Subjects: Trade and the WTO; interest rates; stock market volatility; ANZAC Day; war widows; Israel bridge diaster
E&OE…………………………………………………………………………………
JONES:
The Prime Minister’s on the line. Prime Minister, good morning.
PRIME MINISTER:
Good morning Alan.
JONES:
Prime Minister without getting into a debate here, I don’t want this to go too far but I just want to say to you, early this week I spoke about the extraordinary level of imports coming into this country and I mentioned that you as a government have applications before you. If those applications are successful we’re to be getting more mangoes from Brazil and Egypt and Fiji and bananas from Equador and papaya from Brazil and persimmons from Israel and nectarines and so on. How do Australians come to grips with the fact that they say look we can grow all this stuff ourselves not at the slave labour rates and the subsidised machinery that enables them to come into this country so cheaply. Why are we importing this stuff? What’s the answer to that?
PRIME MINISTER:
Well the answer Alan is that while we are doing that we are also selling an increasing amount of product, primary produce to other countries and it’s the other face of more open trade. We now are watching an industry like the beef industry, which over the years has had a lot of ups and downs, and is doing quite well. I was with a group of beef producers on Monday at the Royal Easter Show and they pointed out to me that their particular industry is doing very well at the moment because they’re selling a lot abroad, they’ve got access in markets in Asia and North America that they haven’t previously had. And I would say to your listeners, difficult though it is to accept if you look at it in isolation the admission of things that we grow in Australia from other countries it is the flip side of our being able to win access to other countries.
JONES:
Against that can I just tell you what you most probably know but agriculture support measures by the United States, Japan and the European Union governments last year totalled $362 billion. If you John Howard instituted that in Australia someone at WTO would belt you over the head. Why do the rules apply to us and not to them?
PRIME MINISTER:
Well because they were made by them and not by us.
JONES:
A very good answer. It’s true. We don’t have a level playing field we don’t have wholly fair trade.
PRIME MINISTER:
Well I don’t argue that we do but if you think that we of twenty million people can win a subsidy war with the United States and the Europeans and the Japanese well that’s not right we can’t.
JONES:
But you’re going to Europe tomorrow and they’ve got a population of five hundred and sixty million people and they only let us import… they only let us export to them seven thousand tonnes of beef. Now there’s one farmer at the Royal Easter Show here who grows more than that in any given year. What chance do these people saying oh yes well we’ll stop subsidising European beef and we’ll let you John Howard have more of your farmers with an export opportunity in Europe.
PRIME MINISTER:
There is very little possibility of the Europeans doing that and that has been a gripe of governments in Australia for forty years and I will raise that again with the French President and the French Prime Minister but if they don’t change and I don’t expect they will change the alternative is not for us to try and fight a subsidy war because if you think they’re spending a lot now in order to preserve the market share of their farmers both domestically and internationally they will be willing to spend even more and that would become for Australia an unaffordable and an unwinable war. The best prospect for Australia still remains to try and wear away at the international trading system and get more access for our exports and we have improved the situation. It is not ideal, it is far from perfect, it is unfair, it penalises a small efficient producer like Australia but it’s a little better than it was ten years ago because we have got some access for our product in countries like Taiwan and Japan and Indonesia that we didn’t have before.
JONES:
You’ve got a bit of a stake in any stock market crash. Well correction, it was not a crash it was a correction.
PRIME MINISTER:
I don’t have a stake in it.
JONES:
Beg your pardon?
PRIME MINISTER:
I don’t have any personal stake.
JONES:
No, no not a personal stake but I’m just saying as Prime Minister with Telstra holding shares which lost about $4 billion. Can you say to our listeners that this correction has, do you believe as Prime Minister it’s taken the heat out of the economy and reduced the need for another rise in interest rates?
PRIME MINISTER:
Oh look I’m not going to effectively speculate about what’s going to happen on interest rates but I can separately say that you have to expect volatility in the share market. There’s no doubt that there was a very heavy flow of money into a lot of stocks some of them speculative some of them not speculative stocks like Telstra are not speculative but some of the others were. I think you have to expect volatility of that kind.
JONES:
There are many people listening to you who think wow they keep talking about an overheated economy, she ain’t overheated where I am, we’re struggling out here to make a quid. I mean…
PRIME MINISTER:
Well I don’t believe, I don’t believe Alan that the Australian economy is overheated. The Australian economy is continuing to grow very strongly. We’re growing at around 4%…
JONES:
If it’s not overheated we don’t need an increase in interest rates do we?
PRIME MINISTER:
If we were growing at five or six percent you might say it was overheating…
JONES:
But if it’s not overheated though we don’t need an increase in interest rates.
PRIME MINISTER:
Well I’m not going into what’s going to happen on interest rates.
JONES:
Why don’t we ask you a couple of questions separately then? I mean if monetary policy, that is the price of money, which is interest rates is a function which they tell us since time immemorial of inflationary pressures are you worried about the dollar value and what it does to the price of imports and the problem that that creates for inflation.
PRIME MINISTER:
Well that’s really another area where you know Prime Ministers don’t talk about and that is the level of the Australian dollar and I know you find that frustrating and perhaps some of your listeners do but when Prime Ministers and Treasurers start thinking out aloud the markets react often erroneously and that can hurt people and therefore we don’t do it.
JONES:
OK is one of the political problems though that you have to manage the fact that wage and salary earners in struggle street don’t create the problems of debt or the dollar value or the higher price for imports or the overblown stock market yet at the end of the day they are the ones who pay with interest rate hikes?
PRIME MINISTER:
Well we’re all affected one way or the other by interest rate movements. If you are a lender, if you’re a self-funded retiree and there are many of those listening to your program, when interest rates go down the return you get on your investment goes down. If you’re a borrower when interest rates go down you’re happy so there are some swings and roundabouts.
JONES:
But are you worried that the benefit of the tax cuts…
PRIME MINISTER:
But look at it this way, those people you speak of, the great bulk of Australian workers wage and salary earners over the last four years the cuts in interest rates have been worth on average $245 a month to them, they’re $245 better…
JONES:
It’s the best wage increase you can get.
PRIME MINISTER:
They’ve also had wage increases which have not been eroded by inflation and one of the things that they have been able… this government has been able to deliver to people on struggle street is not only cuts in interest rates but also increases in their wages that have not been eroded by inflation.
JONES:
But are you worried that the benefit of the big tax cut on July 1 might be eroded by interest rate increases.
PRIME MINISTER:
Alan I believe that people will find after the 1st of July that they are in many cases a good deal better off than they are now. What will happen on the first of July for the great bulk of your listeners, is that they’ll find that the price of some things have gone up, some things have gone down and some things have remained the same. But if they’re in the workforce and depending on their wage and their family circumstances they’ll have a noticeable cut in income tax. Now it’s going to vary according to their wage level and so forth, but that is going to be the experience and that is what the GST, the new tax system is going to bring for the great bulk of your listeners.
JONES:
You’re off to Turkey and France tomorrow, what weight do you plan… you’re going to attend the Anzac Day service in Gallipoli…what weight do you as Prime Minister place on the symbolism and the reality of Anzac?
PRIME MINISTER:
Well, enormously. I don’t think there’s been an experience in the history of our country that has had a greater symbolic and spiritual impact than events surrounding the first Anzac Day. I think they have defined the attitudes of Australians, they have taught us more about how we see ourselves, the sort of values that matter to us. It was a tragic waste of young lives, many thousands of them unrealised and with the passage of time what it represents has become even more hallowed for Australians of all ages.
JONES:
With that being said and given that this only comes once a year, I’m just wondering if I could ask you again as I’ve asked your Minister for Veterans’ Affairs five million times – couldn’t we restore immediately the pensions of around four thousand war widows who remarried before 1984, half of whom have been widowed again, widows who find themselves carrying a terrible burden of loneliness and grief and deprivation, half a century ago and now are denied a war widows pension?
PRIME MINISTER:
Well Alan, you have raised that with me and that’s fair enough to raise it again. I’d just like to say that you can do that, but what we do, what we try and do with these issues is sit down on a regular basis with the RSLs and try and respond to their list of priorities. And over the four years we’ve been in Government, we have done a lot of things, the gold card and a number of other measures that were put to us by the . . .
JONES:
That gold card doesn’t go to Korean veterans, or Vietnam veterans.
PRIME MINISTER:
No, that’s true, but it was awarded, I mean it principally goes to World War II veterans on the same condition that it previously went to…
JONES:
Wouldn’t it be nice to give it… I mean I reckon Australians would be prepared to foot the bill. Why wouldn’t we extend the gold card to all Australian veterans, including the veterans of Korea, Malaya, Vietnam?
PRIME MINISTER:
Well, Alan looked at in isolation– yes it would be a very good thing. And I am not suggesting here for a moment that it wouldn’t be a good thing to do all of the things that you’ve raised the question always is with these things that governments have to assess priorities in a whole range of areas, communities, anything. I don’t think anybody could say that successive governments in Australia and I don’t make a political comment about this, I give credit to former Labor Governments too as well as former Liberal Governments, have been fair and reasonable and generous in relation to our veterans. It’s an area that we constantly look at.
JONES:
I tell you what I don’t want to harp on the point, but I do make the point, I don’t understand that the widow marries again because she has been consoled in her grief when her veteran husband died, she marries again and loses the pension. But if the veteran, if the veteran lost the wife and married again and then died, the little floosy he married, that had absolutely nothing to do with the war gets a widow’s pension, it doesn’t make sense to me.
PRIME MINISTER:
Well, I don’t want to make a comment that… I don’t want to make observations why people remarry and so forth I mean that depends on individual circumstances but Alan these things are, you know the book is never closed on these things.
JONES:
Good, I hope you keep this one open. One other thing, you’re going to Israel.
PRIME MINISTER:
Yes.
JONES:
A woman wrote to me and says this, “my daughter Suzanne was with her husband Greg who died on the bridge when it collapsed in Israel on July 14, 1997. The families of those who died, four, and seventy people injured have not had any assistance from our federal or state governments to put pressure on Israel for compensation. The last two and a half years have been very traumatic, many people have visited here from Israel, made many promises, go back and do nothing. Please could you assist us and hopefully ask Mr Howard to make mention while in Israel concerning all the problems about the bridge tragedy.” Can you do something about that?
PRIME MINISTER:
Well I will be raising that matter when I’m in Israel. I met representatives of the Australian Jewish community last week to talk about my visit and that was one of a number of things that they mentioned to me. There have been some developments in the past few days, there’s been that decision of the court in Israel.
JONES:
Perhaps we could talk about that when you come back.
PRIME MINISTER:
Yes.
JONES:
I’ll go to the news and we’ll wish you well and we’ll talk on your return.
PRIME MINISTER:
OK.
[Ends]