OAKES:
Mr Howard, welcome to the program.
PRIME MINISTER:
Good to be back, Laurie.
OAKES:
Before we talk politics, can I ask you about the dreadful tragedy in Childers? Will you be going up there tonight for the memorial service?
PRIME MINISTER:
Yes. There's a memorial service being organised by the Mayor and I'll be going, and I understand the Queensland Premier and others. It's one of those appalling things, young lives lost, wasted, cut short, is always particularly, I think, gripping, and most of them were so far from home and that adds an extra dimension. I know how we, as a nation, felt about the Interlaken tragedy in Switzerland and the distance seemed to add a special dimension to the grief and, I think, all Australians are totally shocked and the very tragic and distressful circumstances have only added to it.
OAKES:
I guess this is made even worse by the police suspicion that this may have been deliberate.
PRIME MINISTER:
Yes. Well, I have to be careful. Given the processes of our legal system, I don't want to say anything other than that I hope the law works effectively and, if it is ultimately demonstrated to have been a deliberate act, well, that will only add to the sense of, I guess, loss and anger and grief that people are going to feel about it. But, there's always something terrible about so many young lives lost together. It's something quite awful.
OAKES:
Now, a matter of breaking news, the situation in Fiji where George Speight's thugs overnight have released the remaining women hostages. Does the Australian Government have any indication when this will be over, when the rest of the hostages will be freed?
PRIME MINISTER:
I'm afraid we don't, Laurie. We're dealing with a very unpredictable character in Speight.
OAKES:
Yes.
PRIME MINISTER:
And, it's the manner of these things to be sort of half a second to midnight getting a solution and then, suddenly, it stops and you're back to square one. Now, I welcome the fact that he's released some more hostages, including the daughter of Ratu Mara, the president. That's welcome but, of course, we want the rest of them released. We are doing everything we can. We've offered medical teams in relation to any needs that can't be met locally for the hostages. But, of course, you've got to deal through the impenetrable barrier of the fact that hostages' lives are in the hands of somebody who behaves in an erratic fashion, and he's obviously still feeding off the, as it were, the spotlight and the publicity that his position generates, and it's a very difficult situation.
I wish I could say a solution is just around the corner. It looked very close and it may be, but I was warned by the Foreign Minister on Thursday to expect something like this to happen. Alexander said you ... their assessment was that you'd get very close and then he'd pull back.
OAKES:
So, if they are released, or when they're released, what happens to Mahendra Chaudhry? If he, for example, wants to come to Australia seeking refuge, would he be welcome here?
PRIME MINISTER:
Well, we would obviously look at that very carefully and sympathetically. I mean we have certain principles and so forth, but I feel very sorry for him. I met him. He came to Australia. He was a guest of our government.
OAKES:
Only a couple of weeks before it happened, yes.
PRIME MINISTER:
Only a couple of weeks before it happened, and I ... he sat in my Parliament House office in Canberra and, in fact, I agreed to a request of his to extend the deadline for termination of ... of changing some arrangement between Australia and Fiji on trade. Now, he won an election fair and square. He seemed to me to be a decent, dedicated man. There were, undoubtedly, a lot of people in Fiji who didn't like his politics - as a lot of people in Australia don't like mine - but, I mean, that's the nature of a democratic society, and the sad reality is that on two occasions the people of Fiji have chosen an Indian Fijian as their Prime Minister, and on both of those occasions the indigenous Fijians have been through different instruments of being unwilling to accept that. Now, that is a very racist approach, and we're obviously very unhappy with that, and we will ... I mean, we want to be a good friend, we want to be a facilitator. You've got to be careful when you're a country Australia's size in the Pacific that you don't look as though you're throwing your weight around. On the other hand, you've got to be ready to help, and that's what Alexander, as our principle activist on this, has been willing to do.
OAKES:
Now, you say, rightly, that this is a racist situation. There's talk that many Indian Fijians will want to leave Fiji. Would they be welcome here?
PRIME MINISTER:
Oh, yes. I mean, we, once again, we've got to apply criteria of, I mean, there are a lot of people want to come to Australia, but they'll certainly be treated fairly. In fact, there's quite a lot of Indian Fijians have come to Australia over the last ten years. A lot went to the west coast of the United States and quite a number have come here. And, they've made a great contribution to Australia.
OAKES:
Okay. The new tax system ...
PRIME MINISTER:
Mm.
OAKES:
... which is the real reason you're here talking to us today. Six days to go to the GST, will Australians end up loving it?
PRIME MINISTER:
I think Australians will end up seeing it as a huge improvement on the old system. I believe that they will see it as good for Australia, because it'll change a lot of things for the better. It will give the states a greater guarantee of revenue for things like public hospitals and police and education. It will cut personal income tax. It will, when it's absorbed and fully operational and understood, it will prove, for most businesses, to be a simpler system. And, it will make our exports more competitive and our fuel in the bush in particular cheaper than it would otherwise be.
OAKES:
Now, six days to go, are you planning anything this week, to prepare ...
PRIME MINISTER:
Well...
OAKES:
Australians for it?
PRIME MINISTER:
I'm seeking time on the ABC, in accordance with the normal arrangements, to give an address to the nation next Thursday evening. And, I hope, given the importance of it, the other networks might give consideration to running it as well. And, it's an opportunity to paint the broad canvas.
I mean, we've had an incredible focus of the detail, the minutiae. Now, I understand that, in the nature of the political give and take, the parry and thrust but, in the end, it's the overall effect of this new system on the Australian economy and the Australian people that is going to decide whether people want it. I mean, the reason we brought it in is because we think it will be good for Australia. Now, we know with a new system there is always some doubt and confusion and it's terribly easy for people to score points off it at the moment. I mean, we are in our period of maximum vulnerability at the present time.
OAKES:
The Government?
PRIME MINISTER:
Yes. There are easy pickings for the Opposition, I mean, you can run a scare story on everything you like at the moment, but what I say to Australians is, give the whole thing a go. Pull back, shut out some of the claim and counterclaim and just make your own judgment. Now, if your judgment is adverse, then I'll cop that. I accept responsibility for it. I have driven this thing very strongly and if the Australian people make an adverse judgment on it, well, I won't have any regrets. I will have given it my best shot. But, I don't think they will, I believe, very much, that they will see it as a huge advance.
OAKES:
Now, if you make an address to the nation, will Kim Beazley, the Opposition Leader, be given the right of reply?
PRIME MINISTER:
Well, that is a matter for the ABC, but I would expect he would. Because there's a political dimension in this and I would not be critical in any way of the ABC if they gave Mr Beazley a right of reply. I would have, in a similar situation, expected one as Opposition Leader because there's obviously a political dimension to this. I don't fear Mr Beazley's reply because he's going to keep it.
OAKES:
Yes, well, presumably, he should reply on Friday night, before it comes in?
PRIME MINISTER:
Well, I don't know, that's a matter for him.
OAKES:
Yes.
PRIME MINISTER:
That's a matter for him to negotiate with the ABC. That's how these things operate. But, I'll leave that to him and the ABC. But, I want to say right now that I would fully expect the ABC to give him a reply.
OAKES:
Now, there seems to be an assumption in the community, polling shows that, anecdotal evidence shows that people expect prices to go up. Do you have any evidence to the contrary? Do you really believe that they're going to be better off when they come out of the supermarket next Saturday?
PRIME MINISTER:
Well, I think there's a belief about two things. There's a belief in the minds of a lot of people that everything's going to go up by ten per cent.
OAKES:
Yes.
PRIME MINISTER:
Now, that's completely wrong. But, I don't think, until they experience it, they will really know that. And, the other thing is that a lot of things are going to fall. I mean, I've received a letter from Woolworth's, in the last few days, saying that if you take the Choice magazine's thirty-two item basket from their January and February editions, this is the Australian Consumer Association's magazine, those thirty-two items, according to the Woolworth's calculations, they are going to fall in price, by between about two point four and three point three per cent. Now, this is because you've got a lot of items in that basket, that now carry wholesales sales tax. And, that will come off, with effect from the first of July, there won't be a GST replacing it and there are actually going to be falls. Now, this is a dimension of the thing that I don't think people still, with all the talk and the advertising and everything.
OAKES:
Forty million dollars worth of advertising?
PRIME MINISTER:
Yes. Yes. Yes. Yes. I accept that. And, I know that's been criticised.
OAKES:
Yes.
PRIME MINISTER:
But, Laurie, this is the biggest change to the way our economy operates that any government has ever attempted, I think, well, certainly since World War Two. And, I mean, it's very difficult. I mean, it's so easy to run scares, it's so easy to - you put out a press statement, if you're an Opposition spokesman, it gets a run and then we reply. By the time we've replied half the people who heard the first report haven't heard the second report. And, until it actually comes in I don't think any of us are going to know.
OAKES:
Well, if all this is right and you're right next Saturday people will come out of Woolies with smiles on their faces. What about a month or two later when they start getting power bills, gas bills, credit card bills, won't they then have a different view?
PRIME MINISTER:
Well, they will, of course, by then be enjoying a bigger tax cut than most people think that they are going to get. I think in many senses you're going to have ... you're going to have an initial reaction. I think people will make a judgment, an initial judgment, and within a very short period of time and then I think there's going to be a longer term judgment made. And that, of course, is the one that will, I guess, determine the view they take of the wisdom or otherwise of the government having brought this in. So, but you'll get ... I think you will get a reaction next weekend from a lot of people in supermarkets that things have not gone up as much as they have thought will be the case because many items will go up in price, I don't disguise that. Some will stay the same and quite a number will come down. Now, that will surprise a lot of people because superficially if you don't pay a lot of attention and you say ... and they hear that a ten per cent GST is being introduced, they automatically think everything's going up by ten per cent.
Now, that has never been the case and try as we have both in advertisements and otherwise to get that point across, I just don't think in the nature of things it's possible to get something like that across completely until people actually experience it.
OAKES:
Prime Minister, we'll take a break there. We'll come back in a moment and talk about petrol prices and the GST.
PRIME MINISTER:
Sure.
OAKES:
Prime Minister, petrol prices affect everybody, so how come the Government didn't get the GST solution right on petrol prices?
PRIME MINISTER:
Well, I think we have got it right. I think we've done all we could possibly have done to deliver on the commitments that were made at the time of the last election. I mean, to start with we're cutting the excise by six point seven, and this is based on what is called a strike price of ninety cents a litre. And, yesterday, for example, in Bass Hill in Sydney it was eighty-two point seven cents, in Subiaco in Perth it was about eighty-two point something.
OAKES:
And in Canberra it's ninety-three.
PRIME MINISTER:
Yes, well Canberra yes, but the nationwide Ð
OAKES:
In Orange, places like that, it's over ninety.
PRIME MINISTER:
Well Orange, of course, has a special additional subsidy.
OAKES:
But the bottom line, Prime Minister, is you promised petrol prices will not rise as a result of the GST, and next Saturday they're going to rise because of the GST.
PRIME MINISTER:
Well, Laurie, we'll wait and see about that. But, there are cost savings for the oil companies. I mean, what some of the oil companies are saying is that there are no cost savings at all from the GST. I mean that is plainly wrong.
OAKES:
But, nobody except the Government says there's one and-a-half cents per litre savings. The Business Council of Australia says maximum half a cent.
PRIME MINISTER:
Well, I don't know how the Business Council can argue that.
OAKES:
They say they've got independent modelling.
PRIME MINISTER:
Well, we had modelling done too, perhaps we should exchange models.
OAKES:
Will you release that publicly?
PRIME MINISTER:
Well, it's the usual Treasury modelling.
OAKES:
You will not release it?
PRIME MINISTER:
Well, we haven't released the other modelling, but I'll talk to the Treasurer about that when he gets back. But, look, there's a lot of claim and counterclaim. And, everybody knows that petrol is carried to service stations in big tankers and they're fuelled by diesel, and that diesel will fall by twenty-four cents a litre.
OAKES:
But isn't it the case though that only amounts to a cost saving of point one of a cent per litre?
PRIME MINISTER:
Well, there are things like tyres, there are things like spare parts, and many other businesses, Laurie, are being asked by the ACCC to anticipate their cost savings. Can I go back to the price thing?
OAKES:
Yes.
PRIME MINISTER:
We were originally going to do it on a strike price of eighty-five cents a litre, which was, I think, above the average of the capital city prices over the last six months. And, we decided to go up to ninety cents a litre, which is at the top end of the expectations for most of Australia, and certainly the top end of the experience of most of Australia this weekend. I mean, most of Australia this weekend on average, the capital cities is paying about eighty-five cents a litre.
OAKES:
But, Prime Minister Ð
PRIME MINISTER:
Now we've done our calculation on ninety cents a litre, now that is providing a buffer of half a cent a litre.
OAKES:
You promised, as I recall, that excise would be reduced by an amount necessary to compensate for the extra impost of the GST, and you haven't done that.
PRIME MINISTER:
Well, we're reducing the excise by six point seven, and when you add in the cost savings Ð
OAKES:
So you're one and-a-half cents short of that promise, aren't you?
PRIME MINISTER:
No, no, well, that assumes of course there are no cost savings, and we don't accept that.
OAKES:
No, I don't necessarily assume that, but if there are cost savings shouldn't they go to the consumer, why should they go into the Government's kit?
PRIME MINISTER:
Well, the whole purpose though is to subsidise the consumer in relation to the GST, that was the commitment. We didn't promise and lead the Australian public to believe that the price of fuel was going to fall as a result of the introduction.
OAKES:
You promised it wouldn't go up.
PRIME MINISTER:
No, we said it, that's right -- we said it need not rise, but I mean the suggestion that it Ð
OAKES:
No, you said, will not rise.
PRIME MINISTER:
Well, the document said, need not rise. It is true in the parry and thrust of campaign people would have used tougher words Ð
OAKES:
But, Prime Minister, you say ...
PRIME MINISTER:
Laurie, I'm not arguing
OAKES:
You say, parry and thrust of the campaign ... you gave an address to the nation on August Ô98, and you said, the GST will not increase the price of petrol for the ordinary man ... but it will.
PRIME MINISTER:
I've just accepted that.
OAKES:
That was not thrust and parry, that was a carefully prepared address to the nation.
PRIME MINISTER:
Well, I mean, I accept that point. And, I also make the point to you that we have done all that we could reasonably do to honour that commitment. I mean, we've cut the excise by six point seven, we've adopted a price which provides a cushion. There are cost savings, and there's no reason why the oil companies of this country should be under any lesser pressure or obligation to pass on those cost savings. Many companies are anticipating their cost saving. They've been asked by the government, and the ACCC guidelines, in fact, exhort them to anticipate their cost savings.
OAKES:
Prime Minister, isn't it true that more money will now go from petrol in tax? More money will go from petrol taxes to the government as a result of what you're doing?
PRIME MINISTER:
Well, when you say of what we're doing, I mean, there are automatic indexation arrangements which have ...
OAKES:
No, they're in August. I'm talking about next Saturday won't the cake going to governments automatically increase?
PRIME MINISTER:
Well, we're putting a ...
OAKES:
... next Saturday?
PRIME MINISTER:
We're putting a two point two billion additional subsidy in and the extra ones - the extra five - the extra amount that we allowed for the strike price is going to add one hundred and ten million dollars more. You take one hundred and ten million dollars ...
OAKES:
You said two point two billion dollars ...
PRIME MINISTER: ...
off the budget bottom line.
OAKES:
That's a subsidy, I mean, two point two billion dollars compensates for what people ... the extra people have to pay for the GST, it's hardly a subsidy. It still goes in the government's kit.
PRIME MINISTER:
Yeah, well, the two point two billion is a lesser amount. I mean, if we hadn't have provided that subsidy then, of course, there would have been a very significant increase.
OAKES:
Do you deny that if prices go up next Saturday you'll be breaking a promise?
PRIME MINISTER:
Well, Laurie, prices can go up for a whole range of reasons. What I assert to you, and I assert to the public is, that we've done all that we reasonably could to honour the commitments that we made at the time of the last election.
OAKES:
Okay. We're almost out of time, just a couple of quick issues. Parliamentary behaviour - did you reprimand Tony Abbott after the incident in the House last Wednesday?
PRIME MINISTER:
Well, I don't disclose private conversations that I have with my colleagues but I regret what happened. I do. I regret what happened on both sides. I'm in favour of robust debate and I've involved myself in it quite a bit over the years. I'm sorry it happened and I don't think it should and there's a responsibility on people on both sides. I've ...
OAKES:
I mean, isn't the responsibility on you to make sure your Ministers behave appropriately?
PRIME MINISTER:
Oh, well, there's also a responsibility on the Opposition ...
OAKES:
Sure, but ...
PRIME MINISTER:
... not to ...
OAKES:
... I haven't got Kim Beazley in front of me.
PRIME MINISTER:
No. I know, well ... but, you know, it doesn't stop me talking about him and (laughs) ... and, I mean, there's an obligation on him not to take twenty points of order. I mean, I have allowed as Prime Minister more questions for the Opposition than any Prime Minister, I think, since World War Two. Certainly more than Whitlam, Fraser, Hawke or Keating ever allowed. I've had an almost golden rule of having twenty questions and sometimes Question Time will stretch out till half past three. Now, I know that's good for journalists, except those who have got early deadlines. But, it also puts, I think, some obligation on the Opposition not to abuse Question Time by constantly taking points of order. Now, I want to keep those twenty questions because I do believe in the principle of accountability. Unlike Paul Keating, I go into parliament every Question Time and the Leader of the Opposition can ask me ten questions every day parliament Now, I'm prepared to accept that accountability but there's an obligation on him not to constantly intervene with points of order and so forth whenever a government minister gets on his feet.
OAKES:
Another quick issue, the new managing director of the ABC's wielding the axe, executive heads are rolling in all directions. Do you approve of that or does it concern you?
PRIME MINISTER:
Well, I don't have a view at this stage beyond acknowledging that he's got the right to do it as far as ...
OAKES:
What if it means the end of The 7.30 Report? And what about the concerns that ABC Radio current affairs may be in danger as well?
PRIME MINISTER:
Well, I think ABC current affairs is good, providing it's ... remains balanced. And, I mean, I'm in favour of a strong ABC in this country, providing it's always balanced. It has a ... I mean, all media has an obligation to be balanced but the ABC, being a publicly funded one, has a special obligation. Now ...
OAKES:
So, you're not one of those Liberals who's rubbing their hands with glee at the site of all this blood on the ABC floor?
PRIME MINISTER:
No, I don't, look I ... I mean, I have a sometimes a love-hate relationship with the ABC. I have been openly critical on occasions, but I've also been somebody in politics who's appeared on the ABC a lot. And, even in the times of my, perhaps, fiercest conflict with the ABC on certain issues I'll always go on The 7.30 Report and have an exchange with their interviewers and I'll go on their programs. I think they're good ... generally, they're good programs but that doesn't mean to say they couldn't be improved. It doesn't mean to say they're always balanced, they're not. But, the question of what Mr Shier does is a matter for him. I mean, I didn't choose him, the board chose him. I accept that the board's got a right to choose a man or a woman to run the place. And, I think it's too early for people to make judgments, I mean, he's got to be given a go. He's obviously making a lot of changes, he obviously believes they're valuable. Let's wait and see.
OAKES:
Prime Minister, unfortunately we're out of time but we thank you.
PRIME MINISTER:
Thank you.
[ends]