HADLEY:
We'll get on to much more serious things in a moment, but one man that would remember ... and Menthoids is our Prime Minister. John Howard, G'day.
PRIME MINISTER:
How are you?
HADLEY:
You'd remember that add wouldn't you? M-e-n-t-h-o-i-d-s.
PRIME MINISTER:
Oh yes. Dr McKenzie wasn't it?
HADLEY:
Dr McKenzie's Menthoids.
PRIME MINISTER:
That's right. Yes.
HADLEY:
There you go. There you go. You're fantastic. You've solved the problem for me. I was trying to think of his name. Now, to more serious things, much more serious things - interest rates.
PRIME MINISTER:
Yes.
HADLEY:
Up a quarter of a percent. Did the Reserve Bank act the way they should have in light of what happened just after that with the national accounts showing the economy almost slowed to a halt during that last quarter to December?
PRIME MINISTER:
It was one of those occasions when there are arguments for and against, and I'm not going to criticise the Reserve Bank's decision. I would have preferred, obviously, to see interest rates stay where they were - and I speak as somebody who doesn't like to see interest rates I suppose ever go up - but, being a realist, you can't live in that kind of world. But over the time that I've been Prime Minister, the Reserve Bank has done a very good job. And the present Governor has done a very good job of managing monetary policy, and interest rates are still low - in recent experience, very low still. Much lower than what they were when we came to office, and, as Peter Costello has said they've ranged between 6 and 8 percent for the average housing loan over that 9 year period. But it was a difficult call that the Bank which operates independently in these things made a decision to go in a particular direction. Certainly the data was mixed, and when you have mixed data I guess there'll be some people who will criticise the decision and some people who will say it was the right one. But I'm sure that it was given a lot of thought, but naturally I would have preferred, and everyone would have preferred, in an ideal world - but you don't live in an ideal world.
HADLEY:
And yet the Treasurer is saying that the promise that led up to the election win last year was not based on or predicated on you keeping interest rates low but keeping them lower than the Opposition. Is that...
PRIME MINISTER:
No, no. What he's saying is it's not predicated on promising that they would never go up. What essentially Mr Beazley and Mr Swan are saying is that we promised the Australian public before the last election that interest rates would never rise. Well, you can't find anything saying that. What I did say, and I don't apologise for this, is that we will keep interest rate lower than would Labor, and we pointed to what they were - between 10 and 17 percent when they were in office - and what they've been since we've been in office, and the likely impact of their policies if they had won, and there's nothing that's happened yesterday that has in any way invalidated that.
HADLEY:
Why do you seem reasonably comfortable, but not totally accepting of that rise... Would you be very uncomfortable about another half a percent some time in the next couple of months?
PRIME MINISTER:
Well, I don't want to get into future predictions except to say this: inflation is low, there is no sign that wages are breaking out, there's some wages pressure in some areas but there's no sign they're breaking out, and there are signs that the latest growth in the economy has moderated - although once again they are very mixed. Business investment is still very strong; we have a thirty-year low in unemployment. So the economy is still going along very strongly in a real sense. If you're talking about the real economy out there - people in business listening to this interview - they've got, by and large, they've got full order books and they're optimistic. So I'm nonetheless aware that the economy is not growing as strongly as it was say a year ago. So, if you put all of those things together, there's a respectable argument that there should not be another rise for a while, but I don't really want to get too specific about that because you can't on the one hand give the Reserve Bank the authority to do it and, on the next hand, sort of say, well, this is how you should exercise that authority. I'm sure that the bank will take those things into account, but yesterday was one of those occasions where the indicators were very mixed, and I can understand the bank going in either direction.
HADLEY:
What about our level of debt as a nation and as individuals?
PRIME MINISTER:
Well you've got to measure our debt as individuals against our assets as individuals. Your house is worth a lot more now than it was 10 years ago; it's probably worth a lot more than you ever imagined it would be worth. When I'm saying that......
HADLEY:
No, yes, I understand where you are coming from.
PRIME MINISTER:
Collective sense. So, when you say is your debt high? Yes it might be, but are your assets high? Yes they are. That is the case with most people that their household debt is higher but so is the value of their assets. And in the end it's the value of your assets and what you can generate from them - or realise from them - that dictates your capacity to repay your debt. People get into trouble when they incur debts they can't afford. If people have a house worth a million dollars and they borrow two hundred thousand dollars on the strength of it, plainly they can afford that. If somebody has a house, they borrow three or four hundred thousand dollars to buy a house and they have difficulty servicing those payments unless everything is going right, well they can get into trouble. Now that has always been the case. So I'm not so worried about household debt when I match it against household assets and those household assets are a lot stronger than they use to be.
HADLEY:
Okay, now the Reserve Bank according to our shortage of skilled workers, when you pick up the front page of the Australian today to see that Amanda Vanstone is pushing for an extra 20,000 skilled migrants to come into the country, are you supportive of this push? And there's also an indication from the Treasurer that he supports....
PRIME MINISTER:
Well I am in favour. I am in favour of adjusting our migration programme according to economic need. We have an economic need at the moment for more skilled people. You can't generate them out of thin air in Australia. It takes a while to re-train people and we're investing a lot in that. We announced all that money in the election campaign for Australian Technical Colleges. But if part of the solution to that problem is to bring in more skilled migrants, then I'm in favour of it. And we will look at that issue very closely in the very near future. We have a migration programme that is now more heavily tilted towards skills and we're willing to tilt it even further in the direction of skills in order to get the people we need.
HADELY:
How do we compete with other places wanting the same type of people?
PRIME MINISTER:
Very hard, this is the difficulty. Most countries in Europe have a growing shortage of people, in the same way that we do and in some of those countries it's worse than what it is in Australia. But we're not of course confined to Europe. We have a non discriminatory immigration policy. I just cited European countries because they have some of the same skill shortages that we do, but we will take skilled people who meet the bill, who fit the bill from anywhere in the world. But obviously people who have the training and if their language skills are more advanced in English, then obviously that helps as well, but that's not a mandatory requirement, but it can be an advantage when you're trying to get people who will fit in very quickly.
HADLEY:
See one of the problems I have, Peter Costello said, that there's never been a better time to be a plumber, an electrician well I guess he means a builder, a carpenter...
PRIME MINISTER:
I think it's always been a good time.
HADLEY:
You'd know; have you tried to get one lately?
PRIME MINISTER:
You've answered my question.
HADLEY:
The thing about it is....
PRIME MINSITER:
I know lots of them, they're a great lot.
HADLEY:
I'm just filthy on my mates who left in year 8 and they've got four times.....
PRIME MINISTER:
Do you have the same experience at school reunion?
HADLEY:
Exactly. The plumber's got the best car.
PRIME MINISTER:
He's got the latest beamer.
HADLEY:
He's the most popular because you want to stay sweet with him in case you ever have a broken pipe. But the problem is on a serious note: I left in 72 and there was this thing about, oh you've got to go to year 12, and yes, you've got to go to year 12, it's not a good idea to be a trainee and then you get to the end of it, you get the High School Certificate and before TER's you got A, B or C's or level 1, 2 or 3 and you say, crikey, I can't go to Goulburn teachers college, what will I do? And there was some sort of stigma attached to putting on a pair of hobnail boots and putting on a belt with nails in it and a hammer or going down and saying to the plumber, well I want to be apprentice. What do we do to reverse that because I'm talking about 33 years ago?
PRIME MINISTER:
Well, Ray you start, if I may say so, from people like me spruiking the cause of skilled tradesmen. In the last election campaign the best applause line I had on a policy issue was when I said I wanted an Australian nation where a high grade technical qualification was as prized as a university degree. And I really mean that. I think we did make a huge mistake around the time you're talking about of denigrating skilled tradesmen, and we did it as a country, and there were plenty of parents who encouraged their children to stay at school longer than either their ambition or their ability for a particular type of study justified. And, as a result, we downgraded the importance of trade skills in our community and we are paying the price for that now. How do you change it? Well you change it by having conversations like this. You change it by promoting the 24 Australian Technical Colleges which will give a new status to people who want to go down the skilled trade's stream in the last two years of their schooling rather than staying at school, doing the HSC, and perhaps going to university, or perhaps doing something else. I think you do have to change it. I think years ago, and you can't reverse things, but we had a technical schools stream in our education system, and there were great advantages in that. You can't go completely back to that, and I think the lurch years ago towards having a more generalised comprehensive eduction was a mistake, but you can only turn those things back to a certain degree. You have to find a modern, contemporary way of encouraging people to go into trades, and recognising that not everybody should go to university, wants to go to university, or ought to go to university. I think what we have to do is to provide people with more incentives to go and do a trade, and one of the ways is, of course, to lift the whole status of trade skills, to put a greater emphasis on them, and to say to people who want to become tradesmen, that is as prized and as valuable and as possessed of the same status as doing a university degree.
HADLEY:
And in the meantime we try and get them from somewhere else, via the...
PRIME MINISTER:
Well. you do both. If you've got a skilled tradesman in India or Lancashire or Ireland who's immediately available to come to Australia, well, fantastic. He or she can fit the bill. But that doesn't in any way absolve us of the responsibility of training more of our own people to do that. And you have to do both.
HADLEY:
Now, I see you on TV this morning distancing yourself from alleged deals done with other people in the Coalition over when you would go or when you wouldn't go. I know we have this debate all the time, and you say to me 'I've never been in finer form', and I say, 'that's fantastic, I see you walking about the place, wonderful, wonderful'. But it still keeps coming up. Now, obviously there's a succession order here and Peter Costello is the logical successor to you. You celebrated your 9th year, I think, yesterday, and again it's there. Now, I don't raise it. I don't know that other media commentators raise it. Someone perhaps on you own party keeps raising it because they're not thinking that they want to push you of precipice, but they're thinking that maybe some time over the next 18 months you might just decide to spend more time with Janette and the family, and you might decide that, you know, this is, not all too hard, but there are better things in life.
PRIME MINISTER:
Well, there aren't better things in life than trying to serve the country as Prime Minister. It's pretty good. I'm still immensely stimulated by the job. Ray, it's inevitable when you have been Prime Minister for a number of years - and I have now been Prime Minister longer than anybody but Bob Menzies - it's inevitable there'll be debate. That doesn't trouble me and I'm quite happy to go on answering questions. Nothing has changed. I got re-elected at the last election. The Coalition did better than I expected. I didn't think we'd win control of the Senate. There's still a lot to be done. Fortunately the Liberal Party has a lot of talented people apart from... well I'll leave myself out of it, but a lot of talented people. I won't express a view on my own talent, but we have a lot of talented people. There's no doubt that if I were to, use the proverbial expression, go under that bus - which I studiously avoid I might say - there's no doubt that Peter would and should become the leader. Now, there's really nothing more to be said. I'm quite happy to keep saying this.
HADLEY:
I know that.
PRIME MINISTER:
And it's not surprising it comes up. I mean. I don't think we should sort of take private discussions...
HADLEY:
Were you invigorated by the fact that you can control the Senate half way through the year?
PRIME MINISTER:
Oh, yes. It gives us opportunities, and we're going to use those opportunities carefully, but it's an opportunity I never expected us to have. Now, I think what we need to do is to make sure that those things that we have wanted to do, and we have clear public support to do, but we've been denied the opportunity of doing, we are able to implement. But, by the same token, I'm not going to let it go to my head. The Australian public wants strong, sensible, fair government. They don't want ideologically driven, fanatical, zealous government. They've never wanted that, and they won't get it from me in control of the Senate. And what the people I choose to believe like about this present government is that it's got a strong sense of direction, but it does things in a balanced way. We're not a zealous, fanatical government. Australians don't like fanaticism and over-zealousness in public life. It turns them off and it's contrary to the mindset of the Australian public.
HADLEY:
I think one of the focal points of your success, individually, is because you come from the biggest city in the country, being Sydney, and you do, from time to time, express a view that you are concerned what's happening here, and despite the fact that you are looking after our national interest. Now, you've seen what's been going on at Macquarie Fields. You've seen police officers, who you expect to protect you and you family like I expect them to protect me, being subjected to the most horrible set of circumstances. What's you view...
PRIME MINISTER:
Well I'll express a view, and can I say this, that they have my 150 percent support - the police. I think it's a very tough job. I think there are too many people in our community who are only too ready to condemn the police when they have to use a bit of force to make sure the law is observed or protect themselves, but then they expect the police to be around to protect them quick smart if they get into any difficulty. Now, as to the intricacies of this or that aspect of this issue, all I can say is that there is no excuse based on claimed under privilege to justify the open defiance of the law and the open law breaking. And I have to agree with the remarks that have been made by the New South Wales Premier when he said that plenty of people have come from disadvantaged backgrounds and achieve enormous amounts in their lives without breaking the law. And there's something, in a sense, perverse about the notion that people who come from a disadvantaged background are inherently more unlawful and more disposed to misbehave than people who come from a privileged background. I've seen plenty of people who've come from a privileged background who've behaved in an improper fashion. So, I think, if there are social problems in an area, they need to be addressed, but no amount of social disadvantage can justify the sort of behaviour, the sort of danger that has been thrown the way of the police. And speaking as an individual, and also as Prime Minister, as I must, I support what the New South Wales police have done. I support it very strongly.
HADLEY:
Thank for your time Prime Minister, as always.
PRIME MINISTER:
Okay.
[ends]