TRANSCRIPT OF THE PRIME MINISTER
THE HON JOHN HOWARD MP
INTERVIEW WITH PAUL MURRAY 6PR

7 February 2001

MURRAY: Good morning to you, how are you?

PRIME MINISTER: I’m very well.

MURRAY: Ok Prime Minister, let’s get right into it. One of the most high profile ministers in the Court Government, Graham Kierath was quoted in the press last week saying the two biggest issues in his electorate of Riverton are fuel taxes and the Business Activity Statement he said that you should have foregone the recent excise increase on fuel. Now the Court Government needs to hold his seat to stay in power on Saturday. Have you effectively sand-bagged the Court Government?

PRIME MINISTER: No. Look, I get used to the fact that in a tight state election people always try to set up some diversions. The Western Australian election will be decided on state issues. I went to the Premier’s launch, it was an excellent launch. He didn’t even mention the issue of fuel prices in his speech.

MURRAY: I’m sure he wouldn’t in that context.

PRIME MINISTER: And look the election will be decided on state issues. I believe that as you get closer to election day on Saturday the economic credentials of the two sides will become even more important. And the analysis that was given today by Mr Mike Nahan of the Institute of Public Affairs, which indicated that there was a several hundred million-dollar black hole in the Labor Party’s funding. And the rather devastating column in the Australian Newspaper by the retiring Labor member for Eyre, Julian Grill about the two voices of Geoff Gallop not only on law and order but also on expenditure, I think they are the issues that will decide what is going to happen.

MURRAY: But Prime Minister it is not unusual for federal issues to include on state polls and these are big issues. Graham Kierath is close to his electorate and he’s an intelligent politician. If he’s saying that fuel prices and the BAS are issues, I believe him.

PRIME MINISTER: Well you're entitled to any view that you have. What I’m saying - and I might also say that it’s an issue that there’s wide agreement on – that state elections are determined on state issues. If Mr Court wins on Saturday - which I hope he does and I believe would be better for Western Australia – I won’t be running around saying ‘well that’s an endorsement of the Federal Government’ but equally if the Labor Party were to win – which I hope they don’t and I don’t believe that they will – Kim Beazley wouldn’t have any capacity to run around saying that’s an endorsement of the Federal Opposition. This idea that people don’t distinguish between state and federal politics is quite insulting to people. I’ve often found that electors are really quite insulted when they hear somebody say ‘Oh well this outcome is a slap in the face for Howard’ or ‘this outcome is an endorsement of this that or the other’. People have often said to me ‘look we’re not foolish, we know the difference between a state and a federal election’ and we know that in electing a state government we’re deciding who is the better economic manager for Western Australia, who’s got more credible policies on law and order and who’s actually implemented strong law and order policies in government. They are the things ultimately that’s going to decide the state election.

MURRAY: Prime Minister, Richard Court the Premiers is on page one of the Western Australian newspaper this morning basically begging for second preferences from the minor parties. Now you insisted that the WA Liberals not do preference deals with One Nation. That may in the end deliver a Labor victory here in WA. What’s actually wrong with One Nation?

PRIME MINISTER: Well, I don’t believe that the result of the election will be decided by that. I expressed a view and the Western Australian State Executive of the party without any direct lobbying from me took a decision to put One Nation last and I think that was the right decision. One Nation has been in the political field now for three or four years and I haven’t heard any alternative policies, I’ve not heard any solutions to some of the difficulties that face people in regional Australia. Now any party leader in a tight election is going to ask for second preferences. The Labor Party has always done that. The Labor Party in the 1990 federal election boasted about the fact that it held office by having a systematic preference arrangement with the Australian Democrats and the Greens. The fact that Richard has asked people who might vote One Nation or might vote for another minor party to give there preferences to the Liberal Party ahead of the Labor Party is a normal thing to do.

MURRAY: So there’s nothing wrong with a second preference from One Nation?

PRIME MINISTER: The second preference from an individual not a second preference from a party. He’s asking individuals as the Labor Party has.

MURRAY: The parties decide them, the individuals…

PRIME MINISTER: No, no, no, I’m sorry your wrong, you don’t have to, if you go into a polling booth and you want to vote for Party A, you don’t have follow the advice of that party.

MURRAY: Of course you don’t have to, but…

PRIME MINISTER: No well you don’t. A lot of people don’t.

MURRAY: Parties try to direct them.

PRIME MINISTER: You can’t. It’s a secret ballot Paul. Are you saying it’s not a secret ballot?

MURRAY: Well I know it is.

PRIME MINISTER: Well therefore if you are for example a committed supporter of Party A and Party A says ought to allocate your preferences in a particular fashion you don’t have to.

MURRAY: Mr Howard, parties go to great expense to direct preferences.

PRIME MINISTER: But they don’t direct them they only recommend them. And the point I’m making is that Richard Court has quite legitimately said - not only to people who might vote One Nation but people who might vote Democrat or Green or some other party - if you don’t want to give the Liberal Party your number one vote, consider giving your number two or number three vote ahead of the Labor Party. Because the election will be won by either the Coalition or it will be won by the Australian Labor Party. Naturally the allocation of preferences is important and I can’t understand why you think it unusual that the Premier who naturally wants to win the election would not make an appeal.

MURRAY: It’s not so much me finding it unusual it’s the editor of the Western Australian. He put it on page one. Let’s go . . .

PRIME MINISTER: Well, that doesn’t mean to say that the criticism is valid.

MURRAY: Sure, let’s talk to Reg. Good morning Reg, the Prime Minister’s listening.

CALLER: Good morning Mr Murray, good morning Prime Minister. I’m ringing regarding fuel prices. I am retired, but my wife and I have been looking forward to travelling around Australia in a caravan. I would like to preface this by saying that we worked for a total of seventy-five years, that’s together of course. We paid taxes for all of those years and on some occasions for up to three jobs. We’ve educated three children from their first day of school in private schools to completion of university or other tertiary education at our expense and without one dollar of direct government assistance, that’s for a total period of forty-five years. And we’ve been paying private health insurance for fifty-one and fifty-three years respectively and have contributed to superannuation. Now we’ve worked hard, paid taxes and never received unemployment or welfare assistance now in our retirement wishing to travel around Australia we are starting to wonder whether we can afford to travel around Australia with the price of fuel which is up in some areas to $1.40/litre. We are also aware that the government tax on fuel in Australia is lower than many others OECD countries but in view of the fact that about 70% of our fuel comes from Australian crude, the price is too high. For example there is no international freight on Australian crude, there is no insurance on Australian crude and all of that sort of thing but we are paying world prices on a local product. And this world parity pricing covers a lot of expenses I think which just go into the pockets of the oil companies, none of which are Australian-owned and all those profits go overseas. Now could I have your comments please?

PRIME MINISTER: Well your analysis is right, that the reason why petrol is expensive in Australia, overwhelmingly, is because the world price of crude oil has gone up, and that is what the Government has been arguing and what is self evidently the case. You’re asking me whether it’s a good idea to be on world parity, I would argue it is, and the reason why it’s a good idea to be on world parity is that by pricing our crude at the world level we provide an ongoing incentive for exploration. And one of the reasons why we have a high level of self sufficiency is because we’ve always, by allowing the market prices to be charged, we’ve always encouraged companies to look for oil and to find fresh resources of oil. So, I regret the high world prices, it is true, as you rightly say, that our tax take is much lower than OECD countries average, and that overwhelmingly it’s due to the world price going up. Now when that price comes down, which I believe it will as we go through the year, and the northern winter passes behind us, then the price of petrol in Australia is going to come down. I would be very reluctant to move off world parity because I think it would do long term damage to, not only the cause of energy conservation, but also the cause of looking all the time for fresh reserves because it would deny companies the incentive of being able to charge the market price.

MURRAY: Okay, thanks Reg. Good morning Frank.

CALLER: Good morning gentlemen. Look it’s just on the GST and this paperwork, prior to GST there was just a tax exempt number for business and the paperwork was just done there and then on the, virtually on the job type of thing, and there was no payment waiting to come back or anything. Why is that that couldn’t have gone on, continued on?

PRIME MINISTER: Well because that’s, this is a different system, I mean you have to have, you have to have a reporting system because all the time if you’re in business you’re entitled to get refunds of the tax that you have paid on the things that you’ve bought. And it, you’re talking about what obtained under the old wholesales sales tax system, now that was not a multi stage indirect tax system, it was simply a tax imposed at the wholesale level. And one of the criticisms of it was that it applied to some things and not to others and therefore discriminated against some businesses and advantaged others. And also it was very confusing for people who might have some stock in their shop that was subject to wholesales sales tax and other items were not. Now by and large that has been avoided under the new system, although because of the changes that occurred when we had the get it through the Senate, there were some outlets that have a mixture of GST liable and GST exempt. But there is a different system and you are entitled to get your input tax credits back and you have to have a system of reporting because it’s on that basis that you get your entitlements back. Could I just say in relation to the paperwork that we are looking at simplification of the Business Activity Statement, we’re looking at it right now, and indeed we have been for quite some weeks. It was obviously not possible to make any changes while the current BAS was being lodged.

MURRAY: Have you tried to fill out one of those forms?

PRIME MINISTER: Well I have examined it very carefully. Can I say, Paul, that I get very mixed views. I spent three days last week visiting small businesses in regional parts of New South Wales and Victoria. Some people complained about the complexity, other people said to me we found it hard it first but by the second one we’ve got used to it and others said that they couldn’t understand what all the concern was about. Now I have those three quite distinct reactions, now what we’re saying, I’ve listened to that, and I’m very sensitive to that and what we’re doing at the moment is we’re carefully looking at all of the options, we’re not ruling anything in or out and we’re going to talk to the accounting profession and we’re talking to representatives of small business organisations and we will make changes and those that can be given effect to before the lodgement of the next BAS will be given effect to. We’re not going to delay it, those changes that can be made immediately will be made.

MURRAY: Labor’s promising that all businesses will an annual turnover rate of up to a million will only have to do it once a year, can you match that?

PRIME MINISTER: Well, I said we’re looking at all of the options, all of them. And that obviously includes looking at the option of an annual return for particularly small businesses. A lot of things you’ve got to look at, but the point I make is that we commenced the process some little while ago knowing that there were concerns. The concerns, I’ve got to say, the universal reaction has not been one of concern, there have been a lot of people that have been critical of it. And I talked to people as I went around, I mean I walked into shops in places like Bega and Bateman’s Bay and Lakes Entrance and Bairnsdale in Victoria, and I asked people, I said how are you going with the BAS? I didn’t wait for them to raise it with me, and I got a mixture of reactions, some people complained, some people said don’t know what all the fuss is about, and others said well it was hard at first but I’m now getting used to it.
Now, what we have done is we’ve listened to all of that, talked to my colleagues in the party room on Monday and we are now at a Cabinet level and in discussion with all the people I’ve mentioned, we’re looking at ways of simplification, we’re looking at all of the options, and any changes that can be announced with effect to the next BAS will be made.
Now we’ve got to look at it calmly and sensibly and you can’t change a system like that on the run, you’ve got to take account of what everybody says, you’ve also got to allow for those people who’ve conscientiously familiarised themselves with the new system. So, look we will get it right. Inevitably with a new system, it’s a huge change, you’re going to have some teething difficulties and we’re going to fine tune it. This is not a roll back, roll back is when you take the tax off particular items…

MURRAY: It’s the word, roll-back’s the word that’s no longer mentioned I believe?

PRIME MINISTER: Well no, it’s a word that dare not speak its name. I mean we haven’t had any roll-back from the Labor Party. I mean they’re talking about changing the forms, that’s not roll-back. Roll-back is when you take the tax off certain transactions now . . . .

MURRAY: Sorry, Ross wants to talk about small business and GST as well.

PRIME MINISTER: Yes.

MURRAY: Good morning Ross.

CALLER: Good morning Paul, good morning Prime Minister, how are you?

PRIME MINISTER: I’m all right Ross.

CALLER: Good. Prime Minister I’m a medium business operator in the retail industry. Firstly I’d like to say thank you for the $200 voucher that was sent to us, it was totally inadequate to really cover the costs of the implementation of the GST. Just to give you a bit of an idea, the total cost of implementing the GST into my store was between $18,000 and $20,000 and that was the cost of hardware for new computers, programmes and also the excess labour and re-ticketing and that. So, basically with the implementation of the GST we’ve become now unpaid tax collectors with a weekly cost of $200 or more just for my computer operating and filling out all the necessary documentation and of course plus that you have your accounting costs. Now, in all honesty Prime Minister when will the Government finally start to compensate small business for the excessive cost of implementing the GST and ongoing costs? I think that basically if we are going to become unpaid tax collectors, you really have to start looking after us in some other form.

PRIME MINISTER: Well Ross could I say that a number of people say that to me. When I was travelling around last week a couple of people said much the same thing to me, others took a different view, others acknowledged the fact that part of the tax reform was a reduction in company tax from 36 cents in the dollar to 30 cents. I assume from the way you describe your business it could well be incorporated and if it’s incorporated then you’ll get the benefit of that reduction. There’s been a significant reduction by almost a half in the level of capital gains tax. Many small business people are affected by capital gains tax and that would have been a very distinct advantage. And it is therefore important with all of these things to have a look at the totality of the measures that we introduced, and not just look at one individual aspect of the measures that we’ve introduced.

MURRAY: Okay, good on you thank you very much Ross. Prime Minister, Lynette’s on the line now. Good morning Lynette.


CALLER: Mr Prime Minister I don’t usually call talkback radio but I wanted to phone just to say how much I support you, actually 100% on your stance on reconciliation. And secondly I wanted to mention to you that I support the Government’s stance on immigration, but I am still a little bit concerned about all this rioting at these detention centres.

PRIME MINISTER: Well I can understand that and I thank you Lynette for what you said, I appreciate that expression of support. The detention centre issue is difficult. We can’t as a nation allow people willy-nilly to come here. And we can’t allow ourselves to be seen around the world as an easy-touch because the people smugglers will take advantage of that. Equally we are a humanitarian, decent people who want to provide support for people but in a way that recognises that they have come here illegally and they have jumped the queue and they have taken advantage of the fact that law abiding people from other parts of the world await their turn so they can enter into accordance with the laws of Australia. Now we don’t approve of the rioting and we have taken steps to prevent it occurring but I don’t want anybody to run away with the idea that people are harshly treated. But equally you cannot come here as an illegal immigrant, without permission and then expect to be treated as an ordinary member of our society. I mean you have to have some detention system while your status is being clarified. And I think when you look around the world we’ve handled this very difficult issue in a very humanitarian fashion.

MURRAY: Prime Minister, we’re nearly out of time. Frank . . .

PRIME MINISTER: Go ahead.

MURRAY: We’ll get back to that. Hello Frank.

CALLER: Yes, good morning gentlemen. Mr Prime Minister is it true that you’ll be leaving office next year when you reach retirement age and will Mr Costello automatically jump into your seat?

PRIME MINISTER: No. What is true is that I said that at some time during the next term, if I win, I will give consideration to my future. I haven’t said I am definitely going. But I thought it was more honest of me to acknowledge that I’ll be considering my future during the next term rather than as Mr Keating and Mr Hawke did, enter into some secret deal and conceal it from the Australian people. The way I feel at the moment I’d, you know, be happy to go on forever, but nobody goes on forever and I just thought it was honest to acknowledge that at sometime well into the next term, certainly after I’ve implemented all of the commitments I’d take to the Australian people I would give consideration but it doesn’t mean to say I’ll go. Not at all. What it means is that I, it is an issue that I will give consideration to when I am through the bulk of the next term. The question of whom my successor is, and can I say I think Peter Costello is an extraordinarily capable person, that that will be determined by the Liberal Party, I don’t determine that, we are a democratic party.

MURRAY: Finally sir we’ve got about thirty seconds yet, Ariel Sharon appears to have been elected as prime minister of Israel today. Will that change Australia’s approach to the Middle East?

PRIME MINISTER: No we’ll continue to advocate a peace settlement. I congratulate Mr Sharon. I express my admiration for the courage displayed by his predecessor Ehud Barak who tried very hard and went as far as I believe any Israeli prime minister could possibly go in trying to achieve peace and I think it’s a great tragedy that the Palestinians did not take advantage of the peace offer that Barak made because it’s a very fraught, tragic situation and I think he displayed very great courage in going as far as he did.

MURRAY: Prime Minister I thank you very much for your time today we’re going to have to leave it now. Thank you Prime Minister John Howard.

END