Subjects: Olympics; s11 protests; value of the Australian dollar; fuel prices; budget; pensions; East Timor; foreign aid.
E&OE……………………………………………………………………………………
CORDEAUX:
How are you?
PRIME MINISTER:
Good morning Jeremy. Nice to be back with you.
CORDEAUX:
There must be a great buzz in Sydney I guess at this particular moment.
PRIME MINISTER:
Yes there is. From the beginning of this week, on Monday, I did some shopping in Sydney and I walked around the streets a bit and there’s just bubble and enthusiasm and expectation. It’s quite a delightful feeling. Everybody seems very happy. I was out at the flag raising ceremony at the Olympic Village and also at the ceremony which named Andrew Gaze and Rechelle Hawkes the flag carrier and oath reader respectively, and met most of the athletes. Gave them a short speech and wished them all good luck on behalf of the 19 million Australians that will be cheering them on. And it was quite a night and a great experience, and it really has arrived and I know everybody wants it to be a great success and of course it’s not just Sydney. It’s a nationwide event. You’ve got soccer in Adelaide tonight, you’ve got soccer in Melbourne. So all of that is terrific.
CORDEAUX:
A great showcase for the entire country. There’s talk about who should be lighting the cauldron. Have you got an opinion?
PRIME MINISTER:
I’ve got an opinion but I’d rather not mention. I don’t know.
CORDEAUX:
Do you know?
PRIME MINISTER:
No I don’t, no I don’t know and I don’t particularly want to know. That’s a matter….the Olympic Committee’s kept that to themselves. I don’t really care. I’ve got a view but I’d rather not express it.
CORDEAUX:
Okay, all right, okay. There’s speculation that these S11, this amalgam of demonstrators in Melbourne will be heading to Sydney to disrupt the Olympics which is disturbing news at least.
PRIME MINISTER:
Well I don’t think in the end they’ll be that stupid but you never know. They won’t get any sympathy from the public or from police and nor should they. Peaceful protests are acceptable and are people’s right in a democracy even at the Olympic Games.
CORDEAUX:
But it is interesting to hear these people, these business people gathering around not to make decisions but just to discuss things and their basic right of freedom of speech is being denied by a whole bunch of people because they want to demonstrate.
PRIME MINISTER:
Yeah that’s right. There was no earthly justification based on principle in what occurred on Monday. It is one thing to demonstrate your anger at a set of policies followed in this country and other countries. It’s another thing to deny people the very right that you yourself are pushing to its limits by your demonstration. I mean the justification that demonstrators use is that they have to tell the public how they feel. In other words they believe in the uninhibited right to exercise their freedom of speech. But if in the process they deny others to do that their action becomes quite immoral and indefensible and that is exactly what happened on Monday. By all means hold your placard, chant your chants, give us your slogans. But don’t stop other people doing the same thing which basically is what they did. I mean there is no principle known to democratic man that can justify what happened on Monday, none whatsoever.
CORDEAUX:
There is a problem I think in explaining globalisation and multinationals. There is a feeling that these people want to get the best of a deal which may not exactly be the best deal for Australia but we have to expose ourselves to all kinds of risks simply because well gee we’re part of a global village. But if it doesn’t benefit Australia and Australian workers you could understand the anxiety of that.
PRIME MINISTER:
Well Jeremy my argument is that it does overall benefit Australia and Australian workers. The Australian economy now which has been part of the global economy more completely over the last 10 or 15 years than ever before is stronger than ever before. If you take a country like South Korea – in 1960 South Korea’s living standard was equivalent to Algeria’s. It’s third best export was wigs. It is now one of the industrial powerhouses of the Asian Pacific region. It exports billions of dollars of IT material. It’s one of Australia’s best customers and it’s enjoyed a very significant rise in living standards. Now that is a result of South Korea opening up their economy to the world, not closing it down.
CORDEAUX:
Yeah, but people have got to understand and be taken along.
PRIME MINISTER:
They do, they do have to do that. Another example I can use is that a lot of demonstrators talk about globalisation being damaging to developing countries. Indeed if there were more openings into the developed countries for the exports of poor countries the living standards of those poor countries would rise. But yet demonstrators argue all the time against demolishing trade barriers. They are in favour of erecting trade barriers. It is the demonstrators who want us to bring back tariffs, it is the demonstrators who want us to reduce trade flows. If you reduce trade flows the people you hurt most are the poor countries. It’s been calculated that the cost to the poor world of the protection policies of the rich countries is 13 times more than their total overseas aid. In other words if they got rid of all their barriers, their trade barriers, that would do 13 times more than they now do on an annual basis through their overseas aid.
CORDEAUX:
Prime Minister, I know you’re reluctant to talk about things like interest rates and the value of the dollar but I understand that Australia will be looking later on today at growth of about 5%, it’ll be talked about. We’ve got low unemployment, we’ve got, debt is coming down, we’ve got productivity up. What is wrong with the dollar?
PRIME MINISTER:
Well Jeremy the figures will come out at I think half-past-eleven, so the world will know what the situation is then as far as growth is concerned. But as far as the dollar is concerned I am always reluctant to talk about its level because I am the Prime Minister and whatever I say can be used to justify some kind of market reaction and I don’t want that to happen. So I have a steadfast iron rule, even in the face of the most polite and gracious enticement from interviewers like you, I have a very firm rule not to talk about the value of the dollar.
CORDEAUX:
It is pretty unbelievable though isn’t it? I mean I understand what you’re saying to me but for our currency to be marked down presumably by a whole bunch of screen jockeys somewhere in some obscure part of the world……
PRIME MINISTER:
It’s not so much that our currency is being marked down. What’s happened is that the American dollar is very strong. If you look at the value of the Australian dollar against other currencies it is not being marked down. The American dollar’s strength is to all things the strength of all other currencies casting a shadow over every other currency. The Euro has gone down, and obviously the New Zealand dollar and many other currencies have gone down. So it’s not that Australia has seen its dollar marked down against all world currencies. It’s just that the US dollar has become so strong that by mirror reverse other currencies look weaker.
CORDEAUX:
If it went down and down much further would you ever consider pegging it to the dollar, the American dollar?
PRIME MINISTER:
No I’m not in favour of any kind of pegging. The era of fixed exchange rates is behind us. There’s no point, nothing to be served by it.
CORDEAUX:
Doesn’t it look like Malaysia’s done that and gotten away with it?
PRIME MINISTER:
No, well Malaysia’s an entirely different economy and I don’t believe that structural changes that were needed there have been made but that’s a matter for Malaysia. Look can I, with a positive illustration, argue the virtues of a floating exchange rate. One of the reasons that we survived the Asian economic downturn was that we had a flexible exchange rate and we were able by the operation of that exchange rate to shift a lot of our exports away from Asia, where the markets disappeared, to North America and Europe because we took the adjustment, the downward adjustment on our exchange rate and that really helped save the Australian economy from the ravages of the Asian economic downturn. Now if we’d have had a fixed exchange rate then we wouldn’t have been able to do that and we would have been caught up with the contagion of the Asian economic downturn.
CORDEAUX:
Prime Minister would you mind taking a couple of calls?
PRIME MINISTER:
No go right ahead.
CORDEAUX:
Okay Rod, hi. Here’s the Prime Minister.
CALLER:
Good morning Mr Prime Minister.
CORDEAUX:
How are you Rod.
CALLER:
Pretty good thanks. Look apart from the fact that you put us out with the fuel, what I want to know….
PRIME MINISTER:
Put you out? What do you mean by that?
CALLER:
Well you said that everybody was going to be better off and you promised the people in the country as well as…..
PRIME MINISTER:
As a result of the GST yes. I said that people, taxpayers, would not be worse off as a result of the GST and they’re not.
CALLER:
Well I beg to differ with you there.
PRIME MINISTER:
Give me your evidence.
CALLER:
All right then. Well you go for a ride out in the country somewhere and just go in and pull in and get your fuel and see how much it’s going to cost you. You’re looking at about…..
PRIME MINISTER:
Yeah I know that but that’s because the world oil price has gone up.
CALLER:
Yeah but that’s what you say but…..
PRIME MINISTER:
Well it’s not only what I say. It’s what Mr Blair says, it’s what President Clinton says, it’s what President Chirac says. I mean don’t you watch the television news every night?
CALLER:
I sure do.
PRIME MINISTER:
And they show the price of oil being a problem all around the world. Now if it was my fault you wouldn’t have Tony Blair declaring a state of emergency just about in Britain.
CALLER:
We would be the highest taxed nation in the world.
PRIME MINISTER:
No that’s not right. Britain is. Do you know what the price of petrol is in Britain? It’s 2.4 times what it is in Australia.
CALLER:
Well there are a lot of people here hurting Mr Howard.
PRIME MINISTER:
Look can I tell you I don’t like it, one moment, and having said in answer to your I think with respect I think you were a bit unfair in what you said about just ignoring the world consequences, I don’t like it. And the fact that it might be dearer in Britain is of no help to people in Australia but I do want to make the point that the major driver of high petrol prices at the moment is the high world price of oil. Everyone knows that and it’s not fair to try and lump it on the GST. It’s just not accurate and that is why I’m referring to it. But if you want me to say, you know, am I sorry the price is going up? Yeah of course I am. I don’t like it one moment. And if we could do something about the world price of oil we would.
But it’s not a solution….to cut the excise. That would give some relief, but do you know to get a 5 cent-a-litre cut in excise, and that could be wiped out in the next day by a further world oil price fluctuation, that would cost 1.7 billion dollars a year. Now I think a lot of people would feel that to run the surplus down by 1.7 billion dollars at the moment would put upward pressure on interest rates and we don’t want that. And in any event if we’ve got 1.7 billion dollars people might argue that we should spend it on something else.
CORDEAUX:
Thanks for the call, its eight minutes to nine. The Prime Minister is my special guest. I don’t know if you saw Prime Minister the little piece in the Australia which said with some authority that the federal government will make a windfall gain of up to 500 million dollars.
PRIME MINISTER::
I did see that. Well you don’t know, I mean as far as the excise is concerned, if we end up collecting more excise, more revenue through excise because the inflation adjustment is higher than we expected, the extra amount we collect through the revenue side of the budget would be more than outweighed by the extra amount we’ll have to pay out through the indexation of pensions and other benefits. So as far as excise is concerned, we’ll be no better off.
CORDEAUX:
But are you saying that if there was a windfall that you would be one way or the other giving that back to the people.
PRIME MINISTER::
Well, we don’t know whether there’s going to be a windfall or not. You just can’t tell.
CORDEAUX:
If there was one. Would that be your choice?
PRIME MINISTER::
Look I think it is very unwise for the Prime Minister to start speculating about what he will do with a windfall that he doesn’t know whether he’s got or not. I mean that is just not my way of operating. I’m not going to give hypothetical responses to hypothetic propositions. There is no guarantee at the end of the financial year. At the moment, there’s no guarantee that our budget is going to be any better off because there are a lot of things that can happen during the year that can alter the estimates at budget time. And it is now only September. We’ve got nine months, just under nine months to go in this financial year and we simply don’t know. I mean I don’t know what is going to be the revenue consequences in some areas of what’s occurring. We’ve made our best faith estimates, but it’s altogether too early for people to be making judgements about windfalls. And it’s easy for a journalist in the Australian to say well, they’re going to have 500 million dollars more. We might, there might be some change, I don’t know and it’s too early to make that judgement. But I do know this. If your inflation is a bit higher because of higher world oil prices, well there’s a cost to the budget of that, as well as a gain and the cost is much greater than the gain. Now there could be some additional revenue in relation to the operation of the resources rent tax, but once again that depends on the level oil prices stay during the year, it depends upon the operating costs of companies. There’s a whole lot of imponderables at the moment which mean that anything at the present time is pure guestimate and I’m not going to make promises about what we do with the proceeds of guestimates.
CORDEAUX:
Graham, here’s the Prime Minister.
CALLER:
Good morning Prime Minister.
PRIME MINISTER::
G’day.
CALLER:
Prime Minister, the inquiry I have relates to the compensation system that was put in place and that to cover the introduction of the GST. I am a BSB pensioner. My wife, we’re both around the 60 years of age. We live off of the pension and a mix of a modest superannuation. Now there has been a lot of people who are very happy with the compensation system, and people like myself who have some reservation. My query is that since I went on to the disability pension five years ago, my wife and I have always been assessed as a couple. Yet when this compensation system was introduced we have all of a sudden been assessed as individuals for the payments. Now we…
PRIME MINISTER:
Does that disadvantage you?
CALLER:
Yes it does.
PRIME MINISTER:
Can you explain how it does? I am not saying it doesn’t, I’m just interested.
CALLER:
Yes, we’re very happy but we’re obviously going to get the 4% indexation of our pension and it appears that I will get at least some part of the aged persons bonus. However, my wife doesn’t get it because she’s 15 months younger than me, just coming up to 60 years of age.
PRIME MINISTER::
I see, I’m with you, yes.
CALLER:
There’s always a utopian system I guess.
PRIME MINISTER::
She’s not eligible.
CALLER: …. pleased I guess under any circumstances. After a lot of trying, I eventually spoke to my local member and you know after a relatively amicable sort of a discussion that really the end result was recognised as too bad, it’s in place and we’re not going to listen to anyone.
PRIME MINISTER::
Well, I don’t know who the local…but can I….Your wife is not of, she’s just under 60.
CALLER:
She’s just under 60. I guess the issue is Prime Minister is that you know, all of a sudden we’re being assessed differently than what we had been. We’re being assessed as singles under the income tax assessment act.
CORDEAUX:
Yeah, I better leave it there, Graham, thanks for the call. Prime Minister, does it surprise you that Malcolm Fraser has said that he wasn’t told of the intelligence reports about Indonesia’s plans to invade East Timor? Does it strike you as strange?
PRIME MINISTER::
No. I mean I don’t pretend for a moment to speak for Mr Fraser, you would have to ask him.
CORDEAUX:
Well, he’s always giving you advice and I thought that you might…
PRIME MINISTER::
Well I don’t normally repay the compliment. I tend not to make too many comments on the remarks of former prime ministers. I think it’s a good idea to sort of keep one’s counsel occasionally in these things but look, we released those documents in good faith. The documents speak for themselves. We’re not making any judgement about the actions of the Whitlam government or the Fraser government. We will be held accountable for our own actions as a government and our own actions in relation to East Timor have been wholly honourable and decent. But the world is different now from what it was 25 years ago and one has to make an allowance for that. We faced a situation where we had to make judgements and I don’t, as I say, want to pass judgement on either the Whitlam government or the Fraser government. That, after all, was 25 years ago and people viewed things differently.
I think it’s important to always remember the context in which things have occurred and the action that we took in relation to East Timor was very different from what would have happened if the Keating government for example had remained in office. I have no doubt that Australia’s response to East Timor would have been totally different if Mr Keating and Mr Beazley had been running the country a year ago. But I can talk with some feeling and authority about that because they were events that were directly within my control.
CORDEAUX:
Chris, a very quick call from you.
CALLER:
Good morning everyone.
PRIME MINISTER::
Good morning.
CALLER:
In regards to this petrol, I’m a self-employed cleaner trying to survive.
CORDEAUX:
Chris, make it quick, I’ve got a minute before the news.
CALLER:
Alright. Why can’t you guys take away some money from Foreign aid and help your own people here in Australia Mr Prime Minister?
PRIME MINISTER::
Well you could do that, but in the long run, I don’t think that would be in Australia’s interest because our long term security and stability and economic strength is better promoted and helped by having strong economically growing neighbours, rather than unhappy impoverished neighbours and if foreign aid can make a bit of a contribution towards stopping the latter happening, then I think that’s in Australia’s long term interest.
CORDEAUX:
Prime Minister, thank you very much for your time.
PRIME MINISTER::
You’re welcome.
CORDEAUX:
Look after yourself.
PRIME MINISTER::
Thank you.
[ends]