WILKINSON: Morning Prime Minister, now I know as a parent you must understand the aguish of the Lapthorne family. Exactly what is your Government doing to help them?
PM: Well the anxiety of Mrs Lapthorne is just understandable, this is appalling, it is every parent's worst dream for one of their young ones overseas to go missing.
What have we done - an Australian Federal Police officer has been dispatched from London to Dubrovnik to work with the investigation to work with the authorities to try and find this young one. Based on the report from that Australian Federal Police Officer if we need to send more AFP officers they will be there quick smart.
We are doing what we can with the authorities to try and find her. This is very hard and it's a different country, different culture but we will not rest until we have put every effort into trying to track down this young one. She is an Australian, she deserves every level of consular assistance we can provide.
WILKINSON: Should we be demanding more cooperation or more information from the Croatian police?
PM: We are doing that right now. And through our police liaison and through the Australian Federal Police, but also at the diplomatic level, we are putting maximum pressure on the authorities.
Can I say that on a very practical level though, if we find from our own police liaison officer we need more resources dedicated to this they will be there quick smart. And that is what we need to do in this case or any other case like it where we have got a young Australian who has gone missing abroad. And I just say to the family I fully understand your anxiety, your fears. It's horrible, it's absolutely horrible and we will do everything we physically can.
WILKINSON: Prime Minister, have you or your department spoken to the Lapthornes?
PM: Stephen Smith, the Foreign Minister, has spoken with the family I am advised. And on the question of the police being dispatched from London, the Minister Stephen Smith and the other Australian authorities will keep us in the loop about what extra resources are necessary and we will provide them.
WILKINSON: We will turn now to that crisis, the financial crisis, in the US. As you would know just a few hours ago Congress rejected the $700 billion bailout. The stock market fell five per cent in five minutes. Has anyone got a ‘plan B' on this?
PM: This is a bad development, I have just spoken now with Australia's Ambassador to the United States before coming onto this program. We understand that a proposal will be, in one form or another, should be resubmitted to the Congress this Thursday.
But can I say that we believe and I believe all friends and allies of the United States believe that the passage of a measure like this is necessary to stabilise US financial markets, it's necessary to stabilise therefore global financial markets and we would call, together with other friends and allies of the United States, on all parties in the US Congress to put aside partisan differences.
This is too big for the global economy and global financial markets to simply be captured by party politics.
WILKINSON: Prime Minister, what's your advice to everyday Australians who are watching this? They are worried about their own financial security, their super funds, their retirement?
PM: The International Monetary Fund, which is the body worldwide charged with looking at the health of each nation's financial institutions, as late as last week said that of Australia's four major banks. That they are in good working order with good balance sheets. And those four banks represent something of 85 per cent of banking activity in Australia.
That's a very important conclusion as late as last week. And the point I would like to make is that's just the International Monetary Fund's view, it reflects the facts in Australia. We have the world's strongest regulators, our major banks' balance sheets are in strong and good order, and on top of that we have been working closely with the regulator and with the banks to make sure that everything is done that needs to be done to continue this clear difference between the situation of our banks and those in the United States.
WILKINSON: The Reserve Bank of course meets next Tuesday to look at interest rates. Until this point this morning there was a lot of predictions saying that it was going to fall. What do you think this is going to mean for interest rates here?
PM: Well, as you know the Reserve Bank makes its independent decisions on interest rates and that's the policy we have adopted since coming into Government.
Our job as a Government has been to make the job of the Reserve Bank as easy as possible to put downward pressure on interest rates. So we will see what the Reserve Bank does.
But can I say, because the Government has been pursuing a policy of strong economic management, based on a strong budget surplus and because our regulators are the strongest in the world, our situation in Australia is frankly given these global circumstances among the best that you could have. And therefore we as Australia will continue to pursue this strong approach to economic management in the period ahead.
WILKINSON: Prime Minister, now to that recommendation yesterday to the Productivity Commission. It was for all families to have access to 20 weeks taxpayer funded maternity leave at a cost of $450 million annually. In the shaky market can we really afford this? And are you 100 per cent behind it?
PM: Well, the Productivity Commission report is a draft report and it is out there now for community debate through until year's end. That's what is going to happen.
But I think where we have got to as Australians is this - it is time for us all to bite the bullet on the need for paid maternity leave.
And the reason is this - we believe very much in supporting stay at home mums and that's through the baby bonus. We also need to be supporting in the future those mums who are in the paid workforce who represent some 175,000 parents each year or mums each year, who are finding it financially difficult to manage their budget and juggle that with providing for the costs associated with having a new one as well.
This is one practical measure to help, but on the detail of it can I say we will work that through over the months ahead to make sure that we get it absolutely right.
WILKINSON: Prime Minister, pensioners are finding it financially difficult as well. So why can we afford this but not an increase to the pension, an amount that you and a number of your political colleagues have admitted that you would never be able to live on?
PM: Well can I say we are in the business of reforming the pension and that is why we are hard at work on this and we are working our way through all the options, not just for one group of pensioners but across all categories of pensioners.
Let me just point to the cost implications of this as well, every $10 a week increase in the pension costs an extra $2 billion a year now and forever into the Budget bottom line. If it is $20 a week that's $4billion a year, if it is $30 a week that's $6 billion a year.
Now we have got to make sure we get this right because the question we have got to ask ourselves is, in investing significant money in long term pension reform and let's be frank about this Lisa, it hasn't been reformed for the last 12 years and within our first 12 months we are acting on this reform. We have got to get it absolutely right because the numbers here are huge and furthermore we have got to ask how we fund this.
And if it's that amount of money, and if we are looking at a significant investment, does that mean less investment in key infrastructure in our major cities, how do we find that money? And that's the debate we are also having as well. It is easy to put out a press release on this. It's harder to make it work on the ground and we are acting responsibly to make sure that happens.
WILKINSON: Okay. Prime Minister we will have to leave it there, thanks very much for your time, we do appreciate it
PM: Good to be with you