MITCHELL:
Mr Howard, good morning.
PRIME MINISTER:
Good morning, Neil.
MITCHELL:
Do you have any indication or instinct on whether this is Al Qaeda?
PRIME MINISTER:
I have neither information or instinct either way in relation to who might be responsible. Given the history of ETA, the protagonists to the Basque separatists, you might automatically think that it was the work of ETA. One the other hand, the size, the sophistication and also some of these other reports that are just coming in, such as the one you mentioned, it';s just that Al Qaeda';s involvement or some cooperation at least between Al Qaeda and some local terrorist groups can';t be ruled out. It';s too early, of course, to make any such judgement. Let me say immediately how much I express on behalf of the Australian people our sorrow and our outrage, and our sense of support and concern for the people of Spain. It';s a dreadful atrocity without any kind of justification.
MITCHELL:
Is there any indication yet if any Australians are amongst the dead or injured?
PRIME MINISTER:
The latest information I have is no, but given the large number of people who';ve been injured and the nature of these things you can';t discount the possibility that some Australians may have been caught up, but the latest information including from our Ambassador in Spain is no.
MITCHELL:
As you said, it';s a very sophisticated attack. Is that the reason you think that Al Qaeda is suspected?
PRIME MINISTER:
Yes, I';m not saying that we have any evidence that it';s Al Qaeda. I';m simply saying it could be. The evidence that I';ve heard so far and I';m largely going on media reports, I don';t have any separate confidential information as yet. I listened this morning to a British expert on terrorism on Radio National on the ABC and his view was that it was very likely ETA, the Basque separatist cause. On the other hand, many people feel that because of the sophistication of it, it might be Al Qaeda and it';s on a scale that hasn';t previously been attempted so I understand by ETA, but then again it';s occurred several days only before the Spanish general election and action against the Basque separatists has been a key policy of the incumbent conservative Government. So at the moment and all we can do is conjecture, at the moment we are only conjecturing and we really don';t know.
MITCHELL:
Okay, it is fair to say isn';t it, if this does turn out to be Al Qaeda it has significance for this country?
PRIME MINISTER:
Whatever the source of the attack, there is significance for Australia. It is a reminder, a wake up call, a sobering jolt back to reality that we do live in an age of international terrorism and no country is free from the threat and it';s fair also to say that the great majority of people who have died as a result of terrorist attacks in recent times, in which, Al Qaeda has been involved or implicated have in fact been people of the Islamic faith. These terrorist attacks are incredibly indiscriminate and the idea that they';re only directed against western countries is wrong, they are certainly directed against western countries, but there are also directed against Islamic countries. Look at Indonesia.
MITCHELL:
I guess the point thought is if it does turn out to be ETA, that is a local issue. Where if it does turnout to be Al Qaeda, well here';s a soft target, here';s a country that seems a soft target, here';s a country that has been supportive of the United States, here is a country thats role has been very similar to ours – has it not?
PRIME MINISTER:
Neil, I don';t think this is the sort of thing that I';m going to hypothesise about. It';s a very serious issue. My view is that this country cannot be complacent about terrorism irrespective of who';s to blame for what';s happened in Madrid and we just all have to understand that we are potential targets and I';ve said on numerous occasions, including on this programme – I cannot guarantee to the Australian people that there won';t be a terrorist attack in this country. I hope and pray there won';t be, but no person of responsibility in my position can do otherwise and it drives home the need for us to continue to spend additional resources on terrorism, to take a tough line. To support our intelligence agencies. To make absolutely certain that we do everything we humanly can to prevent a terrorism attack and the best weapon against terrorism is intelligence – I';m convinced of that. I';m convinced that any step that is reasonably necessary to strengthen our intelligence agencies so that they can seek out people who might be planning a terrorist attack. That is overwhelmingly the best methodology.
MITCHELL:
Well, does what has happened here overnight – does this alter anything that you are planning in this country? Does it bring forward any of your proposals or plans in the area of terrorism?
PRIME MINISTER:
Well, it';s not just not possible at this early stage to definitely say yes or no to that. I';d want to know a bit more about the details of the attack, if it were to turn out to be other than ETA and I';m not suggesting at this stage that it will. But we are in the process of strengthening our intelligence agencies in their capacity, not only here but their capacities in other parts of the world to deal with these issues and we certainly won';t be relaxing that and in the fullness of time we might see the need to do more. But I wouldn';t want that to be seen as any indication that we haven';t done a lot already - we have. We';ve put an enormous amount of additional resources into the intelligence agencies but something terrible like this whoever is to blame just reminds us again that we are living in a new era. I guess in our natural free and easy way, we over time start to think - oh well, we shouldn';t get too worked up about the terrorist threat and we';re all prone to fall into some kind of complacency. It';s human nature. We are an open free people who are used to domestic stability and domestic bliss and we';ve not had terrorist attacks on our own mainland, although Bali was in an emotional sense, very close to that and of course we lost so many people. And we all wish it would all go away, but unfortunately it won';t and no matter who you are or what you';ve done or what stance you';ve taken on certain political and international issues in the past, if you are a western country, indeed, if you are a free society, you are vulnerable and there have been plenty of countries that have lost citizens whose political stance on an issue like Iraq is quite different from Spain.
MITCHELL:
It is 16 minutes to 9. The Prime Minister in our Canberra studio. We';ll move on to domestic matters now. Now Prime Minister, I suppose you';d consider yourself a political pessimist? If you call an election, you assume you';re going to lose it…
PRIME MINISTER:
I always operate on the principle that I';m going to lose and I work like crazy to make sure that doesn';t happen.
MITCHELL:
Should you use that principle about the possibility of a challenge from Peter Costello?
PRIME MINISTER:
I don';t have anything to say on that. I';ve made my position clear, both in relation to his responses and my own future. And I find with something like this, it';s easy not to try and further define what I';ve already clearly defined.
MITCHELL:
But it has changed. He made a statement yesterday that he was there… he was not going to challenge before the election. One word – yes.
PRIME MINISTER:
Neil, I don';t have anything to add.
MITCHELL:
Even to his comment yesterday?
PRIME MINISTER:
Look Peter and I work together very closely. He';s an incredibly effective Treasurer. There is no better two-fisted puncher in the Parliament than Peter Costello, and I have great regard for the contribution that he has made, and like any other person of great ability in politics, he is entitled to ambition. I have never condemned ambition in anybody. I had ambition myself. And I would be a hypocrite if I condemned it in another person.
MITCHELL:
Well were you pleased to hear his statement…
PRIME MINISTER:
Look I just don';t have any further comment on it Neil.
MITCHELL:
Not on the statement yesterday?
PRIME MINISTER:
Look, I don';t have any further comment, no.
MITCHELL:
Can I ask why?
PRIME MINISTER:
Because that is what I have decided to respond to any questions on the subject.
MITCHELL:
Yes but why have you decided that?
PRIME MINISTER:
I don';t have to disclose every reason for everything I do, but I respect your right to ask me that question.
MITCHELL:
Fair enough. I';m just surprised at that approach. I would have thought it would be… it was all over now.
PRIME MINISTER:
Well let';s just move on.
MITCHELL:
When a politician (inaudible) I get suspicious.
PRIME MINISTER:
Yeah well, fair enough. No, but you shouldn';t. You know Neil, you should not get suspicious.
MITCHELL:
Political pessimism. You';re obviously into election mode with the Medicare and education announcements. What is going to be the main issue of this election and more basic, is there a possibility of it being early?
PRIME MINISTER:
There is no reason on the horizon at the moment to suggest it won';t be in the second half of this year, and that would be the normal time to have it. I can';t guarantee it mightn';t be at another time, but it';s most likely to be in the second half of this year. That is the normal time to have it.
MITCHELL:
Well these are just the first shots, aren';t they?
PRIME MINISTER:
I think that';s pushing it a bit. We have been working on enhancements to Medicare for a long time. It is a big issue. You and I have talked about it and you';ve put me through the ringer on the issue on occasions. Fair enough. It is a very big issue and I think the new package is a huge advance. I think it recognises that having that safety net will bring enormous peace of mind and comfort to Australian families. It';s now a very generous safety net. It was always generous. It';s even more generous now. And I think getting the allied health professionals in – the podiatrists, the physiotherapists – that';s a huge advance. And I also believe that the extra bit of money for bulk billing of the children under 16 and the cardholders in what are essentially the non-major metropolitan areas of Australia where bulk billing rates generally speaking are lower than in the metropolitan areas, is another good move. Overall, an excellent enhancement. And Tony Abbott has done a great job so early in what is a very challenging portfolio.
MITCHELL:
So what';s going to win the election for you?
PRIME MINISTER:
Neil, it';s too early for me to get into that, and in any event you';re asking me to become a commentator. I will be…
MITCHELL:
I';m just looking for your strategy.
PRIME MINISTER:
I';m sure you are. Look I will, as I am now and as I will be in the months ahead, I';ll be asking the Australian people to look at the state and strength of Australia now and what we have done to bring it to that condition. I';ll be asking people to remember when Labor was last in office. We had interest rates of 17 per cent, we had very high unemployment and our economy was nowhere nearly as strong as it is now. And I';ll obviously be talking about some other things as the months go by into the future.
MITCHELL:
Clearly the economy is a key issue.
PRIME MINISTER:
Well the economy is always a big issue, but it';s not the only issue. It is not the only issue. There are social issues as well and of course there are issues of national security and defence.
MITCHELL:
Also issues of tax. Do you accept that a promise has now been broken. You promised…
PRIME MINISTER:
I saw in one of the Melbourne papers…
MITCHELL:
(inaudible) lower tax rates.
PRIME MINISTER:
Well what we said at the time the GST was introduced, that it meant that as a result of the new system, 80 per cent of people would be on no higher tax rate at the margin than 30 cents in the dollar. We certainly said that would be the outcome. Now it is now being suggested that I went a step further and promised that we would always take action to ensure that that didn';t cease to be the case. Now I don';t remember going that step further. I certainly acknowledge that I said as a result of the new tax system, people would… as a result of the new tax system, you';d have a (inaudible) that is now lower than what it was.
MITCHELL:
Well you can';t be happy with that. Are you going to fix it?
PRIME MINISTER:
Well we took some steps in the last Budget. The people would have been paying more tax, in fact, $2.5 billion more tax this financial year, if we hadn';t have cut tax in the last Budget. I';ve said before that if we had the capacity to do so after we';ve provided for necessary things, we would like to further reduce tax. I can';t at this stage go into any detail about that because I don';t know what the available surplus will be. We';re not going into deficit. On the other hand, we don';t need a huge surplus because our debt repayments have been so strong and our overall debt is so low.
MITCHELL:
But doesn';t this really underline the problem with the GST reform. Now whether you';ve promised it or not, you did say 80 per cent of workers (inaudible). It is now not that.
PRIME MINISTER:
Well I don';t think that underlines the problem with the GST.
MITCHELL:
(inaudible)
PRIME MINISTER:
But there are a lot of other benefits from the GST, including the abolition of a lot of more complicated taxes, the fact that all of the revenue from the GST has gone to the states, although they don';t seem to appreciate that, they are still blaming us and asking us for more, even though they now have something they';ve asked for for decades, and that is a growth tax. We finally gave it to them and as the years go by they';ll be much better off. But whenever they get into a political difficulty, they ask Canberra for more money and say it';s all our fault. I mean, look at this debate about schools, the states constantly say that we give more money directly to private schools then we do to government schools. They neglect to acknowledge that throughout Australia 47 per cent of all state revenues and resources come directly from the Federal Government. So if they want to be honest about…
MITCHELL:
But you do give more to the private schools…
PRIME MINISTER:
But hang on, we don';t give more to the private schools because…
MITCHELL:
… the states.
PRIME MINISTER:
Yeah, yeah, of course. 47 per cent of every dollar that the state governments give to their state schools comes from the Federal Government. But do we get any credit? I mean, I saw….
MITCHELL:
(inaudible)
PRIME MINISTER:
Exactly. But I mean, I';m dealing with… Neil, I acknowledge that. Yes, that';s a fair point, I stand corrected on that. But I';m simply making the point that it is quite dishonest of state governments just to look at the direct funding. State schools have state responsibilities, but the states in turn get 47 per cent of the money they pay to state schools from the Federal Government and not to acknowledge that, I mean, you are talking about the destination of Federal Government payments for schools throughout Australia and just to take the direct funding is so dishonest that it shows the mindset that we have in relation to state governments and how the federal system because of this mindset is not working as it should be.
MITCHELL:
Bill, go ahead, please Bill. Quick call.
CALLER:
Yeah, good morning Prime Minister. Good morning. Just interested in talking to you about the tax thresholds, and it';s interesting to hear comments a couple of minutes ago. When you introduced the GST, I was one of (inaudible) community on 30 per cent, (inaudible) bracket creep snuck into the 43 cents in the dollar tax bracket and I';m earning about $61,000 a year.
PRIME MINISTER:
Yep…
CALLER:
… supporting a wife and a new baby. Having to fund superannuation, paid private health insurance and all that sort of thing…
PRIME MINISTER:
It';s a struggle.
CALLER:
I';m really looking for some tax relief and the bracket creep keeps coming up each election. Are you intending to address it as an election issue?
PRIME MINISTER:
Well, Bill, is it?
CALLER:
Yes.
PRIME MINISTER:
We would like to give some more tax relief, we would like to. Whether we can in the Budget – that';s the normal time to do it – I cannot promise you at this stage. We would like to and the point you make is a valid point – I can';t argue with it. On the other hand, I think you';d agree that the…
MITCHELL:
You can fix it, though…
PRIME MINISTER:
Well, I can fix it…
MITCHELL:
… in taxation.
PRIME MINISTER:
Yes, but that';s got to come from somewhere, Neil. It means that if we commit ourselves first to tax reductions and then we commit ourselves to keeping the Budget in surplus, not in a huge surplus, to find the money we have to have sufficiently strong growth or you have to cut expenditure and I don';t hear people putting up their hands and saying cut this, cut that. I actually hear people asking for more money to be spent on health and education and other things. We need to spend more money on defence and intelligence services. So it is a juggling act. But, Bill, I can assure you that if we can provide some additional tax relief we certainly will.
MITCHELL:
Can I ask about something else, the ATSIC board has approved $85,000 to help Geoff Clark fight his suspension. Now, surely, that';s a waste of money.
PRIME MINISTER:
Well, we don';t make those decisions. ATSIC has freedom of action in relation to those matters and I certainly can understand why you feel as you do. We don';t have control of that. The law that was passed many years ago establishing ATSIC gave it independence. I don';t think ATSIC has been a body that overall has been of assistance to indigenous people and I have all the reservations in the world now about the whole notion of having a separate body like ATSIC. Certainly, making a whole lot of executive decisions and controlling budgets, there could be an advisory role, but I have a lot of reservations. But this is an issue that we';ll be dealing with when we address the ATSIC report, that group involving John Hannaford and Bob Collins.
MITCHELL:
It would seem that ATSIC';s on borrowed time, though, would it not?
PRIME MINISTER:
Well, I';m not sure about that because the Labor Party in the past has always opposed reforms to ATSIC, has always done and so… and we don';t control the numbers in the Senate. I wouldn';t be certain about that.
MITCHELL:
But you would do away with it if you could?
PRIME MINISTER:
Well, I haven';t said that. I said I';ve got a lot of reservations. But to be fair to a proper Cabinet discussion, let';s have a look at it.
MITCHELL:
Will you give evidence yourself to the inquiry on pre-war intelligence on Iraq?
PRIME MINISTER:
If I am asked by Mr Flood to talk to him, of course I will.
MITCHELL:
Will you be restricted in what you can say?
PRIME MINISTER:
Well, I will obey the law and there are certain things I may not be able to disclose. I haven';t got… I haven';t had advice on that. But I will do the right thing because I don';t have anything to hide, nothing at all and I am perfectly happy to be questioned by Mr Flood, as I have been by commentators, such as yourself. The only things I can';t do are disclose publicly information that might compromise intelligence sources or disclose things that it is not in Australia';s interest that I disclose. Nobody should think that I';m in any way reluctant to talk to Mr Flood about this issue because I don';t have anything to hide. I';m proud of what my Government did in relation to Iraq. I will never apologise for it and never retreat from it.
MITCHELL:
Did you see those figures that housing affordability is getting worse, the average mortgage (inaudible) per cent of income. Does that concern you?
PRIME MINISTER:
Yes, well it does because this is, in a sense, a case that when you';re a victim of your own prosperity and success. What has happened is that because interest rates are so low, people can afford to borrow a lot more and that feeds into the natural pressures to increase the price of housing. It';s great if you';ve got a house, it';s fantastic. But if you don';t have a home, it is much harder for first homebuyers. We';ve got a Productivity Commission report coming to us, I think, at the end of this month which may have some suggestions in relation to that. But there';s no quick fix. The problem of affordability for the first homebuyer is a product of rising house values, which in turn is a product ironically enough of the lowest interest rates this country';s had for 30 or 40 years. It';s ironic, but it';s true
MITCHELL:
Prime Minister, thank you very much for your time.
PRIME MINISTER:
You';re welcome.
[ends]