Subjects: morning walks; Iraq; interest rates; free trade agreement with US; economy
E&OE...........
HADLEY:
I';m joined in the studio by our Prime Minister, John Howard. Mr Howard, good morning.
PRIME MINISTER:
Good morning Ray. Very nice to be with you.
HADLEY:
It';s great to see you too and it wasn';t too long since I did see you last night.
PRIME MINISTER:
I think you got home a tick earlier than I did. But you started earlier.
HADLEY:
I was in the starting blocks and out by about 10 o';clock. What time did you pull up stumps?
PRIME MINISTER:
We were about 20 minutes after that. And I was up for an early morning walk this morning so I';m not too far behind you.
HADLEY:
Does that happen every morning – the walk?
PRIME MINISTER:
Yes, unless it';s raining or I';ve got a travel commitment or some other commitment that sort of wipes out the time. But I walk virtually every morning.
HADLEY:
How long does that last?
PRIME MINISTER:
About 30 to 40 minutes.
HADLEY:
What do you think you pump out there – a few k';s?
PRIME MINISTER:
Oh yes. Four or five.
HADLEY:
Four or five.
PRIME MINISTER:
Yes, I walk pretty fast. I';ve been doing it now on a regular basis for a very long time – probably eight or nine years. And I think it';s a great discipline. I do it everywhere I go unless I see it';s raining.
HADLEY:
Apart from making you feel good, do you think it helps keep weight off? I mean that';s one of the things that all of us guys worry about when we get older.
PRIME MINISTER:
Yes I think it does. The regularity of it is the important thing. It';s not something you can just sort of do when the mood strikes you because there';s always a reason not to do it, and once you get into the habit I find that I feel as though my throat has been cut if I miss out on one or two mornings because of some intervening event.
HADLEY:
And perhaps a little guilty as well.
PRIME MINISTER:
Very. Very guilty.
HADLEY:
Are you still happy doing exactly what you';re doing at the moment?
PRIME MINISTER:
Very happy, yes.
HADLEY:
No plans to change any of that in the foreseeable future?
PRIME MINISTER:
I don';t have anything more to say on that, nor what I';ve said previously.
HADLEY:
You';ve obviously heard this morning about what has happened overnight with the UN and Iraq agreeing on a return of arms inspectors to Iraq. That appears not to be enough for President Bush and the Americans. Is it enough for us?
PRIME MINISTER:
No it';s not. The objection that has been raised is a very legitimate one. The agreement is based on the old UN resolution and the old UN resolution does not allow the inspection of what are called presidential sites. Now you';re not just dealing here with small areas. One of the illustrations in the document tabled in the House of Commons last week by the British Government was of a presidential site in Iraq, and to demonstrate the size the illustration included a scale area of Buckingham Palace superimposed on this Presidential site and Buckingham Palace is about 1/20th or perhaps 1/10th of the total area of the Presidential site. So it's just not good enough for Iraq to say well, you can come and have a look at some of the areas but a number of these areas are off-limits.
HADLEY:
See what I don';t understand – they';re saying unconditional and unrestricted…
PRIME MINISTER:
It';s not unconditional. And they';re not making any bones about the fact that you can';t inspect presidential sites. Now we all want to avoid military conflict. I don';t want to see Australians or anybody involved in military conflict. I really don';t. I don';t want to see America, the British or anybody, but you can';t go back to what failed before. And what failed before were inspections that were Clayton';s inspections. And unless you have a proper, unconditional regime where people can go anywhere and look at anything and demand production of anything, and have those conditions enforceable, then we';re really wasting our time. We';re not dealing with somebody who plays according to the Marquis of Queensbury rules. We';re playing with somebody who will cheat and fib and cover up and obfuscate better than most. And in those circumstances, and I';m not blaming the weapons inspectors because at the moment all they';ve got is the old resolution – they';ve got no other resolution to operate under, that is why it';s necessary to get another resolution. And what the Americans and the British are trying to do at the moment, and they have our strong support, is get Security Council approval for a new resolution.
HADLEY:
Do you think there is any hope of the Security Council granting that approval?
PRIME MINISTER:
Yes. I don';t give up hope on that. It';s difficult. The Russians and the French are objecting. But I';m not certain in the end that there won';t be agreement. It may be in a slightly different form than is now being proposed but are we really going to get to a situation where the Russians and the French object to a new resolution that guarantees a bona fide, fully enforceable inspection and measures to handle non-compliance with that decision? I doubt in the end if the French and the Russians will object to that. They may take some time. They may extract some changed language but in the end I';d find it hard for them to justify, to the rest of the international community, objecting.
HADLEY:
You spent some time with George Bush recently. Would you think that if the Security Council doesn';t accede to this request that he will go it alone and there will be escalating military action in Iraq from the Americans particularly?
PRIME MINISTER:
I';m not going to speculate on that because I don';t think it aids the cause of getting the Security Council resolution in a form that will work, for me to speculate about what might happen if that attempt fails. I know enough of the way the political process and the diplomatic process works that if you want to achieve an objective, you focus on achieving that objective and you don';t speculate about what you might do if it is not achieved.
HADLEY:
There has been much talk about war tax in recent times, and you';ve downplayed that because we';re not at war. But are you surprised by Simon Crean and the Opposition saying on the weekend that they would do one thing and then on Tuesday saying they would do another in relation to that if it does come to pass?
PRIME MINISTER:
Well I don';t really know what they';re saying on the subject. But what I';m saying on the subject, they do appear to have chopped and changed. And if you look at the last statement you could do a side step through the middle of that one too. As far as we';re concerned any talk about a war tax is absurd because there is no war. We don';t want one and I';m simply not going to engage in speculation on that issue.
HADLEY:
Tony Abbott said that at some stage or other, whatever we do as a nation has to be paid for.
PRIME MINISTER:
But that';s what you might loosely call a… that';s a no-brainer. I mean of course anything any Government does is in that situation. But he was talking generically. He wasn';t talking about a war.
HADLEY:
Domestically, in around 17 minutes the Reserve Bank will announce what is happening to interest rates. Do you have any speculation on what they';re going to do?
PRIME MINISTER:
No I don';t.
HADLEY:
Would you like them to do something particularly?
PRIME MINISTER:
I leave the fixing of interest rates to the Reserve Bank. The only observation I would make generally is that interest rates are a lot lower under my Government than they were under the former government and it';s always a good thing for homebuyers and small businesses to have low interest rates. Although if you are a retired person living on your investments, you don';t always jump for joy when interest rates go down. But generally speaking, low interest rates mean stronger economic growth, more home buying, better small businesses and there is no doubt in my mind that the low interest rate environment of the last five years has been a major cause of our economic strength. Low interest rates are generally very good news for the Australian economy and are particularly sensitive to the position of a lot of farmers at the present time. Many of them are experiencing a very severe drought and low interest rates are making it a little easier for them to cope.
HADLEY:
Now, on that, the farmers, free trade agreement with the US. The US Government has given George W Bush trade promotion authority, power he needs to start negotiations. I mentioned the other day in relation to this - and we don't normally behave like this as a nation but we do have the whip hand in relation to the Americans at the moment. We're not normally in the position of strength in relation to them because it's such a big place but at the moment they're looking for our support on a range of other matters and we're looking for their support on free trade. Is there something we can…?
PRIME MINISTER:
No, I would never trade the two off. If we are involved in any kind of international, political action with the Americans it will be because that is the right thing to do and in the best interests of this country, not because America has covertly agreed to give us some kind of trade deal. I think you have to keep the two things completely separate. All Australian governments in the past have done that. The Hawke Government kept the two things separate. In 1991 when we joined the Gulf War Coalition with the President's father we were in an almighty row with the Americans over farming exports and our farmers were complaining like crazy then about what was occurring and when President George Bush senior came to Australia he met a delegation of the NFF. We've always kept the two things separate and I would never seek to mix the two things up. Getting a free trade agreement with America will be very hard because you have a clash of interest between their farmers and our farmers. And their farmers don't want to give anything up because they're highly protected and our farmers are saying to me, don't you agree to something unless we get a fair deal and I'm saying to them, I won't. So it's not going to be easy but it's worth trying because America is the biggest economy in the world. We have more investment from America than any other country in the world and outward investment from Australia goes to America in a much greater volume than any other country. I mean, we have a very close economic relationship with the Americans already and our economic future involves a closer relationship with them.
HADLEY:
Our economic future involves a closer relationship but I think most people would expect that we're fairly isolated down here in this southern hemisphere, as opposed to the nations throughout Europe, and that if we were to want help, not in an economic sense but another sense, it's particularly important that we do have strong relations with the Americans.
PRIME MINISTER:
There is no doubt about that, Ray. America was crucial to this country in World War II. And without the United States this country could well have been attacked in World War II. Any cursory look at Australian history will tell you that. And our defence association with the United States is the greatest guarantee of security that this country has. It's not the only guarantee because in the end self-defence is the best defence.
HADLEY:
But it';s nice having them on our side.
PRIME MINISTER:
Of course it is, but we don't just do it for security';s sake, we do share a lot of common values with the Americans. It's very easy to criticise the Americans because they're the strongest and people say they're a bully and all that sort of thing. I don't think that's a fair criticism. Of course they're the strongest nation in the world but they do have a lot of values and attitudes that we share and I'm a great believer that you should have close relations with the countries whose way of life is closest to your own. And there's not much doubt, that when you look around the world, it is countries like the United States and the United Kingdom and a number of other countries where we identify in terms of our values far more readily.
HADLEY:
They're very strong-willed women, I'm married to one. I can't get my own way at home.
PRIME MINISTER:
Well, that's…
HADLEY:
[Inaudible]
PRIME MINISTER:
That is not confined to the United States. That is what you call a universal human value.
HADLEY:
It's good to know it works in your house as it does in mine.
PRIME MINISTER:
Sure does.
HADLEY:
Now, the budget deficit announced on Monday - you've been given great credit, and your Government and your Treasurer, for balancing the budget - $1.3 billion deficit announced on Monday. And then we've got the balance of payments going the wrong way as well. I mean, how can we justify that given the fact that you've done well at this in the past?
PRIME MINISTER:
Well, we did predict in the budget brought down in May that last financial year's budget outcome would be $1.2 billion and it came in at 1.3 and that's out of a budget of, what, 160 billion, 180 billion, so it's a very, very tiny deficit and we don't predict that there'll be a deficit this current year. There was a dip last year because the world economy slowed down and we had a bad quarter at the tail end of the year 2000. Things have picked up since then. I would not anticipate that there would be another deficit of that kind but it's very tiny and when you bear in mind that we've repaid about $57 billion of accumulated debt over the last six-and-a-half years our track record remains extremely good. On the balance of payments, well, the world economy is a bit slower and if the world economy is slow you don't sell as much overseas, you continue to import a lot and the trade balance goes up and down. It was running very strongly for a considerable period of time. I think we are going to go through a period where it's softer because the world economy is softer. The drought, for example, is cutting our rural exports. We don't have as much wheat to export because of the drought. If we had more wheat we'd get a bumper price for it. The prices of many of these commodities are very strong. The price of wool and the price of wheat is very good. The tragedy for our farmers is that so many of them are now afflicted by drought and they can't take advantage of these enhanced world prices. Those who can are doing very well.
HADLEY:
I know my colleague, who's not too far away from us, has beat your arm up your back on a number of occasions about water in Australia and in some way alleviating the problem. I guess the best thing we can do for the farmers is pray. But Alan Jones has said [inaudible] about greening Australia, making it more user friendly particularly in those outer regions.
PRIME MINISTER:
Well, that's a very understandable plea and we are looking at different ways in which we might be able to tackle that very big problem. In the past whenever anything of a grand scale has been proposed in this area it's been poo-hooed. I'm not sure that all of the schemes that are put around, I mean, for example, Richard Pratt, the Melbourne businessman, has a proposal in relation to the covering of drainage to irrigation drains to prevent evaporation. Now, I'm not a scientist, I don't understand these things as well as many others. But those sorts of proposals I believe are worth a lot more study than they've received in the past. And obviously being a very dry country, if we could do something about that it would make an enormous difference to many parts of the country which are now, and have in the past and will in the future, be suffering from drought.
HADLEY:
I know given our economy that it's difficult for the Government to make any difference to the way that executives are paid, but in recent times there has been outrage from shareholders about the amount of money that's paid to executives from either bonuses or termination pay. Do you agree on that?
PRIME MINISTER:
Yes, I think the outrage is justified in a number of cases. I believe that people should be paid high salaries to run big enterprises, you won't get good people otherwise. But I can understand why some shareholders get cranky that people get paid very large amounts, over and above quite large salaries, especially when the companies do badly…
HADLEY:
It doesn';t seem to add up.
PRIME MINISTER:
No, it doesn't. There have been some remarkably sharp examples in recent years of people walking away from corporate ruin with too much money, perhaps in the eyes of many ,even if the company's done very well, but appallingly so in the case of a company that's done badly. And there are some things a Government can do - a Government can express a view and I have expressed views in the past and I continue to do so. And many companies are responding, I mean some companies are now taking these executive bonuses out of the deal, others are looking at expensing them, in other words revealing them in their accounts. And there have been some very praiseworthy examples of people in fact contributing salary or dividend increases, contributing the measure of the increase to a charity or some other public cause. I mean, Frank Lowy from Westfield was a good example for that. So, I think their corporate behaviour is sensitive. But it's all a question of what is fair - you can't ask trade unions to display restraint and you can't criticise trade unions for kicking over the trades if at the same time you turn a blind eye to people who are making too much of a welter of it and that basically is what the average Australian feels.
HADLEY:
I think what it's all about, what we're all about in Australia, a fair go. If some company makes a lot of money in their shareholders benefit, they're happy for the bloke…
PRIME MINISTER:
…I mean, you can't have everybody paid the same money, you can't run a country like that.
HADLEY:
…wash, you can't expect [inaudible] to get a bonus.
PRIME MINISTER:
It's ridiculous.
HADLEY:
Now, you mentioned earlier, as I did, the influence of women in our lives. Maternity leave, paid maternity leave, it's been portrayed more recently that your wife and your daughter have spoken to you about that aspect of paid maternity leave. Now, we're all susceptible to being influenced by women. Do you think you views on paid maternity leave have softened? And if they have softened, is it a result of discussing the matter…?
PRIME MINISTER:
Well, my wife and my daughter talk to me about a huge range of things. On paid maternity leave, my position is very much that I'm very happy to look at a possible extension of it as part of an overall extension of family policy. Paid maternity leave already exists for about 38%, including a lot of women in the public service. And I'm not in favour of it being forced on companies. You can't compel a company by legislation to provide it, particularly small businesses because they can't afford it. I encourage companies, where they can afford it, to provide it. But I don't think we should get carried away with the idea that it's going to solve all of the problems of the falling fertility rate. I think that is bunkum. I don't think it's going to have any real effect on fertility rates. I mean, the number of children people have and the time in which they have them is influenced by a whole range of factors. It's not influenced by the fact that you might if you have a child get 14 weeks paid maternity leave. I mean you only have to say it and that women in particular listening to this program would realise that that of itself is not going to tip you one way or another. But if you have a whole economic and social climate that encourages people to have children at a earlier age and provides with more options after the children have born, then I think that over time might have an impact. So look, sure let's have a look at it, but I don't see it as the be all and end all - I really don't.
HADLEY:
Now finally, you and I have spoken about one of our great loves many times - rugby league - and I'll be broadcasting the final on Sunday night for the Macquarie Network. In the past when I've prevailed upon you to tip a team, you've had a problem. An example - 1999, your side St George Illawarra against Melbourne - Now if you tip St George Illawarra, you're offside with all the people in Melbourne and you've got to be sweet with the people in Melbourne. We now have a situation presenting itself on Sunday where it doesn't matter what happens, if you tip the Roosters you're a hero and if you offend those across the ditch, it doesn';t matter. So finally Prime Minister, you can…
PRIME MINISTER:
Well I can get off the fence.
HADLEY:
Get off the fence.
PRIME MINISTER:
Look I do believe Eastern Suburbs is going to win, I do, I think they have a better team.
HADLEY:
I feel a however coming up here.
PRIME MINISTER:
No, no, there's no however. I hope for the sake of the game, it's as good a contest as the AFL Grand Final was last Saturday. That was a great Grand Final, it's the best AFL Grand Final I've been to, and I've been to a lot over the last 15 years, it was a very keen contest. I think the overall star quality of the Eastern Suburbs team will get it across the line.
HADLEY:
The Premiers in New South Wales and Queensland have had these bets over a period of time about Origin football. I imagine that Helen Clark, your Prime Minister of New Zealand will be seated near you, will there be at any attempt to have a small wager with her about the outcome of the game because it really is, it's not about two NRL clubs, it's about the credibility of Australian Rugby League up against the credibility, or lack of it, of New Zealand Rugby League.
PRIME MINISTER:
We're both pretty abstemious over…well perhaps I will ring and see if I can have a wager on the game, I hadn't thought of that. But she's coming over which is good. It's interesting, she hasn't been over… I mean I've seen a lot of football clashes between Australia and New Zealand over the last few years and they've all been rugby union, but it's interesting that she's coming over for this clash. She does have a particular interest in rugby league and I'll look forward to seeing her.
HADLEY:
She's a patron of the Warriors.
PRIME MINISTER:
Yes.
HADLEY:Strangely enough, it's creating more interest, this game, back in Auckland particularly than any other rugby union game in recent memory and that's good for rugby league…
PRIME MINISTER:
I think it's very good for football generally in Australia that we've got away from the stereotypes of my youth, where if you grew up in Sydney - you hardly knew anything about Australian Rules. And if you grew up in a rugby league environment - you didn't know much about rugby union or vice versa. Now, in the last 15 or 20 years, particularly the last few years, all of that has been demolished and everybody sort of to a large extent now follows everything, which I think is great. And it's good that you have participation in a grand final. Let's face it, I mean all parochialism aside, it's good that you have occasionally a New Zealand team, it's very good for AFL that they have a team outside Melbourne winning a premiership occasionally, however much it may go against the grain of many of the traditionalists. In the long run, the Australianisation of football in this country has been one of the best things that's happened in the last 5 or 10 years, I'd like to see even more of it.
HADLEY:
That being said, we want the Telstra Premiership to remain at Bondi and in fact, will it still could remain at Bondi…(laughs)…Bondi Road.
PRIME MINISTER:
Which side of Bondi Road?
HADLEY:
Prime Minister, thanks very much for your time this morning, we appreciate it.
PRIME MINISTER:
Thank you.
[ends]HADLEY:
I';m joined in the studio by our Prime Minister, John Howard. Mr Howard, good morning.
PRIME MINISTER:
Good morning Ray. Very nice to be with you.
HADLEY:
It';s great to see you too and it wasn';t too long since I did see you last night.
PRIME MINISTER:
I think you got home a tick earlier than I did. But you started earlier.
HADLEY:
I was in the starting blocks and out by about 10 o';clock. What time did you pull up stumps?
PRIME MINISTER:
We were about 20 minutes after that. And I was up for an early morning walk this morning so I';m not too far behind you.
HADLEY:
Does that happen every morning – the walk?
PRIME MINISTER:
Yes, unless it';s raining or I';ve got a travel commitment or some other commitment that sort of wipes out the time. But I walk virtually every morning.
HADLEY:
How long does that last?
PRIME MINISTER:
About 30 to 40 minutes.
HADLEY:
What do you think you pump out there – a few k';s?
PRIME MINISTER:
Oh yes. Four or five.
HADLEY:
Four or five.
PRIME MINISTER:
Yes, I walk pretty fast. I';ve been doing it now on a regular basis for a very long time – probably eight or nine years. And I think it';s a great discipline. I do it everywhere I go unless I see it';s raining.
HADLEY:
Apart from making you feel good, do you think it helps keep weight off? I mean that';s one of the things that all of us guys worry about when we get older.
PRIME MINISTER:
Yes I think it does. The regularity of it is the important thing. It';s not something you can just sort of do when the mood strikes you because there';s always a reason not to do it, and once you get into the habit I find that I feel as though my throat has been cut if I miss out on one or two mornings because of some intervening event.
HADLEY:
And perhaps a little guilty as well.
PRIME MINISTER:
Very. Very guilty.
HADLEY:
Are you still happy doing exactly what you';re doing at the moment?
PRIME MINISTER:
Very happy, yes.
HADLEY:
No plans to change any of that in the foreseeable future?
PRIME MINISTER:
I don';t have anything more to say on that, nor what I';ve said previously.
HADLEY:
You';ve obviously heard this morning about what has happened overnight with the UN and Iraq agreeing on a return of arms inspectors to Iraq. That appears not to be enough for President Bush and the Americans. Is it enough for us?
PRIME MINISTER:
No it';s not. The objection that has been raised is a very legitimate one. The agreement is based on the old UN resolution and the old UN resolution does not allow the inspection of what are called presidential sites. Now you';re not just dealing here with small areas. One of the illustrations in the document tabled in the House of Commons last week by the British Government was of a presidential site in Iraq, and to demonstrate the size the illustration included a scale area of Buckingham Palace superimposed on this Presidential site and Buckingham Palace is about 1/20th or perhaps 1/10th of the total area of the Presidential site. So it's just not good enough for Iraq to say well, you can come and have a look at some of the areas but a number of these areas are off-limits.
HADLEY:
See what I don';t understand – they';re saying unconditional and unrestricted…
PRIME MINISTER:
It';s not unconditional. And they';re not making any bones about the fact that you can';t inspect presidential sites. Now we all want to avoid military conflict. I don';t want to see Australians or anybody involved in military conflict. I really don';t. I don';t want to see America, the British or anybody, but you can';t go back to what failed before. And what failed before were inspections that were Clayton';s inspections. And unless you have a proper, unconditional regime where people can go anywhere and look at anything and demand production of anything, and have those conditions enforceable, then we';re really wasting our time. We';re not dealing with somebody who plays according to the Marquis of Queensbury rules. We';re playing with somebody who will cheat and fib and cover up and obfuscate better than most. And in those circumstances, and I';m not blaming the weapons inspectors because at the moment all they';ve got is the old resolution – they';ve got no other resolution to operate under, that is why it';s necessary to get another resolution. And what the Americans and the British are trying to do at the moment, and they have our strong support, is get Security Council approval for a new resolution.
HADLEY:
Do you think there is any hope of the Security Council granting that approval?
PRIME MINISTER:
Yes. I don';t give up hope on that. It';s difficult. The Russians and the French are objecting. But I';m not certain in the end that there won';t be agreement. It may be in a slightly different form than is now being proposed but are we really going to get to a situation where the Russians and the French object to a new resolution that guarantees a bona fide, fully enforceable inspection and measures to handle non-compliance with that decision? I doubt in the end if the French and the Russians will object to that. They may take some time. They may extract some changed language but in the end I';d find it hard for them to justify, to the rest of the international community, objecting.
HADLEY:
You spent some time with George Bush recently. Would you think that if the Security Council doesn';t accede to this request that he will go it alone and there will be escalating military action in Iraq from the Americans particularly?
PRIME MINISTER:
I';m not going to speculate on that because I don';t think it aids the cause of getting the Security Council resolution in a form that will work, for me to speculate about what might happen if that attempt fails. I know enough of the way the political process and the diplomatic process works that if you want to achieve an objective, you focus on achieving that objective and you don';t speculate about what you might do if it is not achieved.
HADLEY:
There has been much talk about war tax in recent times, and you';ve downplayed that because we';re not at war. But are you surprised by Simon Crean and the Opposition saying on the weekend that they would do one thing and then on Tuesday saying they would do another in relation to that if it does come to pass?
PRIME MINISTER:
Well I don';t really know what they';re saying on the subj