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PEACOCK:
Prime Minister, thanks for joining us. Jeffrey Kennett, even Rupert
Murdoch, are suggesting that your Government's stalled
has it?
PRIME MINISTER:
No, it hasn't. The Government has had a remarkable record
of turning the Australian economy around over the last two and a
bit years. We've got the lowest interest rates in 30 years.
We've turned a budget deficit of $10.5 billion a year into
a surplus of
$2.5 billion. We've generated 290,000 new jobs. When I became
Prime Minister, 143,000 young Australians each year went into apprenticeships
and traineeships. The figure this year will be more than 200,000.
We have given the Australian economy protection against the Asian
economic downturn. When you add all of that up, it is a very fine
record of achievement in the area of national economic management.
No other government could have done as well facing such difficulties.
And the first and most important thing I say to Liberals, in particular,
this morning is that we have to come out fighting even harder to
explain to the Australian public just what has been achieved and
how great has been that achievement over the last two and a quarter
years.
PEACOCK:
Well, they'll also be explaining a new tax package. Are you
planning to bring that out, you know, in the next week or so? Is
it due before Cabinet for the final tick this week?
PRIME MINISTER:
I don't talk about Cabinet meetings but I can assure you that
the tax policy will come out soon. It will be far more than a goods
and services tax, although that will clearly be part of it. It will
be an overall tax reform plan and it will be the next logical step
in giving further protection to Australia against the backdrop of
the Asian economic downturn.
What's happening in Asia is a reason to go ahead with tax
reform, not a reason to defer tax reform.
PEACOCK:
Do you agree with your Minister, John Anderson, that it's
been a problem for you not having the details out there yet?
PRIME MINISTER:
Look, I think there's an expectation, there always is, but
it's a big reform. The details have got to be right. The context
has got to be right. And the context is that this is the next thing
we must do. I mean, if you want Australia to really be hurt by the
Asian economic downturn, take Mr Beazley's advice and do nothing
about tax reform.
PEACOCK:
Is it likely to be a popular package, though? I mean, you'll
be bringing it down before, presumably, the Tasmanian election.
Is that wise, do you think?
PRIME MINISTER:
Matt, I believe that the Australian public will look at this package
and they will see a government that's delivered a fairer tax
system. We don't intend to put a goods and services tax on
top of the existing tax system. We won't be increasing the
overall burden of taxation and we'll be making certain that
the low-income people in the Australian community are fully protected.
In a word, yes, I believe it will receive wide community support.
PEACOCK:
But if it becomes an issue in the Tasmanian election and the Liberal
Government there loses power, that could create big political problems
for you, could it not?
PRIME MINISTER:
Matt, the Tasmanian election will be determined on Tasmanian issues.
And could I say on the Tasmanian election, is that Mr Rundle is
the only leader in Tasmania who is offering a way forward. He's
got the courage to give Tasmanians the opportunity to break with
their past and to give them a relatively debt-free future. Our taxation
policy will be seen as good for Australia and it will be seen as
delivering the necessary next step to further strengthen the Australian
economy.
PEACOCK:
Now, on top of that, on top of the expressed concerns as reported
by various people like the Treasurer saying that he's concerned
about the Tasmanian election, we have the National Party, Donald
Macdonald, saying that you should put off any GST until after the
impact of the Asian crisis.
PRIME MINISTER:
Well, I can only repeat what I've said, Matt. And that is
that it is because of what is happening in Asia that you need to
go that next step. If you really want the Asian economic downturn
to burn Australia, if you really want it to singe the flesh of the
Australian economy, you don't do anything. You just sit on
your hands, Beazley-like, and say everything's perfectly all
right - do nothing, say nothing, advocate nothing, merely oppose
things. Now, we're not going to do that. I'm not going
to do that. I believe very strongly that the next necessary step
to further strengthen the Australian economy is to reform and make
fairer the Australian taxation system.
PEACOCK:
Speaking of inaction, what's your impression about the new
Japanese Prime Minister designate? Has he got what it takes?
PRIME MINISTER:
Well, he certainly has a lot of experience. And we all hope that
there'll be further measures taken to strengthen the Japanese
economy. Japan is the second most powerful economy in the world
and is the economic leader of Asia and Australia's best customer.
I wish him well. I've written to him. I hope to have early
contact with him. I expect to see him at the APEC meeting in Kuala
Lumpur later this year.
PEACOCK:
The United States has certainly expressed its concern about what
could happen in Japan. How critical is it that they take firm action?
PRIME MINISTER:
Well, it is very important to Australia because Japan is such a
big economy and is such a strong customer of Australia. But you're
making my argument. The more people argue that there is a problem
in Asia, the more necessary it is that we take all the steps we
can in Australia which are within our own grasp and power to strengthen
the Australian economy. We can't make economic changes in Japan
but we can make economic changes in Australia and we can reform
the tax system. And if we have a better tax system we will export
more because exports will be cheaper and more competitive. Now isn't
that a reason to do it rather than not to do it? Isn't that
a reason to do it while there is an Asian economic downturn rather
than to put it off?
PEACOCK:
Mr Howard, you talk about do nothing Beazley but in Western Australia
it appears nothing has been done about the issue of preferences.
Wouldn't it be unconscionable if the leader of the Labor Party
were to lose his seat because your party put One Nation ahead of
him?
PRIME MINISTER:
Well I am sure that in the end the right thing will be done about
preferences in Western Australia. But the Western Australian division
will decide that in its own time and not when it is told to do so
by Mr Beazley who is hardly the person that we principally set out
each morning to convenience, or indeed, any section of the media.
That decision will be taken at the right time by the Western Australian
branch.
PEACOCK:
Is it, to use Mr Costello's words, matter of principle over
party politics?
PRIME MINISTER:
Well what really matters in the end is the decision that is taken
rather than the timing which it's taken, isn't it?
PEACOCK:
Mr Costello's been a bit loose with his words in recent weeks.
How do you explain that, I mean was he a bit disoriented by the
Queensland election?
PRIME MINISTER:
Enough has been said about that issue last week and I don't
intend to say any more. I am focused on good policy. I am focused
on the Government building on the economic success that I outlined
at the beginning of this interview. That is what the Australian
public wants from me. It's what it wants from all members of
my Government. That is a focus on doing good things for Australia.
PEACOCK:
If you are focused on that, how do you explain your flip-flop on
Telstra or do you say that you're still - it's unimaginable
that you won't sell 100 per cent?
PRIME MINISTER:
Well there's certainly been no flip-flop. I can't believe
the description of last week's announcement as being flip-flop.
We are still committed to a sale of 100 per cent of Telstra.
PEACOCK:
It is a retreat on your previous position, though, is it not?
PRIME MINISTER:
Well Matt, the Senate said no' to our previous position.
PEACOCK:
You said...
PRIME MINISTER:
No, I am sorry, can I just finish. We expected in the face of that
to have simply bowled the legislation up again in exactly the same
form. We would then have been told that we were stubborn and naive
and because we have made an announcement which confirms that it
is going to be sold in stages and there's going to be a process
to ensure that the community service obligations are met then that's
called a flip-flop. It's not a flip-flop. I mean we remain
committed to a sale of the whole of Telstra and the great advantage
of that is that when it is completed we'll have been able to
cut in half, from $82 billion at the end of June last, cut in half
the entire Federal Government debt of Australia. And the interest
that will be saved on the $40 billion that we will get for the sale
of Telstra can be used to provide more roads, more hospitals and
greater education and health facilities all around Australia.
PEACOCK:
So there's no real difference, I mean you are still going
to sell 100 per cent. Why bother with this inquiry?
PRIME MINISTER:
Well for the very good reason that people are concerned to ensure
that the community service obligations of Telstra are being met.
And that is why we are going to do it in stages. We are, first of
all, going to sell up to 49 per cent and then we are going to have
this inquiry and only when we....
PEACOCK:
Is it conceivable that this inquiry would recommend that you don't
sell it and that you won't?
PRIME MINISTER:
The inquiry won't be tasked to recommend for or against the
sale. It will be asked to report on the extent to which Telstra
has met clear benchmarks which have been laid down in the legislation.
Then the Government will consider that report and we have made it
clear we won't go ahead unless we are satisfied that those
conditions have been met. So, far from being a backdown, I saw last
week's announcement as being a very sensible and pragmatic
way to deal with the issue. We remain committed to our goal because
by getting rid of that huge debt we'll be able to spend more
money on roads and schools and hospitals but at the same time we
established a mechanism to make certain that the legitimate concerns
people had were met.
PEACOCK:
Prime Minister, Minister Reith who has been unusually quiet these
days says that he has a second wave of industrial relations reforms.
How critical will that be in your next election campaign to keep
union officials, for example, off sites?
PRIME MINISTER:
Well, the process of industrial relations reform has got to go
on and we have been very successful this term. We have had the lowest
number of industrial disputes for 30 or 40 years despite all the
predictions of chaos by Mr Kelty and Mr Beazley and that process
goes on. It won't be as important perhaps as some other issues
but it is there, it is part of the process of further economic reform
and change that we continue to need in the Australian community.
PEACOCK:
You have decided not to attend the South Pacific Forum this year,
is that a good signal for our neighbours at a difficult time like
now?
PRIME MINISTER:
Matt, my attendance at that forum - I went to the first two meetings
and the fact that I won't be going this year doesn't alter
the fact that we will be represented at a senior level by Mr Downer.
Given the other commitments I have I think everybody fully understands
it. Mr Keating and Mr Hawke didn't go to every one of those
meetings any more than I do.
PEACOCK:
Thanks very much for joining us this morning.
PRIME MINISTER:
Pleasure.
[ENDS]