LAWS:
In our Parliament House studio, the Prime Minister John Howard. Good morning Prime Minister.
PRIME MINISTER:
Good morning John.
LAWS:
How are you John?
PRIME MINISTER:
I am very well.
LAWS:
Good. You're announcing a pretty ambitious scheme this morning aimed fair and square at those people who left school early, and it's a very, very clever idea, but it's a little late.
PRIME MINISTER:
No, I don't think it's a little late, but the old adage better late than never even if it is late. I don't accept that, but anyway, the important thing is the merit of it. And the merit of it is to address the fact that there are a lot of mature age workers, a lot of people who have been in jobs for a long time, who never got to year 12, never got their Certificate II level. If they could upgrade their basic qualifications they might then go on to do another course, they might then go on to do something else. And we're going to offer a voucher of $3,000. It will be redeemable in either a TAFE institution or a private training institution. We want to give people flexibility. It's going to cost a bit of money. We're going to have 30,000 places a year available and we're going to give priority to people who are already in the labour market, although if there are any left over out of the 30,000 we'll make them available to people who are currently out of the workforce, perhaps parents with young children whose skills have not been fully brought up to speed, or have gone down during the time they've been out of the workforce. And they can use this voucher to get their skills up to speed so that they will re-enter the workforce with great ease.
It's a contribution to the fact that we, because we've got such a strong economy at the moment, we do have a shortage of skilled people. You always do when you run a strong economy, there's nothing strange about that.
LAWS:
No, no.
PRIME MINISTER:
It's quite normal because an economy is meant to run at or near full capacity, it's not meant to have a lot of un-utilised skilled people sitting around doing nothing except drawing the dole. And this funny idea that you run an economy efficiently by having large reservoirs of unemployed skilled people waiting for the time when there's a surge in demand for them is ludicrous. It never works that way.
LAWS:
But we haven't got enough skilled people have we?
PRIME MINISTER:
No we haven't got enough skilled people and it's a problem all around the world. One of the reasons...
LAWS:
Well, is it really a problem all around the world?
PRIME MINISTER:
Yes it is. It is. Every developed country is short of skilled tradesmen. One of the reasons we don't have enough skilled tradesmen in this country, John, is that you don't get paid enough when you get qualified unless you get a job say in the Pilbara. The premium or the margin for a skilled tradesman is still not all that great. One of the reasons why people are prepared to live on the smell of an oil rag while they go through university is they know when they get a university degree, they will get paid a very heavy premium for their qualifications, whereas tradesmen don't.
LAWS:
Well given that that won't change, I mean the rate of pay won't change...
PRIME MINISTER:
Well the rate of pay could change if we continue to loosen our labour market and make it more flexible. One of the reasons why you have to have a flexible labour market is to allow an adequate premium to be paid for higher skills. And one of the reasons why there's not a big enough premium now is that the rather centralised wage fixing system that we had for a long time, tended to compress the margins paid for skilled workers. Now that's changing, and the fact that it is changing is a very welcome thing, but it's one of the explanations. The other explanation is that apprenticeships are too long. I've talked to a lot of businessmen and they say that the problem they have is kids start apprenticeships full of enthusiasm but then their mates who've got high paid, unskilled jobs can afford to buy a car, can afford to go out all the time and they are missing out on that and it causes many of them to drop out. We don't have any trouble getting people to start apprenticeships. A lot of them drop out, as they do drop out of university, and one of the reasons is that they are too long, and I hope the states can be persuaded to make apprenticeship courses shorter because in the end they're the ones who determine the length of the apprenticeship courses because they're the ones who control the accrediting bodies for apprenticeships when they've been completed.
LAWS:
If people have dropped out before year 12, and a lot have obviously done that, and taken these unskilled jobs because, for exactly the reason you gave, they make plenty of money, can buy a car and go out all the time. Why do you think they'd want to sacrifice that?
PRIME MINISTER:
Well I'm talking here about people who are in the workforce now and they keep that job, but they might take the time at night or some other time to do a course to improve their skills whilst continuing to work. We're not asking them to drop out of the workforce, we're giving them a voucher and they'll use that voucher at a time of their own choosing, I mean they probably would be able to arrange with some of their employers to blend that with their ordinary work responsibilities.
LAWS:
What about the length of apprenticeships, you agree that they're too long?
PRIME MINISTER:
Far too long, yes, far too long and we have to persuade the states, and they're talking about this and I'm pleased to note that at long last the New South Wales Government, for example, has agreed to support school-based apprenticeships. I mean I know it sounds strange, but in the year 2006 the largest state in Australia has until right now resisted having school-based apprenticeships and the reason for that is the unions don't like them and they're still very unenthusiastic about them, but if, for example, in the building trades, all the people I talk to in the Housing Industry Association tell me that the apprenticeship periods are far too long.
LAWS:
I would agree with that and I think most apprentices would too...
PRIME MINISTER:
I mean you're looking, in the main, at a four year course, many of them four year courses and that is ludicrously long and it's one of the reasons why young people might start and then drop out because often you can get a job at or equivalent to the wage you get paid when you finish your apprenticeship without having finished it and the incentive to complete it, particularly if it's a four year course, is simply not there.
LAWS:
What about, what about the Government subsidising the payment of wages to apprentices?
PRIME MINISTER:
Well one of things I'll be talking about today is giving some extra help to people who want to take up apprenticeships in a more mature age and we are going to propose a subsidy scheme for that which will be quite significant and that's another element of the package that I'll be unveiling, a subsidy to either the apprentice or the employer. See a lot of people get an unskilled job and then they say well look I'll now decide to become an apprentice, they might do it when they're 32, 33, 34 because if I do that I can perhaps then start my own business because if you've got the qualification you can start your business as a plumber or an electrician and this is what we want people to do but they suffer a significant fall in income if they go from being an unskilled person in a full time job to being an apprentice so we're going to provide some significant financial help in the first two years of that apprenticeship to try and bridge that gap.
LAWS:
With respect, is this really some sort of acknowledgement that your government hasn't done enough over the last 10 years that you've been in power, to skill-up young Australians?
PRIME MINISTER:
No because the number of people in apprenticeships has risen enormously in the time that we've been in government, it really has. I wouldn't accept that. There are now 403,000 apprentices in training and that's a 161 per cent increase on the figure in March of 1996. You go back to 1993 there are only 122,000 apprentices in training in Australia and it's now 403,000 so I don't accept that. I think it's an acknowledgement that because of the strength of the economy we have to do more. If the economy were not as strong we wouldn't have this issue because there wouldn't be such an excess of demand over the supply of skilled tradesmen. These are ordinary economic principles, and when an economy is growing as strongly as ours is and when you have a 30-year low in unemployment and when you have resources boom and when you generally have a very heavy demand for labour and an employees' market like never before, of course you're going to have some shortages. You also need to have a sensible skilled migration program that does allow you to bring people in from overseas on proper conditions and provided their wages are compatible with Australian wages which we insist on being the case, then, you have to have a balance of these policies. But this idea that any government would train a whole lot of people and have them sitting around with un-utilised skills against the possibility that some time in the future they would be needed to meet a surge in demand for skills, is just unrealistic.
LAWS:
Just quickly, what is your, all that stuff is very good, I think that will be applauded loudly and it should be, just what is your latest assessment on North Korea, I mean, what could the United Nations...
PRIME MINISTER:
Oh very bad, very bad. I think North Korea is a huge problem for the whole world. Nobody seems to be able to influence North Korea. Up until the last week, all of us assumed, well not assumed, we hoped that China's historic influence on North Korea would restrain her. That hasn't turned out to be the case. Now I do hope that the world can speak through the United Nations with one voice. But the options in a situation like this are limited. Nobody wants to look at military options. You can't take them off the table, you never do that, that's foolish, but nobody really wants to look at that as an option, but they are very limited and we are dealing with a seriously crazy regime.
LAWS:
Well his...you're certainly doing that.
PRIME MINISTER:
I mean this is not a rational person and this is not a rational regime. I mean a rational regime would do something about the starving children.
LAWS:
I was just going to say...
PRIME MINISTER:
I mean for heaven sake, a rational regime would sit down with the other members of the six party...in the six party talks and say, okay, we've got a problem, we'll do a deal with you, we'll stop all this nuclear nonsense and in return would you give us some aid? And they would get it.
LAWS:
But they're getting plenty of aid already.
PRIME MINISTER:
Well they're getting a certain amount of aid but I suspect if they very genuinely repudiated their nuclear ambitions they'd get a lot more aid.
LAWS:
Do we give them aid?
PRIME MINISTER:
Oh we give them some, yes, we give some food aid, yes, and I don't want to see that cut off. I can't tell you off hand what it is, the precise amount.
LAWS:
You see the thing is if sanctions are introduced, the sanctions would only affect those kids that are suffering from malnutrition?
PRIME MINISTER:
Well I think you can do these things in a way that doesn't, providing there's good faith on the part of the regime, now it depends, I mean if you've got targeted sanctions and the regime against which the sanctions are targeted manipulates them, then the poor have no hope and that's what happened in Iraq with Saddam Hussein when we had the Oil for Food Programme. I mean he manipulated that, he pretended that it was the fault of the Americans and the west, but in reality it was his fault, he used to manipulate it and calibrate it so that the supplies were not available and then he'd say, isn't this shocking and horrible, it's because of the terrible west. It wasn't because of the terrible west at all, it was because of the terrible Saddam Hussein.
LAWS:
Speaking of Saddam Hussein, I'm interested in George W Bush's attitude to this whole thing, I mean he was desperate to go into Iraq because of alleged weapons of mass destruction that turned out not to exist. And here we have proof of weapons of mass destruction and this time he wants the United Nations to handle it. Is not that a bit hypocritical?
PRIME MINISTER:
No I don't think it's hypocritical, I think he's doing sensibly what his critics said he should have done further in Iraq and that is fully exhaust the United Nations route. That doesn't mean to say that the United Nations route is going to work.
LAWS:
Do you think he should have done that in Iraq?
PRIME MINISTER:
I think he had exhausted it. I don't think he had any alternative. I mean of course I agreed with what he did in Iraq, I was part of it and I believed at the time, as did everybody, that there were weapons of mass destruction. And I know it's an old argument but I have to remind your listeners that the debate three years ago was not about whether there were weapons of mass destruction; Kevin Rudd said it was an empirical fact that there were weapons of mass destruction; everybody agreed there were, the argument was what you did about them and the argument of our critics was that we should wait interminably on a further United Nations process when we knew we would never get a concerted plan of attack, so to speak, in relation to Iraq or alternatively take the action that we did. Now that was what the debate was about. Now as it turned out the intelligence advice was wrong, but it was nonetheless bona fide, it was believed, it was acted upon and there was wide agreement across the political spectrum that those weapons existed. The debate was about how you reacted to the existence of those weapons of mass destruction, not about whether they existed or not.
LAWS:
Just quickly again because I know you've got a lot to do, you're running a country, which is more important then running radio programme, so very quickly....
PRIME MINISTER:
Always happy to talk to you John.
LAWS:
That's nice of you, thank you Prime Minister. What about this warning from the new Governor of the Reserve Bank, Glenn Stevens, he said interest rates are more likely to rise then fall, hardly music to our ears?
PRIME MINISTER:
No, but I think that's been said before and just listen to what he says again, ''they're more likely to go up than they are to go down''. Now the question of whether they move at all, either next month or the month after, a month after that will depend overwhelmingly on the latest advice about the inflation rate. The strongest point out of his speech last night was that as the new Reserve Bank Governor he saw his major role as containing inflation, and that's right, that is his major role because all the prosperity we now have will be put at risk if there's an outbreak of inflation. And there's always a danger when you have a strong economy that everybody will get too exuberant and there will be some rekindling of inflation and he's legitimately concerned about that. Now that's how I saw his speech.
LAWS:
Do you have a feeling?
PRIME MINISTER:
About what?
LAWS:
Interest rates.
PRIME MINISTER:
I think it depends very much on trend lines in relation to inflation. The September quarter inflation data will come out in the last week of this month, that will be quite an important figure, the Governor said that last night, everybody who, or anybody who follows this debate will know that that's quite a crucial figure. As to what's in it, well I don't know at this stage, it's too early to tell. It was abnormally high last time because of the impact of petrol prices. Petrol prices have moderated somewhat since then.
LAWS:
A lot.
PRIME MINISTER:
Quite a lot, isn't that welcome, but there's always a worry they could go back again. I think what's happened with petrol prices in the last few weeks, John, has driven home the reality, and that is they're governed by the world price of oil. The world price of oil has come down, so local petrol prices have come down. And that's good, and everybody's pleased about it, I'm pleased about it and I know how painful it has been for families and I'm very pleased that some of that pain has temporarily been eased. I can't promise they'll stay down, I don't control them, I wish I did but I don't.
LAWS:
What do you make of this situation involving the New South Wales RSL and this young flag burning kid?
PRIME MINISTER:
I think the RSL was trying to do the right thing.
LAWS:
Good.
PRIME MINISTER:
That's my, I think they were trying to do the right thing, it was risky but, I mean, whatever their motive was is, in a sense, immaterial. I think what they were trying to say well this bloke was very silly but I thought the imagery of a family of, you know, of plainly of Islamic, Middle Eastern background pushing up the Australian flag in their front yard, it's good. I mean, isn't that in a sense what we are trying to do?
LAWS:
I would have thought that was what we fought for.
PRIME MINISTER:
But you know I understand, I mean I do have that old fashioned reverence and passion for the Australian flag that so many people do, and I understand their reaction but I think, you know, looking through all of that, the RSL was trying to do the right thing.
LAWS:
Good. Okay Prime Minister I appreciate your time, you've been very generous and I look forward to talking to you again soon.
PRIME MINISTER:
Thank you.
[ends]