Subjects: The Budget; tax reform; work for the dole; Telstra; legionnaires' disease
E&OE...............................
ZEMANEK:
Mr Prime Minister, good morning.
PRIME MINISTER:
Good morning Stan, very nice to be with you and your listeners.
ZEMANEK:
Nice of you to make the time available. You must be disappointed though with the reaction to the budget because just about every man and his dog has knocked it.
PRIME MINISTER:
No, the public hasn't.
ZEMANEK:
The public hasn't but the experts and the tabloids have.
PRIME MINISTER:
Well some of the experts have and some of them haven't but I guess you've got to criticise something, I mean we've had. this is our fifth budget but let's look at the facts. In the last five years they were in government the Labor Party ran up $50 billion.. $80 billion of debt and in our first five budgets we will have reduced that by $50 billion. In other words we've taken the eighty down to thirty, I mean that's a tremendous. we've taken 50 out of the 80 leaving 30 of what they ran up yet to be repaid. Now that's a colossal performance. The budget is once again in surplus. We predict economic growth of 3.75%. We predict that by the middle of next year unemployment will be at about 6.25%, the lowest in more than a decade, 650,000 more Australians in jobs, a new tax system on the 1st of July and the East Timor levy that would have applied to incomes over $50,000 a year will not now be introduced because we don't need it. Now that's a pretty good achievement and one of which the Government is understandably very proud. And on top of that we're doing something about the area of greatest disability in the bush and that is medical services. We're really addressing in a very comprehensive way something that should have been addressed years ago.
ZEMANEK:
All right, well let's get to the bush in a minute but last night the Treasurer Costello announced a surplus of $2.8 billion. There's been a lot of debate about how the surplus is being funded. The bulk of the money, $2.6 billion has come from the sale of a new mobile phone spectrum. Simon Crean, the Shadow Treasurer says this makes it a phoney surplus. What's your response to that?
PRIME MINISTER:
Well he's wrong. But what is he saying? Is he saying that we should have increased taxes by $2.6 billion?
ZEMANEK:
No he's saying that maybe you know we shouldn't be selling off the assets.
PRIME MINISTER:
Oh, no what he's saying that we shouldn't. In other words he wants to deny the availability of this new technology to hundreds of thousands of Australians because by selling off the spectrum you enable companies to provide services to Australians for which they charge and it becomes a very valuable asset and that's why we auction it off.
ZEMANEK:
But if you don't. if the market falls apart as far as the mobile phone business is concerned your $2.6 billion is going to look pretty sick.
PRIME MINISTER:
No, no I mean, you know these are estimates of what we will get and what people offer in an auction is what they believe the thing is worth. Now what happens to it after they've paid the money is you know, is something for them to be concerned about. Look these estimates are absolutely rock safe and conservative. In other countries such as Britain they've received billions of dollars. I mean we would be crazy not to include this money because we're going to get it. It's similar to the government renting out a building and including the rent in its annual receipts. I mean if we rented out a building as the commonwealth and we didn't put the rent into our budget we'd be crazy. I mean what is a budget worth if it doesn't record what you receive and what you spend?
ZEMANEK:
Well what do you say to Meg Lees from the Democrats who says the money raised from the sale of the spectrum should not have been included in general revenue but should have been reinvested in other assets such as hospitals and schools?
PRIME MINISTER:
Well I think what Meg is saying is that we should have taken it in and then spent it. And what Meg presumably is saying is that we shouldn't have had such a large surplus. Now I don't agree with that. I understand that she has a concern about spending in particular areas.
ZEMANEK:
But what she's saying is that it should have been reinvested in hospitals and schools. But you'd have to agree with the fact that we do need more money spent on hospitals and schools.
PRIME MINISTER:
Well we are spending, we're going to spend in the bush particularly in relation to doctors and hospitals we are spending a lot more. But as far as hospitals are concerned we are providing the states with an increase in their money for hospitals of 15% over the next five years. I mean we are increasing the amount of money that's going to hospitals but public hospitals are essentially the responsibility of state governments just as government schools are. And one of the advantages of the GST is that all of the revenue from the GST is going to go to the states and they will over time have more money to spend on their public hospitals and their public schools.
ZEMANEK:
OK, we're talking about the surplus and you're defending it naturally but.
PRIME MINISTER:
Well I'm not just defending it. I mean I'm just pointing out that the accounting practices used in this budget are exactly the same as has been used in relation to this issue for the last fifty years. There's nothing illusory or shonky about including the proceeds of the auction of the spectrum. It's like including the rent on a government building.
ZEMANEK:
Yeah, I understand all that but you will agree though that politics and life is all about perception and the perception of this budget is not too hot. I mean while Peter Costello was on his feet last night the dollar sank a half a cent. And obviously the confidence is not there on the money side, on the investor's side.
PRIME MINISTER:
Well look, I'm not going to talk about the level of the dollar, I'm not, but I am going to rebut any criticism about the accounting methodology used. I mean Simon Crean giving me a lecture, giving you a lecture on budget surpluses, I mean they in their last five years they ran up $80 billion of debt. In our first five budgets we will have repaid fifty of that $80 billion. Mr Beazley left me with a deficit of $10.5 billion. They told us during the 1996 election campaign that the budget was in surplus when it was in deficit to the tune of $10.5 billion and now Simon Crean is giving economic lectures on budget surpluses, for heaven's sake, give us a break.
ZEMANEK:
What did you predict as far as a surplus in the last budget?
PRIME MINISTER:
We predicted a surplus in the last budget I think in, that's for the current year, I think offhand, I don't have the figures with me it was in the order of $3-4 billion.
ZEMANEK:
But you didn't get anywhere near that.
PRIME MINISTER:
We're actually going to get more.
ZEMANEK:
Well how do you work that out?
PRIME MINISTER:
Well I don't work it out, it's worked out by the Treasury. They tell us we're going to end up this year with a cash surplus of somewhere in the order of $7 billion, that's the estimate. We've actually done better than we estimated.
ZEMANEK:
So all the people that say that the surplus that you had from the last budget has been evaporated.
PRIME MINISTER:
Well that's wrong, they ought to look at the documents. We're going to end up 99/2000 as I understand it, and I don't have the document in front of me, my recollection is that we're going to end up better than we predicted.
ZEMANEK:
OK. Michael Raper is the President of the Australian Council of Social Services he's accusing the Government of squandering the surplus on excessive tax cuts following the scrapping of the Timor tax for people earning more than $50,000 a year. Mr Raper says more should have been spent helping the needy.
PRIME MINISTER:
Well I would expect Mr Raper to argue that because he is the head of the Australian Council of Social Services but I'd point out to him that we have maintained to the full the social security safety net. I'd point out to him that the extra money we're putting into rural health will assist a lot of needy people in rural areas of Australia. I'd point out to him that we're increasing pensions by 4% on the 1st of July. I'd point out to him that the tax package includes very significant increases in family benefits particularly for low-income people. I'd point out to him that the withdrawal rate in relation to social security benefits has been slowed down so that you can earn a higher amount of income as a low-income family and keep your family payment. So we have been able to do a lot as a result of the prudent financial management. I'd point out to him that 653,000 more Australians are in jobs and there's no greater need for the average Australian than to have a secure job and if you provide more jobs for people you have fewer poor people. So if Mr Raper wants a score sheet of what this Government has done for the more needy in the community I think you should take into account some of the things I've just itemised.
ZEMANEK:
With everything as you say that seems to be going so well why are so many people against the Government? Why are so many of the so called experts knocking the budget? Why are so many people saying that Mr Costello and yourself have lost the plot, you've lost the way?
PRIME MINISTER:
Well some people always criticise the Government and when you've been in power for four or five years the commentators search around for the negatives, they look for something different. Maybe we have become the victims of our own success. If you run a series of surplus budgets people lift the high jump bar on you each year and all right ho, hum, just another surplus, why isn't it bigger? Why don't you do something else. I mean that is the natural reaction. Look can I put this to you Stan? If we had not abolished the Timor levy in the budget last night and we'd have therefore brought in a surplus of $3.7 billion for next year all of the debate this morning would not have been about the spectrum sales or auctions, all of the debate would have been about why are these voracious tax gathers in Canberra maintaining the Timor levy when they don't need too?
ZEMANEK:
But I don't think anybody would have complained about keeping the Timor levy there because.
PRIME MINISTER:
No they wouldn't have.
ZEMANEK:
We all know it was for good cause.
PRIME MINISTER:
But no they wouldn't have complained about it if it had been needed to deliver a surplus. The point I'm making is that clearly with the additional money from the spectrum auction we didn't need the Timor levy to have a healthy surplus.
ZEMANEK:
But then you'll having people like Mr Raper saying well OK if the levy would have stayed there it would have been extra money to give out to the needy and the battling people.
PRIME MINISTER:
But that was not the basis on which it was imposed.
ZEMANEK:
That's true.
PRIME MINISTER:
When I announced its imposition last year I said it was necessary in order to produce a sufficiently strong surplus. At that stage we thought the surplus would be only about $500 million or even less and we needed the Timor levy to guarantee a surplus. We found we didn't need the Timor levy to guarantee a surplus we therefore felt that as a matter of good faith with the public we should not proceed to impose it. Now I hear that some people are saying oh no we should keep it there. What, are they saying we should increase tax when we don't need to? Because it's a tax on people. Now however you describe it, although it was only for a year and although it was as a consequence of something that every Australian supported and they would have gone along with it very happily if it were needed to keep us in the black but I don't think they'd have gone along with it so happily nor would it have been right to have kept it there if it was no longer needed to keep us in the black and quite evidently it wasn't. And the point I'm making is that all of these people who are now seeking to criticise us about the inclusion of the spectrum money if we'd have kept the Timor levy and we'd have had a surplus of $3.7 billion they wouldn't have been saying that that surplus was illusory they'd have been attacking us for imposing a tax that was no longer necessary.
ZEMANEK:
OK, Ross Gittins writing in this morning's papers says the budget heightens the risk of further rises in interest rates, says that's a real concern for the average Australian with a mortgage. Do you expect interest rates to rise again in the near future and obviously with this budget and with the concerns of economists it's going to be tougher out there for the average mortgage purchaser.
PRIME MINISTER:
Well I don't. I'm not going to predict the future course of interest rates. I don't agree with Ross Gittins though that this budget has added to pressure on interest rates, I really don't. I think once again it is a question of the high jump bar being set at an unreasonably high level.
ZEMANEK:
But there are predictions that inflation will rise as high as 6.75% after the introduction of the GST.
PRIME MINISTER:
Well there's.
ZEMANEK:
I mean won't that absorb the promised tax cuts?
PRIME MINISTER:
Now, hang on. It will rise for a short period as a result of the introduction of the GST.
ZEMANEK:
So will it rise to 6.75%?
PRIME MINISTER:
Well in that order but only for a quarter. There's a spike. The July quarter, the September quarter rather of this year, that is immediately after the introduction of a GST there'll be a once off price increase above the average because of the GST.
ZEMANEK:
But you said in your last budget though there was going to be no where near this sort of rise.
PRIME MINISTER:
No, no we've always acknowledged there'd be a spike.
ZEMANEK:
Yes there'd be a spike.
PRIME MINISTER:
But what we've said is that then it would plateau out and fall away and that's what's going to happen.
ZEMANEK:
All right. People living in rural and regional Australia are the big winners from last night's budget, $1.8 billion has been earmarked for spending programs in the bush. Do you think that's going to be enough to win back the Coalition support because really when you look at the bush there's a lot of people who are disillusioned. A lot of people out there who are supporters of One Nation still, a lot of people looking to Labor for the answers. I mean is this going to be the answer for the bush?
PRIME MINISTER:
Well it's not a question of winning back votes, it's a question of addressing a need and there are a number of needs in rural Australia and one of them and the most important area of need is the inadequacy of medical services and that's why I decided a long time ago that we would put an emphasis in this budget on fixing that problem. And we've done it in a very big way- more doctors, bonded scholarships, more specialists, more chronic disease facilities and more nursing and podiatry and psychiatrist support.
ZEMANEK:
I think everybody.
PRIME MINISTER:
All of those things, there's a real gap there and everybody I believe will think that's a fair and decent thing to do
ZEMANEK:
Absolutely everybody agrees that you've headed in the right direction, it's well overdue, but Ian Donges from the Farmers' Federation says there should have been more money on spending for roads and building projects as well.
PRIME MINISTER:
Well I guess if you're the head of a lobby group you've got to say that. But . . .
ZEMANEK:
But I mean you've driven out in the country . . .
PRIME MINISTER:
I have.
ZEMANEK:
You have driven out in the country just recently and you know how some of the roads are really rough and ready out there.
PRIME MINISTER:
They are.
ZEMANEK:
They do need to be fixed up.
PRIME MINISTER:
They are, but I also know that the greatest area of need is the inadequacy of medical services and you can't do everything at once. And Mr Donges knows that and I think he should understand that. And I think perhaps it makes for a more intelligent government process if lobby group leaders respond in a more reasonable way.
ZEMANEK:
There's going to be an extension of the mutual obligation policy, parents and families where there's no breadwinners will have to work for their welfare benefits. Jobseekers will also have to sign preparing for work agreements. I mean, how much opposition are you going to get from the Labor, the Democrats, to make it tougher for people to go out there and get the dole?
PRIME MINISTER:
Well I think once again it's a question of not so much the political reaction, but what is fair and reasonable. And we think it's reasonable that if people are able to do so that they put something back in return for the support they get. And that's the principle of mutual obligation. We're not . . .
ZEMANEK:
Are we talking long term unemployed people?
PRIME MINISTER:
Well we could be talking there yes. We've, I mean we started the Work for the Dole, the mutual obligation thing for the younger age cohort and it's gradually increased.
ZEMANEK:
There's roughly 150,000 long term unemployed . . .
PRIME MINISTER:
That's right.
ZEMANEK:
And will they be made work for the dole?
PRIME MINISTER:
Well, depending on the circumstances, they could be included yes.
ZEMANEK:
So what - I mean I would have thought that if they're long term unemployed, twelve months or more they should be made to work for the dole.
PRIME MINISTER:
Yes well it is just that some of them, I mean some people may not be physically able to do, that is the only point I am making.
ZEMANEK:
But I mean if they are on unemployment benefits . . .
PRIME MINISTER:
Well, as a matter of principle, I think anybody who gets unemployment benefits should, unless there is some compelling reason, give something back. That's the principle.
ZEMANEK:
So, you're saying work for the dole?
PRIME MINISTER:
Well yes, I mean we've supported work for the dole now for several years.
ZEMANEK:
I know you have, but you have only done it in small batches.
PRIME MINISTER:
No, no well it's gradually, it's not as small as it was, it's gradually spreading. And you need the community support facilities so that it spreads in a way that is making a positive contribution to the community. But if you're asking me as a matter of principle do I believe in work for the dole for able-bodied people, than the answer is yes.
ZEMANEK:
So okay, we have done it in small batches in the past . . .
PRIME MINISTER:
But it is growing.
ZEMANEK:
It is growing - there is no argument about that.
PRIME MINISTER:
And we're doing it in stages, and it will gradually extend and there's no reason in principle why it shouldn't extend to all able-bodied people. I think the maximum age now is up to the late 30s and you know we have an open mind about increasing it even more.
ZEMANEK:
But why not just spread it right across the board and say if you're unemployed twelve months or more, doesn't matter if you are eight or eighty, you still have to go out and work for the dole?
PRIME MINISTER:
Well it makes sense to do it in stages, because unless you have the programs and the community support, you may in fact end up, it ends up costing the community more than it saves, and more than it contributes. And you've just got to do it in a staged way, that's all. I have no objection in principle, it is just that it makes more sense to extend it in a staged fashion that's all.
ZEMANEK:
$49 million is being spent to control illegal immigrants and a new detention centre is being built. Shouldn't we be stopping illegal immigrants before they get here, instead of building new detention centres?
PRIME MINISTER:
Well Stan the answer to that is yes and we're trying to do that. But when some of them come, notwithstanding our best efforts, there've got to be detention facilities. That's our point. You can't just leave them to roam around in the community.
ZEMANEK:
Well, that's exactly right, but I mean if we're going to keep on accepting these people to come here, we're going to have to build bigger and better detention centres . . .
PRIME MINISTER:
Well we are gradually, I mean it is a very difficult issue this because a lot of people want to come to Australia and the laws have been too lax in the past thanks to the Labor Party in particular who blocked attempts in the Senate to tighten them. And what we are doing is we have been able to get the laws tightened a bit and we've also been able to transmit a message to source countries that it's no longer attractive, and no longer desirable, they're no longer welcome, now, and we've got better coastal guarding facilities. And you take all those things together the flow is being handled a lot better. But there are still some who are coming. You can't turn them back into a hostile ocean in a creaky boat and they drown.
ZEMANEK:
No, but a lot of people would say it would be a lot cheaper to than spending the $49 million just to take them straight out to the airport and send them back to where they came from.
PRIME MINISTER:
Well that's not simple either because airlines won't carry them unless they know that the country they're coming from will take them.
ZEMANEK:
But we have government planes though.
PRIME MINISTER:
Well yes but, you've got to land them.
ZEMANEK:
Well I mean . . .
PRIME MINISTER:
Well no I am serious.
ZEMANEK:
I understand that.
PRIME MINISTER:
You put people in a RAAF jet and fly them to Afghanistan and unless it gets landing permission it's got to turn around and come back.
ZEMANEK:
Alright, Geoff Clarke from ATSIC says the Budget has failed to make any significant advance in the Government pledge to achieve practical reconciliation. What do you say to him?
PRIME MINISTER:
Well I would say to him that the specific requests that ATSIC made to us was to increase the number of community development employment places by 6,000 and we have done exactly that. I mean he will know that that issue was raised specifically with me at two gatherings I had with ATSIC and I agreed to it. It's exactly what they asked for so I mean there may have been other things that they asked for, and obviously there are other things that they did ask for and other things they wanted, but we have maintained our level of spending increases in other areas, we've maintained our spending our aboriginal health. There's been increasing resources put into that area. We have increased . . .
ZEMANEK:
They all say that it's not enough money, we're not solving the health problem.
PRIME MINISTER:
People always say that . . . you can always spend more Stan, but I tell you what if you spend more you have to tax more. Money doesn't come out of thin air.
ZEMANEK:
We're spending $2.2 billion apparently on the aboriginal community at the present time. Now we're going to spend another $2.2 billion next year and the year after, the year after but we are still not solving the problem.
PRIME MINISTER:
Well I don't agree. I mean we haven't solved the problem, but it is not right to say that we haven't made progress. One of the depressing things in this area is that people are only interested in bad news stories about aborigines, they're not interested in good news stories, they're not interested in some of the improvements that have occurred in aboriginal health. And I don't have the time here to go into all of them. But there have been improvements. It is still a long way short of what we need, but it's better than it was. And it would be a good idea occasionally if people spoke on these issues, that they remarked upon the improvements. One of the problems in this indigenous area is that there are some negative stereotypes and they get reinforced every time many people speak on the subject because they speak in such doomsaying, negative terms instead of pointing out that there are some great stories of aboriginal achievement, and there are some great stories of how there have been measured improvements in health outcomes.
ZEMANEK:
Corroboree 2000, you are asking your ministers to go along and your colleagues to go along. Do you think it's going to do much to promote reconciliation?
PRIME MINISTER:
Well I don't think on its own it's going to produce reconciliation. Reconciliation is a an attitude of mind. It's about us as Australians working with indigenous people in our own communities where that happens, and treating them decently and equally and giving them an equal opportunity. That's reconciliation to me - treating a person irrespective of his or her religion, or colour of skin, or racial origin as a fellow human being in a totally open, and equal fashion. And when you have that in Australia, when you have an expected understanding for the fact that although first and foremost we are Australians, irrespective of our background, that's more important than anything else, that we may have some different cultural beliefs and if you respect and understand that, now that's reconciliation.
ZEMANEK:
Well, that's reconciliation according to you. According to them they want you to say sorry. Will you say sorry?
PRIME MINISTER:
Well I have said sorry personally, but if you're talking about a formal national apology, I don't think that's appropriate for the current generation.
ZEMANEK:
Are you worried about the fact that if you do say sorry on behalf of the Government, that you're going to have legal suits and lawsuits flying around the place?
PRIME MINISTER:
Well look the principal reason is not that no. I mean the reason I don't think the current generation of Australians should apologise for what was done earlier is that we didn't do it. I mean I am sorry for the injustices of the past, but I don't apologise for them because I wasn't responsible for them, that's all I am saying.
ZEMANEK:
Alright, well I think a lot of people will agree with you on that particular score. The people listening to us this morning, the average battlers, the people on Struggle Street, the people trying to sort of put bread on the table, the people trying to pay school fees, the people trying to eke out a living and make ends met - what do you say to those people as being the prime minister when you've brought down a Budget where most people have knocked, have analysed and said it's like steady as you go, it's very conservative, we're not really looking at the big picture - what do you say to those people out there who are finding it tough and need more money in their pocket to make ends meet?
PRIME MINISTER:
Well what I say to them is that the Government has done a number of very positive things. We've created more jobs. We've delivered lower interest rates.
ZEMANEK:
But interest rates are going up.
PRIME MINISTER:
But even after the latest increases the average person you're talking about is paying $220 a month less on his mortgage than he was four years ago. We have seen the wages of most people go up faster than the rate of inflation. You say, you talk about people struggling to pay school fees, we have in fact increased the opportunities for people to exercise choices, parents can send their children to the schools of their choice. And we've maintained and increased support for people who exercise that choice. There's a myth in the community that the people who send their kids to private schools are all wealthy. That's wrong. The great bulk of people who send their children to non-government schools are not wealthy, they're struggling. And they think for a combination of reasons, they should have the right to send their children to the school of their choice. And we are supporting that choice with more money.
ZEMANEK:
No argument about that as well, but the reason why more people are sending them to private schools is basically because I suppose the public school system is a tad run down and needs more money and better teachers to fix it up.
PRIME MINISTER:
Well look the public school system does a great job in difficult circumstances. I have a lot of admiration for teachers, in both government and non-government schools. They are, government schools are of course the responsibility of state governments, they run them and they get resources from the federal government and from their own coffers to pay for them. I mean you can't have a system of government in this country that - the state government asserts the right to run government schools, but if they want some more resources they come to us. I mean you, I mean we already provide a lot of money for government schools. An enormous amount of money and we will go on doing so and with the GST, they'll have even more.
ZEMANEK:
Ok, when we talk about the average punter out there, when you talked about the average punter has invested in Telstra - in the Financial Review this morning it says that Federal Treasurer Mr Peter Costello yesterday raised the question mark over Telstra's dividend stream, claiming the telco had delivered very bad news for the government on future payments. With the share price the way it is today it's not looking too flash. How is that going to be resolved and secondly, what are your chances of selling the other fifty percent and will selling the other fifty percent have a big impact on the share price?
PRIME MINISTER:
Well selling the other fifty percent will enable us to free the Commonwealth completely of net debt and that is a huge reason to do it.
ZEMANEK:
But can you get it done now?
PRIME MINISTER:
Well, we'll get it down if the Parliament agrees and I believe over time pressure will build on the Labor Party and the Democrats to let it through.
ZEMANEK:
But how long over time have you got? Because the average punter out there is sitting on the shares . . .
PRIME MINISTER:
Yes, but hang on.
ZEMANEK:
Sitting there on the shares and they get another payment now in November.
PRIME MINISTER:
Well I mean you should be interviewing Kim Beazley.
ZEMANEK:
Well we're going to later on . . .
PRIME MINISTER:
And you should be ensuring that you talk to Kim Beazley and Meg Lees. I mean we've got a policy, our policy is clear, we favour the full privatisation. The present situation is unsatisfactory in that Telstra is half owned by the public and half owned by the Government. And that's quite unsatisfactory. And I think the company would operate more freely and better if it were fully in private hands. As for the current share price, look that will be determined by the market and I don't think a prime minister should speculate about the future level of shares which are bought and sold on the stock market every day. I think that is . . . I mean I am not responsible for the share price of Telstra, anymore than I am responsible for the share price of BHP or anything else.
ZEMANEK:
But it was your government though that wanted to release half of the shares . . .
PRIME MINISTER:
Yeah that's right and people buy shares knowing that they can go up and down.
ZEMANEK:
Well that's exactly right.
PRIME MINISTER:
And you shouldn't assume that the share price today will be the share price tomorrow. It could go up, it could go down.
ZEMANEK:
Alright, we've got the GST coming in very shortly and a lot of people saying well how are we going to control it? The ACCC doesn't seem to have the manpower, doesn't seem to have the power . . .
PRIME MINISTER:
I don't think you could say they don't seem to have the manpower I mean they were attacked the other day by the business community for being too heavy handed. The ACCC is doing a very good job stopping exploitation. And I think people will find after the GST comes in and it's only fifty-four days away, or fifty-five days away and I think it can't come quickly enough. You know once it's been in operation for a while, people will say what was all the fuss about. Most people's experience of the GST will simply be that the price of some things will go up, others will go down and others will remain the same and they'll all have a tax cut.
ZEMANEK:
But the inflation that you talk about - the 6.75% you say well that's only going to be a one off for a quarter..
PRIME MINISTER:
That's right.
ZEMANEK:
That's going to put prices up again, that's going to . . .
PRIME MINISTER:
No, no I am sorry . . .
ZEMANEK:
And that's going to put more strain on the average punter out there.
PRIME MINISTER:
No I am sorry, the inflation is the price increase. You can't count it twice.
ZEMANEK:
Well you can't count it twice, but it's still going to go up isn't it?
PRIME MINISTER:
Well the prices are going to go up once as a result of the GST. Now I admit that. Now that happens every where in the world when you introduce a new tax system. You have a one off increase in prices, reflecting the imposition of the tax on those items that were not previously subject to indirect tax. Now some things will go up, some things will fall in price because the wholesale sales tax will disappear altogether and others will remain about the same. And the forces of competition will ensure more than anything else that the price increases are appropriate. And on top of all that people will get a tax cut so they won't be out of pocket. Now that is how the system will work for eighty percent of the Australian community and that will be the beginning and the end of their contact with the goods and services tax.
ZEMANEK:
I get callers to my program and letters as well from people, small businesses out there saying, you know we've applied for the ABN number, we don't look like we're going to get it . . .
PRIME MINISTER:
Well when did they apply for it? Yesterday?
ZEMANEK:
Well look a lot of them are saying yes they've only applied for it in the last couple of weeks, but I understand there are thousands upon thousands of requests in there for the ABN numbers and the Taxation Department are saying that they may not be able to go through all these and send everybody out an ABN number. Now the Treasurer is saying that if those ABN numbers are not received, people are going to pay the full tax.
PRIME MINISTER:
Well that's the system.
ZEMANEK:
Yeah ok, but if everybody's put their request . . .
PRIME MINISTER:
Well people . . . the position is this Stan, the people who have put their request in by the time they were meant to will get it.
ZEMANEK:
So, they . . .
PRIME MINISTER:
Simple. If they put it in by the time they were meant to put it in then they will get . . . .
ZEMANEK:
Before the end of June.
PRIME MINISTER:
Yes, they will get their ABN number.
ZEMANEK:
Ok, so no tax imposition on them?
PRIME MINISTER:
No. There was a time designated for them to apply and if they have applied within that time.
ZEMANEK:
But still haven't received the number . . .
PRIME MINISTER:
But they will receive it before the 1st of July.
ZEMANEK:
But if they don't? The Taxation Department's saying, look you know they can't do all these requests.
PRIME MINISTER:
No, no the Taxation Department is saying if you were late with your application they can't guarantee that you will get it in time and that's only reasonable.
ZEMANEK:
OK. Well there's no, I suppose a lot of people say there is no major surprise, but one aspect that interested me was included in the $300 million strategy to strengthen families . . .
PRIME MINISTER:
Yes, I announced that at the Liberal Party Convention last month.
ZEMANEK:
It appears that there is going to be a form of civil national service - is that one way of describing it?
PRIME MINISTER:
No, we are going to have youth cadet groups. It is not a form of civil national service in the sense that it is . . .
ZEMANEK:
Can you explain to us . . .
PRIME MINISTER:
Well I mean one of the things we are going to finance are the formation of cadet groups, not only in the sort of military sense, but in the sense of getting groups of young volunteers in different communities around the country doing different community things. And individual communities can put together a proposition that you might have young cadets dealing with emergency services, or young cadets dealing with some other environmental things.
ZEMANEK:
So are these kids under the age of seventeen, or are these kids who are on the dole?
PRIME MINISTER:
Well there's no, the dole thing is separate to this. This is quite separate from that. It can be young people of a variety of ages. But this won't impinge in any way on work for the dole.
ZEMANEK:
Ok, look I know you have given us plenty of time this morning and I thank you for that. First of all I would just like to have your tip for tonight's State of Origin.
PRIME MINISTER:
Well as a prime minister I don't take sides. But for a prediction, I think I will chance my arm on Queensland.
ZEMANEK:
Why is that, because they are red and white just like St George?
PRIME MINISTER:
Maroon.
ZEMANEK:
Maroon, close to it anyway.
PRIME MINISTER:
You need new glasses Stan.
ZEMANEK:
Finally, another tip or another prediction - do you think Kerry Chikarovski can last as leader in, of the Sate Opposition?
PRIME MINISTER:
Well I believe she will and I think she should. It's a tough job and she has my support. It's a very tough job and I wish her well. I think it's important for the Opposition in New South Wales as well as legitimately criticising the government to develop an alternative policy agenda. But I think Kerry will last and I admire the application she brings in very difficult circumstances.
ZEMANEK:
Ok, I have just had a request from our news room and they want to know can you confirm whether you have been tested for Legionnaire's Disease and if there is any problems?
PRIME MINISTER:
No I haven't.
ZEMANEK:
You haven't been tested?
PRIME MINISTER:
I haven't been tested and I feel very well.
ZEMANEK:
Well John Fahey has just apparently just announced that he is recovering from Legionnaire's Disease.
PRIME MINISTER:
Yes, that's true. Yes that's true.
ZEMANEK:
So, we're talking about John Fahey here, not you.
PRIME MINISTER:
John Fahey, this is Howard.
ZEMANEK:
Yes, I know that. John Fahey has just announced it.
PRIME MINISTER:
Yes, John informed me yesterday that he did have, he had been diagnosed with it. He seems OK and so forth and he's going to take some time off and I advised him to do that. He's a very valued minister and I want him to get better.
ZEMANEK:
But as far as you're concerned . . .
PRIME MINISTER:
I am fine, I have not been tested for it. I don't have any of the symptoms. I talked to a doctor who accompanied me on the overseas trip. I wasn't tested, I don't need to be. I am very well and I am, you know, fighting fit on every front.
ZEMANEK:
Mr Howard I thank you for taking so much time with us this morning and we will talk again in the future and good luck.
PRIME MINISTER:
Thank you.
[Ends]