MITCHELL:
Prime Minister, Mr Howard, good morning?
PRIME MINISTER:
Hello Neil.
MITCHELL:
Prime Minister five million people in Rome for the Pope's funeral, it's an extraordinary outpouring, how do you read it? Why such public passion about this man?
PRIME MINISTER:
He was a very strong man. He was not only a great spiritual leader, not only of the Catholic Church, but in a sense all of Christendom. On top of that he did play a major role in bringing about the end of Soviet Communism - that role can't be underestimated. What he did in his native Poland to help the solidarity movement set off a chain of events that culminated in the fall of the Berlin War. I'm not saying he's the only person responsible. I would argue that Ronald Reagan played an even greater role in a political and a strategic sense, but the impact of his emphasis on the spiritual inadequacies of communism was fundamental in galvanising the attitude of a lot of people in Eastern Europe. And given that the fall of Soviet Communism has been the most pivotal event in my lifetime politically (I think it's the defining event in my generation and many other generations) that attributes, explains a lot of the adulation. He was also very widely travelled and he's also a great personality. I had the privilege of meeting him twice. I met him 1986 as Opposition Leader. I met him again in Rome in a private audience about two or more years ago and although he was then quite frail with the onset of Parkinson 's disease, he displayed a great sense of humour and there was a sparkle in his eyes and he was a character and the world loves character. Now when you pull all of those things together, he was also very tough.
MITCHELL:
That's what I was going to ask, a lot of people would have said he was tough, hardline on abortion, euthanasia....
PRIME MINISTER:
Yes. I mean I'm not asking everybody to agree with everything that he articulated, although his broad articulation of the central tenants of the Christian faith, I would naturally support very strongly but there'll - some of his views on some social issues that different people would have different views - I'm not here to dissect them. But you can disagree with somebody but still admire the strengths of their commitment to what they believe in and what was admirable about this man in so many ways - he was admirable - one of the things that was admirable about him was that he wasn't going to be suborned by what he regarded as fashion and passing fads; he was going to cling tenaciously to what he thought was right and that is always an admirable quality in somebody and certainly in a Pope.
MITCHELL:
On something else, the Reserve Bank seems concerned according to reports today about your interest rate campaign during the election. Do you accept that interest rates are now being politicised?
PRIME MINISTER:
No I don't accept that, can I just come.....
MITCHELL:
But on the very eve of the latest decision you were urging them not to put them up?
PRIME MINISTER:
Well...
MITCHELL:
Once upon a time...
PRIME MINISTER:
No, that's not right.
MITCHELL:
(inaudible)
PRIME MINISTER:
Well I've often said that I'm not going to talk about whether they're going to go up or down by a particular amount. But the idea that a Prime Minister never talks about interest rates...
MITCHELL:
You and the Treasurer have regularly said it is not proper to speculate on interest rates and on this one you said that they shouldn't go up?
PRIME MINISTER:
On particular movements. I said that there were some good arguments against them going up and I don't apologise for doing that and I don't think interest rates are being politicised. Interest rates are politicised when the decision taken by the bank (which has the power to set them) is governed by political and not economic considerations; that's when they're politicised. But the idea that they're politicised because the Treasurer or the Prime Minister offer a view... I mean we are expected to have views, it is unrealistic if somebody rings me up and says, John do you think interest rates, what influences interest rates, I mean I've got to talk about them.
MITCHELL:
So you don't see there's a change?
PRIME MINISTER:
I don't believe interest rates have been politicised, no I don't.
MITCHELL:
Okay what about the objections from the Reserve Bank about the campaign - the election campaign message - you were putting out that interest rates would be lower under you than Labor?
PRIME MINISTER:
Well I have been told there were no complaints made. As to exactly what the bank did beyond pass the material on, you'd have to ask the bank. We don't run the bank; it's a matter for them to deal with. But can I just go to the issue of whether anything dishonest was said in the campaign.
MITCHELL:
Before you do though, has the Australian Electoral Commission made any contact with the Liberal Party about the campaign?
PRIME MINISTER:
No, not to my knowledge. I haven't been told about it. I'm the leader of the Liberal Party. I haven't been told about it, no.
MITCHELL:
Okay, well I mean that's the report isn't it, the Reserve Bank talk....
PRIME MINISTER:
No that's not the report. The report is that the Reserve Bank was sent some material by some voters. I don't know who those voters were.
MITCHELL:
And it then asked the Australian Electoral Commission to investigate?
PRIME MINISTER:
No, I'm told it passed the material on. As to what exactly what form a covering letter took, you'd have to ask the Reserve Bank, I'm not privy to that. That's a matter for the bank, the bank should if it wants to, the bank can respond on that. I don't see anybody from the bank publicly quoted; there's a reference to officials but there's no reference to any public figure. But let's deal with the issue. Every single thing I said in the election campaign about interest rates was right. I mean at no stage did I ever say interest rates would not go up under a Coalition Government. I mean you remember asking me that and I stopped short of giving that guarantee. What I said was that over 30 years interest rates have risen to over 10 percent under every Labor Government, now that's true. And that was in our material and that was true from official figures available from the Reserve Bank and the Treasury. And the second claim I made which was also true, that interest rates would always be lower under a Coalition Government than a Labor Government, and we based that claim on our analysis of what Labor had been like in Government and the impact of the policies they were taking to the last election. Now I don't resile one word from what I said in the election campaign about interest rates. We did not promise interest rates would never go up. We promised that we would always have lower rates than Labor and that under previous Labor Governments interest rates had gone up. Now that's the truth and nobody can contest those facts and I don't care who looks at them. Everybody can examine those claims; they were true and can I tell you they were believed by the Australian people because they remembered the high interest rates under Labor and they had experienced the lower interest rates under us. Now that doesn't mean that there won't be some variation in the future either up or down - I make no promises about that.
MITCHELL:
Well where are they going, up or down in the future?
PRIME MINISTER:
Well I would believe that under present settings any significant rise is very unlikely and also any significant reduction is unlikely.
MITCHELL:
So what in the next year?
PRIME MINISTER:
I wouldn't think there would be a major variation in the next year. Now I use the word major variation in the next year - I don't think so, no that's my view. In the end the Reserve Bank will make a decision. Now let me just say immediately that is not heavying the Reserve Bank - it is being realistic on my part in expressing a view. I mean it is quite unrealistic in the present debate that's going on about the economy for the Prime Minister to be unwilling to have a view on interest rates and it's quite absurd of people; the Opposition, editorial writers and commentators to say that in some way it's improper or heavying the bank for me to have a view. I know every member of the Reserve Bank board. I know many of them extremely well, they are not shrinking violets, they are perfectly capable of making up their own minds. They're independently minded men and women who are quite capable of making up their own minds about what they're going to do and they will understand if they're sensible, and I'm sure they are, that it's the role of the Prime Minister to have a view and to express that view from time to time which I'm doing now. That is not heavying, its part of the proper operation of the Westminster System of Political Accountability. I'm accountable to the public, appointed officials are not. Appointed officials are accountable too, in terms of the legislation, but I've got to have views on a whole lot of things, and I do.
MITCHELL:
Just on money matters, the predictions of a surplus - $10 to $14 billion....
PRIME MINISTER:
Don't believe all of those.
MITCHELL:
Do you know what it is?
PRIME MINISTER:
Well I have of course... I have advice as to where it's likely to be given current settings but those settings and economic parameters can be altered as we get closer to the event.
MITCHELL:
So don't believe $10 to $14 billion?
PRIME MINISTER:
Well I'm just saying there's a lot of speculation and I'm not going to play this game of saying well it's not that but it might be something else. I'm simply saying...
MITCHELL:
But it's going to be bigger than predicted?
PRIME MINISTER:
Well we will achieve, for this current financial year, the outcome that was predicted at the time of the mid-year financial and economic review - I can say that. And the budget position will be strong but it needs to be strong to make a contribution to keeping the right influence as far as interest rates are concerned. It also needs to be strong at a time when the current account deficit is big so that we, through a strong surplus, contribute to national savings and don't further detract from them.
MITCHELL: Do you accept that a large surplus, larger than expected in fact shows that the tax system is becoming too onerous? I mean this money is coming from taxation obviously, you've been (inaudible) not coming from penny pinching?
PRIME MINISTER:
Some of it Neil is coming from increased tax collections, yes, but that is not necessarily because tax has gone up. The tax system we now have is more efficient than the one we used to have. In other words some people who in the past were not paying what they should've paid are now being required to pay by the new system. I don't regard that as burdensome or onerous. I regard that as good because it means that....
MITCHELL:
But even so you're talking about the GST?
PRIME MINISTER:
No I'm not only talking about the GST. I'm talking about the fact that the GST indirectly has brought more discipline and rigour to the rest of the tax system.
MITCHELL:
Okay well, I read today in the Financial Review you're talking about a tough budget. Why when there's this sort of surplus are we not talking about tax reform, about tax relief and about infrastructure?
PRIME MINISTER:
Well the time to get into the details of the budget are on budget night when Treasurer unveils it.
MITCHELL:
Well fair enough, what's the broad brush?
PRIME MINISTER:
Well the broad brush is that it will be economically responsible. We will be aiming for a solid surplus; we will be focussing on welfare, on workforce participation. There will obviously be other things in the Budget and I'm not going to speculate about it.
MITCHELL:
But is the headline a tough budget?
PRIME MINISTER:
No, I'm not going to start talking about headlines for the budget and to be fair to him, the Treasurer delivers the document and I'd like to allow him to shape the exact headline.
MITCHELL:
He can write it if he likes. We'll take a break.
PRIME MINISTER:
No, no, you fellas write it.
MITCHELL:
We'll take a break, come back with calls for the Prime Minister and more questions, 9696 1278 if you'd like to speak to Mr Howard. Incidentally just some news that's just breaking, there's good information the office of the Ballarat (inaudible), the Labor Member Dianne Hadden, who yesterday announced her resignation from the Labor Party, her office in Ballarat was vandalised last night and included the word rat written in the large letters across the front of her office. I hope to speak with her later.
[commercial break]
MITCHELL:
Several more questions for the Prime Minister who is our Canberra studio, but we'll take a call, Ian go ahead please.
CALLER:
Yes, good morning Prime Minister. You said a significant rise in interest rates, or major rise, what is that? Can we put (inaudible) on that?
PRIME MINISTER:
Well let me put it this way; I didn't regard a quarter of one per cent as being a significant rise. I mean obviously two, three, four per cent would be a significant rise.
MITCHELL:
Okay, thank you very much Ian. Prime Minister, do you agree with some in the RSL who have said that the medals for the men and women who went down that night in Nias, do you agree with some of them who have said you don't get a medal just for dying? Seems a bit harsh.
PRIME MINISTER:
Well, really I don't want to enter this debate and I agree with Bill Crews, the Federal President of the RSL, who said that it's a bit inappropriate to be debating medals before these Defence personnel have been laid to rest. I have had a look at the whole issue and the circumstances do disclose some deficiencies in our medals system in relation to humanitarian service, and this includes not only military personnel but also civilian personnel and I'm having a look at that. But this is not something that is in the nature of a military medal. There are long established procedures in relation to military medals and I can understand the majority of people in the Defence community and the RSL wanting to continue the practices of the past. But I am looking at any deficiencies that have been thrown up and these are deficiencies relating to the awarding of the Humanitarian Overseas Service Medal which covers service in hazardous circumstances overseas by civilian and military personnel and there are some deficiencies in that but I'm having a look at it.
MITCHELL:
What does that mean? If it's going to be changed will be changed quickly for these people?
PRIME MINISTER:
Well I think it's important with these things that it be done in an appropriate way and of course it's not something that should be done in a fashion that leads to other (inaudible) and other people who oughtn't to be covered in the future ... people who ought to be covered in the future being left out.
MITCHELL:
What about compensation and care for the families? Kim Beazley raised the issue of de factor partners, will they be cared for?
PRIME MINISTER:
Well the Act, as I have been advised, says that if you're living in a bona fide domestic relationship, whether married or not, you get the entitlements, that's what I've been told. So I don't think that is an issue. As to the adequacy of compensation, the law was rewritten last year and the benefits were made a lot more generous, and they needed to be. As to which individual gets how much is a matter between them and the authorities. It varies according to age and the number of dependents and I think it's appropriate that they be allowed to work out with the authorities, and they are given financial help to get financial advice as to what is the best arrangement for them. And if, at the end of that process there are any anomalies, well we're always willing to look at that. But I do want to stress that the system was changed last year and there was a lot of debate about it and it did involve the RSL and the Defence community and we believe the changes that were made last year did lead to a more generous scheme and we think it's fair and proper that people be allowed to sit down and work out what they're entitled to.
MITCHELL:
Some very quick issues, we're running short of time and a lot I want to ask you. The Schapelle Corby case, are we asking Indonesians prosectors not to peruse the death penalty if she's convicted?
PRIME MINISTER:
Yes.
MITCHELL:
Why?
PRIME MINISTER:
Because that's longstanding Australian Government policy. We always put in a plea for clemency in relation to the death penalty if an Australian is convicted.
MITCHELL:
Are you prepared to have her serve her sentence here?
PRIME MINISTER:
Well I don't want to pre-judge what is likely to happen in the court. Let me broadly say this, that we believe in the principle of Australians being convicted overseas, where it's appropriate, serving their sentences in Australia.
MITCHELL:
It's reported today the Malaysian Prime Minister is still concerned by your views on pre-emptive strikes. Can we restate them? What is your view on a pre-emptive strike on neighbours by Australians?
PRIME MINISTER:
Well it didn't come up in our discussions. My view simply is that as a last resort this country has the right to take action to defend itself. It's also my view that, so far as a country like Malaysia is concerned, it's a completely academic issue because we have a very strong defence association with Malaysia.
MITCHELL:
And that view of a pre-emptive strike is without informing the Malaysian or other government?
PRIME MINISTER:
Look it's very much a situation very unlikely to arise where - if we thought this country was going to be attacked and the source country were not willing to do anything about it, then we'd have a right to defend ourselves and I think most of your listeners would agree. But in practical terms it's not going to arise with a country like Malaysia, particularly as we have very strong defence ties with it.
MITCHELL:
No invitation to the East Asia summit, does that concern you?
PRIME MINISTER:
I didn't expect to get an invitation yesterday.
MITCHELL:
Do you expect to get one at some stage?
PRIME MINISTER:
Well that's a matter for the ASEAN foreign ministers to work out.
MITCHELL:
Do you want one?
PRIME MINISTER:
We'd be happy to go and we think that Australia should be part of that gathering. But the thing that matters are the relations we have with individual countries. But we had good talks yesterday and I don't want to say any more about it. The foreign ministers of the ASEAN plus three are going to go away and have their talks and we'll see what comes out of that. It's a matter for ASEAN to decide, we'd be very happy to participate but we are not knocking on doors begging admission - we don't need to do that. Australia is a strong, respected, involved country in the region and that will be the case whether or not we're at this summit. But I do think it would be appropriate given the level of our involvement that we be there and that's a view that's held by a number of countries, including, in particular, Indonesia and Japan.
MITCHELL:
Is it correct that Papua New Guinea is no longer going to accept aid from Australia? $800 million in aid because of what happened with Michael Somare?
PRIME MINISTER:
Well I don't think that will happen in the end. This is an incident we'll just have to work through, but it should be understood that what was applied here are the rules that apply to all of us. The last time I went overseas in January, on a commercial flight on the way to Davos, I put my bag through the X-ray machine like everybody else.
MITCHELL:
Take your shoes and belt off?
PRIME MINISTER:
No, because the alarm didn't go off, but I can tell you this that every time my wife travels domestically on a domestic airliner, and she does very frequently, she takes her shoes off because often she's wearing shoes that have got a metal band in them and rather than go through the business of the bell going off and having to go back she just automatically takes her shoes off, plonks them in that little container like everybody else and goes through.
MITCHELL:
You'd have no problem with doing that would you?
PRIME MINISTER:
No! Why would I? I've never had any problem with doing that. Well look, I mean we have a simple rule in this country that we do have these systems. And, I mean, if I go to another country and I'm asked to go through an X-ray machine I'm only too happy to do so. I frankly believe that these are things that if it's good enough for the rest of the community, it's good enough for the Prime Minister.
MITCHELL:
Just on the security issue - there's a report today about, and we've had many reports about baggage handlers pilfering stuff from luggage, there's a bloke getting around in a camel suit today, are you confident...
PRIME MINISTER:
Camel suit?
MITCHELL:
Yeah, camel suit taken out of their luggage by some fella who then got around in the airport in it, a baggage handler. Are you concerned about the level of security within these areas?
PRIME MINISTER:
Generally no, whenever an incident like this happens you get a bit concerned. But human frailty, I guess from time to time people do silly things. But we think we've invested a lot of money and effort into making the operations more secure.
MITCHELL:
Prime Minister, just finally, I know you're going to Gallipoli, we hope to be going as well, are there any travel warnings as yet on that that you're aware of?
PRIME MINISTER:
Not specifically.
MITCHELL:
Because there were last time.
PRIME MINISTER:
Yes there were and something may come along and if it does we'll be in the, I suppose, anomalous situation but unavoidable situation of saying this is the advice but I am, as Prime Minister, still going.
MITCHELL:
And just finally, could you pass a law to stop the American baseballers pinching Adam Gilchrist?
PRIME MINISTER:
I will seriously consider that. I don't normally like to regulate these things, but that would be a national disgrace.
MITCHELL:
Thank you for your time.
[ends]