HOST: Prime Minister, good morning.
PM: Good morning, Steve. Thanks for having me on your program.
HOST: Pleasure. When was the last time you sat down at spoke with a real working family and do you think they would thank you for last night's Budget?
PM: I think I've spoken to a lot of working families during my recent tour of the nation's public hospitals. I got a very clear idea then that one of their priorities was making sure we had a decent health and hospital system for the future. This is one of the reasons why in the Budget last night you see such a large investment in the future of our hospital system, some $7 billion-plus of additional investment for more hospital beds, more doctors, more nurses, more GPs. I think that's a pretty basic delivery point for people listening to your program.
HOST: If you smoke and you're a working family, you whack them in the Budget. That's probably reasonable. If you've got a mortgage, though, we've had six rises. We've got food and grocery prices that keep going up. We've got the failed Grocery Watch. Petrol's back at high levels, most expensive since the global financial crunch - no Petrol Watch. You've promised to eliminate the double drop off for mums. That's been broken. You've promised GP super clinics. You've built 3, only, of the 31 that you ultimately want to build. And of course we have the great moral challenge of our time to protect future generations of Australian children from climate change - you've walked away from that. You really let the working families, down haven't you?
PM: One of the big responsibilities we've got for working families, and all Australian families, Steve, is to make sure we keep the economy strong. I believe very much in making sure that we have strong public financial management. That's why we've got in this Budget responsible management. The Government will halve peak debt and get the Budget back into the black in three years. That's three years ahead of time-
HOST: -Prime Minister what about those points I made about the environment and petrol and groceries and schools?
PM: Let's go to one of the points you just made which is also relevant to health, which is GP super clinics. At the last election we said that we would fund, I think, 35 or 36 of these. As of now, two years down the track, we have 11 in operation, we have another 17 under construction, this from memory by the way, and contracts I understand, have been settled on the others.
HOST: I won't trade memory with you, because you have a good memory. I thought it was 3 complete and 11 in the pipeline?
PM: I think we've got 11 which are operating fully or partially, we've got 17 under construction. These are my most recent numbers, and the others are with contracts either determined or almost determined. You'd understand that in each location sometimes difficulties arrive, but you're speaking from Melbourne this morning - I was down at Geelong not long ago looking at a new GP Super Clinic there which is almost up. It will be a huge addition to the health services in that area, not just with more GPs operating with flexible hours, but also on top of that, with more practice nurses, allied health professionals, so that people can better health services in the community. That's why a huge part of our investment in this Budget for mums and dads and kids right across the country is building this new National Health and Hospitals Network.
HOST: But mums wanted no double drop-off. That promise was broken. You promised the families of Australia that you would deal with climate change and you said it was the great moral challenge of our time. The ETS has been shelved. I mean, working families expected you to deliver on those promises from 2007, you promised them you would and you've walked away from them.
PM: Let me go to the question of childcare and childcare centres. One of our undertakings prior to the last election which was pretty important was to increase the childcare rebate from 30 per cent to 50 per cent. We've delivered that. We also increased the threshold which people can be paid to $7,500, although we've now kept it at level for the future.
These are two core commitments we've made in terms of the affordability of childcare for working families.
On the question of the additional number of childcare centres, let me just go to that. With the changes which have occurred in the provision of the long day care centres across the country in the last couple of years, what the private industry has done is in fact add about 1,000 of those since then. We've also had to wrestle with, frankly, at a Government level, with the collapse of ABC Learning, and through the interventions Julia Gillard and others keep all those afloat. We therefore have seen that the occupancy rates of child care centres, long day centres, I think on average are running at about 90 per cent, so the judgement we took it would be unwise to add a large additional number to the market right now, that's the first point.
You mentioned also, on the question of climate change, Steve, I was as disappointed everybody else about our inability to get the Emissions Trading Scheme through the Australian Senate, but the Liberal Party has blocked it on three occasions - blocked it on three occasions. I can't force it through. That's why what you see in the Budget is now a whole new investment in the renewable energy future of Australia through this $650 million renewable energy future fund for more solar, more wind power and other forms of clean energy generation and that builds on the investments we've made in the past.
HOST: But you've now shelved the ETS until, you say, I think your quote was until the rest of the world does something. I mean isn't that the ultimate get out for you?
PM: What we've said is that we have delayed the implementation of the emissions trading scheme and certainly we've got to be mindful of action on the part of the rest of the world. But renewable energy is an important and critical start to our action on climate change. Climate change doesn't got away, it is real, and it's present and that's why it's addressed upfront in the Budget through the additional measures which are contained there, but as I said before, Mr Abbott on two or three occasions now, has indicated quite plainly that he is blocking this measure in the Senate.
We did the deal with Mr Turnbull. Mr Turnbull was rolled by Mr Abbott. We can't force that legislation through. That's why, realistically, I've said it will not be dealt with until a subsequent term of this Government, if we're re-elected.
HOST: You're an expert on China. This Budget is predicated on the China boom continuing. What guarantee have you got that boom will continue? What happens if China falls off a cliff?
PM: Well, in terms of the Budget underpinnings, Steve, we believe and I believe very strongly that our big responsibility is to make sure we get our country back into surplus now that we've manage to get our way through the global economic crisis.
HOST: But if China has a hiccup, you've got a big, big headache.
PM: Well, let me just go to the underpinnings of our assumptions about a surplus. It hangs on two or three factors, Steve. One is this - to make sure that of course our export industries are still doing well, but out Treasury analysts have been very conservative about their estimates about what the rest of the world, including China, will pay for our commodities over the next several years.
But the second point is this - because we've kept the economy strong during the global recession, what we've also done is keep about a quarter of a million Australians still in work and as a result of that they've been paying taxes and the Budget has not had to pay for increased unemployment benefits. That's actually held up our overall Government revenues.
And the final thing is this - we've also helped so many Australian businesses, small businesses, keep their doors open-
HOST: -that's going to make it hard for you to control inflation, though, isn't it?
PM: Well, again the Treasury has been very careful about its analysis on these questions. The inflation figure, the CPI figure, has been projected for the year ahead, that's 2010-11, at 2.5 per cent. That of course is an important inflation target for the future because through Budget discipline it's really important to keep downward pressure on inflation. Remember, the job of Government when the private economy is getting smaller and under real pressure, as it was during the global recession, that's the time for the Government to step in and make a difference. With the private economy recovering, that's the point at which Government, of course, should begin to reduce its activity in the economy so that we keep the pressure on inflation down.
HOST: Prime Minister Gordon Brown's resigned overnight. You sad to see him go?
PM: Yeah he was a good man, and he is a good man, and the reason I say that is not just because he's a friend of mine but because I remember clearly his chairmanship of the G20 meeting in London in April of last year, when, frankly, 20 world leaders, including myself as part of the G20, were sitting around the table in Downing Street staring at the global economic abyss as it seemed at the time, and Gordon chaired that meeting. We produced a first-class outcome and any analyst will tell you that that meeting and the decisions it produced basically broke the continued fall in the global economy at that time.
As for his successor, David Cameron, I've just spoken to him within the last hour on the phone, congratulated him on being elected to the high office of Prime Minister of the United Kingdom, and the thing about the Australia-UK relationship is that it's pretty much beyond party politics and I'm looking forward to working with Mr Cameron's Government as well.
HOST: Thanks for finding some time with a busy diary. I appreciate it.
PM: Thanks very much, Steve.