Subjects: Tax reform; John Della Bosca’s comments; travel costs; Fiji; London trip
E & OE…………………………………………………………………………
MITCHELL:
Mr Howard, welcome back, good morning.
PRIME MINISTER:
How are you Neil?
MITCHELL:
I am well thank you. Mr Howard, have you given any consideration to an early election?
PRIME MINISTER:
No.
MITCHELL:
Why?
PRIME MINISTER:
Because I was elected for three years and I see no reason to go early.
MITCHELL:
GST is settling in well. Unemployment figures are good, Olympics euphoria, an election in October would look like quite clever politics.
PRIME MINISTER:
Well, I’m not sure that it’s either clever politics or the right thing for the country. I mean we complain that we don’t have long enough to do things that have a short term political difficulty but a long term national benefit and then if you have an early election for no apparent reason other than presumed political advantage, the public is entitled to think cynically of the way you are behaving.
MITCHELL:
Has it been suggested to you.
PRIME MINISTER:
No. No and I have no thoughts of having an early election. My current intention is to let the parliament run until the end of next year which will be the three year period.
MITCHELL:
You said we would not, probably wouldn’t know the full effect of the GST for as long as six months. Do you stand by that?
PRIME MINISTER:
Yes, I think so. Look it’s gone very well. You had another survey out yesterday which indicated that inflationary expectations have come down which means that people don’t think the GST is now going to have, even in the short term, the cost of living impact it was originally thought. Now I don’t know whether that’s going to turn out to be the case but all the indications are that it’s going pretty well but because I am by nature a fairly cautious bloke, I still think that you will need a period of six months to be certain that it’s fully bedded down. It is a very big change. A very big change but I think what has happened is that as people have got their tax cuts, which has occurred over the last couple of weeks, some people for the first time have realised that there really was an upside as well as a claimed down side, in other words the GST was balanced by the removal of other indirect taxes and the introduction of very big personal income tax cuts and I think people have begun to enjoy those and they now realise that what I have been saying and the government’s been saying over the last couple of years on that score has been correct.
MITCHELL:
Okay, but if it’s going to take six months to bed down, it could still cause you some trouble. It could still blow up in your face.
PRIME MINISTER:
Well I don’t think it will blow up in our face – I don’t, I really don’t, but when I say bedded down, I mean six months before we can say well, it really has been fully introduced without any significant difficulty. Now I don’t expect any significant trouble. But in the nature of things when you have a change as large as this, it’s always a good idea not to claim victory on the basis of early returns, but I think it is going very well. Much better than the Labor Party said and hoped and I think that’s terrific because it is the biggest economic reform this country has had since World War II and I think its fantastic the way the Australian public has taken it in its stride. I mean that was apparent to me the very first morning when I wandered around the shopping centres of my own electorate. It was very apparent to me that people were taking it in their stride.
MITCHELL:
Do you think it’s still a little, well I get the sense it’s a bit polarising that a lot of middle income wage earners seem to have accepted it quite readily. Small business still find it an imposition and pensioners or fixed income earners are still concerned about it. Do you accept that it could be polarising in the community?
PRIME MINISTER:
No I don’t. I have spoken to a number of my own colleagues who’ve got their ears to the ground and hold marginal seats and so forth and they are all reporting wide acceptance.
MITCHELL:
Petrol though is over 92 cents in Melbourne today. Do you take any responsibility for that?
PRIME MINISTER:
Well the price of petrol bounces around. It was 88 cents in Bass Hill the other day in Sydney. It bounces around, there is no rhyme or reason for some of the variations.
MITCHELL:
Do you take any responsibility for that figure. Is it a GST impact in there?
PRIME MINISTER:
Well, we have talked about this before. I don’t, I said before that the price of petrol will move around for a whole variety of reasons, including the world price and the competitive forces in the market. I mean if in fact you can have it as low as the mid 80s in certain parts of the country, well there is obviously a lot of, how shall I put it, flexibility in the pricing structure.
MITCHELL:
I guess it’s fair it, it’s bedded down on petrol now though the oil companies said they are going to add one and a half cents. Are you able to ascertain whether it has or not.
PRIME MINISTER:
I think, I mean in our view there was one and a half cents of cost savings. That remains our position and if you look around, you can see a variation in price such that nobody can properly ascertain that it has added one and a half cents.
MITCHELL:
I am told it’s over a dollar in Mosman.
PRIME MINISTER:
But it’s often much higher in Mosman.
MITCHELL:
Is it? Over a dollar?
PRIME MINISTER:
Well I don’t know about over a dollar, I don’t know, I haven’t got a list and Mosman is not far from where I live, but I haven’t got a list. But it varies a lot around Sydney as it does apparently around Melbourne.
MITCHELL:
Okay, but you are not able to say that there is not a GST impact, you simply don’t know.
PRIME MINISTER:
Well what I am saying to you Neil is that there should have been sufficient cost savings plus the cut in excise so that the price need not have risen as a result of the GST and we have got the ACCC examining it, but you have got to remember that just because the price goes up, that doesn’t mean it’s the result of the GST.
MITCHELL:
You told me during the last election campaign that Kim Beazley didn’t have the ticker to be Prime Minister. Now that has stuck with him, do you stand by it?
PRIME MINISTER:
Well I certainly stand by it, of course I stand by that comment, but it was made not in a personal sense, but in a political sense. I don’t think he has delivered any alternative policy vision for this country and my great criticism of the Labor Party over tax reform is that for three years, they have tried to exploit the inevitable, political adversity that a government will suffer through trying to introduce a major reform. I mean no matter who is in power, if you try and bring in something as big as tax reform, you are going to go through a valley of political difficulty for a long time and what the Labor Party has sought to do, to continue the analogy as to sort of stand on the ridges and shoot us. Now that’s what they’ve tried to do. They haven’t tried to offer some alternative path. They have just tried to stand on the ridges and shoot at us and you know, they’ve you know, found their mark on some occasions, but in the long run the public’s a wake up to that. In the long run, people are going to say to Mr Beazley, if you want to be prime minister, what do you offer the country. Now at least I have had the commitment and my government has had the commitment to endure a very difficult period of time and we’ve finally as it were got the big reform in and people are starting to accept it and Mr Beazley now has the responsibility of offering an alternative and a better vision and the sooner he gets around to doing that the sooner he will be treated seriously. Now..
MITCHELL:
Do you think he is not taken seriously?
PRIME MINISTER:
Well, from a policy point of view, I don’t believe he is. I don’t get into personal slanging matches, I am talking about his policy position. I mean you take this whole imbroglio about Mr Della Bosca…
MITCHELL:
You couldn’t have believed your luck over that one could you?
PRIME MINISTER:
Well..
MITCHELL:
I could just imagine you sitting in India, hearing…
PRIME MINISTER:
Well Neil I am not given to that sort of personal reflection. What I am given though is to point out though that in doing what he did, Mr Della Bosca was speaking the truth. I mean this is a man who was hand picked by Mr Beazley to be the national president. He said he was a gem, he said he was a political genius. He pushed aside that nice Barry Jones in order to install him and this same man has turned around and said your policy on GST is wrong and of course it is wrong and Mr Della Bosca was saying exactly what the government has been saying and that is that now that it is in, you will only confuse and complicate life for small business if you try and roll it back.
MITCHELL:
In political terms, what Mr Della Bosca did was extraordinary. It was either a bad error or it was a deliberate attempt to undermine Kim Beazley. Which was it in your view.
PRIME MINISTER:
Well that’s for the commentators and for the Labor Party. What he said was accurate. I mean it was dead accurate. I mean forget what his motive was. I mean I don’t accept that somebody like that wouldn’t know that what he was saying was going to be reported. I mean this man is…..
MITCHELL:
Well that sounds like destabilisation.
PRIME MINISTER:
Well I don’t know. I mean you can draw your own conclusion. I mean maybe he thought naively that you could say something like this, get it reported and it wouldn’t do any damage. I don’t know. But the important thing is that he said it. And he said it because he meant it. But Neil, don’t cross examine me about the motives of people in the Labor Party towards their own colleagues. Go and talk to them.
MITCHELL:
Well every member of your ministry seems willing to offer a view on it Mr Howard. I don’t think it’s unreasonable to ask you.
PRIME MINISTER:
Yeah well I guess…..
MITCHELL:
Peter Reith’s been frothing about it, Peter Costello’s been frothing about it. You’re making political mileage out of it.
PRIME MINISTER:
Yeah I know. But look, yes, you’re asking me to, you know, to perform the role of a political commentator.
MITCHELL:
Well I’m making the point that every member of your minister has being doing that for the past few days.
PRIME MINISTER:
Well I am more…..well they’ve been making legitimate comments. But I am more interested in what it means in a policy sense. And what it means is that the man who was hand picked by Kim Beazley to be the national president has said Mr Beazley is wrong with his tax policy. Now that has a profound significance for the political debate in Australia.
MITCHELL:
Well can I put it this way – do you believe Kim Beazley is long term as leader of the Labor Party?
PRIME MINISTER:
I think they will keep Beazley as leader yes.
MITCHELL:
Okay we’ll take some calls to the Prime Minister. Graham, go ahead please.
CALLER
Thank you Neil. Mr Prime Minister, good morning.
PRIME MINISTER:
Good morning.
CALLER
With the GST there are two things that interest me, two obvious questions. One is wouldn’t a GST on food be a lot simpler and fairer across the board, and easy to implement provided that pensioners and people that need assistance would be recompensed fairly? And secondly, I’m interested in what Labor would do to taxes and charges if they ever got to government, or when they get to government.
PRIME MINISTER:
Well on the question of food, that issue has been resolved. You will know that the GST on food was part of the package we took to the last election. We were re-elected but we couldn’t get it through the parliament.
CALLER
You would still prefer a GST on food presumably.
PRIME MINISTER:
No not now. No. We’ve moved on. I mean you’ve got to remember that we’ve got a system now and to change it again is silly. And we’re not going back. I mean I don’t want anybody to be in doubt. We have moved on. We found that we couldn’t get that through the parliament so we have now moved on from it and you have to take those sort of things into account. The second question what taxes and charges? Well if the Labor Party is to roll back the GST and to spend a lot more money in some areas, and keep a budget surplus, then they’ll have to increase income tax. It’s a matter of simple arithmetic. I mean they can’t forever run around saying we’re going to roll back the GST which holds out a carrot to every interest group in the country, say you’re also going to spend a lot more money in education and health, and also keep a budget surplus without increasing income tax. And I think if they are to do all of those things they will find the money by lifting income tax.
MITCHELL:
Thank you Graham…. go ahead please.
CALLER
Good morning gentlemen. I ask Mr Howard, I’m very annoyed at the cost that you won’t live at the Lodge which I think every Prime Minister would be honoured to do so, and the cost of your travelling to and from I think is verging on the obscene.
PRIME MINISTER:
Well I’m glad you asked that question. I don’t believe there are additional costs because of my living arrangements. You’re talking about that story in some of the papers yesterday.
MITCHELL:
In the, no the Herald Sun, $500,000 on taxpayer funded personal commuter jet service from Sydney to Canberra.
PRIME MINISTER:
Yeah, okay. Well that neglects Neil is the fact that a large number of the functions that any Prime Minister goes to are in Sydney and the fact that you’re not living all of the time in Canberra doesn’t necessarily mean that you have additional travel expenses. And I’ve had a look at the jet travel expenses of Mr Keating in the last three or four years that he was Prime Minister and compared them with mine. Now I’m not being critical of him let me make it clear. I’m not on this account. But his expenses were higher.
MITCHELL:
[inaudible] travel expenses [inaudible]?
PRIME MINISTER:
Yeah they were.
MITCHELL:
Yours have gone up though haven’t they according to these reports?
PRIME MINISTER:
Well I’ve been travelling around the country a hell of a lot more and that’s part of your job. But you see what people forget is that, that if, I might be in Sydney for a weekend I might do a couple of functions in Sydney. If I were in Canberra at a weekend I’d have to fly up and back to Sydney and the air travel expense would be just as great. I mean that’s what Mr Keating did. Now I’m not criticising him for that let me make that clear. I’m critical of him on other things but not on that. And I think this argument that my living arrangements…..in fact if you want to compare the running expenses of the Lodge and the running expenses at Kirribilli, add them together, compare them with the running expenses of Kirribilli and the Lodge when Mr Keating was there, mine are not higher.
MITCHELL:
Okay. The Telegraph as I say got excited by the story, the Herald Sun recorded it. Do you think you’re getting a bit of a touch up from the Murdoch press?
PRIME MINISTER:
I thought those two stories were poorly based.
MITCHELL:
Is Rupert Murdoch still ….?
PRIME MINISTER:
Well I don’t think there’s any doubt that many sections of it remain unhappy about some of our media policies. But you know it never profits politicians to complain too much about the media does it Neil?
MITCHELL:
The proprietors Mr Howard….
PRIME MINISTER:
Never, never the media. No never. Well next question.
[commercial break]
MITCHELL:
Mr Howard, Fiji, with what’s happening should Fiji be at the Olympics?
PRIME MINISTER:
Well that’s a matter ultimately for the International Olympic Committee and not for the government. I would think at this stage from my personal point of view, yes.
MITCHELL:
Would Australia deal with a government that includes George Speight?
PRIME MINISTER:
Well the government is not going to include George Speight so we are told, although the government is going to be heavily influenced by George Speight. I’ll be talking to the Foreign Minister today about how we respond to what’s happened over the last 24 hours which remains totally unacceptable and completely sort of out of line with our democratic tradition. You’ve always got a problem that in international affairs that whether you like a government or loathe it you’ve got to deal with it if you’re to have any kind of discourse and exchange with a country. So the answer to the question is that we’ll have to in some way deal with the government of Fiji. Whether we’re happy with that and whether we impose measures against Fiji is something that we’ll talk about over the next few days. But let me make it very clear that Mr Chaudhry was illegally removed in a criminal act and I think the behaviour of the Great Council of Chiefs in bowing to Speight’s demands has really been to betray the democratic institutions of that country.
MITCHELL:
Now do you still consider that [inaudible] that George Speight is a terrorist?
PRIME MINISTER:
Well of course he is. I mean he captured somebody at the barrel of a gun who was the democratically elected leader. I mean how else can you regard him?
MITCHELL:
So will you be speaking to Chaudhry today?
PRIME MINISTER:
I’ve already got in touch with our High Commission in Suva to see if I can make contact with him and he may not be taking calls, I don’t know. But I’m going to endeavour to speak to him today. I do know him, I’ve met him on a couple of occasions. Once in Durban and once in Canberra and I feel for him. He’s a man of quiet dignity and strength. He was elected leader in a proper democratic ballot and he should never have been removed. And if we don’t stand up in a personal sense for people placed in that situation then we are undervaluing our own commitment to democratic institutions.
MITCHELL:
I notice he says he still thinks he has a role to play in politics.
PRIME MINISTER:
I think he does. I think he does. Anybody who was elected leader of their country and was then removed at the barrel of the gun does have a future.
MITCHELL:
Sanctions by Australia still a possibility?
PRIME MINISTER:
They are still a possibility. You’ve always got the dilemma with sanctions. I discussed this with the Indian Prime Minister a few days ago. I mean he not surprisingly because of the large number of people in Fiji of Indian heritage is concerned about the issue. And he raised the issue of sanctions with me and I said well I understood their view on the other hand if you impose very severe economic sanctions you end up hurting many of the people you’re trying to help. It’s always a dilemma and we’re going to try and find the right balance in the discussions we have over the next few days.
MITCHELL:
Andrew. We’ve got another call. Andrew go ahead please.
CALLER:
Morning gentlemen.
PRIME MINISTER:
Good morning Andrew.
CALLER:
Good morning Mr Prime Minister. My question to you relates to income tax brackets. Well my understanding of the old system, one of the problems with it was that inflation basically eroded their meaning in a lot of ways. Are there any plans to index tax brackets we’ve got now?
PRIME MINISTER:
Well we don’t have an indexation but we do have a situation where you can go from, under the new system which came into effect on the 1st of July you can go from $20,000 to $50,000 without going into a higher tax bracket.
MITCHELL:
Is indexation, is that a possibility?
PRIME MINISTER:
Well I’m not making any promises.
MITCHELL:
You’re not ruling it out?
PRIME MINISTER:
Well I’m not making any promises.
MITCHELL:
Understandably.
PRIME MINISTER:
I can’t. But the point I’m making is that if you can lift your income from 20 to 50 and the 20 to 50 bracket includes I would guess close to half the income earners of Australia, it would have to, if you can move to that level without getting into a higher tax bracket you don’t need indexation.
MITCHELL:
Do you agree that indexation does entrench a fairer system because you actually free those tax cuts?
PRIME MINISTER:
Well I agree that any further, how shall we put it, benefits from the income tax scale, income tax arrangements would be desirable but I mean we have done what we believe we can afford to do. And whilst I understand and accept your argument about indexation I don’t want to be heard to be holding out the promise of it.
MITCHELL:
Fair enough. Is it on the agenda for consideration?
PRIME MINISTER:
Well not at the moment. Nothing further is on the agenda right at the moment on income tax because we’ve only just introduced the biggest income tax cut in our history. And it’s only been there for two weeks so obviously a further thing is not on the agenda at the moment.
MITCHELL:
The wife of the British Prime Minister as a respected barrister, as a QC is involved in the case on mandatory sentencing which is part of what’s happening in Australia. Did you discuss that with Mr Blair or his wife when you there?
PRIME MINISTER:
No, no. Well I didn’t see his wife. In relation to him, no, he didn’t mention it.
MITCHELL:
Is it appropriate that she should be doing that?
PRIME MINISTER:
Well she’s appeared in a case against her husband’s government, a human rights case. Quite recently she took an appeal in relation to paternity leave alleging a breach of human rights by Mr Blair’s government. I suppose if it’s appropriate for her to appear in a case against the British Government which is led by her Prime Minister then I suppose if she takes the view that she’s free to do that then I guess she’d readily take the view that she’s free to appear in a case involving the Australian government. She’s a lawyer in private practice and it is the obligation of lawyers to take whatever briefs they’re offered.
MITCHELL:
So you don’t see any [inaudible]…
PRIME MINISTER:
I don’t see it as a snub. I mean I’d make the point though that issues relating to the laws of this country should be resolved in this country and not by the United Nations. I mean my view on the appropriateness of the United Nations sitting in judgement in relation to these matters has not changed. I mean we are a fully democratic country and I believe that issues relating to Australia should be initiated, resolved and concluded in Australia and if people don’t like them then they change the laws and vote out the government that’s responsible for the laws. But that having been said Mrs Blair has as much right as anybody else to appear. And as I say if she’s appeared against her husband Tony’s government then it’s hardly surprising that she’d accept a brief in relation to another government.
MITCHELL:
The trip to London, what did you bring home?
PRIME MINISTER:
I didn’t bring home anything in a physical sense.
MITCHELL:
Oh no I don’t mean that.
PRIME MINISTER:
What did I bring? I thought we brought home, what was achieved was a very significant commemoration of a very important event. And I know it was criticised, it was also defended. I think the events did appropriately mark a very important stage in Australia’s history. And unless you are to take the view that we never commemorate anything, I mean we will spend a lot of money as a nation next year marking our centenary and you will be entitled to say at the end of the year what have we got out of it.
MITCHELL:
At least that’s in Australia.
PRIME MINISTER:
Yes but this actually, you know the event we commemorated which was important to Australia did not occur in Australia.
MITCHELL:
True.
PRIME MINISTER:
And unless you are arguing that you never mark an event of importance to Australia which didn’t occur in Australia…
MITCHELL:
Oh no I don’t think anybody argued that. I think they argued the extent.
PRIME MINISTER:
Oh the extent. I see. One of the advantages…
MITCHELL:
The point I’m getting at, did you do business? Was it worth sending the people [inaudible]?
PRIME MINISTER:
From a business point of view it was of incalculable benefit. I had the opportunity of meeting every major business leader in the sort of space of time which was available. The heads of all the major banks, many of the industrial organisations, the Governor of the Bank of England, naturally the Chancellor of the Exchequer. It was an unrivalled opportunity to showcase the strengths of the Australian economy. And Neil can I say the advantage of taking with me two former Labor Prime Ministers and two former Coalition Prime Ministers and Labor Premiers was that I was representing with that the entire nation.
MITCHELL:
It’s a pity you didn’t get Pat Rafter over the line.
PRIME MINISTER:
Yes I wish I’d have done that.
MITCHELL:
Thank you very much for your time
[ends]