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Interview With Prime Minister John Howard -

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(generated from captions) We still have a very big fight ahead of us.

The Budget is a very comprehensive addressing of our current opportunities and our future needs. One of your predecessors spoke of an election-year discount that the voters get more cynical of budgets in election years. Do you believe in that? You are inviting me to get into commentary, I prefer to talk about what we've done and the fact that we've used our prosperity to give a human dividend to today's generation, but also lay aside something for the future particularly in an area like education, and that is what the public wants. The public wants us to use this prosperity wisely. They don't want it squandered. They want a share of it because it's their prosperity, it's their work, but they also want something laid aside for the future. Economists seem generally, from what I can see,

to believe that this is a responsible budget that won't put upward pressure on inflation and, therefore, interest rates. There are some others who are more cautious. The Government has taken something of a risk, hasn't it? I don't believe we've taken a big risk, Paul. I think it's finely balanced, but correctly balanced. There's still 1% of GDP in the surplus. The tax cuts are directed to low- and middle-income earners, they are staged over two years. The low- and middle-income earners get all of it this year, and there's a little bit by way of adjustment of thresholds next year. I don't think it will put upward pressure on interest rates. What might put upward pressure on interest rates is if we adopt the Labor industrial relations policy which would flow through the high wages paid in the mining industry to other sectors of the economy creating inflationary pressures,

and that's a reason why Labor's industrial relations policy would be bad for the Australian economy. Does it constrain what you can do for the rest of the election year? We saw a very generous John Howard at the election campaign launch last time. Are you constrained by the fact that right now the economy seems to be running at full capacity?

I think we have to continue as we will behave responsibly

and as for our generosity at the last election campaign, I hadn't noticed the Labor Party hasn't recommended

the abolition of the child care rebate. I haven't seen the Labor Party recommending the abolition of investing in our schools, which is of enormous help to Government and low-fee Government schools, I think we got that right. People like those things, when you are doing well... But they don't like higher interest rates. No, they don't. They want it balanced, our interest rates are at 8%. For housing they hit 17% under the last Labor Government. Interest rates you can be guaranteed will be lower under a Coalition than under a Labor government, Mr Howard, thank you. One Budget handout has been welcomed as long overdue. After years of being overlooked, World War II veterans held as prisoners in Europe are now finally eligible for a payment. Bob Hill was a 23-year-old private when he began a 4-year ordeal as a POW in Austria. We were constricted to areas, if you went to get up to go to the toilet, you'd get bitten by a dog, a police dog or get shot.