Subject:
Interest rates; federal election; ADF Gap Year Announcement; President Bush; Iraq.
E&OE...
HADLEY:
From our Canberra studios, the Prime Minister Mr John Howard. Good morning sir.
PRIME MINISTER:
Good morning Ray.
HADLEY:
Well anyone who thought the Reserve Bank of Australia was operating at the, I guess, or beholding to the Government, got a shock earlier this week when they lifted those official interest rates. It couldn't have come at a perhaps worse time for you or your Government?
PRIME MINISTER:
Well that's right Ray, I didn't want, for the sake of homebuyers, I didn't want interest rates to go up but they are set independently by the Bank and everybody's got to accept the Bank's decision. It was done in the belief that it would help prevent any inflationary outbreak and in the long run that's in everybody's interests. Interest rates are still lower now for housing than at any time under the previous government and if you take the averages, the new rate, as a result of this rise, for housing will be a full four and a half percentage points below the average under the previous government. So our claim during the last election campaign and our slogan that we would always have lower interest rates than Labor Governments remains true.
HADLEY:
Even allowing for that, you've copped a fair hammering over it because one of the features of your Government, led by you and your Treasurer, has been economic stability, discharging debt and making sure that interest rates have remained historically low, and they are creeping up?
PRIME MINISTER:
Well Ray we have taken a hammering in the press this morning, I accept that and I am not going to complain about that. You've got to accept a hammering on occasions. I acknowledge fully that we did campaign very strongly on interest rates during the last election campaign. They have gone up by one and a quarter per cent since the last election. They are still lower than at any time under the former government for housing and that's four and a half percentage points lower than the average under the former government, and we believe very strongly that that's the evidence that they will always be lower under us than under a Labor Government. And anybody who thinks that voting Labor at the next election is a vote for lower interest rates is ignoring the history of Labor Governments and also ignoring the impact of Labor's policy especially to get rid of our industrial relations reforms which according to the advice of independent experts will lead to higher interest rates. The other thing that I would say Ray is that getting rid of our industrial relations reforms and bringing back the unfair dismissal laws which effect small business so badly will push up unemployment. And I am pleased to note the unemployment figures that have come out just a few moments ago show that unemployment remains at a 33-year low at four and three quarters per cent. It's 4.7 per cent in New South Wales. This is a terrific outcome. More than 2.1 million jobs have been created in the time that I have been Prime Minister and the greatest human dividend of good economic management is low unemployment because that's what affects the capacity of families to pay off their homes and to provide for their children's education and their children's clothing. If you don't have people in work, then so many things become impossible and the greatest dividend of all out of our economic management; the thing that we must hold onto most dearly is this low level of unemployment.
HADLEY:
Do you think that figure, because one of the jobs for the Reserve Bank apart from stability of the currency in what they say they should be doing, the maintenance of full employment and the economic prosperity and welfare of the people, would that ease the pressure on another interest rate hike because of the figures that have been produced just a short time ago?
PRIME MINISTER:
I think the figures that came out a few moments ago are unqualifiedly good news and I mean I want people to be in work. I mean let's remember that there are human dividends out of economic management. Economic management is not just a collection of statistics, it's what it does to people's lives. And sure we've had an interest rate rise, and I am sorry about that, I regret it. I didn't want an interest rate rise, but one has come about because the Reserve Bank in its independent judgement has made the call that the economy is so strong, and there are some inflationary pressures around, that the best thing in the long term interests of the economy is to adjust interest rates. Nobody has ever argued that interest rates should never on occasions be adjusted either up or down. I didn't argue that during the last election campaign. What I argued then was they'd always be lower under us than under a Labor Government. And everybody still remembers they hit 17 per cent for housing interest rates under the prime ministership of Mr Hawke and the treasurership of Mr Keating. Now that's a fact and many people have never forgotten. Now what are they now, 8.3 per cent. That is what they will be after the adjustment is made by the banks to reflect the cash increase announced by the Reserve yesterday.
HADLEY:
Got a date in mind in November yet with all the booked advertising space?
PRIME MINISTER:
No, no, the only date I am aware of in November at the present time is the date of the Melbourne Cup and that's on a Tuesday and we won't be having an election on that day Ray.
HADLEY:
Do you think you'll follow on with the fervour of the Melbourne Cup with the following Saturday perhaps?
PRIME MINISTER:
Oh look...
HADLEY:
Everyone will be happy, they've backed the winner of the Cup and the Japanese...
PRIME MINISTER:
Well not everybody, maybe some of the bookies won't be happy but there's only a few of them, but anyway, great race, don't want to offend the bookies. Look, I don't know when the race is, I don't know when the election is rather.
HADLEY:
Well I can help you there, it's the first Tuesday. I'm asking you to tell me when the next big one is in November.
PRIME MINISTER:
Well look, one of the things that I think is fascinating about my race is that the more I listen to him, I've come to the conclusion that Mr Rudd doesn't really have a plan of his own for Australia's future. He either agrees with me or he does what the unions tell him to do on industrial relations and I think it's a bit of a risk electing a bloke who doesn't have a plan of his own. Do you notice how often he says oh look, I agree with Mr Howard, I agree with the Government, there's not a sliver of difference between me and the Government. Our economic policy is the same as the Government, I mean it's not, they have a track record of having opposed everything we tried to do to get the Budget back into surplus and all of our big reforms the Labor Party strenuously opposed in Opposition, but what he's now saying is well look, I agree with the Government on economic policy except for industrial relations. Now come on, if you're really serious about running the country and if you believe that you have a better plan to run Australia then you've got to do better than simply saying well I'm the same as the Prime Minister except on industrial relations because people who don't have a plan or a mind of their own are a big risk because they're, they'll be too easily influenced if they get into government.
HADLEY:
But wouldn't the spin doctors simply say to him it's not such a bad policy, this bloke's been very successful so pretend you're him and that's illustrated by a column by Matt Price in The Australian today. Pretend you're him, and I don't wish to raise this spectre as I enter my 53rd year, but pretend you're a younger version of him. You're him 10, 15 years ago, 20 years ago as the case may be.
PRIME MINISTER:
Well I think that raises a series of questions. I mean, I think his spin doctors are probably saying that to him but it does raise a series of questions about the suitability of a man for the top position in the country who doesn't really have a core set of beliefs or a plan of his own. I mean, politics is about competing visions about the running of the country. Now if his only vision is to agree with me as much as possible except on industrial relations where he will do what the unions tell him to do because he has to, then I don't think that is a very good alternative vision for the running of this country and you've also got to remember that up until now the Labor Party has tried its level best to deny us all of the reforms that have given us the prosperity we now have. They voted against tax reform, they voted against industrial relations reform, they voted against measures to get the Budget back into surplus, they voted against the privatisation of Telstra; I know that wasn't popular but it's helped in paying off the debt. So every single thing that we have done to give us the balanced budget and the strong economy we have at the present time they opposed and now Mr Rudd is saying well forget about all of that, I am the same as the Prime Minister except that his terrible industrial relations policy, which I'm going to get rid of and incidentally if I get rid of it, it will put upward pressure on unemployment because you bring back the unfair dismissal laws, you scare small business out of taking on more staff. I would simply say to your listeners, isn't it a risk voting for somebody who's got no plan of his own? I mean, politics and election campaigns are about saying to the Australian public this is how I would run Australian differently and better than the current government. Well I don't think they can claim they'd run Australia better when they're saying themselves that they're not going to change our economic policy except on industrial relations where one of the results of that will be to frighten small business again and put upward pressure on unemployment.
HADLEY:
I wouldn't presume how to tell you suck eggs in relation to winning elections, but particularly because we're talking to a New South Wales audience here and an audience in Sydney that has just returned a Labor Iemma Government, do you think in reality your best hope of returning to power some time in November would be to illustrate to, and you've got to win New South Wales for a start, that in fact, you know, if there is a Kevin Rudd federal government it's a Kevin Rudd Labor government, state Labor governments, territory Labor governments, that no longer is there any conservative representation anywhere across the continent?
PRIME MINISTER:
Well I think, it is an element, a big element in people's consideration, the idea that you will have no checks and balances. Take the situation that's now, if I can just go to Queensland for a moment where you've got the Beattie Labor government pushing through amalgamations of local councils. Some people support it, some people don't. I don't have a strong view in relation to each individual area but I do have a strong view that the local people should be consulted. I mean, if you're going to completely demolish a council surely the local people are entitled to be consulted? Now we as a federal Coalition Government have objected to this lack of consultation, we have in fact offered to fund referenda in individual local council areas if the locals want to carry them out. Now if there'd been a federal Labor Government now they wouldn't have done that. I mean, Mr Rudd is now saying oh look, I agree with John Howard on that, he's right. But if he had been there he would not have crossed his Labor counterpart and the same thing applies with the Northern Territory intervention. Mr Rudd says he supports what I'm doing in the Northern Territory but everybody knows that if Labor had been in power in Canberra now they would not have crossed their local Labor colleagues in the Northern Territory and what I'm saying and it's a very strong and relevant argument, is that you need in a federal system, you need the check and balance of having different governments in power in different levels. And if Labor wins at the end of this year and Mr Rudd becomes the Prime Minister it will be the first time since federation that we have had Labor governments in office in Canberra at a federal level and in every state level, at every state level. Now that is bad for the general democratic process because it takes away all of the checks and the balances. It means that the union influence will be all that much greater because there'll be no restraint on that union influence. We've never had this before, we did for a brief period of about a year in the late 1960s have governments of all political complexion, namely Coalition complexion in office in Australia but that came about finally through the election of a Liberal Government, I think it was in Tasmania. Now it only lasted for 18 months and I think if you elect a Labor government will all states being in Labor hands you're taking away a very valuable check and balance and checks and balances are very important to the proper working of the democratic system.
HADLEY:
You must be happy or perhaps you're sad that this Kevin Harkins, this union official who's now quit as the Labor candidate for Franklin, Kevin Rudd had a potential election nightmare in relation to this fella but he's pulled the pin on his policy career so...
PRIME MINISTER:
Well he's obviously been offered a job somewhere. I don't think there's any doubt about that. I mean, he's been offered a job somewhere...
HADLEY:
He's not going to be the Ambassador if Kevin's the prime minister is he?
PRIME MINISTER:
Well I don't know but there was, the reason I say that, there was a report in the Tasmanian press yesterday suggesting that the Tasmanian president of the Labor Party, the man who is alleged to have unfairly dismissed, as a unionist, a union employee in Tasmania, but that is another matter and it does illustrate the hypocrisy, but there was that suggestion; but this would never have come about if we had not raised this fellow Harkins' background, if we'd not drawn vigorously to attention the fact that he was under summons in relation to an alleged illegality, a breach of federal legislation regarding the building and construction industry. So once again, it was only the pressure of the Coalition drawing attention to this fellow's background and his unsuitability that this fix has come about. Now it is a fix, everybody knows that and it's very shallow. We have a very good candidate, her name is Vanessa Goodwin and she's an excellent candidate and I have campaigned for her and she will do very well. She's got rid of one Labor opponent and I look forward to helping her get rid of another, but it will be a tough ask.
HADLEY:
Okay just quickly to an announcement that was confirmed this morning about the gap year and as the father of a year 12 student, my son Daniel, and obviously he'll make a decision about this, not me, but I found it of some interest. Some kids aren't quite ready at the end of the year 12 to go either into the workforce or to further study, now how is this physically going to work?
PRIME MINISTER:
Well physically they will be integrated into regular Army and Air Force and Navy units, and they'll be paid the proper rate and they'll have the same conditions and they will be able to do this for a year. I think it's a terrific idea and many of them will stay on, a lot of them won't. The military are very enthusiastic about it and I was talking to a lot of the people who will be involved in running it this morning out at ADFA, just a short while ago, and they are very enthusiastic. They'll get the same pay and conditions and be subject to the same discipline and so forth and the same rigour of military life and all of those things. It'll be challenging to achieve the integration that's necessary but it is a great idea. Some people say that we should bring back national service. Now my reply to this, and the Government's reply to this, we bring back national service if there is a defence or military need for it. But in a way this is a form, if you like, of voluntary national service, if I can put it....if I can use that expression where young people are offered the opportunity for a year, and taking a gap year is a far more frequent thing with young people now than what it was 20 or 30 years ago...
HADLEY:
Well I'm discovering that...
PRIME MINISTER:
You'd be discovering that now. It's even greater than what it was10 years ago when my children were leaving school. So it's a wonderful opportunity to give people with a gap year another option. I mean many of them as you know go overseas, coach a sporting team, they take a part time job, they go backpacking, now this adds another option, a really live option, a remunerative option and an option that will give you at least a year of skills and camaraderie and the experience of service life and many of them will convert that 12... into a long term career in the Army or the Navy or the Air Force and I think it's just a great idea and I am sure it's going to be enthusiastically taken up.
HADLEY:
And you're getting the message out on YouTube, are you now a convert?
PRIME MINISTER:
Oh I'm a convert to any means of communication that enables you to get a message out, it's part of it, just as I have been an enthusiastic user of radio and talkback, as you know, as a way of talking to people and communicating with them. YouTube is yet another way. I only do things that I feel comfortable about doing and what I've done with a number of things is make an announcement initially on YouTube early in the morning of the day that something is going to be released. It means that a lot more people access it. Some people now, younger people in particular don't read newspapers, you know that as well as I do, they get all of their information from the internet, they get in different ways than you and I get our information and it makes commonsense to use that methodology in order to get an argument across.
HADLEY:
Now I've had a tip that you've been talking in the past 24 hours to the American President, can you confirm that?
PRIME MINISTER:
Yes, he rang me yesterday morning and we had a talk about his forthcoming visit to Australia for APEC and also about what is on the agenda at the APEC meeting. And apart from the normal trade and economic issues, we'll be talking a lot about climate change. And incidentally on climate change, the chairman of the international body that issues all of these authoritative predictions about changes in the climate and the earth's atmosphere, in Australia yesterday said that the Government's decision not to set a target until next year and until we know the implications of various targets was absolutely correct, which is a very interesting endorsement of the Government's sensibly balanced approach to these issues. But we'll be talking quite a lot at APEC about climate change because APEC will be the first meeting which brings together both China and the United States and they are the principal polluters. They're the two countries that have the largest volume of greenhouse gas emissions and this will be the first meeting where they come together at a head of government level in a manageable size. I mean there's only 21 countries at APEC and that's a manageable meeting. The United Nations meetings are so big that it's very hard to....you can't run a meeting of 146 people, you can't have 146 people sitting around a table, whereas if you've got 21, I think we can make a bit of progress. We're not going to solve the world's problems but I do think we are going to make some progress on that and the President also brought me up to date on his latest feelings about what's occurring in Iraq and Afghanistan.
HADLEY:
And that is?
PRIME MINISTER:
Well there is progress being made, it's tough. It's not all negative and nobody pretends that it's easy, but the alternative urged on us by the Labor Party and others of pulling out will guarantee a descent into civil war and chaos and a victory for terrorism and we're totally opposed to that.
HADLEY:
And he's under pressure at home to a certain extent too...
PRIME MINISTER:
Well he is under pressure at home, of course he is, but he's not a person who succumbs easily to pressure and he's right because if the United States were to withdraw from Iraq in circumstances of a perceived defeat that would cause enormous instability in the Middle East and it would be a terrible blow to American prestige. I mean, whatever you may have thought about the original invasion, you've got to deal with the reality of what is happening now and the reality is that if the terrorists win in Iraq that will be an enormous boost for them in the Middle East and all around the world, and if it's good enough to fight terrorism in Afghanistan, why isn't it good enough to fight it in Iraq?
HADLEY:
Okay I appreciate your time Prime Minister, thank you.
PRIME MINISTER:
Thank you.
[ends]