Subjects: Trade deficit figures, republic referendum, President Gus Dur
E&OE.............
PHAN:
To kick-off a series of interviews with newsmakers in Australia we have
in our first programme Prime Minister John Howard. In an interview recorded
earlier I started by asking the Prime Minister for his reaction to the trade
deficit.
PRIME MINISTER:
The size of a trade deficit is relative and if the trade deficit goes up
somewhat but is accompanied by other economic fundamentals that are very
strong then it is eminently manageable. And when you look at the other fundamentals
of the Australian economy, inflation, budget surplus, growth, investment,
all of those things are very strong, therefore, it's quite possible to,
for a period, accommodate current account or trade deficit that is a little
higher than the long-term trend.
PHAN:
Australian consumers, Prime Minister, seem to be consuming at a hefty pace.
We've seen imports in Australia or for the month of September rise some
seven percent, exports are of course following. Is there any fear that inflation
really will be kicking in and on top of that there's the GST that could
be adding inflationary pressure?
PRIME MINISTER:
Well, the inflationary pressures are still quite low in the Australian economy.
For example, we had a wages growth figure a few days ago that was below
expectations. And given that wages have in the past been a main driver of
higher inflation that's encouraging. Our consumer price index for the September
quarter was a little higher than normal but that was due entirely to a spike
in the price of fuel because of the increase in the world price of crude
oil. That is now subsiding, therefore, there is no reason why our inflation
rate ought not to return to a more normal level for the last few years and,
of course, that has meant that we've had the lowest inflation rate for more
than 30 years.
PHAN:
The Reserve Bank Governor, Ian Macfarlane, has talked about possible necessity
to take pre-emptive steps in terms of monetary policy. If he does raise
rates by between 25 to 50 basis points, what's your reaction?
PRIME MINISTER:
Well, I never speculate about the future path of interest rates. That's
my reaction.
PHAN:
Prime Minister, let's talk now about the referendum that's going to happen
this weekend on whether or not Australia should become a republic. It seems
that some polls show that two-thirds of Australian voters actually support
a republic in Australia, however, the referendum may fail because they don't
agree with the type of republic that's being offered to them because they
really want to elect their own President. Why are Australians not being
offered that option, what they want, which is to be able to elect their
own President?
PRIME MINISTER:
Well, Australians are being offered what the Government promised that they
would be offered and that is the republican model that gathered clear support
out of a constitutional convention that was held at the beginning of last
year. That was the promise that the Government made and that promise is
being delivered in full. I don't know what the result is going to be and
I'll wait and see. I'll cast my vote. I'm advocating a no vote because I
don't believe in disturbing a very stable constitution which has made Australia
a sea of stability.
PHAN:
Kim Beazley of the Opposition has said that if the Opposition ever won power
they would offer this option to the Australian people to be able to elect
their own President. Why wouldn't you consider offering Australians this
option?
PRIME MINISTER:
Well, I believe that if the yes vote wins on Saturday there will never be
another referendum with the option of a direct election because most of
the people in both the Government and Opposition parties believe that a
directly elected President would basically change our system and that it's
not an option they would support. So despite what he is saying I don't for
a moment believe that that is going to happen. But can I say this to your
listeners that this is a matter for Australians to decide and whatever the
outcome is I will accept it. And I don't think Australia will play a stronger
or more effective role in the region as a republic. We already play a very
strong role in the region with our present constitution and I'm quite certain
that if we continue with it after Saturday we'll continue to be just as
effective and strong and clear in the region as we are now.
PHAN:
And if, indeed, Australians vote for a republic Australia would you resign?
PRIME MINISTER:
You're kidding.
PHAN:
Well, you strongly disagree with the idea of a republic Australia, would
you step down if Australians want a republic?
PRIME MINISTER:
Of course not. I'm the person who's allowed the Australian people for the
first time in 100 years to vote on this issue. I've given them the choice.
I've always said that I will allow them to make a choice and I'm doing that.
The idea of resignation would never enter my head. It's a perfectly astonishing
proposition and you're the first interviewer ever to put it to me.
PHAN:
Let's move on to talk a little bit about foreign relations. The new President
of Indonesia, President Gus Dur is embarking on a pan-Asian tour starting
this weekend. He's planning to visit nine countries in about three days
as I understand. He's planning to visit China and Japan. Conspicuously he's
not visiting Australia. What is your reaction to that?
PRIME MINISTER:
Well, of course, that's not surprising to me because we have gone through
a period of tension with Indonesia because of the role, the leadership role
we took in East Timor. And it is to be expected that the relationship will
go through a healing process because of that leadership role over the months
ahead. I have no doubt that we'll re-establish a very good relationship
with Indonesia but there has to be a period of healing. There has to be
a period of drawing of breath, of an acknowledgement that we took strongly
different views on East Timor.
PHAN:
Australian Prime Minister John Howard.
[Ends]