TRANSCRIPT OF THE PRIME MINISTER
THE HON JOHN HOWARD MP
RADIO INTERVIEW WITH JOHN MILLER, RADIO 4BC

14 March 2001

MILLER: Prime Minister good morning.

PRIME MINISTER: Good morning John.

MILLER: It’s good of you to talk to us this morning and indeed to take calls from listeners. So if people would have a sensible question or two for the Prime Minister, a view that you may wish to put you can do that by lining up now on the phone on 131332. Prime Minister may I get the ball rolling though by saying that the electorate shouted it, the Labor Party are taking great glee in shouting it, and indeed I have said it – too little too late particularly on the issues like the BAS and fuel excise.

PRIME MINISTER: Well can I take them in turn. The BAS – I said before Christmas that if difficulties emerged with the BAS we’d be willing to change it. And we did have to allow the experience of the lodgement of two of the old BAS forms to be completely satisfied that the changes we made were the right ones and they were enough. I indicated before Christmas, I was asked a question on one of your companion programs in Melbourne – what about the form is it too complicated? And I said then long before a lot of hoo hah started I said look, if there’s a problem we’ll change it. And the changes to the BAS are administrative changes and we’re always willing to make administrative changes and it’s commonsense to do so. This idea that it was too little too late, we had to allow two lodgements, two quarterly lodgements to go by so we had a sufficient information base if you like so that the changes we made were the sensible ones. Now on petrol I acknowledge the different situation. I did not understand the depth of the public anger. I indicated that when I made the announcement. Now I take that one, I take my lumps on that. You’re entitled to raise that, your listeners are entitled to say that of me in relation to the petrol issue.

MILLER: The First Homeowners’ Grant of $14,000….

PRIME MINISTER: For new homes.

MILLER: For new homes, that’s correct. But is this again a case of too little too late. I mean we’ve seen carnage?

PRIME MINISTER: No no. Once again, I mean the reason I decided to increase it were the figures revealed by the December quarter National Accounts. They came out on Wednesday, I announced the change on Friday because it was very clear from those figures that the problem with December had been the downturn in the housing industry. That was the problem and it was revealed in those National Accounts for all the world to see. It was clear beyond argument that there had been a much greater cool down in the housing industry than we expected. We expected some because we knew that with the GST applying to new housing there’d be a drag forward of activity, there’d be a lot of new houses just before the 1st of July last year and there’d be a slump after the 1st of July. But the slump turned out to be bigger than we anticipated. That was shown in the National Accounts. They came out on Wednesday, I acted on Friday morning. I don’t know how anybody can either call that a backflip or too little too late. But I’m prepared to cop and accept criticism and acknowledge that I’ve got something wrong where clearly that’s happened and in indicated that in relation to petrol. But in relation to the Business Activity Statement I flagged right at the beginning that we were going to do something if difficulties emerged and that’s exactly what’s happened. In relation to the First Home Owners’ Scheme, when it was clear to me beyond any argument that something bigger than we’d anticipated had occurred with the housing industry I decided to act. I don’t think anybody can deny that the stimulus of doubling the grant for new homes won’t give a dramatic charge of adrenalin for the housing industry particularly in Queensland. It’s of particular benefit because the downturn in Queensland has been somewhat greater than in other parts of Australia and I know this will be very warmly welcomed because I’ve spoken to the housing industry at length. They all came to see me on the eve of the release of the National Accounts and they put their case to me and I said I’ll think about it. I knew the National Accounts were coming, I waited for them. I saw the National Accounts, I put what they submitted to me against the National Accounts and I said to my colleagues we have got to do something immediately about this. This has got, incidentally, nothing to do with the Ryan byelection. I keep reading that the housing industry win is all about Ryan. It’s got nothing to do with Ryan. It’s got all to do with trying to ensure that we inject some confidence into a very important industry that not only employs a lot of people in its own right, but there are knock on consequences from hardware to whitegoods all through the economy.

MILLER: Well the housing industry being one of the prime engines of the economy, there’s no disputing that. We can go on about individual issues such as this but let’s take a wider view for a moment and say that there is a general mood out there in the electorate which may or may not show up in Ryan on Saturday. I guess you’d be hoping that it doesn’t. A general mood of disenchantment, a general feeling that I constantly get on this program that government is of touch and is not responsible….not responsive I should say, to the raft of issues that are making people feel discontented, angry and grumpy, certainly not comfortable.

PRIME MINISTER: Well John I recognise that. We are going through a period when people are being quite critical of us. We’re certainly going through a difficult period politically but I’m not asking for any sympathy on that. That’s our problem. I’m interested in your listeners’ problems and concerns. Some of their complaints are legitimate and fair. Some of them I would take issue with buy I certainly recognise that there is such a mood there. What has happened in this country over the last few years under this government is that we have brought in a number of changes such as the new tax system that will be of great benefit to Australia when they’re fully bedded down. They will help to make us more competitive, they will give us a better taxation system. They were accompanied by big cuts in personal income tax and in the nature of things you get your income tax cut and after a couple of weeks you tend to forget about it. I mean I understand that. That’s human nature, I’m not criticising people for that. And we are going through a difficult time and certainly the economy worldwide is being buffetted by uncertainty and Australia is no island in relation to that. We are part of the world and we can’t avoid being buffetted by what’s occurring. But can I just remind people no matter how down they may feel on the government that when we came to office the unemployment rate was about 2% higher than it is now, and we’ve generated 750,000 jobs. The average homebuyer was paying $270 a month more on his or her mortgage. We inherited a government debt of $85 billion and we have repaid through our budget measures $50 billion of that and it means that the national bankcard of Australia is lower than just about any country in the world. And I mean we’ve done all of that and we’ve done all of that in the teeth of total opposition from the Labor Party. And can I say to Liberals in the seat of Ryan who may think I’m going to give Howard a kick on Saturday, just remember that if you give Ryan to Labor you’ll be rewarding the negative approach of Mr Beazley over the last five years. He’s tried….he not only left us with an $85 billion government debt, he’s tried to sabotage our attempts to repay it. So I don’t believe that that kind of negativity should be given a vote of confidence. So to those Liberals who are tempted to deliver a protest vote, no matter how angry you may feel with us on particular issues if you deliver Ryan to Labor you’re giving a tick and a vote of confidence to the blind negativity of the Labor Party over the last five years.

MILLER: Well one wonders if that anger hasn’t been sent or whether it will surface or not in Ryan. But again I come back to the point – the people are angry. People are constantly telling me on a variety of issues. For example dairy deregulation. They see that as being a nonsense. They say government says we can’t do anything about it, it’s the way market forces are going, and yet they are saying surely isn’t that what we have government to do and that is to protect and foster Australians making a living?

PRIME MINISTER: Well John, dairy deregulation was requested by the dairy industry. Can I say that again – it was the dairy industry, the representatives of Australian dairy farmers, they came to the Federal Government and to the State Government and they said look, Victorian dairy producers are going to sell milk into other states which is their constitutional right. That is going to bust the quota system in the other states. It is going to have a vast impact on the price of milk and the viability of dairy farms in other states. Will you please institute a national scheme that will create an orderly transition of the whole industry? We did not force dairy deregulation on the industry. The industry asked for it. Now, I know that some people in the industry disagreed with the majority of the people in the industry but it is wrong to say that in some kind of blind, ideological fit the Federal Government imposed dairy deregulation on the dairy farmers of Australia. We were asked to facilitate and we did. We have a consumer levy at $1.7 billion, which is funding financial support for marginal dairy farms and also funding the exit from the industry of people who can no longer handle it. Now, if we hadn’t have done that deregulation still would have occurred. There’s no legal impediment on Victorian dairy farmers selling their milk into other parts of Australia. That right is guaranteed under the Australian Constitution.

MILLER: Prime Minister, there is a lot of discontent out there and, in fact, I was told yesterday by someone who has very close workings with the Department of Taxation that they’re concerned that the implementation of the tax system has not been very thorough, that in fact, they used a colloquial expression for we got it wrong.

PRIME MINISTER: Well, certainly nobody from the Tax Department has said that to me. I’d be fascinated if that is the view of the Tax Department. It would be a good idea if they said it to me or to the Treasurer instead of putting it around. I’d be amazed…and can I, if that were the view of the Tax Office – look, when you bring in a big new system like this it is always hard. Now, I had two alternatives when I became Prime Minister. I could do nothing and swan around in a white car and say, gee, this is great, I’m the Prime Minister or, alternatively, I could seriously address some of the problems of this country and try and bring in change that in the long-term would give us a stronger country. Now, that is what I have tried to do over the last five years. I haven’t always done it perfectly, I’ve made mistakes, but, gee, it’s a stronger country now than it was. We’ve repaid $50 billion of Labor’s debt. We have lower inflation. We have lower interest rates. We have a budget in balance. Sure our dollar is being buffeted at the moment but that flexible exchange rate, the capacity of the dollar to go down, helped take us through the Asian economic downturn. And you’ve got to take a long view of a floating exchange rate. Never say that because the dollar’s at a particular level that means permanently a particular outcome to the economy. It goes up and down. And when you have world turbulence it’s only natural that currency speculators would put their money towards the greenback, the American dollar, because America has the strongest economy in the world and that has a reverse impact on the Australian dollar.

MILLER: All right, well, I mean, I said loudly and I will continue to say that I fear sometimes that we talk ourselves into a recession.

PRIME MINISTER: Well, there’s no doubt about that and, look, we have a lot of alarmist talk at the moment and they have a perfect right to do it but I see…

MILLER: Pretty serious figures, Prime Minister.

PRIME MINISTER: Oh yes, well, serious figures for one quarter and I see every night on the television, it’s their perfect right in a democracy, people speculating, people from banks and financial institutions, talking about where the dollar might go overnight. Now, that’s, you know, they get a grab, they get a run, they feel good about that. I don’t know that that makes a great contribution towards the future strength of the Australian economy. But I think there is far too much alarmist talk around at the present time. Look, we had a bad December quarter, largely due to the drop off in the housing industry and we’ve responded immediately in relation to it. The advice I have at the moment, and I stress at the moment, is incomplete, it’s not precise and obviously it could alter, that’s the luxury that economic advisers to governments always have. But you ask me how we’re going in the present quarter, the indications from our official advisers are that the present quarter will be better than the December one but they can’t say by how much.
Now, it’s not easy but the fundamentals are stronger. I mean, just imagine where we’d be now if our interest rates were 17% like they were when Mr Beazley and Mr Keating were there, if our unemployment were 11%, if our government debt were 85 to 90 billion instead of the $50 billion less than what it is now. Just imagine our vulnerable the Australian economy would now be if that legacy were still there. I mean, that’s what Mr Beazley left me. He said yesterday that he left the economy in good shape - $85 billion of government debt. It’s a funny idea of an economy in good shape.

MILLER: All right, Prime Minister let’s go to the callers. We have some on the board. Good morning to, Rob. Rob, are you there?

CALLER: Yeah, good morning.

MILLER: You’re talking to the Prime Minister.

CALLER: Good morning, Prime Minister.

PRIME MINISTER: Good morning, Rob.

CALLER: I knew that…ever since the…I drive a small truck. Since the GST’s been in and we’ve seen that Business Activity Statement, I knew that Business Activity Statement was unworkable, it was far too complicated. We didn’t really have to have a report to find that out. We didn’t have to…I don’t think you should have had to wait for reports on downturns in the building industry. I mean, I just haven’t been getting any work for months and months and months and I think what you’ve done is too late.

PRIME MINISTER: Why do you think your business has been affected?

CALLER: Well, there’s just no work around in the building industry. It’s been going on…

PRIME MINISTER: Do you mainly interact with the building industry?

CALLER: I deliver materials for the building industry and no one wants them any more.

PRIME MINISTER: And did you notice the downturn after the 1st of July?

CALLER: We did.

PRIME MINISTER: Yes, yes.

CALLER: [inaudible]

PRIME MINISTER: Well, did you find before the 1st of July it was a lot better?

CALLER: Well, it’s never been brilliant in the last couple of years, especially after the GST…

PRIME MINISTER: Well, the GST didn’t come in until last July.

CALLER: Yeah.

PRIME MINISTER: You can’t blame the previous couple of years on the GST.

CALLER: No, but there’s gone so much work since July and with the Business Activity Statement, you’ve only got to look at that, when it came out to see it was too complicated.

MILLER: Look if I can chime in here, Prime Minister. I think the point that Rob’s trying to make is that why does it take so long for the Government to react when he, at the coal face, driving his small truck, knows that things are going bad?

PRIME MINISTER: Well, could I say two things in relation to that. And we knew that the building industry was going to cool off after the 1st of July because there had been such a surge in activity in housing before the 1st of July. There’s no way that that rate could have been maintained. I mean, there was a chronic shortage of tradesman, there was chronic delays in many sections of the home building industry before the 1st of July. We knew it was going to cool off and you just had to accept that. But what we did need to wait for is to decide, to find out whether it had cooled off more than we’d allowed for. And you really had to wait for the national accounts to get that. We got that and we acted within two days.

MILLER: All right, Rob. Well, I hope that answers your questions. Jeff, good morning.

CALLER: Good morning, John and good morning, John Howard.

PRIME MINISTER: Good morning.

CALLER: John, you’ll know my voice and Mr Howard, I have called the radio station a lo! t complaining about the BAS. My name is actually Jeff (inaudible). I’ve been in business for 25 years. And, John, I left school at fourteen. No government gave me a leg-up. No one helped me get where I am and I’ve got a little business. And I mainly talk to Senator Ian Macdonald’s office and they know me very well. But John, when I rang up there and I used to tell them how bad I thought the BAS was, how bad business was and I told them in December we were in recession they used to argue with me and they wouldn’t believe me. Now, that seems to also be what the attitudes that you’re taking in Canberra. So I wonder why the Government in Canberra virtually took no notice. And I’m assuming that Senator Ian Macdonald would take my concerns back to you. Why did you take so long to react? Because I am very angry that the BAS has put so much pressure on my situation and I know many people who when they saw it they through their hands up and said, look, I’m nearly up to retiring age, what’s five years, I’ll go now.

PRIME MINISTER: Well, Jeff – Jeff isn’t it?

MILLER: Yep.

PRIME MINISTER: The answer to that is that you get lots of advice, you get anecdotal evidence. I did have reports from some people along the lines you suggested, yes. I had reports from other people who said, oh look, we don’t find the BAS a difficulty. I still get people saying to me, look, we got used to it. I was in the outer suburbs of Sydney a couple of weekends ago in Liverpool and I spoke to the Head of the Chamber of Commerce there and she said, look, I’ve got to tell you, John, my local business people have not found the BAS such a problem, we know some people have. You get…look, don’t imagine that people don’t come with stories of concern and don’t imagine that I’m insensitive to them but you get very mixed stories. And, inevitably, when you do decide to change and do something, that the people who have been giving the negative stories from the beginning say, well, if you’d have listened to me in the beginning everything would have been all right. But I just ask them to bear in mind that for as many negative stories that you get on something like this you also get a lot of other people saying, look, I haven’t found it hard at all, I got used to it, it’s a good discipline, I run my business better now, I know what’s happening in my business a lot better now than I used to before. Now, we have tried conscientiously to respond to concerns. I didn’t think it was sensible to change it just on the basis of one quarter and most people lodge quarterly rather than monthly. And we decided to get two quarters in. I said before Christmas we’d make a change and that’s what we’ve done. And I believe the changes we’ve made will dramatically simplify it. They give people a lot of options and I think it will be a much easier situation, particularly for the businesses with a turnover of less than $2 million.

MILLER: Prime Minister, yesterday on 3AW in Melbourne Steve Bracks, the Victorian Premier, told my colleague, Neil Mitchell, that if Labor got in the whole GST package would have to be re-negotiated with the possibility of a GST rate rise to fund the rollback?

PRIME MINISTER: Well, of course. I mean, what Mr Bracks did yesterday was really blow the cover on Labor’s rollback. What he said was that if there was rollback he’d want the whole GST re-negotiated. Now, that can only mean a rise in the GST rate under a Labor Federal Government because if you…rollback means taking the GST off certain items. So if you take it off certain items and you want the same amount of revenue you’ve got to increase the rate of tax on the items to which the GST continues to apply. In other words, the narrower the base, the higher the rate. Now, that’s the fundamental principle of indirect taxation. Now, Mr Bracks this morning is running around saying, oh look, hang on, that’s not right, we’re not going to increase the rate of the GST, Howard’s panicking, there are other ways of funding rollback. Well, let us know what they are. Because Mr Beazley has said he won’t increase income tax. He’s promising to spend more. He’s guaranteed the States will be no worse off under rollback. Something has got to give. It doesn’t add up. You can’t be all things to all men. You can’t run around saying, look, we’re going to give you more, we’re going to tax you less, we’re going to roll it back, we’re going to respond to this area of concern, we’re going to guarantee the States, we’re going to, you know, produce rabbits out of a hat (inaudible) of the economy.
Now, easy for the Labor Party to do that at the moment because politically, you know, we’re being criticised a lot at the moment. It’s easy political pickings. But there’ll come a day when the Labor Party has got to come clean with the Australian public and tell us how they’re going to fund rollback.

MILLER: Prime Minister, one more call before we go. We’re almost out of time. John, good morning.

CALLER: Good morning. Look, I just want to ask the Prime Minister what is he doing about refunding the 8 cents a litre that he takes off the Queensland Earthmovers?

PRIME MINISTER: What do you mean? I mean, we have a rebate.

CALLER: Yeah but the rebate that you’ve taken off the Queensland…

MILLER: Off road vehicles I think he’s referring to.

PRIME MINISTER: We haven’t taken any rebate off you. I mean, there were some changes forced on us by the Democrats and the Labor Party in the Senate. That’s not our fault.

CALLER: I pay the State Government 8 cents a litre for every litre of fuel I buy where everybody in Queensland’s subsidised by that 8 cents a litre, so why aren’t I subsidised the same amount of money?

PRIME MINISTER: I’m sorry, we haven’t taken 8 cents off you.

MILLER: All right, John. Well look, I think the Prime Minister has answered that very succinctly. Prime Minister, it’s almost time for us to go, very quickly, we’ve got about 20 seconds left, is there going to be anger in Ryan?

PRIME MINISTER: Oh, I’m sure there’s anger at the moment. I’m sure there are some Liberals thinking I’m going to vote Labor at the weekend to give the Government a kick. But can I say to those people, if you do that, you are giving a vote of confidence to Mr Beazley’s negative behaviour of the last five years. You’re in effect saying to Mr Beazley, it’s okay to stop the Government reducing Government debt by 50 billion, it’s okay to stop policies that have brought interest rates down, it’s okay to stop policies that have brought unemployment down. I just ask those people to think of the implications of delivering Ryan to Labor.

MILLER: Prime Minister, thanks for talking to us this morning.

END