Subjects: economy; budget; Liberal Party leadership; petrol prices; Sydney’s second airport; welfare report; relations with Indonesia; research and development.
E&OE………………………………………………………………………………
GLENN MILNE:
Well we're headed into an election year after the Christmas break, but there are some worrying signs on the horizon - home lending is down, unemployment is up, for the moment interest rates are on hold. But do you think the economy could afford to slow any further?
PRIME MINISTER:
I think the economy is moving a little more slowly than it was a year ago and that's not necessarily a bad thing. We had very strong employment growth three months ago, stronger than I thought, and you therefore are seeing understandably a bit of an adjustment in the figures in the last couple of months.
So it's too early to talk about unemployment rising. After all it's still near a 10 year low.
GLENN MILNE:
So you could expect it to drop again?
PRIME MINISTER:
I don't know. I can only in a sense repeat the best advice we have from the Treasury and that is that unemployment is likely to remain about where it is now well into next year.
GLENN MILNE:
Well you told your party room this week that the Government had probably had the best year of its term so far. Your previous public remarks have been all about an election probably sometime after October next year. Are you still locked into that timing?
PRIME MINISTER:
Well you're never locked into a particular timing but the election is due around October/November of next year and at the moment I can't really say any more than that. That's when it's due. You fight too hard to win elections to go earlier than your appointed time.
Three years is a pretty short period by world standards. I'm in no particular hurry to go to the public. But I accept that, under the constitution, I've got to go to the public and, as you should in a democracy, by the end of next year. And I can't really say any more than that.
GLENN MILNE:
Well I thought one thing that might hurry you up is the turmoil in the Labor Party over alleged electoral rorting at the present time. I mean Queensland in particular is in a terrible mess. You're not tempted?
PRIME MINISTER:
No, no, I think that would be seen very cynical. You don't get any marks for that. What the public want from us is good government and that's what we're trying to deliver and we're making decisions.
We just brought down the biggest defence revamp in a quarter of a century. We've delivered this huge change in the tax system. We've got a major directional statement from Jocelyn Newman on welfare policy this week. So it goes on.
I mean while the Labor Party wallows in internal recrimination and rorting, we'll get on with good government.
GLENN MILNE:
But it's clear of course the problems with rorting are spilling over to both sides and there's general cynicism amongst voters. One of the things that the Labor Party is suggesting is that the Electoral Commission ought to come in and oversee internal party ballots to stop this sort of practice. Do you think that's something you might embrace?
PRIME MINISTER:
Glenn, there's no former member of the Liberal Party in gaol for criminal fraud. That's how this all started in Queensland. So let’s have none of this business of, oh, it's six of one and a half a dozen of the other. It's not.
GLENN MILNE:
All right, so you're not tempted to go early? We're still looking at October probably. Do you think though that, given you're sitting on a large budget surplus, that personal tax cuts could be on the agenda next year?
PRIME MINISTER:
Well we've just had a huge personal tax cut.
GLENN MILNE:
Well you know what voters are like, they'll always take more from Government.
PRIME MINISTER:
Well that's understandable because, afterall, it is their money. It's not our money. It's theirs and they're entitled to have a strong view about what's done with it.
Glenn, we've just had a very big personal tax cut. We need to maintain a decent budget surplus. I'm not going to get into speculation about further rounds of tax cuts. We'll obviously look at our budget position when the budget is brought down.
We've got other commitments. In the New Year I'm going to have something to say about innovation policy, and that's a very important thing about the country's future, our science base, our technological base, our innovative capacity. All of those things are very important. So there's a lot to be done on the nation building side in the broadest sense of the word. But we always try and keep these things in appropriate balance.
GLENN MILNE:
Well an appropriate balance sounds like tax cuts dependent on size of budget surplus. Is that a fair equation?
PRIME MINISTER:
Well they're your musings. They're not the Prime Minister's responses.
GLENN MILNE:
Equation.
Okay, you've signalled that you'll probably retire mid term if you win the next election. But you seem to have kept the language deliberately vague. Is there any chance that you would stay on?
PRIME MINISTER:
Glenn, what I said in that interview I did on my 61st birthday was that, by the time I got to the age of 64, I'd start thinking about my future. Now I think that's an honest statement of the position. I neither add to that nor subtract from it. It's always been the position. It's been the position since I made that statement, and nothing I have said since has qualified it or added to it.
GLENN MILNE:
Governments get shock wall, of course, after time. What's your assessment of your relationship with the Australian people now? Do you think they still like, trust, respect you?
PRIME MINISTER:
I would hope that the Australian public think we're doing a good job. I don't expect every decision we take to be popular but we have tried to do the right thing by the country, rather than serve sectional interest groups or respond to transient political pressures. We've tried to take a long-term view.
That was most evident with things like tax reform. That was very unpopular, and I'm sure I've probably made some enemies along the way in the process of implementing those changes. But I've probably also made some friends in the terms of people, even though they may not like my policies, they respect the doggedness and the consistency of the Government in always trying to do the right thing.
GLENN MILNE:
I was going to say, do you think you're a Prime Minister whose relationship with the people is built on a sort of grudging respect rather than an emotional bond of some sort?
PRIME MINISTER:
Well that is for others to decide. I am not like some of my predecessors who are preoccupied with, you know, self-analysis. I try and do the right thing by the Australian people. I find, when I mix with the Australian people which is very frequently, that my relationship with them is easy and open and friendly. That's not hard because Australians are easy people to relate to. They are very direct. People are very direct with me, sometimes critical, sometimes supportive. And that's how it should be. And I do spend a great deal of time talking directly to people - far more than many allow for.
GLENN MILNE:
So you don't consider your Government is at the same stage as, say, the Government that Paul Keating led?
PRIME MINISTER:
No, I don't find, as I move around Australia, a sort of visceral political hatred of the Government. I certainly don't. I find people happy about the broad direction of what is being done, critical on particular issues. I mean everybody is very unhappy at the moment about the price of petrol. So am I.
GLENN MILNE:
But there are signs it's coming down, don't you think?
PRIME MINISTER:
There are, and they're welcome. Any strengthening of the exchange rate of the Australian dollar against the US dollar helps and other things help as well.
In the end what you've got to try and do is deliver good government for the generality of the Australian people. And if you do that, and you don't get preoccupied with your own political persona, as distinct from doing the right thing by the public, then I think you can keep them supportive of what you're doing.
GLENN MILNE:
Is Peter Costello now your obvious successor, do you think?
PRIME MINISTER:
Well Peter is very competent and he'd obviously do a very good job as a party leader. But I have always taken the proper view that it's not for me to decide who my successor is when the time comes to choose one. That's not my job. It's the job of the parliamentary party.
GLENN MILNE:
Are there any other candidates?
PRIME MINISTER:
Well the question whether there are other candidates, and I think there a lot of other competent people in the party as well, is a matter for the parliamentary party at the time. Now we don't know when that is, nobody does. And all I can say is it will be their decision. I owe my position to their decision and my successor will owe his or her position to their decision as well.
GLENN MILNE:
Prime Minister, before we get to those big, domestic agenda items we were discussing - Indonesia. We had the first visit by a Ministerial group to Australia since our difficulties over East Timor. It was an on again, off again visit. Encouraging signs, do you think?
PRIME MINISTER:
Yes, I thought it was good that it finally happened and the substance and the atmosphere of the meeting was excellent. Our relations are improving. There's still a long way to go and you have to take it in a measured way that is consistent with the political dignity of each side.
But we are seeing an improvement at the Government level and that's very encouraging. I had a very long discussion with the Ministers and particularly with the Foreign Minister, Mr Shihab and…
GLENN MILNE:
He's not a great fan of Australia…
PRIME MINISTER:
Well he has been critical in the past, yes. But he indicated to me that, to use his own language, we are on the upward rather than the downward. And that's good.
GLENN MILNE:
Any sign of a visit from President Wahid?
PRIME MINISTER:
Well that's a matter for President Wahid. He is welcome if he wants to come. And I hope he will come. I've had three very productive meetings with him in different parts of the world - in Tokyo, New York, and Brunei and I hope the next meeting might be in Australia but that's a matter for him. He's very welcome.
GLENN MILNE:
Right, to Sydney airport. You've said that we're going to have a decision on Sydney airport, the second Sydney airport by Christmas. Is that still going to happen?
PRIME MINISTER:
Well I said that I hoped to be able to say, or the Government hoped to be able to say something substantive about it by Christmas. Now we're going to discuss the matter again at our Cabinet meeting this coming week so perhaps somebody ought to ask Mr Anderson a further question about that after the meeting.
GLENN MILNE:
So, it will be before Christmas?
PRIME MINISTER:
Well I can only repeat what I've just said. I don't…
GLENN MILNE:
I'm just interested in the form of words you're using. This is clearly not going to be a final decision.
PRIME MINISTER:
Well I think, if you go back and have a look at what I've said before, I've…Whatever comes, there will be a statement about the situation of some kind before Christmas. Now it may not be a completely final decision. It's a difficult issue and it's a moving game.
I think a lot of people were impressed with the capacity of Sydney airport during the Olympic Games. And that has had an impact on the thinking of some of our aviation advisors. It's one of the things that you have to keep in mind.
GLENN MILNE:
In Parliament last week on that sort of theme you mentioned that Sydney airport, one of its great advantages was that it was close to the CBD and that was an advantage on which we should be building. That seems to suggest that Badgerys Creek is a long way from the CBD.
PRIME MINISTER:
Well Badgerys Creek is a long way from the CBD. But we have to keep a number of options open and that is what we are doing.
GLENN MILNE:
Like Kurnell.
PRIME MINISTER:
Well I'm not going to rule anything out. I understand people's sensitivity wherever you look. I mean you can always expect that people in an area that might conceivably be affected will be unhappy. That applies to Badgerys Creek. It applies in relation to people who live around the existing airport. It applies to any other option that's ever been considered. There is nothing surprising about that.
But I just want to say that, when we take the final decision, it will be one that is in the best overall interests, including a concern that no one section of the Sydney population carry all the noise burden. That is something we will not do.
And the other thing we will not do is relax the curfew.
GLENN MILNE:
The McClure Report on Welfare: That's another big agenda item that we referred to earlier. What is the Government going to say about those welfare reforms?
PRIME MINISTER:
Well I'll leave that to Jocelyn Newman. She's making a directional statement next week. You can be certain we won't be using welfare reform as a cost-cutting exercise.
GLENN MILNE:
So does that mean more money for welfare?
PRIME MINISTER:
Well it could mean up front some additional resources, yes. If you look at McClure, McClure is about expanding what he calls participation. The long term dividend of that is that you'll have fewer people on welfare and more in work. So in the short term it might involve the investment of more money. In the long run it will be beneficial to the budget because there will be fewer people dependent on welfare.
GLENN MILNE:
So in other words, spending more money at the start to save more later.
PRIME MINISTER:
Well that's another way of putting it, yes. But I do want to make the point that this is not a cost cutting exercise. We believe in a social security safety net. We don't believe in casting people off when they are most vulnerable. That's not part of the Australian way and we certainly won't do it.
GLENN MILNE:
Now, the research and development innovations package that's due next year. Will that involve a restitution of tax breaks for research and development?
PRIME MINISTER:
Well I'm not going to get into the detail of that. There are a lot of things involved in the general umbrella of research and development innovation and tax concessions are only one relatively small part of it. There's a lot more to it. There's the whole sort of university infrastructure. Promoting ideas: Australians are very good at ideas. We really punch above our weight. The big weakness we have is converting the ideas into positive commercial outcomes.
GLENN MILNE:
And keeping them here.
PRIME MINISTER:
And keeping them here. I mean it breaks your heart to see these great Australian ideas sold off because nobody will risk investing in them in this country. And we've got to try and alter that culture and we’ve got to stop bright men and women leaving this country, and we've got to bring them back.
And we also have to be as attractive as possible to bright people from around the world. And one of the things we ought to do is have, I think, a more open view perhaps in relation to our immigration policy in concerning this. I mean we want the brightest and the best, not only to stay here, but also where possible the brightest and the best from around the world to come here. I think that's very important.
GLENN MILNE:
So a more flexible approach to those with skills.
PRIME MINISTER:
Well that's one of the things that we have under consideration, very much so, and I think it would make a positive contribution as one of the things the Americans do. And I've given this a lot of thought. I believe that greater flexibility in that area would be part of any really broad approach to innovation.
GLENN MILNE:
Prime Minister, you've obviously got a lot of work to do before the holiday break, but do enjoy your Christmas.
PRIME MINISTER:
I will and merry Christmas to you and your listeners, Glenn.
[ends]