JONES:
Prime Minister, good morning.
PRIME MINISTER:
Good morning Alan.
JONES:
Well Westpac today, who's to follow?
PRIME MINISTER:
Well I hope all of them follow, and I would expect the entire business
community would now expect the other banks and lending institutions
to match what Westpac has done. These are the lowest small business,
and indeed business lending rates, for more than 30 years. We now
have a base lending rate of 7.25 per cent. It was 11.25 per cent
when I became Prime Minister just two years ago and it has actually
been 20.5 per cent in January of 1990. This is the great interest
rate breakthrough that small business has been waiting for. Terry
McCrann, one of the more respected economic writers in Australia,
says that this new rate will be worth something in the order of
150 to 400 million dollars annually to the small business sector
and it's not, of course, restricted to small businesses in
the cities and the suburbs. It will, of course, extend where overdrafts
exist into small business loans for farmers and others in the rural
sector.
JONES:
Yes, of course, as you just said before, it's not just the
Westpac change is it? If this forces the entire banking sector then
the benefit to business is enormous.
PRIME MINISTER:
I hope it does and I'm saying to the banks and I'm sure
their borrowers will be saying to them: let the other banks duplicate
what Westpac has done. This is meant to be a competitive sector.
This is meant to be a sector where if one goes in a direction and
there is a competitive pressure put on the others, then the others
ought to follow. We saw that happen with housing interest rates
and I believe a good deal of the credit for the cut housing interest
rates had to go to the mortgage originators like Aussie Home Loans
and so forth. They, in a sense, led the charge but to their credit
the banks, particularly the Commonwealth Bank, followed. Now what
you are seeing happening in the small business sector is, I hope,
a repeat in this crucial area where so many jobs are at stake. I
mean, small business has been saying to me for the last two years:
yes we agree with what you have done with industrial relations,
we agree with some of the tax changes you have made, we agree with
the fact that you have reduced the Budget deficit and got general
interest rates down, but when are we going to get a really big dividend?
Now they've got the big dividend because if you remember that
it was 11.25 per cent when I became Prime Minister and a rate announced
yesterday is 7.25 per cent, that's four per cent off.
JONES:
Does the Prime Minister pick up the phone and rattle a couple of
banking cages, the Prime Minister here?
PRIME MINISTER:
Well I talk, Alan, I talk to a lot of people and I think I'm
probably talking to even more people by coming on your programme
and I would hope that my remarks and those of the Treasurer yesterday
are not ignored. I mean at the end of the day, banks have got to
make commercial judgements, I understand that. But the crucial thing
is this: if we had not wiped out Kim Beazley's 10.5 billion
dollar deficit, if we had not begun the task of reducing the accumulated
debt the Federal Government alone of about 100 billion dollars that
we inherited, then these falling interest rates would not have been
possible.
JONES:
No doubt about that.
PRIME MINISTER:
You cannot separate the two. You've got to cut the debt and
cut the deficit to cut the interest rates, and that is exactly what
we have done, and this is the dividend. When I talked, when I announced
the fact that Australians would be able to buy the remaining two
thirds of Telstra, I talked about paying a social bonus out of the
proceeds of the sale. Now this cut in interest rates is the small
business bonus, the bonus for all small businesses in Australia
from the action that we've taken over the last two years.
JONES:
Just what about the couple of issues, you've got big issues
on your plate which you've to be fair inherited, but still
you're the Prime Minister you have to do something about it.
This question about carers, you were going to do something about
it, there's 8,000 people over 65 full-time carers for adult
children, it's a really tough load.
PRIME MINISTER:
Well Alan, I have to say to you that of all the people I have met
in distressing circumstances as a local member in my own electorate,
some of the cases that I've encountered of carers, of people
who have, one example I'll never forget is a lady who had a
profoundly handicapped child of about 25 or 26. She had another
child who was doing his HSC and she and her husband and the two
children were living in a small unit and trying to sort of discharge
her responsibilities to both of them in the most distressing of
circumstances, and it was one of those cases that it really stayed
with me forever, and I think they are a group that have been, well
I won't say neglected, but perhaps not as recognised as much
as they should have been and over the past little while we've
been working on making some changes and I hope that we'll be
in a position to say something very positive for them fairly soon.
JONES:
Okay, now the other thing more as I mentioned I think to one of
your staffers yesterday. Of all the correspondence I get and I answer
hundreds of letters myself each week increasingly now it is about
health care. I know you're aware of that but this four time
payment of the levy of the gap of the premium and then of the tax
that you pay in consolidated revenue. What can you say, I mean I
know you can't say much, but look you must be aware now that
this is becoming a major albatross?
PRIME MINISTER:
Well I am aware of the community's concerns. I don't
think the full effect of the increase in the Medicare levy on high
income earners has yet bitten. I've had evidence presented
to me in the last couple of days that indicates a lot of people
don't know that that's been imposed and that until they
get their tax returns after the 30th June, they are not going to
know it and that could have quite a beneficial impact on the number
of people who take out private health insurance. We did make a generously
increased offer to the States. We've offered to pay them 3
per cent a year, each year for five years over and above what they
are now getting, and in a climate of zero inflation, that is quite
a generous offer but, Alan, I think I've said to you before,
this is an area that remains under constant review. You never stop
keeping an eye on the health system, you never stop thinking of
different ways in which you can make it more acceptable and more
affordable and I do understand the anger of a lot of people with
private health insurance who not only pay the Medicare levy, they
pay their premiums, they go into hospital and then they have a multitude
of bills and we are looking at, right at the moment, at different
ways in which that particular problem can be addressed because it
is one of the irritants associated with private health insurance.
JONES:
Right.
PRIME MINISTER:
Can I say finally though that it is very important to understand
that with all its faults the average Australian gets better treatment
from our health system than does the average American or the average
Brit or the average person living in a European country.
JONES:
This is true.
PRIME MINISTER:
It is undoubtedly true and you should never lose sight of that
fact.
JONES:
Time is on the wing. I just want to ask you one very serious question.
You were very strong about guns a couple of years ago. Is it the
role of the Prime Minister to really intervene, if not initiate,
public debate on this continuing virus of violence as entertainment?
Do you appreciate the outrage that now exists in the community following
the Arkansas thing that guns and knives and all those sorts of implements
can be used in movies and on television to offend and pollute the
minds of young people in a way which is costing us enormously in
a social sense?
PRIME MINISTER:
Alan, the answer to that question is yes. I think it is the role
of the Prime Minister from time to time to take a lead on an important
social issue even though the prime Government responsibility for
that issue might be with State Government. I mean that's why
I took the attitude I did on guns, that's why I've always
been willing to express my view despite criticism on issues like
the legalisation of heroin, and the legalisation of marijuana. And
I take the same view in relation to violence and if you say to me:
do I deplore it? Yes. Do I reserve the right as Prime Minister from
time to time, not only to say things about it but also initiate
ways of dealing with it? Yes. Do I pretend that it's easily
solved? No I don't. But I do worry as you do and I'm sure
many of your listeners do that we are breeding through some of the
material on the media and elsewhere in our society a culture of
violence and a culture of brutality which does have an adverse affect
on younger people in particular, and there is plenty of evidence
to link certain violent crimes with obsessive viewing of certain
material and videos and on television. There's absolutely no
doubt about that, the material has been researched, a lot of it
came out in that terribly tragic case involving that young boy James
Bolger in the United Kingdom several years ago. It's been documented
and evidenced elsewhere, so the answer to your question is that
of course as Prime Minister it's my responsibility from time
to time to express a view and even to initiate action and naturally
I'll continue to do that.
JONES:
Okay, good to talk to you and th
Okay, good to talk to you and thank you for your time.
PRIME MINISTER:
Thanks Alan.