E&OE……………………………………………………………………………………
McGRATH:
Prime Minister, thanks for speaking to AM this morning.
PRIME MINISTER:
Good morning.
McGRATH:
First of all, the good news for Australians is that up to a quarter of a million of them will get $2,500 for a baby bonus. But I guess the bad news is that to get the top amount they’ll need to have earned $52,000 a year and stay at home for five years.
PRIME MINISTER:
Well, it’s true that it depends a bit on your income but there’s a guaranteed minimum of $500 a year and that’s quite a generous minimum. And the whole idea of this is not to encourage this or that kind of behaviour after your child is born but to recognise the reality we all understand and that is the peak expense for a couple is really when they have their first child because they, for however short a time or for a medium amount of time or for a longer amount of time, depending on the choice parents make, they lose one income. And this is a carefully targeted measure designed to ensure that we provide some assistance to people at that peak expense time and to assist them in the process of family formation and I think it has very desirable social goals.
McGRATH:
Now, carefully targeted, as you just said then. ACOSS has made the point that it’s not means tested so those on higher income…
PRIME MINISTER:
But it is capped.
McGRATH:
…but those on higher incomes will get more.
PRIME MINISTER:
But it is capped. They still get it. Well, I think we can, you know, over do the means testing but the compromise that we have struck is that it’s capped so that the small number of people who might earn very high incomes, they don’t get any more than the capped amount. And we have a minimum, a guaranteed minimum of $500 a year, so I think it strikes a very good compromise. And remember that the family benefits we brought in with tax reform are skewed in favour of low and middle income families and that’s been demonstrated by the independent research of NATSEM and that’s not my assertion, that’s independent.
McGRATH:
Can I make one point, though, for families who’ve already had their children, they have young children, two, three, four children under the age of five, have very high expenses, there’s nothing in it for them.
PRIME MINISTER:
Well, Catherine, we literally don’t have enough money to have a generalised tax break for everybody, we just don’t, and we had to work out how could it be most beneficial. And we took the decision that the peak expense time is when you lose that second income when your first child comes along. Now, I think everybody who’s been through that, that is listening to this programme, would nod their head and say, yes, that’s right.
McGRATH:
Can I put the point to you, though, that there was such a large surplus at the start of this year, that surplus has disappeared through other spending, if the surplus was there there would be the chance to have, you know, broader tax cuts for more families.
PRIME MINISTER:
But if the surplus had been there, Catherine, we would be paying more money for our petrol, we would have weaker defences, we would have poorer roads, we would not have given such a good deal for self-funded retirees who haven’t got the benefit of lower interest rates. In other words, we haven’t wasted that surplus, we have spent it on good investments for Australia’s future, all of which, incidentally, the Leader of the Opposition has supported and, in fact, has said we should have gone further. The only thing he doesn’t like is that it’s cost anything.
McGRATH:
Can I put two critics to you this morning – Tony Walker in the Financial Review says it’s a grab bag of measures, less to do with the future than it is to do with saving John Howard’s hide. The Telegraph editorial says it’s not an adequate replacement for what’s really needed which is cuts to income tax.
PRIME MINISTER:
Well, if we had more resources then we would have had more generalised income tax cuts. But I made it very clear that any available surplus would first be applied to tax cuts. It’s not a big available surplus so, therefore, we have to target the tax cuts and we believe that they can best be used for people who go through that peak expense load in their family lifecycle and that is when they have their first child.
McGRATH:
So you’ve got no regrets about the way it’s targeted.
PRIME MINISTER:
I have no regrets at all. I mean, it was done – why would I, it’s my policy and I did it quite deliberately because I think that is where it can help the most.
McGRATH:
And ACOSS’s concern about not giving more help to the less well-off because it means…
PRIME MINISTER:
Can I say to ACOSS that contrary to some of the mantra that comes around – and even Michael Raper admitted this last Thursday – that the rich are not getting richer and the poor getting poorer, that’s not happening. The income differentials are not widening…
McGRATH:
Well, he did question you on that afterwards. I was at that speech and he did ask…
PRIME MINISTER:
Well, I mean, he admitted it while I was there, he said, you are right. Isn’t that interesting. I mean, this is a very, very big development, ACOSS actually agreeing with me that I’m right when I say that the income differential has not widened. One of the reasons it hasn’t widened, Catherine, is because of what we did a year ago with the family tax benefits under tax reform. We have massively increased the benefits for low-income families including, in particular, sole parents. Now, people said we weren’t going to do that but we did and that’s one of the reasons why I really don’t take too much notice of the ACOSS criticism.
McGRATH:
He did say, though, that his belief was that the needy were more needy now. But if we can move on because we’ll have to agree that their views and yours are different on that. Can I ask you about the speech yesterday because you looked extremely confident, you spoke for an hour. On the lectern read the words, ‘certainty, leadership and strength,’ behind you was the sign, ‘keep Australia in safe hands.’ Now, two questions, on that issue of certainty, leadership and strength and Australia in safe hands, are you being alarmist?
PRIME MINISTER:
No, I’m telling the truth. I do have a safe pair of hands, but collectively the Government has a safe pair of hands. We…
McGRATH:
But why do we need safe hands, I mean, what’s the threat…
PRIME MINISTER:
Well, because we are going into more difficult economic times. Thankfully our economy is very strong. We are also going into very difficult political times internationally and you do need safe hands both individually, in the person of the Prime Minister, and collectively, in terms of the skill and the experience and, most of all, the track record of the Government.
McGRATH:
Now you were looking confident yesterday as I said. Many Liberals that I spoke to were quietly confident, even though they say it’s very close, but the feeling definitely within the Liberal camp that I was getting yesterday is that people believe that you just might win. Do you feel that, you looked like that yesterday?
PRIME MINISTER:
I think it’s very tight. I really do believe it’s very tight and anybody who thinks that the Liberal Party is heading towards an easy victory ought to take a cold bath, it’s nothing of the kind.
McGRATH:
In your closing remarks you said, my instincts, my energy, my experience, my successes to date and my sheer commitment to the land I love best equip me for that job. Now, as you said that you were very, very emotional and I saw on the close shot that, you know, virtually there were almost tears in your eyes. Why were you so emotional at that point, is it because you feel victory’s close?
PRIME MINISTER:
No, no, because I meant every word of it. It really matters very much to me, to the Liberal Party and the vision I have of Australia that the Government win this election. I think it would be very bad for this country if we go back to a Labor government. I don’t think they’ve learnt anything about how to manage the economy. They flip flop on international issues. And I felt very passionately about that and if I looked and sounded emotional, well, I don’t mind that, I was and I am.
McGRATH:
But you’ll need to hand over, some time during your next term, to Peter Costello.
PRIME MINISTER:
I haven’t said that.
McGRATH:
So you’ll be back for the next election.
PRIME MINISTER:
Look, Catherine, try as you may, my position is we get elected for three years, a couple of years through I’ll think about my future. No, I haven’t said any more than that.
McGRATH:
Can I ask you quickly on Telstra, if I may.
PRIME MINISTER:
Sure.
McGRATH:
Treasurer Costello last week revealed that in 2003/2004 the budget costings are that the sell-off would begin. Now, that was in the budget papers we saw earlier in the year, however, there were more details on that. Now, you have said and so has Senator Alston that if services are not improved there will be no sell-off. So the question is then, if there is no sell-off doesn’t that then put a question mark over your budget costings?
PRIME MINISTER:
Well, it doesn’t really because as Chris Murphy pointed out, and he’s an independent economist, over the period of the forward estimates the difference between selling and not selling the rest of Telstra is about $11 million. So it doesn’t really make any difference. Our position on Telstra is very simple, we are not going to sell another share in Telstra until we’re completely satisfied, after proper consultation with people in country Australia, that services are up to an adequate level. Now, that is the position without qualification.
McGRATH:
Just quickly, though, I’m a bit confused about how that can be the case, if you don’t sell it, why that doesn’t then leave the Coalition with a black hole.
PRIME MINISTER:
No, it doesn’t because you’ve got a trade-off of dividends and a few other things during the forward estimates period.
McGRATH:
Prime Minister, thanks for speaking to AM this morning.
PRIME MINISTER:
You’re very welcome.
[Ends]