E&OE..........................................................................................
MITCHELL:
Mr Howard good morning.
PRIME MINISTER:
Good morning Neil, good to be with you again.
MITCHELL:
Apologies about the delay.
PRIME MINISTER:
No problem at all.
MITCHELL:
We'll take calls in a moment. Mr Howard, would you agree that
this is probably the most testing time of your leadership as Prime
Minister?
PRIME MINISTER:
Well, there are a few challenges around but I've got my eye
focussed on what is good for Australia.
MITCHELL:
Is it the toughest time do you think?
PRIME MINISTER:
Oh, it is always tough being Prime Minister. It is always tough
being a party leader.
MITCHELL:
We've got these ructions in the Coalition. I mean, it really
does look as if you are going to have to fight to keep the Coalition
together.
PRIME MINISTER:
I don't think the Coalition is in any danger at all. What's
happened is that people, particularly from Queensland were unsettled
by the result of the Queensland State election. It was after all
a State election and it was the judgement of the people of Queensland
on the politics of Queensland and whilst you can never completely
isolate these things to one state you have to take care not to draw
too many federal conclusions, but what is important at the moment
is what is good for Australia, and the reason that I continue to
support the sale of Telstra, and I noticed that the former National
Party Deputy Prime Minister Doug Anthony this morning came out strongly
in favour of that policy too, is that it is good for Australia.
MITCHELL:
But we do have obviously a disagreement about what is good for
Australia. We have the federal President of the National Party criticising,
well, asking questions over the tax policy saying we should delay
it. Now, over race power as well. We have the economy, by some reports,
heading into trouble. Telstra not settled down yet, the polls not
good. Now you put that all together and it looks like a pretty bleak
picture for John Howard.
PRIME MINISTER:
Well, one thing at a time. Let's deal with Telstra. Now, the
reason that I support the sale of Telstra is simply this, that the
30th of June this year, Australia's federal government
debt was $82 billion. If you sell Telstra you'll get about
$40 billion, so in one hit, you'll get rid of half the national
debt of the Federal Government of Australia, and just think of the
money you could spend on schools and roads and hospitals and all
sorts of other desirable things with the interest saving on that
$40 billion.
MITCHELL:
But surely the point is that you still have your partners, or at
least, part of your partnership resisting these things. Now, how
does the partnership survive when you've got argument over
so many areas?
PRIME MINISTER:
There are thousands of members of the National Party around Australia
and there are thousands of members of the Liberal Party around Australia
and you are not going to get everybody saying the same thing all
the time on every issue. The thing that counts is that the policy
making section of the National Party which of course are the elected
members of Parliament which are part of the Coalition, they are
part of that policy. Now, there's nothing strange about people
from time to time having some disagreement, individual members having
disagreement with a position taken by the Government. That happened
with Labor Governments, it's happened with Coalition Governments
in the past. This is not an easy time for the National Party, I
understand that, but what really counts is that you look at what
is good for Australia, not whether John Howard is being stubborn,
or John Howard's being inflexible, or John Howard's willing
to do this or that. I just simply ask the question when you look
at Telstra, when you look at tax, what is good for Australia? And
what is clearly good for Australia is to get rid of that huge federal
Government debt and also to have some money over to spend on additional
communications infrastructure in the bush. The same thing applies
to taxation.
MITCHELL:
So are you confident the parliamentary party, the National Party
parliamentary party will support you?
PRIME MINISTER:
Yes.
MITCHELL:
And if they don't?
PRIME MINISTER:
Well I just believe they will.
MITCHELL:
But if they don't?
PRIME MINISTER:
Well, that's hypothetical.
MITCHELL:
Okay, on tax. And I asked you about this last weeks ago. There
is nervous environment in the country, that nervous environment
continues. In that sense, does the National Party president have
a point. If you go ahead it increases the nervousness if there's
GST?
PRIME MINISTER:
No, I think now, because of Asia, it's all the more important
for Australia that we change our tax system. If things were more
settled in the Asia-Pacific region there may be a slightly lesser
argument but it is all the more necessary for us to go the next
step for our own sake once again, not because I want to have my
way or because people are being inflexible but it is good for Australia
that we have a fairer taxation system because that makes us stronger
and makes us more competitive. So, I don't accept for a moment
the argument that because of Asia we have to go easy on giving Australia
a better tax system. It is because of Asia that we must press ahead
and give Australia a better taxation system.
MITCHELL:
Because of what's happening in Asia and the economy in this
country, does it affect the way, the type of tax reform you look
at?
PRIME MINISTER:
Not a great deal. It makes it all the more necessary, for example,
to change the tax system so that our exports are more competitive.
And the present tax system makes Australian exports uncompetitive
and our new policy will make Australian exports more competitive.
Now isn't that a reason for the sake of Australia, forget about
the party politics of it, but for the sake of our country, we should
give it in these difficult economic times a more competitive taxation
system.
MITCHELL:
But what about race power. This is another area where the National
Party president is...
PRIME MINISTER:
Well, there is no intention by the Government to sponsor any referendum
of any kind on that subject.
MITCHELL:
Do you have the support of the National Party parliamentary party
then?
PRIME MINISTER:
Well, it's not even been raised with me.
MITCHELL:
Would you raise it with them?
PRIME MINISTER:
No, because it is not on my agenda.
MITCHELL:
It's not going to happen?
PRIME MINISTER:
No.
MITCHELL:
Okay, you make the point what's good for Australia'.
Obviously there's a difference of some views on what's
good for Australia. Is the National Party overreacting to the One
Nation thing?
PRIME MINISTER:
I do think it has unsettled the National Party in Queensland. I
just say again, that in Queensland, that election was a judgement
on the Government of Queensland. Now, I'm sorry that the Borbidge
Government was defeated. But I don't take One Nation lightly,
but you deal with One Nation by having good policy and doing things
that are good for Australia. The Australian public will support
the Coalition if it does the right thing by the country and we have
to go out and argue that. And the right thing by Australia at the
moment in relation to tax is to give us a more competitive and a
fairer tax system.
MITCHELL:
Is it correct that you would rather resign than back away from
tax reform?
PRIME MINISTER:
Well, I used that... I made that statement, yes I did, but in
the context of simply saying, look I'm not going to.. if people
say to me "Look John you've got to stop doing this, even
though you think it is good for Australia because some people may
like it" my answer to that is No, I'm not going to do
that. I'll continue to do what is I believe, and what I know
is good for Australia, irrespective of the political consequences,
because that is, in the end, that is what you are in public life
to do: to argue those things that you think are good for the country,
and then the public makes a judgement. And if the public decides
that what I'm arguing for is not in their opinion good for
Australia, well, they won't support me, but if they do, they
will. But you don't all the time calculate as to what might,
for the next two weeks, have more support than something else. You
just sit down and you say what is good for Australia, and then you
go out and argue for it, and that is what I'm doing.
MITCHELL:
This is the point I'm getting to about leadership though I
suppose, that if, and as you say, if necessary, you are putting
yourself of on the line aren't you?
PRIME MINISTER:
Well, all political leaders who believe what is good for their
country do that, otherwise you are of no use to your country. I
mean, what is the point of having a political leader, whether as
Prime Minister or Opposition Leader, argues things entirely out
of political calculation and never out of the public interest.
MITCHELL:
Do you have the total support of your own Party?
PRIME MINISTER:
Yes.
MITCHELL:
Are you aware of some mumblings in Victoria, the belief that you
couldn't win an election?
PRIME MINISTER:
Well, I don't know about that. There are always mumblings,
always people get nervous about...
MITCHELL:
Has anybody raised that with you?
PRIME MINISTER:
No.
MITCHELL:
Are you aware of it happening?
PRIME MINISTER:
No.
MITCHELL:
Hmm. So you are confident you are leader til the next election?
PRIME MINISTER:
Well, I would imagine so. I certainly expect so.
MITCHELL:
Yeah. Do you feel it personally testing at the moment?
PRIME MINISTER:
Not more than on some other occasions in the past. I've been
through a lot, Neil.
MITCHELL:
But as Prime Minister?
PRIME MINISTER:
Well, it is challenging at the moment but we are dealing with some
big things. There's a lot at stake. The future strength of
the Australian economy is at stake.
MITCHELL:
Well, let's look at that. Dun & Bradstreet, a very pessimistic
report today heading into a recession. Are we?
PRIME MINISTER:
No, I think that's too gloomy. But we are obviously being
affected by the Asian downturn and it is all the more reason to
have, as a Government of this country, a group of people who took
the decisions that had to be taken two years ago.
MITCHELL:
The Federal Treasurer seems to be suggesting they'll review
the economic forecasts, will you?
PRIME MINISTER:
Well, that's something that we will be influenced by the advice
that we receive, but we took some measures a couple of years ago
which were attacked by the Labor party and opposed by the Labor
Party but if they hadn't have been taken we would now be in
an awful mess. If we had followed Mr Beazley and Mr Evans'
advice, the Australian economy now would be much more vulnerable,
our interest rates would be higher, our inflation would be higher,
our debt would be greater.
MITCHELL:
But are your forecasts for economic growth achievable?
PRIME MINISTER:
The forecasts that were in the Budget have not been revised by
the Treasury. We naturally have to rely on the expertise in the
Treasury in relation to economic forecasts. You don't manipulate
economic forecasts, you rely on the advice of your experts.
MITCHELL:
Well, your Treasury yesterday seemed to be saying they would be
revised, it's down to 2.75 growth forecast.
PRIME MINISTER:
Are you saying the Treasurer?
MITCHELL:
Yes.
PRIME MINISTER:
Well, what Peter was doing was obviously always keeping open the
possibility as has always been the case and always will be the case
that economic growth forecasts could be varied, but we have not
received any advice from the Treasury, I certainly haven't,
and I don't believe the Treasurer would have either, because
he'd have told me, that we have to revise them downward.
MITCHELL:
Even if it is not a recession which is I think, are we heading
into a period of negative growth?
PRIME MINISTER:
Well, I wouldn't even say that Neil. What is obvious is that
the Asian economic downturn is huge, and it can't leave Australia
unaffected but it won't damage Australia as much as it would
have if we hadn't have done what we did two years ago, and
if we were to be replaced by Mr Beazley and Mr Evans who believe
in returning to deficit and debt and high interest rates, the Australian
economy would be far more damaged than would otherwise be the case.
And that really is the biggest political decision that will need
to be made over the next few months. Do you want Mr Beazley and
Mr Evans back in charge of the economy with their high deficit,
high debt, high interest rate policies or do you want the present
Government with its willingness to do things for the good of Australia
such as taxation reform?
MITCHELL:
The next few months we'll have to decide that will we?
PRIME MINISTER:
You'll have to decide.. well, the next election has to be
held by the first half, first bit of next year and we are now into
July but I don't know when the election is going to be. We
are going to release the tax policy soon, and we'll spend a
lot of time explaining that to the Australian public.
MITCHELL:
Is next week a chance for the tax package?
PRIME MINISTER:
No. No chance at all. I can tell you that.
MITCHELL:
Yes, good, thank you. We'll take some calls. Hello Bill go
ahead please.
CALLER:
Good morning Mr Howard.
PRIME MINISTER:
Hello Bill.
CALLER:
How are you?
PRIME MINISTER:
I'm pretty good.
CALLER:
That's good. Look, from out in the average suburbs of Melbourne
I've been looking at your performance on television, plus your
Ministers. I can't get a handle on solid direction from your
position and it is getting to the stage now, Sir, where I think
the Liberal Party, with due respect to Tony Staley, is becoming
crippled.
PRIME MINISTER:
Well, I obviously, Bill, don't agree with that.
CALLER:
Well, I just see that we are not getting any decisive pointers
saying where we are going, and everything is being put off consistently
and the despondency in the ...outside here in Victoria is getting
larger and larger against the Liberal Party.
PRIME MINISTER:
Well, you say we are putting things off. I thought we've been
criticised for not putting things off. I've just spent 10 minutes
talking to Neil about suggestions that we ought to put things off
and the implication is that I'm wrong because I don't
put them off and now you're coming on and saying that you're
hearing all the time I'm putting things off. I don't know,
you must be tuned into a different program. I mean I thought the
criticism of me at the moment was that I'm not willing to put
tax reform off, I'm not willing to put off the sale of Telstra,
I'm not willing to put things off, now I won't put them
off because they're good for Australia. Not because they're
my prized personal possessions.
MITCHELL:
Okay, thanks Bill, thank you for calling. John is next, go ahead
John.
CALLER:
Yeah, Mr Howard how are you...
PRIME MINISTER:
Might do better with this name.
CALLER:
Oh, this name, it's one thing we've got in common.
PRIME MINISTER:
Good. Is that all?
CALLER:
That's about it I'm afraid.
PRIME MINISTER:
Oh dear me, another one!
CALLER:
Okay then well look the problem is that you've introduce a
15 per cent surcharge on superannuation on incomes over $75,000.
PRIME MINISTER:
Yes.
CALLER:
Okay. The only problem what you've done is you've calculated
that on gross income not on the actual person's superannuation.
Now my superannuation is only calculated on my standard salary which
is $40,000. I have no option, I can't go any higher than that.
But I got a bill this week for a $1,020.
PRIME MINISTER:
I don't understand that. If you'd like to send all the
details of that to my office, just on the face of it it doesn't
sound plausible because the purpose was to introduce that on peoples
whose incomes were much higher level around the $70,000 mark.
CALLER:
Well, no....
PRIME MINISTER:
If your real income is only....
CALLER:
My salary is up around the $78,000 because.....
PRIME MINISTER:
I thought you said 40, I'm sorry.
CALLER:
No, my super is fixed at 40.
PRIME MINISTER:
Your super is fixed at 40, yes.
CALLER:
My super's fixed at 40 because overtime does not come into
it.
MITCHELL:
I see.
CALLER:
So with my employer right it's your superannuation is....
PRIME MINISTER:
But you still earn $78,000 a year do you?
CALLER:
That's right.
PRIME MINISTER:
I see, well $78,000 a year means that you are amongst as an individual,
you are amongst the 10 per cent of the Australian population which
are the highest income earners.
MITCHELL:
Okay. Thank you John. Michael go ahead please.
CALLER:
Good morning Neil, and good morning Prime Minister.
PRIME MINISTER:
Good morning.
CALLER:
Mr Howard, are you or Mr Costello aware of the Australian Tax Office
change in position regarding investment in film production tax deductibility
and that the intention of the Australian Tax Office is a four year
retrospective tax reassessment of investors tax returns?
PRIME MINISTER:
Well we certainly haven't authorised any retrospective application
of tax in that area. I often get people who ring me up saying are
you aware of what the tax office has done. You've got to understand
the tax office under the law acts independently of the Government...
CALLER:
And they're not accountable to you.