TRANSCRIPT OF THE PRIME MINISTER
THE HON JOHN HOWARD MP
RADIO INTERVIEW WITH NEIL MITCHELL
RADIO 3AW
11 May 2001
MITCHELL:
In our Sydney studios, the Prime Minister Mr Howard, good morning.
PRIME MINISTER:
Good morning Neil.
MITCHELL:
Do you agree these profits are over the top?
PRIME MINISTER:
They’re very large but I believe in profits. I believe that people who invest their money in companies are entitled to a good return. We will be a poorer society if we fall into the habit of attacking profits. But in return companies that make big profits must of course pay their fair share of tax and I’m not saying that the banks don’t. And in the case of the banks they do have social obligations, that is something that I have argued for a long time.
MITCHELL:
Are they ignoring them?
PRIME MINISTER:
I don’t think they have adequately met them in the past but to be fair there are changes occurring. The ANZ for example a few weeks ago made an announcement which provided much less costly banking facilities in a traditional way for older people. And that shouldn’t be ignored. There was a quick response by Westpac when news got out that it wasn’t passing on the full value of the government’s increase of $7,000 in the home owners grant.
MITCHELL:
When it got caught. I mean this is part of the problem, there doesn’t seem to be an understanding of the basic responsibility that I would argue banks have got towards their customers.
PRIME MINISTER:
Well Neil I’m not here as the advocate of the banks.
MITCHELL:
No but I’m asking whether you can do anything, is it possible to regulate a basic account for low income earners which has got no fees on it?
PRIME MINISTER:
I believe the best way to get the banks to change their habits is to provide more competition. We have cheaper housing loans today then we did some years go for a number of reasons. The first and best reason of course is the government’s running a low interest rate economic policy. That’s the main reason. But another reason is that we have mortgage originators such as Aussie and others that have come in to the banking area as a result of changes in government policy and a freer approach. I am reluctant to go back to the days of regulation because regulation drove up interest rates. We used to have regulated interest rates in Australia in the name of helping the needy, the problem was that nobody would lend their money to the banks because the banks couldn’t afford to offer them competitive interest rates because they were constrained on the interest rates they could charge their borrowers.
MITCHELL:
Well I guess the other thing…
PRIME MINISTER:
Going back to regulation is not the answer. The answer is a combination of competition, of public cajolery…combination of public cajolery and competition will bring about a changed attitude.
MITCHELL:
Well you’re in the best position for public cajolery. What’s your view? I mean are they fair?
PRIME MINISTER:
Well I’ve spent the last three or four minutes giving you a fairly balanced view. I’m not going to lapse into a populist bank bashing exercise, I’ll leave that to those who have no responsibility to deliver outcomes. I have the responsibility to maintain a good economic climate that encourages risk taking and profit reward. But I do say to the banks as I’ve said before, you have social obligations, you are very profitable and the banking system of this country is very stable. Now I find in my discussions, and I have regular discussions with the chief executives and the chairmen of all the major banks in Australia, and quite recently, I find that there is a far greater awareness, a much more realistic approach and a recognition that in the past the banks have not always been very good at responding to their social obligations or very good at understanding the level of community desire that they should do so.
MITCHELL:
Okay. Another area of populist concern, oil companies. They want to pass on the cost of the new fuel standards required by government, pass them onto customers. Now is that fair? You’re saying here you’ve got to provide clean fuel they say yeah we’re going to charge more for it.
PRIME MINISTER:
Well we’ll be watching that very carefully and if the banks, I’m sorry, if the…
MITCHELL:
They’re all the same.
PRIME MINISTER:
Well if the oil companies try to do anything unreasonable in this respect well I guess the ACCC will have a look at them. But can I just say in relation to these standards, in working them out we have paid quite a lot of regard to the capacity of the oil companies to adjust. And therefore if they sought to use these new standards as an excuse to increase prices then the government would take quite a dark view of that.
MITCHELL:
Good. Let’s take a couple of calls. Peter, hello.
CALLER:
Good morning. Mr Prime Minister, if I may take you back a couple of minutes in your conversation, I wonder if you’d mind explaining to me in regards to banks and your comment on risks and rewards. What you see in the current climate is being the banks’ primary risks.
PRIME MINISTER:
I’m taking about the people who buy bank shares. They are ordinary people. Do you have superannuation, are you part of any superannuation fund?
CALLER:
Yes.
PRIME MINISTER:
Well you, for all you know your superannuation fund could have some of your money invested in bank shares. I don’t know, it might. I’m talking about….I mean if the profitability of banks is strong then a lot of people who own shares in the banks benefit. I think sometimes when we sort of take pot shots at big profits we forget the people who get dividends out of big profits are Australians spread throughout the community. I may even be talking to one who’s in that situation. That’s the point I’m making.
MITCHELL:
Thank you Peter. Jason go ahead please.
CALLER:
Ah, yes good morning. I’d like to ask you about POW payouts.
MITCHELL:
Ah, yes I had this on my list too.
CALLER:
Yep, I’ll tell you the email now. My pop whom you met in Benalla when you opened the Weary Dunlop statue.
PRIME MINISTER:
Yes.
CALLER:
He’s been told he’s getting a $28,000 payout.
MITCHELL:
That’s in the paper though isn’t it Jason? When you say his been told.
CALLER:
Yep.
MITCHELL:
You saw it in the paper?
CALLER:
Ah, he saw it in the paper a while ago. They’ve pretty much accepted that they’re getting it. So I’d just like to know when that’s going to happen.
PRIME MINISTER:
Well is it Peter? I’m sorry, Jason. We haven’t made any announcement to that effect, there has been speculation but the government has not made any announcement about that. If there were anything like that to be considered it would be considered in the context of the budget. But I know there’s been speculation but we haven’t made any announcement about that.
CALLER:
I just thought it’d be, you might follow in the footsteps of Britain and New Zealand I think, and there might be another couple of countries that have…
PRIME MINISTER:
Well a number of countries have done that, and I’m aware of that. I also ought to say that our general repatriation and veteran’s benefits are much better than those in Britain and New Zealand.
MITCHELL:
Given that it’s now in the public arena though, is it under consideration?
PRIME MINISTER:
Well there are a whole lot things that are put to us by the veteran community in the lead up to the budget. And this is one of them. But a lot of other things have been put to us as well. We consider them all each year and we decide what we believe are the high priorities and what we ought to do. And I think people will just have to wait to the budget to see what the outcome of that process is. I’m certainly aware of the views of many people about this and those views have been given added force following the New Zealand announcement. We have considered it along with a lot of others things and as I say people will have to wait Jason until the budget. But what has been in the papers has not been based on any government announcement or any authorised reporting from the government either.
MITCHELL:
Okay we need to take a break and we’ll come back with more from the Prime Minister. Just ask you Mr Howard, how you getting on with Peter Costello now?
PRIME MINISTER:
Very well as always.
MITCHELL:
No tension?
PRIME MINISTER:
No, we have spent a lot of time with each other putting the finishing touches to the budget over the past few days and the partnership couldn’t be better.
MITCHELL:
Have you found who leaked the Shane Stone memo?
PRIME MINISTER:
No.
MITCHELL:
Still looking?
PRIME MINISTER:
You wouldn’t expect me to comment on that.
MITCHELL:
Why not?
PRIME MINISTER:
Well, I’m not going to.
MITCHELL:
Fair enough. A break… a few more from the Prime Minister.
[ad break]
MITCHELL:
The Prime Minister is in our Sydney studio. Mr Howard given your answer to the question before the ad break, is it reasonable to assume the person who did leak it has been found?
PRIME MINISTER:
No it’s not reasonable to assume anything it’s just that for reasons which you all understand I’m not going to give you a blow for blow account of anything I might be doing to try and find out what happened.
MITCHELL:
With respect I don’t know if I do understand it, because if you’ve got a leak within the Prime Minister’s Office it’s a serious issue.
PRIME MINISTER:
Well I’m not saying we have. What I’m saying is I’m not going to add to the speculation, full stop.
MITCHELL:
OK, Federation week, there’s a lot of issues out of that. What was your reaction to Paul Keating not attending the celebrations at the Exhibition Building?
PRIME MINISTER:
Well I’m surprised but it doesn’t excuse, I think just a bad lapse in manners and an ongoing sulk I suppose about what happened in 1996. I think that’s the reason but, I mean…
MITCHELL:
A constutional variety show…
PRIME MINISTER:
That’s his problem. I didn’t regard it as a constitutional variety show, I thought there were some aspects of it that could have been done differently and better but overall it was an occasion for people to feel legitimate pride in what our country has achieved and I think also on occasion that ought to have been used by and large to put aside political differences. I take the view on occasions like that, that you celebrate the things that you have in common rather than the things that put you apart. That’s always been my view about those kinds of gatherings. They are not the occasion for partisan political point scoring they are occasions to celebrate the unity of the nation. Now, to some people that might sound old fashioned and corny, I don’t think it is. There are some things about our country, about our civic behaviour that is relevant at all times in our history and having a bit of regard and respect and generosity towards both points of view on such a grand national occasion is what is needed.
MITCHELL:
What did you think could have been done better? What were you unhappy with?
PRIME MINISTER:
Oh I thought there were a couple of the events put on by the Victorian organisers that were very, very partisan. I thought the women’s thing was appallingly partisan.
MITCHELL:
Politically partisan or Victorian partisan?
PRIME MINISTER:
Well politically partisan, yes. I mean the complete failure to acknowledge a number of women from the non Labor side, or to involve them was regrettable.
MITCHELL:
Do you think it’s changed any? I suggested, I was talking to Gus Nossal I don’t think it really grabbed public imagination. Maybe that wasn’t it’s role but, has it achieved anything? $3 million, a big week, all the leaders of the country in Victoria, in Melbourne, did it achieve anything?
PRIME MINISTER:
Yes, I think it gave to all of those who are involved in the responsibility of decision making and government an even better sense of the history of this country. And it’s one of those slow burner quiet achiever things that takes a while but over a period of time it does have a valuable effect. It does remind people of the scale of the achievement of being six or so disparate, geographically separated colonies together 100 years ago. I certainly know a great deal more and I think I speak for a lot of other colleagues about the detail and the commitment of the people who put the constitution together. I thought I understood a lot about it anyway but we can all learn more. And I think there is a much greater understanding of the history of this country. I went to a little primary school near Nunawading on the 9th of May to present some of the Federation Medallions and you could tell from the project work the children have done the way they responded to some of the questions that there was a better understanding of some of the earlier political figures in Australia. And I think that’s all good because we have long lamented the fact that we don’t know enough about our history, it’s all been part of the process of teaching us more and we are better and stronger as a result.
MITCHELL:
Did Kim Beazley behave himself or was he too political in your view? He did lobby, well speak on things like reconciliation.
PRIME MINISTER:
In keeping with the tone that I endeavoured to strike in my remarks, I’m not going to start going into what he said. I just have a very strong view, it may be out of step with many others, I have a very strong view that occasions like this are to celebrate unity and things we have in common rather than the things that divide us or put us apart. And that is why I spoke and behaved as I did.
MITCHELL:
Ok Peter. Go ahead please Peter.
CALLER:
Thank you, good morning John. Mr Howard if you go back, recall five weeks ago, I’m sorry on Friday the 6th of April on this programme. Neil Mitchell asked you a question regarding deeming rates. At that stage you said that deeming rates were currently under review. Five weeks later we’ve heard absolutely nothing about that. Could you please tell me why there is such a delay in things that effect people who are on benefits from the Government whereas other things which bring money into the Government coffers are reviewed immediately when it’s in favour of the Government?
PRIME MINISTER:
Well they have been reviewed and we’ve come to the conclusion that there was not going to be an aggregate gain for pensioners if the deeming rate were dropped.
MITCHELL:
What is it at the moment Prime Minister?
CALLER:
Six percent.
PRIME MINISTER:
Yeah well one of the reasons why we didn’t think it was a good idea to automatically drop it ahead of a possible adjustment later in the year, Peter, was that a very large number of people have, what are called deeming accounts where they get the full deeming rates.
CALLER:
Yes Mr Howard, I’d just like to put something in there…
PRIME MINISTER:
..just hear me out, we have looked at it and it’s one of these situations where if you cut the rate there are some people who lose.
CALLER:
Look, I’ll put it to you this way, if you cut the rate…
PRIME MINISTER:
…there are some people who gain but there are also a very large number of people who are in the middle and the reason – we haven’t been insensitive to this and I can promise you that if we were satisfied that there’d be a far greater number of winners than losers out of immediately cutting the deeming rate then we would have done so. We have no desire to hurt people.
MITCHELL:
Can I explain to people who perhaps don’t understand, the deeming rate is what the Government deems welfare or pensioners to be receiving on money invested regardless of what rate. And they’re staying at 6%, and interest rates are now 5%.
PRIME MINISTER:
Yeah well, could I say that there are a lot of financial institutions who maintain accounts that pay the deemed rate, irrespective of what the market rate is. Therefore, those people lose if you cut the deeming rate. That’s the point I’m making to Peter.
MITCHELL:
OK Peter, you had another point.
CALLER:
Yes, I’d just like to make the point that I have money tied up in a superannuation fund that I cannot get because I’ve not declared myself to be retired. That money is deemed to be making 6%, it is claimed as an asset and as I say it is money I cannot get at.
MITCHELL:
And what’s it making?
CALLER:
Oh about three and a half.
MITCHELL:
When is the deeming rate next reviewed Prime Minister?
PRIME MINISTER:
Well it’s normally reviewed from recollection, don’t hold me exactly to this, reviewed around March and September.
MITCHELL:
OK the jobless rate up. In fact the biggest, I read the biggest drop in full time employment since the last recession.
PRIME MINISTER:
But also a huge rise in part time employment.
MITCHELL:
Do the figures concern you? Still too high.
PRIME MINISTER:
I think, well they’re always too high, they’re too high if they’re not zero. But they are of course massively lower than what they were, or significantly lower, then when we came to office. I think we have to bear in mind that the Bureau of Statistics, of it’s own volition and not as a result of any influence from the Government, changed the definitions of full and part time employment a few weeks ago and that’s resulted in some realignment of the figures over the years, not huge but some realignment. And it may be that it will take a month or two for the new definitions to settle down. I have to say that both of those figures - both the 40,000 rise in full time, drop in full time jobs surprise me but I was equally surprised by the 80,000 rise is part time jobs.
MITCHELL:
It’s interpreted as putting new pressure on interest rates, do you agree?
PRIME MINISTER:
I would have thought that’s too premature, I think there’s something perhaps aberrant about these figures so both of the figures sound too high to me. I don’t thing we lost 40,000 full time jobs, I just find it hard to believe we gained 80,000 part time jobs as well. It may be that the movements are within narrower bounds. But the employment market is still quite strong and there’s still quite a lot of kick in the economy and with the benefits of lower interest rates, even lower interest rates coming through, I don’t think people should be pessimistic.
MITCHELL:
Prime Minister, there’s been some criticism, well a lot of criticism the federal government, the way it’s handled the HIH collapse and certainly a lot of people are hurting in that. The state government basically said, this state government, the Victorian government, that it’s basically the federal government’s fault for not monitoring it properly. What will the federal government do?
PRIME MINISTER:
Well when we get the report of the liquidator which we will have next week which will give us all of the information you need before you start making decisions. We will then be in a position to give a more comprehensive response. We have responsibilities, I accept that, but so do state governments, they have statutory responsibilities for things like compulsory third party insurance and workers’ compensation. No government can be in a position where it is the lender or banker of last resort to every company in the country. But HIH is the second largest insurer. We will encourage ASIC to throw the book at the directors if there has been any wrongdoing. Well I would want the wrongdoers pursued, of course I will and they will be and there’ll be resources made available to the Securities Commission to ensure that that happens. But it’s easy on the sidelines if you’re a state government or an opposition to say to the federal government well you’ve got to do something. Before you can do something intelligent, you’ve got to know all the facts.
MITCHELL:
Do you think it could mean billions of dollars as I’ve heard reported?
PRIME MINISTER:
Well I’m not going to put a figure on it until I’ve got the liquidators report. But Neil we’ll have the liquidators report early next week. We have had a number of submissions put to us. The Insurance Council put a submission on a levy, other people have put other submissions. State governments have tried to shift their responsibilities to us, we’re not going to accept that, they’ve got to wear their statutory responsibilities to the full as we have to ours. Now when we have all of the information we can make a better judgement. But I am sympathetic to people who have been hurt, very sympathetic and we want to try and help if we can.
MITCHELL:
Talking earlier about competition in the banks, what about the airline industry losing, probably losing Impulse and Virgin going on. What do you think that’s going to do to airfares?
PRIME MINISTER:
Well I don’t think it’s going to exert downward pressure on them, but on the other hand it is a market. And some of the fares were, given the cost structure involved and given the distances travelled, some of those fares were very low. I think probably we’ll end up with fares not as low as we might have had if Impulse had continued, but obviously Impulse couldn’t afford to. I mean in the end Neil, we all have to accept that we do live in a market and there, we are … I mean I know we can over-emphasise the market, but we can also get to the ridiculous situation that whenever something goes wrong, whenever a firm can’t make it, whenever a full profit realisation is not achieved, the government has got to step in and do something. Now we cannot run a community like that, I’m sorry it’s just not … I mean I have to say to people that is not realistic. I mean in the end people take risks, if they’re successful they make a lot of money and good luck to them and providing they pay their taxes and they trade fairly they’re entitled to make money and that, I believe in that kind of society. But equally on occasions if people invest and things don’t work out you can’t expect the rest of the taxpayers and that’s all the government is, to bail them out. I mean there’s got to be, there have got to be risks and responsibilities as well as profits and achievements.
MITCHELL:
Can I just ask you quickly about something else? A researcher on British nuclear tests revealed today or is saying that there’s, well definitely proof that Australian servicemen were used as radiological guinea pigs in Maralinga, are you aware of that report?
PRIME MINISTER:
Well I just heard a reference to it on the radio this morning, I have not had a chance to be briefed on it because I was heading towards the 2UE Studio in Sydney to talk to Neil Mitchell.
MITCHELL:
Will you explore it?
PRIME MINISTER:
Yes.
MITCHELL:
And the other thing, the gays in Sydney … you know Archbishop Pell that’s a bit rough – protesting against him isn’t it?
PRIME MINISTER:
Well I think what is rough and I was at the service that installed him as the Archbishop, what I thought was rough was there was far more publicity given to their protest than the installation. I thought it was, and as a non-Catholic can I say it was an absolutely magnificent service. I am impressed with Archbishop Pell, I think he’s a person of great strength and directness. Not everybody will agree with him, but he sticks up for what he believes in and I admire that in a man.
MITCHELL:
Thank you very much for your time.
END
