Subjects: Tax reform; ABC; Centenary of Federation Trip.
E & OE……………………………………………………………………………
LOANE:
You have been out and about this morning haven’t you? Telling us not to worry tomorrow when we go to the shop.
PRIME MINISTER:
Well I have Sally because it’s been easy up until now for those who would want the tax reform plan to fail to spread a lot of fear and disinformation and frighten people and now of course the phoney war stage is ended and it’s the real thing tomorrow and when people go along to the shops, particularly the supermarkets, they will I expect be surprised that not everything has gone up by 10%. That was never going to be the case and they will also be surprised that some things have remained the same and some things will actually go down in price. And then as the days go by, workers will get their pay packets and they will find that less tax is being taken out and I guess it will take several months before people get a real fix on it and can make up their own minds. The good thing is that we will be dealing in reality and not in argument and assertion and supposition and projection and assumption.
LOANE:
It’s always been hard hasn’t it? We’ve always said we’ll have to suck it and see. This one, we really don’t know.
PRIME MINISTER:
We have tried to make projections and I know you may think…certainly my critics will think it’s self serving to say there is a difference between a commitment and a projection but when you introduce something like this, you ask your experts to say to you what impact do you think this will have on a certain item and you get a projection. Now you can’t be a hundred per cent certain that that projection is accurate and I think what people are going to find over the weeks ahead is that some things are not going to go up as much as we have said and in some other areas they may go up a little more than we’ve said.
LOANE:
Like petrol, that’s been, I guess your Achille’s heel on this.
PRIME MINISTER:
Well there is a big debate about that. We will wait and see what happens. But even that, you are talking about a margin of probably a cent a litre. Now I am not saying that’s insignificant but we’ve just got to keep a sense of proportion about it and Woolworths I notice have said they are going to hold their prices exactly as they are. Well that might set up a few competitive forces in the market. Now if they can hold them, petrol consumers may well ask why can’t others, but petrol prices bounce around a lot. They were 82 to 83 cents a litre on a capital city average earlier in the week and by the end of the week, they were up to 86 or 87. Now that is not the GST, because the GST doesn’t start until tomorrow.
LOANE:
I hope not.
PRIME MINISTER:
Well it can’t be. It doesn’t apply to them. I am just making the point that petrol is one of those commodities that can go up and down for a whole variety of reasons and it may and over the days ahead, it could move around and it will be very hard out of all of that to say for certain is that due to the GST or is that due to other reasons. I don’t know because it’s a volatile spot market they operate on.
LOANE:
Prime Minister I have read in dispatches that you’ve been quite surprised at the complexity of this whole project, reforming the tax system. It’s been a very tough one for you. Are you worried, are you nervous about things tomorrow and concerned for the future that maybe this government maybe you’ve bitten off more than you can chew in trying to reform the whole tax system?
PRIME MINISTER:
I don’t know that I have been more surprised at the complexity than I expected. I don’t know who’s dispatch that was but anyway, I always knew it would be complex. Am I nervous? No, I am not nervous. I am conscious of the magnitude of the change and I am very conscious that the transition to the new system does impose a lot of work on the business community in particular, smaller operators and I thank them for their patience and cooperation and I am also conscious that like any big change, there is an adjustment process, but I am not nervous. I really believe in this change, very strongly indeed and I think it will be good for the country. I am sure it will be good for the country and whatever judgement people make, I will naturally accept, but I am sure it will be a very positive one. I wouldn’t have undertaken it otherwise because it has been very difficult from a political point of view. We’ve taken a lot of hits over the last couple of months.
LOANE:
And they are not going to end are they Prime Minister.
PRIME MINISTER:
No, except that we will have from tomorrow Sally, the armoury of reality, which is a far better weapon than simply denying allegations. I mean you can actually point to things and say well there you are. I mean if something doesn’t behave as predicted over the next few weeks and it behaves better than people alleged, doesn’t matter what’s been said up until now, people are going to react to what they actually experience and it is a generational change. It’s something this country has wanted for a long time and it’s a lot more than the price of things. What you’ve got to remember is, and it’s also more than tax cuts, although they are very important. We are going to give a guaranteed revenue base to the states. I think we are now living in a community that, particularly in country Australia, that is interested in services. It’s lost a few services over the past few years. They want to think that we in the national Government as well as state governments are developing arrangements that can guarantee service delivery a little better than perhaps had been the case in the past.
LOANE:
How hard has it been keeping, I suppose keeping the ticker going in your back bench. I know there is a lot of nervous back benchers who are worried about the next election. They are on slim margins. How hard has that been, you know keeping them up to the mark, keeping them confident…
PRIME MINISTER:
They have been magnificent.
LOANE:
If not nervous?
PRIME MINISTER:
Well that is the nature of things and you don’t, there is nothing in this life that’s worth attempting, let alone achieving that doesn’t involve periods of introspection and is it the right thing to do. Of course you go through that kind of thing, but I have never had any doubt that we had to do, once we started that we had to see this thing through and I know on occasions people must have wondered why. But the backbencher has have been very good. They know it’s for the good of the country and one of them said to me last night, it’s been difficult on occasions but it is far better to have tried something like this then to have sat there and done nothing. I didn’t get elected to parliament to sit there and do nothing.
LOANE:
A lot of people have said, Prime Minister do you regard this tax reform as your greatest achievement. I mean will you still regard it as that even say, you get a back lash at the next election?
PRIME MINISTER:
If the public throw me out because of this, well I will accept that. I will still believe it was the right thing for the country.
LOANE:
Your biggest achievement?
PRIME MINISTER:
Well I think it’s often for others. I mean I am very proud of gun control Sally and I am very proud of the leadership we displayed in East Timor. I am very proud of the fact that we’ve got the budget in…and we were able to build an economy that stared down the Asian economic collapse. All of those things are great achievements. In the end, it’s for others to write of my achievements and you don’t sort of start reflecting on your achievements when you still have a lot of other things you want to do.
LOANE:
I was going to ask you about the size of the black economy. I know there has been a couple of conflicting reports out of this. Mr Reith, he reckons it’s big and that Treasury will reap in a lot more tax than what they otherwise might have thought. Would you agree with that? I know the black economy is something that worries the government but there are a lot of people who say look a GST will actually exacerbate the problem.
PRIME MINISTER:
I don’t think it could possibly do that.
LOANE:
Not even in the scale of it?
PRIME MINISTER:
No, but it’s also the fact that the introduction of the Australian Business Number as much as the GST is the thing that will hack in to, no pun intended, hack in to the black economy.
LOANE:
That’s something that you have been wanting to do, isn’t it?
PRIME MINISTER:
Yes and I think all of your listeners should want to do that because you and I pay our tax. Your listeners pay their tax but there are some people out there who don’t and if part of the tax reform process is that people, more people are paying their fair share, well that’s got to be good all round and look I don’t know how big the black economy is. I don’t have any information on which to base a claim that the collection from the black economy is going to be bigger than we anticipated. I don’t have any evidence of that.
Peter Reith was expressing a personal intuition of his own, well he is entitled to have that. I don’t know, I have to calculate on the basis of hard evidence and the data that the Treasury put in the estimates is conservative as it should be. If we collect more, well that’s fine, but I’m not either counting what that is, or planning on how much I might spend. I think that is ridiculous.
LOANE:
Some people have written with the GST in the lead-up in the months and the years that we’ve become a bit of a nation of whingers about this, we’re always crying look, you know this is too hard, this is terrible, we’ve had media reports of small business who say I am going to go out of business because of the GST. I mean do you think we are whingeing, we have become whingers?
PRIME MINISTER:
Well I think some of the media reporting is in that vein, very much so. I think . . . I don’t know that it echoes the public. My takeout is that the public is more capable of and willing to embrace the change than some media outlets are suggesting. But, we’ll wait and see. It’s about to start, there’s only what? A few hours to go now, we’re counting down.
LOANE:
You’re counting?
PRIME MINISTER:
Yes. I think it is, I mean you go into public life to try and do something positive and something that is for the longer term to try and make a change for the better. Now Sally, you’ve reported politics for a long time, you know that there’s been debate about the need for a new tax system for a long time on both sides of politics.
LOANE:
Yes.
PRIME MINISTER:
And I don’t think there’s been a person in national political life over the last twenty years who’s made a serious contribution and I say on both sides of politics, who doesn’t know, hasn’t known deep down that one of the things we’ve needed to do is to fix our tax system. We’ve had to do other things, we’ve had to get the Budget in shape. We on our side of politics have argued very strongly we should reform industrial relations, the Labor Party’s clearly had a different view on that because of its union connections. But we’ve really needed this tax reform for a long time and at long last it’s arrived.
LOANE:
Mr Prime Minister, if I could just guide you now onto another issue – digital television which of course affects us here at the ABC. The legislation went through the Senate. It appeared as though you were able to win over Labor to your side with, I’m going to talk to Viki Bourne from the Democrats about this. But you have placed restrictions on the public broadcasters, on the ABC and SBS, they will be unable to show sport, movies and comedy on their new digital channels. They will be quite restricted. It appears . . .
PRIME MINISTER:
On their multi-channels.
LOANE:
Yes, that’s right.
PRIME MINISTER:
But of course, the other, the free-to-airs can’t multi-channel at all. So when you say restrictions, I mean the ABC’s able to do things that the free-to-airs can’t.
LOANE:
Wouldn’t have been better though to have a deregulated market? I mean you’re a believer in the deregulated system and the level playing field. Why don’t we ever get a Government that wants to deregulate the media industry properly instead of what appears to be leaning towards one media mogul or another?
PRIME MINISTER:
Well, I seem to remember a few years ago I raised the possibility of changing the cross media prohibitions. Which are very regulatory and I argued then that conversion, conversion was changing the world in which we all lived. And there wasn’t any support for that, anywhere. Well, one or two areas of support, but not many. And . . .
LOANE:
Do you think people…the scene has changed ?
PRIME MINISTER:
Well, I don’t, I know I keep reading that. I read that Fred Hilmer was arguing for an unrestricted approach. And I’ve heard others argue for that, but there’s not a country in the world that doesn’t have some regulation of its media. The Americans have very heavy regulation. I mean that is the reason Rupert Murdoch became an American citizen because of the requirement of American law. There are heavy media restrictions in the United Kingdom. I mean I don’t regard the present media laws as being all that satisfactory, but . . . .
LOANE:
Would you like to see a bit more on your national broadcasters though?
PRIME MINISTER:
Well you are going to get a lot more. You’re going to get multi-channelling. Something that the others don’t have. I mean, I know I’m talking to the ABC, I talk to the ABC a lot. And it’s a very important part of our national institutions, but there are going to be facilities for multi-channelling that will be available to the ABC and SBS that aren’t available to Channel 9 or Channel 7 or Channel 10.
LOANE:
So, you’re saying look what we’ve got now, what we’ll have in place will be compromised.
PRIME MINISTER:
Well, it’s more than . . . well I mean our original position was that, was that there shouldn’t be any multi-channelling. Now we have agreed to have some multi-channelling and, but not unrestricted multi-channelling. Because I think there is an argument that if you are going to have unrestricted multi-channelling for the national broadcaster, why shouldn’t you have it for the, particularly if you get into areas like sport and movies. Because they are direct and you’ve got pay tv to consider. See the problem with this is that, is that people tend to believe in total deregulation in those areas that they want freed up, but don’t really favour total deregulation in other areas.
LOANE:
So, there’s [inaudible] on both sides of the equation?
PRIME MINISTER:
Well yes there is. I haven’t met anybody in this debate who has a completely even-handed attitude. I mean . .
LOANE:
That’s been the problem hasn’t it? With our media policy.
PRIME MINISTER:
Well of course, and I mean I know, you know and we all know that. And that, with respect it also applies when the ABC’s point of view is being put to. I mean it can argue from, I mean many people who support the ABC argue that it shouldn’t for example be subject to any of the restrictions from the ABA that apply to the commercial channels. And the commercial channels say to me this is outrageous, we have to comply with certain restrictions that the ABC doesn’t. And I listen to that and I listen to the ABC and I mean they’re both arguing from a personal point of view, but the ABC will have more freedom now than it’s had in the past. And I think that’s a very good thing and I think it can develop those services, particularly in regional areas, which is good.
LOANE:
Prime Minister, I wonder what your reaction was the other day when you heard our new Managing Director Jonathon Shier say that he would be having a look at the 7.30 Report. I know a programme that occasionally brings your, you some grief. Did you applaud when you heard that? Would you like to see changes yourself in parts of the current affairs . . .
PRIME MINISTER:
Well look I as you know, am a regular appearer on the ABC and I like the ABC. I disagree very strongly occasionally with the ABC on issues of balance, I’ve never been reluctant to say that. And I have quite vigorous exchanges with people on that subject. The question of individual programmes, I don’t want to get into the debate. I don’t run the ABC, it’s got a board and the board’s chosen a managing director and it should be run by the board and the managing director and not by the government. The Government’s got a point of view it should express it and the Government decides how much money it gets. As to the programming, I’ve always found the 7.30 Report as a programme that I’ve enjoyed appearing on. I mean I appear on it a great deal as you know. And I appear on other ABC programmes a great deal and I will continue to do so whenever they are. I guess if they’re at 10 or 11 o’clock in the evening you’re not quite as enthusiastic. But even I am very, pretty – I’m pretty willing to be there. But I think the question of whether they, I didn’t hear them, I didn’t hear it being suggested that the 7.30 Report was going to be axed, I mean that is something you should ask Mr Shier, I’m not, I don’t make those decisions.
LOANE:
No, I know. I just wondered what your reaction was.
PRIME MINISTER:
Well, I think I ought to stay out of that. And I mean I . . . you know me and the 7.30 Report, whenever I’m asked virtually now I go on. I don’t see my opposite number on it very often, but then that’s a matter for him, isn’t it?
LOANE:
Alright Prime Minister, we’ll leave it there. You’re flying out to London I think tomorrow?
PRIME MINISTER:
No, no. Monday.
LOANE:
Monday.
PRIME MINISTER:
No, I’ll be here for the whole weekend and Monday morning and I’ll be away for about eight days and it’s a very important visit. The day I arrive in London I’ll see the Prime Minister, Tony Blair and the Chancellor of the Exchequer and I’ll make a major speech on the Australian economy to a gathering of the, all the senior businessmen in London. And it’s a great opportunity for us to explain to the business and financial community in Britain the changes being made to the Australian economy and the strengths. People forget because our relationship with Britain is so close and longstanding that Britain is the, either the first or the second largest foreign investor in Australia. We invest more money in Britain than we do in any other country. We have a very close economic relationship. After France, Australia now exports more wine to the United Kingdom than any other country. The financial market in London of course is one of the key financial centres in the world and we’re trying to build Sydney as a world financial centre or a regional financial centre. So there are a lot of good, non-historic, non-traditional reasons for an Australian prime minister to, to be in London. And of course it does coincide with a hundred years of the passage of the Constitution. And I think it’s an important historic observance. I know my going there at this time has been criticised by the Labor Party. I think that’s petty because all the Labor premiers are going anyway. Bob Carr will be there and Jim Bacon and Steve Bracks and Peter Beattie. They acknowledge the historic significance of this event. I mean if it is alright to, to expend public funds on fireworks displays and so forth, which are all important celebrations, then it’s surely okay occasionally. And there were three great events in the Federation of Australia – there was the passage of the act by the British Parliament which gave legal force; there was the first of January, 1901 when the Commonwealth was inaugurated and there was the first sitting of the parliament in Melbourne on the 9th of May, 1901. And they are three very critical dates in the building of the Australian nation. And I think it deserves an observance and there’s a whole week being devoted to the promotion of Australia in London and I think there’s an enormous national benefit in that and that’s why I’m going.
LOANE:
Despite the fact that Mr Beazley calls it an expensive junket?
PRIME MINISTER:
Well I mean that really is childish. I mean if I was so uncharitable to add up the cost of all the trips undertaken by Labor Ministers during the Hawke and Keating years and compare them with ours, I don’t think he’d come out in front. And I just think that sort of – I mean he was originally going to go and his minders got to him and said look you can score a few points against Howard by not going. I mean he was originally going to go, I know that for a fact. And so, I think we’re all being a little bit childish, but the public will decide these things. He sent a guard there in 1988, just as expensive as the one in London at the moment. Just as expensive. And he thought that was terrific. I’ve got his press release as Defence Minister saying what a wonderful thing it was.
LOANE:
Prime Minister, thank you for your time this morning. We’ll leave it there. Will you be out getting your paper in the morning? Or going down to the shop and buying a pint of milk?
PRIME MINISTER:
I will be out, I will be out and about tomorrow. I am not saying exactly when because whenever I announce in advance where I’m going, a funny thing happens – branch members of the local ALP branch turn up posing as outraged citizens.
LOANE:
Thanks Mr Howard.
PRIME MINISTER:
Bye.
[Ends]