Subjects: Attendence at Olympic Games; Petrol prices; blockade
E&OE……………………………………………………………………………………
ZEMANEK:
On the line from somewhere here in Australia the Prime Minister of Australia Mr John Howard. Good morning Mr Prime Minister.
PRIME MINISTER:
How are you Stan?
ZEMANEK:
I’m not too bad. Where have we found you?
PRIME MINISTER:
You’ve found me in my Sydney office.
ZEMANEK:
Very good. Now that’s going to keep a lot of people happy because there’s a lot of small-minded people out there who complained about you going to the Olympics all the time. But I think it’s fantastic that you’re there.
PRIME MINISTER:
Well I go because it’s the right thing to do. I’m not only very interested in sport but this is the greatest sporting event that has ever come to Australia’s shores in the lifetime of most of us, certainly since 1956 when we had the Games in Melbourne. And it’s the right thing for the Prime Minister of the country to be out there cheering the Australian participants on and taking the opportunity where appropriate in a proper sportsman like manner of congratulating representatives of other countries where they’re successful.
And I might point out that it’s not only as one small-minded editorial this morning suggested, not only medal winning events for Australians that I’ve attended. I’ve attended the heats and elimination rounds in a number of sports where unfortunately we haven’t come through. And my hope is to try and show an interest in as many sports as possible because this is the culmination of a life’s work for many of these young men and women. And they’re supported by thousands of volunteers who slave their insides out at weekends and so forth keeping sporting associations going. And I think the least somebody in my position can do is show interest and support.
ZEMANEK:
Absolutely right. The story today is these blockading truckies in the oil refineries down in Melbourne and by all reports its got the potential to spread right around Australia. What do you say to those blockading truckies?
PRIME MINISTER:
Well I don’t agree ever with blockades. We have processes for resolving situations and people who take things into their own hand and prevent people lawfully going about their business, that is never to be condoned by any government state or federal. I don’t like the high price of fuel. Of course it’s lower in Australia than it is for example in Britain where it’s more than twice the level it is in Australia. It’s well over $2 a litre in Britain but of course that doesn’t make it easier here.
The increase in the price is due to the trebling of world oil prices over the last eighteen months. You’ve even seen the President of the United States who leads the most powerful nation the world has ever seen having to dip into that country’s strategic oil reserves. It’s a move that’s been a bit controversial in the United States but that’s a matter for them.
So not even the President of the United States has an immediate answer. Pressure will continue to be put on the oil producing countries to increase the production of crude oil. And if you increase the supply then the price should fall. Now it is a difficult issue but it won’t be solved by people imposing blockades. I mean governments don’t respond, certainly no government I lead will respond to a blockade. That is not the way that you do things in this country.
ZEMANEK:
But the truckies are saying this morning though that if the Government cuts back on its taxes and levies and fees and excises as far as the petrol cost is concerned it could go a long way to bringing down their costs because they’re saying something like 65% of their running costs is all to do with fuel. And they say that a lot of that cost obviously goes to government taxes. Now what do you say to those truck drivers who say okay yes we are taking a lot of taxes? Why can’t you drop some of the taxes?
PRIME MINISTER:
Well let me use a figure to get a… I mean you wouldn’t sort of regard a reduction of anything less than say five cents a litre as being even touching the sides would you. I mean the current price of fuel is bobbing around depending on where you are in Australia, bobbing around a dollar or a bit under or over depending where you are. And it bounces around even from street to street in the same suburb. Now if you were to cut the price of petrol by five cents a litre which in the eyes of a lot of people would not be nearly enough, that would cost $1.7 billion, $1.7 billion.
Now I’ve got to say that it wouldn’t in the present climate of world financial markets it would not be economically wise of the Government to take $1.7 billion out of its surplus. Now there’s a lot of loose talk about Government coffers being swollen by additional revenue. I don’t know that. The indexation of excise cuts both ways. If inflation goes up more than we expect and there’s no guarantee, there’s no evidence that it’s going to - let me make that clear - then you have to increase the payments you make to pensioners and there’s as much hit on the expenditure side of the budget as there is again on the revenue side.
ZEMANEK:
But obviously if the sale of petrol, if the cost of petrol is going up then obviously you’re making more taxes, more excises out of it.
PRIME MINISTER:
No the excise is a fixed amount. The GST revenue could be effected by, if the price of petrol stays at a higher level it could be but the excise is a fixed amount per litre it doesn’t go up automatically with the increase it’s a fixed amount per litre. It’s a volumetric tax.
ZEMANEK:
But government charges though are taking 49%.
PRIME MINISTER:
That’s right, that’s right.
ZEMANEK:
49%.
PRIME MINISTER:
They’re taking 75% in Britain and many European countries so the orders of magnitude are very different.
ZEMANEK:
Yeah, okay well I understand…
PRIME MINISTER:
75% it is taking in Britain. So people who are looking to Europe as an example to follow in relation to blockades should bear that in mind. I mean I could understand the anger if that were the proportion in this country.
ZEMANEK:
Before this gets out of control though would you be prepared to talk with these truck drivers.
PRIME MINISTER:
I don’t think it’s appropriate for people in government to talk under duress. I mean I don’t deal that way. Look if people have a proposition to put in an orderly fashion then I’m always ready to talk. But I’m not going to ever be in a situation of saying look you’ve done this and yes if you agree to take it off I’ll talk to you. I mean I don’t operate under duress, let me put it that way. If people want to approach, I mean, we’ll talk to people but it’s not an easy situation. If you were, can I go back to my example because people have this idea that all you’ve got to do is tweak the excise and the price of petrol comes down by ten or twenty cents a litre. It’s not like that. I repeat, to cut the fuel excise by five cents a litre and thereby bring down the price of petrol by five cents a litre that would cost $1.7 billion a year in revenue.
ZEMANEK:
Yeah but can you understand though the truckies plight though, in their case? I mean one of their major costs is petrol. They just see it’s eating away their profits all the time and the truckies as we all know…
PRIME MINISTER:
But many of them of course run on diesel don’t they?
ZEMANEK:
Well a lot of them do.
PRIME MINISTER:
And one of the things in the tax plan was a cut of twenty or more cents a litre in the price of diesel was one of the centrepieces of the tax package. It’s not as if the Government has been insensitive to the costs of running those businesses. We are very sensitive to them and I do understand the difficulty that is faced but it’s not an appropriate remedy to impose a blockade. That’s the point I’m making. You just don’t do, you can’t run a country on the basis of responding to threats of blockades. I mean we don’t operate that way.
ZEMANEK:
If they pulled off their blockade this morning, if they pulled off the blockade would you then talk to them?
PRIME MINISTER:
No look I’m not going to get into a situation of effectively, by saying yes to that means that I promise to do something and they withdraw the blockade.
ZEMANEK:
Because it did get out of control in England though didn’t it?
PRIME MINISTER:
Yes but this is not England and I don’t want to buy into who handled what in England. I just make the point though that it did get very messy there and you had farmers involved. I understand the farmers have indicated very sensibly and very responsibly and I congratulate them for it that they’re not going to get involved in this blockade and that is one big difference between Australia and Britain. And of course I repeat, the price of petrol in Britain is more than double what it is in Australia, more than double, it’s up to $2.20 a litre and the government take there is about 75% of the total price, it’s less than fifty in this country.
Now I know it’s high, I acknowledge that and I know that if we were to cut the excise by five or ten cents a litre that would be popular but it would not be seen as going anywhere near far enough to solve the problem and that would cost an enormous amount of money. And if you were to take several billion dollars out of the budget surplus at the present time that would send the wrong signal on the exchange rate, it would send the wrong signal on interest rates and variations, adverse variations there would do even more damage to people in the trucking industry and elsewhere and in the economy generally.
It is a difficult period in relation to petrol prices through which Australia is living. We are the victim of world movements over which a country of our size has no direct control. And I want people to understand I’m aware of that and where there’s opportunity for the Government to move, but it’s certainly not in relation to the level of excise, we would do so. But it’s one of those things where we are at the receiving end as other countries are of very high world oil prices.
ZEMANEK:
Mr Howard unfortunately we are going to have to leave it there. I do thank you for being on the programme and we will talk again.
[ends]