senator was going to cross the floor and I can count, I came to the conclusion that it was a complete waste of time going ahead with it. Now I pulled it, I think that was the sensible thing to do.
LAWS:
Isn't that democracy?
PRIME MINISTER:
Of course it's democracy, I said that yesterday as well. I'm a Liberal and a democrat - small d - and I mean I wanted this bill, the world and his wife knows that I wanted this bill, but it was opposed by the Labor Party, root and branch, and several of our own, plus the other minor players in the Senate. So in those circumstances it was not going to go through and I saw no sense at all in having two or three days of debate about it. I thought the central thing was to acknowledge reality and move on, and that's what I've done.
LAWS:
Do you accept what Jakarta says, that it's going to open the floodgates to more arrivals here?
PRIME MINISTER:
I'm not sure Jakarta in the sense of the Indonesian Government is saying that, there are some spokesmen...look they have a domestic political audience and I'm not going to respond to the comments made by a spokesman for some section of the Indonesian Government. I have no doubt that our relationship with Indonesia will continue to be strong. I have a good relationship with the President. We don't always agree, we won't always agree in the future. The only observation I'd make, additionally, is that Indonesia has helped us stem the flow of boatpeople and part of the success we've had over the last five years, since 2001 in stopping a large number of asylum seekers coming to Australia, has involved Indonesian cooperation. And some of Indonesia's critics forget that. And that's an observation I would make to people who are prone to look at Indonesia in a hostile vein in relation to people smuggling, rather than to understand the dynamic involved in the cooperation of the Indonesian authorities in stopping boatpeople and people smugglers from setting out in the first place. Without Indonesia's cooperation our task would be harder.
LAWS:
Okay, Prime Minister I know you're out of time, I appreciate the time you've given us and as usual it's been good to speak to you.
PRIME MINISTER:
Thank you John.
LAWS:
Thank you.
[ends]