PM: It's good to be here at Geelong again and good to be here with our local Member and to talk about the needs of Geelong Hospital. This is an important part of the entire national network of hospitals which we'll be supporting through the new National Health and Hospitals Network. Funded nationally, run locally with the Australian Government, for the first time becoming the dominant funders of the public hospital system of Australia. This is going to be a very big change.
In the years ahead, that is the next two to three years ahead, the Australian Government will be investing a further one and half billion dollars or thereabouts into the Victorian public hospital system, in order to fill some of the gaps which currently exist, whether it's in accident and emergency, or elective surgery, or adequate hospital beds, or enough doctors and enough nurses. Then we fold into the long term reforms to be delivered through the National Health and Hospitals Network. But with one purpose, to deliver better health and hospital services to the Australian people and the people here in the wider Geelong region. That's what's so important, making it happen on the ground.
We've already made a start here in Geelong at this hospital. We've invested, already, $5 million, or thereabouts in expanding the elective surgery capability of this hospital, plus an investment in a couple of additional theatres as well as an additional investment in other support services for those theatres. This is important for the future, but I've got to say there's much, much more to be done and we have just begun.
Of course the Australian Government's ability to fund the National Health and Hospitals Network rests on the continuation of a strong economy. A strong economy based on strong public finance. A strong economy also based on international financial markets and their perception of this economy and also the strength of the global economy writ large. Which brings me to recent developments overnight in Greece and more widely in Europe.
Overnight, global markets have returned to the turbulence that we saw back in 2009. On the streets of Europe, and the stock exchanges right across Europe and the world, we have had a sudden reminder of the fragility of the global economy recovery.
I've said this repeatedly in recent months and I say it again - we are not out of the woods yet. We've therefore got to follow these developments with great, great care, caution and concern. I just this morning been briefed on developments in Europe overnight from the Secretary of the Treasury in Canberra
The immediate problem is that the Greek Government is struggling to cover $10 billion in its own debt payments due later this month.
The European authorities and the IMF are currently working their way through a $140 billion package of support for Greek Government. The Greek Government is working to implement its own fiscal consolidation strategy. There is therefore a framework of response for the Greek crisis. We need, however, to continue to work very closely with the international financial authorities to ensure that that framework is implemented effectively on the ground and that the confidence of financial markets is restored.
The Australian Government continues to monitor these developments in Greece and more widely in Europe closely. We have Treasury officials, as we speak, working around the clock to ensure that these developments are not only monitored closely, but that any response that is required from us is, in fact, delivered at the right time as well. We have been doing this, not just in the last several days, we've been doing so over the last several recent weeks and months as the situation in Greece has unfolded.
As for the implications for Australia, let me be very blunt about our circumstances. The Secretary of the Treasury again advised me this morning that Australia's national accounts, our national balance sheet, is uniquely positive compared with the other balance sheets of the other advanced economies of the world.
Our public finances are strong in Australia. We have continued growth in our economy, the only economy amongst the major advanced economies not to go into recession. Furthermore, Australia's public debt as reported in our most recent statement through the MYEFO document peaks at some 9.6 per cent of GDP in 2013-14. This contrasts with that projected for the rest of the developed economies of the world peaking at 117 per cent of GDP. In other words, that for Australia lies at less than one-tenth of what applies to the OECD on average.
This, therefore, marks Australia's strength against the rest of the world and, as the Secretary of the Treasury reminded me this morning, Australia in a uniquely positive position in terms of the strength of its national accounts, the strength of its public finances and the strength of the economy overall.
These facts are well recognised by international financial markets as they follow developments around the world and look particularly at the strength of Australian financial markets and Australia's underlying economic strength and the underlying strength of its public finances.
The Australian people, therefore, should have confidence that the Australian Government negotiated our way through the global financial crisis during the turbulent events of 08 and 09. We did so in close cooperation with our economic regulators.
The Australian Government again will negotiate our way through the current challenges and those challenges which lie ahead, drawing upon the same team of economic regulators. Therefore we should, as a nation, have confidence in this country's capacity to withstand any subsequent financial and economic shocks arising from the crisis in Greece and the crisis in Europe. We will however remain vigilant
It's important also, to be mindful of the recent advice of the International Monetary Fund on the global economy. This contains two key recommendations for Australia and related recommendations for other countries.
The first of those recommendations from the IMF is this. Continue to implement the remaining elements of the Government's economic stimulus strategy, given the uncertainty of the global economic recovery. The second is this, to put in place a clear strategy for return to budget surplus.
These two courses of action have been implemented by the Government rigorously so far, will be reflected again in the Budget which will be released next week. This is the sober course of public finance action that is necessary under these circumstances and has been underpinned by the independent advice of the International Monetary Fund.
I remind people of the following. Of the major advanced economies, Australia was the only one of them to maintain positive economic growth, the only one of them not to fall into recession, with the second lowest unemployment, the lowest debt and the lowest deficit of all the major advanced economies.
To conclude on this, can I make one further comment. Given the nature of the IMF's advice, given also the uncertainty of the global economic recovery, now is not the time for risky snap decisions to be made on the run concerning our economy. Mr Abbott recommends that we pull the plug on economic stimulus now. Given the uncertain state of the global economic recovery, given the clear advice by the International Monetary Fund, that represents irresponsible, risky and reckless advice on the part of Mr Abbott.
International markets are still very, very volatile. That's why we've stuck to our position of maintaining the implementation of our economic stimulus plan. The Australian economy can't afford a jolt or a shock through the sudden withdrawal of that stimulus. Let me repeat and be absolutely clear, international markets are still volatile and therefore it is imperative that we maintain the implementation of our economic stimulus strategy as recommended by the International Monetary Fund. Any sudden jolt or shock in our policy, as recommended by Mr Abbott, would be precisely the wrong thing to do in these delicate global economic conditions.
Finally, the Budget next week will stick to the same continuing strategy we've outlined in the past. It is the right course of action which has steered Australia through the economic crisis so far. It is the right course of action given where we are in terms of the global recovery. It represents the right course of action into the future as well. I'm happy to take your questions.
JOURNALIST: Has Treasury told you at all about how or whether the shockwaves from (inaudible) central Europe on the market, the international market overnight will have on Australia and our economy and what we have they told you we could do about that?
PM: I spoke at length to the Secretary of the Treasury this morning about these questions. These are important matters of concern, not just for Government officials but also all Australians and the entire Australian business community.
First and foremost we have to be very mindful of the impact of any problem of confidence in Europe becoming more widespread in terms of its impact on international financial markets more generally. Secondly, we are therefore working in very close collaboration indeed with our counterparts in the G20, the largest economies in the world, to ensure that our responses to these developments around the world are properly integrated and coordinated.
Furthermore, what the Secretary of the Treasury has advised is that, given the uniquely positive circumstances of the Australian economy - strong public finance on top of the fact that we have strong and positive economic growth - places us in a uniquely positive position when viewed from the perspective of international financial markets more generally.
When I finish my program in Melbourne today I'll be returning to Canberra late this afternoon, early this evening for further briefings with Treasury officials on developments in Europe over the past 24 hours.
JOURNALIST: So it's a watch and wait approach at this stage?
PM: We need to monitor closely what's occurring. We need to maintain close liaison with the economic regulators who assisted the Australian Government to steer our way through the financial crisis of 08-09. The same economic regulators are monitoring developments at home and abroad as we speak. We'll be meeting with the Secretary of the Treasury and other officials when we return to Canberra later today.
That is the prudent, normal course of action under these circumstances. As I said, we've had our Treasury officials monitoring these developments closely, not just for the last few, days, not just for the last few weeks, but for the last few months, because this is an international financial market we're talking about.
JOURNALIST: Did Cory Bernardi play the race card this morning, or last night, when he called for the burqa to be banned?
PM: You know something, it's really important just to be clear about all this. I believe Australians pride themselves in having a diverse society, one which is characterised by tolerance, one where we don't stand up and give people lectures about what they should be wearing and what they should not be wearing. I think that's a pretty basic first point.
Secondly do we really want an Australia where we start, through our language, to try and turn one group of Australians against another? I don't think so, not the sort of Australia that I want to see for the future. I haven't seen any form of advice from any law enforcement authority, anywhere in the country to us that suggests that we should do anything different. I just think it's pretty important to be responsible in our public comments on sensitive matters. I've said before, I don't think Australians would like to see one group pitted against another. I don't think that's right. I don't believe that's the sort of Australia that we want to see in the future. I think we've got to be very careful about these sort of statements. What I want to see is a diverse, tolerant Australia for the future, based on mutual respect and a common obligation to adhere to the laws of the nation.
JOURNALIST: Do you accept Tony Abbott's assurances that he, you know, doesn't agree with Cory Bernardi and that it's not Liberal Party policy.
PM: Well, that's a question for you all to put to Mr Abbott. What is shows is -
[PA Announcement]
PM: Can I say to all members of the press, if you haven't had your flu vaccinations yet, queue up over there and I'll use a syringe and personally administer it to you.
[Laughter]
PM: Back to what we were talking about. The question was about what Mr Abbott has said. You know, I think what this, at best, shows this is a Liberal Party in absolute chaos when it comes to delivering one policy. You have the Parliamentary Secretary to Mr Abbott going out with this statement, and then Mr Abbott 12 hours later saying, well, it's not our policy. What's actually going on in the Liberal Party? I mean these are sensitive and important matters which have a real effect on community life. I believe in a tolerant, diverse Australia. One where we actually embrace the diversity within our community and where we have no interest as a nation in setting one group against the other, no interest whatsoever.
Think what happens in other counties when that occurs. It's really bad. What I see across Australia is everyone, frankly, at the coal face, making it work, getting on with one another.
Let me give you one further example.
Last night I was out in Epping, which I discovered last night, is an hour and half drive from the middle of town. It was a fair old trek north. It was the Italian community celebrating the 50th anniversary of Il Globo, the Italian language newspaper. There we had representatives of the Italian community who've been at the coal face, building this nation of ours for the last half a century including the folk who started off the newspaper back in 1959 when most of you weren't born. I was just born. What they said, and I listened very carefully to what they said last night, is that when they came to Australia in the late 50s there was all sorts of prejudice and discrimination against Italians, all sorts of prejudice and discrimination against people who'd just arrived. And they are so glad of the fact we have put those years behind us, that it's actually a different Australia today. Let's keep it that way. Let's keep it that way. Let's remember some of the bad things that we've had go on in the past in this country. Learn from those lessons for the future and let's ensure that we keep this a great country that we all believe in, that I believe in. One marked by tolerance and respect and adherence to the law.
JOURNALIST: You mentioned that our markets can't afford a jolt by withdrawing the economic stimulus. Have you then introduced this mining tax, through no fault of your own, but at the wrong global time, will this also further impact the market?
PM: Well let me provide you with one part of a response to that before I respond to it more generally, and that is a couple of days ago there was a bloke who went out there, in fact it was on Tuesday, from a company called Cape Lambert, and said that the Government's decision to introduce a super profits tax for the most profitable mining companies in Australia would lead to the destruction of his project. And then we discover yesterday that the same chairman of that company, I'm advised, goes about and purchases a million shares in that company.
Now, I think the Australian public are a bit sceptical about that sort of behaviour. They like to see a bit of consistency.
And can I also draw your attention to what the former head of the Minerals Council of Australia had to say, David Buckingham, he said, and this is him, he's acted as chief executive for the mining council of Australia, he's described the response by some of our largest mining companies as quote 'hysterical'. He's said that all these threats to withdraw exploration, quite frankly, these threats were never true in the past, and they are not true now. He goes on further to say that in fact the tax reform we've planned for the mining industry, which includes new incentives for the exploration industry, better treatment of small to medium sized companies who are not generating profits upfront, will actually lead to the growth of the mining industry over time, consistent with Treasury's modelling, that the overall increase to mining activity would be something like 6.5 per cent.
So I think people will be taking with a grain of salt, some of the statements being made out there about threats of project closure.
One further remark just on that though. Our position on this is clear. What Mr Abbott has now done is take another knee-jerk decision yesterday to oppose our plan to deliver better superannuation for working families, and tax breaks for small business. Let's be very clear about it. Mr Abbott has sided with the most profitable mining companies in the world, and turned his back on better super for working families and tax cuts for small business. What we say is that when it comes to the mineral resource wealth of Australia, the Australian people own those resources, and they deserve a fairer share from those resources to fund better super, better tax cuts for small business, and better infrastructure for the future.
JOURNALIST: Seeing what's happening in the global market, is it great tax reform at the wrong time?
PM: Can I say that you have seen Australian mining shares over the last several years go up and go down, and go up and go down, that's what happens when it comes to stock markets. It's very easy for an individual mining company to take a particular slice of time on a stock market and say this, that or the other happens to be happening. I think people need to take a broader perspective on that, and if you want a broad perspective on, frankly, the recovery of the Australian share market over the last 12 to 18 months, based on the fact that this economy has done so well in the midst of the global economic crisis, frankly, that's because the Government has been out there making tough decisions on the economy, keep positive growth, prevent the economy from going into recession, preventing half a million Australians from losing their jobs. Imagine what it would have done with Mr Abbott's strategy of junking stimulus to employment here in Geelong. Just in Geelong alone, think about the consequences in this economy, this regional economy, had we done nothing, we saw the same unemployment rates as in America and Europe, it would be now 10 per cent plus, according to what's happening there. That translates into another half a million Australians out of work, and in sensitive areas such as this, you'd have thousands of Australians out of work with huge impact on local community life and small business.
JOURNALIST: Commsec has issued a strong buy recommendation for BHP Billiton and Rio shares this morning, does that give more credence to your theory that the miners are being perhaps a bit Chicken Little on the Super Profits Tax?
PM: Well I noticed a few billionaires out there in the last 24 hours saying that they are going to have a real problem with this. I'm pretty interested in what working families need for better super, to have a decent retirement with, and for the 2.4 million small businesses out there trying to have a go. I'm really concerned about that. And one other thing, if I look down here at Geelong, long term, and around the nation, funding the infrastructure these communities need. What I'd like to see is a fairer share for the infrastructure needs of growing regional communities around Australia, for the millions of Australian workers who are worried now about whether they have enough money to retire, to get them better super by raising the SGL from nine to 12, and better tax breaks for small business.
So I think, when people look at what Commsec's saying, what the former head of the Minerals Council of Australia is saying, look at the actual behaviour of certain company executives from a company like Cape Lambert, I think they may just pause and reflect and scratch their head and just wait for a bit more of this evidence to come out.
JOURNALIST: (inaudible) clearly sided with the Opposition, does that pose a significant problem for you in an election year when the Leader of the Opposition now has these super rich companies behind him?
PM: Well my job as Prime Minister is to stand up for the national interest and to stand up for working families, pensioners and carers. I intend to do that.
This will be a tough fight. Prior to the last election, the same companies came out and said that if we got rid of WorkChoices, the economy would fall apart about three hours later. Well guess what - it didn't. There was a very big campaign against the party that I lead prior to the last election, saying that the mining industry would fall apart if we got rid of WorkChoices and got rid of AWAs. None of that's happened.
20 years ago, the Australian Government, the then Keating Government, introduced something called the Petroleum Resource Rent Tax. Guess what, it taxes at a rate of 40 per cent, you know where it applies, to all those offshore developments off the North West Shelf. And in the 20 years since then, we have seen massive developments including the biggest resource project Australia has seen, the Gorgon project, a $50 billion investment. Twenty years ago if you read the editorials of the financial newspapers, they said that this would be the end of the world as we knew it. In fact I re-read one of those editorials the other day, the Financial Times, 1985, I draw it to your attention for your lunchtime reading. Guess what - it didn't happen either. So a whole lot of people, defending their individual interests are going to go out there and threaten all sorts of things. My job is to act in the national interest and I intend to do so. The opposition will be stiff, Mr Abbott has decided to side with billionaire miners against the interests of working families and better super, and small business, who are crying out for some tax breaks.
Thanks folks, got to zip.
JOURNALIST: Just quickly, Geelong [inaudible] in the Budget, will it do well in the Budget?
PM: [inaudible]. That's fantastic. Well you know as I said before, Darren and Richard have been in my face and Treasurer's face about the needs of this local community for a long period of time. And it's not just some of the big investments we've made here in the hospital, the fact that we've got a Super Clinic which is due to be opened a bit later in the year, that's a big investment from the Australian Government, the fact that we already have a significant investment here in the local community in support of, dare I say it, the Cats, and the needs specifically at Kardinia Park, $15 million -
JOURNALIST: $14 million -
PM: - there you go, you got an extra million, and I understand they're probably going to hit us with some more in the future as well. Well, I'll leave that for the proper process. You know what the key thing is here? For communities like this, we have kept the economy strong. So many of the readers of your local newspaper, the Advertiser, so many listeners to your local radio stations, their number one concern is keeping their job, and what we have done through the national stimulus strategy is have unemployment at 5.3 per cent. That is the second lowest unemployment rate in all the major advanced economies. That is number one, two and three. And having a strong economy able to fund the future growth, in partnership with the Victorian Government and Geelong Hospital and local health services, these are big things for the future as well.
Now I've really got to zip.