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Transcripts from the Prime Ministers of Australia

Transcript 11945

Interview on AM Programme with Catherine McGrath

Photo of Howard, John

Howard, John

Period of Service: 11/03/1996 to 03/12/2007

More information about Howard, John on The National Archive website.

Release Date: 23/05/2001

Release Type: Interview

Transcript ID: 11945

Subjects: Federal Budget.

E&OE................................

MCGRATH:

Prime Minister thank you for joining AM this morning. Looking first of all at the newspaper coverage, 'Desperate Measures' says the headline in The Age, 'Golden Oldies Gamble' says the Sydney Morning Herald. The Telegraph has a dummied up Seniors Card saying it entitles older Australians to the undivided attention of the Government until polling day. It's not exactly the sort of bounce you would have liked this morning.

PRIME MINISTER:

Well I'm not a commentator. The important message out of this budget from the Government is that because of the careful good economic management of the last five years and the repayment of that enormous Labor debt that we inherited, the country is in a position to make a strong investment in the future. We are paying $4 billion a year less in interest on previously accumulated debt. And it's because of that kind of dividend from good economic management that we are in a position to afford to invest, not only in giving proper relief and help to retired Australians but also to invest in strengthening Medicare, things like asthma, cervical cancer and so forth. All of these things right across the board.

MCGRATH:

You're selling your economic credentials definitely but you've lost the first test do you think?

PRIME MINISTER:

Catherine, you do the commentating. No, no, I'm here to tell the Australian people the reasoning behind the budget and it is for the Australian people to make their mind up at the appropriate time as to whether they agree with what we say or they want to go back to the 17% interest rates, the 11% unemployment and the $96 billion of Government debt that Mr Beazley gave to the Australian economy.

MCGRATH:

Looking at the measures in this budget. $300 for pensioners - it's a bribe isn't it?

PRIME MINISTER:

No it's not a bribe. It is a recognition that help of that kind is always valuable. It is a group in the community who's propensity to spend because of their more limited circumstances is very high therefore it has a stimulatory effect as far as consumption spending is concerned. I don't see it as a bribe at all. I see it as something that they will welcome and I would expect the legislation to give effect to it to go through the parliament very speedily.

MCGRATH:

Well in fact the pensioners lobby groups said, you heard Nora McGuire at the beginning, it's not enough, it will be gobbled up very quickly they said. And they want it once a year.

PRIME MINISTER:

Well I didn't actually hear her at the beginning, I'm sorry there must have been something wrong with the audio. But we took great care when the new tax system was introduced to make sure that there was a real increase in the pension so that the pension will always be, as a result of those changes, 2% in real terms higher than what it would otherwise have been. And it is well.that increase leaves it well over the impact of the cost of living. And in fact if you look at the way the pension has gone in the five years we've been in Government, the increases in the pension have been much greater than the increases in the cost of living over that period of time. And we are the first Government in Australia's history to have tied the pension to 25% of male average weekly earnings. That was something the Labor Party never did.

MCGRATH:

Now if the pensioners say to you though John Howard, on your next 'meet the people' walk through a shopping mall somewhere in Australia, if they say to you '$300 as a one off is not enough for me, plus I want that $1000 I thought I was going to get in the last campaign'.

PRIME MINISTER:

Well what we do with all of these things Catherine is we do listen to people. I do walk through a lot of shopping centres and I will go on doing that because it is the responsibility of a Prime Minister not to hide himself in a radio studio or in a Cabinet room. but actually get out and talk to people. We listen to a lot of people and this budget, like so many of the things the Government does is a response to what people have been saying. But it's also a very responsible long term economic document. I mean we have now run up our fifth successive surplus. We have one of the lowest Government debt levels of any industrialised nation in the world. And can I go back to my first point, that we are able to do the things that we've announced in last nights budget because we have a dividend out of past good economic house keeping. If we had continued down the Beazley path of running deficits we wouldn't have been able to have responsibly afforded things that were announced last night. I mean you can't have it both ways. You can't spend as recklessly as they did, you can't go into debt but also provide benefits because you can't provide those benefits in a responsible climate. And remember this budget underpins the lowest interest rates that this country has had in 30 to 40 years and the greatest gift out of this budget to middle Australia and to small business are the record low interest rates that this country is now enjoying.

MCGRATH:

Well just one more question on pensioners before we move on, if they're saying to you we want more is that it though? Prime Minister, do you say to them I'm sorry, that's it, the..?

PRIME MINISTER:

Catherine we have delivered a budget which we think is fair and balanced and good for the long term future of Australia.

MCGRATH:

Are you opening the door though to..

PRIME MINISTER:

Look Catherine it is absurd. We've just delivered a budget and you're asking me about the one next year. I'm happy to come back after the election if we're re-elected and talk about next year's budget. But this year's budget is a fair, balanced response to concerns that people have. But very importantly it demonstrates that if you show good economic housekeeping, if you pay off debt, you not only get the dividend of lower interest rates but you also have the wherewithal because of the reduced interest payments on the lower debt to spend it on things like education and roads and the environment and defence and protecting this country against things like foot and mouth disease. Without the dividend of past economic good housekeeping we would not have had the resources to do those things.

MCGRATH:

Well looking at Australia's battlers in marginal seats right around Australia, younger Australians, Australians with families, there doesn't look as though it's much in it for them this time.

PRIME MINISTER:

Do you know the greatest thing in this budget for families? Low interest rates.

MCGRATH:

They were there anyway.

PRIME MINISTER:

Catherine if we had gone into the red they would have been put at risk. I mean the reason why we have low interest rates in Australia at the present time is that we rejected the Beazley budget approach. We said no more going into debt, we will repay debt. And by repaying debt we have created a situation where the average family paying off a mortgage is now paying $300 less a month than that family paid when we came to office. Now that is an enormous on going benefit and Australian families I know appreciate lower interest rates. On top of that of course Australian families are continuing to enjoy lower tax levels. The marginal tax rate would cut in at 43 cents in the dollar for so many people. It is now a top rate of no more than 30 cents in the dollar with an income of under $50,000 a year. You put that on top of the lower interest rates - $300 a month cheaper, you put on top of that the fact that people get a 30% tax rebate on their private health insurance. You ask me about families, what about the initiatives in the budget for asthma, for diabetes, for mental health, for cervical cancer. These are great health initiatives.

MCGRATH:

The AMA representing Australia's doctors says the budget falls short of the mark. Rural doctors say the increase, the funding will not meet their increased costs. They're not happy.

PRIME MINISTER:

Well the AMA wanted a budget outcome which would have increased the incomes of GPs by a greater amount than will be delivered under the budget. That is why the AMA President is a little critical of some of the aspects of the budget. But could I point out to the GPs of Australia who I think do a fantastic job, that there are benefits in this budget and the new programs which we are supporting with hundreds of millions of dollars will target areas that GPs have said to us over the years should be targeted - greater emphasis on diabetes. I mean asthma affects almost 2 million Australians. You ask me about what this budget does for families, a budget that gives greater help for families to tackle the problem of asthma, particularly for young children, is a budget targeted very much at the concerns and the needs of middle Australian families.

MCGRATH:

Prime Minister, this budget factors in the sale of Telstra for 2003/2004. Is that going to go ahead?

PRIME MINISTER:

Well the first thing we have to do in that area is to get services in the bush right. Now we've put a lot of money...

MCGRATH:

Yeah but get it right in what way?

PRIME MINISTER:

Well so that the service levels are adequate and people in the country can properly say that we are being treated as fairly..

MCGRATH:

And then it gets sold in 2003?

PRIME MINISTER:

Well the condition is fix it first.

MCGRATH:

So it's in the Budget Paper though.

PRIME MINISTER:

Well of course it's in the Budget Paper but...

MCGRATH:

So if it's not fixed it won't happen?

PRIME MINISTER:

Catherine, we have always said that the sale of the rest of Telstra is conditional on first fixing things telecommunications wise in the bush and that is happening now. Mobile phones, Internet access - all of those things are now occurring in a very dramatic way.

MCGRATH:

Prime Minister, thanks for joining AM this morning.

PRIME MINISTER:

You're welcome.

[Ends]

Transcript 11945