6 August 1999
E&OE……………………………………………………………………………
MITCHELL:
First in the studio the Prime Minister, Mr John Howard, Good Morning.
PRIME MINISTER:
Good Morning Neil, good to be with you.
MITCHELL:
I know it is a local issue, nothing to do with you but I know your father was a soldier, can you imagine Japanese war drums at the Shrine of Remembrance?
PRIME MINISTER:
I don’t think Shrines should be used for anything other than remembering the dead and that applies whether it is a Shrine of Remembrance in Melbourne which is, I guess of all the Shrines in the state capitals of Australia there is none more moving and evocative than the one in Melbourne. I was there for the dawn service this year. I think that it is a very silly idea and I can understand the reaction of the veterans, of the old diggers, it is not a question of whether, I mean obviously there is a particular awkwardness to say the least in relation to Japanese war drums but that’s not really the issue, the issue is what is really appropriate for such a memorial, such a monument and I don’t mind buying into something that I regard not just as a, it’s not a Victorian or a Melbourne issue, it’s an Australian issue because these are memorials that honour Australia’s war dead and I agree with Bruce Ruxton and all the others who have complained and I can understand their dismay.
MITCHELL:
It is a holy place, isn’t it?
PRIME MINISTER:
It is.
MITCHELL:
Sacred. Now petrol prices. They’re going up significantly, right around the country. Is there anything the Government can do about that?
PRIME MINISTER:
I don’t think the Government should get involved in this, this is just the operation of the market. With a petrol market as big as Melbourne, it will sort itself out but you can’t have a situation that every time there is a bit of stickiness in the market, oh come on the Government has to intervene. I mean this is something that will sort itself out, I can understand the anger of the consumers and I heard David Cummings is it, from the Automobile Association this morning on the radio, telling people to delay their purchases, well if people want to do that, that’s fine. I mean this is the market in operation, it will sort itself out.
MITCHELL:
I guess the Government could do something about parity pricing couldn’t it, about the level of taxation as well, I think that it is 43 cents a litre, isn’t it?
PRIME MINISTER:
Well, why? I mean we still have by world standards very cheap petrol.
MITCHELL:
45 cents a litre in the States.
PRIME MINISTER:
Yes but we have, well as far as the consumer is concerned what matters is the price of petrol and the price of petrol in this country is very low and it’s probably the second lowest in the world after the United States given that crude oil in the long run, I guess is a wasting resource, it is a very very good bargain in this country, you think of the prices consumers pay in Europe.
MITCHELL:
That’s true but the predictions are also relatively up at least until the end of the year which isn’t going to do much for Peter Costello’s dead dragon of inflation, potentially this is inflationary isn’t it?
PRIME MINISTER:
Well I don’t accept that it is going to remain at those sort of levels. I think that it is very important when something like that happens that you don’t immediately have a knee jerk reaction and say come on the Government has got to intervene and do something about it. We are meant to operate in a market and the Melbourne petrol market is a very big one by national standards.
MITCHELL:
Do you agree that it could be inflationary if they stay up?
PRIME MINISTER:
Well all prices if they remain, if prices go up that does have an impact on the inflation rate, of course, but if other prices come down that has a compensative affect.
MITCHELL:
But it flows through, petrol prices wouldn’t it?
PRIME MINISTER:
Of course they do, but you have to keep it in proportion compared with the sort of price rises that occur in other commodities in other countries which cause big increases, the movement here has been quite slight.
MITCHELL:
Can you tell me how much tax government takes out of petrol prices? How much…
PRIME MINISTER:
I don’t have the figure at hand, it’s a lot, it’s a lot. Look, I don’t disguise that fact but if you’re a motorist buying petrol at the bowser, the thing that you worry about is the price that you pay not the destination of the money that you pay per litre after you have forked it over and the point I make is that petrol prices in this country are probably the second lowest in the world. Now I don’t think that is a bad situation and I don’t think that we should over react to a situation that may not last for very long.
MITCHELL:
Roads, I suppose road funding is a related issue, Senator Julian McGauran says Victoria gets 16.6% of road funding, New South Wales: 33.6%, Queensland: 20.6%. It seems that Victoria is well behind. The point he is making in the papers today.
PRIME MINISTER:
Well I don’t agree with Julian on this. I think what Julian has ignored is that the major responsibility of the Federal Government is the National Highway program and if you look at the last 12 months there has been less national highway activity in Victoria than in New South Wales or Queensland because the completion of national highways in Victoria was achieved earlier in time. These interstate comparisons, it depends on when you start. If you start sufficiently far back you can get one result, if you start half way far back you get another result, if you start in the last 12 months you get a different result again.
MITCHELL:
But it hurts a bit when we’ve got a road like the Geelong Road which is accepted is not satisfactory and here is this amount of money going to New South Wales and Queensland.
PRIME MINISTER:
But hang on you have got to bear in mind that the Federal Government’s responsibility is for national highways, we also have these roads of national importance and on top of that we also give the States additional money to spend as they choose on roads and we gave Victoria 80 million dollars more in this budget, along with other states they got their proportioned increases as well. You have to look at what we have done in relation to all of the States over the longer period of time than the last 12 months because the state of national highways in Victoria is better than it is in other states because work has been done on those highways earlier. I mean work on national highways, say the Pacific Highway in parts of New South Wales and some of the highways in Queensland lags far behind the quality of national highways in Victoria. The Premier has raised the Geelong Road with me which was part of the point that Senator McGauran was making and we continue to have talks about that.
MITCHELL:
There might be some money there for it?
PRIME MINISTER:
We continue to talk.
MITCHELL:
That’s constructive?
PRIME MINISTER:
I always find it constructive to talk to the Premier instead of at him.
MITCHELL:
Okay, we’ll take some quick calls to the Prime Minister. There’s some other issues I want to raise as well. Hello Brian, go ahead please.
CALLER:
Hello Neil, hello Mr Howard.
PRIME MINISTER:
Hello Brian.
CALLER:
Just curious to know whether the tax on fuel is a set rate or is it a percentage.
PRIME MINISTER:
No, it’s a rate per litre.
CALLER:
It is a rate per litre?
MITCHELL:
It goes up with inflation does it not?
PRIME MINISTER:
Well yeah. There’s half early indexation but we haven’t had much inflation under this Government.
MITCHELL:
Went up one-and-a-bit percent last year.
PRIME MINISTER:
Yeah, but compared with what it used to go up with it’s nirvana.
CALLER:
But doesn’t that mean that if the oil prices have gone up that it means the tax rate’s gone up as well?
PRIME MINISTER:
Well the take has gone up, the rate hasn’t gone up. The take has gone up.
MITCHELL:
Okay thanks Brian. Hello Trevor, go ahead. Trevor? No Trevor’s dropped out. I think he might have been asking the same question. Could I ask you Mr Howard about the health review. Now the Premiers are having a go at you again saying that you’ll have an inquiry, your Productivity Commission into gambling, not into health. They’re threatening in fact to go it alone and have their own inquiry on health. Why not inquiry into it? I mean [inaudible] unsustainable stress.
PRIME MINISTER:
Well can I tell you why? The reason why I think an inquiry by the Productivity Commission is a waste of time is really many fold. Firstly it will freeze any kind of policy initiatives for 18 months. It will be an excuse for all governments around Australia to say – oh we can’t respond to that idea because we’re waiting on the results of an inquiry. Secondly we know what most of the problems are with the health system, and we know that the gaps are a problem. We know that the use of public hospital facilities by people who are privately insured is a problem. We know that use of out-patients departments by people who might otherwise use the services of a doctor is a problem. We know that the use of modern technology is a lot more expensive. I’m not saying that’s a problem because I think everybody who gets sick in this country is entitled to the best attention. We know fundamentally what many of the issues are and to me having yet another inquiry, and the Australian public gets very cynical of governments who have another inquiry into something, I think that is just an excuse for putting off doing anything about some of these issues.
MITCHELL:
Well we know the problems, do we know the answers?
PRIME MINISTER:
Well some of the answers are not palatable and particularly to State Premiers, and they want to have an inquiry to put the thing off another 18 months. And that’s, and I don’t just make that observation of premiers, I’d make that observation of a lot of people. Now what I want….
MITCHELL:
[inaudible] wanting to delay it?
PRIME MINISTER:
No no. I think everybody hopes that some how or other a national inquiry is going to produce an easy solution. There aren’t any easy solutions. It is also the case that our present system of health, for all the criticism that’s made of it, is better than any in the world. And I get worried that there’s constant denigration of the health system. Every time I hear some Premiers talk about it, I hear them saying there’s a crisis. There is not a crisis in Australia’s national health system. There are problems.
MITCHELL:
But it’s a bit like what you were saying about petrol, what matters to people is what they pay at the pump. What matters to people is the treatment they get in hospitals. A lot of them are not getting sufficient….
PRIME MINISTER:
No, no, that is true, but it is also true that one of the reasons for that is that there is an imbalance between the public and the private hospital system which means that a lot of people who take out private health insurance still use public hospitals because of the gap. Now we’ve known that for a long time. Having a productivity commission inquiry is not going to tell us anything new. We know that and the Federal government is endeavouring to address that problem right at the present time, but we need the cooperation of the health funds, we need the cooperation of the doctors.
MITCHELL:
What….do you accept it’s under unsustainable stress, which is a phrase they keep…?
PRIME MINISTER:
No I’m not as alarmist as that. You see the solution in the end that most State governments see is that the Federal government hands over more money for their State public hospitals.
MITCHELL:
Well what’s the unpalatable solution that they don’t want?
PRIME MINISTER:
Well I think they don’t want to face, some of them don’t want to face the reality that you have to deal with that problem and there’s no particularly easy way of dealing with it.
MITCHELL:
But what do you do?
PRIME MINISTER:
Well what I want to do over the next, rather than have an inquiry over the next 18 months, is that I want to isolate, in discussion with the States, the particular problems consistent with our commitment to Medicare, consistent with our commitment to Medicare. I mean let’s be quite plain about this. We are not going to junk Medicare. We made a firm commitment before the 1996 election campaign that we would support it. It can be improved, it can be built on, it can be changed, but we’re not going to undermine it. And what I would like to do over the next 18 months, rather than have an inquiry, what I would like to do is deal with individual problems with the health system in a direct way. I mean we’ve done a lot. We’ve given a $1.6 billion subsidy to private health insurance. We are at the moment addressing the problem of gap insurance and we are also prepared on an issue by issue basis consistent with our commitment to Medicare to discuss other problems of the health system with the States. But for the public another huge inquiry taking 18 months, you get the inquiry, you then put it out for public consultation, another two years goes by. The public gets very cynical about it.
MITCHELL:
What if the States goes it alone with their own inquiry? [inaudible]
PRIME MINISTER:
They can have their own inquiry but in the end they know that the Medicare system is controlled by the Federal government and they all know that private health insurance is the responsibility of the Federal government. But I have to say in defence of the Federal government, if you go back over the last 10 years you can find a number of examples of where State governments have significantly reduced the money they themselves out of their own budget have put into their own public hospitals as the Federal government has increased its resources. And I think that that has to born in mind when we listen to some of the State Premiers complaining about the State of their health system.
MITCHELL:
Is there a radical answer like the Federal government taking it all over? We seem to have a…..
PRIME MINISTER:
Well nobody’s suggesting that to us.
MITCHELL:
What do you think of it?
PRIME MINISTER:
Well I just don’t think the States would want to do that.
MITCHELL:
Well what about fee for service, what do you think about that? [inaudible] means test on public hospitals.
PRIME MINISTER:
Well the problem with a means test on public hospitals Neil is that in order to raise a significant amount of money the means test would have to apply to individual incomes of $45,000 a year, and family incomes of $75,000 year. There’s a silly idea around emanating from some State sources to the effect that if you means tested the very wealthy you would raise billions of dollars. You wouldn’t. In order to raise a lot of money you’d have to apply a means test to those sorts of earnings, and the great bulk of people who are treated in public hospitals and would therefore be subject to the means test are over the age of 65, because the bed usage in public hospitals is far more intense amongst people over that age. There’s a lot of mythology around, there’s a lot of easy glib talk about how you’re going to fix it.
MITCHELL:
Okay we’ll take another quick call and then a break. Paul go ahead please.
CALLER:
Oh good morning Neil, good morning Mr Howard. Look I was just wondering, my question is actually about, to Mr Howard about the whirling disease and with the introduction of Canadian Salmon. I was just wondering whether, or what the Australian public has as assurance that this disease perhaps wouldn’t spread through our waters, and what sort of controls or protection…?
PRIME MINISTER:
Well the assurance you have is that AQIS which is made up of scientists have recommended a series of standards and tests and whatever which actually increase the degree of difficulty of importing all types of fish into Australia. And that compared with the standards that are applied around the world it is as stringent as you can get. That’s the assurance we have.
MITCHELL:
I think it was…..no it wasn’t Rex Hunt. It was somebody else who tried to [inaudible] the equivalent of foot and mouth disease for fish.
PRIME MINISTER:
Well somebody put that to me. And I mean, I don’t know what the scientific basis of that is. I can only repeat what I said to Paul is it, who rang a moment ago.
[Commercial Break]
MITCHELL:
The Prime Minister’s with me. Another call. Judith, go ahead please.
CALLER:
Hi, good morning. Just an inquiry. I’m pretty concerned about Medicare. We’ve been paying private health insurance for a long time, and I just happened to get sick two weeks ago, and I was admitted to hospital for four, five days. And I’ve got all these bills coming in now.
PRIME MINISTER:
Well that’s the gap problem.
CALLER:
But that’s what I’m….[inaudible] a minute. What I’m worried about, I thought well we’re a two income family but we work hard to have what we’ve got, and I know a lot of people that aren’t in Medicare Private or Medibank Private because ‘A’ – they don’t think it’s worth it and they earn more money than us.
MITCHELL:
So you think Medicare….you mean Medibank do you? You’ve got private insurance?
CALLER:
Well I’m in private insurance as well, and as I said I had a really bad attack of asthma so I had to stay in, but I had all these costs. And I’ve just got another bill. When I got it I went to my local doctor. I got admitted to hospital and then the doctor at the hospital saw me.
MITCHELL:
Okay. Judith, look I’m sorry, we haven’t got time to go through the detail but…..
PRIME MINISTER:
It’s the gap and those extra bills is what we call the gap. In other words when you go into hospital you think because you’ve got private insurance that will cover the whole shooting match. And then you find out to your horror it doesn’t because there’s a gap between what your insurance covers and what you get charged for the procedure or the service. Now that is a big problem. We know about that. You don’t need a productivity inquiry to tell us that and we’re trying to do something to address it, and it’s incumbent on the doctors, the health funds, and everybody to try and work out a solution to that problem. And that is far more urgent and important and will do a lot more to allay public concerns than having an 18 month productivity inquiry.
MITCHELL:
Thanks for calling Judith. Mr Howard, heroin. The ACT tell me they will have legalised or….no, using shooting galleries by the end of the year. And New South Wales is moving towards these safe injecting rooms. Victoria’s considering it seriously again.
PRIME MINISTER:
Well I thought the Premier yesterday was indicating some reservations about that.
MITCHELL:
He said he was having a serious look at it, but reservations you’re quite right. Are you willing to change your mind the idea of a safe injecting facility?
PRIME MINISTER:
No, no I’m not. I don’t support it. But mind you I don’t control it. The thing that Federal government does have control over is a heroin trial. You see as I understand these injecting rooms, people bring their own heroin with them illegally acquired presumably. And I think it’s a very bizarre circumstance and I don’t agree with it.
MITCHELL:
It could save life.
PRIME MINISTER:
Well, I am not convinced about that and the evidence in other countries doesn’t suggest that. But this is part of an ongoing debate which, of course, I am very happy to be engaged.
MITCHELL:
Some of the environmentalists want something else, they are arguing there is a need for a Senate inquiry into what’s happened in Sydney Harbour, the oil slick. Do you think there’s a case?
PRIME MINISTER:
No, I don’t. I think it’s something that ought to be handled by the State authorities in New South Wales. They seem to have reacted very quickly and very promptly. This is, once again, an example of the passion for inquiries this country has. Now, you have got a total responsibility of the harbour authorities and the State government let’s put party politics aside, nobody wanted the oil spill to happen in Sydney Harbour. Whatever steps the New South Wales Premier needs to take to get to the bottom of it I totally support and it’s his responsibility.
MITCHELL:
Can I ask about the republic, the two Peter’s, there seems to be a bit of tension between Peter Reith, Peter Costello. A few words are being exchanged in print today. Does this division within your Cabinet worry you over an issue like this?
PRIME MINISTER:
No it doesn’t, Neil, because this is a free vote issue for the Liberal Party. I said, what, almost two years ago at the Convention that the Liberal Party would allow a free vote. I think it’s a mature, sophisticated thing to do.
MITCHELL:
It can’t be good for relationships though when they are sniping at each other.
PRIME MINISTER:
I don’t think they are really sniping, they are just expressing different points of view. One of them is a supporter, I understand, of the model that’s being put up, that’s Peter Costello. Peter Reith is a direct election republican and therefore he is arguing, I think understandably, that if you want a direct election president you’ll vote ‘no’ because if the current proposition is carried it’s unlikely to ever be submitted again to a referendum. I myself, as you know, support the status quo. On fairly conservative grounds the present system works, we are a fully independent country, why change it? I have got to say, of course, that I don’t, I certainly don’t myself favour a directly elected president.
MITCHELL:
So if we had to have a republic you’d rather see the president appointed by Parliament?
PRIME MINISTER:
Oh, I’d rather, I would not want to see a directly elected one. I think it would set up an alternative power centre to that of the Prime Minister. But my views on all of this were laid out before the Constitutional Convention. But the most important thing, Neil, is I have promised the public it would have a say and I am honouring that promise and that’s why we are having a referendum even though I don’t advocate a ‘yes’ vote, I advocate a ‘no’ vote. I promised the public we’d have a vote and I have never disguised my position on this. I have been twice elected Prime Minister with the public fully knowing where I stand on this issue.
MITCHELL:
Do you think we’ll ever become a republic?
PRIME MINISTER:
I don’t know. I think we might some time in the future. I just don’t know. I mean, as of now I am not in favour of change. People say to me: will that be your view in 20 years time? My response is if they’re interested and I am still alive come and ask me.
MITCHELL:
The Ralph Report on business tax, I read it is delayed. Do we know when it’ll be released?
PRIME MINISTER:
No, it’s not delayed. We’ve received it and Peter Costello and I are actually having a discussion about it in here in Melbourne this morning and then there will be further discussions at a Cabinet level. It’s not being delayed but a report as big as this we want to absorb it and understand it and the Cabinet needs to absorb and understand it before we decide how we are going to handle it. Whether we are going to make decisions and then release it or release it or make some decisions and release it, or release or not before we make any decisions. There are all sorts of combinations and we want to have a look at that. But it’s not been delayed. John Ralph has done a superb job with this and I thank him and his colleagues very warmly for what they have done.
MITCHELL:
It’s reported today there’s already division within Cabinet about it, is that true?
PRIME MINISTER:
There is natural debate about such things as whether you remove accelerated depreciation in return for a lower tax rate. When people see the whole gamut of the report we’ll make a decision but it’s barely surprising that something as big as this you won’t have people coming from different vantage points. Neil, there’s nothing wrong with intelligent people in a government having different points of view occasionally on issues provided they are…those differences are managed properly and you reach a decision and when a decision is reached everybody gets behind it.
MITCHELL:
Is this as important as the GST?
PRIME MINISTER:
Very important. It affects our international competitiveness as a country. It affects the way in which we can attract capital, it affects the way domestic investors behave. I mean, I can foreshadow that there will be some changes to the Capital Gains Tax. I can’t say what and there will be changes all designed to make this country more attractive to overseas investors and also to encourage greater risk taking within Australia.
MITCHELL:
Are there likely to be changes to the company tax rate as well?
PRIME MINISTER:
That’s possible. That’s one of the options that’s clearly on the table that you have a lower rate for everybody paid for by the withdrawal of concessions that only some can now enjoy. That’s part of the debate and there’s nothing wrong with a debate about that and I can understand if you’re a manufacturer or a miner you might come at that from a different point of view than if you are a banker or another service provider. That’s only natural.
MITCHELL:
Which way do you come down?
PRIME MINISTER:
I want to hear all the evidence. I want to read…I haven’t read the report yet. I have read a summary and I am not doing a lot over the weekend and I hope to read the report, as much of it as I humanly can, over the weekend.
MITCHELL:
Terrific weekend.
PRIME MINISTER:
Thanks.
MITCHELL:
On that issue though, I mean, Peter Costello did say the inflation dragon was dead. Do you think it’s dead or is it just having a bit of a rest?
PRIME MINISTER:
Oh, I would say it’s at least comatose.
MITCHELL:
It can revive can’t it…
PRIME MINISTER:
Anything, I guess, can come back. But Peter was making a totally valid point that we are enjoying at the moment unprecedentedly low levels of inflation and that’s terrific.
MITCHELL:
And could I ask you, just finally, Sri Lanka, the Australian team I know they are reviewing next week whether they go. I don’t know whether you get information about Sri Lanka but what’s your sense of it?
PRIME MINISTER:
Well, my sense is that it’s no worse than it probably was the last time the team was there. But also, as I said to one of the team members who I ran into in a restaurant in Melbourne last night and we were talking about it, is no better either unfortunately.
MITCHELL:
Thank you for your time. Were you offended when Rex Hunt said you could land a Cessna on your head?
PRIME MINISTER:
No, nobody could ever be offended by Rex. He is one of life’s great characters.
MITCHELL:
You could land a Jumbo on his I think. Thank you very much for your time.
[ends]