BYNER: Prime Minister Kevin Rudd. Prime Minister, thanks for joining us today.
PM: Good to be back in Adelaide Leon.
BYNER: Well I'm glad you are. Now, I know you're down south and I want to run by you a caller typical of those businesses in the region where you've been today.
PM: Yeah.
BYNER: His name is Jim and he said listen Leon, I run an engineering company and I can tell you that demand on our business has dropped between 50 to 60 per cent. And he said all these stimuluses are all very nice and sound great but for me and those like me here at Lonsdale, we're really under the pump. And I said to him, I said Jim what would you have Wayne Swan or Kevin Rudd do? And his answer was interesting, he said well look we're burdened with a lot of taxes and charges that right now are an absolute disincentive to even be here. And I said what do you mean by that and he said well for example, and this is a state issue I know but given that we've got both a state- federal Labor Government I think it's relevant.
And that is that, for example he says if I am a day late in my WorkCover payments, I have a 1,200 per cent penalty that I have to pay. And of course he knows that this is a State issue, that is a State government instrumentality, it's a statutory authority, but is there something that you believe can be done in cooperation with the federal government to help businesses like Jim's actually survive this crisis?
PM: Let me say one thing in response to Jim is that when he describes his orders as being down he's absolutely right. This global recession is cutting a swathe through economies right across the world. 32 out of 33 of the world's most advanced economies are now contracting, eight of our 10 biggest trading partners are now in recession. This is affecting everybody.
The key challenge is what do we as Government do to make a difference now to reduce the impact or cushion the impact on Australia. Let me give you two examples. On the question of investing in the economic stimulus, what we have done through the investment in schools, in social housing, in energy insulation and also what I've been announcing today which is our investment in the rail projects both on the Gawler Line and the Noarlunga Line as well as the O-Bahn, as well as the doubling the capacity of the desalination plant which I've just been down to visit the Premier with.
What are we doing? We are supporting jobs, apprenticeships and business now by investing in the infrastructure we need for tomorrow. Now that desalination plant for example, our investment now will mean that what is currently on site there will involve another hundred or so jobs, a lot of involved with site engineering and site works.
Whether Jim, the bloke who has called into you, can access some of that work, of course I can't say that over the radio. But what I can say is that right across South Australia right now we are now investing in school modernisation projects in every primary school across the State. And you know what that means? Job opportunities for tradies, for carpenters, for brickies and the rest because we're trying to make a difference now in this recession and if Government wasn't acting now with the private sector in retreat it would be much, much worse.
The second thing I would say Leon is this, for businesses like Jim's - and this doesn't answer all of his problems at all and I wouldn't pretend to do so - but one of the things that the Australian Chamber of Commerce and Industry have put to us as the federal Government which can help is to provide a temporary investment allowance. That is, if businesses now are looking at the sorts of plant and equipment that they need for the future, what we've brought in through until the 30th of June this year is a 30 per cent temporary investment allowance. I ran into a guy running a building company the other day in Brisbane, sorry in Sydney, employs about 12 people, he went out and bought a bob-cat, he gets a special 30 per cent deduction on that from his tax.
If you're a small business what we announced in the budget is that we're going to up that to 50 per cent until the end of this year. Now this doesn't solve all problems but it gives people a lift on the way through together with the stimulus measures across the economy as well.
BYNER: Prime Minister, what of the issue that's come up recently and I know it's a practice that has gone on in many States, but the federal monies that were given for example for education where some students would benefit $100 a year for some years. We had revelations recently that a lot of that money hasn't been delivered and that the State in many cases takes if you like a little commission off the top to actually spend the money that you've said that States will get for specific purposes. Do you sit comfortably with that?
PM: Well the details of what you just referred to Leon, I'm not familiar with. What I can say is, just in summary since we've been in office which is just a little less than 18 months now, we've provided some 6,000 computers delivered to over 70 South Australian schools, we've invested $62 million in 23 Trades Training Centres, benefiting 75 schools and the School Modernisation Program that I've just referred to is massive. The School Pride Program, 783 projects at 511 schools involving $67 million, as well as the modernisation of primary schools where our investment will total some $314 million.
Now all this is happening as we speak Leon. Now the implementation of this of course is done in partnership with the South Australian State Government. But our intention is the same - supporting jobs, apprenticeships and training now while also building the best education facilities that our kids need for the future.
BYNER: Okay but in general terms though, how do you feel about States taking commission for monies you give for specific purposes?
PM: Well I am unaware of that particular practice that you refer to. What we do as the federal government when we deliver any of these programs, whether it's computers in schools, as I said 6,000 computers, or Trades Training Centres or modernising classrooms by building state-of-the-art libraries. We expect this to be done fairly and reasonably with state governments. I am unaware of the practices you just referred to.
BYNER: Alright. Now one question, Malcolm Farr who writes for the Sydney press has done a story which has gone national and that is that taxpayers are paying off the mortgages of politicians to the tune of tens of thousands of dollars a year. And he says that a growing number of federal politicians are buying homes in Canberra to live in when they're in town for parliamentary sitting weeks. Are you comfortable with that?
PM: Well the arrangement for entitlements for members of parliament have been around since, in their current form at least, since Mr Howard was Prime Minister. I think the current entitlement arrangements were set in place around about 96-97. Secondly, the actual amount that is that a member of parliament is paid when they are travelling to Canberra is determined independently by the Remuneration Tribunal and thirdly those guidelines also make it possible for members of parliament to use that allowance they have for when they are travelling to either stay in a hotel or to stay in other forms of rental accommodation or other forms of accommodation.
The net impact on the taxpayer is the same. These arrangements have been around for a long time, as I said I think the current set of arrangements were set in place by Mr Howard in 96-97.
BYNER: Alright. Mr Rudd what happens if we find that things don't get better and they may even get worse before we turn the corner. Are you prepared for yet another stimulus beyond what we've just announced?
PM: We believe we've got the right strategy now for economic recovery Leon. I think in my remarks before I would have painted a picture of how grim the global economy has been. And our challenge in Australia to implement a strategy to lift Australia out of this global recession. And you can either sit around and do nothing about it, sit on your hands and just complain as a number of people who have been launching political attacks on the Government are doing at present or you can get out there and have a go. What we're doing is having a go.
And as a result let me give you just two examples. Because of the stimulus strategy that we've engaged in so far, Australian retail sales are out there better than practically any other advanced economy at this stage.
BYNER: Are we prepared to spend more on the stimulus, and borrow more if things don't get better?
PM: I was about to say, what we're doing and the impact of what we've done already on retail sales is to support one and a half million - one and a half million Australians currently working in retail. Our housing construction figures than most of the other countries because of the trebling of the first home owners boost. These measures are having an effect. Secondly the investment in the school modernisation program, turning every primary school in the country into a construction site and rolling that out the door now, that's going to have an effect as well.
We believe we've got the strategy right.
The third phase of it is what I've just been here talking to the Premier about this morning, is our investment in longer term nation building infrastructure, rail, roads, ports, as well as in the case of South Australia desalination but investments in universities, in hospitals, as well as school modernisation, as well as in longer term infrastructure like high speed broadband.
BYNER: Alright.
PM: All these things together provide overall the aggregate effect on the Australian economy is to invest something like four to five per cent of GDP back into the economy when the private sector around the world is in retreat. If we weren't doing that Leon, you know what would happen?
BYNER: What?
PM: We would have unemployment much, much higher. We would have a much deeper recession and a much slower recovery and many other families hit hard and hit personally by this recession which is brought to us courtesy of the global financial crisis beginning in the United States.
BYNER: Prime Minister, thanks for your time this morning.
PM: Good to be back in Adelaide Leon. I'm told by my staff this morning this is my 10th visit, I'm down here about every six weeks or so, so it's good to be back and good to be with the Premier this morning.