SPEERS:
Prime Minister, thanks for your time. This poll out this morning shows that more than 90 per cent of voters think you should be doing more on renewable energies and more than 70 per cent think you should sign Kyoto. Are you out of step with voters on this?
PRIME MINISTER:
No, let's...to start with this was an online poll, it wasn't one where people were rung up and properly sampled so I think we have to discount it to an extent because of that. However, it is natural with all the focus of the last few days on climate change that everybody when asked say oh yes, we've got to do more. We are doing a lot and it's very important that we don't over-react to the Stern report. The Stern report says what most people believe and that is that the science says climate change is a problem. Whether the doomsday scenarios painted in the Stern report are right or wrong I don't think anybody can assert with great confidence. I agree that the science says that the globe is getting warmer, I agree that over time we've got to take measures in order to tackle that problem and I think the best way to go in the short term is to clean up the use of fossil fuel and that's very important for Australia. That means investing in clean coal technologies and things that will ensure that we maintain the natural advantage we have as a country. We mustn't throw that away, we mustn't by over-reaction and panicky reaction impose burdens on industries that give Australia enormous advantage.
SPEERS:
You've said that we shouldn't over-react to the Stern report, but this is one of the most thorough examinations of the problem, do you doubt the main findings that the world is facing a huge economic cost from the threat of climate change?
PRIME MINISTER
Well I reserve judgement on whether the predictions of the scale of the crisis are accurate or not. I accept that the world is getting warmer and I accept that we do need to take action to reduce greenhouse gas emissions, but it is possible to simultaneously agree with that but be a little sceptical or reserved about the dimension of the disaster that's being spelt out. I mean, Mr Beazley's embraced it all and say's it's absolutely 100 per cent correct, well what is his plan to do something?
SPEERS:
He'll sign Kyoto...
PRIME MINISTER:
Well that will achieve nothing. I mean that's just signing a piece of paper. Kyoto only includes half the world's major emitters and if we had signed Kyoto we would have taken risks and assumed burdens that our competitors haven't and that would have put this country at a disadvantage. But what we need to do is embrace practical measures. I am a great believer in doing practical things and I noticed in this morning's newspapers that so are Mr Beattie and Mr Bracks. Mr Beattie said that investing in clean coal technology is the best thing we can do at the moment. That is exactly the policy that I've been advocating for more than two years.
SPEERS:
Still, it could take some time before those technologies are practical.
PRIME MINISTER:
Yes, well signing Kyoto, I mean, there's a mantra and a mythology about Kyoto. The impression is being created that you solve the problem by signing Kyoto. If we were to sign Kyoto tomorrow, it wouldn't represent a practical measure to reduce greenhouse gas emissions over the years ahead. If, on the other hand, we invest in clean coal technology which we are doing and Mr Beattie and Mr Bracks support, then that is a practical measure. I'm all in favour of trying to get a new Kyoto and that's one that includes everybody and I can then be certain that our country is not disadvantaged. I mean what we've got to understand about this is that our position is very different from that of countries like Britain and other European countries. We rely very heavily on coal, not only to generate our own electricity but as a major export earner and people have to understand that if major immediate measures were taken to change the situation we'd run the risk, a huge risk, of burdening those industries with additional costs...
SPEERS:
Isn't Stern warning that we face huge risks if we don't...
PRIME MINISTER:
Yes, but it's easier for countries that don't depend for their livelihood on these industries to tell those who do that they have to take measures. What we have to do is understand there's a problem and what we have to do is invest in technology to reduce the problem, we also have to be broad-minded enough to look at nuclear power as an alternative. It's not an alternative now because dirty coal, that's coal that is emitting the problem, is clearly the cheapest source of power generation in this country, but there will come a time as we require coal to be used in a cleaner fashion, that it's use will become dearer and it's at that point that something like nuclear power comes into the equation.
SPEERS:
What about a carbon trading scheme, are you ruling that out altogether?
PRIME MINISTER:
I would be willing to look at an emissions trading system around the world of which Australia were part, but it would have to include the nations of the world. It's no good us subjecting ourselves to a carbon pricing system that is not matched by our competitors, we only then run the risk of investments going to other countries.
SPEERS:
And yet, Professor Warwick McKibbin, a member of you own nuclear review team, says you should be embracing a national carbon trading scheme, that you can't simply wait for a new Kyoto, a new international agreement.
PRIME MINISTER:
Yes, I've seen that report, and I respect Professor McKibbin a great deal, but the difficulty, as I see it, with that approach is that in order to preserve our comparative advantage, we'd have to in some way exempt our coal exports and our other resource exports and if we did that we might run the risk of imposing a disproportionately heavier burden on our domestic consumers which could result in even higher electricity prices. I mean, what people have got to understand is that we're now in sort of the easy stage of the debate where everybody's grabbing hold of the rhetoric and everybody's saying oh this is terrible, we've got to do something and they say oh well let's sign Kyoto and that solves the problem. It doesn't solve anything. And that is essentially what Labor is saying. Sign Kyoto and everything will be solved. Well that's nonsense. What people have got to understand is that if you put a price on carbon, you are going to make the use of product generated by the process that emits carbon; you're going to make that dearer.
SPEERS:
You don't think people want to do that?
PRIME MINISTER:
Well I think people over time will adjust and they will have to accept that things will become more expensive. There is no easy way, but I don't want a situation where our country is panicked into doing things that put a disproportionate burden on us. And I heard a representative of the coal mining union on radio say this morning, and I agreed with him, he said we've got to be careful about panicky reactions, he said, otherwise investments will just flow to countries like China and Indonesia.
We need a balanced approach. I want to take action, I want to take the Australian people along with me, but we need an approach that achieves the goal but doesn't disproportionately hurt Australia. I mean that's the view that Mr Beattie has. I mean Mr Beattie was fascinating this morning and he was saying that you need clean coal technology, it's better and more effective than renewables. Now I think renewables are part of it, but Mr Beattie is right, and Mr Bracks is right, and both of them are saying what I have been saying now for several years; that we have this enormous natural advantage in coal, so our first priority in the immediate future should be to reduce greenhouse gas emissions from the use of coal. And that is exactly what AP6 is about. It's exactly what the initiatives announced over the last couple of weeks have all been about, reducing the dirty emissions that come out of the use of a resource that we have in abundance.
SPEERS:
But just back on the question of public opinion, do you think it is simply the caf‚ latte set who want to sign Kyoto?
PRIME MINISTER:
That's your expression in relation to this. What I'm saying...
SPEERS:
It's also the expression of Greg Hunt, one of your Parliamentary Secretaries that it's only the caf‚ latte set that Beazley is appealing to.
PRIME MINISTER:
You asked me about public opinion. It is natural that public opinion would be saying do things, do that. My responsibility is to listen to the public, but it is also to take decisions that I think on the merits are in the public interest and it's not in Australia's interests to be panicked into measures that will hurt industries that give our country a natural advantage. People have got to understand that providence has given us an enormous natural advantage because we have gas, we have coal, we have uranium, we have all of these things and I do not intend to allow this whole debate to impose upon those industries unfair burdens. They have to shoulder their share of the burden and if we are to tackle this problem over time, things will become more expensive. It is unavoidable.
However, it has got to be done in a way that doesn't unfairly burden Australia and every time Mr Beazley gets up and says well this is a crisis he ought to be asked well what does he intend to do? Does he support a carbon tax? Does he support other forms of taxation? I mean you can't simultaneously say the thing's a crisis and the world is about to come to an end, and just say oh well, people will adjust.
I mean I'm not saying the world is about to come to an end. I'm acknowledging that there is a problem, but I think we need a measured and balanced response that reduces greenhouse gases but does it in a way that doesn't unfairly burden or hurt Australia. And I am going to stick up for Australia's interests in this, I'm going to stick up for Australian jobs and Australian investments. And I'm going to stick up for the things that we have a natural advantage in. They've got to change, they have got to adjust over time, but not in a way that robs us of a great natural advantage.
SPEERS:
Prime Minister there are reports this morning that two of the Australians arrested in Yemen on terror related charges were under investigation for an alleged suicide bomb plot at Kings Cross train station in Sydney. Are you able to confirm that?
PRIME MINISTER:
Well I am not able to go into that, obviously you appreciate for security and other reasons it's always wise for people in my position to avoid confirming or denying these things. I can say in a very general fashion that because of the skill and the sophistication of our security and police services, we're always looking out and guarding the national interest. But if there are further things that can be said on that, they will be said, but at the moment I am not in a position to confirm or deny those reports.
SPEERS:
The head of ASIO Paul O'Sullivan said overnight he's surprised at the number of Australians, I guess, willing to inflict damage on their own country.
PRIME MINISTER:
Yes I did hear that and it's a reminder that terrorism is a threat. It's a reminder that this country can face a terrorist attack. It's a reminder that there are people with extreme views in our society. It's a reminder that the laws we've passed have been absolutely necessary and it's a reminder that those who regard us as having over-reacted are quite wrong and they are ignoring the changed world in which we now live.
SPEERS:
Is there ever any fear in your mind that there's too much incitement of fear over this issue and perhaps alienating young Muslims in Australia?
PRIME MINISTER:
No I don't. I think this business of alienating young Muslims is absurd. I mean the alienation that's occurring in relation to the Muslim community right at the moment is coming from Sheik Hilali and I have to say that the failure of the community to resolve this issue is daily doing damage. And I can't, and I won't try to remove him from a position that is not a gift of the Government or the gift of all of the Australian people. It's a position within his own community but I've said repeatedly and I have to say it again that unless this matter is resolved, and time is running out to resolve it, there will be left a sadly diminished view of the willingness of the Islamic community to integrate into the broader Australian community.
What he said was unacceptable. It can't be excused, it can't be fobbed off through bad interpretation and misunderstandings and so forth. I mean that is not credible. Nobody believes that and the remedy lies in the grip of that community. And I just ask them to understand, and I say this with the greatest of goodwill and I say it as a Prime Minister of a country who wants to see them fully integrated as part of our society, that the failure to act on this is daily doing damage to the perceptions of the community and there will be people who will say you're not doing anything about it because half of them agree with him. Now that's terrible.
SPEERS:
Well some of them are holding a rally this weekend in support of Sheik al Hilali. Would it concern you if we do see hundreds of people turn out in support? Would you be urging them not to show support?
PRIME MINISTER:
No, look, people are entitled to lawfully and peacefully assemble in public in this country and I will defend their right to do that, it's part of our democracy. That is not the issue. There are 300,000 people of Islamic faith in Australia so a few hundred gathering in Lakemba, or even a few thousand, is not going to speak of the view of the total community. But I do believe that the great mainstream of the Australia community is seeing this as a test of the bona fides of that community to deal with these issues. You cannot allow these sorts of remarks and this kind of stance to go unrebuked. He carries the title of the Imam of Australia, and when he goes overseas he carries that title. Now we just can't allow this issue, it oughtn't to be allowed by the community, to just be buried and I'm afraid if it's not fixed then the rest of the community is going to reach a very negative judgement and I think that would be tragic.
SPEERS:
Prime Minister, Fiji, the situation still has not been resolved there, have you held any further talks with your counterpart?
PRIME MINISTER:
No, I had a long talk with him a couple of nights ago and everybody knows where we stand. We do not want a military coup. We call on the Fijian military to observe the constitution of that country. Whatever he may think, that's Bainimarama, the head of the military, whatever he may think about this legislation, it is the legislation of a lawfully elected government. It now includes people from the Opposition and Qarase has brought the Fijians and the Indians together in a way that many people thought not possible a few years ago. He's the proper constitutional democratically elected Prime Minister and there can be no justification at all for a military coup. It would be unconstitutional. It would be universally condemned by countries in the Pacific region. I've spoken to Helen Clark, the New Zealand Prime Minister, she shares my view. I've heard Colonel Bainimarama on the radio this morning. He can have all the views he likes but in our system of democracy and Fiji's system of democracy, the military is answerable to and subservient to the civilian government. I mean it's a cornerstone of our system.
SPEERS:
He's even raised the prospect of bloodshed and violence....
PRIME MINISTER:
Well I thought that was particularly unhelpful and indicative of a man who is obsessed with his own personal views on issues rather than the long term interests of the country. It cannot be in the interests of Fiji to have a military coup. It cannot be in the interests of Fiji to have a military commander talking about bloodshed. Heavens above, the economy in that country is recovering. It's got a tourist industry that's booming. I've just been to Suva, just about every second person there was an Australian tourist and they're bringing their families, they're bringing money, they're bringing hope and prosperity and investment to the tourist industry and these people are talking about a military coup.
SPEERS:
If there was a violent situation there, would Australia have a role to play to restore peace?
PRIME MINISTER:
Well we are taking precautionary steps to make sure that we can look after our own citizens.
SPEERS:
But what about helping restore...
PRIME MINISTER:
Well, look, it's a foreign country and we respect the fact that it is a foreign country. We don't run around interfering where we're not wanted but we are obviously in a position to help in relation to our own people and let's just see how the situation evolves. I mean the Fijian Prime Minister made it clear this morning that he wanted to handle the situation himself and that's a position I respect.
SPEERS:
We have, of course, forces in East Timor and the Solomon Islands as well, what's going wrong in the region?
PRIME MINISTER:
Well I think all the situations are different. I mean Fiji had its first coup in 1987, so you can't say it's a recent phenomenon. That was the Rabuka coup...
SPEERS:
But Australia's aid policies are directed at trying to prevent these sorts of things happening aren't they?
PRIME MINISTER:
No, not...I mean yes and no. The origins of the Fijian situation lie in areas unrelated to our aid program. As far as the Solomon Islands is concerned, there is local resistance to the implications of our aid program and our aid program says that the aid is conditional on better governance and improved economic performance. And as that process spreads through the community it creates a bit of resistance.
SPEERS:
Prime Minister back home, next week the experts are saying rates will go up, do you think they will?
PRIME MINISTER:
Well that's a matter for the Reserve Bank. I mean I made some comments about this last week and I stand by those comments. I can tell you this; that the housing interest rate at the present time is what about seven and three quarters per cent, it was at a high of 17 per cent when Mr Keating was the Prime Minister.
SPEERS:
I think your comments last week were almost justifying a rate rise...
PRIME MINISTER:
No the point I made was that if there are inflationary pressures in the community and a rate rise that suppresses those inflationary pressures and thereby removes the need for a bigger rise later on, would be a rate rise that the Reserve Bank might think is justified. I mean, well look, there's no...they haven't made a decision yet and...
SPEERS:
Do you think there are those inflationary pressures....
PRIME MINISTER:
Well there are some, there are some inflationary pressures, they're not great, but there are some inflationary pressures and they are the product of an exuberant economy. They're not the product of the skills shortages that Mr Beazley keeps talking about because the former governor of the Reserve Bank, in his final testimony to the House of Representatives Committee, said that the skills shortages had not created any significant wage inflation and it's wage inflation that creates a problem for interest rates because wage inflation feeds into general inflation. And what Mr Macfarlane said was that although there were skills shortages, they hadn't had any appreciable impact on wage inflation. So this whole argument that's been run by Mr Swan and Mr Beazley, that the problems we now have are because of the skills crisis, that's not the view of the former Reserve Bank governor. We do have a shortage of skills, but the wage figures are not suggesting that that shortage is leading to massive wage inflation.
SPEERS:
Can you assure homebuyers that you are doing and will do everything to keep downward pressure on inflation over the next 12 months leading up to the election?
PRIME MINISTER:
I can certainly do that and I can certainly assure them of one other thing, and that is that interest rates for housing will always be much lower under a Liberal government then under a Labor government and....
SPEERS:
You can't prove that though?
PRIME MINISTER:
Well I can, I can point to what happened when they were in office, I can...
SPEERS:
And they can point to what happened with....
PRIME MINISTER:
Well hang on, the last quarter of a century you've essentially had a Labor Government for 13 years and a Coalition Government for almost 11 years and the track record is there for all to see. Under them, rates hit 17 per cent for housing, we're talking about, and under us, at the present time, they're seven and three quarters, so I can prove it by a comparison of what's happened over the last quarter of a century.
SPEERS:
But what did they peak at when you were Treasurer?
PRIME MINISTER:
Housing rates? They were subject to a peg, authorised regulated housing rates were subject to a peg. I mean the last 25 years....
SPEERS:
What did they hit?
PRIME MINISTER:
Well under housing they were pegged at 13 per cent, the regulated rate was pegged at 13 per cent. It wasn't a very workable system, I accept that and in fact it's a system that I argued to get rid of. But if you're looking at the last 25 years, which is the relevant experience for most Australians because housing loans don't normally last longer then 25 years David, so I think we've got to have a sense of proportion about this. You compare them, there's no argument that....about the track record and I can prove it by pointing to those figures. 17 per cent versus seven and three quarters, I think that's a big difference and that's why I can look people in eye and say they'll always be lower under us then under them.
SPEERS:
Okay, Prime Minister thanks for your time.
PRIME MINISTER:
Thank you.
[ends]