Subjects: Fuel prices; GST; roads package; drug policy; Telecard; Reconciliation Walk; takeover of Woodside Petroleum; Woomera Inquiry; Kerry Packer.
E&OE……………………………………………………………………………………
MITCHELL:
Mr Howard, good morning.
PRIME MINISTER:
Good morning Neil. Good to be with you again.
MITCHELL:
Thank you for your time. Mr Howard the cat is out of the bag, Ted Evans the head of Treasury, your most senior Treasury bureaucrat has admitted we are paying more in petrol tax. Do you now accept that as a reality?
PRIME MINISTER:
I have read that article and I have checked on what he said. There’s nothing in what he said that conflicts with what the Treasurer has said or what I have said. ‘
MITCHELL:
But we are paying more in petrol tax?
PRIME MINISTER:
No, he didn’t. What he said was that the, when the price of petrol goes up then the GST take goes up. But what was not included in the news report and I don’t know whether it was not included because he didn’t say it at exactly the time, is that when the GST was brought in we had a discretionary cut in excise of 6.7 cents a litre and then when you allowed for cost savings flowing to oil companies of 1.5 cents a litre that equalled 8.2 which is the GST to be collected on the basis that you would have a price of fuel of about 90 cents.
MITCHELL:
But . . .
PRIME MINISTER:
Which and I if I could just finish it Neil because it is important to the narrative, which at that particular time was a fairly how shall I put it, generous or reasonable way of calculating what the price of petrol was likely to be. But we’ve never said, we’ve never said that there wouldn’t be a GST on petrol.
MITCHELL:
No, but you are taking more in petrol tax now than you would have been?
PRIME MINISTER:
Not if you allow for things, if you allow for the excise cut, I mean there was an excise cut when the GST was introduced and what Ted Evans is not in conflict. I haven’t seen his testimony but I’ve spoken to somebody in the Treasurer’s office about it and what I am told is that it is not in conflict. In fact the very first paragraph of the story that I’ve read this morning in the Sydney Morning Herald says that the Secretary of the Treasury has admitted that the price of petrol is higher now than when it was, than it was . . .
MITCHELL:
But the tax is higher.
PRIME MINISTER:
No, no that is not what the story says, it says that the price is higher than when the GST was introduced. Now self-evidently of course it is. We all know that. It’s a question of what the . . .
MITCHELL:
Well that’s not what my story says in . . .
PRIME MINISTER:
Well I haven’t got that story. But . . .
MITCHELL:
I have – he yesterday conceded petrol taxes are higher now than before the GST. The question from Senator Evans was “my point is this, that we’re now paying more, when the price of petrol goes up, in tax”, that’s true isn’t?
PRIME MINISTER:
Look when the price of petrol goes up you pay more GST….but nobody’s ever denied that.
MITCHELL:
Can you tell me how much the GST is taking in petrol taxes?
PRIME MINISTER:
I would have to check, I don’t know.
MITCHELL:
Would you, okay is it possible to do that?
PRIME MINISTER:
Well not in the next half an hour.
MITCHELL:
Oh no. No but I think that’s a fascinating thing to know how much the GST is actually taking out in petrol tax.
PRIME MINISTER:
But you’ve got to, you’ve got to remember that the that any additional GST collection and there’s some, although my recollection is not quite as much as people thought it might be, there is some additional GST collection but that of course has an impact on the arrangements between the Commonwealth and the States because the States are the ultimate beneficiaries of additional GST collections. I mean if you have something that is levied and paid by the consumer on, as part of the final retail price, it is obvious that when that price goes up then that amount is going to go up and it is also obvious that when that price goes down that amount is going to go down. We’ve never sought to deny that but what we said was that when the GST was introduced we’d endeavour to offset the impact of the GST by a combination of those two amounts of 6.7 and 1.5. Now there was a lot of debate about whether the 1.5 . . .
MITCHELL:
But the dollar figures will tell us that won’t they? Whether it’s worse or not?
PRIME MINISTER:
Well no except . . . .
MITCHELL:
The amount of dollars that the GST takes.
PRIME MINISTER:
But it won’t necessarily give you the full picture because it will not take account of the fact there may have been consumption switches. See people may buy more or less petrol.
MITCHELL:
Gas prices, sorry gas prices are getting a lot of attention too, now that is directly GST linked, because there wasn’t a tax there before. Gas prices are horrendous at the moment, there’s an industry meeting here in Melbourne today. Domestic gas has gone up at an alarming rate, is there anything that can be done about that? Bottled gas I mean.
PRIME MINISTER:
Well gas is fixed by the world price, there’s no excise on LPG, there is a GST yes. You say what can be done about it? Well what’s causing it is the world price.
MITCHELL:
And the GST.
PRIME MINISTER:
Well . . .
MITCHELL:
There was no tax before, now there is.
PRIME MINISTER:
Yes well I mean obviously there are quite, I mean you’ve picked something that has gone up in price that has a GST. I mean there are lot of things that have gone up in price with the GST, there are a lot of things that have gone down in price with GST. And we’ve never represented that the position was going to be otherwise. I mean of course Neil if you went around and picked any item that the consumer thought was a bit expensive and said well why don’t you Prime Minister take the GST off that because it will make it cheaper. I mean of course I could do that but it would leave our tax system in a shambles.
MITCHELL:
Well yes but the gas is certainly flowing through. I mean cab rates have gone up in this town, delivery costs have gone up, even the price of bread has gone up Mr Howard as an indirect result of the GST. Because fuel prices have gone up, the price of bread has gone up.
PRIME MINISTER:
Well all I can say Neil in answer to that is that the broad measure, the comprehensive measure of the impact of the GST as disclosed in the CPI figure for the September Quarter that came out a few weeks ago was lower than people had predicted. But I mean you may say the price of this and that has gone up and I am not denying that it may not have gone up. I am not denying that but there must have been significant falls in the prices of other things because the price effect of the GST, the impact on the CPI turned out in the September Quarter to be a lot less than we had predicted. Now that is a good thing. But we never suggested, we never denied, we never represented other than there would be some increase in overall prices as a result of the introduction of the GST. Now we can’t walk away from that and we don’t intend to do so. We said that would be balanced by the fact that there would be reductions in many areas and there would be personal tax cuts so that was always the deal if I can put it like that in relation to the GST. Now we could spend the whole day with you saying well if you took the GST off this wouldn’t the price be cheaper and I would be saying yes, yes, yes to every question that you asked. I mean that really is in effect unravelling the tax system and I’m not going to do that.
MITCHELL:
Ok, can I ask you about the roads funding package?
PRIME MINISTER:
Yes.
MITCHELL:
It’s now being announced I think on Monday isn’t it.
PRIME MINISTER:
On Monday yes. I’ve had to re-arrange my schedule because I’m going to visit the flood devastated areas of New South Wales tomorrow.
MITCHELL:
Now this is basically the trade-off for petrol prices isn’t it?
PRIME MINISTER:
Well this is funding that we believe is a much better long-term investment in the country’s future than any alternative. We think the country, and where I say country I mean the whole of Australia …
MITCHELL:
So it will affect the city as well?
PRIME MINISTER:
Oh yes. Oh yes.
MITCHELL:
City roads?
PRIME MINISTER:
You’re going to find that suggestions that this package is just restricted to the bush is quite wrong.
MITCHELL:
So in what sense will it effect the city?
PRIME MINISTER:
Well I’m not going to announce all the details now.
MITCHELL:
I’m not after details.
PRIME MINISTER:
No, no, well.
MITCHELL:
Just a broad idea.
PRIME MINISTER:
Well let me give you a broad idea. All parts of the country, including the cities, are going to benefit from this road package.
MITCHELL:
How much money?
PRIME MINISTER:
A very significant amount of money which I’ll announce on Monday.
MITCHELL:
Will it be equivalent to the amount that’s been taken on petrol tax?
PRIME MINISTER:
Well I haven’t done a deliberate calculation on that but I don’t think anybody will regard this other than a very comprehensive roads package and it is being done by the Government because we see investment in roads as being an extremely good long-term investment.
MITCHELL:
Ok, so it’s fair to say that the capital cities will benefit as well?
PRIME MINISTER:
It is fair to say that. It’s not only fair to say that, it is accurate to say that. It is fair and accurate.
MITCHELL:
That’s what it was on about Prime Minister.
PRIME MINISTER:
Good.
MITCHELL:
And is the package finished fully? Is it prepared?
PRIME MINISTER:
Well all the decisions have been made but with something like this you’ve always got to cross a few I’s, you know cross a few T’s and dot a few I’s. There’s paperwork to be done but the decisions were taken by Cabinet and we needed to get a bit more advice on a few things to finally bed it down. So I suppose you can say it’s 95% ready to go and it will be 110% ready to go on Monday.
MITCHELL:
Do you think the heat would go out of the petrol issue next year? I mean, you’ve got this road funding thing. There’s a possibility I suppose world prices will come down but in political terms do you think the heat will go out of petrol next year for you?
PRIME MINISTER:
Neil, I don’t know. I deal with these issues as they come along and we try and make decisions that represent long-term investments in the country’s future and that’s why we’re doing something on roads. We think that is a better use of the additional resources we found we had after the mid-year Budget review than any alternative and that’s why we’re doing it, because roads last forever. Other things can disappear overnight.
MITCHELL:
It’s not the end of your resources though? There could be more such things could there not?
PRIME MINISTER:
No, but…well it may or may not be the end of our resources but I can’t really speculate about that. Neil, it stands to reason that if we have a healthy budget position and we find we’re in a stronger position, that we’d want to continue to pay off debt because Mr Beazley left us with about $80 billion of debt. We’ve paid off about 50 but there’s still more to go. But it also stands to reason that if we have a capacity to put money into other areas, we’ll do so. We are spending money on tackling salinity, we’ve got a major statement on defence coming out in December.
MITCHELL:
More room for tax reform?
PRIME MINISTER:
Well I don’t know at this stage. We’ve just had $12 billion of personal income tax cuts. No Government that I lead will maintain a surplus just for the sake of being able to say I’ve got a surplus. In any event, it never moulders in the bank – it goes to pay off debt. And if we have the capacity to do additional things then we’re going to do it. But I don’t want to start raising speculation.
MITCHELL:
No, fair enough.
PRIME MINISTER:
In this game, as you know, you speculate about something and if you find for the very best of reasons you haven’t been able to do it, then people say you’ve broken your commitment. Now …
MITCHELL:
Fair enough. Can I ask you about another thing – French nuclear subs visiting here next year – now that’s a bit rich given the way they treated us over testing isn’t it? Is it not outside the guidelines – we normally only have American and British nuclear ships?
PRIME MINISTER:
Well I don’t know that it’s outside the guidelines. I haven’t looked at the guidelines recently, I will as a result of these …
MITCHELL:
The Defence Department Operations Manual is quoted as saying “visits to Australia by nuclear powered warships only from the United States and British Navy”. So why are the French being …
PRIME MINISTER:
Well I’ll seek to get some more information on that. I don’t necessarily think it’s a bit rich, as you put it. Sure they did behave badly – that’s some years ago. The relationship with France has improved since then. I visited Paris earlier this year and met the President and the Prime Minister. It is a relationship that’s important to Australia. It’s not as important as with other countries but it is important.
MITCHELL:
True, the British and Americans though have agreed that if there’s any accident involving their nuclear powered ships that they’d pay to clean it up. Would we seek the same assurance from …
PRIME MINISTER:
Oh we would obviously require the same conditions of the French, yes.
MITCHELL:
Requirements? So they wouldn’t come unless they met them?
PRIME MINISTER:
Oh they would have to … There’s no way they’re going to be treated any more leniently than the British or the Americans, no.
MITCHELL:
Ok, we’ll take a quick call and then more from the Prime Minister. Pauline, go ahead please.
CALLER:
Yes, good morning Mr Howard and Neil. Mr Howard, may I please ask you just for ten minutes to stop and think. Can you imagine if tomorrow morning you wake up and you read the obituaries and one of the first ones is Howard, son or daughter of John Howard and it’s a drug overdose. Is it going to make you act?
MITCHELL:
What do you want done Pauline?
CALLER:
I don’t know, Neil, something’s got to be done and it’s got to come from the top mate.
MITCHELL:
Ok, well that’s interesting. The drug issue Prime Minister – I was going to ask you about that because there’s been a lot of attention on it in this town. Is it time to reassess the principle of zero tolerance on drugs?
PRIME MINISTER:
Well Neil can I answer Pauline’s question. If that happened to me I would be devastated. Of course I would. I love my children very much and I can’t think of anything worse that could happen to me than to lose one of my children, particularly in those circumstances. I’ve spoken to parents who’ve suffered that trauma. I’ve spoken to a lot. And one of the hard things for a policy maker like me is that when you talk to parents in those situations you get different reactions. Some of them think the way to go is to legalise everything and open it all up and have free heroin trials and have injecting rooms and lift the criminal sanctions. Others want to go completely in the opposite direction. Others would argue that even the attitude I’ve taken is not tough enough. So, there’s no clear steer. It’s a very divided community. You ask me Neil, about zero tolerance. I find as always with these things, I find strong supporters of the approach that’s called zero tolerance. I think it’s too shorthand a way of describing it but basically the view which is against liberalisation and legalisation – there’s a lot of support for that. The evidence from overseas is pretty convincing from a country like Sweden where it seems to have worked extremely well. Others would argue that the evidence coming out of Switzerland, which has gone in the other direction doesn’t prove that, although that evidence is a bit mixed. And my sense in the community is that the anti zero tolerance mood has not increased. I think there’s more impatience now with the overt character of drug peddling and so forth in our community.
MITCHELL:
So you think the community is moving towards sort of zero tolerance?
PRIME MINISTER:
Well I hesitate to sort of use those black and white expressions because I think one of the great pities about this debate, and you and I have discussed this before, is that in most areas there’s enormous agreement. In fact the Victorian government, Mr Bracks and the same could be said of Mr Kennett’s government, we disagreed as I recollect it on heroin trials and heroin injecting rooms and that’s all. On everything else we agreed. We agreed on putting more resources into the police. A lot of money going into drug diversion programs. It’s a great pity that we focus always on things like injecting rooms because the impression is created that there’s no agreement between political leaders. That’s just not right.
[ad break]
MITCHELL:
Mr Howard if I may, a couple of quick issues. Your phone bill, you told me back on October 20 it was zero. It turns out your phonecard bill’s $514.85. Has somebody else been using it?
PRIME MINISTER:
No. What happened was that I asked the department what it was and they in writing said it was zero. That was the figure I used in the interview.
MITCHELL:
Where’s the 500 bucks come from?
PRIME MINISTER:
Well they’ve now said it was used by you, and to me there’s no suggestion it was used by anybody else, and they’re giving me details of the usage.
MITCHELL:
But you don’t remember using it obviously.
PRIME MINISTER:
Well no, I mean I could have used it but let’s get this straight. What I said to you was that I’d been told it was zero.
MITCHELL:
I understand that.
PRIME MINISTER:
I had been told it was zero and they’ve now said, no, it has been used a bit. It looks as though the usage could have been mainly, I’m not saying all, but mainly during the time that I was Leader of the Opposition. But let me stress I was perfectly entitled to use it. I had it, it was used for proper purposes. I’m unhappy that I was misled by the department. I mean I don’t know what you do in a situation like this. You ask the department, you get it in writing, you use it publicly, they then come along with a different figure. And then quite naturally people in your position say hey, what’s all this. It’s a purely innocent situation.
MITCHELL:
Yeah, but I’m a little surprised you don’t remember using it.
PRIME MINISTER:
What, don’t remember using it at all? Well if you have a look at what I’ve said, I’ve said that I haven’t used it for years.
MITCHELL:
Yeah but you were quoting the zero figure and accepting that from the department over this period ‘96-’99. Well you’ve obviously used it to run up 500 bucks worth of bills….
PRIME MINISTER:
No the point I’m making is that the bulk of that 500 bucks could have come from the period before I became Prime Minister.
MITCHELL:
There’s no suggestion somebody else has used it?
PRIME MINISTER:
There is no suggestion that anybody else has used it, no. I mean do you remember the circumstances of your making every phone call you made five years ago?
MITCHELL:
I think if I had a card….
PRIME MINISTER:
So you’d remember every time you used it?
MITCHELL:
I’d remember if I had used it, but I haven’t got one.
PRIME MINISTER:
No you haven’t got one. You’re probably entitled to have one.
MITCHELL:
But I think if I had such a card I’d remember using it.
PRIME MINISTER:
Well my recollection was that I hadn’t used it since I became Prime Minister. That was my recollection and the preliminary advice I have, because we’ve questioned these figures, is that most of it was done while I was…..the preliminary indication is most, not all, there may have been one or two calls after I became Prime Minister, but the great bulk of it appears to have been before I became Prime Minister. But this is what I’ve been told. I don’t pay the bills, they are paid by the department but I stress again what I said on your program was based on what I had been told in writing by the department. I don’t know what other precautions somebody in my position can take on that but I clearly wasn’t misleading you or misleading any of your listeners.
MITCHELL:
The Melbourne Reconciliation Walk is coming up. Will you come?
PRIME MINISTER:
Well I have something else on that day in Sydney which I really can’t not go to. It’s an end of year gathering for all of the supporters in my electorate who are very patient and understanding of me being away a lot and it’s the one day in the month that they can do it and this was arranged I should tell you months before I heard about this reconciliation walk.
MITCHELL:
Will you send a representative?
PRIME MINISTER:
The Government will be represented, yes.
MITCHELL:
Do you have any objection to Peter Costello walking?
PRIME MINISTER:
Well it’s a matter for him.
MITCHELL:
But it’s no issue for you.
PRIME MINISTER:
No. None what so ever.
MITCHELL:
Woodside petroleum, are you concerned such a huge Australian resource company may be taken over by Shell which is what Anglo-Dutch?
PRIME MINISTER:
They’re always hard questions to answer Neil because on the one hand the shareholders of the target company are entitled to get a good return if there’s a nice offer in the breeze. On the other hand like all red blooded Australian Prime Ministers I don’t like declines in levels of Australian ownership if it can be avoided. In the end you’ve got to give a lot of sway to the commercial interests of the parties and the market choices that those parties are entitled to make. I don’t think we should lose sight of that but there will need to be a consideration made of the national interest if as appears to be the case there’s a significant reduction in the level of Australian ownership. I mean you say to me in general do I like foreign ownership increasing – no. But if you say to me do I want plenty of foreign investment in Australia I’d say yes.
MITCHELL:
I’d also say to you would you do anything to try to prevent it?
PRIME MINISTER:
Only if I thought that were in the national interest.
MITCHELL:
What could be done?
PRIME MINISTER:
Well there are certain foreign investment approvals required of the Treasurer and that means the government. And if we were satisfied that there was a national interest involved but I can’t be satisfied that that is the case. I mean it is not in the interests of this country to look unfriendly and inhospitable towards foreign investment. I mean we cannot have it both ways. We cannot constantly say we want people to invest in this country, we want them to buy Australian assets, we want them to create jobs, invest in new industries, but when one comes along say no you can’t have that one because we’d prefer it to remain in Australian hands. It’s always a hard choice this.
MITCHELL:
Mr Howard, the Woomera Inquiry has now been called on the allegations of the child being raped. Do you expect if these allegations are proved the government is culpable because nothing was done for a long time after this was first notified?
PRIME MINISTER:
Well because there are legal issues involved I’m not going to answer that question because it might be construed as some kind of admission if I were to say one answer and some kind of denial if I were to say other and I can’t really do either because I’m not in possession of all of the facts. I can tell you that when we came into possession of information that should have been provided earlier we acted immediately. Mr Ruddock has handled this matter promptly. He’s established a proper inquiry with a very experienced and hard headed former bureaucrat and departmental head and Australian High Commissioner to London – Philip Flood – to head it. Now I can’t really say much more until I’ve got the results.
MITCHELL:
Perhaps one you can clear up for me, if charges are laid and convictions come through this, will any convicted person be punished in Australia or would they be deported?
PRIME MINISTER:
I’d have to get some advice on that.
MITCHELL:
Okay. Well thank you very much for your time. I just wanted to ask you, Kerry Packer and the donor are both recovering well.
PRIME MINISTER:
I’m very pleased to hear that and I wish Kerry a speedy recovery, but I also salute his very generous friend and wish him a very speedy recovery as well.
MITCHELL:
Extraordinary. Would you donate a kidney to Peter Costello?
PRIME MINISTER:
He’s not asked me.
MITCHELL:
What do you reckon, if you lined up your Cabinet and said I need a kidney, who would be the first to step forward?
PRIME MINISTER:
That would make an interesting reaction. I don’t know. I thought you’d ask me that.
MITCHELL:
A few of them have attempted surgery on your back in the past.
PRIME MINISTER:
Well I’ve been stabbed in both the back and the front in my political career. I always respect the people who stab you in the front.
MITCHELL:
Thank you for your time Prime Minister.
PRIME MINISTER:
Thank you.
[Ends]