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Transcript 22401

Interview with Peter Dick and Ross Davie Radio 4BC, Brisbane

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: 02/08/2006

Release Type: Interview

Transcript ID: 22401

JOURNALIST:

Good morning Mr Howard.

PRIME MINISTER:

Good morning, is that Ross is it?

JOURNALIST:

No, that's Peter and this is Ross here, good morning Mr Howard.

PRIME MINISTER:

Not very good reception.

JOURNALIST:

Oh.

PRIME MINISTER:

Your voices, I can just hear you, they just; anyway keep going.

JOURNALIST:

We will, we will, we'll do our best for you Mr Howard. Welcome to Queensland and you've just come back from Innisfail, were you still surprised or shocked to see that there are still so many homes that need to be repaired?

PRIME MINISTER:

Yes I was still surprised, the change from when I was there in March has been enormous. The spirit of the people is terrific and the way everybody has worked together, we've worked across all levels of government and General Cosgrove has done a great job. But there's still quite a bit of work to be done and we continue to pour a lot of money in. The Federal Government has now put $239 million towards the recovery effort for Cyclone Larry. Now I think every dollar of that has been well spent, but it's worth making the point that part of the rapid recovery has been due to the immediate injection of a lot of cash by way of small business and farm and dwelling reconstruction and rehabilitation grants. And that immediate injection of money has paid a very big part in helping to pull the place around.

JOURNALIST:

Yes, we might see something happening there soon. Just tradesmen very, very slow at the moment to get things happening?

PRIME MINISTER:

Well there's an enormous amount of demand and the good thing in a sense of there being cash readily available, and also wage subsidies and the like, has meant that there's a lot of activity, and when you get activity you get money circulating and that helps to bring the economy of the district back in a big way.

JOURNALIST:

Now on the subject of the economy, we find out in a couple of hours about interest rates. You had asked the Reserve Bank to try not to raise interest rates, do they listen?

PRIME MINISTER:

Well I think some of my comments, and that of, those of the Treasurer, were misunderstood. We were expressing views about the issues to be taken into account. The Reserve Bank makes the decision and we'll know what that decision is in just under an hour's time, so there's no point at all in my speculating. But can I say, generally speaking, the Reserve Bank has done a very good job. Over the last 10 years the Reserve Bank has made a very good contribution to managing the economy and the retiring Governor, Ian Macfarlane, has been very expert in the way in which he's carried out his responsibilities and I'm sure that his successor, Mr Glenn Stevens, who the Treasurer named yesterday, with his great background will do a good job. But the job the Reserve Bank is to adjust interest rates according to the economic circumstances of the time. Now overall I believe in the past 10 years they've done an excellent job and it's one of the reasons why we have such a strong economy. And irrespective of what the decision announced this morning is, it remains a very strong economy.

JOURNALIST:

We asked our audience this morning how they thought it would affect them, we didn't have a lot of interest in the subject, which either means we've got very affluent listeners, or they don't care, they're more concerned about petrol prices, Mr Howard.

PRIME MINISTER:

Well petrol prices is the biggest problem Australians have with the economy at the moment. It worries me more than anything else, it's not something that any government in Australia can control because everybody's battling with the problem, everybody around the world. I mean if anybody says there's some magical solution to the high price of petrol in Australia, will you please ring The Lodge and I'll spend an hour, all ears listening to them. I'd be absolutely delighted because we need an answer and there are different ways in which, at the margin, you can have a tiny effect. But it is the result of high crude oil prices. Everybody's got the problem, America's got it, Europe's got it, Asia's got it, the Middle East has got it, and it's being compounded by the instability in the Middle East. Bear in mind that Iran, Iraq and Saudi Arabia are major suppliers of oil and they're right in the middle of enormous conflict at the present time and that's not doing anything to keep the price of oil down and that's feeding through into the bowser at your local petrol service station.

JOURNALIST:

But if you stopped a man on the street, he would say yeah, but what about the tax, the excise tax?

PRIME MINISTER:

Yes well, yes well, let me answer that, that's a fair question, we could further cut it, we did cut it several years ago and we no longer increase it in line with inflation. And the excise, the federal tax does not go up as the price goes up, because it's levied on the volume of the motor spirit, not on the cost of it. But if you cut excise by one cent a litre, that would cost just under $300 million, and in order to get a saving of, that people would notice, they'd want to cut by 10 cents a litre, that's $3 billion. Now a lot of your listeners would say, gee that's a lot, I think I might prefer the Government to spend that $3 billion on perhaps another tax cut and then I can decide how much petrol I buy up to a point. They might want it spent on hospitals, they might want it spent on getting more people into the army, they might want it spent on a new health centre or they might want it saved against a rainy day. I'm not sure that the Australian public would automatically thank us for punching a $3 billion hole in the Budget, just in the name of reducing petrol excise. What happens if the price of petrol tumbles by 10 cents a litre? The public is not going to say, well you can put the excise back on again to restore the Government's financial position, they'd be dead against that, I think I would be if I were a member of the public. So that is not an easy answer. I mean if we could cut the excise by 10 cents a litre and it only cost a few hundred million dollars a year, we'd have done it ages ago. But you've got to understand the amount of money that's involved in this. And it's all very well for people to stand back and score points and say the Government ought to do this, ought to do that, I mean I'm very happy to listen to any suggestions. But this is a world problem world wide, it's not something that's been home-grown. The price of petrol at the bowser has not gone up because of anything done in Australia, it's gone up because of what's happened with the supply of crude oil, and that's caused by a number of things; the huge demand from China, the underinvestment in refining capacity, the impact of Katrina on the refining capacity in the Gulf of Mexico, all of these things have fed in, plus of course the terrible instability in the Middle East.

JOURNALIST:

On that terrible instability in the Middle East, we're seeing Lebanese residents calling on Mr Bush to do something about this, is he the only man on the globe who's able to do something? Are there phone calls going back and forth between you and George W. or Tony Blair, where is this headed and are you concerned that this is going to escalate further?

PRIME MINISTER:

Well I share the concern of so many people about the loss of life on both sides. We have to understand why this latest outbreak started. It started because Hezbollah, which is a terrorist organisation, supported and encouraged by both Syria and Iran, went across the Israeli border, took some Israeli soldiers prisoner and in effect conducted a mini invasion of Israel. Now the Israelis responded, and they do respond very emphatically, they have a very strong army, they feel embattled because so many people are against them. You've got to remember that there have been numerous attempts over the last 50 years to destroy Israel and to drive the Israelis into the sea. Well they're not going to allow that to happen. I would like to see the fighting stop. But unless there is a determination by the international community to put a stabilisation force into southern Lebanon, and that stabilisation force is given the authority to work with the Lebanese Government to disarm Hezbollah, the problem's going to break out all over again.

JOURNALIST:

One gets the impression though that the United States are certainly in go-slow mode.

PRIME MINISTER:

Yes, but what people are asking of the United States, and indeed others, is to say well, we'll stop the fighting but not put in place an arrangement that will stop it breaking out again. And what the Americans are saying, is yes, they want a ceasefire, but unless the ceasefire is on the proper condition that there be an attempt to address the problem, all it's going to do is postpone the resumption of hostilities, perhaps at a much more intense level. That's the point that the Americans are making and it's a very legitimate point.

JOURNALIST:

It's not easily solved, we've run out of time, but look thank you very much for joining us on the programme this morning Prime Minister, there's lots more we can talk about, but I'm sure we'll talk a bit more between now and the next election.

PRIME MINISTER:

Thank you. Always nice to talk you fellas.

[ends]

Transcript 22401