JOURNALIST:
Prime Minister I've got a question, what's your message to homeowners who are maybe losing their homes with the eighth consecutive interest rate rise tomorrow under your Government?
PRIME MINISTER:
I never want to see interest rates for housing go up. You're asking me, both as Prime Minister, as an individual, I never want to see them go up. But I have to accept the economic reality that occasionally a central bank does find it necessary to lift interest rates in the name of keeping inflation in check and guaranteeing our term prosperity.
JOURNALIST:
Mr Howard, Fiji, will you be sending Mr Downer or any other senior ministers to Fiji this week to try and resolve the problems there and the accusations against the Australians?
PRIME MINISTER:
Well I don't think there's any problem about the accusations against Australia, there's no real problem in relation to that. There's always the possibility of a foreign ministers' meeting taking place under the auspices of the Biketawa Declaration and Mr Downer would be part of that. I don't have any separate mission in mind for him at present.
JOURNALIST:
Prime Minister you do think surrogacy laws should be changed around the country?
PRIME MINISTER:
Oh it's not something that I've given a lot of thought to and I'm therefore not going to, just off the top of my head, say yes or no. Let me take the opportunity of wishing Senator Conroy and his wife good fortune and happiness.
JOURNALIST:
Prime Minister following on from Mark Riley's question, what do you say to homeowners who will or may lose their homes as a consequence of tomorrow's interest rate rise?
PRIME MINISTER:
Well if the bank puts up interest rates tomorrow, and many people think the bank will, I will say that I never like to see rates go up, but sometimes in the name of good, longer term economic management it is necessary - especially when the economy is running very strongly - it is necessary for the central bank to act rather than sit on its hands and I would say to everybody that if the bank were to sit on its hands and do nothing then the pain of adjustment later on would be much greater.
JOURNALIST:
Prime Minister shouldn't the Government accept some responsibility for this latest increase, for the increase, particularly given the warnings that the RBA, amongst others, made about expenditure and the last....
PRIME MINISTER:
Well I'm not sure you are correctly stating what the Bank said.
JOURNALIST:
Ian Macfarlane said....
PRIME MINISTER:
Well Ian Macfarlane in his last testimony did not say that tax cuts had been inflationary, he didn't. He said, if I recall it, the opposite of that. He also said in his testimony on the 18th of August that the skills shortage had not contributed in any significant way to wage pressure. I mean you've got to understand the impact of skills on wages and the impact of both on inflation. And what Macfarlane said on the 18th of August, if you go back and have a look at it, and that was after the last interest rate increase, what Macfarlane said then was because of the flexibility in the wages system there had been no appreciable additional pressure on inflation. And this is a very important point, because if we go back to a less flexible industrial relations system the wage increases in the mining sector will flow through to other sectors of the economy, and that will really blow the lid off wage inflation in this country. So Labor's industrial relations policy, which is to bring back a more centralised approach, poses a threat to wage inflation in this country and it's something that ought to be borne in mind and will be borne in mind, particularly by the Government, over the months ahead.
JOURNALIST:
So none of the responsibility for this eighth interest rate increase should be sheeted home to the Government?
PRIME MINISTER:
Look, in the end the Prime Minister gets blamed for everything and in a generic sense is responsible for everything. But the reason why, the reason why interest rates went up last time and if they go up tomorrow, the reason why they will have gone up is because of the strength of the economy and the overheating from that strong economy which is causing some inflationary pressure - that's the reason.
JOURNALIST:
Prime Minister at the last election the sign on your lectern said 'keeping interest rates low'.
PRIME MINISTER:
That's right and historically even if rates go up tomorrow by a quarter of one per cent, they will still be low, they will be for housing, somewhere in the order of seven-and-three-quarters per cent, compared with a peak of 17 per cent under Mr Keating. So that sign will still be correct.
JOURNALIST:
Prime Minister, U2 rocker, Bono, said this morning that he'd like to sit down with you and discuss....
PRIME MINISTER:
Did he?
JOURNALIST:
...aid. He said he'd like the Australian Government to commit point seven of...point seven per cent of GDP to African nations. Will you accept his offer to sit down with him and discuss it?
PRIME MINISTER:
Well if he wants to come and talk to me I'd be happy to see him. I haven't had any formal request, but of course.
JOURNALIST:
He'll be in Sydney on Saturday night.
PRIME MINISTER:
He'll be in Sydney on Saturday night, will he...
JOURNALIST:
At Telstra Stadium.
PRIME MINISTER:
Telstra Stadium...will he? Is he a follower of which code of football?
JOURNALIST:
Oh I think he's performing....
JOURNALIST:
Would you be willing meet Al Gore during his coming visit?
PRIME MINISTER:
Well I don't know when he's coming but you know I think we ought to be realistic about...I don't know that I'm at the top of his popularity list, I after all am a rather close friend of somebody he's not very keen on.
JOURNALIST:
Prime Minister there's been some early criticism of the results of the water summit today and some people are saying they aren't brave enough by not looking at the issue of water buy-backs....
PRIME MINISTER:
Who said that?
JOURNALIST:
There's been some concern from the Opposition and the Dems...
PRIME MINISTER:
Oh the Opposition and the Dems....well they would have to criticise it.
JOURNALIST:
....of the timing of today's summit, on the eve of Melbourne Cup and it's fast approaching that time now, what's your response to that, that you're not serious about climate change and water?
PRIME MINISTER:
Well I would've thought quite the reverse. The fact that we had it on the day of the Melbourne Cup indicates that it is a huge priority. I mean I have no desire to stop anybody watching the Melbourne Cup - and I want to do so myself in a few minutes - but I have a lot of commitments, Premiers have a lot of commitments, it was convenient to have it this morning. I was in Canberra all day today and quite frankly I don't make any apology for having it today and I don't think the Australian public think it was a stunt. We do have a serious drought and we do need to look at some immediate measures to deal with it, as well as longer term responses.
JOURNALIST:
What do you make of the Nielsen poll results today on climate change?
PRIME MINISTER:
I found the Nielsen poll results quite unsurprising, quite unsurprising. Of course people would say at the present time in the wake of all the publicity given to the Stern Report that more needs to be done - it's a natural response to that sort of question. I didn't find that surprising. I didn't find the 50 per cent who thought solar was the answer surprising either because solar is a nice, easy, soft answer. There's this vague idea in the community that solar doesn't cost anything and it can solve the problem, it can't, it can't replace base load power generation by power stations. It's a good idea to make a contribution at the margin, but in the end, if you look years ahead, there are only two ways of generating the electricity that this nation needs - either through the current methods of fossil fuel use or a combination of that in a cleaner form with nuclear power. Solar, wind, all these other things can make a contribution at the margin but unless you want to have a windmill every few hundred feet starting at South Head and going down to Malabar - and I can imagine the residents of Sydney wanting that - you simply won't be able to generate enough power from something like wind in order to take the load off the power that is generated by the use of coal and gas and in time, I believe, nuclear. Now this is going to be a long debate but I'm going to continue to argue reason. I can't have a policy on something like this dictated by an opinion poll. I read what people say, I understand it, I'm sympathetic, but in the end I've got to call it as it is and calling it as it is means that I have to say that solar and wind will not replace conventional power stations.
Thank you, enjoy the Cup.
[ends]