Subjects: Federal Budget 2002
E&OE...........
MITCHELL:
Mr Howard good morning.
PRIME MINISTER:
Good morning Neil.
MITCHELL:
Do you feel a touch Churchillian this morning?
PRIME MINISTER:
No. Well it';s, you know, we are not at war.
MITCHELL:
It';s like a war time budget though.
PRIME MINISTER:
Well it';s not because a war time budget would be infinitely more ferocious than last night';s budget.
MITCHELL:
[inaudible] there's some ferocity.
PRIME MINISTER:
Well everything';s relative. I think last night';s budget was as I promised it would be appropriately firm and it';s not a time to throw away the economic gains we';ve made. We must avoid the mistake of seeing the budget as the be all and end all of economic management.
MITCHELL:
But is there a bit of ‘fortress Australia'; in this? Do you agree….
PRIME MINISTER:
Well we are unashamedly putting more money into defence, border security and internal security measures against the possibility of a terrorist attack including a stockpile of antidotes to a possible germ war attack. Why wouldn';t we do that after what happened last year. I mean I would be inexcusably negligent as Prime Minister of this country if I didn';t require those sorts of things to be done.
MITCHELL:
But you have also been continually trying to put into perspective the possibility of such an attack.
PRIME MINISTER:
I have.
MITCHELL:
Has that changed? Is there a greater chance of attack which is what has made you go this way?
PRIME MINISTER:
No it';s no greater than what I assessed it to be immediately after the 11th of September and if you go back over the records you';ll find that I repeatedly said it could happen in Australia. That was my view then and it remains my view. It';s less likely to happen here than the United States and in the United States or in other countries but it could, and it';s the first responsibility of any government to make reasonable provision against that and that is what we have tried to do and I think the Australian public will thank us for it. They may not like some of the implications of it but I think they will certainly understand that that is our first responsibility.
MITCHELL:
Do you think it might frighten people because when you see it in hard dollar terms and you';re talking about the stockpiles of drugs and new forces and things - this might frighten people?
PRIME MINISTER:
I don';t think it frightens people. The images of the attacks last year are forever. They';re in people';s minds now. I don';t think people deny that the world has changed since last year. They';re not defeatist about it. They';re not devastated by it. They accept that we must exercise a higher degree of caution and a greater level of readiness than we have in the past and I am sure that most Australians would agree with me on that and believe that the priorities of the Budget are right : the priorities of security, safety and strength both from a national defence point of view and also from an economic point of view because the two are mutually reinforcing. You can';t have strong national defence if you don';t have a strong national economy.
MITCHELL:
Security, safety and strength, is that the [inaudible]?
PRIME MINISTER:
Security, safety, strength are the three S's. They';re the emblems of this budget and they are realities that I believe most Australians want their government to provide. They do want this country to be strong economically, strong politically and strong socially. They want it to have security, they also want it to be safe from those who would disrupt our way of life or those who would seek to come here without our permission.
MITCHELL:
I guess it';s a question of who pays for it.
PRIME MINISTER:
Well we all pay for it. I mean well everything in the end is paid for by the Australian public.
MITCHELL:
One would argue that disability pensioners are paying more than most and so are people…..
PRIME MINISTER:
Well let me deal with the disability pensioners…..
MITCHELL:
Well let';s deal with the terrorist thing first. This drug stockpile, what will it be?
PRIME MINISTER:
Well just the sort of drugs, I mean I';m not a medical expert but just the sort of drugs, you know, a reasonable supply of drugs in case there some kind of attack.
MITCHELL:
What things like smallpox, that sort of thing?
PRIME MINISTER:
Yeah and others, and anthrax and the like.
MITCHELL:
And how big will it be?
PRIME MINISTER:
I can';t tell you in quantity but it will be according to our medical advisers adequate to meet a reasonable foreseeable emergency.
MITCHELL:
And what would that cost specifically?
PRIME MINISTER:
Well I';d have to go back to the papers.
MITCHELL:
Where will it be?
PRIME MINISTER:
There are arrangements made with drug companies and as to the exact location I don';t think I should tell you that, should I.
MITCHELL:
There will be literally a drug centre somewhere holding…..?
PRIME MINISTER:
No not necessarily. I really don';t, for reasons I hope you understand, I don';t really want to go into that.
MITCHELL:
Okay. What about the new anti-terrorist force? Trouble recruiting soldiers, where are you going to get them?
PRIME MINISTER:
I don';t think you have any trouble getting people for the specialist operations and the anti-terrorist operations. I don';t think there';d be any difficulty and many of the people as I understand it for that will come from the ranks of the regulars.
MITCHELL:
When will they be up and running?
PRIME MINISTER:
Well as soon as possible.
MITCHELL:
(inaudible)
PRIME MINISTER:
Well we would like it to be, you know, certainly in the next year or even, you know, as soon as possible.
MITCHELL:
Will they operate on Australian soil?
PRIME MINISTER:
Well the purpose of this particular group is to take action against some kind of terrorist behaviour on our shores within Australia yes.
MITCHELL:
So if there';s an event in Australia they would be called.?
PRIME MINISTER:
The purpose is to have them to deal with those events in Australia. I mean I';m not saying that there mightn';t be some contingency in which the actual personnel could be required to go elsewhere. But the purpose of this group is to be there to respond to some kind of terrorist incident in our country in the way that we had people to guard against such an incident during the Sydney Olympic Games.
MITCHELL:
How many of them?
PRIME MINISTER:
Well you have somewhere in the order of, I think the group';s somewhere in the order of 150 and 200.
MITCHELL:
Okay now let';s get to the paying for it. You accept there's a broken promise here, you promised no deficit.
PRIME MINISTER:
No what I, I';ll check my precise remarks, what I said in the campaign was that it is our policy not to run deficits and that remains our policy.
MITCHELL:
But the policy';s breached.
PRIME MINISTER:
Well in going to the election we had a statement about the books issued by the Secretary of the Treasury and the Secretary of the Department of Finance and they both predicted then that we';d end up this year with a small surplus.
MITCHELL:
So they got it wrong?
PRIME MINISTER:
Well I don';t think they got it wrong. When you';re dealing with, what, $170 billion……
MITCHELL:
Yeah but Mr Howard you and the Treasurer made a great deal of promises. October 17, Peter Costello, we are giving a guarantee we';ll keep the budget in surplus. Where';s that guarantee gone?
PRIME MINISTER:
We';re budgeting for surplus next year and we made that statement….
MITCHELL:
… budgeted for the one this year?
PRIME MINISTER:
Well I';m sorry. You';ll have to accept that statements of that kind are made on the basis of all of the information that';s available and the information available through the election campaign to us indicated we';d end up this year in surplus.
MITCHELL:
It was promised.
PRIME MINISTER:
Yeah and the information available during the election campaign indicated very clearly that we remain in surplus this financial year. Only in putting together this budget because of the additional expenditure and the weaker revenue collections in the first six months of this calender year that what was predicted to be I think from memory something like a $1 billion surplus or a bit less is now predicted to be a $1.2 billion deficit. Now in a Budget of $170 million that';s the kind of difference that you would expect.
MITCHELL:
That said you can promise a deficit for next year?
PRIME MINISTER:
Well we are budgeting for a surplus next year.
MITCHELL:
Sorry surplus, you promise a surplus next year?
PRIME MINISTER:
We are budgeting for a surplus in the coming financial year.
MITCHELL:
Okay.
PRIME MINISTER:
We are budgeting for one based on the information now available to us and that will be subject to review half way through the year but I choose my words deliberately and carefully, we are budgeting for a surplus.
MITCHELL:
Well should Peter Costello have guaranteed one?
PRIME MINISTER:
Look I think Peter is very proper and cautious and responsible in the words that he uses…
MITCHELL:
… guarantee we';ll keep the budget in surplus (inaudible) before the election.
PRIME MINISTER:
The information we had then…
MITCHELL:
You were choosing your words carefully, he wasn';t.
PRIME MINISTER:
No well look…
MITCHELL:
Okay let's go to the 10th May, you said that one of the things that had keep interest rates low was the continuing surpluses, given that we are now in deficit and we can';t be sure we will have anything other than deficit next year surely the pressure is on interest rates to go up.
PRIME MINISTER:
Well you';ve got to once again see that perspective in the debt repayment over the last 6 years. And we';ve repaid $61 billion of the $96 billion of debt that we inherited and the economic need, let me put it this way, be even more specific, the economic need for a large surplus now is much less than it was six years ago because we have paid back so much of the debt. Economically we don';t need an enormous surplus at present, we really don';t. My own argument is that the reduction in debt though the running of surplus has taken pressure off interest rates. And that assertion is not in any way weakened by the fact that this financial year we may have a small cash deficit of $1.2 billion. It';s not in any way weakened by that because the orders of magnitude are so different, if you';ve repaid $61 billion the fact that you may one year go into a deficit of $1.2 billion and then go back into surplus in all the subsequent years it doesn';t even make a nick on that $61 billion. I mean you';ve got keep these things in proportion.
MITCHELL:
Do you accept the argument that the cuts in health and welfare more than pay for the increases in the war on terror and border protection? So in other words you';re bringing more…
PRIME MINISTER:
Well you don';t have hypothecate these things. You don';t earmark them, you don';t say well look, but everybody makes a contribution to the expenditures of the government…
MITCHELL:
But the arguments been put that we have to do this at least in part because of the war on terror, but you are bringing in more from your cuts than you';re actually spending, aren';t you?
PRIME MINISTER:
Yes but you never look at a budget like that.
MITCHELL:
But part of the defence you';re putting is that (inaudible).
PRIME MINISTER:
No the major reason, the major reason for doing something about the Pharmaceutical Benefits Scheme is that unless we do something about it is now growing so rapidly, almost exponentially, that it will break down under its own weight and the vulnerable in the community will really be exposed. I mean the cost of this scheme, quite apart from border protection and defence, the cost of this scheme has to be addressed.
MITCHELL:
So you would have done this regardless of…
PRIME MINISTER:
Well there is very strong case, there was a very strong case for doing this quite independently of the additional expenditure needed. Look at that intergenerational report, the fastest growing item in health is the Pharmaceutical Benefits Scheme, it has grown and grown and grown, it has quadrupled in a relatively small number of years. So there is a case in isolation, I mean I';m not asserting that the main reason why we';re doing this is to pay for the war against terror, I';m asserting that one of the reasons, the principle reason for doing this is that it cries aloud for reform, the same thing applies in relation to the disability support pension. The McClure welfare report recommended that we did something about the 30 hour thing, Wayne Swan in making a submission to that inquiry on behalf of the Labor Party said we had to something about that, that there were too many people on the disability support pension. The Labor Party';s own spokesman said that. Anybody independently and non-rhetorically looking at those two issues would have to acknowledge that separately and apart from the war against terror and border protection you had to do something about that.
MITCHELL:
We will take a quick break, come back with more from the Prime Minister. I want to look specifically at the issue of prescription drugs and disability pensions.
[commercial break]
MITCHELL:
Well we';ll take your calls at 9 o';clock after the news… your views on the Budget. But a quick call for the Prime Minister. Paul go ahead.
CALLER:
Hi Mr Howard. Can you please explain to me why me being in a wheelchair with a disease which is going to take my life is any different to a vision impaired person and how come I can't get a means…
PRIME MINISTER:
Non-means tested.
CALLER:
Non-means tested pension?
PRIME MINISTER:
I can understand why you put it that way. I guess in our society for a long time under Governments of different persuasions we have taken the view that people who are permanently blind have an entitlement by dint of that particular disability for certain benefits and it remains the case. There was some speculation incidentally before the Budget did come out that it was going to be affected. Well that';s not the case.
MITCHELL:
What';s your disability Paul?
CALLER:
It';s called (inaudible). There is about 40 people in the State with it.
MITCHELL:
What is it, a motor neurone disease?
CALLER:
Yes (inaudible). Eventually you die from it.
PRIME MINISTER:
Paul can I just pursue your position if you don';t mind. Are you in any kind of work?
CALLER:
I work 22 hours a week. I';ve got two young boys and at the moment I';m struggling.
MITCHELL:
[inaudible] go on the dole, isn';t it?
CALLER:
Yeah it';s going to be better for me to go on the dole. Or would it be better for me to leave my wife and kids and have maybe them have a chance of finding an able bodied man.
PRIME MINISTER:
I';m sure nobody would encourage that. You say that you';d be better on the dole financially.
CALLER:
I';d better to stay on the pension. It';s just ridiculous.
PRIME MINISTER:
I understand that point but are you suggesting that you are going to be adversely affected by last night or are you talking… it doesn';t sound as though you';re arguing that. It sounds as though your concern is about the different treatment of somebody in your position and the blind and somebody who has got a…
CALLER:
That';s a big concern for me because I work with vision impaired people who…
MITCHELL:
Are you saying you will be worse off Paul?
CALLER:
I';m definitely going to be worse off. Definitely.
PRIME MINISTER:
So you say you would be better off going on the pension.
CALLER:
I am on the pension now. I';m normally better off cutting my hours back.
PRIME MINISTER:
Yeah I see. Well I mean I don';t know all of your… I mean we have had a good discussion, I don';t know all of your circumstances. But the… as I was saying to Neil earlier, the view of a lot of people in the welfare sector and a lot of people out of that over the years has been that we should move to put some controls on the growth of the resort to the disability support pension and one of the things that has been recommended by a lot of people in this area is not only… is to look at the current level of 30 hours.
MITCHELL:
Thank you Paul. Mr Howard on the drugs issue. Self-funded retirees – any safety net for them?
PRIME MINISTER:
Well people who have the concession card have the safety net.
MITCHELL:
How do self-funded retirees…
PRIME MINISTER:
Well somebody who is a self-funded retiree and doesn';t have a Seniors Health Card is in no different position from you or me.
MITCHELL:
That';s going to hurt them.
PRIME MINISTER:
Well yes but they have a reasonably high income because we lifted the eligibility limits for the Seniors Health Card very significantly last year.
MITCHELL:
Do you remember the figure?
PRIME MINISTER:
From memory for a couple I think it';s up to about $52,000.
MITCHELL:
Can you guarantee not to lift the PBS rate again next year?
PRIME MINISTER:
I';m not going to give guarantees. Look I can';t do that. That';s not to say that we have it in mind to do it.
MITCHELL:
It may not get through the Senate.
PRIME MINISTER:
Well I want to make it clear because we tend to get hung up on the use of words like guarantee and so forth. I mean you';re asking me to give a cast iron guarantee in relation to that. I can';t give that and I won';t try and give it, and I hope people understand that doesn';t mean I want to do it or will do it. It';s just that I don';t think it';s appropriate to give a cast iron guarantee.
MITCHELL:
If you don';t get this through the Senate what happens?
PRIME MINISTER:
Well I hope it does go through the Senate because there are some other measures in relation to the disabled which are very positive for them and a part of the overall package and we regard it as a package. And what we';re saying to the Senate is we would like the Senate to pass the lot.
MITCHELL:
$800 million for inappropriate use of PBS. Now what does that mean? Where are you going to get that? Does that mean that doctors will be restricted in what they prescribe and when?
PRIME MINISTER:
Well one of the things we are going to do is to require doctors… I';m just looking up, I';ve got a list of the things here. The doctors for example will be required to provide additional information about patient eligibility when they seek approval to prescribe particular drugs.
MITCHELL:
One that had a lot of attention was the cholesterol argument, you wouldn';t be prescribing anti-cholesterol drugs unless you tried to get fit first would that be (inaudible)
PRIME MINISTER:
Well I think that';s very desirable. I mean one of the problems…
MITCHELL:
Will that be written in though? That a doctor has…
PRIME MINISTER:
That exists now. That will be continued.
MITCHELL:
That you can';t get certain drugs unless you…
PRIME MINISTER:
Well I mean it';s not quite as, I can assure you, it';s not quite as sort of draconian as that. But what it's designed, these sorts of things are designed to do is to say to doctors instead of automatically prescribing drugs to somebody you might say to them, look have you thought of changing your diet? Have you thought of going for a walk after you';ve had an evening meal? Have you thought of doing a few things that might improve your general health? And that';d be a better and more economical alternative to taking a drug. And can I tell you Neil, I';m told this by pharmacists. I talk regularly to pharmacists in my own electorate and they speak of their experience, and they do argue that there is a case for doctors more conscientiously examining with their patients lifestyle changes.
MITCHELL:
Sure, but we don';t want Peter Costello in a consulting room do we?
PRIME MINISTER:
No, these are doctors.
MITCHELL:
But we don't want him sitting there next to the doctors
PRIME MINISTER:
No but in the end we all have to foot the bill and if you look at the intergenerational report, it shows that the PBS is by far the fastest growing component of Commonwealth health expenditure. I said a moment ago quadruple, that was wrong. Over the last decade spending on the PBS has grown by 250 per cent over the last decade. Now that';s, and as we are an ageing population, the thing will break down under its own weight. You can quote some sort of present day examples but unless we try and build some additional price signals and disciplines and better practices into the prescribing of medicines and drugs, this thing will break down under its own weight and then the people who will really be at risk are the very sick and the very poor.
MITCHELL:
If I may, just quickly because there';s a number of issues I want to raise, will you be using pharmaceutical representatives to try to educate doctors. Is that right? Is that the plan?
PRIME MINISTER:
Well I think there should obviously be communication between the two of them.
MITCHELL:
Yeah I know, but the argument was put to me that you';d be using the pharmaceutical reps to go and educate the doctors on what drugs to use. Which will seem strange because they';re effectively sales reps.
PRIME MINISTER:
Well look in the end we';re not going to do anything that will stop a doctor prescribing a drug if he or she believes that';s what the patient needs. What we are saying is that because it is a publicly funded scheme, we are entitled to encourage doctors to encourage their patients to try lifestyle changes as well as or in lieu of taking drugs or resorting automatically to prescriptions. And I think that is a self evidently common sense approach.
MITCHELL:
Do you accept that the tax cuts that you gave at the time of the GST have now evaporated?
PRIME MINISTER:
No.
MITCHELL:
Income tax receipts are up, tax receipts are up 10 cent over two years.
PRIME MINISTER:
Because there are more people in work.
MITCHELL:
(inaudible) tax cuts are still benefiting?
PRIME MINISTER:
Oh yes, if you';re an individual you';re still better off.
MITCHELL:
600 new GST auditors at 45 million dollars to bring in 855 million, where are they going to get that from?
PRIME MINISTER:
Well it';s just really ensuring that there is a reasonably high level of compliance for the GST.
MITCHELL:
What are you doing with the light beer tax?
PRIME MINISTER:
We';re making it easier for the States. I sometimes wonder why with the way the States carry on. But I mean, it means as far as a beer drinker is concerned he or she is essentially the same.
MITCHELL:
Superannuation for children?
PRIME MINISTER:
Yes, yes that was promised during the election campaign. And what it means is that for the first time in the history of this country we';ve broken the link between employment and superannuation. It means that from the time you're born, if somebody wants to contribute into a superannuation account for you, the money in that account can be added to the superannuation you begin to become entitled to when you enter the workforce. I think it';s a fantastic idea.
MITCHELL:
Peter Costello says he';s not cutting anything but you're cutting the rate of increase. Do you accept that?
PRIME MINISTER:
Well that';s, but in what context?
MITCHELL:
He';s talking about cutting in to welfare, not cutting things…
PRIME MINISTER:
No, well that's right.
MITCHELL:
(inaudible) rate of increase, isn't that a real cut?
PRIME MINISTER:
No, no it's not a real cut, if you look at it collectively, if you';ve got an ageing population, if you slow the rate of increase that strikes a sensible balance between fairness and responsibility.
MITCHELL:
Prime Minister, thank you.
[ends]