20 August 1999
E&OE……………………………………………………………………………………
MITCHELL:
Mr Howard good morning.
PRIME MINISTER:
Good morning Neil.
MITCHELL:
Mr Howard, I’m almost speechless with delight. The Treasurer’s reported as saying there’ll be further income tax cuts. What’s on, what’s planned?
PRIME MINISTER:
Well I saw the report. We always like to hold out the prospect of further taxation relief. We don’t have anything specific to commit ourselves to at the moment. There’s a huge tax cut coming into force on the 1st of July next year when the GST comes into operation. That is the biggest personal income tax cut in our history.
MITCHELL:
Well the Treasurer says he’s an income tax cut man.
PRIME MINISTER:
He’s an income tax man is he?
MITCHELL:
Income tax….
PRIME MINISTER:
Cut it out. All Treasurers are accused of that.
MITCHELL:
Are you an income tax cut man as well?
PRIME MINISTER:
Look I want the lowest tax we have consistent with economic responsibility. The country’s running very well at the moment. Workers are better off because their mortgages are down and their real wages are up, and their tax will go down on the 1st of July next year. But beyond that, if we do well economically, well there can be more relief. But neither of us can be any more specific than that.
MITCHELL:
You agree with this principle though that you don’t build surpluses if your debt is zero, you give it back in tax cuts?
PRIME MINISTER:
Exactly. That’s the advantage of getting rid of debt because if you get rid of debt you’ve got a capacity to give back in tax cuts. You can provide some more services, and there are areas where more services are desirable. But I think most people beyond a certain level of services want the surpluses returned to them. And when we pay off our debt, and we’ll be able to pay all of our federal government debt off in net terms by the year 2002 if we can sell the remaining half of Telstra. But I say to those who don’t want the remaining half of Telstra, one of the real advantages of getting rid of it is that we’ll then have enough money to pay off the remainder of our net federal debt, and after that more capacity for tax reductions.
MITCHELL:
What’s a fair tax rate?
PRIME MINISTER:
Well a fair tax rate is that 80% of the Australian community pays no more than 30 cents in the dollar at the margin, and that’s what the Australian public will have from the 1st of July next year. As we get closer to the implementation of tax reform I think there’s going to be a much greater focus swing away from the GST and to the value of the personal tax cuts. Up until now most of the debate has been about the GST. That will change as we get closer to implementation day, then people will begin to realise that you could perhaps now be earning $20,000 a year and you could lift that income to $50,000 a year, that’s double it…increase it by two-and-a-half times without going into a higher tax bracket. Now that will give to middle-Australia, to 80% of the Australian community a tremendous additional incentive to work and that is what a taxation system should be about – giving people incentive to work harder without an increasing amount being taken by the taxman.
MITCHELL:
Okay. But the principle is there, if Telstra’s sold and all goes well and we can perhaps look at future tax cuts?
PRIME MINISTER:
Indeed.
MITCHELL:
On the Ralph Report, a couple of weeks ago I spoke to you, you were going to read it over the weekend.
PRIME MINISTER:
Well I’ve done that.
MITCHELL:
[inaudible]
PRIME MINISTER:
I’ve read it over several weekends. It’s big and complicated, but very good. Cabinet has started to discuss it. We’ve had several discussions. We’ll have another one next week. Mr Ralph is going to talk to a number of my colleagues about it. I don’t disguise the fact that we’re not in a position yet to make announcements. We want to get the collective Cabinet head around it. It’s a very big issue. We want to get it right. We’re not going to delay decision making but we’re not going to just pick the recommendations up and run with them without giving them a lot of thought.
MITCHELL:
How significant will it be?
PRIME MINISTER:
Well it will change the way we tax our business activities for the better. We will make changes. We haven’t decided on what all those changes are. The aim is to make this country as attractive as possible as a place in which to invest, and also the aim is to encourage Australians to invest more. We do need to make some changes to our capital gains tax system. One of the debates that is central to the Ralph Report is whether you opt for a lower general company tax rate, say 30%, paid for in part by taking away special concessions which are now available for things like accelerated depreciation. Now some companies like that. If you’re a service company, if you’re a bank, or you’re an advertising agency or if you’re a recruitment agency you think that’s a good idea because you don’t have much to depreciate in an accelerated way. On the other hand if you are a mining company where you need to make large acquisitions of capital equipment and depreciate that over a period of time, different consideration.
MITCHELL:
Have you made a decision on that yet?
PRIME MINISTER:
No not yet but it’s one of the issues that’s central to the debate and I’m asking the business community to keep in mind that when you’re looking at the impact of business tax don’t just look at the impact of the Ralph recommendations. Look at the impact on your business of the GST. Some businesses do much better out of the GST than others. I think it’s fair to say that manufacturers have done better out of the GST than service industries because under the current wholesale tax system manufacturers pay wholesale sales tax, or the wholesale sales tax on manufactured items but not on services.
MITCHELL:
Okay. Now onto something else, the republic debate. Your position is very well know known there. But let’s take it forward a step – do you believe if we become a republic there will then be pressure to change the flag?
PRIME MINISTER:
I think some people want that. Now I’m not….well I’m against changing the flag. But, look, historically what happened was the two things were debated together and now people have sort of just focused on the republic. I am against changing the flag. Neil, can I say this, totally against it. And I think some people will pressure for change in the flag, yes. But I’m not suggesting for a moment that that issue is being voted on in November. I mean it’s not.
MITCHELL:
But the republicans are avoiding talking about it because they know it could frighten the horses. It worries me. I mean there’s a secret agenda there. If you become a republic then we change the flag.
PRIME MINISTER:
Well you should ask them. Don’t ask me, I’m not a republican.
MITCHELL:
Well Peter Costello’s writing about symbols in the….his speech about symbols and how important the symbols were. Well there’s no more important symbol than the flag.
PRIME MINISTER:
Well there is no more important symbol than the Australian flag, and I don’t want to see it changed and I don’t think the great majority of Australians want to see it changed. Could I just say one other thing about this republican issue – everybody knows my view. I will, particularly as we get closer to the event, I’ll be making some considered statements explaining in a positive way why I support the present system. But I’m not going to sort of get into a day to day response on what this or that person says about the detail of the debate. There are other issues that I have to deal with as Prime Minister. But people will have a very clear understanding from me as a result of a number of considered statements as to exactly why I support the current system.
MITCHELL:
Well that means you’ll be playing a pretty active role then as Prime Minister in the debate.
PRIME MINISTER:
The public’s entitled to know why their Prime Minister does not support change. It seems to me I’m damned if I do and I’m damned if I don’t. There’s a suggestion from some that I should really say nothing at all while everybody else makes a contribution. There are others who are saying that, you know, I’ve got to intervene and let my position be known. I mean it’s a very unusual situation.
MITCHELL:
But you will get involved?
PRIME MINISTER:
No I will explain to the Australian people in detail and in a positive way why I support the current system. I’m not going to respond to comments made by every person, be they on one side or the other during the course of the debate. I don’t want to get involved in the trivia of it.
MITCHELL:
Does that include David Elliott, your former adviser who’s today talking about…..
PRIME MINISTER:
It includes comments made from time to time on both sides of the debate. I mean I have got more important things to do then to comment upon each and every individual remark made by activists on both sides of the argument.
MITCHELL:
I can understand that but….
PRIME MINISTER:
I mean….
MITCHELL:
…..but we aren’t heading to a Nazi dictatorship….
PRIME MINISTER:
Well nobody….I have never used extreme language in this debate and I never will. But I naturally, as a citizen, and as Prime Minister, I have sponsored the referendum. I kept my word. I told the public we’d have a vote. A lot of people said I wouldn’t have a vote. A lot of my critics in the lead up to the ’96 campaign said one way or another if he becomes Prime Minister he’ll stop it happening. Now I haven’t tried to do that.
I’ve allowed the debate to go ahead, I’ve promoted the referendum and the Government is equally funding both sides of the argument. But I have a right to express my view and I don’t think it’s reasonable of people, including some journalists, to run around and basically say, well look, John Howard should stay out of it. I mean, I’m not going to get involved in it on a day-to-day basis but, of course, if journalists keep asking me questions, as you are, it’s very difficult to stay out of it.
MITCHELL:
Will it be a speech to the nation or something like that?
PRIME MINISTER:
Well, I will make a number of considered statements explaining why I support the present system and I will transmit my views to the Australian people in that way rather than giving a running commentary every day on do you agree with what so and so said.
MITCHELL:
Fair enough. There’s just one thing that worries me, in my mind, about the Queen’s visit next March. If the republican referendum doesn’t get up, I wonder if it’s the right environment for her to come to this country because there could almost be protests about that.
PRIME MINISTER:
Oh, I don’t think either way Australians will be other than immensely courteous, whether you like her or don’t, agree with her or not. If people are not interested they just take no notice. I mean, it’s a free country and we’re a very sophisticated people about those things. We don’t display bad manners but equally those of us who are not interested in her, won’t take any interest in the visit. And those who want to welcome her, whether republican or not, as a person who we respect then that will happen too. I’m not the least bit concerned about that.
MITCHELL:
We’ll take some calls for the Prime Minister, of course, 9696 1278. Hello, Tony, go ahead please.
CALLER:
Good morning, Neil. Good morning, Prime Minister, how are we this morning?
PRIME MINISTER:
I’m pretty good, Neil. Is it, Neil, is it?
MITCHELL:
No, it’s Tony.
PRIME MINISTER:
Tony, sorry. No, you’re, Neil.
MITCHELL:
You’re the Prime Minister.
CALLER:
I’m a voter.
PRIME MINISTER:
You’re a voter, even better, a very important bloke.
CALLER:
Could you clear something up for me, Prime Minister, friends of ours were in Coober Pedy about a month ago and there’s all these dogs around the street. They inquired as to why all the dogs were roaming the street and apparently the Aboriginal people up there get paid $10 to feed the dogs. Firstly, is this true and if it is so, why would they be paid $10 to feed the dogs?
PRIME MINISTER:
Well, I’ve never heard of that. It sounds very strange to me and I’d be surprised if things like that were operated on the basis if you’re an Aborigine or not an Aborigine. I can’t believe that.
MITCHELL:
I don’t know if it’s an urban myth or not, Tony, it’s been suggested here before. We’ll check it out with Coober Pedy.
PRIME MINISTER:
Yeah, look, I just don’t know and, I’m sorry, I can’t help you on that.
MITCHELL:
Okay, Ian, go ahead please, Ian.
CALLER:
Good morning, Neil, good morning, Mr Howard. I’ve worked for Paul Barratt in the Department of Primary Industries and Energy and found him to be a very capable person. Now, I was just wondering, you recruited him to the public service, do you not have confidence in his ability any more?
PRIME MINISTER:
Well, you know as well as I do that there’s been a court case and you also know that he’s put his case, the Government put its case. I don’t bear Mr Barratt any ill will.
MITCHELL:
Will he still be sacked?
PRIME MINISTER:
Well, I’m not going to comment on his future.
MITCHELL:
Will it be decided today?
PRIME MINISTER:
I’m not making any comment on that. I don’t think that’s appropriate. I repeat, I don’t bear the man any personal ill will and I don’t have anything further to say at the present time because that’s not appropriate. He took the matter to court, he put his case the Judge made a finding. The finding of the Judge didn’t surprise me in the slightest. I thought it was a common-sense finding and we will naturally follow the law of the country as declared by the Judge.
MITCHELL:
[Inaudible]…you hired him didn’t you, I mean, Mr Barratt said that himself last night.
PRIME MINISTER:
Well, the sequence of events was that he indicated a willingness to return to the public service and he was offered a job by my Government. That was the sequence of events which is somewhat different from the emphasis that’s been placed in the newspapers. I’ve read some reports suggesting that we’d sort of been close friends for 20 years. Now, I have nothing against him personally but I think there’s just been a little bit of embellishment at the edges as far as the character of the relationship is concerned.
MITCHELL:
Do you regret hiring him?
PRIME MINISTER:
Well, I’m not going to talk about that because it’s not appropriate for me to do so. I can only repeat, I bear him no personal ill will or malice. The Judge confirmed the basis on which a relationship should exist between the Government and its senior bureaucrats. It required procedural fairness, to put it one way, be followed. Naturally the Government accepts that because it’s the law as declared by the court.
MITCHELL:
So does the Prime Minister have the power to dismiss if he wishes a head of a department?
PRIME MINISTER:
The Judge declared the circumstances in which that can occur, yes.
MITCHELL:
Are you happy with that?
PRIME MINISTER:
I accept it completely. In the end, we’re all bound by the law and if we don’t like the law we change it. Now, the Judge clarified the law or confirmed the law yesterday. His decision, which I’ve read, did not surprise me in the slightest. I thought that would be his decision. I thank the Commonwealth legal team. Naturally, nobody likes court cases of this kind to arise but Mr Barratt had a right to take his case to court. I don’t think the situation’s been helped by the deliberate courting of publicity that’s occurred.
MITCHELL:
By Mr Barratt.
PRIME MINISTER:
Well, I leave it at that. I don’t think the situation’s been aided by that. I don’t think that helps anybody. But he has a right, and as I say, I don’t bear him any personal ill will of any kind.
[COMMERCIAL BREAK]
MITCHELL:
The Prime Minister is in our Sydney studio. Mr Howard, Jesse Martin, the young Melbourne man sailing around the world solo. I talked to him earlier in the week. Now, you have sent him an e-mail.
PRIME MINISTER:
Yes. I sent him a message yesterday wishing him the best of luck and saying what a great matter of national pride when an Australia achieves something out of the ordinary. And he’s saying he’s been nine months alone on a boat, relied on himself, across the world’s most dangerous waters and that presents both a tremendous example and a tremendous challenge to the young people of this country. And whatever the outcome is we hope it’s very, very positive and successful. He’ll have the admiration and a sharing in the spirit of adventure of his fellow Australians and we wish him Godspeed and a safe return home very soon.
MITCHELL:
An extraordinary young man.
PRIME MINISTER:
An amazing young man and he will actually beat the record if he does succeed in his goals of another Australian. David Dickson, Western Australia, who was 18 years and 41 days when he completed his unassisted circumnavigation. So to break that record Jesse, I think, has to complete the remainder of the voyage within seven weeks.
MITCHELL:
The Geelong road. Now, the State government said they’ll pay for half of it and they’re expecting the other half in Federal funding. Will it be there?
PRIME MINISTER:
We’re looking at it. I saw Mr Kennett in Melbourne earlier this week. We discussed a number of matters including that and we are looking at it. I don’t think I can say any more than that at present.
MITCHELL:
It’s been suggested it’ll be timed for the State election….
PRIME MINISTER:
Well,….
MITCHELL:
….suggested?
PRIME MINISTER:
Well, you should never be cynical. If there’s merit in supporting it given the other demands and priorities we have, I mean, if you look at it in isolation of course there’s a case for funding it but, from the Federal point of view, but we can never look at these things in isolation. And it’s not as if we don’t fund other roads of national importance in Victoria and we announced some during the Federal election campaign. But, Neil, we are looking at it and if we have something further to say you will hear.
MITCHELL:
Very well. David, go ahead please.
CALLER:
Yes. Good morning Neil. Good morning Prime Minister.
PRIME MINISTER:
Yes David.
CALLER:
Um, as an ardent cricket fan, the anti-siphoning laws. Why do we as free-to-air people miss out on the tour of Sri Lanka and the one-day internationals and Zimbabwe test? Can you please intervene so that we can free-to-air see it on the picture?
PRIME MINISTER:
Well, I’ll check this out but my understanding is that the anti-siphoning laws haven’t been breached. It's just that commercial decisions have been made by the channels. I mean, what the anti-siphoning laws require, as I understand, is that they should be offered to the free-to-airs. But if the free-to-airs don’t want them the original acquirer of the rights is entitled to have them used on pay TV. But I’ll check that out. You have raised an understandably heart felt plea.
MITCHELL:
Thanks David. Mr Howard, tuna. Now, it seems that we are of the battle with Japan…
PRIME MINISTER:
Yes. We have taken the Japanese to court and no less than the Attorney-General has been over there fighting it out on our behalf. We’re getting down to boost supporting the Australian case before the relevant tribunal.
MITCHELL:
How important is it?
PRIME MINISTER:
Very important because this is a valuable resource and the Japanese, in our view, are doing the wrong thing.
MITCHELL:
Okay. Are you aware the Romanian Junior Wrestling Team wants asylum?
PRIME MINISTER:
Yes. I read it in the papers this morning.
MITCHELL:
So there’s no reaction yet?
PRIME MINISTER:
No. I don’t know any more than that. The first I knew of it was when I read it in one of the Sydney papers this morning before coming here. And I’ll find out during the day what the Immigration Department is doing about it. They’ll be dealt with in accordance with the normal processes. I don’t know whether they have got a case or not and I can’t really give a comment on the run.
MITCHELL:
There’s also a report today that 900 Kosovars now want to stay in the country and some of them will just refuse to leave. What do we do about that?
PRIME MINISTER:
We’ll try and handle it sensibly bearing in mind that we always said from the beginning that they were meant to be here in a safe haven and not permanently. The whole exercise has really gone very well and most of them go back to Europe with lovely memories of this country and feeling great goodwill towards Australia now. We will handle the remaining cases in a sensible way. I can’t rule out the odd difficulty here and there with individuals, that always occurs. But you are dealing with 4,000 people and in the main the whole thing has gone very well and I want to thank the Australian people.
MITCHELL:
Will any be allowed to stay over?
PRIME MINISTER:
Well, we’ll make decisions on that according to particular circumstances. We are disinclined to allow any because the rest of the people who want to come to this country and who are waiting in queues and that have abided by the rules will then be entitled to say: well, they took advantage of being here, we’ve abided by the rules and we, in effect, are being penalised.
MITCHELL:
Mr Howard, the Fairfax papers have been running a lot of detail about a number of German citizens and Nazis, members of the Nazi party [inaudible] to this country. And they have named people who are members of the Nazi party while admitting they thought that they didn’t know why they were, whether they were forced into it. Do you think that’s been fair? Is that relevant? Is there still anything to be done there or is it history?
PRIME MINISTER:
Well, I can understand the sensitivities of people who suffered at the hands of the Nazis. They’ll go to their graves, you know, with very very understandable feelings about what was done to their people by the Nazis and you can never forget that. On the other hand, it is a very long time ago. You may remember that 10 years ago we established some laws in this country for war criminals to be dealt with and it proved very difficult to have satisfactory prosecutions. And those activities were discontinued not because there wasn’t a willingness on the part of both sides of politics in Australia to bring war criminals to justice but simply through the passage of time we couldn’t guarantee fair trial. Now, while that’s not directly analagous to this situation it does, sort of, throw light on the distance in time that is now represented by these situations. And, I mean, I read those stories. I can understand sensitivities of some in our community about them and I respect those sensitivities very deeply. But it is a long time ago and I am not certain as to what a current government can be expected, with the passage of all that time, to do about those particular decisions.
MITCHELL:
Turkey. Awful, awful situation.
PRIME MINISTER:
Appalling.
MITCHELL:
Anything we can do about it?
PRIME MINISTER:
Well, we have made a contribution of a million dollars. We are considering more. The Foreign Ministry has been in touch with the Turkish authorities. I am very conscious that there are tens of thousands of Australians of Turkish descent and there’s certainly a lot of them in Melbourne, in the suburbs of Melbourne. And I know of some families who have lost, Australian families, who have lost relatives. And we’ll continue to be in touch with the United Nations and if more assistance is needed and can be given we’ll provide it because we are a very lucky country in so many ways including in relation to these things. And you really are greatly moved. It’s just an appalling disaster and I just and many of us can’t begin to contemplate the horror of being there.
MITCHELL:
It’s going to be a problem for a long, long time.
PRIME MINISTER:
Very, very long time. And the death toll is truly staggering when you bear in mind that you are looking now at thousands. It’s an appalling tragedy.
MITCHELL:
Okay. Just one last quick one. The Ministerial Council on Consumer Affairs is meeting today and considering, amongst other things, banks…fining banks for bad service. Could you see that working?
PRIME MINISTER:
Well, I, you know, look, I understand that. It sounds a little bit far fetched. I mean, how do you measure it? I’ll see what they have got to say but I am not going to put my hand up for it just on the run. Banks are pretty conscious that there are some concerns in the community. On the other hand, they’re not guilty of every single charge that is laid against them. And I think we have to have a sense of proportion.
MITCHELL:
Thank you very much for your time again.
PRIME MINISTER:
Okay.
[ends]