STEFANOVIC:
To talk taxes and much, much more, including the cricket, Prime Minister John Howard joins us in the studio now. Good morning to you Prime Minister.
PRIME MINISTER:
Good morning Karl.
STEFANOVIC:
You are looking a little bit blurry-eyed today.
PRIME MINISTER:
I am. A fantastic finish. I thought we would win it, when Lee bowled Flintoff, I thought we could win.
STEFANOVIC:
It has been the most remarkable series.
PRIME MINISTER:
A wonderful series and Shane Warne has been Australia's greatest player in this series; he is just a fantastic bowler and he keeps coming. He loves tight finishes.
STEFANOVIC:
How do we address the woes though, Prime Minister?
PRIME MINISTER:
Well I'll leave that to the selectors.
STEFANOVIC:
Alright let's get on to taxes now. On Friday you flagged your support for reducing the top tax rate in this country. Have we moved a step closer to some sort of official change?
PRIME MINISTER:
No, I was a little surprised that people saw that statement as something big and new. I've said before that I think that the top rate is a bit too high. But in the last Budget we brought in changes which will mean that from the first of July next year only three per cent of Australian taxpayers are on the top rate. So in a sense we have reduced the relevance of the level of the top rate by pushing up the threshold and the big change in the last Budget was that from the first of July next year the top rate won't cut in until $125,000 a year. That means only three per cent of Australian taxpayers will actually pay it. And on top of that, 80 per cent of Australian taxpayers, I think a little more, about 83 per cent, will be paying no more than 30 cents in the dollar. So I think when we're talking about the top rate, and I'm not going back on what I said in any way but I think when we're talking about that top rate we have to keep in perspective that very, very few people ever hit it. And particularly now that we've pushed it up to $125,000. It used to be stuck at $60,000 courtesy of the Labor Party and the Democrats in the Senate. But now we've been able to push it through to $125,000, although the Labor Party voted against it but fortunately we had the numbers in the Senate to bring it about.
STEFANOVIC:
So what you're saying is that there won't be any immediate change to that top rate at all?
PRIME MINISTER:
No, what I'm saying is that we are always in favour of lowering tax. It's a philosophy the Treasurer and I both have, that if you balance the Budget, you've provided for defence and health and education, anything that's left over you give it back to the taxpayer, particularly if we've paid off most of our debt. Now that's our philosophy and when it comes to the Budget we look at the best way, if there's money over, the fairest way of handing it back. And you've got to have a mix; you've got to make sure that the incentives are there so that the hard workers don't get too much of it taken in tax. You've also got to make certain that the other hard workers in the community, the low and middle income family people also get relief. And we've been able to do both and let me remind you in the last Budget the Labor Party voted against tax relief. Now they're running around now saying they're in favour of lower taxes. Well they didn't behave like that when the last Budget was before the Parliament.
STEFANOVIC:
Can I ask you what you think the ideal tax rate should be? Should it be 35?
PRIME MINISTER:
I'd not wedded to any particular rate, and I think there's a lot of unreality in this debate. People are talking about middle class welfare, that is code for saying that they want to get stuck into the Family Tax Benefits system and I want to make it clear I'm opposed to changing the Family Tax Benefit system because it has underpinned the situation where low and middle income families have done better in relative terms than the really well off.
STEFANOVIC:
How does all this debate and discussion that's going on, obviously more outside your party at the moment, sit with the Treasurer?
PRIME MINISTER:
Well I think it sits very easily with him because he, like myself, believes in cutting tax when we can - both of us took the view at the time of the last Budget that the priorities should be on increasing the tax free threshold. I mean that was a joint decision that he and I took and there is no difference in our approach. We are both in favour of lower tax and I have previously said, I said on the eve of the last election that I'd like to see the top rate go down but it's not as, getting it down was not as big a priority to me or to Peter in the last Budget as it was increasing the threshold and when you've only got three per cent of people paying it as from the first of July next year it really does put it into perspective. But where opportunity arises we will cut taxes further. But I think you've got to be realistic about it.
STEFANOVIC:
Australians do need to smile this morning after that loss, can you at least guarantee a short way down the track that there might be a cutting in that top tax rate?
PRIME MINISTER:
Well can I say to the 97 per cent of people that there's only three per cent of the others who are paying it. Look, we are in favour of lower tax but I'm not going to commit myself to some kind of timetable. And there's nothing new about us declaring that we're in favour of lower tax and we did it in the last Budget. I mean that was a fantastic reform, only three per cent will pay the top rate and it won't cut in until $125,000 a year. Well your viewers will know that not many of them earn $125,000 a year and in those circumstances not many of them from the first of July next year are going to hit that top rate.
STEFANOVIC:
Alright, let's move onto terrorism this morning. France's top terrorist investigators are being quoted as saying al-Qaeda is preparing for an attack on a big financial centre and Sydney could well be a target. I presume you're not all that surprised by that statement?
PRIME MINISTER:
No, we have been a terrorist target since before the attack on Washington and New York in 2001. And no nation is immune from the possibility of a terrorist attack.
STEFANOVIC:
Does it concern you that they've specifically mentioned a financial target and Sydney being a specified target?
PRIME MINISTER:
A lot of things concern me about terrorism, Karl. I've been concerned for a very long time and I'll continue to be concerned because trying to cover every base and anticipate every move is a very challenging task. But we are a potential target, not as exposed as some but we are a potential target.
STEFANOVIC:
Is there anything specific that you're doing in response to that? Or is it just part of...
PRIME MINISTER:
Well it's part of the general torrent of warnings and predictions that we have. We continue to upgrade our intelligence services. I've just announced, or the head of my Department has just announced Major General Duncan Lewis, a former SAS commander, as the top anti-terrorist bureaucrat in Australia, he's Deputy Secretary of my Department. We're doing different things virtually every day, we're talking to the States, I want to work with the States on this because we're all in this together, this is not just something for me and for the Federal Government but it's very challenging and we have every reason to take all the precautions we can.
STEFANOVIC:
You're comfortable that we're sitting okay though?
PRIME MINISTER:
Well I am comfortable that all is being done that can be done, but I am not comfortable and not happy about the fact that we in the modern world have to cope with terrorism.
STEFANOVIC:
Alright, making news this morning, frontpages of the papers in New South Wales at the very least, is John Brogden's comments about various things, including Bob Carr's wife. Where do you stand on his comments?
PRIME MINISTER:
Well what he said was quite wrong and he owes Helena an apology. A very big apology.
STEFANOVIC:
Should he resign?
PRIME MINISTER:
Well look his future is obviously a matter for him and it's a matter for his parliamentary colleagues, that's a matter for the State Parliamentary Party. But that sort of comment was just quite wrong. I know Helena Carr, she's a very gracious person and that sort of comment should never have been made.
STEFANOVIC:
Is it realistic to expect that a political career can survive comments like those?
PRIME MINISTER:
Look I'm not going to get into that. And he's apologised and I'm sure he's very remorseful and I'm sure he'll have something to say both publicly and privately about the matter and I'm not (inaudible), don't read anything into my remarks, you've asked me what my position is, I've made it very clear. His position (and his future) is in his hands and that of his parliamentary colleagues.
STEFANOVIC:
Prime Minister it's been a pleasure talking to you this morning, thank you very much for coming on Today. And you haven't in the time that we've been talking come up with any ideas on the Australian cricket team at all?
PRIME MINISTER:
Well can I just say that, I mean McGrath will be back and you know they've really still showed a great capacity and let's look on the bright side - our win in the first test was much more emphatic than their win in Edgbaston or last night. There you go, there's optimism for you.
STEFANOVIC:
We're holding on aren't we Prime Minister. Thank you so much for joining us.
PRIME MINISTER:
Thank you.
[ends]