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Transcripts from the Prime Ministers of Australia

Transcript 22893

Radio Interview with Neil Mitchell. 3AW

Photo of Howard, John

Howard, John

Period of Service: 11/03/1996 to 03/12/2007

More information about Howard, John on The National Archive website.

Release Date: 15/09/2000

Release Type: Interview

Transcript ID: 22893

Subjects: Olympics; petrol prices; Australian dollar; Olympics; petrol prices; amendment to tax legislation; John Hewson; World Economic Forum protests; Indonesia; Australia Card.

E&OE……………………………………………………………………………………

MITCHELL:

Prime Minister, Mr Howard Good morning.

PRIME MINISTER:

How are you Neil?

MITCHELL:

I am well thank you. As a Sydney expert, you will know about the weather, what’s going to happen?

PRIME MINISTER:

Well, I don’t like some of those clouds out the window, I’m saying my prayers and keeping my fingers crossed. It’s been fantastic spring weather and every day I’ve wondered whether we’re squandering it on the wrong day. But you can’t rearrange the weather, you can only hope.

MITCHELL:

Even the Prime Minister must be excited on a day like this. What is your emotion?

PRIME MINISTER:

I think it’s wonderful. Every body feels different. I went to the arrival ceremony gathering for the torch in my electorate the night before last and that was just unbelievable and that’s been the same all around the country. The thing about the torch relay is that it’s enabled everybody to be part of it. It’s one of those simple things that everybody can be part of and because we are a pretty unpretentious, unstructured society, people are quite uninhibited in mixing publicly and getting involved in these things. I think it’s fantastic and it really does bring out that community spirit, but in a very special way and there’s a feeling of goodwill, which is always a nice thing that every body’s trying to make it a success and you feel as though people will put up with the odd delay and the odd frustration and the odd disappointment because they want the whole thing to go well and that is the spirit, not only in Sydney, but I’ve found all around the country. I was in Tasmania a few weeks ago and Launceston and the Mayor was telling me how they had 20,000 people in the local sporting field to greet the torch and it was in rural Victoria and of course all around Queensland and the rest of the country. It’s been exactly the same.

MITCHELL:

Do you think it is seen as Australian games, not just the Sydney games?

PRIME MINISTER:

Oh, I think it is increasingly. I mean look at the crowd last night, the night before last in Melbourne - 93,000, that’s fantastic. Melbourne is a great city, the greatest in Australia for loyalty to sport, I mean it’s fantastic. I think it is far more an Australian games than many people thought, back in ‘93, it would be. I mean I think those old sort of parochial attitudes have dissolved in a great surge of national pride that we are going to do something very well and of course our athletes have come from all over the country and they’re representing all of us and our focus will now turn to them and everybody will be wanting them to do so well and I met most of them the other night at the naming of Andrew Gaze as the flag-bearer and that was a great ceremony.

MITCHELL:

Any regrets that you are not opening the Games?

PRIME MINISTER:

No, I don’t have any regrets about that. That was my decision. I took the view that I did not want it to be in any way touched by controversy and I knew that the Labor Party would continue to attack me, with one hand saying it was okay, but one person would be saying it was okay and another one would be attacking it. I mean what is the point? I am concerned that the Games be completely free of controversy and I didn’t want to inject any note of controversy into it myself.

MITCHELL:

So what will your role be through the Olympics?

PRIME MINISTER:

My role will be to lead the cheer squad for the Australian team.

MITCHELL:

Chief spectator!

PRIME MINISTER:

Well, I will certainly go to a lot of events, yes. I have other things to do as well, but I am very interested in how the Australian team goes. I have a great interest in sport as you know.

MITCHELL:

No doubt you are sending a message to the athletes?

PRIME MINISTER:

I have already done so. I have personally written to every one of them.

MITCHELL:

Personally?

PRIME MINISTER:

I have signed a letter to each of the athletes.

MITCHELL:

What’s the message to them?

PRIME MINISTER:

Well, I’m just saying how much pride the Australian people have in what they’ve done and how they must be looking forward to competing and I hope whatever the outcome, I hope they all remember it.

MITCHELL:

What will this do for Australia do you think? It’s costing us one hell of a lot of money of course, but what will it do for us?

PRIME MINISTER:

Yes, although the organisers say that it will be the first games for years that will do really well. I don’t think anybody knows the outcome of that until after it’s all over. What will it do? I think it will certainly make Australia better known around the world as a nice place to be in. I mean the television coverage alone, NBC has 26 million viewers in the United States showcasing Sydney and Australia for a couple of weeks. That has to help our tourist trade. I think it must reignite the interest of business people in this country. I spoke to a couple of hundred chief executives at a dinner organised by IBM last night and they were all, some of them hadn’t been to Australia before, most of them had, but if their first impressions were any guide, they were overwhelmed by the place so that will help. And I think the experience of the average tourist, if they’re, as I expect they will be, received in a friendly courteous open way, they’ll go back home feeling pretty warm about us and all of that has a cumulative effect.

MITCHELL:

We’ll take calls for the Prime Minister in a moment, 96961278, whatever you would like to raise with him. What is your blue ribbon event? What is the event you just wouldn’t want to miss at the Olympics?

PRIME MINISTER:

Well, any finals that Australians are involved in, I wouldn’t want to miss and also beyond that, I’ve always had a great interest in the relay. I think the relay events towards the end – the 4 X 100 and the 4 X 400, they are fantastic events. There’s something a bit special about a relay because it’s a team effort and it can ebb and flow and there are a few more sort of margins for error and superlative performance that you mightn’t get in just a straight sprint event.

MITCHELL:

On to some economics Prime Minister, the dollar. Now, it’s been interpreted as a disaster that we have with the dollar. Is it?

PRIME MINISTER:

No, it’s not a disaster. It’s surprising and what’s happened is that the level of the dollar does not reflect the fundamentals of the Australian economy and the reason for that is that the level of the dollar is largely a reflection of the strength of the American dollar. Our dollar has not fallen against the pound sterling or the Euro. It has fallen sharply against the American dollar, but so has every other currency in the world, major currency, with the exception of the Yen.

MITCHELL:

That’s still going to hurt us though isn’t it?

PRIME MINISTER:

It depends. There are winners and losers. Exporters don’t mind the weaker dollar. If it’s sustained over a long period of time, then it can flow through into import prices and to higher inflation. It is having a bad effect on the price of petrol because world oil prices are denominated in American dollars and when you see 32 dollars US a barrel, that’s a lot more Australian a barrel.

MITCHELL:

Might be a good reason to freeze the excise Prime Minister.

PRIME MINISTER:

Well we’ve discussed this before and I don’t…..until we’re further into the year, given the way indexation operates because you have to increase your welfare payments because of indexation, it’s too early to tell whether there is going to be any gain to the budget and I don’t think it would send a good signal to financial markets if it looks as though the government was willing at the moment to run down the surplus. I don’t think that would help the dollar at all.

MITCHELL:

You do accept though that the problem with the dollar will cost people more in the end. I mean do you? Do you not believe it will be at that level long enough to effect the price [inaudible] what we pay?

PRIME MINISTER:

It all depends Neil on how long it stays at this particular level and it depends on what you are doing. Clearly overseas travel will be a lot more expensive. On the other hand, a number of our producers will do well. It is a difficult time for the Australian dollar. The fundamentals of the economy are very good. We’ve actually got a lower current account deficit than previously. We’ve got still very low inflation, we’ve got very strong economic growth. We’re certainly not running a loose monetary policy. There has been a tightening of monetary policy by the Reserve Bank. So when you look at all of the fundamentals, the economy is very strong.

MITCHELL:

So why is it being judged so harshly? Why is the dollar…

PRIME MINISTER:

The Australian dollar is not being judged harshly, it’s just that every body’s in love with American things at the moment. They are. I think Peter Costello said the other day that the world was besotted economically with all things American and that’s right. There is a flight to America because the American economy is bigger than any other, it’s running a very large current account deficit and it has to devour a lot of capital in order to finance it and it’s kept its inflation low and the economy there is very productive.

MITCHELL:

You would agree the problem with the dollar is that it does have a potential for increasing inflation.

PRIME MINISTER:

Well if you have over a long period of time, you have an increase in import prices which are not absorbed, then that can push up inflation.

MITCHELL:

And that obviously leads to the problem of increased interest rates.

PRIME MINISTER:

Well, all of these things are interactive, but the one impacts on the other, of course it does. Now it depends on degree and it depends on the capacity of an economy to absorb. I mean years ago, I remember in the old days of fixed exchange rates, we had a very large devaluation in the 1970s and every body thought that was going to have a huge inflationary effect but it didn’t. Now we are dealing with a very volatile situation on the international financial markets. It certainly doesn’t reflect the fundamentals of the economy and as the Reserve Bank Governor has said, and I agree with him, that the Australian dollar is from any kind of medium term perspective is undervalued. You have to in these circumstances hold your nerve and talk about the fundamental strengths and recognise again that it’s the strength of the American dollar. I mean it’s not that our dollar is weak, it’s just that the American dollar is very strong and the mirror reverse of that is that our exchange rate against the American dollar has gone down. But it hasn’t gone down against the pound or the Euro.

MITCHELL:

So you would anticipate that we will ride it through? You are confident…

PRIME MINISTER:

I am very confident we’ll ride the thing through. And also I would make the point that with a floating exchange rate, the flexible exchange rate, you have to accept that there will be gyrations, and it was a flexible exchange rate that actually helped Australia through the Asian economic down turn. If we hadn’t have been able to take a depreciation on our currency in 1997 we wouldn’t have been able to win export, new export markets in Europe and North America to replace the markets we’d lost in Asia, so it was a plus to have a depreciating exchange rate at that particular time.

[ad break]

MITCHELL:

The Prime Minister’s with me in our Sydney studio. We’ll take a quick call. Margot, go ahead please.

CALLER:

Yes. Good morning Mr Prime Minister, good morning Neil.

PRIME MINISTER:

Good morning Margot.

CALLER:

I just wanted to say I thought it was disappointing that you’ve chosen not to open the Olympic Games as our leader but I think your decision shows that you’re a true gentlemen and it’s a shame that the Opposition party couldn’t act in a similar way.

PRIME MINISTER:

Okay Margot, thank you.

MITCHELL:

Okay thank you. Thanks for calling. Philip go ahead please.

CALLER:

Yes good morning Neil, good morning Prime Minister. I just wish to have a quick chat to the Prime Minister about the comment he made with regard to tourism and the affect it may have on the Olympics……the Olympics may have on Australia. I’ve got friends in hospitality who’ve had a major downturn in bookings over the past four months and sort of aside from the three week Olympic period haven’t got much going on until December. Everybody I saw [inaudible] from the US who hasn’t already been to Australia knows a lot about the country and can’t wait to come here anyway. So I’ve got no idea how in fact you and others can say that the Olympics is in fact going to have a boom on tourism and economic development in Australia.

PRIME MINISTER:

Do you think they all want to come here? I’m sorry I mean I thought you contradicted yourself there. You said you know a lot of people in America and they all want to come here.

CALLER:

Well most publicists will say there’s no such thing as bad publicity but most of them know a lot about Australia anyway besides from what they may be seeing on the NBC Today Show or any other program.

PRIME MINISTER:

I see. So what you’re saying is that there’s really not much more publicity Australia can possibly provide. Well that is a matter of opinion. I don’t think that’s right but I’m always surprised at how ignorant many Americans are of Australia. My experience is that Americans do not understand this country well. And I was talking to a couple of very senior American executives last night who run very large companies and they both agreed with me that large parts of the United States, particularly Washington, political America, does not understand Australia. The financial community understands Australia very well and a lot of people perhaps on the west coast. But there are a lot of Americans who don’t. They have an appalling ignorance of this country.

MITCHELL:

Thank you Phillip. Thank you very much for calling. Let’s take to petrol if I could just quickly Prime Minister. Do you think we’re heading to another period of increased prices because of what’s happening internationally, not just with the dollar but it seems to be squeezing it again?

PRIME MINISTER:

Well it’s very difficult and we don’t control it. And there was some relief, the increase was what, 800,000 barrels a day instead of 500,000 and there’s some suggestion they’ll lift it again. And there’s been a little bit of softening in the price. I can’t make any bold or optimistic predictions. I can only say that I understand the resentment about high prices and it’s certainly very deeply felt throughout the world. I mean in Britain…..

MITCHELL:

The boycott in the United Kingdom is essentially really biting and the Transport Workers Union, or one of the officials of the Transport Workers Union he has suggested a boycott. How would you react to that?

PRIME MINISTER:

Well I don’t favour boycotts. I think they’re stupid and they hurt vulnerable people. And I’d make the point that in Australia our petrol is less than half what it is per litre in Britain. In Britain, I mean a recent scale, it’s still proportionately accurate, the UK price is over $2 a litre and 75% of that goes in tax. By comparison in Australia it’s about you know somewhere between 95, thereabouts, plus. It bounces around a bit.

MITCHELL:

It’s not quite the same commodity in Britain though is it? I mean you look at the distance of travel.

PRIME MINISTER:

Well no, everything’s relative.

MITCHELL:

Well yeah but you have to truck stuff around Australia [inaudible]….

PRIME MINISTER:

Yes but the great bulk of Australians live in the suburbs, Neil, and the great bulk of Australians don’t travel long distances.

MITCHELL:

[inaudible]

PRIME MINISTER:

No they don’t. I mean I think you have to remember that is the paradox about Australia is it’s a very big country but most of the people as you know, 85% of them live in the metropolitan areas and therefore I think it is fair to make that comparison. And the tax take in Australia is 48% versus 75% in Britain. So you can understand why the depth of anger there is so strong. But look I understand the anger in Australia and it is something that I fervently hope changes in our favour over the months ahead but that will need a softening of world oil prices.

MITCHELL:

I read there are to be some changes to the GST. What are they?

PRIME MINISTER:

Well they’re really what you might genuinely call technical changes. They don’t take the GST off anything. There’s going to be a lot of these fine tunings.

MITCHELL:

It doesn’t take it off anything. Does it put it on anything?

PRIME MINISTER:

No it doesn’t put it on anything either.

MITCHELL:

John Hewson, is he going to make a comeback or not?

PRIME MINISTER:

Well I read in the paper this morning an article he wrote where he said no.

MITCHELL:

Do you want him back?

PRIME MINISTER:

Well that’s a matter for him. I just assumed when John left he left and I’d never taken seriously suggestions that he’d want to come back but that really is a matter for him though. It’s a free country.

MITCHELL:

The World Economic Forum has just been in Melbourne and the protests around it. I wonder if we might not be heading into a new era of protests. The environment I saw at that protest was different to any I’d seen for a long time. Is that a possibility? Do you see that as significant or as a one off?

PRIME MINISTER:

Well I think it was a copycat demonstration. It copied Seattle. I mean the Seattle thing was very brutal, very highly organised, was very effective because I thought too much notice was taken of that demonstration by people in the American administration. I was disappointed in the Seattle meeting whereas in the World Economic Forum the good thing about it was that although it was a different meeting in a sense, it was only a meeting to talk as distinct from a meeting to take decisions, they didn’t seem to be influenced by the noise in the streets. But I had the impression and a lot of people did - that the Seattle meeting was influenced by what happened in the streets and I think that was hugely disappointing. But it was a copycat demonstration. It was quite brutal. I think the police always have a difficult situation and any suggestions that they overreacted are ridiculous.

MITCHELL:

You think they did a good job?

PRIME MINISTER:

Look if anything people were saying they were a bit too polite on the first day. But I don’t think they were unreasonable. Look if people throw themselves in front of cars and horses and so forth, and generally as you know they do they behave in a completely absurd fashion you’re always going to have the danger and I think the police were provoked. They had ball bearings thrown at them, urine sprayed at them. I mean it was just appalling and they’ve got to put up with this. I mean they’re ordinary people. I mean do you want to put up…..does any of your listeners want to put up with that. I mean this is in the ordinary line of duty. I think it’s appalling.

MITCHELL:

Some of them had fishhooks thrown at them with a bit of line on them.

PRIME MINISTER:

Precisely. I mean this is really courageous stuff and this is what these men and women have got to put up with the whole time and I’ve got a lot of sympathy for them.

MITCHELL:

Under your new legislation was that the sort of incident to which the Army could have been called?

PRIME MINISTER:

No because the police were always….they always had enough resources to deal with it. No there’s never any suggestion that you’d use the Army for that.

MITCHELL:

Prime Minister Indonesia seems to be suggesting Australian spies had some sort of role in the incident where those UN workers were killed. What’s your reaction to that?

PRIME MINISTER:

Well that’s wrong, they didn’t. They didn’t.

MITCHELL:

As simple as that.

PRIME MINISTER:

I mean that is just a story, I don’t know how well sourced it is and I don’t know whether it accurately reflects the view of the Minister. But that’s not the case. That was a brutal unprovoked attack on humanitarian workers and it was an appalling deed by the militias and we hope the Indonesians use their authority and influence to bring the militias back into line. That’s not easy but of course we had nothing to do with it.

MITCHELL:

Are they yet bringing the militias into line?

PRIME MINISTER:

Well that incident indicates no but I recognise that the chain of command in the Indonesian Army may be a little uneven, but there’s a lot of world pressure on Indonesia now, certainly as those deaths occurred right at the time that the President was in New York and the rest of the world was meeting at the Millennium Summit so a lot was said about it including by the Secretary-General at the beginning of the meeting when we had a minute silence for the aid workers who’d been killed. Now that’s a pretty graphic demonstration by the world of its unhappiness at what had happened.

MITCHELL:

How are our relations with Indonesia now? Have they recovered from that low period or are they still a little bit dicey?

PRIME MINISTER:

Well we’re still going through a period of adjustment at a political level. At a day to day business, community, people to people level they’re really always continue to be quite good. But there was going to be a political fall out but the President said he still wants to come to Australia and we had a very positive talk at his initiative about the possibility of having a meeting of ministers preceding the meeting between the President and myself. So those relations are building but you have to accept that if you take a stand like we did, which was the right thing to do a year ago, that there was going to be some fall out and it’s just not possible to do what we did without there being some fallout.

MITCHELL:

Are we headed into another Australia Card. The AMA’s very critical of plans to link the Medicare numbers with pharmacy details….

PRIME MINISTER:

I think the AMA is overreacting. I think that is just…..

MITCHELL:

You opposed the principle of the Australia Card.

PRIME MINISTER:

Well the Australia Card was more embracing than that and I think this was just an efficient adjunct to providing a government service. I think the AMA is being super sensitive.

MITCHELL:

Were you a supporter of the Australia Card or not?

PRIME MINISTER:

Me?

MITCHELL:

Originally.

PRIME MINISTER:

I was on record way back in the early ‘80s as having once said that, you know, there was some, you know, it ought to be examined. I can’t remember the exact words and I don’t want to sort of recommit myself to them without reading the record. But we then decided to oppose the Australia Card back when I was Leader of the Opposition back when I was leader of the Opposition in 1986/87. In fact the 1987 double dissolution was obtained in part on the Senate’s rejection of the Australia Card legislation.

MITCHELL:

Would you change your view on that because the technology and the world has changed so much? I wonder whether something like an Australia Card is inevitable.

PRIME MINISTER:

Well it sort of hasn’t come up. I don’t know that I’ve thought a great deal about it because it’s not been something that’s been debated. We certainly haven’t had it in front of us in the four-and-a-half years of being in government.

MITCHELL:

Well Prime Minister we should be talking about Olympics. That’s what the whole country is talking about. You have sent the troops in – they’re going to drive buses or help out on the buses.

PRIME MINISTER:

Yes we got a please help call from the Olympics Minister Michael Knight and we’ve provided some defence drivers….the Defence Department has which, as always, the Defence Department’s very willing to help out in these situations. I mean we want to do anything we can to help. I don’t quite know what’s happened in relation to the drivers. There’s some suggestion that it’s union obstinacy, there’s some suggestion that it’s been double counting by the bus company. I don’t really know and the Defence Department said they could make some drivers available, well that’s terrific.

MITCHELL:

And have you got any clue who’s going to light the flame?

PRIME MINISTER:

No I haven’t got any clue.

MITCHELL:

The Prime Minister doesn’t know?

PRIME MINISTER:

No, you know you don’t want to get carried away with your own importance….

MITCHELL:

You’ll be there no doubt.

PRIME MINISTER:

I certainly will. Thanks a lot.

MITCHELL:

Thank you very much for your time.

PRIME MINISTER:

Thank you.

[Ends]

Transcript 22893