JOURNALIST:
Prime Minister good morning to you.
PRIME MINISTER:
Good morning Matthew, good morning David.
JOURNALIST:
Nice to have you going right out across the whole of South Australia to all our regional listeners and many farmers listen on their tractors and out on the fields and in the vineyards, so it's terrific. Prime Minister the water summit on Melbourne Cup Day, people watching this, would it be fair to say there is an element of panic about the approach and we've had forecasts by Premier Mike Rann that this was one in a thousand year drought, suddenly we are going to have a weir at Wellington, have our political leadership hit the panic button?
PRIME MINISTER:
No, no, there's been no panic by us at a federal level and I don't think at a state level either. What happens is that you live in hope that the season will turn and when you know it is not going to turn, there is a possibility that next year will be the same, you then have to look at ensuring that measures are there so that people and communities get the water they desperately need and it was a very useful meeting. We were given in stark terms the dimension of the problem by the Murray Darling Commission. We discussed some of the options that would be looked at in order to guarantee the availability of water. We also saw the states commit to water trading by the 1st of January 2007. Now that's something that they had been dragging the chain on and if no other benefit came out of the summit, that was an enormous thing, that was part of the agreement way back in 2004 and...
JOURNALIST:
Is that the key breakthrough in your view?
PRIME MINISTER:
It was a very big breakthrough and let me be fair, South Australia wasn't dragging the chain on this. I think one of the other states in particular was being dilatory and I am glad. It was also an opportunity for me to put the heat on the states to give some relief for council and shire rates and also water charges during the drought for farmers in Exceptional Circumstances declared areas. The Federal Government has put hundreds and hundreds of millions of dollars into drought relief, I think the total figure now is over $2 billion and I announced relief for small business people in EC areas. They'll get the same support as farmers if they can demonstrate that 70 per cent of their business comes from farmers. Now that's a very big extra extension and I am appealing to the states to give their farmers at the very least, the rate relief that the Victorian Government has offered, which is 50 per cent to eligible people in Exceptional Circumstances area and I want every state government around Australia to do that and I also want state governments to rebate or waive water charges where there's been a substantial reduction in water allocations. Now a lot of these things, they apply differentially around the country but it is, in my opinion, the least the states can do. Now I know in South Australia you've got a private water trust and there may have to be some equivalent adjustment in relation to the licence charges and I acknowledge that in the request I made, but given the measure of Federal Government support, I mean we carry 95 per cent of the cost of Exceptional Circumstances. Now I am not complaining, it's our responsibility, but I think the state governments have financial responsibility as well and I am sure that they will help the farmers on those two counts.
JOURNALIST:
Prime Minister some of the problems in responding to the drought arise from various states being involved in the management of the Murray as well as the Federal Government. What would it take for you to just take it over from the states. If a one in one thousand year drought is not enough, what would it take for you to just intervene and say we've got to manage this?
PRIME MINISTER:
Well the Constitution gives the states certain powers in relation to their river systems. It was one of those things that was expressly reserved at the time of Federation, but Matt, I am for collaboration. I am always a person who perseveres with collaboration. There's nothing inherently virtuous about a federal takeover of something if it is working well collaboratively. Now there have been delays...
JOURNALIST:
Prime Minister, it's David here, you gave the example a moment ago of one state in particular dragging the chain on water trading...
PRIME MINISTER:
New South Wales was...
JOURNALIST:
They've been dragging it for a long time PM.
PRIME MINISTER:
I understand that, but I also know that when you get into situations of perceived federal takeovers, then that creates a momentum and a debate all of its own which tends to sort of divert people from the main game. The main game is to get sensible decisions that will help farmers and we've had plenty of those and I hope there are more forthcoming from the states, I really do emphasise the states have got to help with these rates and charges. I hope that happens and I also believe that the agreement we got on Tuesday to get a quick audit done of what was needed, and this audit will come back on the 15th of December which is only a little over a month, to us and my department is putting together the team that is going to do the audit. We've also got CSIRO to do an in-depth examination of the capacity of each catchment valley within the Murray-Darling system. So there's a hope that the urgency of the current drought will spur greater collaboration. Now, I will persevere with collaboration, obviously if the collaboration doesn't deliver the best outcome well you look at other alternatives, but I don't want to turn this into a federal-state argument, power dispute. I don't think the Australian people want that, they want it fixed and what they're saying to me, what they're saying to Mr Rann and Mr Iemma and Mr Bracks or Mr Baillieu if he wins the election, what they're saying is will you work together as Australians to fix this? They're not really interested in...but in the end if work can't occur together than they might want something else done.
JOURNALIST:
We're talking to Prime Minister John Howard here on The Soapbox on 891 ABC Adelaide, ABC South Australia and Broken Hill. Prime Minister, we have had a couple of people questioning what ever happened to the $800 million Telstra dividend that Meg Lees negotiated with you as part of a trade-off for approving the sale of that tranche of Telstra. That money was meant to go on saving the river?
PRIME MINISTER:
We have a 200, we have a $2 billion water fund and separately from that the federal Government has in two different lots put $700 million into the Murray-Darling Basin. We paid an extra amount out of the blue, without requirement, of $500 million out of the last Budget into the Murray-Darling Basin Commission. We'd previously put $200 million in and separately from that we have a $2 billion national water fund, so if you're talking about $800 million, gee, that's a lot more than $800 million.
JOURNALIST:
I was reading a blog by John Quiggin last night on water restrictions and he quotes you as looking at the sustainability of long-term water restrictions and saying, you know, you wouldn't accept that, you wouldn't accept power restrictions, electricity restrictions as a permanent state of affairs and that there must be another way of dealing with handling water and that perhaps the way to do that is to look at pricing, the way you price water when you have a minimum so called free allowance and then you start penalising people who've got the spa baths and the ginormous swimming pools and so on. What's your view on that?
PRIME MINISTER:
Well I don't, I'm not going to get into individual things otherwise it will side track the whole conversation, but I certainly agree that if we had better systems of handling water, for example, we are critical of city water authorities for paying too much of their revenue to the government, state governments by way of dividends, rather than reinvesting that money in infrastructure. Now I say this particularly of the water authorities in my home town of Sydney and it's not really the fault of the water authorities, they've become milch cows for state governments...
JOURNALIST:
...South Australia, $300 million in this budget, water authorities have had to borrow to fund its capital works program.
PRIME MINISTER:
Well I think that's silly and that's the sort of thing that I've got in mind and what Mr Turnbull has had in mind. It is crazy that what is, in effect, a public utility dealing with a scarce asset that that is used a tax and revenue raising device. Quite wrong, bad policy. If there had been more of the earnings of these utilities invested in infrastructure, which after all is what they should be doing, and less of it paid by way of revenue to state governments then we would have better systems. I'm not saying the problem would have been solved, but we would have had better systems
JOURNALIST:
Tom has called from Waikerie and Tom you're an irrigator?
CALLER:
Yes, I've got a small licence, thank you. Yes, to the Prime Minister, the contingency plans for next year are all based on the premise that it won't rain, but I would make the point that there won't be any water in the catchment anyway, they're talking about it running out in April perhaps, so if it hasn't rained after then, the contingency plans don't make any difference at all. We should be looking at issues directly now, not in 12 months time if it doesn't rain to conserve what we've got because in South Australia this year, probably two thirds of what comes over the border will be lost in evaporation for example.
PRIME MINISTER:
I accept that point and one of things that was discussed was the intention of, which I understand and support, of the construction of a weir at Wellington and this is a project the South Australian Premier said that he was intent on doing. My understanding suggests that that would be a very, very sensible thing to do and he told me that the planning on that would start immediately. But obviously the detail of that is something you have to pursue with him because that's a state government project, but it seemed to be to make a lot of sense what he had to say about that.
JOURNALIST:
Prime Minister, we've just got the latest unemployment figures, the official jobless rate has fallen for October, unemployment stands at a seasonally adjusted 4.6 per cent. We're just now absorbing the latest interest rate rise and one of the concerns there is what is going on with employment and the pressure this is putting on inflation. Does this bode well for another interest, or bode badly for another interest rate rise?
PRIME MINISTER:
No, I wouldn't have thought so, I'd have thought it was neutral. The unemployment rate has come down, although the number of people in work has also come down and the reason why the unemployment rate has fallen, notwithstanding, is that there's been a slight fall in the participation rate. I don't think these figures are bad for interest rates, but let's once again have a sense of perspective. Isn't it good that we still have a 30-year low in unemployment? You have to go back to a date in 1976, I think it's August, to find a figure for unemployment as low as 4.6. What you have seen this month is a fall in the number of people in work and given the furious pace at which people have got jobs, some kind of correction of this kind was to be expected. But fundamentally we still have unemployment, and I expect this to be the case generally speaking for some time, at a 30-year low. I mean, it might go up a bit, it might drift up to 5 per cent, it might stay at 4.6, it might drift up to 4.8, but I can't see it changing dramatically over the next few months because the economy is still very strong.
JOURNALIST:
Prime Minister, the US election result and the departure of Donald Rumsfeld, do they signal a disengagement from Iraq, that that is now a more likely option?
PRIME MINISTER:
No, I don't think for a moment the Americans are going to precipitately withdraw from Iraq. Obviously Iraq was on the minds of a lot of voters and what has happened in relation to Donald Rumsfeld is in the realm of what you might call gesture politics, a recognition that there had to be something done by the President to acknowledge that there is concern about the conduct of the war. Let me say I like Donald Rumsfeld. I've had a lot to do with him. I wish him well. He had his critics. He was a colourful, in the minds of some, even controversial figure, but he was a good friend of Australia's and he was always very solicitous of Australia's interests in the dealings that I and my various Defence Minister's have had. The other point I'd make is that although Iraq was on people's minds, it wasn't the only factor in the American elections. A lot of Republican supporters, I believe, stayed at home because they didn't like the fact that their Administration was running a budget deficit. It went against their grain, they're fiscal conservatives. Now of course that is a point of departure and a point of distinction between the Bush Administration and my Government, however, clearly Iraq was on people's minds. I don't believe for a moment that there's going to be any fundamental change or even big change in strategy.
JOURNALIST:
Well there will be if the House of Reps doesn't sign off on Presidential, if the President needs for money to fund the ongoing...
PRIME MINISTER:
It's going to be very hard for many of the Democrats who voted in favour of the war, back in 2002, to cut off money. You've got to remember....
JOURNALIST:
They may argue they voted on a false premise?
PRIME MINISTER:
Well, I think you will find that the money will not be cut off.
JOURNALIST:
But it's fair to say....
PRIME MINISTER:
There'll be debates about it but you should also bear in mind that on current trends the two protagonists in the next Presidential election, namely Hillary Clinton and John McCain, both voted in favour of Iraq back in 2002. In politics you have to answer for, and be accountable for, positions you've taken and decisions you've made. And if the weather gets a bit heavy along the way you can't wriggle out of the position you once had. Now I accept that in relation to politics in Australia and on Iraq it's not only George Bush who should be held accountable for positions he took, but so should some of his Democratic critics like Hillary Clinton and others.
JOURNALIST:
But given the message that voters have sent in these elections, the contenders for the Presidency in two years time will have to have some sort of policy of disengagement, they'll have to take something to the electorate which shows a way out of Iraq. Is that a fair comment?
PRIME MINISTER:
Well that would be a matter for them. What is a fair comment is that what has happened in America at the ballot box has not altered the situation on the ground in Iraq and that is that if the coalition were to withdraw in circumstances of defeat, that would be an enormous victory for the terrorists not only in the Middle East, but would give them a great propaganda weapon around the world. And I'm sure when the dust settles from the Presidential election that'll be understood. What you should bear in mind about American politics is that....
JOURNALIST:
...it wouldn't be the first time, I mean, the US and Australia withdrew with defeat in Vietnam and the communists didn't overrun the world, it would not be the first time that that has happened, that a country has had to weigh up the balances, the cost benefit ratio, and decide to disengage because they're on a bad wicket?
PRIME MINISTER:
Matt, the circumstances of Vietnam and Iraq are quite different, quite different, and the analogy that is being drawn is historically flawed, very badly flawed. The judgement of history in relation to Vietnam that it was originally a civil war. That was the judgement. Now whether that is an accurate judgement...but I'm saying it's a fact that that's what history adjudged. And I think you have to see Iraq and Vietnam as quite different and I think pushing the analogy distorts our analysis of Iraq. But the point I'm making, the other point I was about to make is that American politics are very different from ours because you can have a Republican President, as you're now likely to have, certainly a Republican President, and a Democrat controlled Congress, whether it's both Houses, and it looks to me as though it could be both Houses, I don't know, but it looks a bit like that, certainly the House of Representatives, you can't have that in Australia, of course. And therefore it's possible for people to protest their heads off in a mid-term Congressional election, but still know that they're not changing the Administration. It's possible for Republicans who are cranky with the Administration for having a budget deficit or about this that or the other, or the Abramoff affair, or some of these other things that have dogged the Administration over the last couple of years, to say well I'm staying at home, I'm not going to vote for them, but I still know that the Republicans will be in the White House. Now these are factors. I'm not saying Iraq was not relevant, clearly it was front and centre in people's minds, I don't argue for a moment people weren't concerned about it but I don't think it was the only issue and it would be a mistake to see it in those terms.
JOURNALIST:
You're listening to Prime Minister John Howard here on The Soapbox, we have him for about another five minutes. Richard of Kensington Park, good morning to you Richard.
CALLER:
Good morning Matt and Dave and good morning Prime Minister. Ah Prime Minister, I've noticed you're changing stances on global warming recently, most recently saying that there would be a cost to it, and of course there would be, and those like me who are grandparents, are willing to pay that cost. Australia now is a place where we consume to be happy. The ideas of duty, future, seem to have gone out of our lexicon and I think that we need to have some leadership on this and I'd just like your comments?
JOURNALIST:
Prime Minister.
PRIME MINISTER:
Well certainly if you reduce the greenhouse emissions coming from coal, the use of that as a source of electricity generation will increase, that's what I had in mind, and I just hope that people who've called for changes, and I know you're indicating your willingness to pay the cost and I respect that, it's people who call for those changes acknowledge that it won't be costless. And of course we've got to make sure that as we adjust we don't put Australia at a disadvantage. Australia's quite different from Europe on this issue. We are a country that depends very heavily on fossil fuel not only for power generation, but also for wealth, and it's easy to talk in the abstract about the cost being borne by the current generation and clearly in terms of inter-generational equity, that's a fair proposition. But we have to make certain that in our negotiations and our decisions, we don't assume a cost burden that other countries won't. And I've been told this morning, for example, at the meeting that's going, taking place in Nairobi that the G77, which represent the developing countries, have made it very clear that they're not going to accept any controls on their emissions of greenhouse gases. So it's going to be quite a challenging thing. But I accept that there are greenhouse gas emissions which are causing damage to our atmosphere, I accept it is a challenge. I'm not as, how shall I say it, embracing of some of the doomsday predictions as others are, I am a person who thinks we should have a very balanced approach and also make sure that we don't hurt Australia unduly in the process.
JOURNALIST:
Prime Minister John Howard just finally, one your own MPs, Liberal MP for Schubert, Ivan Venning, has come-up with a proposal this morning to save water and a very....
PRIME MINISTER:
Oh a State MP, I'm sorry....
JOURNALIST:
A State MP....
PRIME MINISTER:
Oh sorry I didn't recognise the name.
JOURNALIST:
No, no, no, that's fair enough, but he's not one of your federal team
PRIME MINISTER:
(inaudible) a good man.
JOURNALIST:
Well he's an interesting man and he's a farmer and he has suggested that one way of saving a massive amount of water would be for men to have a leak in the backyard rather than always using the toilet inside. He often wanders off apparently into the top paddock at night, has a contemplative one and I just wonder whether that has ever occurred to you Prime Minister?
PRIME MINISTER:
Well I think you've broadcasted a view and that's his view.
JOURNALIST:
I just wondered how far water conservation will go in this country, that's all. Prime Minister thank you very much for talking to 891 mornings.
PRME MINISTER:
Thank you.
[ends]