TRANSCRIPT OF THE PRIME MINISTER
THE HON JOHN HOWARD MP
RADIO INTERVIEW WITH JOHN MILLER, 4BC
24 May 2001
MILLER:
Prime Minister good morning.
PRIME MINISTER:
Good morning John. Good to talk to you and your listeners again.
MILLER:
Good to talk to you too sir. Now in fact it is good to talk to you this morning because we’ve now had a chance I think to all have a better look at the federal budget brought down the night before last. And a lot of questions being raised which I shall put to you. Now these are questions Prime Minister that have been put to me primarily by the audience, and I suppose the most concerned voice for me has come from self funded retirees who are below the pension age. They’re feeling pretty angry and pretty hard done by this morning.
PRIME MINISTER:
Well just before I deal with that can I just make one general point about the budget seeing it’s the first opportunity I’ve had to talk to your listeners directly and that is that this budget should be seen as the culmination of a process of very good and careful economic housekeeping which has given us the wherewithal, the resources, the money, to invest in quite a number of areas not only in relation to self funded retirees which I’ll come to very directly. But also in areas like education and the strengthening of Medicare, tackling environmental problems, a greater commitment to defence, a greater commitment to science.
All of those things, more help for rural medical services building on what we did for rural doctors in last year’s budget. So it is very important for me to make the point that this year we are paying about $4 billion less in interest on government debt than we were five years ago. And when people say where’s the money coming from, it’s coming from the fact that we are no longer paying such a big interest bill because when we came government the government, the federal government on behalf of the people of Australia, owed people it had borrowed money from to finance previous budget deficits about $96 billion of debt. And we’ve repaid between $50 billion and $60 billion of that and it means our interest bill is lower. And when you have a low interest bill, a lower interest bill, you can afford to do more things and on an ongoing basis. And that is why I think it is very important in looking at this budget to bear that in mind.
Now you asked me about self funded retirees, the group who are not of pension age. I guess John the answer to that is where do you start and finish with something like this. Some people do retire before 65, in the case of men, 61½ is the pension age for women. Others don’t. Some people say well you should have it for people who reach the age of 60, you should treat them as self funded retirees if they’re out of the workforce. But then others would say why not 55. I know some people who retire at 50. You know, where does it end? And it’s always been the practice of governments to look at self funded retirees as people who are essentially self supporting and of pension age and that’s been the attitude that we’ve adopted and other governments have adopted in the past.
MILLER:
But Prime Minister wouldn’t you agree that when those ages were set at 65 and 61½ for women, I don’t why the half, but when they were set things were very different. The times have changed. There are many people out there of that 50 plus age group who have had retirement forced upon them.
PRIME MINISTER:
Yes well we have done something for them. One of the changes in the budget that hasn’t received as much publicity but it is very relevant to your very question is we have changed the rules relating to the accessing of superannuation. Previously anybody aged over 55 had to in effect access their superannuation because it was made part of the assets test for entitlement to any kind of pension or benefit including unemployment benefit. And you had many cases of people who were retrenched, 55 and over and they had some superannuation and they were only able to have unemployment benefits for a period of I think 9 months before they were required to then use up their super before they could get benefits again. And we’ve taken the view that that was working unfairly against people of that age cohort who through no fault of their own might have been retrenched in the reordering of a business and would find it hard in their late 50s to get another job. And that was one of the things that was put to us by groups representing older Australians as a measure that could be fairly directed towards people who were under pension age.
I think it’s important in something like this to bear in mind that one of the objectives of government policy should be to encourage people to remain in the workforce for as long as they wish. I don’t think we should have policies that provide people with incentives to leave the workforce earlier than they might otherwise do because people are in fact living longer and there is a tension in my view between a society where people are living longer because they are healthier and yet you have policies that encourage them to leave the workforce earlier. That may have been a valid approach a generation ago to encourage people to leave earlier because the demographic of the population was a bit different then. I think it’s really going in the reverse direction now John. I think the trend is to get rid of compulsory retiring ages. I think the trend is to say somebody has a contribution to make no matter what their age is. I think the trend is to recognise that we are squandering a great resource if we lose people of experience from the workforce. I think we have changed, not in the direction of encouraging people to leave the workforce earlier but rather keeping them in the workforce as long as they are able to make a contribution. And I think those attitudes have changed.
MILLER:
Well recent articles I’ve read would seem to bear that out, particularly when they’re now saying that there is a change in the attitude of business overseas and it’s starting to filter through here.
PRIME MINISTER:
And it’s commonsense.
MILLER:
Well absolutely.
PRIME MINISTER:
There is no substitute for experience. And one of the things that we have got to stop doing in this country is segmenting people according to age and making assumptions that one particular age group are better than another in doing things. And I welcome the fact that people are increasingly looking at the worth of a man or a woman irrespective of that person’s age. And of course the older people in the population have got to accept that in relation to the young, where you have somebody of great ability, the fact that that person is younger than one would normally be and aspiring for a position, that shouldn’t bar them.
MILLER:
Well more power to that sort of attitude becoming more prevalent in the business community throughout Australia.
PRIME MINISTER:
It is long, it is long overdue and I think the community is adopting a far more, no pun intended, mature attitude towards it.
MILLER:
All right, let’s get back to basics though. Let’s talk about the $300 payment for pensioners. There’s a lot of confusion out there that I am getting through to callers this morning as to who gets it and who doesn’t.
PRIME MINISTER:
Well it is only available to people of aged pension age. It is available to anybody who is on a full or a part pension of aged pension age. It is not available to people under aged pension age. And it is also available to that small number of people who are of aged pension age but for one reason or another through the operation of the assets test or whatever, are not in either the social security or the tax system and that effectively means a single person whose income would be below $20,000. And under the new rules that person wouldn’t be paying any tax and, who by reason of the operation of the assets or income test, is not entitled to an aged pension.
MILLER:
All right, what about disabled, people on disability pensions?
PRIME MINISTER:
No, it’s intended as a contribution to people of aged pension age. We did make some other changes in relation to disability pensions. We have put more resources into that area. And I make the point that if you gave it to that area then quite understandably people on unemployment benefits would argue that they should be entitled to it as well. And unfortunately with these things wherever you draw a line people will argue that, well you should go over that line and provide it to another group. But this is a measure for people of aged pension age, just as the measures that were introduced in relation to self-funded retirees were designed to assist those people as well.
MILLER:
All right, now let’s come to middle Australia, the typical, traditional, single income family unit – there’s nothing in this Budget for us.
PRIME MINISTER:
Well there has been a lot in earlier measures. No group, can I say, did better out of, in terms of the tax cuts, did proportionately better out of the personal income tax cuts in the tax system changes than did that group. And I mean I am very proud of the fact that in the time we’ve been in government, we have significantly improved the tax position of single income families relative to two income families. We’ve in effect, we’ve given the single income earner close to two tax thresholds where there’s one child in the family under the age of 5. And I’d also make the point John that most people in that category are paying off their home and that group, that is the people paying off their home, have derived more benefit from low interest rates than any other group in the community. It is in effect the reverse of what low interest rates have done for self-funded retirees. Self-funded retirees don’t always welcome low interest rates because they’re living on investment income whereas if you’re paying off a home, I can say to you now that if your loan is $100,000 which is the average around Australia, you’re paying $300 a month less than you were paying when this government came to office. I mean one of our great achievements has been to get interest rates down for battling, typical Aussie families. And it’s one thing I would say to any of those who are tempted to support the Labor Party, remember the 17% interest rates on housing loans that operated only a few years ago under Mr Keating and Mr Beazley. Now we have got housing interest rates in this country to levels not seen for 30 years and that has done more to help the group you’re speaking of, plus the tax cuts than any other single thing.
MILLER:
You mentioned the Labor Party, let’s then look at the political equation – I have seen the Budget described in various august journals around the place as a ‘crafty attempt by your Government to claw back its heartland’. That heartland that is apparently deserting you and certainly on the basis of the by-elections and the state election here in Queensland would seem to have run away in droves.
PRIME MINISTER:
Well in the end the Australian public will make a judgement about that. I always resist the temptation to be a political commentator John and I will leave that to you. And those, well you described them as august journals, those journals to which you refer, I’ll leave that to others. Look in the end the Australian public will make a judgement about me and about my Government. We’re doing our best. We’ve made our mistakes. We’ve tried to remedy some of those mistakes but we’ve also done a lot of very good things for the Australian people. We have certainly got the Australian economy in a stronger position. We’ve got our fifth successive budget surplus. And I say again it’s because of that good management that we can afford to do many of the things that people are now talking about. If we hadn’t have paid off all of that debt, and had that extra $4 billion a year we wouldn’t have been able to do so much. And I think it’s a message that is very important.
MILLER:
Well Prime Minister, I don’t want to attempt to turn you into a political commentator but you must, you must admit that you would have got a message surely that there are a lot of people who have been very disenchanted with you in recent times and coincidentally along the way this Budget happens to address some of those concerns.
PRIME MINISTER:
John the job of a prime minister is to both lead and listen. You’ve got to mix the two up. Sometimes you say this is what I believe is good for Australia, I know you may not like it now but we have to do it and along the way I’ll explain as best I can why it should occur. On other occasions you’ve got to go around and listen to people and if they’re unhappy about certain things, if you can do so you try and respond. Now that is what I have endeavoured to do. I know I don’t please everybody, I know there are many people in the community who disagree with our government’s policies. There are many who strongly support them. And there are some of course who are a bit fifty-fifty. Now it’s all part of the democratic process and we’ve had our difficulties and we’ve had our critics and we’ve tried to respond to them. We certainly knew we had to do more in relation to excise on petrol and we did. I mean this Budget confirms the reduction of 1.5 cents a litre, it confirms the abolition of the automatic tax rises in petrol, for petrol, something that Mr Hawke introduced in 1983. It means in August of this year there won’t be an automatic increase in the tax on petrol which there would have been had it not been for the decision that we took a few months ago. Now we are a government that both leads and listens and that is what any good, responsive, but strong government of this country needs.
MILLER:
One more quick thing on the Budget before we may move onto a couple of other matters that I would like to quickly raise with you this morning. The removal of certain drugs from the pharmaceutical benefits list, particularly the anti-cholesterol drugs is causing a great deal of concern out there from some of my listeners this morning.
PRIME MINISTER:
Well it’s not being removed, it’s just that the eligibility for it is being made a little… subject to some conditions. In the end it will be a matter for the patient’s doctor. But it’s not being taken off the list. It’s just that the view is taken that people should be encouraged if they’ve got a cholesterol problem to change their diet and do a bit of exercise if they can as well as considering a drug. And I think that is good, balanced medical practice.
MILLER:
Well I must say that I have medical opinion quite to the contrary that diet and medication can make only a small difference.
PRIME MINISTER:
Well there you are. I mean it’s like so many of these sciences, you get conflicting views but certainly the weight of medical opinion that’s been given to us is that diet and exercise are an important part of fighting heart disease and high cholesterol.
MILLER:
Okay let's move on to another couple of issues if we may. Issues that have been raised with me this morning. Apparently Australia is going to be diplomatically represented at a reception tonight at the Chinese Embassy marking the 50th Anniversary of China’s military occupation of Tibet. Now given the bloody nature of that invasion, should we be seen to be at this celebration?
PRIME MINISTER:
Well I must say off hand I don’t know the details of that, I’ll find out, I don’t know that. Can I just make the point thought that when the Dalai Lama came to Australia I made a point of seeing him just as President Bush saw him last night in Washington. Despite the opposition of the Chinese Government, so even if what you say is correct it doesn’t in any way alter the fact that we have continued to recognise the spiritual role and therefore a leadership role in terms of the spiritual role of the Dalai Lama. So I don’t think anybody could accuse us of being unreasonably accommodating in relation to Tibet, unreasonably accommodating of China.
MILLER:
Now again Prime Minister this is in response to callers this morning who said when you get the Prime Minister on please ask him about this. Apparently the tax department is moving to enforce this 80/20 rule for sub contractors. Meaning that if you earn more than 80% of your income in any given year from one source you will be taxed at the higher rate.
PRIME MINISTER:
Yes but there are five let outs in relation to that. If you have a certain number of employees and if you have separate premises and a whole lot of things that if you go over the 80 then if you meet one of the other criteria you’re not effected. What I’ll do, I’ll get, if you’ve had a series of calls about that I will get some information to you about those let out points. I mean there’s a lot of misunderstanding on that. You’re not automatically caught if it’s over 80%.
MILLER:
Prime Minister the concern is for someone like Fred the owner/driver who has a concrete truck.
PRIME MINISTER:
Yeah well I’d have to know some of the more details of that. But the purpose of this was to stop people who were in every sense of the word a salaried employee just turning themselves into a company to reduce tax. Which throws more onto you and me and the rest.
MILLER:
Oh absolutely.
PRIME MINISTER:
…more than our fair share.
MILLER:
Yeah indeed, I’m a passionate advocate of the fact that people should pay their fair share.
PRIME MINISTER:
If everybody paid their fair share we’d all pay less.
MILLER:
Yeah precisely. And finally Prime Minister lets just go back for a moment if we can to the budget. The various savings, for example the abolition of the bank transaction tax.
PRIME MINISTER:
Financial Institutions Duty, yes.
MILLER:
Now that’s gone. But will the Government be diligent in making sure the financial institutions actually pass that on?
PRIME MINISTER:
Well we certainly will. I mean it’s a tax that’s levied by the States. I don’t think it does apply in Queensland though. One of those Financial Institutions Duty, either that or the Bank Account’s Debits tax doesn’t apply in Queensland but in the other states. Now we will certainly be absolutely diligent in making sure that’s passed on and I make the point that the abolition of this has been made possible because of the new tax system. If it hadn’t been for the new tax system, for the GST there wouldn’t have been the resources to abolish this. So if you hear any State Governments claiming credit for it don’t believe them.
MILLER:
Alright and Prime Minister will you be also, well a Royal Commission is a Royal Commission, but will you be asking them to be as swift as they possibly can in relation to HIH?
PRIME MINISTER:
Yes we will but it’s a very complicated matter and it can’t be done over night. I’m considering the terms of reference and I’m in discussion about the person or the people who will comprise the Royal Commission. And when that’s completed and it will take a little while, I’m not saying weeks or months but it will take a few days or perhaps a week or two. I will then be in a position to announce it.
MILLER:
Ok, Prime Minister finally now the question that I know you’re going to be asked a hundred thousand times but I’ll ask it anyway and I think I already know the answer, are you still intent on running full term or are you looking at an early election?
PRIME MINISTER:
No it remains my current intention, it remains my intention, my current intention to go the full term. I, we have a number of other things to do in this term, we have a lot of governing to do. Three years is a fairly short period of time anyway and there would have to be very good reasons to make it even shorter. That’s my current intention, I would expect at this stage that the country will go to the polls when the election is due which is towards the end of the year. So we had an election in October of 1998 so the election would normally be due, and can of course be held at any time around then or shortly thereafter. So you’re looking towards the end of the year, October, November, December. They’re the range. Now that’s my current intention. I’m only, I can only honestly say that is my current intention and the Labor Party is the source of all this talk about an early election. None of that speculation has come from us. It suits an Opposition to keep running speculation about an early election, it keeps their own mob in line and it sort of wipes away the need for the Opposition to be telling the public what they stand for. Whenever the election is held, one thing you can be certain of is that I will be inviting the Australian people to make a choice between what we have delivered for Australia or a return to the 17% interest rates, the $96 billion of Government debt and the 11% unemployment which were features of the years when Mr Beazley was a senior Minister in the former Labor Government.
MILLER:
Alright Prime Minister we’re right out of time, thank you for your time this morning. Good to talk to you and no doubt we’ll do it again soon.
PRIME MINISTER:
Thank you.
END
