Subjects: Australia Day; General Cosgrove; BAS; Alice Springs to Darwin railway; ANZUS; Medicare; Inflation
E&OE................................
CORDEAUX:
On this special Australia Day programme, it gives me a great deal of pleasure to introduce the Prime Minister of Australia. Sir, thank you so much for your time.
PRIME MINISTER:
Good morning Jeremy, and happy Australia Day to you and your listeners.
CORDEAUX:
And I know how busy the day is so I am particularly grateful.
PRIME MINISTER:
It's always a great day, particularly if you are privileged enough to be Prime Minister of Australia. I've tried on each of the Australia Days I've been Prime Minister to spend it in a different part of the country, and I'm spending it in Canberra today because it is the Centenary of Federation year and there are a lot of additional celebrations for Australia Day because of that conjunction.
CORDEAUX:
Peter Cosgrove, the Australian of the Year - a great choice?
PRIME MINISTER:
A wonderful choice, very warmly received last night when it was announced. I don't think there would be anybody who would argue with that. He's a great role model, a modest but strong leader. He has upheld the tradition of the Australian Army and the Australian services, also given a very humanitarian and generous faith, what he did in East Timor and the example he set, is something that I find as I go around the country still resonates very strongly.
CORDEAUX:
I guess the next big decision you've got to make is the next Governor General. I remember I asked you once whether you thought General Cosgrove would make a good Governor General and you sort of, I can't remember what you said, I think you said you hadn't thought about it yet.
PRIME MINISTER:
Well, there will be an announcement made about the next Governor General in proper time before Sir William Deane retires on the 30th of June. All I can say is that the person will be a very distinguished Australian.
CORDEAUX:
And on this day, where I noticed the Republicans are out rattling their swords again, I take it that it's not going to be some, I don't know, obviously a distinguished Australian but not a closet republican.
PRIME MINISTER:
I don't want to say anything about who it might be other than that it will be a very distinguished Australian.
CORDEAUX:
Now you've got a major statement that you are going to make on Monday?
PRIME MINISTER:
Yes, it will be a statement that will commit the Government to even greater support of research, of science and innovation and technology. We already give a lot of support. In fact there was some data in the press this morning suggesting that when it came to research and development support, government help in Australia was up near the top amongst industrialised countries. But we are going to give more resources because science and technology will bulk even larger in Australia's future than it has in the past. And there is a very growing recognition in this country of just how clever we have been in the past, how good at ideas we have been. Sometimes tragically we have thought of the invention. we've invented the things and then we've lost them overseas. And the inability to convert a great idea and a great invention to a commercial reality is one of the gaps in this country and we do need to address that.
CORDEAUX:
Do you foreshadow therefore some sort of government, I don't know what, venture capital approach?
PRIME MINISTER:
Well we made quite a big change in that area with the capital gains tax and the Ralph announcements last year. Not only did we cut capital gains tax in half but we also made it more attractive for overseas pension funds to invest in venture capital companies and projects in this country and as a result of that there has been a very sharp increase in the amount of capital coming in for those purposes. In a sense that particular part of the issue has already been addressed.
CORDEAUX:
Now I know that you have been a great supporter of the Alice Springs to Darwin railway line, in fact, you've likened it to the Snowy River Scheme.
PRIME MINISTER:
Yes, the Government has put $165 million, committed $165 million to it.
CORDEAUX:
Now, what happens if the states, because one of the major investors to the tune of $70 million has backed out of it, what happens if the states come knocking on your door for some more money? What's your reaction going to be?
PRIME MINISTER:
Jeremy, this is a difficult and sensitive issue at the moment. I don't want to hypothesise. There's been some comment in the press about the withdrawal of one of the participants. The matter is under discussion right at the moment and it is probably not very helpful for me to say anything other than that I'm of course very happy to talk to John Olsen and Denis Burke and I remain sympathetic to the project. But I've also got to be realistic about the commitment of the Government and beyond that I don't want to say anymore, I just want to hear precisely what the position is and I'll very carefully and sympathetically consider any proposition that is put up, but I can't really say more than that. It probably doesn't help things if I say any more than that at the moment.
CORDEAUX:
I understand. You must be pleased with the inflation figures that have just come out. Generally the economy is slowing but that inflation figure is a very very important piece of data. The thing that sort of looms on the horizon for a lot of small business people is this Business Activity Statement. You've, in the last few days, expressed a good deal of sympathy for the difficulty that people say they are having. How are you going to sort that out?
PRIME MINISTER:
Not easily, because I get contradictory views. There are a lot of views coming to us from industry organisations. Most of them suggest that there should be some changes. Anecdotal evidence is very mixed. Some people complain about the complexity, others tell me - and these are people in very small businesses - that they don't know what all the fuss is about, that it is really very straight forward. My bottom line Jeremy, as I said at the press club yesterday, is that if there remain any lingering concerns then we will want to address those, because this is an implementation issue. We are not talking here about changing the tax system, but we are talking here about implementation and we don't want it to be any more difficult than it need be. Recognising of course that when you have a new system, there are always some adjustment challenges, it doesn't matter what it is. And it was unrealistic to imagine that you could introduce as big a change, introduce a new system like this without there being some adjustments being made.
On your point about the inflation, it was a spectacularly good figure. Much lower than I expected. I didn't think it would be 0.3 - I really didn't. I was expecting 0.7 - 0.8. And that is very good news. It means that the inflationary impact so far, and this is after six months, the inflationary impact so far of the GST has been much less than we forecast and that is really very good news. And it means that the compensation for people on fixed incomes, pensioners and so forth, is more valuable than what originally we thought it was going to be when we brought it in.
CORDEAUX:
Now, you've created an environment where it looks as though it could be appropriate to bring interest rates down?
PRIME MINISTER:
Well, that's a matter for the Reserve Bank. I never speculate about interest rates but certainly I read the newspapers as you do and there's a lot of talk.
CORDEAUX:
Prime Minister, it is great to talk to you. One last question, I saw last night people ranting and raving about Medicare, talking about the imminent collapse of Medicare and that the Government has really got to put more money into it.
PRIME MINISTER:
Well that really. I don't know how people can argue that Medicare is about to collapse. By getting people back into private health insurance, and we have gone way beyond our expectations, we have strengthened Medicare. The new five year hospital agreement with the states has put a lot more money into it, into the states. We gave, on top of that, because of the increase in the number of people in private health insurance, we gave the states an even better deal than we'd promised. And the consequence of that increase, because the original understanding was that as more people went into private health insurance there should be a lesser federal government payment to the states. Now we didn't insist on that. I don't know how anybody can argue that Medicare is on the verge of collapse. I know the AMA would like an increase in the rebate. I mean they, I think, are considered on an annual basis, but this alarmist talk about Medicare falling over is ridiculous. Medicare is very strong. People said five years ago when I became prime minister, my critics said that we were going to try and undermine it. Now, they've had five years to try and make good that gloomy prediction, and of course so far from undermining it, we've actually by encouraging people back into private health insurance we've strengthened it.
CORDEAUX:
Have you spoken to President Bush yet?
PRIME MINISTER:
Yes, I spoke to him on the phone just after he was confirmed as the new President. We had a discussion and I expect to go the United States some time this year. It is the 50th Anniversary of the signing of the ANZUS pact between Australia and New Zealand and the United States and the defence alliance between Australia and the United States is still so very important to us and it will certainly be an appropriate occasion, probably in Washington or San Francisco to mark that very important event.
CORDEAUX:
Prime Minister thanks for your time. Happy New Year and Happy Australia Day.
PRIME MINISTER:
Happy Australia Day to you and your listeners.
(ends)