28 February 1997 TRANSCRIPT OF THE PRIME MINISTER
THE HON JOHN HOWARD MP
INTERVIEW WITH ALAN JONES RADIO 2UE
E& OE
JONES: Prime Minister, good morning.
PRIME MINISTER:
Good morning Alan.
JONES: 12 months Sunday, how long does it seem?
PRIME MINISTER:
On occasions a lot longer and on occasions only yesterday. But I still find the job, and
I'm sure I'll continue to find the job an immense privilege, very stimulating and
something that I find a great deal of satisfaction in doing.
JONES: Those who see you in operation every day in Canberra say that you are very much
chairman of the board, that the Government runs from your office. Is that an accurate
view? PRIME MINISTER:
Well in a sense those two statements are contradictory. If the Government runs from
your office you're not quite in the sort of hands off chairman of the board role. It's a
mixture of the two. Look, I am the chairman of the board or the first amongst equals,
however you like to put it, but I take a very keen interest in things that are important.
I try to let Ministers run their own portfolios. When problems emerge it's my
responsibility to get involved and it's also my responsibility to push and be responsible
for the major goals of the Government. So I guess it's a mixture. I think I've got the
mixture about right.
JONES: Is it fair for people to say 12 months out that it's been a year of living cautiously?
PRIME MINISTER:
Not a year of living it's been a year of living sensibly. I don't think it's a good idea
for any leader to play fast and loose with the security of the Australian people. I don't
believe that leaders should run around calling for change just for the sake of change.
There's been an enormous amount of change in peoples' lives over the last 20 years,
social change, personal change, economic change, political change. And therefore if
you want to change something you've got to be satisfied that what you're changing to
is better and you've got to be satisfied that you take people with you. Now, in areas
where I believe change is necessary, like industrial relations, I've pushed it harder than
anybody in Australian political experience in the last 20 years. I mean, I've led the
debate in this country in other positions for industrial relations changes. In other areas,
as you know, like the constitution, because I'm unconvinced that we're going to be
any better off I'm facilitating the debate and if the Australian people, in the fullness of
time, want change it will be their decision and I will naturally, as I've always said,
accept that decision. But I don't believe that change for its own sake is necessarily a
good thing.
JONES: All right, well having said that people are able to understand the kind of person, if they
didn't already understand, that John Howard is. Just running then off that word
change and your own statement that I'd like to see people comfortable and relaxed I
think you made that statement by the year 2000 I'd like to see an Australian nation
that feels comfortable and relaxed about their history. I'd like to see them comfortable
and relaxed about the present and I'd like to see them comfortable and relaxed about
the future can I ask you, are you comfortable and relaxed, for example, about the
health care system?
PRIME MINISTER:
No, I'm not. We'll be dealing with the final report of the Productivity Commission
arising out of the changes in health insurance premiums and other matters. We'll be
dealing with that very soon. There are many aspects of the health system which I'm
not comfortable and relaxed about. There's too much pressure on the public hospitals.
There are too few people in private health insurance.
JONES: Do you understand why?
PRIME MINISTER:
Well the major reason there are too few people in private health insurance is that the
previous government, against the advice of one of its own former health ministers,
Graham Richardson, allowed the number of Australians to fall below what you might
call the critical mass point of about 40%. And if tax breaks of the type we are
introducing in July had been introduced five or six years ago as people like Graham
Richardson wanted and Bob Carr now recognises should have occurred then we would
not now have such a heavy drain on the public hospitals.
JONES: But when Gough Whitlam became Prime Minister all those years ago and introduced
this failure which is Medibank-Medicare, which every Prime Minister since including
yourself, with respect, seems to be unprepared to touch, there were over 80% of
people looking after their own health care, took out their own private health insurance
and the premiums were deductible. What's wrong with that?
PRIME MINISTER:
Well Alan, the major reason why there has been that big change in relation to private
health insurance is it has become less attractive for people in private health insurance.
JONES: Only because you've stopped allowing people to cover their insurance as a tax
deduction. PRIME MINISTER:
Well the main reason is tax. Well, when we were last in office, with respect, in 1983
when we were voted out there was a tax deduction for health insurance. It was
abolished by the former government...
JONES: But why not reinstate it?
PRIME MINISTER:
Well, it's coming back on the 1 st of July.
JONES: What, $ 450?
PRIME MINISTER:
Well Alan, if we hadn't have had such a large deficit we could have afforded more but
we can't frankly afford more. But that is better than having nothing. I mean, there's
not a man or woman listening to your programme who's got private health insurance
who won't welcome that rebate, that $ 450. I mean, it must help.
JONES: Has anyone done any figures for you though? You see, the total health bill at the
moment is about $ 39 billion. If people actually were given a tax deduction for their
health costs and that gap didn't exist there would be an incentive for people to go out
of the taxpayer funded public system into a private health system. Surely you'd save a
massive amount out of that $ 39 billion. In other words, wouldn't the reforms fund
themselves? PRIME MINISTER:
People often, with respect, argue that and it sounds great on the surface but people
don't always behave in that fashion. Different people react differently to incentives
and the margins are often very thin and therefore the incentive is not that great. Many
people feel more comfortable with dare I use that expression again more
comfortable with the public system than a private one and you may find that you have
an enormous tax bill which is not recouped by the switch of people out of the public
system. Alan I understand there are a lot of deficiencies in the health system. It's a
shared responsibility between the Commonwealth and the States. We are very
conscious of it. I don't dismiss it. We committed ourselves to tax rebates. I believe
they will help. They should have been brought in years ago and if they had have been
we'd probably now have something like 40 to 45% of people in private health
insurance instead of about 34 to 35%. Now, I take on board all of the very legitimate
criticisms that are made about the system. We will be addressing a number of things
other than tax in looking at the private health insurance system and the Government
will be examining that whole area over coming weeks.
JONES: All right. Can I just ask you another question about jobs? There's about one and a
half million people out there unemployed. I mean I know you've been given crook
advice about the budget from bureaucrats who admitted in a Senate Committee
hearing on Wednesday they made 170 mistakes. That mustn't impress you.
PRIME MINISTER:
Well I wasn't happy, no. No I wasn't and everybody knows that. The one thing that
can be said in their defence is that it's had no actual effect on the budget bottomline
and this is the first time bureaucrats have ever, under any government, put together a
mid-year review in such detail. But that doesn't alter the fact it was a mistake and
those responsible for the area in which it occurred are well aware of how unhappy both
the Treasurer and myself are with that.
JONES: Well you've got one and a half million people unemployed perhaps, does it astound
you as it does every person listening to this programme when I tell them that last year
our beer imports went up 20%, our beef imports up 17%, our wine imports up 2 1%,
our milk and cream imports up 37%, our butter imports up 49%, that we can't actually
compete with concentrate from Brazil? So recently a businessman wrote to me about
a million Valencia orange trees to be destroyed in the MIA because we allow cheap
orange juice from Brazil. What the hell is going on?
PRIME MINISTER:
Well Alan what you're saying is that if you introduced import controls you would
bring about a fall in unemployment.
JONES: Yes, I am saying that.
PRIME MINISTER:
1 think the arguments for that are debateable. In some areas it is true that the pace of
change and the pace of tariff reduction has caused jobs to be lost in other areas
because people who previously invested in those industries that used to have tariff
protection have invested in other areas, jobs have been created. I mean, we are in fact
seeing jobs created, for example, now hand over fist in the tourist industry...
JONES:
That should be as well as, not instead of
PRIME MINISTER:
Well it's just to know that if you're an investor and you've got $ 10 million and you
find it more attractive to invest in a protected industry than in an unprotected industry
you're going to invest in the protected industry even though the prospects for job
growth ( inaudible)...
JONES:
Can I just ask you this. You're a parent and you've actually had to feed and clothe
your kids for many years and they're all mad about the Reeboks and the Nikes and all
that sort of stuff, just to take one example. Are you trying to tell me that you couldn't
find an Australian manufacturer that couldn't actually put Nikes or Reeboks on the feet
of your kids for the price that you have to pay when you go into the supermarket store,
$ 135 or whatever? Are you trying to tell me that we couldn't actually produce that
gear for that price? I don't believe that.
PRIME MINISTER:
Well what I'm trying to tell you Alan is that faced with a choice between investing in
something that gives you a 10% return and something that gives you an 8% return,
somebody will always put it in the 10% return. And it's not always the case that the
thing that gives you the best return is the industry that employs the most people.
JONES:
Last time you were Treasurer...
PRIME MINISTER:
Look Alan, I'm not arguing, I'm not arguing with you that it is stupid to reduce
protection without getting something in return from other countries. I mean, we have
a decision to take on the motor vehicle industry for example. Now, we haven't got the
final report of the Productivity Commission and I can't pre-empt what we're going to
say. But I am very well aware of the employment consequences of that decision. I'm
also well aware that the real growth in the motor vehicle industry in Australia lies in
the export market. Because Australia is a small domestic market. The cost of
manufacturing cars is quite high in any part of the world and in order to make dollars
and employ people as well as selling into the domestic market, which is relatively
static, you've got to be able to sell into the world market. So we've always got to
have an eye to the export market if we want big investment and we want jobs in the
industry. So it is not as simple for us to say look, we'll put up the barriers, we'll keep
everything out...
JONES: No, I'm not saying that.
PRIME MINISTER:
Well, I'm glad because it is a mixture of the two. It is sensible...
JONES: It is, but we're out of kilter. See, I don't know where that kind of argument comes
from because I know the way Prime Ministers function, I worked for one, and they get
all this rubbish put over their desk that bureaucrats write and I wish we'd just get rid of
some of those bureaucrats. See, when you say that to me I then look at the figures in
front of me where our manufacturing trade deficit that is, just to explain to my
listeners, the aggregate of what we manufacture and export to make money and the
aggregate of what we import. Take them away. When you were last Treasurer the
deficit was $ 2 billion. Very tolerable. We could live with it because it was a different
framework in operation there in relation to tariffs and whatever. That deficit is now
billion. Now, we're not fair dinkumn are we? We've dropped the tariff barriers.
We're letting all these imports in. When you do that you're actually exporting jobs.
Someone else overseas has got the jobs, manufacturing stuff that we're letting into the
country. How can we sustain that deficit?
PRIME MINISTER
Alan, that argument is, like all arguments in this area, it is correct up to a point, just as
the argument in reply I've given you is correct up to a point. It is a question of getting
the right mix. It is not a question of being a slave to ideology or responding to the
latest piece of advice that comes across your desk. You've got to try and get a mix of
the two. It is a fact that in some highly protected industries, despite the highest tariffs
in the country, employment has fallen steadily over the last 20 years. You can't get
away from the fact that people will always invest their money in the industries that will
do the best and if you have industries that are very heavily protected but don't employ
many people, and you will attract investment into them to the detriment of investment
into other industries that might grow more quickly and employ more people. Now
what I am trying to do is to get a correct balance between the two of them.
JONES: You understand the concern though, don't you?
PRIME MINISTER
Alan, I do. I understand, I mean, I have been to South Australia, for example, many
times and talked to people in the motor vehicle industry. I understand these things.
JONES: Right. Well let's just take it a step further. On March 12 you were elected. On July
the official interest rate went from 7.5% to On November 6 it went from 7 to
On December I11 it went from 6.5 to Now Japan is the most successful
economy in the world. They've got unemployment...
PRIME MINISTER
No, I don't entirely agree with that.
JONES: Well it's one of the most..
PRIME MINISTER
I think the United States is.
JONES: Okay, well Japan, United States. Japan has an unemployment rate of about 2.5% and
businesses up there pay about 2% for their money. Why when you have presided over
a reduction on those sorts of interest rates, down to an official rate of 6% is business
the only engine that can employ these people that you want employed still paying 13,
14 and
PRIME MINISTER
Well I think there are two reasons for that. Firstly, I don't think the banks pass on the
reductions quickly enough. That's the first point I have made and that is a criticism
that the Treasurer and I have repeatedly made and we will continue to make, and
secondly and most importantly, the banks need more competition in the business loans
area. Now you mentioned business loans. Let me compare housing loans. Housing
loans have come down dramatically. You know why they've come down? They've
come down because there's been more competition and that's the reason. The
greatest... JONES: Why wouldn't you think of doing though what the Bank of Japan does? The Bank of
Japan is directed by the Government to funnel money into manufacturing and
agriculture at very significant concessional interest rates..
PRIME MINISTER
Well I say on that Alan that the major reasons why Japan has a very low
unemployment rate is that the whole culture of that country is utterly different from
what it is in Australia and no Government can turn the inherent culture of a country..
JONES: No. PRIME MINISTER
You have lifetime...
JONES: But you're talking about..
PRIME MINISTER
You don't have the same obligations on taxpayers in Australia as they do in Japan to
look after their own. In the whole, people have lifetime employment, your companies
are meant to look after the retired people. Now I mean that might be a good thing but
you're not going to bring about that kind of...
JONES: No but you were just talking before about investment and no business is going to go
out and enthusiastically invest when they are being charged 15% for their money.
PRIME MINISTER
I agree with that and that is why we have pushed very hard to have lower interest
rates. It's why we cut the deficit and because if you have a lower deficit, in time you
have lower interest rates but the key to even lower interest rates for small business is
of course a continuation of our policies which push rates down but also the key to it is
to have more competition. Now you've seen it happen in housing, and it's the lowest
housing loans since the late 1960s and that is because of Aussie Home Loans, and
RAMS and all those other small groups that have really...
JONES: Well listen, we've got to go to the news and I just want to give you a chance to say
something. It's 12 months in. There's 12 months in front of you. It's going to be
tough. What do you say to the people listening to you now about what they can
expect from John Howard?
PRIME MINISTER
Well there will be a continuation of the style of government that I tried to describe in
my opening remarks. We do have challenges but we have a lot of strengths and we
have a lot of opportunities. I am going to keep in touch with the Australian people. I
will never take them for granted. I will always regard the job that I have as an
immense privilege and the most important commitment I made I believe I have
honoured and that is I have stayed true to the essential promises that I took to the
people at the last election, and I promised the Australian people a continuation of an
approach to Government that listens to what they have to say, understands their
problems, on occasions is willing to argue very strongly and very passionately the need
for change and reform but somebody who believes that on the great balance sheet of
the history of this country is a very proud one, and as we look back over our history
we have far more to be proud of than we have to be ashamed of and we should take a
discriminatory approach towards change. We've changed the things that have failed.
We keep the things that have worked.
JONES: Okay, just on that subject, I didn't want to pursue this but you are aware of course that
the Wik decision is, in perspective holding up about $ 9 billion worth of decision
making which is also jobs. When will the nation get an answer from you on Wik?
PRIME MINISTER
I expect to be able to make a recommendation to the Cabinet at Easter. I have spent
an enormous amount of personal time over the last few weeks since I came back from
my annual break talking to everybody, to the Aboriginal leaders, to the states, to the
mining and farming leaders. It is very complicated. Everybody at the moment is
approaching it with great goodwill to see if we can get an agreed outcome. If we can't
I will recommend a course of action to the Government because this issue has to be
resolved. The Wik decision did overturn one of the basic principles of what we
thought represented native title.
JONES: It overturned an assurance by the previous Prime Minister.
PRIME MINISTER
Well it certainly did and it overturned a preamble in the Native Title Act which said
that the grant of a pastoral lease extinguished native title. Now the courts made that
decision. It is the prerogative of the Parliament to change the law as declared by the
courts. I am trying to reach an agreed outcome which will deliver justice and certainty
to everybody. I am concerned about the impact of that decision on the security of
pastoral titles. I am concerned about its impact on resource development. I had a
group of Aboriginal people from the Cape come to see me last week, pleading with me
to change the Native Title Act. They had cut a very, very beneficial deal with the
Queensland Government and the mining company which would have delivered jobs
and benefits and hope to them and to their children and this deal was frustrated by a
minority of who they describe, not me, they describe as malcontents and they were
pleading with me to change the Native Title Act.
Now that, there couldn't be a better demonstration to me as Prime Minister, they were
Aboriginals, they were the Waanyi people and there were six of them. They were
Aboriginal elders. They were respected leaders of their community saying the Native
Title Act is a failure. One of them actually said to me, I am going to file a claim
against the Native Title Act. This has let me down, it's not delivering me anything.
Now that's not John Howard, it's not Tim Fischer, it's leaders of the Aboriginal
community who want to make the process of reconciliation work, who want the
benefits of investment in mining companies, who want the jobs that investment will
generate for their children. They want it, they want a future for their children. They're
not worried about nitpicking and political point scoring. They want a future for their
children and they are being held up by who they describe as the malcontents and...
JONES:
Well just on that, I mean, you mentioned Tim Fischer. He's copped a serve today
from the Chief Justice. Isn't Tim Fischer entitled to criticise a High Court judgement
which puts so much in this country at risk?
PRIME MINISTER
Interestingly enough, that was a dispute about the timing of the judgement but
interestingly enough, the Chief Justice in his letter published this morning makes that
very point. There is nothing wrong with criticising judgements. People frequently
criticise the judgements of the courts. You know, obviously the courts have a role and
an authority in our constitutional set up and I think, we have a very, very long history
of great judicial integrity in this country. One of the great strengths Australia has is
that we do have an incorruptible judiciary but that doesn't mean to say that we always
agree with the decisions they take and the point has to be made, Alan, is that the court
declares the law as it is. It is the Parliament's ongoing right to change the law if it
thinks that change is in the interests of the Australian community and that is the
attitude I adopt towards the High Court and it is the attitude I adopt towards the role
of the Parliament.
JONES: All right. Good to talk to you. Have a good Sunday.
PRIME MINISTER
Thanks Alan.
JONES: Prime Minister, John Howard.
ends