Prime Minister
PAUL MURRAY: Prime Minister, thank you so much for the chance to chat.
PRIME MINISTER: Thanks, Paul.
MURRAY: All right. Before we get to the drought, there are some big announcements today, I want to go through some of the stuff that is around in the news. Before we get to the fun of the Labor Party review, how was your meeting with those mothers yesterday and their want for a Royal Commission? What was the experience like to look those mums in the eye?
PRIME MINISTER: Well, it was a very, very moving experience. We were there for about an hour and a quarter, actually. And I just listened and it gave me a real, a much better understanding about what they were seeking through a Royal Commission. And the Royal Commission can do many things. And think it was a good opportunity for them to talk that process through for them what it would mean for them, how it would help them and others who are going through that terrible, terrible set of circumstances. And so, I mean, they were aware that I hadn't ruled it out. And it's something that I am actively considering, along with our response to the Productivity Commission and a range of other issues. So, you know, as you know, I'm not one to move into those things lightly, and there are a range of other things we're doing. So, I'm actively considering that. And I'd like that to be considered along with these other things that we're doing because there is a lot happening. And one of the key points they did make and I agree with them and actually so does Defence and others. And that is we have to prepare our servicemen and women for their life after service almost from the very day they join the service. And for their sons, that never happened. And that is happening now. There are changes that have been more recently introduced in that and a range of other issues for transitioning and other support. That wasn't there for their sons. And so we need to make those changes. And I don't want us to slow down on the things that we are doing. We need to do all of that. But it was good to get from them what they would take out of a Royal Commission, and that helps.
MURRAY: There's been a big decision in Melbourne today. The Victorian Premier Daniel Andrews has essentially made the choice of environment over massive parts of the logging industry. Is that the right call?
PRIME MINISTER: I don't know what they have against regional Australia. There’s 1,600 jobs. I mean, the Labor Party, whether it's in agriculture or it’s mining or it’s forestry... we made this point at the election - you can’t trust them because they are a progressive left wing party, which wants to tell you what sort of job you can have and how you can earn your living and where you can live and where you can have an income in regional Australia. And this is just another example of that. I mean, it's their decision. We were working with them in good faith on the regional forestry agreements, as we've done with other states, and they’re clearly going down a different path. And this assumption that you can’t… that you can do it all with plantation forests. Well, no, you can't actually. It's the dominant but it's not all of it. And there are products that come from what they're shutting down that can't be replaced in other sectors. And there's a whole other flow-on set of industries and jobs that sit around that. I just don't think the Labor Party gets regional Australia.
MURRAY: The election review has come out into the Labor Party, 94 pages, couple of dozen recommendations. They've even done a 500-word precis for anyone who wants to dig through it. Two-part question about this. Did they lose the election? Because that seems to be the assumption where all of this starts, rather than you winning the election?
PRIME MINISTER: Well, as I said on election night, the Australians who just go on about their lives every day, they're the ones who won the election because they decided what they wanted. I continue to see in Labor's whole attitude that they still don't get that. It's all about them, apparently. No, it's not about the Labor Party. It's not about the Liberal Party. It's about where Australians are at and what they want for their future. I mean, a huge part of the election was that we, I believe, spoke very clearly to the aspirations of Australians. They know things are hard and we will talk about the drought in a second. But the Australians have got irrepressible optimism and I don't think they understand that. And that's what I thought they spoke down to and whether it was in regional Australia or metropolitan, the suburbs and all these other places. But it seems like the report is 60 excuses as to why it wasn't their policies. It was their policies. Their policies were not where Australia wanted to go. And they seem to be in denial about that. But that's their problem. We'll stay focused on what Australians want us to focus on and remain true to what we took to the election and was supported at that election. Today is a classic example - they’re spending the day talking about themselves, and we're focused on actually delivering serious support for drought-affected communities.
MURRAY: But it must be frustrating that at the very same time as you were making the announcements about drought today, this report was also being released and for much of the afternoon the media seemed way more focused on the report than the money for the drought. What does that tell you about the political climate?
PRIME MINISTER: Well, it tells you a bit about the bubble, I think. But for me, I mean, that's their problem. I mean, for me, what I was focused on and pleased to be getting some really good feedback from rural and regional communities today from the package we announced today and it's in response to listening to them very carefully about what they believe needed to be the next step in what we are doing. So, you know, I had a footy coach once and he always used to say that you can never complain about the field, right? If it's raining, if it’s windy, if it’s muddy, you know, that's where you’ve got play the game that day. And I have a very similar view about how you deal with the media. It is what it is. And you deal with it.
MURRAY: Very good point. All right. Well, yes, let’s talk about drought. But before we get into some of the specificity, I want to sort of deal with an elephant in the room here, which is there seems to be two different ways of interpreting the Government's drought response. The people in the regions and the people who love the regions but don't live in them. And they seem to be the pockets of people who write some pretty ferocious emails about the Government's response. What can you say to get these people to look twice at the efforts of the Government? Because it feels like, as we've seen in previous governments, previous prime ministers, once a certain attitude starts to metastasize, it becomes a real problem.
PRIME MINISTER: Well, the policies we have to put in place, the support we have to put in place actually has to make a difference and work in the communities they're designed to. That's how you should frame policy. That's where your focus should be. And that's where our focus has been, in those places. And in those places, they understand the challenges of the drought and they also understand what the needs are and they've been telling us about that and we've been constantly responding to it. In metropolitan areas and in city areas where it isn't a day to day issue, there's lots of opinions. And that's fair enough. We’re a country where everybody can have one, and that's fine. But what my point is, is our job is to demonstrate how these policies are actually making the difference in the places it needs to make the difference. So that's what we've done today. I mean, our plan, as I said to you when we got together last time, has three components. The direct assistance to the farmers and graziers, families and themselves and what they do there. And we look after the sort of income support side of that. The states look after what's going on on the farm. Then there are the communities themselves, which are also deeply affected because of the loss of income from the agricultural sector. And we’ve put big stimulus into those towns and communities. And thirdly, there's the longer-term issues of the irrigation infrastructure or the water infrastructure and the silage facilities, all those sorts of things. So that's what we've been doing. And today, what we knew was there are so many farmers who know they will get to the other side of this drought. They know that on the other side of this drought there is a profitable, successful, viable business, as there has been for generations before. And as the drought has gone on, initially there will be some farmers who are marginal before the drought. And you see that in droughts, but as it's gone on even longer, well, those who have had good farming practices, those who have made preparations, they're the ones who have got into greater difficulty as time has gone on. So the loan scheme that we announced today, which is the feedback we've had from the sector, zero interest loans means for two years they are able to get the capital they need and whether it's to transfer their stock for agistment or pay for fodder or cart water or do up their dam infrastructure on their property or clean them out or whatever it is they're doing for their farming practices. They can do all that, keep the farmhands employed and all that sort of thing because they know in two years time they will be in a position to actually have the business service that loan.
MURRAY: But what happens if it doesn't rain in the next two years?
PRIME MINISTER: Well, in two years time, if we're still in that situation, then we would look at those loan arrangements again. But our expectation in framing this is that within that two year period, we would hope and certainly they would too that they’d be harvesting two years from now. That they would have been restocking by that period of time. And as a result of our trade agreements and other things, they'll be doing a lot better. The thing about this drought which is a bit different is that farm prices have held up very well. In fact, they’ve increased every year for the last five years. And the equity level that the funds have had in their places has been growing as well. So those who made the difficult decision to leave the land, they been able to do it with a much better price. And that is factored into their decision about, well, was this a good time to go and how can they redeploy that capital and what they might want to do next in their lives. So the thing is that farming is a business. It's not a charity. And they don't like to be seen as a charity, either. They are running viable businesses that employ people and have done so over generations. So you give loans to businesses.
MURRAY: And is that why you're charging them interest and not just giving it as a grant?
PRIME MINISTER: Well, we're not charging interest for two years. And then it's a concessional rate of interest. And so the current concessional rate of interest on those that happened prior to now is 3.11 per cent. There'd be a lot of businesses in metropolitan areas that, you know, when they go through difficulties, would love zero interest loans for two years and concessional rates at 3.11 for a small business. But, you know, we've had that conversation before about the strategic significance of the agricultural sector. But there's $700 million in direct grants that we announced today. And that's the grants for the Roads to Recovery program. That's the grants of a million dollars each that all these councils will be getting. It’s the grants for the Building Better Regions programme. It's the direct cost of actually providing that zero interest for two years and that of itself is in the vicinity of over $70 million. And then, of course, there's the water that we're going to buy from South Australia to flow along the Murray, which is going to re-energise that whole district as they grow fodder, both to support themselves and the activity there and provide more fodder up into the drought-affected areas.
MURRAY: So that deal that you've been able to do with South Australia, you pay market rate, base rates? How does this work?
PRIME MINISTER: We pay the marginal cost of running the desal plant. And we anticipate that will be around about $80-odd million for 100 gigs. And through the swapping arrangements, that means we can release water over the next six months down through the system out of the Murray. And that will provide and that will be allocated through a tender process at deeply discounted. They’re not going to pay market rates. I mean, the market rate for water is about $1,000 a megalitre. This will be significantly discounted around about the cost of our production on those things and probably a lot less than that. So that will mean that they'll get access to the water. They can get their planning going, get their crops all ready. They’ll do that over two ways, I understand. Now that activity along that area, which has seen water flow past their properties. I mean, I've seen those terrible images, too. And this is why we thought this was an innovative way of addressing what is a particular problem along the Murray, which we all understand. That area itself is not in... there's water there but they can't access it because they can’t afford it. So this is going to be a way of, I think, providing some direct, immediate support to those places. But at the same time, we're helping farmers so they can help other farmers. It’s got quite a virtuous cycle to it.
MURRAY: Last question, hopefully again, we can get a chance in the next couple of weeks to present more questions from people, because they want to hear from you and hear from you in great detail. Prime Minister, thanks so much for your time.
PRIME MINISTER: Thanks a lot Paul, cheers.