E&OE...................................................................................................
JOURNALIST:
Today's interest rate rise, is that the first of a number that will
be generated by the GST [inaudible]...
PRIME MINISTER:
Well, it's really got nothing at all to do with the GST. The average
housing loan will still be $266 a month cheaper than what is was when
we came to office.
JOURNALIST:
Will we see more interest rate rises as the GST kicks in?
PRIME MINISTER:
Interest rates are set by the Reserve Bank and it's quite clear
from the Reserve Bank's statement this morning that this has really
been influenced by international factors. There's no reference at all
to the GST in the Governor's statement. So the line that it's
got something to do with the GST is wrong and the reality is that interest
rates now are miles below what they were when Labor was in power and the
average mortgage is $266 a month lower than in March of 1996.
JOURNALIST:
[Inaudible] expected isn't it?
PRIME MINISTER:
I didn't make any prediction about rates.
JOURNALIST:
You and the Treasurer though had said that you didn't see any signs
that the economy was overheating. Do you think the Reserve Bank has?
PRIME MINISTER:
Well, the Reserve Bank says that the economy is not overheating. If you
have a look at the Governor's statement you'll find that he
confirms what I said and what the Treasurer said. He spoke of the international
influences. The reality is that the world economy now is stronger than
what it was a year ago and central banks around the world are marginally
adjusting interest rates in an upward direction. There's wide speculation
that the Federal Reserve in the United States will lift interest rates
by half of one per cent or perhaps a little less in the next 24 hours.
Against that background, the Governor believed that this adjustment was
necessary but it's an adjustment that still leaves the average home
mortgage $266 a month better off than four years ago.
JOURNALIST:
This is going to hit regional areas hard though with average home loans
now going up by $30 a month because of the full half per cent increase.
PRIME MINISTER:
Well, the average homebuyer is $266 a month better off than what he or
she was in March of 1996 and that's the bottom line. And the bottom
line is that even after this interest rates in Australia are dramatically
lower dramatically lower than what they were when Labor
left office in March of 1996.
JOURNALIST:
So the timing and the rise, is that appropriate in your view?
PRIME MINISTER:
Well, the Governor explained the reasons for the Reserve Bank's
decision. As you know we have an arrangement where official interest rates
are set by the Reserve Bank and not by the Government and the Reserve
Bank has explained the reasons for the rise and those reasons do not include
the GST. He does not suggest that the economy is overheating and he talks
very freely about international factors.
JOURNALIST:
Mr MacFarlane has always talked about the need though to be pre-emptive.
Half a per cent is fairly large in pre-emptive terms isn't it?
PRIME MINISTER:
Well, he's put it in the context of the international situation
and I think you ought to read his statement. It was a decision taken by
the Reserve Bank under the arrangement whereby it independently sets official
interest rates.
JOURNALIST:
Queensland farmers say this will impact them significantly. What do you
say to them?
PRIME MINISTER:
Well, interest rates are dramatically lower now than what they were in
March of 1996, that's the reality.
JOURNALIST:
Prime Minister, you have acknowledged the high unemployment problem in
the Tweed area, have you got any measures that you are looking at to try
and improve things up here at all?
PRIME MINISTER:
Well, continuing to run a high growth economy, continuing to ensure that
employment throughout the country grows, that business conditions are
good. If we can get our GST reforms through and implement it which we
are in the process of doing then that will produce cheaper fuel in regional
Australia and will generally make for a better export climate. There are
some characteristics of this region, you know as well as I do, which mean
that the unemployment rate might always be a little above the national
average. It seems to be the kind of area that is appealing to people who
have a particular lifestyle and I think you have to make allowance for
that. It's unreasonable to expect that the unemployment rate here
will be exactly the same as in other parts of Australia. But it has come
down, it's now, what, five per cent lower than what it was a couple
of years ago and that's a very significant improvement.
JOURNALIST:
[Inaudible] to stop regional services leaving the bush has already come
unstuck this morning, it revealed a plan to remove 28...
PRIME MINISTER:
Are you talking about that story in the Sydney Morning Herald?
JOURNALIST:
Yes, I am.
PRIME MINISTER:
Well, that story totally distorts what the Government has done. The headline
was wrong. The story inaccurately and dishonestly represented what the
Government has done. The service provided there is the money the Government
provides for the Job Network system. We provide a large amount of money,
we call for tenders and whoever presents the best tender gets the money
and therefore with our money provides the service. Sure, Employment National
offices activities have gone but they have been more than replaced by
the Government funded private providers. Therefore the Commonwealth service
is better now, not worse, better than what it was under the old system.
JOURNALIST:
Mr Howard, aren't there some potential problems however if a further
[inaudible] a national service with linked offices is diminished and replaced
by more discreet terms?
PRIME MINISTER:
The test, Michelle, is whether you help the unemployed and whether you
have got a proper spread. And the new system is helping the unemployed
50 per cent more than under the old system and I think it's splitting
hairs to allege that one provider is less able to provide the service
than another. Employment National didn't provide a competitive tender
and it's quite wrong of anybody to suggest that because Employment
National has missed out that the service has been diminished. The service
has been increased. The private providers are very effective. I have been
told in regional towns around New South Wales that the private providers
are most welcome. The new network is producing 50 per cent better outcomes
than the old Commonwealth Employment Service. And in the end it's
how you help the unemployed that determines the value of the employment
service.
JOURNALIST:
[Inaudible] there's a town in Queensland, Murgon, closed their meatworks...they
want you to visit.
PRIME MINISTER:
Well, I can't do that. I mean, you know, I'd like to visit
every town in every part of Australia but I have a Cabinet meeting next
week. I will be going to rural Queensland as part of my continuing pattern
of visiting regional and rural parts of Australia. But this proposition
that every time you embark on a regional tour you are somehow or other
failing if you don't go to every town in every State is a little
bit rich. I notice the acting Premier of Victoria, Mr Brumby, was running
that rather infantile line.
JOURNALIST:
Mr Howard, [inaudible] by the return of Cheryl Kernot and the circumstances
surrounding that?
PRIME MINISTER:
Well, I wish her a full recovery in her health. I would wish that of
anybody in Australia. Beyond that I don't have any comment.
JOURNALIST:
[Inaudible] for the Labor Party?
PRIME MINISTER:
I don't have any comment on that. I think the liability for the
Labor Party is its lack of policy. And Mr Beazley has been Labor leader
for almost four years and he has no employment policy, he has no taxation
policy. Labor's liability is its policy vacuum.
JOURNALIST:
Are you concerned that instability may arise from the continuing stand-off
in Indonesia between General Wiranto and the President?
PRIME MINISTER:
Well, Indonesia's going through a very difficult transition phase
and it has our understanding and our sympathy. The new President is strongly
committed to democracy, he's strongly committed to a more open political
system. I welcome the fact that there is a serious investigation being
conducted into what occurred in East Timor and there's a determination
on the part of the authorities to bring people to account. Beyond that
I think any comment is really intruding a little into the internal affairs
of another country. Thank you.
[ends]