UHLMANN: Prime Minister, good morning.
PM:Good morning Chris.
UHLMANN: Now, some of the piecemeal actions by the governments around the world made your job more difficult, and I'm thinking particularly of government guarantees on bank deposits.
PM:Well there has been a series of, at best, uncoordinated actions by various national governments on this, and this has not created an overall image of international government consistency on these questions.
I think, overall, what we face is a broader problem of a lack of a demonstration of global and coordinated political will to deal with some of the deeper regulatory challenges that we now face, and that, I believe is a key part of the confidence equation and that must be addressed as the finance ministers meet in Washington this weekend.
UHLMANN: Well if some governments guarantee bank deposits and you don't, don't you risk capital flight from our banks?
PM:Well the first and fundamental fact in all of this, Chris, is that our banks are in good working order. Our banking system is the best-regulated in the world and the balance sheets of our major banks is in first-class working order. That's the advice of the Australian Prudential Regulatory Authority.
The second thing, for a long, long time, unlike many countries, we've have had a depositors-first scheme that if any bank got into any difficulty, then depositors would be looked after first. And to augment that the government has already put on paper its proposals to the financial community many months ago for a further financial claims scheme, and that in fact was in direct response to an international recommendation from the Financial Stability Forum which operates under the G7.
We've been acting on this, acting effectively, and to the greatest extent possible in coordination with recommendations with the international body.
UHLMANN: So do you rule out guaranteeing bank deposits?
PM:Well our financial schemes goes to this very question, providing, in terms of the proposal which has been discussed between the banks and the Treasury, coverage for up to 80, 85 per cent of depositors in Australia. This is a considerable advance on the system which existed before and that is currently being finalised between the Treasury and of course the financial community. And, we've acted, and acted quickly on this.
UHLMANN: As the economy slows, and that's expected now, you expect that the IMF expects that we'll see government revenue fall, so will pensioners get relief in the next Budget?
PM:Well, the Government has always said that we are committed to long term pension reform. And, we believe that it's very important to get the numbers right.
As I've said to you and others in other press conferences on this subject, every $10 a week increase in the pension results in $8 billion across the forward estimates - that's a lot of money. That's why we've got to get it right.
But we're confident that we'll get this right by the time of the next Budget.
UHLMANN: So you will be offering relief to pensioners in the next Budget?
PM:Well I'm not going to indicate in a radio interview, Chris, our precise timetable. We've been working through this for many months to make sure that we get the numbers right. It is a huge, huge expenditure. We intend to get the numbers right rather than just pluck a number out of the air as others have done in the political debate on this.
Pensioners, in particular single aged pensioners, have been doing it very tough and for a very long time, going back many, many years. There was no fundamental pension reform under the previous government, during those 12 years. We'vehad to start from scratch on this, and we've been doing it thoroughly, and we are in the process of working through our conclusions on this. And as I said before, it'll be done by the next Budget.
UHLMANN: Looking at other places where people are feeling pain at the moment, there isn't really anything any government can do to protect someone's super, is there?
PM:Well, on superannuation, as I've said in interviews again in recent days, it's just a simple basic and terrible fact that the falls we see on global stockmarkets directly affect what happens with people's superannuation earnings. And that is happening right across the world and it's affecting superannuants here in Australia.
Our job is to ensure that we provide strong, decisive action to maintain the overall strength of the economy and to deliver on those measure that we introduced through the Budget, including our $55 billion family tax support package, including tax cuts, increases in the childcare tax rebate, and other measures.
Of course, when it comes to the specifics of superannuation, stockmarkets have been heading in the wrong direction. What we can do is maintain strong economic direction and provide support to families by other means.
UHLMANN: Prime Minister, are we likely to see increases in health insurance premiums as the funds face losses on their investments?
PM:We have no advice to that affect, Chris. I think the overall thing is to ensure that we are providing overall assistance to the family budget when the family budget is under so much stress. I go back to what I was saying before about our $55 billion package to assist families through our Budget, including significant tax cuts that have been delivered since 1 July.
UHLMANN: Alright, looking more broadly, can you afford an extra $23 billion over the next four years for the states on top of the $33 billion they already get?
PM:Well I just noticed a report on that in one of today's papers. That I presume, is some sort of wish list put out by someone from the states. I'm unfamiliar with that number. I would think that the best way to continue that negotiation, between the Commonwealth and the states, is for it to be done through the normal meetings between the Treasurer and the heads of treasuries. That works (inaudible) and it's thorough work and needs to be completed that way.
UHLMANN: It's done though to put pressure on you, isn't it?
PM:Well, the states can jump up and down and put any public pressure they seek to put on me, I won't be responding to that.
My responsibility is to deliver continued strong, economic leadership to the country which means, as you've seen through the Budget, delivering a strong surplus which is a buffer for us to use in the future, and to engage the states and territories in a real reform of the Federation whereby the Commonwealth invests more and the states do more. That's the bottom line here.
We're not simply going to extend to the states any blank cheque and we won't be extending to the states a blank cheque in the order of magnitude I see reported in today's newspapers.
UHLMANN: Prime Minister, just finally, we're coming to the end of George Bush's term as President of the United States over the last eight years. How would you assess the job he's done, was it a good one?
PM:Chris, I'm not in the business of providing foreign policy commentary on the performances of other heads of government. The core thing is this: Australia is a strong ally of the United States. I speak with the President of the United States on a regular basis and I believe that in dealing with the challenges ahead in the global economy and security, Australia must deal with any administration, Republican and Democrat, and there's been good cooperation between Australia and this Republican administration in some of the challenges we've had to deal with in recent times, including the treasurers' upcoming meeting in Washington, including with the US Treasury.
This G20 meeting, that's coming up over the weekend, is absolutely critical to deal with the challenges of long term regulatory change to the financial system. That's in turn critical to restoring confidence to markets, and that's where Australia and the United States are working closely together.
UHLMANN: Prime Minister, thank you.
PM:Thanks Chris.