JOURNALIST:
And joining us live on the line from our Canberra bureau, the Prime Minister of Australia Mr John Howard, Mr Howard good morning to you.
PRIME MINISTER:
Hello there, how are you John?
JOURNALIST:
Very very well.
PRIME MINISTER:
Your voice has faded away.
JOURNALIST:
I am terribly sorry.
PRIME MINISTER:
That's much better, you are back again with a vengeance.
JOURNALIST:
There we go.
PRIME MINISTER:
How are you Ross?
JOURNALIST:
Very well Mr Howard. Okay, now the latest opinion polls, do you really pay much attention to these polls?
PRIME MINISTER:
Contrary to what some people in parliament might say, I always read the polls, I always follow them, but having said that you have to bear in mind that opinion polls taken what five months after the last election are fairly meaningless. These latest polls do however remind the Liberal Party and its followers around the country, it's something I emphasised just after the last election and that is the idea that in some way the Liberal Party is guaranteed another two terms in office as a result of the last election is completely false. Political fortunes can change. And all elections in Australia are close and we have as always a fight ahead of us and that has always been my view and it's a view I would counsel all of my colleagues to accept and understand that national politics is a highly competitive business. It might be different at the state level on occasions but at a national level it's always competitive, it's always close and you always have to be at the top of your game in order to win.
JOURNALIST:
Mr Howard it would appear though that Kim Beazley is gaining some traction and what he has been quick to point out there are a couple of broken promises, the media has picked them up as well.
PRIME MINISTER:
Well there were no broken promises about interest rates, every commentator, every interviewer in Australia knows that I never promised interest rates would not go up, I never said that, I said that because of our policies and on the basis of past performance, interest rates would always be lower under a Coalition government than a Labor government, I think most Australians believe that, they certainly believed that at the election, I am sure they still believe it. But look we've had a couple of bad economic numbers and polls are going to go up and down. Remember, if my memory serves me correctly, last year Mr Latham recorded the highest approval rating in Australian political history for an Opposition Leader, now that was last year and that was before the election, so things do change when an election campaign starts but we are you know years away or two and half years away from an election. It's a sober reminder, a sobering reminder to all of us that politics is a competitive business and you won't hear me taking anything for granted, you won't hear me, other than saying that the Coalition has got to work hard every day of the week in serving the Australian people and delivering good government and a strong economy and a secure nation, they are our three great goals and we have to work at those goals every day. We can never take the people for granted and I never will take the Australian people for granted and I always regard it as a huge honour to be Prime Minister of this country.
JOURNALIST:
What about the other promise of no more troops?
PRIME MINISTER:
Well I never promised there would be no more troops, I said quite honestly and accurately that when asked, I wasn't asked all that often about this issue, that we didn't have any plans to significantly increase our force. Now two things have happened since the election, three things, you've had the decision, the final decision of the Dutch to take their 1400 people home and that was taken about the middle of November, the final decision. You've had the extraordinarily inspiring Iraqi election at the end of January which went far better than people had predicted and you also have this very important Japanese element, we have no more important regional partners than Japan, remember that we are very close to Japan, I know we've obviously got bitter memories of past history and I don't, for one ever forget that and I understand why sections of the Australian community will never forget it but in 2005, it is in Australia's interest to have a close relationship with Japan and providing a secure environment for the Japanese forces in this province of Iraq serves a number of objectives and they are the reasons why we decided to send these people, it does not represent a broken promise. I mean this proposition that you can never change a position without being accused of breaking a promise is absurd, it's a new doctrine in Australian politics, governments often change their position in the light of changed circumstances, they would be foolish and stubborn if they didn't do so. But having said all of that, I acknowledged at the time that our decision, would not be popular and the polls would indicate that it's not got popular support but occasionally governments are required to take decisions that involve unpopularity.
JOURNALIST:
Alright you were speaking of our Asian partners there, the Chinese parliament has now passed laws which permit the use of military force if Taiwan declares independence, due to our treaty agreements with the United States who are giving the Taiwanese full backing, where would this place Australia in the event, as unlikely as it may be, of some, well hopefully unlikely as it may be, some sort of armed conflict in the area?
PRIME MINISTER:
Well John I don't believe there will be armed conflict and the goal of our policy whenever we engage on this issue with the Chinese, the Americans or the Taiwanese is to encourage calm and restraint and the peaceful resolution of differences and I am not going to get into hypothesising about how Australian might respond in the event of something that we would encourage, never occurs. I don't think anything is achieved by hypothesising about something which I don't think is going to happen and something that, it is in Australia's interest to do everything we can to prevent happening. Now everybody knows that Australia has no closer ally than the United States, now that is a given of our foreign policy, it's a given of so many aspects of Australian life, everybody knows also that we have developed a good relationship with China, we are different countries, China's not a democracy, Australia is, there are a lot of things in China that we don't agree with, equally however, we have very strong people to people links and we will work very hard to further expand that relationship. So it's in our interests to work at preventing anything from occurring and I am not going to start hypothesising about how we would react if those efforts were to fail, there is nothing to be achieved by that.
JOURNALIST:
Okay so that is a hypothetical situation, Mr Howard what about the situation between North Korea and South Korea, there's some war games going on there at the moment which North Korea are saying may turn into the real thing, what is your position on that?
PRIME MINISTER:
Well our view on that is that we should continue to work through the six party, six power talks which involve the two Korea's the Japanese, the Chinese and the United States, five power talks rather, in order to bring about a peaceful resolution of it and in this respect the Chinese have played so far, a very positive role and we would encourage China to go on doing that because China has more influence on North Korea than any other country, far more influence on North Korea than any other country and it's in everybody's interests, particularly Australia's, that that process go on.
JOURNALIST:
Alright let's move away from international politics for the moment and get back to one of the major issues that has been debated over the last couple days and that is taxation and Malcolm Turnbull is saying that the poor are paying too much tax and the rich are able to avoid it altogether and he wants a crackdown on high income tax with proceeds used to cut tax rates across the board and there are also calls from other Coalition MPs to give more tax cuts.
PRIME MINISTER:
Well everybody would like lower tax and that is a given. I didn't think that Turnbull had said that all the rich avoid tax, I don't' think he said that, I think he made an observation that some people...
JOURNALIST:
Well the rich are able to avoid...
PRIME MINISTER:
Well hang on, yes but that is different to saying that they all do, there is a lot of rich people I know who pay a lot of tax so let's understand that. Look everybody wants lower tax including me, including the Treasurer and could I remind you there will be a further reduction in tax, this is already in the pipeline, that will come into effect on the 1st July this year. Now so far as the coming Budget is concerned, our position remains as I have outlined it now, for the last few months and that is it is always our desire to give tax relief if we can, but we must first make provision for the necessary services of government. When we are not talking about tax, I mean we the community's not talking about tax, we are being asked to spend money on more things, it's either one or the other. Now there is a tension between the two, you cannot simultaneously spend more money and collect less which is really what is involved in tax relief. Now our view is this, that if we are able to give further tax relief after we have provided for essential spending and that's defence, health and roads and all of those things and provided we have a strong budget surplus which is all the more necessary in the light of the current weakness on our trade account, I think that will only be temporary, that weakness but it adds to the case for a strong surplus. If after those things have been provided for, we can provide further tax relief, we will now, it's impossible at the moment for me or the Treasurer to say, if that is going to be possible in the next Budget, I can only state the principle, it's pointless speculating as to what our exact position is going to be at the time of that Budget but that is the principle, that was the principle last year, was the principle the previous year, it's the principle now, and it's easy to call for tax relief, the hard part which is the responsibility of the Treasurer and myself and other senior ministers of course is to balance all of these things up and to make the necessary decisions that will be fair to the community, that will also preserve our very strong economic position.
JOURNALIST:
If our however one of the wealthiest men in Australia is saying the rich aren't paying their due share of tax, doesn't he have a point and wouldn't he be in a position to know that that's the case?
PRIME MINISTER:
Well I don't know that you have to be rich or to have a particular level of income to understand how the tax system works, there is a case which says that people who are outside the PAYE tax system, sometimes have greater opportunities for tax arrangements. But it's also fair to say that those arrangements are a lot harder to enter into now than they used to be. I get a lot of complaints today, these days, about the tax office, I always have and I always will because it's in the nature of people to complain about the tax office and many of those complaints say the tax office is being too tough on people and often being very tough on high income earners. So I'm not sure that this notion that the rich are evading their tax responsibilities, or avoiding their tax responsibilities is accurate, some of them do, but I don't accept that the great bulk of them do and as I say I know quite a lot of well remunerated people in this community who pay a lot of tax. And I also know that our Family Tax Benefits system has been designed to help low-income earners, and for example if you are a single income family with a couple of children and you're on $40,000 a year, when you take into account the tax benefits you receive effectively you're paying no tax at all because the value of the benefits is slightly above or equal to the amount of the tax that you pay.
JOURNALIST:
Well one could fairly think though it's a bit of an admission, I mean most people on the other side of the political fence have long believed that the rich don't pay enough tax...
PRIME MINISTER:
What's an admission I'm sorry?
JOURNALIST:
Well what I'm getting to here is that, say you're a rich man and a Liberal MP say the same thing will surely resonate with them?
PRIME MINISTER:
Well I can only state the position as it is. I don't think Malcolm said exactly what you're saying he said. But the truth is we have tightened arrangements in relation to tax avoidance a great deal, we've tightened them a great deal, and the notion that everybody on a high income escapes tax is completely false, completely false and there's just no evidence of that at all. And it's equally the case that I can say emphatically that all of our Family Tax Benefit changes have been designed to help low income people and in fact they're not available once your income goes beyond about $90-100,000, your combined family incomes, so therefore by definition none of the so-called rich people in Australia get the benefit of our tax relief for families. Now that couldn't be more skewed in favour of low and middle income earners.
JOURNALIST:
Alright Mr Howard, let's get a little more local, we believe you're coming to Queensland to have some discussions at state level with the hope of possibly getting the Coalition to get their act together a little. What can you possibly hope to achieve there?
PRIME MINISTER:
I think we're having the discussions in Sydney, but that's immaterial. Look I am having a meeting with John Anderson and Lawrence Springborg and Bob Quinn that arises out of proposals that Mr Springborg floated about an amalgamation of the two parties in Queensland. I'm not in favour of a state-based amalgamation, you can only ever amalgamate our two parties on a nationwide basis, that's been my view all along.
JOURNALIST:
Would you be in favour of that?
PRIME MINISTER:
All over the nation? Well if both parties wanted it and you could be certain that those people who currently voted for the National Party in rural areas of Australia would vote for the amalgamated party then it's something that I would support. But I think we're a distance from that and I'd point out to people who argue in favour of changing the current Federal arrangements, my Government has won four elections in a row in Coalition with the National Party and I challenge anybody to suggest that if we had been an amalgamated party we would have done better at the last four elections. You've got to understand that when parties amalgamate that amalgamation is only successful if all of the adherents of the two parties contributing to the amalgamation support the amalgamated entity. I mean if we had an amalgamation between the Liberal Party and the National Party that left a section of National Party supporters disgruntled and with the feeling that they'd been taken over by the city-based party as they would represent it and they formed a rump country party, that could in fact produce a worse outcome than the two parties remaining separate entities. Now that's speaking nationally. What I'm saying is that I'm totally opposed to the notion of a state-based amalgamation because that would produce effectively a third centre right party in Australia - that is a Queensland conservative party, and I'm totally against that, I mean I am the leader of the Liberal Party of Australia and my colleagues from Queensland are also members of the Liberal Party of Australia and the most important thing to me politically is the strength and the cohesion of the Liberal Party governing in coalition with the National Party and we have been politically very successful at a Federal level. What I think the parties have got to do at a state level is to work together, I mean I am in favour emphatically of a state Coalition. The Liberals and Nationals will never beat the Labor Party in Queensland unless they work together closely as a Coalition, they will never beat them. They think they can operate separately and win, that is a pipe dream, they have to operate in close collaboration and if they do that they can become again a very effective opposition.
JOURNALIST:
Yeah well I guess what you're saying here is that unless they're very careful it's shades of the DLP.
PRIME MINISTER:
No, I don't know if it's shades of the DLP but it's, well it's more opposition, that's what it is, I mean we have this phenomenon around the country at the moment where federally the Coalition has won four elections in a row, but at a state level we don't hold a single government. Now state parties have got to recognise that they will not get elected unless they perform effectively as oppositions for four years, not for four weeks, but for four years, or three years, in the case of Queensland. And you've got to provide a strong alternative right through the three or four-year cycle and in the case of Queensland the two organisations and the two parliamentary parties have got to understand the only salvation lies in working together, they've got to agree on which seats will be contested by which party, there will have to be give and take, there'll be some seats that the Liberal Party agrees to give up that will cause heartburning amongst Liberals and there'll be some seats the Nationals will have to give up that will cause heartburning amongst their own party. But unless they work together as a Coalition they won't beat the Labor Party in Queensland. And salvation does not lie in some kind of state-based amalgamation because the Federal organisation and the Federal parliamentary Liberal Party and I know the great bulk of Liberal Members in Queensland will oppose that and I'm sure that could well be the view of many rank and file members of the National Party. I mean the one great asset the anti-Labor parties have in Australia at the moment is the success of the Federal Coalition and the unity between our two parties based on respect and a close personal relationship between myself and John Anderson and all of his senior colleagues, that's a great political asset and I don't intend in any way to see that asset undermined or compromised.
JOURNALIST:
Liberals being the stronger entity at Federal level though, which is a different situation to what we have here in Queensland.
PRIME MINISTER:
Yes, I understand that, and clearly that has to be reflected in any Coalition arrangements. But we just have to be commonsense, we have, the Liberal Party of Australia is a cohesive, successful political organisation and I will not in any way be involved in any understanding that is going to fragment or diminish that, I think that's the overwhelming view of my Liberal colleagues. But I'm also cognisant of what has happened, we have won in Coalition and it's hard to believe that we would have done better with a different arrangement.
JOURNALIST:
Prime Minister, we've only got a couple of minutes left as the news is almost upon us, but just quickly the Nationals MPs and Senators, many of whom oppose Telstra's full privatisation, met in Canberra last night, John Anderson is saying they won't necessarily bow to any pressure from you to support the full sale of Telstra.
PRIME MINISTER:
Well John has said a lot of things and he recognises that we had a policy as a Government, as a Coalition Government, and he's also interested as I am in making sure that we have strong rules that guarantee competition, guarantee that Telstra is not able to dominate its communications rivals after a full sale of Telstra. We will work through these things in the spirit of co-operation and respect which has characterised a very successful Federal Coalition. And I don't intend to pre-empt the character of those discussions, except to say that we went to the election with a policy and we will be implementing that policy and that policy contains a very strong commitment to principles of competition and a desire on the part of rural members from both parties to see that facilities in the bush are well and truly up to scratch.
JOURNALIST:
Alright, Prime Minister thank you very much for you time this morning. Pleasure as always, look forward to talking to you again soon.
PRIME MINISTER:
Thank you.
[ends]