MCGRATH:
Prime Minister, good morning. You heard from Linda there speculation about an early election. What do you say?
PRIME MINISTER:
It's misplaced. There's no reason why this Government shouldn't run its full term. Governments that go to the polls early without a good public policy justification are normally censured by the electorate and deservedly so. Now, no Prime Minister categorically rules out having an election earlier than the normal time. But anybody who thinks that this budget is laying the basis for an early double dissolution is wrong.
MCGRATH:
Modest tax cuts - $4 a week for middle income earners. But there is a $2.2 billion surplus. Do you feel this sends a good message to international markets?
PRIME MINISTER:
Oh, I think it does. And when you look at the total size of the budget, a $2.2 billion surplus is really a bare surplus and anybody who thinks you can spend that surplus down to zero and still confidently predict that you're going to be in surplus at the end of the year is being reckless. Now, you've got to provide some cushion against economic change and economic comtraction and we calculate that the $2.2 billion will still mean that we can fairly comfortably predict that we're going to remain in surplus. But if were much lower than that, you'd be running the risk of flipping under water. Now that's why... when you have so little debt, you can afford to have a small surplus and return what's leftover after that to the Australian public. And that is going to be our philosophy. It's their money, it's not ours, it's the money of your listeners and if it's leftover after you've spent on necessary things, and you've provided a careful surplus, why shouldn't you hand it back to the public?
MCGRATH:
Talking about the amount that's been handed back, the Daily Telegraph this morning calls it piddling.
PRIME MINISTER:
Well, you can always say that, but it's better than not handing it back. It's better than wasting it on other things. It's better than having an unnecessarily large surplus. And I have listened over the past few months to people, particularly the Opposition, screaming for tax cuts and now they've come along and saying - oh, there could be more. Well I mean, that's... it's easy to say that when you're in Opposition.
MCGRATH:
Well, one question that does come to mind though, is that the tax cuts are funded at $2.4 billion. Now, one question you could ask is - that's a large amount of money, yet people are getting such a small amount back...
PRIME MINISTER:
Well, there's a lot of people...
MCGRATH:
That's right. The question...
PRIME MINISTER:
Everybody pays tax, so when you have a tax cut, everybody's got to share it, Catherine. You can't say - well, look, we're not going to give it to you, we'll only give it to these people, now come on.
MCGRATH:
If I could just explain the question fully though. That money could be spent on great many other things. That amount - $2.4 billion - could really make a big difference if either all the tax cuts were given to low income earners. For example, the Medicare situation...
PRIME MINISTER:
Well...
MCGRATH:
It could be spent differently. Why...?
PRIME MINISTER:
Well, let's say Medicare - I mean, we're already putting an extra billion dollars over four years into Medicare. You say all of the tax cuts could be given to low income earners, they are weighted in favour of low income earners and the biggest proportion of winners out of these tax cuts are part time working women - they are the biggest, the way they're skewed, they will help them probably more. I mean, part-time workers a significant proportion of which are working mothers - they will do very well out of these tax cuts compared with the rest of the community. Look you can't, when you cut tax, you can't just always give it only to low income earners, you've got to provide incentive for people who are achieving. I mean, one of the things that I resented about the reaction of the Labor Party and the Democrats in the tax package three years ago is that they imposed this absurd high income threshold of only $60,000. Now, we want a community that cares for the low income battlers, but also a community that encourages people to achieve and gives people incentive. And you've got to mix... you've got to respond to a mix of values when you frame a budget. Yes, care for the underprivileged, but also try to reward the people who are having a go.
MCGRATH:
Prime Minister, we saw last night the first details of your education overhaul. People will be able to pay their way into certain courses, all courses in fact that many they didn't have access to before. But also HECS fees could increase to up to 30 per cent.
PRIME MINISTER:
They could, yes.
MCGRATH:
And how do you...
PRIME MINISTER:
Well, they won't automatically. I mean there is a... the universities have been given flexibility up to 30 per cent, but HECS... there'll still be that HECS protected area and they'll be able to borrow the rest and if they incur a HECS debt in future, they won't have to start repaying it until they reach an income level of $30,000 and for a lot of people who once again many women who only work part time, if they don't earn above that, they don't have to start paying back the HECS debt. And could I just make one other comment about universities - 70 per cent of Australian boys and girls who leave school do not go to universities. We've got to remember that those 70 per cent pay taxes which contribute in turn to something like 70 to 75 per cent of the cost of educating the 30 per cent who do go to university. So once again, there's an equity argument here and you were talking earlier about low income earners, people who go to university and get degrees on the whole earn more money in their careers than people who don't, therefore it's only fair that they make some contribution to the cost of their education.
MCGRATH:
But you were also, earlier, talking about having incentive. The people in middle Australia who have drifted towards you over the years, you've been... when in Government and since, many of those are aspiring voters, they want their children to go to university...
PRIME MINISTER:
They are...
MCGRATH:
So...
PRIME MINISTER:
It's a balance, it's a balance. And in all of these things...you can't look at our response to middle Australia just in relation to a particular area. I mean, you mentioned health a moment ago. Middle Australia wants a tax break for private health insurance. There's one thing that middle Australia does want, is choice in where they send their children to school, whether it's to a government school or an independent school. We are catering for a whole range of choices for middle Australia and in the area of education, the changes here will give more people more opportunities. But importantly, they will encourage the universities to compete in an increasingly competitive international environment. And I think the historic changes in higher education, and I think they lay the ground work for the emergence of even higher performance by our universities.
MCGRATH:
Prime Minister, you will be doing the rounds of media interviews today and more public engagements over the next few days as you promote this budget. But one issue that is still running in the background that's causing a lot of concern in the community is Dr Hollingworth. Have you read the report yet? And are you aware of the finding in the report that questions Dr Hollingworth's honesty in a statutory declaration, in...
PRIME MINISTER:
Yes, I have...
MCGRATH:
And it indicates... it says that... it indicates that it's questioning his honesty...
PRIME MINISTER:
No, well I didn't read it that way. They reached a different conclusion than what was put to them by Dr Hollingworth. But they acknowledged that he acted in good faith and they also said... they had no doubt that he believed what was in the statutory declaration, well that's...
MCGRATH:
They also said that he could not... what he said could not have been true.
PRIME MINISTER:
Well, I can only quote to you what I read and I mean, Dr Hollingworth has stood aside. He's indicated that only after this court action in Victoria has been disposed of that he can give proper consideration to his longer term tenure. And he said that in giving that consideration, he'll give the upmost priority to the dignity and the integrity of the office. So, I think that is a plain statement of the position and I don't have anything to add to it.
MCGRATH:
Peter Beattie said in the Queensland Parliament yesterday that the number of cases being examined was expanding from two to five cases.
PRIME MINISTER:
Well, that's just Peter Beattie. I mean, Peter Beattie is running a very political campaign on this, let's call a spade a spade. I mean, I don't... I mean, Peter Beattie... he's running a political game on this, it's an appointment made by a government of another political stripe, he really is running a very political game on this and using parliamentary privilege to attack Dr Hollingworth, I'm not going to get into that game. Dr Hollingworth has given enormous amount to the underprivileged in the Australian community and I think people like Peter Beattie forget that in their zeal to traduce the reputation of a person, who has in the past, given a great deal.
MCGRATH:
Prime Minister, thanks for your time this morning.
PRIME MINISTER:
Thank you.
[ends]