SPEERS:
Prime Minister, thanks for your time. We';ve just learnt this morning the Opposition Leader has called off his trip to the United States, the UN and China because he believes you are priming for an early election and he wants to be here in Australia. Can you give him any assurances as to whether or not#8230;?
PRIME MINISTER:
Well, I can assure him there won';t be an election in June.
SPEERS:
Will there be one in August?
PRIME MINISTER:
I don';t know when the election';s going to be, but I do know this that it won';t be before the 30th of June. I';m going to be in the Unites States briefly, lobbying the congress for the Free Trade Agreement that';s going to add billions to our national wealth in the years ahead and then another few days in Europe to commemorate the 60th anniversary of the Normandy landing and I';ll be away for about a week. Mr Latham';s visit would have in a sense overlap with mine or being very close to it. I guess he';s decided to use this as an excuse not to go because he feels somehow or other awkward in his relationship with the United States. I think that';s a great shame for Australia. I thought the US alliance was an article of faith with the Labor Party. I thought the US alliance meant something and yet he';s going to call off a visit to our most important partner and he';s putting himself forward as the alternative Prime Minister of this country. I think the decision speaks volumes for itself but it';s his decision. But I can assure the Leader of the Opposition that there isn';t going to be an election in June. I mean, I';d hardly go away myself, I';m not going to have an election in June. And I think everybody should just understand the reality and I don';t know exactly when the election is going to be. It';s due some time in the second half of next year. As to when it will exactly be, I can honestly say I have not made up my mind and I';m a long way from making up my mind.
SPEERS:
Well, most pundits are now tipping August after what now has been the biggest spending budget from your Government ever. It must be tempting to go sooner rather than later.
PRIME MINISTER:
I';m not saying any more on the timing of the election. It';s a good budget. It';s a good budget for Australian families made possible by good economic management. You wouldn';t have got this budget out of a Labor Government because interest rates would be too high. The economy would not be growing and therefore delivering the revenue that';s underpinned our capacity to give benefits. One of the reasons we';ve been able to be, I think, fair and generous to families is that our company tax collections have surged, not off higher tax, in fact we';ve cut the company tax rate because the economy';s doing well. And isn';t that good? If you';re economy is doing well and you have low debt and you';ve paid off other debt and you';ve funded improvements in health and education, why shouldn';t you give it back? It doesn';t belong to me or the Treasurer, it belongs to your viewers, it';s their money. It';s not ours, and they';re entitled to have it back if you';ve got a bit left over.
SPEERS:
But why are you giving it all back in this election year? I mean, it is a lot more generous than last year';s budget, particularly for families. Isn';t it fair enough for families to have a bit of a cynical look at this and see it as a vote buying exercise?
PRIME MINISTER:
Well, David, last year we had an across the board tax cut. Our financial position last year was not as strong, it was still very strong. But we found as the months went by in the latter half of the current financial year with the collections and the projections about the strength of the economy and the way in which we weathered the drought and the overseas downturns that we felt on all of the projections we were in a position to give something more for families. And bear in mind, we';ve also funded outside the budget, well the funds is in the budget but we';ve announced it outside the budget, very big investments in improving Medicare and improving and reforming higher education.
SPEERS:
Well despite all the big spendings on families and on the tax cuts, they only apply to the top two income brackets. What is there for people who don';t have kids who earn less than $52,000 a year, they haven';t got much out of this have they?
PRIME MINISTER:
Well, David could I just say about the tax cuts. Tax cuts benefit people from about $52,000 a year on. They are not wealthy people. According to my figures 37 per cent of full time male earners in Australia, 37 per cent earn more than $52,000 a year. This notion that $50,000 -$60,000 makes you rich could not be more out of touch with modern Australia. Now as far as people earning lower incomes are concerned, if they';ve got families they get the family tax benefit. They certainly get the benefit of the superannuation co-contribution that cuts out altogether when you';re about $56,000 of income and the greatest benefits under that are focused on people around $28,000 through to $40,000 a year. So that';s#8230; they';re clear winners out of that. But bear in mind that many of those people are retired and are getting the benefit of the retired person';s tax offset, which is a very generous tax provision that was introduced in the budget of 2001. Bear in mind also that many of these people are people who one day, perhaps quite soon and a result of last night they might even sooner will decide to get married and have children and get the benefits. Now we make no apology for targeting families. If you';re earning $50,000 a year and you';re trying to support a wife or a husband or some children, you';re financial position is infinitely more difficult than a single person earning the same amount of money. Now that';s no disrespect to that person. It';s just that reality tells all of us, experience tells all of us that bringing up children is expensive and we want people to have children. We are an ageing population. Our greatest asset are new born Australian babies and we therefore need to help families who undertake that great responsibility. I mean, it';s tremendously important, we want to help them and give them all the encouragement we can.
SPEERS:
$52,000 a year may not be a lot of money, it';s certainly more though than those who are earning less.
PRIME MINISTER:
Yeah, but people learning less are paying a lot less tax because we have a progressive tax scale and we have to bear that in mind. Look, we can';t have a society that penalises hard work and many people earning smaller amounts of money, I';m not saying all, many of those, I talked about retired people, I also talk about those who are on part time incomes, I mean many of the people when you do the bald statistics a large chunk of those people are not full time workers, they';re on part time income and of course if those people are in#8230; have children, if women in part time work and there are hundreds of thousands of people in that category, they are massive winners out of this budget because they not only enjoy the $600 a child increase in the family tax benefit but if they';re in the part time workforce they may be entitled to a greater amount under the family tax benefit B which is designed to assist principally mothers who are at home full time.
SPEERS:
You';ve run down the surplus a fair bit for this year or for the coming financial year and the year after that. Will you have much left in the election campaign to throw around in promises?
PRIME MINISTER:
Well, the greatest promise we';ll make in the election campaign is that we';ll continue to manage the economy well and don';t risk a beautiful economy with people who aren';t good managers and who';ll only bring you high interest rates, debt and budget deficit grief. That will be the principal pitch that we';ll be making to the Australian public as far as the economy is concerned. We haven';t run down the surplus. There';s no need when the economy';s doing well and you';ve paid off debt. I mean, we have only three per cent of annual debt#8230; annual wealth generation now that has to go towards debt repayment. We';ve saving about $7 billion a year because we';ve paid off $70 billion of Labor debt. It maybe a bit less than seven, maybe close to five or six. But an enormous amount because we';ve paid off all that debt and that';s going into hospitals and schools and roads and defence and intelligence services. So we don';t need a big surplus, we really don';t because we have a very low debt and that is a good position for a country to be in.
SPEERS:
Well, Labor has signalled that one of its campaign pitches is going to be that a vote for John Howard is a vote for Peter Costello. The Treasurer told us last night that you and he had discussed this leadership issue that';s been brewing over the last few days again. Have you given him any commitments on when a transition may occur?
PRIME MINISTER:
Oh, we don';t have any deals. Look, the question of the leadership of any political party is decided by the party room. Could I just say that I fully understand why Peter aspires to lead the Liberal Party #8211; it';s a very natural thing.
SPEERS:
And have you spoken to him about it?
PRIME MINISTER:
And we talk about a lot of things a lot of time. I mean, there';s no secret about that.
SPEERS:
But no commitments?
PRIME MINISTER:
No, look, there are no deals and that';s been my position all along and it will remain my position. But I do want to say that it';s very understandable Peter would like to lead the Liberal Party and if anybody has in a general sense earned some entitlement, well not entitlement, but certainly some prospect and some right perhaps of doing it Peter certainly has and I think there is a general view that if I went under a bus tomorrow he ought to replace me. And I think#8230;
SPEERS:
What if you lost the election or what if you retired, should he still expect#8230;?
PRIME MINISTER:
#8230;.I think all of that is very understandable. But two other things should be understood and that is that the Australian public will decide whether or not I continue as Prime Minister and at the next election the contest is between a John Howard led Coalition with a great team of John Howard and Peter Costello who';d be responsible, if I may say so, with the help of many other people for this strong economic position and the Labor Party led by Mark Latham. And my own position has always been and it will remain that I';ll continue to lead the Liberal Party for so long as the Party wants me to and it';s in the Party';s best interests. Now somebody who';s been in politics in the leadership as long as I have can give no other answer. It';s a sensible commonsense answer that I believe the Australian people fully understand.
SPEERS:
Okay, Prime Minister. Thanks for your time.
PRIME MINISTER:
Thank you.
[ends]