TRANSCRIPT OF THE PRIME MINISTER
THE HON JOHN HOWARD MP
PRESS CONFERENCE,
PARLIAMENT HOUSE

18 March 2001

PRIME MINISTER: Ladies and gentlemen, whatever the final outcome is there has been a very big swing against the Government in the Ryan by-election. There’s no beating about the bush about that and it does contain a number of lessons for the government. It is not however another Bass or another Canberra and it’s important in the political analysis, which I’m sure will occur over the days ahead, that that be kept in mind. If you’re reaching for a historical comparison this is more akin to the setbacks the Hawke Government suffered in 1988 and ‘89 in the by-elections in Adelaide, Port Adelaide and Oxley where the two party preferred swings were equivalent to or in excess of what happened in Ryan yesterday.
It’s very plain to me and it should be plain to everybody else that the swing against the Government was in no way the fault of the Liberal Party candidate in Ryan – Bob Tucker. He was a first class candidate. I hope he wins al! though he’s got a struggle against him given that Labor is about 800 ahead on the booth count. It is a big challenge to make that up with 8000 to 9000 postal and pre-polls. If he does make it he’ll be a very fine representative for Ryan. If he doesn’t he’ll be an excellent candidate for the Liberal Party at the general election. I couldn’t speak more highly of him. He worked hard, he campaigned to the end, he was indefatigable and in every way he will make a very good contribution to the parliamentary party when he comes here.
I think it’s fair to say looking at the politics of it that the by-election could not have taken place as it turned out in a worse atmosphere for the Government. I look back over the last couple of months and I feel as though the Government has been subjected to political carpet-bombing in relation to a large number of issues. If you list them – in January petrol prices after falling somewhat began to rise again. We had the setback in Queensland, we had the set back in Western Australia. We had the Auditor General’s report on road funding that wrongly created the perception of a shortfall in funding. We had the national account figures showing a contraction in December. And we had the reaction in the media and elsewhere to the fall in the value of the dollar. Now all of these things created what in my view was an atmosphere that could not conceivably have been worse.
It will be said of course that the by-election should never have taken place at all. Now there is always criticism when a by-election occurs. I would simply remind you of the political climate that obtained at the time the by-election was made necessary and that is in December. It was a reasoned risk taken in the context of a major reshuffle which involved some generational change and was therefore of great long term value for the Government.

What of the lessons that I and the Government learned from this? There are a number and I won’t attempt to canvass all of them today. But certainly one of them is that reform which is so necessary and unavoidable in a fast changing world environment in which we live is always difficult. There is a certain weariness in the community about reform but we have no alternative. We can’t stop, we can’t go backwards. It’s not that kind of world. We will have to do a lot better at explaining the advantages of reform and ensuring that people who are more likely to be vulnerable to the impact of reform are as far as possible cushioned.
I think it’s also necessary to keep a balance between policy resolution and sensitivity. If you listen and don’t act there’s no point in listening, but there has to be a willingness to see sensitive adjustments at the margin in the context of the maintenance of commitment to overall reform as being part of the process of managing reform and change. This Government will not be altering its fundamental direction. That is not a message I take out of the Ryan result.
We remain committed to the fundamental direction that the Government was elected to follow in 1998. We will of course continue where we can to ensure that the impact of change is made as palatable and as acceptable as possible to vulnerable sections of the community. It is not easy to preside over a reform government in the early part of the 21st Century because there is a natural reluctance after some years of change for people to say no more. The problem is that if we do no more our living standards will decline. We don’t have the alternative of turning our back on change. It’s just not realistic.
And the challenge I have between now and the election is to communicate that message better, to ensure that there are opportunities to underpin and cushion those who are affected by change. But the way out is not to turn our back on reform and that is something I will not do and it is not something may I say that the Opposition can do if they’re fair dinkum about being an alternative government. This country is irrevocably on the path towards change and reform because we need to do so in order to create jobs for our children and to maintain our living standards. The alternative of retreating cocoon like into some kind of cloistered past is just not available to us. But I do understand that people can be hurt in the process and I have to do better at ensuring that those people are protected, and I have to do better at communicating the value and the benefits of change and that is an obligation that is thrown on not only myself but all members of the Government.
The task ahead of the Government politically over the next nine months is very challenging but I am certainly not daunted by it and I look forward to that period with great enthusiasm.

JOURNALIST: [inaudible] 

PRIME MINISTER: What now? No. It’s not an issue.

JOURNALIST: [inaudible]. What does it mean for example in terms of…..?

PRIME MINISTER: Well it means that wherever a policy is being implemented that involves change and reform we have to be absolutely certain that we identify people who might be adversely affected by it, and that where it’s possible to provide them with help to adjust to the change we do so. I mean a classic example of the thing I’m talking of is the dairy industry. I mean the dairy industry itself asked to be reformed. We didn’t force it on them. We didn’t. And many dairy farmers are much better off now as a result of reform. You go to Tasmania and to Victoria and ask the dairy farmers there what they think about dairy deregulation. They think it’s marvellous.

JOURNALIST: [inaudible]

PRIME MINISTER: Well maybe their understanding of what they got was inadequate and maybe they could have been given a little more assistance over a longer period of time. I’m simply making the point that there has to be a greater capacity on the part of government in relation to reform and change to manage the impact. The answer is not to go back and I quote the dairy deregulation which has been, you know, quite shamefully exploited by state governments all of whom incidentally supported the process of deregulation.

JOURNALIST: [inaudible] overnight, what can you do to relieve the hip pocket pain for Australian motorists where it would be expected to flow onto petrol prices in this country?

PRIME MINISTER: Well I can’t change the OPEC decision. I think it could be counter productive for OPEC because if it has a depressing effect on world economic activity the OPEC countries could be the losers. I can’t stop OPEC doing that, nor can Mr Beazley. And whatever people say about the 1.5 cents being swallowed up, the price of petrol at the bowser will always be 1.5 cents less than it would have been if we hadn’t have taken that decision. And we have taken away automatic tax increases on excise. And I say to the Labor Party that will undoubtedly try and exploit this decision over which they have no control either, in government would have no greater control, are they saying to the Australian public that they would cut excise further. If they’re not I don’t think their criticisms have any credibility.

JOURNALIST: [inaudible] Prime Minister one of the major changes that has doubtless adversely impacted on voters and therefore the Government is tax reform..Do you have in mind any plans to ease the burden of GST or the business activity statement given the message you got from Ryan?

PRIME MINISTER: Well I certainly don’t intend to rollback the GST. When you talk about changing the GST, and when you talk about rollback, let’s…you know, let’s drop the jargon and the generics and let’s be quite specific. When you say you’re going to rollback the GST what you’re really saying is you’re going to take the GST off certain items so that it would apply to fewer items. That’s what a rollback is. I mean altering the administrative arrangements for collection of the GST, or altering the reporting requirements, that’s not a rollback. That’s just an administrative change. Now we have made some major changes in relation to the BAS. I would have thought that if concern about the Business Activity Statement and concern about the implementation of the GST was a factor in the Ryan result, and there are many things that were factors in it, but if it were a factor then obviously the impact of the resentment that people had was before we made our changes was reflected in the result. I mean if you were cranky about the BAS and you were a Ryan voter then the fact that we changed the BAS not long before the by-election probably wouldn't have altered your anger, it probably wouldn’t have changed your mind. But it might in six months time.

JOURNALIST: Prime Minister your commitment the softening the [inaudible] reform, does that extend to perhaps going into deficit to….

PRIME MINISTER: No it doesn’t.

JOURNALIST: What about competition policy? Is that part of your commitment to….?

PRIME MINISTER: Well you used, Paul, an expression at the beginning of your question which I don’t think quite reflected what I said. Would you mind repeating it?

JOURNALIST: Your commitment to softening the blow of….

PRIME MINISTER: Softening the what?

JOURNALIST: The impact of economic reform.

PRIME MINISTER: On vulnerable people, yeah. No it won’t involve going into deficit no.

JOURNALIST: And competition policy?

PRIME MINISTER: Well competition policy in the broad has been very beneficial for this country. That doesn’t mean to say that there aren’t elements of it that can’t be implemented better and in a more understanding fashion. But we need competition in Australia. We have lower interest rates now because of greater competition. We have cheaper telecommunications charges because of greater competition. There may be other aspects of competition policy that don’t yield the same economic dividends. But if you’re asking me a general question about competition policy I’m supportive of it. If you’re saying that there are elements of it that….I mean are you saying are you giving an absolute guarantee that no minute element of it will be changed, well nobody’s going to do that and I’m certainly not.

JOURNALIST: [inaudible]

PRIME MINISTER: Well our position on Telstra is not going to change.

JOURNALIST: When you look at the message from Ryan, a 10% swing against the Government in a safe seat, can you still win the next general election or is the condition terminal?

PRIME MINISTER: We certainly can win the next election. I do not regard our electoral position as being as you described it. I simply remind you of political history in this country. In the late ‘80s the Hawke Government suffered a 14.1% decline in its primary vote in the seat of Port Adelaide. Port Adelaide was more Labor than Ryan was Liberal and they suffered a 14.1% decline. Our primary vote declined by half of that in Ryan. Now it’s a bad result. I’m not trying to pretend that it’s not. But it was not a Bass or a Canberra and I reject completely any suggestion that it spells inevitable defeat for the Government at the general election. It doesn’t and it would be a very foolish Opposition that thought otherwise.

JOURNALIST: How do you convince some of those backbenchers on the wafer thin margins though to keep their eye on the ball and not panic?

PRIME MINISTER: By my own behaviour.

JOURNALIST: What about the National Party Prime Minister? There are reports that they are keen to challenge some of the polices of the Government. Could pressure from your Coalition partners destabilise the Government in the months ahead?

PRIME MINISTER: No. I would have thought what yesterday has done is to focus the minds of everybody on the need for the maximum level of cohesion and unity within the Coalition rather than the opposite. Everybody knows that we have to work together very cohesively and very inclusively in order to succeed and that is what we intend to do. But we have to understand that it will be within the parameters of adhering to our fundamental direction.

JOURNALIST: Prime Minister, are you going to give more consideration to things like personal income tax cuts?

PRIME MINISTER:

Well I was asked about this last week and people got a bit excited. Look we are always a party that has a preference for lower rather than higher tax. But the budget position in the upcoming year is going to be quite tight and that will be a discipline for us and it will be a discipline for the Opposition as well. There are not billions sloshing around as a result of the GST. Can I say that again in the hope that it will be more readily accepted. There are not billions sloshing around as a result of the GST. The Treasury forecasts in relation to the GST have turned out to be quite accurate so far.

JOURNALIST: You spoke of the need for further reform. In what areas do you see your Government pressing ahead with reform?

PRIME MINISTER: Well I mean it’s a question Ian of continuing….I mean there are a lot of reforms that are still you know in progress and we just intend to maintain that. I’m not sort of about to announce some major new tranche but there are a lot of reforms in process and we’ve got to see them bedded down and the effectiveness of them seen in the community.

JOURNALIST: If you’re going to soften the blow of reform on the vulnerable, does that involve possibly spending more money in terms of compensation et cetera? Does that further limit the….

PRIME MINISTER: There’s no sort of prescribed way of doing that. I’m simply recognising the need to factor that in in relation to the administration of our policies. I can’t say whether it’s going to involve that or some other approach.

JOURNALIST: As bad a result as it is in Ryan, are you thankful in a way that you’ve got the wake up call early?

PRIME MINISTER: Well I’ve had a lot of calls in my life politically, wake up and otherwise. I’ve certainly found the last couple of months where the political climate has changed dramatically. I mean it’s worth bearing in mind, you know, in advance of the stories that may be written about the ill wisdom of having a by-election, that when this by-election was made inevitable by the reshuffle in December the political climate was very different from what it turned out to be as the year unfolded. Now that’s the luck or the bad luck of prime ministers and political leaders and you have to take that. Look the outcome yesterday was a big swing and I’m sorry that it occurred. I certainly understand that there are some unhappy people. It was not as big a swing as most people predicted. All of the polls predicted a bigger swing and there’s no doubt about that. Both the published ones and the unpublished ones predicted a much bigger swing than did occur.

JOURNALIST: Are you relieved by the…?

PRIME MINISTER: I can’t say I was relieved by a 10% swing. That would be an exercise in political self-delusion that would dwarf some of the fantasies of my predecessor.

JOURNALIST: Mr Howard the by-election became inevitable because Mr Moore resigned. Wouldn’t it have been better for the public, and certainly some of the electorate was saying this yesterday, that Mr Moore just serve on the backbench until the federal election?

PRIME MINISTER: Well that was not an option. The situation in relation to Mr Moore was that he indicated to me that his personal preference was to leave the Ministry and leave politics at Christmas. He did indicate that if I wished him to stay on as Defence Minister he would be happy to do so until the election. He was not interested in resigning from the Ministry and staying on the backbench. I had a choice. I either had a more extensive reshuffle which I thought at the time and I still do was beneficial to the Government and run the reasoned risk of a by-election, or have him wait until the election and have a much more limited reshuffle. Now I took the risk, I mean I accept responsibility for the fact that there was a by-election. I’m the Prime Minister. I’m not looking around to point fingers at other people but you should understand the sequence and the options. The only two options that were available to me was Moore staying as Defence Minister and a far more limited reshuffle, or Moore going completely and having a by-election. He did not entertain the option of staying on the backbench.

JOURNALIST: Prime Minister Lynton Crosby suggested this morning that Kim Beazley’s late campaigning in Ryan [inaudible] impact on the result, that it was a plus for you and there are Labor officials saying the reverse. How much do you think this was a vote on his leadership and on yours?

PRIME MINISTER: I thought it was interesting that he appeared to let the running be made at the beginning by Mr Beattie. I feel that we clawed it back in the last few days, I do. I don’t think there’s any doubt that over the last week the margin shrank. I sensed that we were making some headway during the last few days. I’ll leave it to you people to sort of analyse and comment upon that. He did seem to me to get more enthusiastic when he thought he could possibly win. He didn’t seem to have his coat off right at the beginning. I did. You can draw your own conclusions from that.

JOURNALIST: [inaudible] Green vote increased again in Ryan. Will you be giving a rethink to your environmental policies?

PRIME MINISTER: Well they’re very good already. We’re not going to sort of dramatically change them but we are greenish.

JOURNALIST: [inaudible] consideration to Mr Beattie’s demands for a compensation for tree clearing regulations?

PRIME MINISTER: We have already offered to have sensible discussions with the Queensland Government in relation to tree clearing. We’ve offered that all along. He’s just playing petty politics on that issue.

JOURNALIST: [inaudible] and also Greg Sword’s calls this morning for an immediate federal election claiming that that would clear up economic instability?

PRIME MINISTER: How interesting. I mean we were wrong to have a premature by-election, but it’s not wrong to have a premature general election. Well I’ll tell you what I’ll do, this is for Mr Beattie, I’ll spend the next nine months consulting the Australian public about when the election should be held.

JOURNALIST: Why did it take five years to realise that there had to be a cushion for those who are exposed to reform?

PRIME MINISTER: I don’t think it’s taken five years for me to realise that. I just think that in the context of analysing why people voted as they did that’s something that’s come through very strongly. Maybe the cushion we have provided hasn’t been good enough. Maybe we haven’t explained it well enough. I mean you’re asking me to give a generic explanation of the outcome. I mean you can talk about individual areas of irritation and there are quite a number. The Labor Party is saying it’s petrol and the GST yet they’re keeping our policies on both.

JOURNALIST: Mr Howard over a year ago you said there was a red light if anything came up that would effect people in rural and regional areas. Is this the same sort of thing only it’s a broader red light on government policies that are going to hurt people?

PRIME MINISTER: Well I wouldn’t quite use the same language. I was talking there about the withdrawal of services.

JOURNALIST: [inaudible] last few days, what do you think contributed to that?

PRIME MINISTER: I think the letter I wrote to the electorate. I have been criticised by some people for entertaining the possibility of a Labor win. I think you’ve always got to be realistic with these things. It was self evident to me that a lot of traditional Liberals were thinking of a protest vote and I think can, you know, directly asking them to consider the implications of that was of help. And I think the cumulative effect of Tucker’s campaigning was very good. He was a very good grass roots campaigner.

JOURNALIST: Mr Howard [inaudible] political uncertainty and the impact that could be having on the exchange rate and the position over Woodside. What can you say in relation to Woodside and also to regional and international investors?

PRIME MINISTER: Well the decision that will be taken on that issue will be in accordance with our foreign investment policy. I mean this is a classic example of where people who sit back and comment upon the Government are having two bob each way. There saying that, you know, you can’t possibly approve it because it will show insensitivity towards the desire of the Australian public to avoid becoming a branch office. And then, you know, the people on the other end of the spectrum are saying that any rejection of any foreign investment proposal, we’ll leave Shell out of it, will send the wrong signal to the financial markets. I mean look, the United States government has blocked foreign investment proposals affecting the resource sector in the United States and that’s not had an adverse effect on capital flows into the United States. I think with great respect the treatment by the financial press of this issue has not been particularly calm.

JOURNALIST: [inaudible] commercial solution to the Woodside….

PRIME MINISTER: Oh look, I don’t want to get into the detail of the…you know. I really don’t.

JOURNALIST: Mr Howard with a large small business constituency in Ryan, how much of the result do you think is a protest vote from that constituency against your Government’s policies particularly the GST and BAS? And I think you alluded before you thought you could win back some of that support over the next six months through those BAS changes. Do you really believe that or do you think that core Liberal constituency has been lost because of the damage the GST has caused?

PRIME MINISTER: No I don’t believe it has been and in the end the things that will influence that core constituency you speak of at a general election are more likely to be the relative offerings of the parties on interest rates and inflation and economic stability. And the most vivid recollection that most small business men and women have who’ve been, this is for the last ten years or so, is still of high interest rates under the former government and that’s still a very potent consideration. Not a potent consideration in a by-election because in a by-election you’re not changing the government. You’ve got to remember as Lynton Crosby said this morning that the whole thrust of the Labor’s campaign was to say look you’ve got a perfect opportunity here to have it both ways – you can have your cake and eat it. You can give the Government a kick but you won’t put them out. In other words you can go back to voting for them in the general election. I mean they actually tailored a by-election message. They weren’t asking those people to desert the Liberal Party full time. They’re just asking them to desert them for the purpose of the by-election. Now there was a 7% drop in the Liberal Party’s primary vote. Now I think in the nature of things that would have been a mixture of small businessmen, self-funded retirees, a cross section of the electorate. I don’t think you could say they were all in small business. It’s very hard to know. I mean we haven’t done an exit poll. I think the electorate is polled out at the moment and I don’t they’d welcome anybody ringing them up to ask they why they voted in a particular fashion.

JOURNALIST: Some of the booths that did swing against you in a big way were the more middle class seats or booths, the Gap, Toowong. Isn’t the message a little deeper than…..?

PRIME MINISTER: Well I’d like to analyse each booth. I haven’t done that. But there’s a degree of uniformity about the electorate. I mean you don’t have a situation where one area is sort of 70% Liberal and another area is 70% Labor. You’ve got some Labor pockets. But I’d like to see some more detailed analysis before I accepted the proposition that’s inherent in your question.

JOURNALIST: [inaudible] seen as an endorsement of Mr Beazley’s negative approach. If there is a Labor win do you stick to that or do you….?

PRIME MINISTER: Well I said it Michelle. But that doesn’t mean to say that I can’t over the next nine months persuade the Australian people, including the people in Ryan, of the ill wisdom of such an approach. I mean I can’t quite understand the logic of that question. I mean I was confronting the reality that Liberals were contemplating a protest vote. And I addressed openly and publicly an argument to them not to do so. I happen to think that that argument in relation to quite a number of them was successful. It wasn’t in relation to others but I’m not going to withdraw the argument. I’m not going to retreat from what I’ve said in the letter.

JOURNALIST: Back on the Woodside issue, West Australian backbenchers have expressed a view against the bid [inaudible]. Given what you said a moment ago about some of the dangers in public debate of that kind do you think they’d be better off keeping their mouths shut?

PRIME MINISTER: Look we live in a democracy and people have responsibilities and they have rights. I mean you get to a point though, I mean if you’re a member of Parliament and you see people every night making a comment on where the dollar’s likely to go without any care as to the impact of that on markets. I mean I commend to many of you what Gerry Harvey said on Sunrise this morning about confidence and some of the media treatment….commentators treatment of….financial commentators treatment of financial commentators treatment of some of the economic data. I think Members of Parliament show a great deal of restraint. But they do have obligations, they have rights and their obligation is to express the views of their constituents. It’s my responsibility and the Treasurer’s responsibility to see that the foreign investment policy is administered but that doesn’t mean to say - administered properly in accordance with the law, that doesn’t mean to say that you can’t talk in general terms about the issue although I’ve avoided talking about the detail as has Peter of the Woodside Shell issue. But it’s unrealistic of me not to answer questions about it, I mean it’s in the papers every day and as a result I think a view’s been put to the media by the players. That’s right isn’t it?

JOURNALIST: But Mr Howard only last week you had the Reserve Bank board member Mr Dick Warbuton saying that political uncertainly was one of the factors that could be undermining the currency. I mean he’s obviously a well respected figure and I think that was in reference to the Woodside decision. I mean can you afford to delay any longer and indeed reject it with the dollar at 49 cents?

PRIME MINISTER: Delay any longer?

JOURNALIST: Can you afford not to make a decision now?

PRIME MINISTER: On what?

JOURNALIST: On Woodside?

PRIME MINISTER: Well it has to be dealt with in accordance of the law and Mr Warbuton’s remarks were made in a different context and you are drawing, I think with respect, a tenuous connection between his remarks and that.

JOURNALIST: Mr Howard you’re off to Brisbane tomorrow, is that correct?

PRIME MINISTER: Yes it was organised a long time ago. I am, we’re having a Cabinet meeting and then I am spending some time in the seats of colleagues in Queensland.

JOURNALIST: You said that you were given no choice by Mr Moore. No option really in terms of having a by-election …

PRIME MINISTER: No I could have, I could have had a more limited reshuffle.

JOURNALIST: Why didn’t you persuade him to sit on the backbench. I mean if you can’t persuade your minister to do something if it’s in the interest of the Government, how can you persuade people?

PRIME MINISTER: Oh I think that’s, I mean if you’ve been a senior minister and you’ve done a good job which he’d done and you’ve just piloted through a white paper – you say why didn’t I persuade him to stay on the backbench, well I mean he just said to me that if he left the ministry he didn’t want to stay around. Now he made that very plain and I wouldn’t have been able to persuade him.

JOURNALIST: Was it disappointing?

PRIME MINISTER: Look there’s no point in sort of talking about disappointments or anything. I mean look I had an option, I had two options – have a limited reshuffle with him staying or have a more extensive reshuffle and the reasoned risk of a by-election. And at the time, let’s not here rewrite too much history, at the time although some people pointed out in generic terms that having a by-election is always risky, few people in December were predicting that it would go bad and I’ve checked the records so I can assure you that I am not making that up.

JOURNALIST: ….. political carpet-bombing. Did you have no inkling that that was about to happen? The carpet-bombing of the last couple of months. Did you, none of your senses were picking that up that there was a big shift going on?

PRIME MINISTER: Oh look, I think some of the things I expected. I knew we were going to lose in Queensland and I knew that the Court Government was going to cop a swing. I thought that the swing against Court in Western Australia was greater than I expected, it was greater than you expected too and the media and the polls expected. The opinion polls have had a rocky ride over the last few months. I was surprised at that, everything that sort of went bad went bad and some things went even worse. Now you do have, you do have those periods in your time in politics. I mean I sort of you know, live in hope that its all sort of happened together.

JOURNALIST: Prime Minister has Treasury botched the transition to the GST as business large and small seems to be saying?

PRIME MINISTER: No Treasury has not botched it. That’s not a reasonable criticism and business large and small is not saying that to me. Some people are saying that to me. Some are not. I am still surprised by the large number of people who say to me, I don’t know what all the fuss concerning BAS was all about, a number of people in small business. So it is still a very mixed story.

JOURNALIST: Mr Howard you live in hope that it’s all happened together. Do you expect the next few months to be a lot easier, a lot more …

PRIME MINISTER: No I think the next few months will be very difficult. I was speaking whimsically and you know it shouldn’t be taken too seriously. I don’t sort of expect an easy ride on anything over the next eight or nine months. I don’t. I think it will be very difficult indeed. But I certainly don’t accept for a moment that what happened yesterday indicates that the Government’s defeat at the next election is inevitable. I mean it is simply not. I mean you are all students of political history, as I am and you know as well as I do it is not a Bass or a Canberra. I mean there is a difference between a fall of 22% in your primary vote in a seat like Canberra and a fall of 7% in your primary vote in a seat like Ryan against the background of the different circumstances that obtain. I mean the Keating Government although it was generally behind in the polls before the Canberra by-election, it started to fall behind in the polls from about the beginning of February was not you know sort of subjected to that accumulation of individual circumstances that we’ve had over the past couple of months. So look it’s going to be very tough but I don’t feel and I am sure I don’t appear devastated by what happened yesterday.

JOURNALIST: If it is going to be so tough how come you do look so relaxed?

PRIME MINISTER: Well, I’ve been through a lot of tough experiences politically and I’m just trying to be realistic about it. I mean I’ve deliberately sought to address the reality of the situation today as I did in the closing days of the by-election. There’s no, I think part of the problem with the political dialogue between the political leaders and the public at the present time is that sometimes you know the public is more acutely aware when politicians aren’t talking real language and real terms to them and they think, I think one of Beattie’s successes was to talk very directly and to sound real. I think you have to be.

JOURNALIST: Prime Minister you talked about softening the blow of reform for the most vulnerable. Does that, does that also refer to the upcoming welfare package which you’ve …

PRIME MINISTER: Well, we’ve fully factored that in anyway. I mean, well the whole idea, I mean the whole sort of McClure offering is a mix of both elements. I mean I don’t have in mind any further softening in relation to that. The softening is already there.

JOURNALIST: Mr Howard you volunteered before that self-funded retirees may have lodged a protest vote in Ryan.

PRIME MINISTER: Some of them.

JOURNALIST: Some of them.

PRIME MINISTER: Some of them didn’t.

JOURNALIST: How did you detect that and what do you think you might do for them?

PRIME MINISTER: Well I know that some self-funded retirees are unhappy with some aspects of government policy. I know that. I know that from my own electorate. I have quite a large number of self-funded retirees and I listen very attentively to the people of Bennelong and my colleagues have told me that. Now not all of them are unhappy but I mean there elements of it. You’ve got to remember that self-funded retirees don’t jump with joy when interest rates fall. They often behave in exactly the reverse fashion and you’ve got to bear that in mind.

JOURNALIST: Do they talk to you about superannuation as well?

PRIME MINISTER: Self-funded retirees? Oh some of them do. Depends a bit on how well funded they are.

JOURNALIST: The surcharge?

PRIME MINISTER: Oh look don’t start writing stories that we’re going to change that.

JOURNALIST: Mr Howard there’s been a mini-military revolt in Papua New Guinea. How seriously do you …

PRIME MINISTER: Well quite seriously. I initiated and had a phone conversation last night with the Prime Minister, Sir Mekere Moruata. I ought to make it clear that any challenge to the constitutional authority of the government of Papua New Guinea would be taken very seriously by the world and very seriously by Australia. I know that there are difficulties with the defence reform process. Australia has offered to help in relation to that in a way that is fully respectful of PNG’s sovereignty and independence. I’ve had lengthy discussions with the prime minister about that. We did make available General Michael Jeffrey to serve on the group which made the recommendations and I hope the thing is handled within the constitutional processes of Papua New Guinea. But I have always taken the view that we have a special responsibility in relation to Papua New Guinea and I will be following this very closely and I’ll remain in regular contact with the prime minister.

JOURNALIST: Mr Howard you talk about a very tough challenge ahead in a few months. How does that rate with you personally with other challenges you’ve faced in your political career. Is it one of the hardest or the hardest? And if you overcame it would it be the sweetest victory of all to win?

PRIME MINISTER: Oh you know I think I still if I look back over the years I think the fraying of the Federal Coalition at the beginning of 1987 was probably the worst period in my political existence, nothing could quite equal that.   But this will be, this and we do this from the position of being in government and we do this from a belief that the fundamental direction of our policies is not wrong. I mean if you take, you know if you really look carefully at what the Labor Party is offering, they’re not saying that the fundamental direction is wrong, they’re just snipping at the edges and being opportunistic. But one of the things that this result will do is to focus more attention on the Opposition. There will be more pressure. There certainly ought to be more pressure on Mr Beazley to say how he’s going to fund rollback. I mean he really does have a problem with rollback. If you’re serious about rollback, it means you’re going to take the GST off a lot of items, now that’s going to cost a lot of money. So you’ve either got to have a higher GST, you’ve got to have cuts in government spending or you’ve got to have higher income tax because you’re guaranteeing the states they won’t be worse off or you’re going to go into deficit but Simon Crean says he’s going to have a bigger surplus than us. So I mean that is, that should be a daily question. I mean it’s, each of you should have on your walls, you know – it’s paying for rollback Stupid.

JOURNALIST: Mr Howard you can’t have a higher GST, you’ve assured the nation.

PRIME MINISTER: No, no I am talking about them not us.

JOURNALIST: But they can’t either.

PRIME MINISTER: Oh, can’t they? Well I don’t speak for them.

JOURNALIST: But we understood from you that …

PRIME MINISTER: You won’t have a higher GST from me. I haven’t suggested otherwise. What I’ve said is that if you have rollback, if you take it off several items, one way of paying for it is to increase the rate of GST on the items that remain subject to it, that’s my point. But that doesn’t apply to us, it applies to them. Let them deal with that.

JOURNALIST: Prime Minister Aden Ridgeway’s going to address the United Nations’ Human Rights’ Committee in a week or so on issues including mandatory sentencing and indigenous policy. Does he have a responsibility not to criticise the Government in that sort of forum?

PRIME MINISTER: I didn’t know he was going to do that, but I mean, well I think he has … it is not for me to sort of give advice and if he were to do so then he wouldn’t be behaving less responsibly than a lot of Labor shadow ministers have done overseas in criticising the Government when they’ve been away, such as Senator Bolkus at the Tokyo conference on the environment. But I think the Australian public would expect our elected representatives when they’re overseas to respect the duly implemented laws of the Commonwealth and the States when they’re overseas. I don’t think there’s any mileage in this country in bagging our political processes and our political decision making when you’re overseas, I really don’t. One more question and then I better go, I am getting hungry.

JOURNALIST: The National Party’s talking, openly talking about preparing zonal tax rebates, or a plan for zonal tax rebates this year. Given the Budget constraints that you’ve been talking about, how is that possible?

PRIME MINISTER: Well I mean different people belonging to different sections of the Coalition can put forward proposals but there won’t be any separate, sort of offerings from National Party members to the public I mean anymore than there’ll be separate offerings by the Liberal Party. The whole thing will be done as part of the Budget process. But we, you it is one of the things that is on the agenda but nobody should imagine that there are billions of dollars sloshing around for that or indeed for anything else.

JOURNALIST: Mr Howard how pessimistic are you about the outlook for the US economy and (inaudible) the global economy in terms of your electoral fortunes as well?

PRIME MINISTER: Well the slow-down in the US stockmarket has certainly had a, and the NASDAQ and the Dow they’ve certainly had a, there’s certainly been a slowdown in the United States. The President’s view as expressed to me is that it will be all bounding back in about six months time.

JOURNALIST: When did he say that to you?

PRIME MINISTER: When he spoke to me on the phone.

JOURNALIST: When?

PRIME MINISTER: Oh a couple of weeks ago. I thought I’d already said that but you were probably too busy reporting my travails in Ryan Michelle. The very last one and then I must go.

JOURNALIST: I was just going to say like Steve Waugh you believe you can come back and win the decisive test, is that the message from today?

PRIME MINISTER: Absolutely.

JOURNALIST: And you’re not invincible?

PRIME MINISTER: Nobody’s invincible Denis. But some have a better trackrecord of resilience than others.

JOURNALIST: You don’t have to chuck out Shane Warne to win?

PRIME MINISTER: Who is the Shane Warne of my Cabinet?

JOURNALIST: A few tweakers up there?

PRIME MINISTER: Okay, see you later.

END