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Media Interviews

Prime Minister

1 September 2000

TRANSCRIPT OF THE PRIME MINISTER
THE HON JOHN HOWARD MP
RADIO INTERVIEW WITH NEIL MITCHELL, 3AW

Subjects: Kerry Packer; Mark Latham; cross-media ownership; petrol prices; Telstra; Carmen Lawrence; Kevin Andrews and Petro Georgiou; defence bill; s11 recruiting school children; John Laws; AFL Grand Final.

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MITCHELL:

Good morning.

PRIME MINISTER:

Good morning Neil, how are you?

MITCHELL:

Iím well. You wouldnít like to buy this poster for Peter Costello would you?

PRIME MINISTER:

I think heíd even dip into the surplus for that.

MITCHELL:

Mr Howard, Kerry Packer . . .

PRIME MINISTER:

Yes.

PRIME MINISTER:

Has been attacked by the Labor backbencher, Mark Latham and heís replied very strongly in The Australian today. Do you believe Kerry Packer is a good Australian, a good corporate citizen?

PRIME MINISTER:

Yes, I do. I donít always agree with him and he doesnít always agree with me. But I thought the Latham attack was ludicrous, driven I believe very much by Lathamís closeness to Paul Keating, theyíre very close. I thought the attack was silly. There is a problem with gambling in this country, but the problem doesnít lie with people who can afford to gamble and afford to lose.

MITCHELL:

Well is it any of our business if Kerry Packer . . .

PRIME MINISTER:

Well itís not, itís not. Itís his money. I mean he made the very legitimate point that he doesnít gamble with his companyís money and I think if you look at his corporate record, thatís right. He does have a reputation for canny investments and good luck to him and he also has a reputation for being very loyal and generous to his staff. Now he can look after himself and heís a person whoís not afraid to either throw or receive a few punches. But I think under the cover of privilege for Latham to have a go at him in this fashion is ludicrous and . . .

MITCHELL:

Do you think itís Paul Keating inspired?

PRIME MINISTER:

Well, no I donít know. All I do know is that thereís a closeness there between the two of them. But look . . .

MITCHELL:

I guess the broader point is whether Kerry Packer , has he followed his taxation obligations in corporate dealings?

PRIME MINISTER:

Well I donít know the details of Mr Packerís personal affairs and I donít know them frankly. He, like any other citizen of this country is entitled to secrecy provisions of the Tax Act. But he like everybody else has got obligations. He says that heís kept them and heís pointed out the fact that his companies employ a lot of people and pay a lot of tax. Now, I canít imagine that he would say that if it were untrue and it is self-evident thereís a case that he does employ a lot of people. Itís a successful business and obviously those businesses pay tax, the extent of that tax payment I donít know and I donít want to know because the last thing a prime minister of this country should be doing is worrying about the individual tax affairs of individual citizens. We lay down the law and everybody has to comply with that law whether itís John Howard or Neil Mitchell or Kerry Packer. We are all equal before the law and should be. And if any of us transgress well weíve all got to be treated equally and penalised accordingly, but . . .

MITCHELL:

Well what about the allegation that youíve given him special treatment, that youíve given Packer special treatment Ė I suppose the inference being to well to protect yourself from criticism from the Nine Network and the . . . ?

PRIME MINISTER:

Well I naturally reject that criticism. I naturally reject it. What we have done in the media area is well known. Weíve taken decisions regarding datacasting, the free-to-air television channels are undertaking the cost of, of changing their transmission capability, there is an investment and a cost involved in that and to the extent that Mr Packer is affected, or allegedly heís benefited by that, so are Channel 10, so are Channel 7, so itís not as if we singled out Kerry Packerís network. In relation to other aspects of the media laws, well the thing that Mr Packer has been talking about most of all is a change in the cross-media laws. They havenít been changed because the Labor Party and the Democrats are against the change. I have never disguised the fact that I personally think the cross-media laws are an anachronism, thatís been my view for years, it was my view before I became prime minister.

MITCHELL:

Well he says today you wants to buy a newspaper . . .

PRIME MINISTER:

Thatís always been his view. The one thing youíve got to say about Kerry Packer, heís always prepared to state his view.

MITCHELL:

Youíve got no problem with that?

PRIME MINISTER:

Well I personally think the cross-media laws are an anachronism, but I have no intention of reopening that issue unless there are clear indications from the Labor Party and the Democrats that they would agree to a change in the law. It is just a waste of time expending energy on something that is not going anywhere.

MITCHELL:

Okay, can we move onto petrol. The Competition Commission is reported as saying you could only keep your promise on petrol prices, that the GST wonít lift them if you remove the GST from the February excise. Will you look at doing that, at fiddling the formula?

PRIME MINISTER:

Well, Iím not committing myself to do that and we have no capacity to do that without it having some impact on the Budget surplus. Neil this has been debated a lot and I understand that and Iím quite happy to continue to talk about it, but we factored a certain increase in excise collections because of indexation into the Budget and if the indexation factor is higher than we anticipated well the Government will have to meet additional payments for pensions and the like . . .

MITCHELL:

So youíre . . .

PRIME MINISTER:

I beg your pardon?

MITCHELL:

So youíre linking it to pensions as well?

PRIME MINISTER:

No, no I am not linking, and can I say I think you are referring to what Peter Costello said and I think some of the things that have been said about his comments are unfair. Peter wasnít threatening pensions, he was simply making the point that indexation works on both sides of the ledger and if you look at the budget papers, earlier this year you will find that if there is a 1% increase in the rate of inflation that will cost the budget $240 million in extra expenses because of indexation against additional collections of $100 million. So this idea that the Government is endowed with an enormous revenue windfall because of indexation is wrong.

MITCHELL:

Do you . . . I interviewed the Treasurer earlier in the week when the pension issue came up, do you also agree that there is no hope of a change to the excise system before the next election?

PRIME MINISTER:

Well I donít have any proposals, the Government doesnít and the Labor Party doesnít. I mean the Labor Party is trying to make political whoopee out of this and be politically opportunistic . . .

MITCHELL:

Yes, but forget the Labor Party, I mean the people are angry about it, people are hurting . . .

PRIME MINISTER:

Yes well you asked me a question about, you know, a change well that normally is a question about the policy of the government , the policy of the Opposition because we are the alternatives. All Iíll talk about the Government Ė we have made huge changes to the tax system, we have reduced the overall tax take in net terms, overall tax is lower now than it was before the 1st of July, much lower, itís not just the personal income tax cuts, but itís other changes. So people are better off, they have more money in their pocket . . .

MITCHELL:

But Prime Minister you made a promise on petrol prices. Now the ACCC has supported you on this . Now they are not.

PRIME MINISTER:

No, no, no.

MITCHELL:

Unless you make this change [inaudible] the promise is broken?

PRIME MINISTER:

That report is somewhat inaccurate, the ACCC referred to a letter by a economist, I think itís inaccurate to say that they actually made that allegation . . .

MITCHELL:

Well the economist is your preferred modeller . . .

PRIME MINISTER:

Well when you say our preferred modeller, I mean our preferred modeller is the Federal Treasury.

MITCHELL:

But you use him . . .

PRIME MINISTER:

Well you might use a lot of people. But if you say who is the preferred economic modeller of the Government Ė the Federal Treasury. The Federal Treasury has as good a track, if not better track record than any other modeller. And can I just make one point about this whole issue of the impact of the GST on petrol prices? Even if you accepted what the so-called preferred modeller, Econtech, Mr Chris Murphy said, even if you did and I donít, but even if you did, the impact is 1.2 cents a litre. Now if you took 1.2 cents a litre off the price of petrol tomorrow, do you think that would stop public concern? It wouldnít, you know that.

MITCHELL:

No but if the public . . .

PRIME MINISTER:

The public concern arises out of the fact that the price of petrol has over the last twelve months has gone up quite dramatically. In eighteen months the world price has gone from $US12 a barrel for crude oil to $US33 a barrel.

MITCHELL:

But Prime Minister you promised that there would not be an increase in petrol prices as a result of the GST, here we have this economic modeller, Chris Murphy saying that there has been and the ACCC seem to be accepting it.

PRIME MINISTER:

Well can I look at the field evidence as distinct from the economistís estimates? The refinery price which is the price of petrol per litre before you impose excise and the GST between before and after the 1st of July when the GST was introduced, the refinery price has gone up fewer cents per litre than the retail price. I have in front of me a list of Melbourne pump prices in the period up to, in the period after the GST and on many days the price of petrol in Melbourne was in fact lower than it was on the 30th of June.

MITCHELL:

Youíd agree the price, that graph though and I have a copy of it in front of me shows that the prices overall are higher since the GST was introduced.

PRIME MINISTER:

Well of course theyíre higher, Neil I am not denying that.

MITCHELL:

Youíre saying itís not the GST?

PRIME MINISTER:

No, no I am saying it is the world price. I mean you canít go from $US12 a barrel to $US33 a barrel without that having a huge impact on the world price. I mean why do you think Bill Clinton is complaining about it when heís in Nigeria?

MITCHELL:

Okay, weíll take a call for the Prime Minister. Ron, hello go ahead please.

CALLER:

Oh, good morning. Mr Prime Minister you know weíre talking about the pensions you gave us 4% as July 1st to cope with the GST, right?

PRIME MINISTER:

Yes.

CALLER:

And I seen the Aged Pension Brochure which you put out.

PRIME MINISTER:

Yes.

CALLER:

All sources Iíve been trying to get onto people to give me an explanation and Neil got somebody asking, I never got the answer from it . . .

MITCHELL:

Whatís the question?

CALLER:
Remember we get our CPI rise, next March you make it 2% adjustment on our pension but take 2% back, thatís 4%. That means we only get a 2% rise in the pension.

PRIME MINISTER:

No, you will always be at least 2.5% ahead of what you would otherwise have been, always.

MITCHELL:

Okay, David go ahead please.

CALLER:

Good morning Mr Prime Minister.

PRIME MINISTER:

Good morning David.

CALLER:

We in good faith, I am a Treasurer of a club, we in good faith put you into office to take care of us as pensioners .We have supported you wholeheartedly, but sir you have deliberately gone against your promises and you have made it impossible for us to exist here in this country. Sir, weíre not concerned about the price of petrol world-wide, we are concerned about the petrol price here in Australia. And no matter what you say, the writing is on wall sir, that is all I have to say. The writing is on the wall. Arrogance brought down many, many kingdoms in the past and arrogance will bring you down too.

PRIME MINISTER:

Well, I hear what you say and in the end as you know I am always answerable to the Australian people and if the Australian people decide at the next election that they want another prime minister, well that is their right. Iíll do my best between now and then to win their support. I donít believe I am arrogant , refusing to run down the budget surplus in order to buy a short term, perhaps reduction in the price of petrol, I think Iím acting not arrogantly, but responsibly. I really do. I know world, high oil prices are unpopular, but the only way we can reduce them Neil at the moment is to cut the excise. Now leave aside all the arguments about modelling and everything, I think everybody agrees that if John Howard decided tomorrow morning that he wanted to bring about say a 5 cent a litre reduction in the price of petrol, the only way I could bring that about unless we abandon world parity pricing which from the long term conservation point of view is just madness, would be to cut the level of excise. Now 5 cents is $1.7 billion a year. Now if we run that down in the present climate that will exert upward pressure on interest rates, it certainly will and I donít think anybody wants that. I donít think pensioners want that, I donít think homeowners, wage and salary earners, people in small business, I donít think any of them want that. So we are in a difficult position. Itís not arrogance, I think itís steady responsibility, holding ones nerve in a difficult situation. I donít regard that as arrogance. I think arrogance is when you refuse to engage people, when you refuse to explain to them why you are trying to do something, when you tell them that theyíre foolish and theyíre ignorant in having an opposite point of view. And Iím not doing that. What Iím trying to do is to explain to people why itís not possible for the government to change its position.

[ad break]

MITCHELL:

Mr Howard, Telstra shares shed about $6 billion yesterday. Now you encouraged people to get into Telstra shares as shareholders. What do you say to them now?

PRIME MINISTER:

Well I would say that like any other stock shares in Telstra go up and down. I donít give and I never have, I didnít do it when it was doing well or doing better than itís doing now. And Iím not going to do it now. I donít give a day to day commentary and I would simply make the observation that people should take a long view.

MITCHELL:

Do you agree there could be a bit of a backlash you though? You were very enthusiastic about them.

PRIME MINISTER:

Well Neil when youíre in government and youíre the Prime Minister there can be community reaction to a whole lot of things. I donít regret for a moment the part privatisation of Telstra and I remain strongly committed to the full privatisation. I think it would help strengthen the perceptions of the company in the world market place if it were fully privatised.

MITCHELL:

On some of the figures Iíve seen the sharemarket drop has devalued it by $18 billion what is left to be privatised - $18 billion. So what does that say for the timing of the privatisation?

PRIME MINISTER:

Well Neil those things can change very rapidly in a period of weeks. You know that. The stockmarket bounces around and you canít assume that what is a notional valuation today is going to be a notional valuation in two, three, six or twelve months. I just donít know. But I do know this that if you are half government owned and half privatised there are ambiguities about your capacity to act in the market place that are not there if you are fully privatised. There are restrictions and limitations and encumbrances on a company that is part owned by the government that donít exist on a company which is fully owned by the private sector.

MITCHELL:

Is that part of the reason for this drop do you think?

PRIME MINISTER:

Well it might be. I donít know. There are many and varied reasons and Iím not a market commentator. Iím a policy maker. It is good policy to have something fully privatised rather than half privatised. Itís neither fish nor fowl at present and it would be much better if it were fully privatised. Now that is a statement of good policy. As to the reason why the share price moves around from day to day you really should get market analysts to talk about that. Iím not a market analyst, Iím a Prime Minister.

MITCHELL:

Maybe if itís privatised we could use some of the money to freeze the petrol excise do you think? Give some petrol relief.

PRIME MINISTER:

Well if you were privatised you would be paying less interest because you would have paid off more debt. As to what you would do with those interest savings, well that is a matter for the government to decide when the full privatisation occurs.

MITCHELL:

Would that be a possibility?

PRIME MINISTER:

What?

MITCHELL:

Petrol.

PRIME MINISTER:

Look I think it would be rash of me to start talking about what you might do.

MITCHELL:

The Labor Party looks to be bringing Carmen Lawrence back. Will the government attack her on her history, the Easton affair?

PRIME MINISTER:

The history that I would attack her on is her history as Health Minister in the Keating Government. She presided over a catastrophic fall in the number of people in private health insurance. She is ideologically opposed to private health insurance. She demonstrated that when she was in government and she was really chastised by one of her predecessors Ė Graham Richardson Ė who fought very hard as I understand it to get tax incentives for private health insurance. She was not a good Health Minister in the Keating Government and she is a reminder to the Australian public of Keatingís policies in areas like private health insurance.

MITCHELL:

Well is that history of the Easton affair irrelevant now?

PRIME MINISTER:

Well you asked me about how I would react to her as a shadow minister.My initial reaction is to remind the Australian public of her failings as a minister.

MITCHELL:

Youíve a couple of high profile members here in Victoria under challenge Ė Petro Georgiou, Kevin Andrews. Would you be supporting them?

PRIME MINISTER:

Well I see, let me, I didnít know about Petro and Iím not even certain now as to what the measure of that challenge is. I see no reason at all why he should be displaced, not at all. I support all of my sitting colleagues. Kevin Andrews, one thatís been in the news a bit, Iíve provided a reference for Kevin. I think it would be quite unjust if he were to lose his endorsement, quite unjust. Heís a person of very great ability, he works hard for his constituents, heís a man of his principles and his values and heís entitled to have those particularly in a free vote situation. And I think it would be quite wrong. I mean I can understand people being challenged if theyíve been there for a long time and theyíre not making a contribution but that certainly doesnít apply with the two people youíve mentioned, neither of them. I mean Petro has only been there since í91. Kevin came in I think the same year. Maybe Petro came in in í93, heís í93, í94 Iím sorry. It was Kevin that came in in í91. Both of them make a strong contribution. But I think loyalty flows both ways. As leader I appreciate loyalty from my colleagues .Theyíre entitled to have a bit of reverse loyalty from me. And when a bloke whoís under attack and the fellowís done a good job, Iíll go into bat for them and I imagine that would be the view of my senior colleagues from Victoria.

MITCHELL:

The Defence Bill. Laborís holding up further amendments on troops in the streets. Will you negotiate with them to try and get these laws in place?

PRIME MINISTER:

We have been doing that Neil and weíre making a lot of progress.

MITCHELL:

Will they be in place by the Games do you think?

PRIME MINISTER:

We hope so and we expect so.

MITCHELL:

S11 protestors in Melbourne is of great concern. Iíve now got evidence of actually going into schools trying to recruit kids at lunchtime which I find quiteÖ..

PRIME MINISTER:

Well that is very disturbing and thereís a very heavy obligation on the State education authority in Victoria and on parents to fight that. It is extremely disturbing. I donít think they should be allowed into government schools to do that kind of thing. I really donít.

MITCHELL:

No I donít think schools want them.

PRIME MINISTER:

No and I think they should be presenting a united front against them.

MITCHELL:

Weíll be talking about that after nine. John Laws, do you think heíll go to gaol?

PRIME MINISTER:

You know I canít comment onÖ..

MITCHELL:

Ooh even a Prime Minister couldnít influence a judgeÖ..

PRIME MINISTER:

No Iím sorry. Iím a stickler for certain proprieties. There is a rigid separation of the executive and the judiciary. I donít think judges should comment on individual political matters. Unfortunately some do. And I donít think politicians should comment on individual trials.

MITCHELL:

Fair enough. Football this weekend in Melbourne. Are you coming to the Grand Final?

PRIME MINISTER:

Yes Iíll be coming . Iíll be going to the Grand Final Breakfast. Iíll be coming down to Melbourne tonight and Iíll be at the breakfast tomorrow morning and Iíll be at the game. Itís always a fantastic sporting event. Itís probably the, in many respects, the best annual sporting event in Australia in terms of this one spectacle in one spot for a limited period of time. I guess as a passionate cricket follower I could hardly conclude anything is better than a hard fought cricket test, and Iíve got to say also that rugby union tests involving the Wallabies are pretty hard to beat. But itís an annual ritual the grand final in Melbourne. Iíll be there and I know youíre barracking for Melbourne. I guess for the gameís sake that would be nice if Melbourne were to win. I have to say that if you look at it clinically itís hard to see that happening.

MITCHELL:

I think it is. Youíve been listening to your Treasurer.

PRIME MINISTER:

Yes but, I have been yes. Yes heís very enthusiastic and very persistent. But I also know and listening to the beginning of the program it is such a long time. What 1964?

MITCHELL:

í64 was the last premiership.

PRIME MINISTER:

Yeah and well, you know, it would certainly be nostalgically and romantically and all of those things it would be great. But I try and be realistic about these things, it looks improbable.

MITCHELL:

It is improbable. So what was your tip Ė Essendon by how much?

PRIME MINISTER:

I donít know. Iím not as good as some of you fellows at that. I guess 30 or 40.

MITCHELL:

That seems to be a popular view. Thank you very much for your time Prime Minister.

PRIME MINISTER:

Okay Neil

[Ends]


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