GARDNER:
Prime Minister good morning to you. Welcome to Sunrise.
PRIME MINISTER:
Hello Georgie.
GARDNER:
Are the papers right? Are you planning an early election?
PRIME MINISTER:
No we’ll go our full term, that’s my current intention. Last night’s Budget was an opportunity for us to invest in Australia’s future because, through years of careful economic management we’ve paid off Labor’s debt and with the interest savings from that and other resources we had the opportunity to invest across a wide area of Government activity. That’s what last night’s Budget was about – it was delivering a social bonus out of the care and the good management of earlier years.
GARDNER:
All right, so just to clarify, you’re ruling out an early election?
PRIME MINISTER:
My current intention is that the Parliament should run its full term.
GARDNER:
All right, but how much of this Budget is about winning back disillusioned Liberal voters?
PRIME MINISTER:
This Budget is very much about addressing areas of legitimate need and concern but also very much about building for the future. You take something like the investment in the Natural Heritage Trust, tackling of problems of salinity, the hundreds of millions of dollars in the area of health, I mean we’ve got new programmes in asthma, diabetes, mental health, cervical cancer. Now they are things about building a healthier and therefore a stronger Australian nation. Those things are only possible when you’ve engaged in good housekeeping over earlier years. At the end of the coming financial year we will have repaid almost $60 billion of the $90 or more billion of debt, of government debt that we inherited from the Labor Party and because of that we’re paying something like $4 billion a year less interest on government debt. And if people ask ‘where’s the money coming from’, it’s coming from the interest savings on having repaid Labor’s debt.
GARDNER:
I want to focus on the elderly though, I mean clearly they’re the big winners in this Budget. Is that an admission that they weren’t adequately compensated after the introduction of the GST?
PRIME MINISTER:
No it’s not. It’s an acknowledgement of the contribution they’ve made in building the Australia we have today. A sensible, fair, forward looking government builds for the future, works actively for the present, but never forgets the people who’ve contributed in the past. And this Budget certainly acknowledges the contribution of older Australians, people who’ve raised their families, contributed to the economic strength we have today, given us the kind of society we have today. And the Budget is very much, in many of its elements about acknowledging the contribution of those people to where we are today.
BERETTA:
Prime Minister most of the criticism this morning is the claim that this is simply a short term budget, that it lacks some long term vision. How do you respond to that?
PRIME MINISTER:
I don’t know how anybody can say a budget that has repaid $60 billion, is part of the repayment of $60 billion of debt lacks vision or does anything other than build for the future. I mean you go through the Budget, you look at the investment I mentioned earlier about health and the environment, you look at the investment in defence, you look at the investment in roads, you look at the investment in tackling the problem of foot and mouth disease, you look at the enormous investment in welfare reform, that is all about getting people back to work who we find it harder with present policies to effectively assist. Now these are all things about building a fairer, stronger, more secure Australian future.
BERETTA:
But isn’t reducing the surplus a short term move?
PRIME MINISTER:
You have a, for the fifth time we have a surplus. I mean when we came into government, surplus was a word nobody had heard of. I mean we’d had years and years of Beazley, Mr Beazley as Finance Minister and Mr Keating running up enormous government debt and we now have a surplus frankly which surprised people, they didn’t think it was going to be as high as 1.5. There’s no point when you’ve paid down so much debt, there’s no point in piling up surpluses unnecessarily. We have the right balance. After all it’s the public’s money, it’s not mine, it’s not the Treasurer’s, it’s the public’s money and in present times people are entitled to look to a dividend out of the contribution they have made in the past to getting our finances in order.
BERETTA:
Prime Minister small business feels the Budget could have done more to fine-tune the GST – do you feel you’ve done enough?
PRIME MINISTER:
Well you’ve got to look not only at what was announced last night and it did include a $600 million unexpected injection into the motor car industry which will be of enormous immediate help to people in all shapes and sizes of businesses. You’ve got to look at the cut in the company tax, it’s going down to 30 cents in the dollar, the abolition of many other taxes. All of those things are going to be of help to small business. But Mark the biggest help to small business that this Government has delivered by far is the lower interest rates we now have. Interest rates went to 17% under Mr Beazley. Interest rates 17%. Small business were paying often 18% and 19%. Farmers, bill rates of 21% and 22%, they’re now well below 10%. We have the lowest interest rates this country has had for thirty years. Now that is the greatest gift that any government can give to any small businessmen or farmer in this country.
BERETTA:
The Budget does paint a fairly rosy picture. How confident are you of reaching the targets that you have set?
PRIME MINISTER:
We’re very confident, they’re based on the advice we have from the Treasury. They’re not manufactured in my office or the Treasurer’s office as happened with one of Mr Keating’s economic statements. They’re Treasury estimates. We believe them. My feel is that the economy is coming back from that temporary downturn in the December quarter. We’ll know a bit more about that next month. But that’s my sense, that there’s still great strength in the engine of the Australian economy and that there is a feel in the community that it’s bouncing back.
GARDNER:
Prime Minister we’ve talked about the elderly being the big winners. What’s in this for middle Australia?
PRIME MINISTER:
Well what’s in this for middle Australia and of course let me say the older section of the community is part and parcel and at the centre of our nation. This idea that you somehow or other segment older people off and don’t regard them as part of the community is quite frankly offensive and wrong. They’re part of middle Australia just as you and I and the rest of us are. We’re all part of the nation. But the general low inflation, low interest rates, the investment in education, the investment in roads, the investment in welfare reform, the investment in health – I mean every family in one way or another at some stage is touched by things like diabetes and mental illnesses perhaps, cancer, all of these things, asthma, I mean there are estimated, what 2 million people in Australia who are affected by asthma. Well we’re doing something very concrete over and above what is already being done to address that problem. Now these measures which strengthen the Medicare system, and remember all the criticism of us a few years ago about Medicare, we’ve strengthened Medicare and on top of that through the 30% tax rebate we’ve encouraged hundreds of thousands of Australians to come back into private health insurance. We’ve saved private health insurance and strengthened Medicare. That’s not a bad double in health.
GARDNER:
One commentator this morning is describing this Budget as a ‘political repair job’. How big a role does a budget play in shaping the image of the Government? I mean does this help shake off that ‘mean and tricky’ tag that you earned?
PRIME MINISTER:
Well I don’t accept that tag. But let’s deal with the issues. The Budget is an important statement of not only the Government’s economic management, but it’s also an important statement of priorities. And last night you saw the priority of this Government is investing in the country’s future. Very much about investing in Australia’s future and we have the wherewithal to invest in the future because we’ve taken care in the past. If we hadn’t have run budget surpluses over the last four or five years, if we hadn’t have paid off Labor’s debt of $90 billion or more, despite their fierce opposition at virtually every turn, we would not now be in a position to invest further, right across the board in securing Australia’s future.
BERETTA:
Prime Minister while we’ve got you this morning we wanted to ask you about HIH. You’ve been very vocal on this. Are you now confident the Directors will be held to account?
PRIME MINISTER:
Well I’m very confident that we’ve put in place mechanisms to find out what happened. The question of who did the wrong things, when it happened and what should be done is a matter for those who’ve been charged with the investigation through the Securities Commission and of course the Royal Commission will also have a general role, not only in relation to that but also in examining the role of the regulatory authorities. Now I’m not in a position to make a judgement, I haven’t examined the books of the company, that’s for the Securities Commission and the Royal Commission in due course, but I am satisfied that we have all of the mechanisms available, but more importantly than that we are doing something immediately to help the people who’ve been affected by the collapse. The most important thing is to give urgent help to people in hardship as a result of the company’s collapse. That’s the most important thing to do. The other is very important and people are entitled to ! be angry, they’re entitled to want the Government to throw the book at people who’ve done anything wrong and through the proper processes of the law we’ll find out what really happened, who’s to blame, who ought to make restitution and who ought to be brought to account.
GARDNER:
Just finally Prime Minister, a boost for you in the polls this week, how are you feeling? Are you relaxed and comfortable?
PRIME MINISTER:
Well the next election, whenever it is held and I repeat my current intention towards the end of the year, it will be tough. I don’t get too heavily influenced by individual polls. In the end there’s that old cliché about only one poll counting and the one that counts is likely, on my current thinking to be towards the end of the year.
GARDNER:
All right well we do appreciate your time this morning. Prime Minister John Howard thank you very much for joining us on Sunrise.
PRIME MINISTER:
Thank you.
END
