25 October 2001

Subjects: illegal immigrants; health policy; welfare policy; budget deficits; interest rates; salinity and water quality; Telstra; Kyoto agreement; refugees

KNIGHT: My guest this morning John Howard, welcome to the programme once again.

PRIME MINISTER: Very nice to be with you all again.

KNIGHT: We'll be talking about some regional issues this morning, we'll also talk about today's health policy launch. But we should start with the tragic story of course of a number of boat people. 350 I believe, drowned on their way to Australia. The development this morning is some of the survivors have suggested they were forced onto the boat at gun point by Indonesian soldiers. Have you had a briefing on this morning?

PRIME MINISTER: I've sought more information on that allegation. It's been an appalling tragedy this. It really is a desperately sad event. And if those allegations are true, and I stress that I've not had any official confirmation of those allegations so I have to preposition what I say by making that comment. If they are true then that reflects very badly on the authorities to allow that to happen. It also further reflects on the Opposition Leader for trying to link the Australian Government with the tragedy and suggest that we were in some way responsible. He's already implicated in that kind of cheap shot already.

The other comment I'd make about the boat people issue is to welcome the announcement by the Indonesian Foreign Minister that Indonesia will convene a meeting of source countries, transit countries, and destination countries such as Australia. This of course disproves the argument that Indonesia will only deal with a Labor government in Australia. If that were the case then the Indonesian Foreign Minister would barely have made the announcement now. He would presumably have waited until after the election and in the event of a Labor victory would have announced it, or in the event of a Coalition victory would have said nothing at all or not invited us. So that was always a ridiculous claim.

But our position remains that we will talk and we've always been ready to talk to Indonesia and others about controlling the flow. In the meantime we will maintain a policy of not allowing asylum seekers, illegal immigrants to come to the Australian mainland. That is our policy and we have said that we are not going to be, confronted by illegal immigration, we're not going to become the destination for the machinations and the evil trade of people smugglers. What's happened over the last few days is so sad and so appalling. It's the fault of the people smugglers. It's not the fault of the Australian Government and it was wrong, wrong, wrong of the Opposition Leader to have tried to link that appalling human tragedy with the policy of this Government, and indeed if the allegations about what the police have done are true that further discredits the Leader of the Opposition.

KNIGHT: Well Philip Ruddock has said that the survivors of this tragedy won't be getting special consideration and I appreciate the thinking behind the line. But isn't that sort of letting policy override compassion a bit?

PRIME MINISTER: No, because there are other people who are waiting to come to Australia as refugees and have been waiting for a long time in very difficult conditions and if you take others then you put them ahead of those people who've been waiting and have been assessed as refugees.

KNIGHT: Why's it up to Indonesia to convene a forum on this and perhaps not Australia?

PRIME MINISTER: Well we have sought on numerous occasions discussions with them. Maybe this appalling event has provoked Indonesia into doing what it's doing, I don't know. But in the end we'll have to see what happens at the meeting. We can't be certain because of the meeting there's going to be an understanding but it is a step forward and it does demonstrate of course that Indonesian responses on this issue have got nothing whatever to do with the complexion of the government in power in Australia. I mean that is just a piece of Labor Party sophistry.

KNIGHT: You're talking about health today, you will be launching your health policy. There has been I think a bit of a drip feed to some journalists overnight and shows that one of the items will be $80 million to be spent on attracting doctors to areas outside the major cities. Now are these country towns or the outer suburbs?

PRIME MINISTER: Well we have already of course announced a very big programme to get more doctors into country Australia and today we'll be taking that a bit further, a significant way further in providing some more resources to get doctors into outer-metropolitan areas. Now there are quite a number of other initiatives in the health policy and this is going to build on the $2.5 billion we've put into private health insurance and the 28 per cent increase in real terms that we are providing to state governments to supplement public hospital funding during the life of the current Medicare agreement. What I'm outlining today is our third term agenda for a large number of health areas and indeed I'll be outlining to ACOSS our third term welfare agenda which will include the most comprehensive attempt to reform and modernise the Australian welfare system and it will consume quite a lot of the energy of the government in the social policy area during our third term.

KNIGHT: ACOSS, the Australian Council of Social Services, have I think already put a bit of a wish list your way. One of the items on it is that the government consider going into deficit to fund social welfare problems and programmes. Now with money so cheap as it is at the moment is there anything inherently wrong with that idea?

PRIME MINISTER: Well it would appear-.well there is a lot wrong with it. I'm sorry there is a lot wrong with it and it would appear of course that one side of politics has already responded to the ACOSS proposition. That's the Labor Party. Because under Labor's spending plans announced to date the budget next year would already be in deficit to the tune of about $200 million and every additional promise Labor makes from this day onwards will further add to the deficit if Labor wins the election. Our calculations are that they are $200 million, just under $200 million in the red next year.

Now why is that a bad thing? Well something that country listeners would understand very well, it's a bad thing because it puts pressure on interest rates. Now you mentioned quite correctly that money is cheaper now, you know why its cheaper? Because we're no longer in deficit. And if you go back into deficit you put upward pressure on interest rates. And the last thing country people want over the next three years is to go back to very high interest rates and they were an unforgettable feature, an unforgettable feature of Labor's years in office and I would say to all of your country listeners we do not want to return to the days of high interest rates and as day follows night if you go into deficit, and Labor's already $200 million into deficit the next year, already, and we're only half way through the campaign so you can imagine where that bottom line will be by polling day with all the additional promises they're going to make. That will just push interest rates upwards. Now even our fiercest critics would acknowledge that one thing we have really delivered on in spades which is of enormous value to rural people is lower interest rates and the last thing your listeners, the last thing the people of country Australia want is a return to high interest rates but that's what you will have if you go back into deficit and that is what Labor is wanting to do.

So my answer to Labor and my answer to Michael Raper is don't go back into deficit, it will push up interest rates, that will cause business to slow, it will lead to higher unemployment and it will make life more difficult for the less well off.

KNIGHT: There's going into debt and there's going into deficit isn't there? We wouldn't have the Snowy scheme unless we borrowed money, now if you're running a business when the money is cheap you go and get it and you do some of your major works, you do some building. Isn't there a responsibility on the government to take advantage of that at the moment?

PRIME MINISTER: Well when you go into debt you put upward pressure on interest rates and when Labor goes into debt boy do they do it in a big way. I mean when we came to power, federal government debt was $96 billion. By the end of this financial year it will be $58 billion less. Now those figures speak for themselves and if we undo the good work of the last few years. I mean what the Labor Party is saying is really we'll just go a little bit into debt but you know you'll go a little bit into debt for somebody and somebody will say well you gave it to him, what about us? And so the whole cycle will be repeated. They are already $200 million in deficit next year and we're half way through the campaign. Half way through it, you can imagine where it's going to be by the 10th of November and imagine the impact of that on interest rates.

KNIGHT: It's 14 past nine, ABC Victoria, Ben Knight with you this morning through until 11. And my guest, as I'm sure you can tell, is the Prime Minister John Howard. We'll be taking your calls shortly, the number is 1800 033 800, that's 1800 033 800. We'll talk a little bit about third term agenda as it applies to regional Australia, regional Victoria. You've been saying for a long time that salinity and water quality is a priority for the third term.

PRIME MINISTER: Well we've not only been saying it, we've actually done something about it. One of the big things we're going to do is in cooperation with the states spend $1.4 billion over the next few years to begin to tackle the problem.

KNIGHT: But I think only one state's actually received money, that was yesterday and that was South Australia.

PRIME MINISTER: Yes well that's because South Australia as a state has been quicker off the mark. If all the other states were as quick as South Australia they would get the money. There's no discrimination on the part of the Federal Government, but I don't think Mr Bracks really wants to be seen to be cooperating with the Federal Government close to a federal election.

KNIGHT: So in that case is it ever going to happen?

PRIME MINISTER: Of course it will happen, once the election is over and he stops his silly nonsense of playing politics and forgetting the interests of the people of Victoria, we'll be able to get on with. I mean this is the problem with some of these states, they play this political, this silly political game instead of recognising that, no matter who is in power the people want things done. But we, I announced this programme more than a year ago and we've been negotiating to get agreements with the states. Now we are ready, the money is in our budget, the money is on the table, we're ready and anxious to go.

KNIGHT: So why won't they agree to it?

PRIME MINISTER: Well they in the end are not terribly keen to be seen to be cooperating with a Coalition Government because they think the environment's a big issue for federal Labor and the more they cooperate with us the more that appears to enhance our credentials on the environment and that hurts Mr Beazley. I mean it really is a pathetic game and it doesn't serve the interests of the people of Victoria or indeed in other cases the interests of people in other states. I mean in the end you are elected to serve your people, you're not elected to score political points for your federal political mates.

KNIGHT: Telstra's also raised itself, I think this week you've been saying I think on Perth radio that the Government will not sell the remaining component of Telstra until there is satisfaction that the problems have been fixed, that country people are happy with the service that they're getting from Telstra. Which problems are you talking about?

PRIME MINISTER: Well there are a number of things that were identified by the Besley inquiry and what we have said is that we're going to fix all of those thing. When I use the expression fix all of those things it's really implement the changes recommended by Besley and what I'm saying to country people is that we're not going to go any further with the sale of Telstra until those things have been fixed. So it's fixing country communications requests according to Besley, that comes first and that has got to be done and done in full before we go any further.

KNIGHT: What might that include?

PRIME MINISTER: Well there are a number of recommendations about, you know additional guarantees and additional services and ensuring that there is comparable Internet service, ensuring that in every respect the basic communications facilities for people in country Australia are on a par with people in the cities.

KNIGHT: Is that ever going to happen?

PRIME MINISTER: Oh I think yes it will happen, it will happen. I mean we've gone a very long way towards doing it. I mean the Internet speed times have been greatly improved, mobile phone coverage, untimed local calls areas have been extended. There has been a dramatic change in communications opportunities in country Australia over the last couple of years, financed incidentally out of money we got from the sale of part of Telstra which the Labor Party voted against, therefore they were against improving these communications facilities in country Australia.

KNIGHT: But is it realistic to say that every Australian household no matter where it is will have access to something like an ADSL line for Internet access at the same price that someone in Toorak can get it?

PRIME MINISTER: Well I think it is quite realistic to aspire towards that and that's what we're endeavouring to do.

KNIGHT: How long would it take?

PRIME MINISTER: Well we've already made a great deal of progress, I can't sort of define it in terms of months but the message is that we don't go further on Telstra until we have properly responded to the Besley recommendations and people in country Australia are satisfied that we have properly responded.

KNIGHT: Just before we go to calls, Stock and Land the rural newspaper is this morning reporting that the Nationals have said they won't sign a new Coalition agreement after the election unless the Government makes a commitment, or unless the Liberal Party makes a commitment to property rights and water property rights.

PRIME MINISTER: Well that's no difficulty, they haven't actually raised that, but there's really no point, there's no problem about it because we are committed to ensuring that if people's property rights are affected they get compensated. I made that clear at the premiers conference meeting when I discussed the salinity issue.

KNIGHT: So they'll get their COAG meeting?

PRIME MINISTER: I beg your pardon?

KNIGHT: They'll get their COAG meeting, the National Party wants a COAG meeting-



PRIME MINISTER: Well Mr Anderson hasn't told me that. I don't, you know I greatly respect that journal you refer to but I don't think it's quite like that. But what it is like is that the Coalition, the Liberal Party and the National Party are both committed to ensuring that country people whose property rights are affected get proper compensation. And that includes water property rights.

KNIGHT: 1800 033 800, it's 20 past nine, the guest the Prime Minister this morning. Graham in Glen Lyon we'll go to as the Prime Minister puts his headphones on. Graham good morning.

CALLER: Hello. Hello Prime Minister.

PRIME MINISTER: How are you?

CALLER: Alright thanks. I'd just like to enquire about if you sell Telstra will you talk it up like you did to sell it to the Mum and Dad investors and they lost so much money, like you can't even get your money back now if you want to sell it.

PRIME MINISTER: Well there has been a change in the share price but that's only part of the time that people have had those shares. I believe Telstra remains an extremely good long term investment.

KNIGHT: Okay Graham.

CALLER: Not really.

PRIME MINISTER: Well it remains the case that I believe Telstra remains a good long term investment.

CALLER: But you talked the price up a fair bit before it was sold.

PRIME MINISTER: When you say I talked the price, I said it was a good investment and I still believe it's a good investment.

CALLER: Alright we'll just see how it happens in the future then.

KNIGHT: Thank you very much Graham. 1800 033 800, there's a line free if you'd like to talk to the Prime Minister who'll be taking your calls until around about half past nine this morning, your chance to put one directly to him before the election. Doris in Daylesford, good morning.

CALLER: Good morning Prime Minister. I'd like to say a very special thank you for the $25,000 that was awarded to the wives of the Prisoners of War who passed away, it's allowed me to do desperate repairs to my home, thank you. I thank you also for my pension and I thank you for services that we get with a discount, it really makes a lot of difference. I congratulate you on your firm stand with our illegal immigrants and I would also like to say that I'm very proud of your leadership and you get my 100 per cent support.

KNIGHT: Thank you Doris in Daylesford.

PRIME MINISTER: Thank you very much, you're very kind and I simply say on that compensation that given the appalling suffering that those men endured, it's the least that we can do.

KNIGHT: John's in Pinesville, good morning John.

CALLER: How you going.


CALLER: John Howard, self funded retirees, how do I support myself if I'm under the age of retirement and I sort of can't get a job, that type of thing.

PRIME MINISTER: How old are you John, may I ask?





CALLER: Yep and I haven't worked for a while. Now how do I support myself with the interest rates going down so low. Spend my investment money or-

PRIME MINISTER: Well I guess, you know it's very hard for me to give you detailed investment advice without knowing your exact circumstances but as a matter of policy you've got to have a cut off point in relation to who's regarded as a self-funded retiree, you are obviously under that age. The view is generally taken that people of your age still have an enormously useful contribution to make as part of the workforce and that policy should be directed towards assisting people of your age to get back into the workforce and one of the things that we'll be focusing on in our third term, if we get it, is to how to reconnect people of your age with the workforce and to help them more effectively by providing them with more personalised advice, helping them more effectively to get back into the workforce. But you can't keep lowering the age at which a person is deemed to be a self-funded retiree because by definition we'll all end up being self-funded retirees no matter what age we are and we can't really sustain that economically.

CALLER: Can I say something else?


CALLER: Wouldn't it be better to subsidise these people to get them to a certain level of income rather than having them spend their money, you know the investment money they've saved up because in future years they're going to be a burden to the public anyway, to the taxpayer anyway.

PRIME MINISTER: Well I don't think any nation can afford to do that because if you start doing it for one group then you'll be expected to keep lowering the age and if you keep lowering the age I mean the whole thing becomes unsustainable.

KNIGHT: 1800 033 800 if you'd like to make a question, make a comment or put a question to the Prime Minister John Howard who's my guest on the programme this morning, it's 25 past nine. Go to Bendigo, hello Keith.

CALLER: Oh hello Prime Minister. The University of New South Wales and RMIT have done some good work on solar energy and wind energy.

PRIME MINISTER: They certainly have and I've met some of the people involved in it.

CALLER: Also international solar energy society on November 25 is having a five day conference in Adelaide, mainly because Australia's well behind the western European countries in the development of solar and wind energy. Wouldn't it be a good idea over the next three years to target a few towns like Echuca and Wentworth, that size town, to see whether we could get them self contained with solar energy or wind energy, the thing would be in the day time to feed in enough electricity-

KNIGHT: I think we've got the idea.

PRIME MINISTER: I get the idea and can I say Keith I am broadly sympathetic, I was a lot more sympathetic to that project in Western Australia in Derby, the tidal power project, I mean it's not wind energy, but it's the same, it's renewable energy and we do have a $400 million fund that was negotiated with the Australian Democrats when tax reform went through last year for renewable energy activity. Now I simply want to say to you that I have no policy objection to developing projects for solar energy, I in fact have a something of a policy sympathy or bias towards it, they've obviously got to be feasible and they have to be ones that are achievable and affordable but from a conceptual point of view I'm very strongly in favour of them.

KNIGHT: Well if you put more money or support behind those sorts of things it would make it a lot easier to agree to things like the Kyoto protocol which has drawn you some international criticism.

PRIME MINISTER: Well the problem about signing the Kyoto Protocol as Mr Beazley has promised to do, ratify it, the problem with that is that we don't know the impact of that on the Australian economy.

KNIGHT: What about the Australian environment?

PRIME MINISTER: Well the two are linked, you can't separate the one from the other and the reality is that if we enter into the obligations under Kyoto that Mr Beazley is saying we should, without the Americans being involved and without developing countries being involved we'll be played off a break by the rest of the world.

KNIGHT: We've done that on free trade though haven't we?

PRIME MINISTER: No we haven't.

KNIGHT: We are subscribing to free trade in a way that the rest of the world is not, particularly the United States.

PRIME MINISTER: Well I don't- we're not subscribing to it, that was forced on us. And in fact that is a very good illustration of the folly of what Labor is now proposing. We don't have to ratify Kyoto without the Americans and the developing countries being involved. In relation to free trade, as you call it, the disproportionate treatment of Australia in agriculture that was really forced on us, we had no, in the end we had no alternative because of the weight-.we never agreed to that, I mean I've never supported that and I never will and I'll continue to rail against the fact that the Europeans and the Americans and the Japanese subsidise their farm industries far beyond the subsidies that we deliver to those same industries. But it makes my point, you never willingly enter into an international agreement that doesn't give you as much as you give, but that is what Mr Beazley is proposing in relation to Kyoto. You can't have an effective agreement on the environment unless you have the mightiest industrial country in the world involved, that's the United States. And if we sign an agreement and it doesn't involve the developing countries it means that a so called dirty industry could leave Australia and go to a developing country where there are no environmental constraints, the jobs would follow the industry and we'd be infinitely worse off.

KNIGHT: But we're the ones who live under the hole in the ozone layer aren't we-

PRIME MINISTER: Yes but we have already implemented a large number of programmes which will go on in order to meet the targets set at the Kyoto meeting without the necessity of us entering into the binding nature of ratification. We are still implementing those plans, we are still doing things that are going to reduce emissions but we should not give away our negotiating position unless the Americans and the developing countries are in the cart. Otherwise we'll do a lot of damage to Australia's future.

KNIGHT: 29 past nine, we'll take one more call, Margo from Horse Gaps been waiting, hello Margo.

CALLER: Hello, I wanted to talk about asylum seekers and refugees. In view of the large number of refugees world wide some of them have spent years in camps, there's a huge number sitting in very poor countries. Can't we up the number of refugee places? I'd like us to suspend the business migration programme and accept at least that number extra in our refugee intake. I'd love to see both major parties up the number of refugees we accept.

KNIGHT: Okay we'll get a response Margo.

PRIME MINISTER: Margo I understand that and I appreciate your reason for advancing it. I would point out that already we take more refugees on a per capita basis than any country in the world expect Canada. Australia is one of only nine countries that has a resettlement programme and I'd make the broader point that business migration is very important for Australia, it really is very important and we have unashamedly rebalanced the migration programme to put a greater emphasis on business migration because we think that's better for Australia.

The refugee problem around the world is very acute. The long term solution, if there is one lies in creating conditions which are more congenial in the countries from which those people have come. The number of countries that take refugees is so small and the numbers they can take is so relatively tiny compared with the number of refugees that even if you doubled or trebled it you wouldn't make any real impact. I mean you've got the potential for 2.5 million refugees according to the President of Pakistan that might come into Pakistan, now whether that's true or not I don't know but obviously there's going to be a lot. Now I think the best thing we can do is to give more resources to Pakistan which we have began to do to help them handle that additional number and of course hopefully to see conditions improve in places like Afghanistan so that those people can go back to the countries from which they came. The model in my view for refugee handling and processing was in a way what was done with Kosovo. People were temporarily driven out of their country, they were given a safe haven but on the understanding that they would go back when conditions stabilised in their own country. Now I think that was quite effective but it makes the point that you don't solve the problem by necessarily by increasing the number of permanent refugees you take, I don't think that is the answer and I just make the point again that compared with other countries we are quite generous, we're more generous than many of the countries from which our critics, our international critics come, far more generous.

KNIGHT: Prime Minister you're watching television tonight?

PRIME MINISTER: Well I'll be watching a recording of Australian Story-

KNIGHT: Someone's taping it for you?

PRIME MINISTER: Somebody will be taping it for me, I'll be flying back to Sydney when the programme's on but of course I'll have a look at it with great interest.

KNIGHT: Did you enjoy that?

PRIME MINISTER: What the, well I haven't seen it yet. I'll suspend judgment until I see it. But did I enjoy being-. well it was a very nice person who did the programme, Wendy, she's very very pleasant, give her my regards and she certainly had a lot of our private time.

KNIGHT: It looks like it.

PRIME MINISTER: She's a very nice person and it's an interesting programme, it's different, it's not a programme that seeks opinions, it seeks to analyse people and I guess bring out the human side and I've watched a number of the programmes, the best one I've seen of that group was the one that was done on Wayne Bennet the rugby league coach, well that was a fantastic programme and he's a great bloke but it was a fantastic programme.

KNIGHT: Thanks for your time.




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