Subjects: GST; economy; petrol prices; ABC; electoral rorting; defence
E&OE……………………………………………………………………………………
MITCHELL:
Mr Howard, good morning.
PRIME MINISTER:
Good morning Neil.
MITCHELL:
You sound very pleased with yourself up there at the moment. Why?
PRIME MINISTER:
Well you won’t be getting me sounding smug, we’ve done a lot of things this year and there’s a lot that we can point to but I don’t end the year in any sense of triumphalism but I certainly end the year feeling that we’ve kept pace with the public, we had a great triumph getting the tax system in, and the Defence White Paper released a couple of days ago, the biggest defence revamp in probably 25, years has been very well received. We’ve had some major initiatives in things like salinity which is a problem we’ve needed to tackle for a long time. So it’s fair to say that we’ve been a very active government and that’s our job.
MITCHELL:
I would have thought in political terms you would would have expected to be in a far worse position than you now are given that you’ve introduced a new tax and it was always going takes time to bed down, given the time you’ve….the period of government, you tend to hit walls occasionally. I would have thought that you would be, politically very pleased that you’re in such a strong position now.
PRIME MINISTER:
Neil I thought we would have been, by the poll measurement, significantly behind as the year ended. That was my feeling in the middle of the year. But it has gone better than we expected. But what happened was that the public warmed to the idea that we had a go at changing something that they felt deep down needed changing and I think the Labor Party’s excessively negative campaign, really building all their political hopes on our tax reform being a failure, I think that’s blown up in their face because the public warmed to the tax system. They liked the personal tax cuts. They may not have been happy with every aspect of it but they did at least acknowledge it was something that the country needed and that we’d had the guts to do it and I feel that they hold a certain contempt for the Labor Party for being so negative.
MITCHELL:
Do you think there’s still a bit of flow through from the GST to come? I mean talking to some businesses recently, large businesses, who argue they have been absorbing some costs, they’ll be passed on in the New Year. Do you think that’s likely?
PRIME MINISTER:
Neil that could happen in some cases, yes. You could have a situation with some businesses where they stagger or spread the cost increases involved with the GST. That is possible. I don’t think it will be widespread but I think it will occur in some cases.
MITCHELL:
What sort of industries would you expect it?
PRIME MINISTER:
I think it will occur in some establishments in a whole range of industries. I don’t think you can say that one particular industry is going to be more likely to do it than another. So I can’t put a quantity on it but I just sense that there may be some people who do that.
MITCHELL:
Job figures down, slipped a bit yesterday……
PRIME MINISTER:
They did.
MITCHELL:
……there’s talk of a cut in interest rates, business confidence is perhaps not as strong as you’d expect. Is a downturn inevitable in the first quarter next year?
PRIME MINISTER:
I wouldn’t use a word like downturn. We’ve always said the economy would slow somewhat. Our growth forecasts were for lower growth next year. We have had 13 quarters of growth of 4% or more. It’s very hard to sustain that. There’s a slowing in the United States. “Downturn” is too strong, I would say a moderate slowdown and that’s to be expected and is no bad thing. The employment figures were very strong a few months ago, stronger than I expected. There’s a bit of an evening out occurring now and you’ve had a fairly unusual six months. You had the GST by definition almost, inducing some companies to bring forward activity, others to defer it. Then you had the Olympic Games and that had some distorting effect, some beneficial some not so beneficial on particular businesses. So I think you’ll get a better read on the medium term behaviour of the economy in the first six months of next year rather than this past six months. It’s been an atypical six months and there has been the inevitable adjustment with the GST. I recognise that a new tax system requires a lot of adjustment and I know aspects of that adjustment are difficult for business, particularly small business, and I’m very sensitive to that. And as I’ve said on your program before if there is fine-tuning we can undertake to make it easier for them we certainly will.
MITCHELL:
If there is a slowing down, presumably at least that means there’s likely to be adjustments in interest rates and I see that’s being….
PRIME MINISTER:
Well I don’t want to join that speculation. It depends, it depends on a number of factors and the bank that sets the interest rates, the Reserve Bank, has always seen inflation as the principle driver of interest rate adjustments.
MITCHELL:
I have heard, it surprised me, but I have heard a few people using the word recession, a possibility of a recession next year. Do you reject that?
PRIME MINISTER:
Yes, completely.
MITCHELL:
World oil prices have come down. Are you expecting lower petrol prices as a result next year?
PRIME MINISTER:
Yes. All the indications are, both because of the fall that we expect in the first half of next year, it may take a few months to occur, and also if the exchange rate of the Australian dollar against the American dollar remains firmer, then that should produce a reduction. I notice even that the, in the last week the weighted average of petrol prices in Melbourne is 91 cents a litre against 97 a week ago. Now that could move around as you know, it bounces around, several cents a litre during the week. But there’s already been just a little bit of softening. I naturally hope that softening becomes a big bit of softening and I hope it comes sooner rather than later because I don’t like these high petrol prices. I know that the motorists of Australia find them difficult and I would like to see the price come down. But as you can see and as you
acknowledge with your question it’s being very much driven by what happens with world crude oil prices. But all the indications are that they will be lower by the middle of next year than they are now.
MITCHELL:
Well that doesn’t do much I guess for the chances of you reviewing your decision on excise?
PRIME MINISTER:
Well we have discussed that before and I understand your view and I’ve done my best to explain my view to you and to your listeners. And I would remind your listeners we have invested $1.6 billion, or are going to invest $1.6 billion in road funding. That is a long-term investment and that is there in a sense forever.
MITCHELL:
Mr Howard, can you guarantee the editorial independence of the ABC?
PRIME MINISTER:
Absolutely.
MITCHELL:
The ABC staff clearly think that’s in jeopardy, in part at least because of the sacking of Paul Barry after a very tough interview with the ABC Chairman. You can understand why they think it. He does a tough interview and the next day….
PRIME MINISTER:
Well can I tell you I can’t understand how anybody could imagine that the ABC does not have editorial independence particularly under this Government. I don’t think anybody could seriously argue that the ABC doesn’t have quite a number of people who comment on public affairs in that organisation that aren’t very regular and often very fierce critics of mine and the Government. Now I accept that. I’ll disagree with them when I think they’re wrong and I’ll point out where I think they’re being inaccurate.
MITCHELL:
Do you think you get a fair go from the ABC?
PRIME MINISTER:
From some people no, from others yes.
MITCHELL:
Who are the ones that don’t…..are they still there?
PRIME MINISTER:
I’m not going to….well I think it’s common knowledge there are one or two who sort of elevate it to a bit of an art form.
MITCHELL:
There’s a perception isn’t there that what’s happening with the ABC is your agenda, the Government is trying to nobble the ABC?
PRIME MINISTER:
Well that is not true. I do believe in the ABC. I regularly appear in interviews on the ABC and I have a lot of respect for what the ABC does. But I do think in some areas its political balance is lacking and I say this publicly. It’s not something I say privately. I have had, what, in the time that he’s been Managing Director I think I’ve met Jonathon Shier on one occasion and spoken to him socially on another. It is well known that Mr McDonald is a personal friend of mine. Neither of us have ever disguised that but he’s a person of great independence and personal determination. And the ABC is run by the board. The board is appointed by the Government, the board appoints the Managing Director. And the idea that we’re interfering with the editorial independence, I mean this seems to be trotted out from time to time by people in the ABC. I’ve got to tell you I haven’t had any ABC people here in Canberra say to me they believe the Government’s interfering with editorial comment. I’ve not had that from any of your fellow ABC journalists, your fellow journalists who work for the ABC rather.
MITCHELL:
Do you agree with the direction Jonathon Shier is taking the ABC at the moment?
PRIME MINISTER:
Well my view really is this Neil that you appoint a board and the board appoints a managing director and you let him get on with the job. If I say…
MITCHELL:
The boss draws the line somewhere doesn’t he?
PRIME MINISTER:
The boss? He’s the boss.
MITCHELL:
Well you’re the owner. You’re representing….
PRIME MINISTER:
Yes but you’ve asked me to guarantee editorial independence and now you’re asking me to publicly comment as Prime Minister on whether I think Jonathon Shier is going in the right or the wrong direction.
MITCHELL:
But there are certain principles which the owner will impose such as editorial independence [inaudible]. What about things like sponsorship? There are certain guidelines aren’t there that…..
PRIME MINISTER:
There’s certain guidelines yes.
MITCHELL:
….don’t cross those lines.
PRIME MINISTER:
There’s certain guidelines.
MITCHELL:
What are they?
PRIME MINISTER:
Well they relate to things like balance, and they relate to….I mean I’d have to get the list out. I can’t recall all the things. They’re predictable things like balance and covering a range of subjects and looking after the legitimate interests of regional Australia and certain national interest. But look….
MITCHELL:
What’s balance? Balance is very much the eye of the beholder isn’t it?
PRIME MINISTER:
Yes it is and that’s the trouble. Balance often is accepting that the only way you have balance is not to ask, expect the same person to one week have a what you might call a left of centre view and the next week have a right of centre view. Balance is recognising you probably need to have two people – one with a left of centre view all the time and one with a right of centre view all the time and that way you get more balance.
MITCHELL:
Is the ABC generally left of centre do you think?
PRIME MINISTER:
On certain issues many of its commentators are yes. I think that’s traditional.
MITCHELL:
What about sponsorship in the ABC? Is that one of the guidelines you don’t break?
PRIME MINISTER:
Well we’re generally not in favour of that. But can we just make one thing very clear we give the ABC, what, $600 million, a very large amount of money. We did cut it in the first year but we cut everything in the first year except defence. And we had a budget deficit of $10.5 billion a year from Mr Beazley and we had to do something about it. And we’ve never apologised for that and there was no reason why the ABC alone, along with defence, alone should be exempted from cuts. That would have been ridiculous. But since then we have not further cut it in real terms.
MITCHELL:
Are you going to give them more money? They want….
PRIME MINISTER:
Well we will look at their application in the context of next year’s budget. But why should they, I mean there’s an implication in the whole of this debate that in some way the ABC should have been treated as it were like defence. Well I don’t quite, as much and all as I respect it, I don’t quite see it in that context.
MITCHELL:
Just one other guideline issue – is news and current affairs the core of the ABC or has that changed?
PRIME MINISTER:
Well let me answer that by saying I think it’s a very important part of the ABC. I think education’s important too. As a child I remember the role that the ABC played in school broadcasting, school education. I remember the role the ABC played in nurturing my love of sport. All my early recollections of listening to sporting broadcasts in Australia were ABC ones – on cricket, rugby league, boxing, the whole bit.
MITCHELL:
We’ll take a call. Andrew. Go ahead please Andrew.
CALLER:
Yes good morning gentlemen. I wonder if the Prime Minister would care to comment on a new excise being levied on automotive, or lubricants and is on petroleum based lubricants which would include a range of cosmetic grade and food grade [inaudible] oils which would be ultimately passed onto the consumers?
PRIME MINISTER:
When you say it’s a new excise….
CALLER:
My understanding is it’s a recycling excise or a levy for recycling directed at the waste oil [inaudible] in society which I accept.
PRIME MINISTER:
Yeah well I think there have been some put on in relation to…for conservation and environmental reasons. Whether it goes as far as you suggest I’d have to check. I don’t know off hand.
MITCHELL:
Okay Andrew, thank you for calling.
[ad break]
MITCHELL:
We’ll take another call and then I have a few more questions. Peter go ahead please.
CALLER:
Yes, good morning Mr Prime Minister.
PRIME MINISTER:
Good morning Peter.
CALLER:
I’m a battling small business, and I’ve just done a trip from Victoria up to Queensland and back, I’ve been on the road for six weeks. It wasn’t a very profitable trip unfortunately. What I found talking to fellow small businessman on the way up and on the way back was they’ve been absorbing cost increases for the last 5 months, and we’ve really sat done in the last 3 weeks and really done our figures (inaudible), I’ve noticed that the price increase has generally been anywhere from 20% to 35%, and we just can’t really absorb it anymore and I see the next 3 months, 4 months, we’ve got to pass these cost increases on and it’s either going to make us or break us and we just can’t, we just can’t look at our customers anymore and say well we can keep selling at the old price, we’ve just had all these price increases and I’m really worried.
MITCHELL:
You’re talking about the GST Peter, are you?
CALLER:
Yes the flow on effect, everything. A lot of people are trying to be good to their customers, not put the prices up much and absorb it but there comes a time when you really face reality, and the reality is that you just, you just really, the writings there on the wall, I’m worried next year when we have to put the prices up because our margins are so much reduced.
PRIME MINISTER:
Can I ask you Peter what, if I may interrupt, what sort of business you’re in.
CALLER:
I do promotional products, the t-shirts, the stickers, the caps, the stubbies…
PRIME MINISTER:
And you’re saying that you’ve had price increases of 20% to 30%
CALLER:
Oh yeah, it’s not, well my business is under $50,000 right, and my previous, one of my major suppliers went out of business so I had to go to another bloke and I’ve been with him before the GST came in, and then he said all my real products have gone up, and I can understand that, he’s a pretty good bloke, he showed me what had gone on, and then if he has to charge me the GST on top of that…
MITCHELL:
Okay, so the GST and price increases…
PRIME MINISTER:
Well Neil, I don’t pretend that every single small business in Australia is doing well, and I don’t deny that there haven’t been cost pressures, and in answer to an earlier question that you asked me I acknowledged that some businesses may be spreading the price increases, and like all businesses always they’ll be influenced by competitive pressures. And I can only react to the generality of what people tell me, I have some people who speak the way Peter has spoken, I have a lot of other people who speak to me differently, and there are a range of optimistic and not so optimistic responses. I always knew that the introduction of the new tax system would have some challenges, but I also have to say, in keeping things in context, that it’s hard to see how you can have 20% to 30% cost increases as a result of the GST.
MITCHELL:
Okay Peter, thank you for calling. Prime Minister are you softening on the prospect of the formal apology to Aborigines?
PRIME MINISTER:
No I remain of the same view that it’s not appropriate to have a formal apology, my view on that has not altered. But I’ve always been very sympathetic to the cause of reconciliation and perhaps yesterday’s breakfast was an opportunity for me to communicate that personal commitment to reconciliation, and communicate it in a more effective way than I may have had on other occasions. And if the view has developed as a result of what I said yesterday, that I and the Government are really a lot, together, a lot more committed to reconciliation and we do wish to properly honour the place of indigenous people in our community, well I am glad of that. My position in relation to a formal apology remains, I made that yesterday, clear. But I think what’s happened on this issue is that the ground has shifted in relation to all points of view over the last year. We’re ending the year feeling more reconciled on this issue than we did at the beginning of the year, and a number of things have contributed to that, I think the Olympic Games helped.
MITCHELL:
Do you think your attitudes have changed through the year, I think a lot of people have?
PRIME MINISTER:
Well I’m like everybody else, of course they’ve changed in the sense that I feel the country is a lot more at peace with itself on the issue than it was at the beginning of the year. And even where you have differences like the formal apology, we’re not allowing those differences to overwhelm the debate. I made the point yesterday that on something like this the things that unite us are more important than the things that divide us.
MITCHELL:
What about a treaty, do we need one or not?
PRIME MINISTER:
No, I’ve got reservations about a treaty, and my position in relation to that has not altered and I tried to make that clear yesterday, and I repeat it this morning. I don’t see a treaty as being appropriate for a united, cohesive nation. You make treaties with other countries, you don’t make treaties with each other. I think what’s happened over the last year is that people have come to recognise, more than perhaps at the beginning, that there are many paths to reconciliation and rather than have this sort of stereotyped attitude that the only way you can have reconciliation is if you have a formal apology, and you have a treaty and you do this and this and this, it’s not like that. Different people express their feelings about each other and about other Australians in different ways and just because somebody like myself does not support a formal apology or a treaty, doesn’t mean that I’m not very strongly committed to reconciliation, that I don’t recognise the importance of symbolic gestures, that I don’t of course recognise the importance of practical reconciliation.
MITCHELL:
The, onto something else, the political rorting, as it’s described, is it proper that, I know it’s legal, but is it proper that one party actually funds another party to run an election, is that proper?
PRIME MINISTER:
Well, I’m not aware, can I say, that that happens…
MITCHELL:
…minor way, helping the Liberal Party and so…
PRIME MINISTER:
Well I’m not aware of that, and I’m certainly not aware of any charges that have been made by, or any suggestions that any of my colleagues in Federal Parliament have done that. I, that’s the extent of what I can say. Is it proper, I can understand why the public would not see it as proper, and I, as I say, I’m not aware that my party does it.
MITCHELL:
Not even with the Nationals?
PRIME MINISTER:
Well, in a sense we are the same, aren’t we. We’re a Coalition. I would not see any difficulty in the situation, and can I say once again I’m not sure that that happens either because there’s often a bit of rivalry and competition where you might have a Liberal candidate and National candidate running in the same area but we do operate in Coalition, and in the eyes of many people we are one party.
MITCHELL:
Would it just not be cleaner if it was not permitted at all to be the sort of dealing that’s gone on, regardless of preferences deals or anything, you can do your preference deals if you wish but there is no financial or assistance in kind between political parties.
PRIME MINISTER:
Well you could have a law to that effect, but there may be circumstances where that would work against the wishes of the contributors of both parties. And you’ve got to remember that, that it’s the parties in many cases, the members of both parties may want something to happen, particularly in the case of the National Party and the Liberal Party, where as I say we’re effectively the same.
MITCHELL:
If I can just quickly on defence, does Australia have to accept that it has a role in this region as a policeman?
PRIME MINISTER:
I don’t use the word policeman and I won’t use it. We have a role as a good neighbour, as a regional mate, I’ve used the expression…
MITCHELL:
Which involves a bit of security work
PRIME MINISTER:
Well it can, it has in the past, it did with Timor, it does now with Bougainville and the Solomon Islands.
MITCHELL:
Will that increase?
PRIME MINISTER:
It might, and that’s one of the things that we’ve had in mind in putting the White Paper together, it’s one of the reason why we’ve greatly strengthened the capacity in the Army, and given them more helicopter capacity, and more effective equipment for daily work, not only peace keeping, but also combat work.
MITCHELL:
Mr Howard, we’re heading into an election year, I assume you’ll have a holiday will you?
PRIME MINISTER:
I will have a holiday, from really Christmas Eve through till, well New Years Eve through to January, probably 21st, something like that, I have that three weeks off, like everybody else, and then get back into it.
MITCHELL:
Are you confident next year?
PRIME MINISTER:
I’m hopeful, I think the next election will be quite hard because I’ll be asking the public to vote for us third time in a row and that’s always difficult, although I was heartened to notice the Canadian Prime Minister leading his party to the polls won again, for the third time, so that was encouraging to me, although there are some philosophical differences between his Government and mine, I was very encouraged by that.
MITCHELL:
What’s your report card? How many points out of 10 for John Howard this year.
PRIME MINISTER:
I’ll leave that to others. I’d give, on policy achievement, I’d give the Government 7 or 8 out of 10, me personally I’ll leave that to others, but I think what we’ve done on the policy front this year has been quite remarkable and I’m very proud of it.
MITCHELL:
Thank you for your time, have a good holiday and we’ll speak to you next year.
[Ends]