HOST: The Prime Minister joins us now on the phone and I appreciate his time, Prime Minister Kevin Rudd good morning
PM: Good morning Neil, thanks for having me on the program, I'm on my way to Geelong at the moment.
HOST: Yeah, I appreciate you finding the time. Before we get into anything else, Wall Street, an appalling result over night, down nine per cent at one stage and closed three per cent down, are you concerned that we're, we could sort of go back to the worst of the global financial crisis?
PM: Neil I don't wish to be alarmist about any of this, but we are following these developments with considerable concern. When I get off your program I'll be speaking to the Secretary of the Treasury about developments overnight, both in the United States and in Europe. But let's just cut to the core of it. As your listeners would know there's been a problem with the Greeks and specifically Greek sovereign debt, and Europe's ability to step in on Greece's behalf. And markets have judged those arrangements to be inadequate.
And the problem that's come from that is it that it's spread a broader lack of confidence into market perceptions of a range of other economies in Europe. Europe then represesents about a third of, let's call it global financial markets, and therefore we're starting to see some volatility more broadly. Can I just say though in terms of your listening audience, in terms of an economy in the financial system which is the most robust in the world, we are the best positioned of any to withstand any subsequent shock. But we continue to follow these developments extremely closely.
HOST: This is the most concerning development these past few days is it not, since the whole thing started?
PM: I've been speaking publicly about problems in Greece for some time now, and we've been frankly having a battery of officials following these developments very closely, both here and around the world, in the last several weeks. And I'll be speaking with representatives of the International Monetary Fund myself sometime during the course of the day to plot precisely the actions now necessary in Europe and/or by the IMF, to stabilise what is a concerning set of developments in New York overnight. I believe with rational action on the part of governments in Europe, and with appropriate action supported by the IMF, we can get through this, but we are watching this very closely and through the G20, largest group of economies including Australia, we are also activating all those networks of response as well.
HOST: Could this affect the Budget, next week's budget?
PM: The key thing for the Budget, Neil, is to make sure that we do two things. The IMF, International Monetary Fund, said only about two or three weeks ago, that governments around the world need to focus on firstly, delivering the remaining dimensions of their stimulus strategy, including Australia, because the recovery globally is uncertain, and secondly, to chart a course back to returning budgets to surplus as rapidly as possible. At the last Budget we put forward our strategy for fiscal consolidation, bringing the Budget back to surplus. You'll see in the Budget next week, that the rules that we laid out 12 months ago have been rigorously applied.
HOST: A lot more money for health is being suggested, is that right? On top of what we know.
PM: Well, what we've outlined in the deal with the Premiers is a $5.6 billion investment in making sure that we've got better health and better hospitals. As for the Budget measures, I won't speculate one way or the other, Neil, in terms of what's contained within it. We will be funding, of course, through the Budget each and every one of those measures for accident and emergency, elective surgery, and more doctors' training places that we put forward to the Premiers when we had that meeting in Canberra a week or so ago, and reached the new agreement on a new National Health and Hospitals Network.
HOST: Have you kept some surprises in the Budget?
PM: Neil, won't comment one way or another on the Budget, but at the Melbourne Press Club yesterday, where I got to meet so many of your colleagues from across the great city of Melbourne, who asked a range of questions, most of them as feisty as yours, I said that the Budget will be a no-frills Budget, a no-frills fiscally conservative Budget, and the reason for that is that when the global economy is contracting, as it was during 08-09, our responsibility as the Goverment was to step up to the plate and fill the space. When the global economy is recovering, then you've got to bring the role of Government in the economy back and that's what we'll be doing.
HOST: If I may - onto the matter of the burqa, the proposition the burqa be banned. If you're out on a streetwalk, as you'll be doing in the election campaign, and a women in a burqa approached you, would you react with some automatic trepidation?
PM: Ah no, because I've met many such women, not just here but abroad over a long period of time. This is a diverse country, Neil, and people have different forms of dress, they have different forms of cultural tradition. We've been living with these sorts of differences for the last couple of hundred years. And on this debate that I see in the Melbourne papers this morning, let's just go back to a pretty basic point. We at the Australian Government level, I'm not aware of receiving any advice from any law enforcement agencies about the need to take action of the type which is being recommended by Senator Bernardi.
HOST: I guess, look I agree with you and I don't think we need to ban it, but I can see the concern if a person in a burqa walks into a bank. I can't go into a bank wearing a motorcycle helmet, or a balaclava if it's cold. Do we perhaps need to look at degrees of reaction?
PM: Look, I'm just always attentive to, Neil, the advice that we get from the law enforcement authorities. I think we've just got to make a distinction between that on the one hand and just sort of playing populist politics on the other. Look, we're a pretty sensible country in Australia, we know how to get these balances right, and I just think the diversity we've got in this country, people coming from all parts of the world, different things. The worst thing we can do is actually start ganging up on particular groups within our country, I just think that's the wrong way to go.
HOST: So you don't want to ban it?
PM: Well, the Government policy is very clear on this - which is that we've got nothing before us from any law enforcement body which says that this needs to be done, and that's our approach, we won't be doing it.
HOST: Yeah, and if they do come up with an argument you will, will you?
PM: Well, we will look at stuff on its merits. But on the question of our basic belief in the nature of Australian society, which has got a whole bunch of different people in it, who bring different cultures and traditions here and we all end up in the great Australian melting pot, and roll on a generation, you see everyone basically ending up as one big Australian family, and then the next group come, and they all end up, a generation later, as one big Australian family. Let's just look back from where we've come with waves of Greek migrants. I was with the Italian community, for example, out at Epping last night, big group here in Melbourne, talking about the contribution on the 50th anniversary of Il Globo, you know the big Italian language newspaper? And it was interesting listening to all of those folk, from 50 years ago, about the amount of prejudice they received back then, when Italians first arrived in large numbers -
HOST: That's true -
PM: Let's just put it all into a bit of context.
HOST: Prime Minister, you, I know you need to get away -just very quickly. For your super tax, $6 billion wiped off superannuation funds in three days, predictions that electricity and energy costs will go through the roof. Are you locked into it, or could you be willing to negotiate at a lower level?
PM: No, we think we've got the rate about right, Neil. That's what I said in Perth when I was asked about this the other day.
HOST: So what about the $6 billion off the superannuation funds for retirees?
PM: Well, can I say that you are always going to have share market volatility on given days, that's been the case the last three months, six months, nine months and frankly in the history of the share market. I understand that most of the mining stocks are trading within their range of the last three or six months.
Look, I think it's pretty important to have some balance in this debate. The former head of the Minerals Council of Australia, David Buckingham, was very clear in a statement he made today, he's describing the reaction from various parts of the mining industry as hysterical. He says that the reality is that the model that we're putting forward as a Government could actually underpin a growth in investment, a growth in jobs and in exploration activity, and that he goes onto say that the threat to withdraw investment, withdraw jobs, is frankly, you know, just being hysterical.
I think the bottom line is this Neil, for your listening audience - we want to make sure that by imposing a Super Tax on the resources of Australia's most profitable mining companies, that the Australian people are getting their fair share from the resources which they themselves own, in order to fund better superannuation for working families, tax cuts for all the small businesses listening to your program this morning, and tax breaks as well, and also providing funds to build the infrastructure we need for the future. Unfortunately my political opponent has decided to side with the most profitable mining companies in the country, and therefore stands in the way of blocking better super for working families and tax cuts for small business.
HOST: Ok just finally too, I've been send a letter that the Government is sending out to insulation installers. Are you aware that they're offering - these are people who got caught in the middle of the insulation mess and have been stuck with stock - they're being offered 15 cents in the dollar, not much?
PM: On the detail of that, I would prefer to get Greg Combet to speak on your program as Greg has responsibility for the implementation of this arrangement. On the content of the letter you've just referred to, no I'm not aware of that but I'll have him come onto your program and speak about it.
HOST: Fair enough, but I assume that you were aware that there was a 15 per cent compensation, 15 cents in the dollar, compensation.
PM: Again on the detail of those arrangements I'd really prefer to defer to Greg, and I will have him on your program to speak to the detail of it. I'd just rather not mislead you or your listeners, that's all.
HOST: I appreciate your time, I read you're going to stay around if you're re-elected, you're going to stay the whole term?
PM: Well-
HOST: -what about after that? You will have had enough by then I assume?
PM: The first thing Neil, is the Australian people will make their judgments about the Government's achievements and its plans for the future come the next election which is due by the end of this year.
Secondly, if the Australian people re-elect the Government of course then I would remain for that subsequent term. That's a matter for the people.
My job in the meantime is to make some critical decisions in the national interest and that's negotiating our way right now through the financial crisis bubbling away in Europe, which you began the interview with, talking about, that's frankly what is preoccupying my mind at the moment.
HOST: Okay, have you given any thought to when you would step down?
PM: You know something, Neil, I reckon it's very important to just be clear about what you put to the Australian people for your plans for the future, put to them what you've achieved so far, be frank about the fact that not everything is perfect, I've never claimed to be perfect. They'll make their judgment, they're very sensible people. As for myself, I'll continue to make a contribution so long as I believe I can make a positive contribution to the country's future. That's what I'm in the business for.
HOST: Final, final, final question, have you talked to Gordon Brown and how do you read to the election result, he looks as if he's finished, doesn't he?
PM: I haven't seen, because I've been working on these other things this morning, I haven't seen the most recent results for the last hour or so from the elections -
HOST: I know he's a mate of yours, I just wanted to know if you've spoken to him.
PM: Yeah, I know, I was about to say I spoke to him a couple of nights ago, and I've know Gordon for frankly a decade plus, he's a really good man. Whatever the British public decide in this election, can I just leave your listeners with one thought about the global financial crisis last year. The critical turning point in preventing this thing collapsing from a recession into the possibility of a depression was the G20 meeting in London in March-April of 2009 which he chaired. If he wasn't in the chair for that, I really fear for where we would have gone to in the last part of last year. The outcomes there, as the International Monetary Fund has said since then, was the turning point in the world's reaction to the implosions on Wall Street in the six months prior to that. So I think Gordon deserves an appropriate recognition for that, whatever the voters of Britain decide today.
HOST: Sounds a bit like a political obituary but fair enough. Thank-you -
PM: No, it's just a fact, he's just a good man. I sat with him for two days during that G20 meeting and frankly, I never seen such an ashen faced look from the faces of 20 heads of governments in my life, as we looked, we stared literally into the global economic abyss -
HOST: I guess the fear is we could be about to do that again?
PM: Well, these are concerning days but I believe we now have a mechanism to effectively respond to developments like we see in Greece when they arise, that's the G20. The G20 heads of government are due to meet next month again, and I'm sure the stability of financial markets will be the core of the agenda again. It was the mechanism we used last year to stabilise financial and economic collapse, we have that mechanism which is ongoing today, and on every given day my officials and advisors are working with their counterparts around the world. But these are concerning days.
HOST: Look I thank you for your time, I know the Secretary of the Treasury is waiting for your call and I'm feeling quite guilty. Enjoy Geelong.
PM: Thanks very much, appreciate it Neil.
HOST: The Prime Minister, Kevin Rudd. Very serious air to that discussion.