Subjects: economy; opinion polls; Business Activity Statements; Telstra; Ryan by-election.
E&OE..................................
CARLTON:
The Prime Minister is on the line. Good afternoon.
PRIME MINISTER:
Good afternoon Mike.
CARLTON:
Am I being too hard on you? Black Wednesday.
PRIME MINISTER:
Oh no. I can understand why you would say that.
CARLTON:
Is it a fair description?
PRIME MINISTER:
Well, certainly not the greatest day I've had. Of course it's, look we are obviously, from a political point of view, the polls aren't good for us and they're not going to be for us for a while. On the economy it is true that we had a negative result in the December quarter, and that's disappointing. But that set-back in one quarter doesn't wipe out the gains and the strengths and the process of the last five years. It doesn't alter the fact that we have a lot more people in work, that we have much lower inflation, and one thing you didn't mention, I'm not saying it was deliberate, and that you didn't mention, and that was the fact that interest rates came down again this morning. And the average home buyer is $270 a month better off then when we came to office and that's quite an important thing for families. But I'm a realist Mike, I don't.
CARLTON:
Well let me put it to you bluntly, your Government now is in big trouble, you've got to get yourself and your party and your Government out of it haven't you?
PRIME MINISTER:
Well there are a lot of political challenges, yes, a lot, a lot. But your listeners are, I guess, interested in what I have to say about things that affect them rather than what I have to say about things that affect me. I mean in the end they will pass the judgement on me according to how well I've served them, not, and I don't know that I serve them well by being preoccupied with my own future as distinct from being concerned about theirs.
CARLTON:
Why has it call gone so wrong in the last three/four months? Is it the GST?
PRIME MINISTER:
Well I think over the last three or four months, as often happens with Governments, you can have a confluence of events. Obviously people were more cranky about the petrol price issue, and I have acknowledge the Government recognised, and I said that last week when I announced the cut of 1.5 cents a litre and the abandonment of the automatic indexation. I think that was a factor, I think that was quite a factor. And you often get a momentum effect after very bad state election results. Those two state election results were very bad, and whether they were all state or half state, half federal, it's not really the point, they do create some kind of momentum, and they have a spill over effect. Now I'm lapsing into political commentary, which is not really what your listeners are all that interested in. They are more interested in your commentary or one of the journalist's commentary, but I'm the commented upon one rather than the commenter.
CARLTON:
Well one of the comments that you keep hearing about you, and your Government, and I'll be blunt again, is that you have been mean, unheeding, and uncaring. And that you're now paying the price for that.
PRIME MINISTER:
Well I don't think that's a fair criticism, I know people make it and I don't like that criticism because I've never set out to be mean or uncaring or unheeding. And I don't think that's a fair charge, and if you look at the sort of basic living standards and living conditions, the best you can measure them, they haven't gone down under us, they've in fact gone up. And even people at the lower end of the income scale, there are fewer people in a position of absolute welfare dependency now than was the case four or five years ago. There's not been a big change, but it certainly hasn't gone backwards. And if you're getting a higher wage, which people are now than they were five years ago, this is in real terms, after inflation, and if you're paying lower interest rates, you're not worse off. I mean, I'm not saying that, you know, it's heaven for everybody, and I'm not suggesting for a moment that a lot of people aren't doing it tough, but no Government is full of people who wave magic wands and I don't think the allegation of meanness is fair, that's certainly not our intent. It disturbs me to hear.
CARLTON:
It mightn't be the intent but isn't it the perception that seems to be happening, that you're a Government that's not offered leadership, that you're a Government that's saying fill out this form, pay this tax, do that. You know what I mean, style comes into it.
PRIME MINISTER:
Well unfortunately every Government this country has had, and any Government we'll have in the future will have to raise tax for certain things. I mean you can't look after the poor and the vulnerable unless you have tax revenue. Look, I acknowledge that introducing a new tax system has involved quite an adjustment process for a lot of people, and I knew that that was likely to upset some people for a period of time, and that we could pay some kind of political price for that for a period of time. Now I acknowledge that, but the alternative is to do nothing, and this.
CARLTON:
It might have been better.
PRIME MINISTER:
Mike it might have been better for me, but it wouldn't have been better for Australia. And in the end, what is the point of having five years in office and at the end saying well everybody loved me, I didn't upset anybody, I didn't do anything, isn't that terrific. I mean what's the point of that? There's no point in that at all, I mean nobody consciously sets out to hurt people, nobody consciously sets out to anger them. But, I mean when you are given the office of Prime Minister you've really got to try and improve things. Now, I thought this country needed a new tax system, and I tried to give it the best shot I could, I didn't get everything I wanted because we didn't.
CARLTON:
But you can see that you got it wrong, that Business Activity Statement was just too bloody hard.
PRIME MINISTER:
I conceded that that form was too complicated, I didn't concede that I got the tax wrong.
CARLTON:
No, no, no. I'm just talking about the BAS form, it just drove small business nuts.
PRIME MINISTER:
Well it drive a lot of them, although can I say that I am still amazed at the number of people in small business who come up to me and say look I didn't have too much trouble with it, I know other people did but I didn't. I was out in Liverpool last weekend, and with a whole group of people from the Liverpool Chamber of Commerce, and they made that very comment to me. Now I'm not saying that's the whole country, and I acknowledge that there are a lot of small business men and women who felt, as you have articulated it, and that's why we made the changes. But not everybody, and a significant number of people have made that point to me.
CARLTON:
Yeah. Did you tell your party room the other day, as reported, that you're not going to sacrifice yourself on the pyre of ideological purity?
PRIME MINISTER:
Well let me, I don't normally disclose what I say in the party room, but I am a person who believes that my responsibility is, I mean you must have ideals in front of you, but you've also got to implement them in a pragmatic way.
CARLTON:
Did you say that, use that phrase though? Good phrase.
PRIME MINISTER:
I neither confirm nor deny it.
CARLTON:
Does it mean then, that you're going to pull back from some of your other more cherished reforms, like selling off the rest of Telstra. Is that off the agenda now?
PRIME MINISTER:
Well our position on Telstra, Mike, is as I've constantly described it, and that is that it is as we've constantly described it.
CARLTON:
Which is?
PRIME MINISTER:
And that is that first we've got to get it fixed in other words. We've got to get it fixed - the services and everything for the bush before moving on.
CARLTON:
So you still want to sell it off the rest of Telstra?
PRIME MINISTER:
Well the condition is that we've got to be satisfied about circumstances and everything in the bush and I'm not satisfied at present.
CARLTON:
You're sounding equivocal. The end game is to sell it off?
PRIME MINISTER:
No I'm not, our position is that sale is conditional on us first being satisfied and I'm not so satisfied.
CARLTON:
Right. So is it far enough further down the track than you might have though a year ago?
PRIME MINISTER:
Well I think that's hard to quantify. I think that there's still a lot of work to be done in relation to facilities in the bush. But the policy remains the same.
CARLTON:
Is there a current of backbench opinion in your party that would like to see you rolled and Costello in the job do you think before this next election?
PRIME MINISTER:
Well you better talk to them?
CARLTON:
Well, you hear it. I mean I don't know.
PRIME MINISTER:
Well look, look..
CARLTON:
Do you feel that your leadership is a little shaky?
PRIME MINISTER:
Well Mike look, in the end my colleagues will decide my future. I've always said that my position is if the party wants me to lead it to the next election I'll be very happy to do so and all the indications I have are that it does. But look I don't...
CARLTON:
[inaudible]
PRIME MINISTER:
Hang on hang on. This is quite important and I don't want you to misunderstand my reaction. In the end, I mean the Liberal Party has been very good to me and they've given me the enormous privilege of leading it for a lot of years and I hope I've given something back in return. And I will always be its, ultimately be its servant. I don't take the view that the prime ministership of this country or the leadership of the Liberal Party is something that you know, is somebody's as of right and then he sits down in secret and does a bargain with somebody else. I mean that's another party that does that.
CARLTON:
But no Kirribilli House agreement.
PRIME MINISTER:
But my party room is always my master. I think the mood of the party at the moment is, sure, we're going through some difficult times.
CARLTON:
There is a suggestion, the Press Gallery's starting to write this rightly or wrongly, the suggestion is that you and Peter Costello are not happy at the moment, not getting on. Is there some truth to that?
PRIME MINISTER:
No that's not true. That's not true. Peter is a very good Treasurer. We have a very close working relationship. From time to time as with any two people who work closely together we will have some different opinions on certain things and we'll talk them through. But the suggestion that there's any sort of difficulty in our personal relationship is just not correct.
CARLTON:
No friction, no feeling on Costello's part that he's going to be left to carry the baby for the GST and you've now dumped on him?
PRIME MINISTER:
Well I haven't dumped on him and any suggestion that I have is ridiculous. Look, we're people who work together as a Prime Minister and a Treasurer. I think our relationship has been closer and more professional than the relationship between Hawke and Keating was.
CARLTON:
It could hardly be more chilly than that one!
PRIME MINISTER:
Well you know, I just wanted to get a sense of proportion about it!
CARLTON:
Okay, all right. Good point. The critical question for you, but even for you, for Australia, is this - we've seen economic growth go backwards in that last quarter by 0.6%. The question is will it do it again? And I guess you have to ask is the GST effect temporary or is it permanent. Have we just had a speed bump if you like in the economy or have we done a u-turn? What do you reckon?
PRIME MINISTER:
Well I certainly don't think we've done a u-turn. There were some transitional effects of the GST on some industries including in particular the housing industry..
CARLTON:
Building yeah.
PRIME MINISTER:
Yeah. And housing was drawn forward. It was booming before the 30th of June and then there was a draw forward because of the, you know, it was before the GST was introduced because it was going on new housing and it wasn't there before...
CARLTON:
[inaudible] tried to get it [inaudible]
PRIME MINISTER:
Inevitably therefore there was going to be a slump, something of a slump afterwards. Now that's been one of the things that's pushed down the business investment stuff. There's no doubt about that and we don't deny that. But you've got to remember that part of the tax reform package was a huge stimulus to the economy from personal tax cuts. There was a stimulus this current financial year in net terms of about $6 billion. Now that was part of the tax package. Now if that hadn't been there then I'd venture to say the contraction, you know there would have been a further contraction and the possibility of what you were talking about.
CARLTON:
[inaudible].. well next quarter.
PRIME MINISTER:
Beazley last year was saying what was wrong was that we were overheating the economy. Now he's saying we've contracted it. I mean you can't be right on both accounts.
CARLTON:
Do you reckon the Reserve Bank got it wrong last year with interest rates, that it put them up too far too fast?
PRIME MINISTER:
Well I was asked something about that this morning. You know, I think it's obvious that there was some, you know, if you just look at what's happened. I mean they went up, now they've come back.
CARLTON:
All right. So they shouldn't have gone up is what you're saying?
PRIME MINISTER:
Well I've said something about that this morning. I don't really care to add to it.
CARLTON:
Don't want to bash the bank again?
PRIME MINISTER:
Well it's not a question of bashing. I mean I was asked a question about it and I gave an answer.
CARLTON:
How are you feeling about the Ryan by-election in Queensland? That's going to be extraordinarily tough for you isn't it?
PRIME MINISTER:
In the current climate it's very tough, yes. We have a good candidate and he's working his heart out and he's a local. And he'll be a very energetic person if he gets elected. But it's quite tough.
CARLTON:
It shouldn't be. I mean that's the bluest of blue ribbon Liberal seats isn't it? It should be.
PRIME MINISTER:
Well it's the safest Liberal seat in Brisbane. It's not on a par with a seat like Bradfield, or Berowra. I mean it's margin in the last election was 9.5. The Bradfield margin was 19 or 20. I mean you've got to..it's not..
CARLTON:
But it's never gone to the Labor since 1949.
PRIME MINISTER:
It's always been held by the Liberal Party I acknowledge that, and it will be tough, very tough.
CARLTON:
Are you worried?
PRIME MINISTER:
Well it will be tough. I mean, look, I'm taking a lively interest in it.
CARLTON:
I'll bet you're doing that.
PRIME MINISTER:
And an energetic interest. I've been there and I'll be going back. And I don't take it for granted. You know I notice the Labor candidate is saying how wonderful it will be on that plane to Canberra. My candidate's not saying that. He's just focused on getting to polling day.
CARLTON:
All right. Prime Minister thanks very much for your time.
PRIME MINISTER:
Okay.
[ends]