MITCHELL:
Prime Minister, good morning.
PRIME MINISTER:
Good morning Neil.
MITCHELL:
The Middle East, an awful, awful situation. Is there anything Lebanon can do about Hezbollah?
PRIME MINISTER:
I don't think Lebanon is in a strong enough position because for years and years it's had governments or it has engaged in compromises which have just enabled Hezbollah, which appears to be directed out of and inspired by Syria, to run amok. One of the worries in all of what is happening at the moment is that the present Lebanese Government, weak though it may be, could fall and be replaced by a government even more heavily under the influence of Syria, as was the previous government in Lebanon and Hezbollah would have an even stronger hold on the support and acquiescence of the Lebanese Government.
MITCHELL:
Is it reasonable on that basis for Israel to be attacking Lebanon? There's not much Lebanon can do about it.
PRIME MINISTER:
Well there's not much in the sense that Lebanon lacks the will and to some extent, because of its attitude over the years, the capacity, but what else does Israel do?
MITCHELL:
So you think the action by Israel's justified?
PRIME MINISTER:
Well I think the initial response by Israel was justified because what triggered the latest episode, and bear in mind this is but the latest episode in a long running, ugly situation.
MITCHELL:
It is the worst for a long time.
PRIME MINISTER:
It is the worst for a long time but it was triggered by Hezbollah going across the border and seizing those additional soldiers in clear breach of international understandings, potentially in breach of international law and certainly against the wishes of the United Nations. There's not much doubt that the latest incident was triggered by the provocative, potentially illegal under international law behaviour of Hezbollah. Now that doesn't mean that this whole issue can be defined by what has happened over the past few days.
It's a long running issue and we will never have lasting peace in that area until two things happen, that there is a full and unconditional acceptance by other countries of Israel's right to exist behind secure and defensible boundaries and that she is free of terrorist attacks; and of course that there's a recommitment to the emergence of an independent Palestinian state.
Now that has been the Australian Government's policy now for years and years. It shouldn't be forgotten that Ariel Sharon, before he was struck down almost seven months ago, that Ariel Sharon had confronted what was regarded as the hard right in Israel by dismantling many of the settlements in the Gaza. And that was a very controversial thing for him to do, and it was a demonstration that he was prepared to confront the more extreme opinion in his own country in order to provide an Israeli contribution to a lasting peace settlement.
It's a great tragedy of course that Hamas won the last election in the Palestinian Territories because the previous government, although apparently very corrupt, was not as tainted with terrorist associations as has been the case with Hamas.
MITCHELL:
Are you concerned that this could lead to tensions within Australia?
PRIME MINISTER:
No I don't believe so. I think opinion in Australia except in the minds of a few is respectful of the fact that they are citizens of Australia. I mean there's a very strong sentiment of course for Israel's position, but there's also, although I am a well known friend and supporter of the State of Israel, I don't regard myself as an uncritical friend, and I have always argued very strongly that there has to be a total acceptance of the principle of a Palestinian state.
And there is that sense of grievance amongst Muslims and others around the world and I share the view that many people hold that we have to, no matter how hard it is, we have got to keep working away at trying to get a proper basis on which you can have a Palestinian state. But it was made much harder when Hamas won the last election.
MITCHELL:
But is Israel overreacting here?
PRIME MINISTER:
Well I think there's, some people are saying that, but obviously I'm like everybody else, I would like the violence to stop straight away. You say is Israel overreacting, well in a sense that's sort of avoiding the issue isn't it? Is Israel justified in defending herself against an unprovoked attack?
MITCHELL:
True. But we do ask various states to exercise restraint at times.
PRIME MINISTER:
Well I'm like everybody else. I want both sides to exercise restraint.
MITCHELL:
Oil prices went up around the world as a result. Are we in for a burst of economic pain?
PRIME MINISTER:
Could be. I hope not. But it's just another reminder of how subject petrol prices in Australia are to events like this.
MITCHELL:
Well the other aspects of that though is interest rates. I mean there are suggestions, broad suggestions today interest rates will inevitably go up next time.
PRIME MINISTER:
Well that will be a judgement the Bank will have to make. I suspect in light of the inflation figures that will come out later this month for the previous quarter, interest rates are driven more by inflation and inflationary expectations than anything else. We had some fabulous job numbers yesterday. I am quite impressed, perhaps even more so, really enthused by the strength of the job market in this country.
There doesn't appear to be any evidence of all of those hundreds of thousands of people who are going to be unfairly sacked when the new law came in, as predicted by the Labor Party, they said that millions of people would be vulnerable to unfair dismissal. That doesn't appear to have occurred. It was never going to occur. Of course it won't occur.
MITCHELL:
So where does it leave us on interest rates?
PRIME MINISTER:
I don't know. I think that's a matter for the Reserve Bank. It depends whether everything that's happening feeds into the underlying inflation rate and if the underlying inflation rate is affected then that becomes the biggest determinant of interest rates. Strong employment growth and strong wages growth, providing it's based on productivity, do not together constitute a case for an interest rate rise. It has to be something that is determined ultimately by the inflation level.
MITCHELL:
Of course the other aspect I suppose is the fuel prices. You've always argued that's the equivalent of an interest rate rise.
PRIME MINISTER:
Well many people do argue that. Many people argue that if the name of the game is to suppress exuberant demand and make sure the economy doesn't blow its head off, then the way in which you do that is to factor in the impact of petrol prices.
There is no doubt that the extra 20, 30 40 dollars a week that people have got to pay for petrol to do their normal things and to go about their normal business, there's no doubt that that is having a depressing effect on expenditure in other parts of the economy and the tax cuts that have just come in of course are a very welcome offset to that. And people would be a lot worse off if it hadn't been for those tax cuts that were in Peter Costello's last Budget.
MITCHELL:
Hello John. Go ahead please John.
CALLER:
Good morning Neil. Good morning Mr Howard. Neil, I've got my wife and three children in Lebanon.
PRIME MINISTER:
Oh dear.
CALLER:
Now with all this business that's going on, everybody is aware that the Lebanese Government cannot control Hezbollah. You know, and everybody's saying that you know, the Government that's responsible for what happens on its soils, but it's been known for years and years they've never had control. Syria had control before, prior to that, when the Israelis invaded in the 80s.
MITCHELL:
Where are your family John?
CALLER:
They are in East Beirut fortunately.
MITCHELL:
Visiting?
CALLER:
Yeah they were supposed to come back on the 20th of next month, but now they can't, everything is blockaded.
PRIME MINISTER:
Have you been in touch with them John?
CALLER:
Yes I have, they rang me this morning.
PRIME MINISTER:
And are they ok?
CALLER:
They are ok, but it is escalating now, they are very concerned. My kids are 10 and eight, you know.
PRIME MINISTER:
Dear, oh dear, oh me. I obviously feel very much for you and when do you think they might be able to get out?
MITCHELL:
Any indication John, when they can get out?
CALLER:
They don't know, they are not giving any information out.
PRIME MINISTER:
There is a hotline, I don't have it in my mind, but I am sure that we can through the programme give it to you, the Department of Foreign Affairs, which you can ring and they can provide you with as much information which has come to our hands.
MITCHELL:
Hold on John we will help you with that...
PRIME MINISTER:
...I am very sorry John and I do hope that you get them back safely. It must be very worrying for you.
MITCHELL:
We want to get all Australians out as quickly as possible.
PRIME MINISTER:
Indeed.
MITCHELL:
We'll take a break and we'll come back with more calls, more questions for the Prime Minister in moment.
(Commercial Break)
MITCHELL:
The Prime Minister is in our Canberra studio and about to head off to the COAG meeting. Mr Howard, how do you feel, the Government is going along nicely, everything is nice and smooth, suddenly there is leadership crisis and leadership tensions. Were you a bit angry that Peter Costello provoked this?
PRIME MINISTER:
Well I don't think the last week has been a good week for the Government, but I am not going to comment in any way on Peter. He is my Deputy and we are still colleagues and my responsibility is to work with all of my colleagues. I think it is interesting to note that despite an obviously bad week, there is no point in pretending otherwise on the leadership front...
MITCHELL:
...but it was unnecessary wasn't it?
PRIME MINISTER:
Well I will leave that to commentators to talk about, I really don't want to get into commentary myself. In the midst of all of this we have these fantastic job figures, we have a huge reform agenda to deal with this morning and we've unveiled some major media reforms, so nobody can say the Government is being diverted from its core responsibility to continue developing good policy.
MITCHELL:
Sounds like no need to change the leader?
PRIME MINISTER:
Well I think you know the views of my party on those matters.
MITCHELL:
There is a serious point here. Geoff Prosser, one of your backbenchers in Western Australia told me it was all Peter Costello's doing and nothing to do with you. Now how can you let a party go on like that?
PRIME MINISTER:
Well I am not going to respond to each and every thing that people say. I have 107 free-spirited, free-wheeling, free-minded men and women in the federal parliamentary Liberal Party. I can understand everybody having a view on these things, but you know as well as I do nothing is achieved, certainly nothing for the benefit of the Government by my continuing a commentary on every piece of commentary by somebody else.
MITCHELL:
What about the people, do you believe seriously that the people of Australia will look at you and Peter Costello as a credible team, will you go the next election as a team?
PRIME MINISTER:
Well, we were a very good team at the last election, we remain a very good team, this has obviously been a difficult period, but I know that he Australian public pay on results, they look at us and they, look at yesterday, I mean, 4.9 per cent unemployment, another 52,000 jobs, I mean this economy is so strong and we were told, these changes are going to lead to widespread sackings and everything, well they don't seem to have materialised and I knew they wouldn't.
MITCHELL:
Can you win an election without Peter Costello as Treasurer?
PRIME MINISTER:
I want Peter as apart of the team and...
MITCHELL:
Do you want him as Treasurer?
PRIME MINISTER:
Peter is a great Treasurer and I am very happy for him to continue as Treasurer for so long as he wants to.
MITCHELL:
Do you have a plan B if he doesn't want to?
PRIME MINISTER:
Look I am not going to hypothesise.
MITCHELL:
Is Alexander Downer a possibility as the next Treasurer?
PRIME MINISTER:
Alexander Downer is doing an outstanding job as Foreign Minister and you really have the three of us who have been in our respective positions since March of 1996, myself as Prime Minister, Peter as Treasurer, and Alexander as Foreign Minister and the stability and strength in those areas has been in a sense the centre pole of the tent.
MITCHELL:
Would you agree the stability has gone now?
PRIME MINISTER:
No, I think we have had a bad week.
MITCHELL:
Did you consider at any stage sacking Peter Costello?
PRIME MINISTER:
Certainly not.
MITCHELL:
Has he been disloyal?
PRIME MINISTER:
He has not done anything to warrant sacking and look I am not going to, I am obliged and quite properly so to answer that question because it has never entered my head. As to my passing observations on him, I am not going to get into answering other questions, he's expressed views and people have heard them and I decline to be further drawn on it.
MITCHELL:
You have said you will stay as long as your party wants you. They clearly want you, does that mean you'll stay?
PRIME MINISTER:
Well that is an issue that I've dealt with over the past couple of days and I continue to talk to my colleagues. I think part of the process of being a good leader is being in constant dialogue with one's colleagues and that is what I am.
MITCHELL:
What are they telling you?
PRIME MINISTER:
Well all sorts of things, but they do like certain confidentiality in those discussions.
MITCHELL:
Would it be fair to say that they want you to stay?
PRIME MINISTER:
Well I have expressed a view in the past few days that the overwhelming majority of my colleagues are happy with the current arrangement, now I can only repeat that view.
MITCHELL:
Obviously you are well entitled as anybody is to make a decision on your own future when you are ready. You are in a different position clearly because the whole country is waiting for it. When can we expect a statement?
PRIME MINISTER:
Well all I can say Neil is that I will continue to talk to my colleagues about that matter, I am not going to be stampeded by any particular events.
MITCHELL:
So do you have a timetable by which you will announce it or not?
PRIME MINISTER:
I don't want to say further on that, I will speak further on that. Just bear in mind, and I mean this very politely, that I was elected as Prime Minister in 2004 having said exactly what I now say and that is that I will remain leader as long as my party wants me to and it's in the Party's best interests that I do so. I didn't say then that by a particular date I would announce what I was doing. So I don't feel in the context of my relations with the Australian people that I've been anything other than totally candid.
MITCHELL:
It's not just about what you're saying now, it's what your Deputy's saying.
PRIME MINISTER:
I realise that, I do realise that but I also continue that dialogue with my colleagues.
MITCHELL:
Do you sense there's a deputy standing behind you with a great big knife?
PRIME MINISTER:
I don't feel uncomfortable.
MITCHELL:
Very well. It has been an extraordinary week hasn't it?
PRIME MINISTER:
It's been an interesting week.
MITCHELL:
Have you had one like it before? Peter Beattie says Peter Costello's political adviser must be General Custer.
PRIME MINISTER:
Oh look, I mean...they're Labor Premiers and you know what they're about.
MITCHELL:
Well, but they're supporting....
PRIME MINISTER:
Oh well, hang on, Peter Costello is my Liberal colleague.
MITCHELL:
...remember that...
PRIME MINISTER:
No, well, no, he is my Liberal colleague and we're on the same team. I mean not that I bear any personal animosity to Labor Premiers, my job is to work with them, but I've been around long enough not to actually get lulled into thinking their comments are, how shall I put it, eternally constructive and benign.
MITCHELL:
Okay final question on this I think, but has this damaged your personal relationship with Peter Costello?
PRIME MINISTER:
I think we'll continue to have a good personal relationship. Clearly you...when you're working close with somebody in the Government things have difficult periods, but we've....
MITCHELL:
But it's usually a policy?
PRIME MINISTER:
We've been able over the last 12 years to work together very closely and I stand by what I said on Tuesday that we'll work together in close professional harmony, well that's my desire anyway.
MITCHELL:
And you believe that the public will accept that, if you go to the next election as a double act?
PRIME MINISTER:
Look I think the public will react to us according to how we behave and what we do, and most particularly, what we do for them. After all, our job is about what we do for the public, not what we do for ourselves and they're not as wound up about timetables and dates and who said what when, they want to know what we're doing next for them, which is their entitlement.
MITCHELL:
Prime Minister, a couple of quick things, the Kokoda mine....
PRIME MINISTER:
Well I sought some information about that. The short answer is yes, I'd like to know more about that.
MITCHELL:
Okay, you haven't got the information yet?
PRIME MINISTER:
No.
MITCHELL:
World Cup bid, would you like the World Cup in Australia?
PRIME MINISTER:
Yes.
MITCHELL:
Will you still be Prime Minister when it comes?
PRIME MINISTER:
Oh look, I can definitely say there will be another Prime Minister there, definitely say that, definitely, gee heavens above. Look we discussed it briefly last night over dinner at The Lodge and the bid has to come from the Football Federation of Australia, Frank Lowy and John O'Neill.
What I'll indicate is that if the Football Federation chooses to make a bid, all Governments in Australia, the Commonwealth and the eight State and Territory Governments will all support that bid and do everything we can collectively to help it come to a successful conclusion.
MITCHELL:
Changes to the media laws which I don't think rivet the public actually...
PRIME MINISTER:
No they don't. They rivet many commentators and some media proprietors, but they certainly don't rivet the public.
MITCHELL:
The... I remember very well last time the changes to the law under the Labor Government, there was buying and selling going on before the law was even written, do you think that'll happen again and would you advise against it?
PRIME MINISTER:
Well I always advise people never to assume Parliament will do what the executive says it will do. This Parliament is like any other Parliament, it has the final say. I certainly think people should base commercial decisions on what the law is, not on what the law might be, that goes for anything. I don't think you might have the same reactions, because in part if my memory serves me correctly, the decisions that were taken in 1987 were a product of commercial hopes as much as the commercial behaviour was a product of the decisions taken.
MITCHELL:
COAG meeting today, is double jeopardy on the agenda?
PRIME MINISTER:
Yes, very briefly. We had a talk about that last night. I personally think the law should be changed in strictly limited circumstances, so do other states, some States have a different view and I guess we'll try and find a way at a COAG level of having the issue looked at.
MITCHELL:
We'll take one very quick call for the Prime Minister to finish. Shaun go ahead please.
CALLER:
Thank you. Firstly Prime Minister thanks for 10 years of good government, it's refreshing to have good government, so thank you for that, Prime Minister. My question is that with regard to Israel, I see Australia being pretty much, or appearing to be pretty much blindly supporting Israel and I'm constantly frustrated that the Israelis seem to expect that you can have good government in the Middle East with them destroying the instruments of government. I mean they've destroyed the Palestinian authority yet there's no infrastructure left and now they seem to be doing the same thing in Beirut, yet we keep saying to them, you know, good lads we're behind you.
PRIME MINISTER:
Well the reason, I mean we don't say we unblinkingly and blindly follow Israel, I don't think Israel's always right. Of course, Israel's not always right, but what has to be said in defence of Israel is really two things. Firstly it is the only true democracy in the Middle East, that's got to mean something.
I have never forgotten the sight of Ariel Sharon in mid sentence in an election telecast, and the power was pulled on him by the Israeli electoral authority because they thought he'd infringed the electoral laws and it also should be in defence of... said in defence of Israel that it does have a properly functioning judicial system. I mean one of the most notorious war criminals with a nickname of 'Ivan the Terrible,' you may remember was I think John Demjanjuk or named something like that was deported to Israel from America and he was freed by an Israeli superior court because they weren't satisfied that enough evidence had been accumulated against him.
Now they are the acts of a country that does believe in democracy. I think the second thing is that the root cause of so much of the difficulties in the last decades in the Middle East is the refusal of so many other countries and other groups to recognise Israel's right to exist. Now if that could be fundamentally and unconditionally accepted I am sure that we could make progress. But that doesn't mean to say Israel's perfect, it doesn't mean to say they're not on occasions pig-headed and they don't overreact.
MITCHELL:
Prime Minister thank you for your time, inevitably I have one last question. I do hear that you dropped into McDonald's this week.
PRIME MINISTER:
I did.
MITCHELL:
And that you found time to watch Dancing on Ice or some of it.
PRIME MINISTER:
I did watch Dancing on Ice.
MITCHELL:
Do you ever get the feeling the ice that you skate on politics is a bit thin?
PRIME MINISTER:
I've had that feeling for 32 years.
MITCHELL:
What about this week?
PRIME MINISTER:
Oh well I suppose I've been watching my footwork even more closely.
MITCHELL:
Thank you for your time.
PRIME MINISTER:
Okay.
[ends]