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Transcript of press conference: 29 February 2008: Parliament House, Canberra: 100 days; achievements; First Home Save Account; inflation; interest rates; ABC Learning Centres; Commonwealth department redundancies



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Interview

Press Conference, Blue Room, Ministerial Wing, Parliament House, Canberra 29 February 2008

Subject(s): 100 Days; Achievements; First Home Saver Account; Inflation; Interest rates; ABC Learning Centres; Commonwealth department redundancies

E&OE

PM: Thanks for coming this morning.

We have been, as of next week, elected for three months as the new Government of Australia. And, the purpose of this gathering with the representatives of the media today is to speak about the achievements that we have made in those first three months of Government. And those are outlined in this document which we have circulated to you just now.

We were elected on the basis of providing new leadership for the country. We said also that we intended to be upfront with the Australian people. That means, upfront about the commitments we made prior to the election. Upfront about our implementation of those commitments. And up front in our accountability

to the Australian people about what progress we made.

That’s why we’ve produced this document.

This document goes through those pre-election commitments which we’ve implemented so far. There are further pre-election commitments to be implemented during the course of this year including in the Budget context.

But this goes to the heart of what we’ve achieved in our first three months, and it’s part of our accountability back to the Australian people.

We fully recognise as the new Government of Australia that we face huge challenges for the future. We were elected to provide new leadership, we were elected to provide fresh ideas to meet the future challenges. Those future challenges have taken a long time to build, and therefore they’re going to take a long time to turn around.

Future challenges on the productivity revolution to be achieved through our investments in education, skills and training.

Future challenges when it comes to the long term reform of our health and hospital system.

Future challenges when it comes to climate change.

Future challenges when it comes to laying out the economic infrastructure which this economy needs for the 21st century, including high speed broadband.

And future challenges when it comes to fixing the decrepit state of our Federation itself.

These challenges have taken a long time to build and they will take a long time to turn around.

But we were elected on a platform of dealing with these future challenges rather than sweeping them under the carpet and avoiding them and hoping that they would simply go away.

Our overall mission statement as a Government is this: we are committed to building a modern Australia to meet the challenges of the future in order to secure the future for working families.

We recognise that in each of these challenge areas, a program of action is necessary.

We believe we have made a solid start, a start indicated in the document we have circulated to you today. But we still have a long way to go and we intend periodically to report back to the community and to the country along these lines.

As for the next three months, well, we’re working now in the period between now and the Budget.

We are acutely conscious of the fact that we have a problem on the inflation front. We’re acutely conscious of the fact that we have uncertainty with the global economy. We’re accurately conscious of the fact at the same time we’ve got to move forward on the future agenda that I outlined before. And, those will be the key areas of continued work on the part of the Government over the next three months as well.

I’m happy to take your questions.

JOURNALIST: Mr Rudd, (inaudible) page document outlining your achievements over your first 100 days. So you obviously must think that you have achieved quite a bit. How in your first three months in office have you tangibly improved the lives of Australians?

PM: Well the first thing that we have done is taken seriously the implementation of our pre-election commitments.

When the previous Government was elected, they lapsed very quickly into a debate about core and non-core promises. I believe they created a lasting cynicism on the part of the Australian community towards their elected officials. I don’t think that’s healthy for the democracy, I don’t think that’s healthy for any Government of the country when you have to take tough decisions into the future on some of those challenges that we face.

So you ask what changes have we made, I’ve got to say, honouring our pre-election commitments is important in itself. Trust is the key currency of politics, and unless you can be trusted to honour that to which you’ve committed to do, then, I’ve got to say, you’re not going to obtain the enduring respect of the Australian people.

Let me go to something concrete now beyond that.

Look at today’s reports on housing affordability. These upfront core challenges for working families. Prior to the election, and we were attacked by some for doing so, we convened a summit on housing affordability because we identified it back then, way back then, as a challenge for working families.

We outlined a set of policies coming out of that summit on how we would deal with the affordability crisis. None of those is a silver bullet in itself, but let me tell you, when you’ve got First Home Saver Accounts on the one hand and a range of supply side measures to come on the other, it does help deal

with the problem.

On the data itself, if you look at where housing affordability was in terms of the proportion of peoples income being spent on mortgages, in the December quarter compared against the September quarter compared against the previous year, this is getting a tougher, becoming a tougher and tougher challenge for working families. So we’ve made a start, it’s a very practical area, it means something for the bottom line.

JOURNALIST: Mr Rudd this document is full of reviews and working groups, doesn’t that give the Opposition ammunition for its point that there are too many working groups being established? And a related question if I can -

PM: I’ll come back to your related question. I’m glad you raised that. On the year, I think it was ’05-06, our predecessors in one year alone commissioned 495 separate inquiries and reviews.

Can I say that those that you see commissioned in this document proceed from pre-election commitments we made.

Let me give you one key example, and that’s the Health and Hospital Reform Commission. If you’re looking at something as fundamental and as core business as that, which is how do we deal with the future structure of Australia’s health and hospitals system, you must bring together the stakeholders.

Private, public, State, Commonwealth, as well as those who are dealing with the preventative health care programs of the country as well.

We said that had to be done through a proper reform and review commission. We said within the 100 days we would establish it and appoint its key staff. We’ve done so. We said before the election that it’d run for 18 months, that’s our intention. And then we’ll deliver on the outcome.

It’s a responsible course of action for an incoming Government to say, ‘here are areas where you need to review the future direction’, I own that, and it’s what we said beforehand. And contrast it to the proliferation of review activity which occurred almost at the fag end of the previous Government.

JOURNALIST: It’s only three months, but, would someone who left Australia on November 23 and came back on February 29 notice that it was a different country?

PM: That’s a question, of course, which you in the press will reach your own conclusions on, I’m not in that sense, to paraphrase someone else in politics, a commentator, I’m actually in the business of doing what I’m elected to do.

But can I just make one point. In one area, which is the absolute importance of honouring your pre-election commitments. What I’ve sought to do is to say to the Australian people, we are serious about that. We’re not just engaged in the classic core and non-core promise business.

I am sure we are going to run into problems in the future about (inaudible) of our pre-election commitments and how are they going to be implemented precisely, that’s the business of Government. But I am dead serious about maintaining our trust of the Australian community.

Second point in response to your question Malcolm is this: when we undertook the apology in Parliament, we, I believe, acting in response to our pre-election commitments but also engaging the Australian community and Indigenous Australia on the way through, were doing something, I believe of long term and enduring value to the nation.

I described it as constructing a bridge of respect between indigenous and non-indigenous Australia so that we can cross that bridge and then work on the practical programs of closing the gap between Indigenous and non-Indigenous Australia.

I think that’s different.

The final thing I think is different is this: when we have this 2020 Summit, what I’m also seeking to say through that is that we’re actually in the business of open Government. I’m actually keen to attract the ideas of all Australians out there in their submissions to Government through the Summit on future policy ideas for the nation against the strategic directions we have set. And, I want to encourage a culture of that nationwide. If I want to contrast that with before, I think the past there was a view that there was right and wrong answers, the debate was not entirely encouraged either within the

bureaucracy of beyond the bureaucracy. Look at the number of NGOs that had their funding cut after they publicly disagreed with what Government was doing.

We’re not in that business. We actually believe in the contestability of ideas and open debate.

JOURNALIST: Mr Rudd, you talked about - I guess this is a little bit of what Malcolm was talking about - you talked about a lasting cynicism that was created by the previous Government. Are you saying that a key objective of your first 100 days is turning that around and creating a culture of (inaudible)

PM: Others will reach their own conclusions as to whether we succeed on this. What I’m saying is that it is a fact that the previous Government said about its pre-election commitments, prior to its coming to office, that they were then to be considered as core and non-core promises. I believe that created a lasting cynicism. As did the reality of the last Federal Election. No mandate to introduce WorkChoices, and they turned around and introduced WorkChoices. They said explicitly they wouldn’t increase our troop numbers in Iraq, and then they increased by significant numbers our troop numbers in Iraq. That corrodes the fabric of a democracy.

What I’m saying is, however imperfect we may be, our intention is reflected in this document, to the greatest extend possible, is this is what we committed to do. This is what we’ve done so far. And we’ve got more work to do.

JOURNALIST: Without getting to get bogged down in semantics, isn’t your achievements something you have completed. Isn’t this book about things (inaudible)

PM: Well, we’ve always like to to be ahead of the pace here. Well, it’s three months to the third that the Government was elected, and a few days after before we were actually sworn in.

You’re right. In this document you will see, in a number of key pre-election commitments, work has simply begun. And, I’d like to identify for you, in the tradition of transparency, one area that I don’t think we’ve done enough. As I went through this the other night, if you flip over to page 51 which is World Heritage Listing convicts sites in Ningaloo Reef in WA. I asked specifically, well what work have we done to accelerate the processes necessary to nominate the Ningaloo Reef in WA for World Heritage Listing. We’ve done a bit, but not much. And, that’s an area, for example, where I think we’ve got to

crack the pace up more than has occurred so far.

To be fair to the Government, the colleagues in the Cabinet, people have been working very hard. This is as upfront as possible on what we’ve been able to achieve so far. I say again, there are a number of other pre-election commitments which are yet to be delivered and that will unfold during the course of this year including the Budget context.

JOURNALIST: Can I just ask a question on housing affordability and the First Home Saver Accounts. What’s your view on the First Home Buyers Grant, is the First Home Savers Account going to replace that? Do you think it’s adequate? Should be increased, should be abolished? What’s your view on it?

PM: The FHOG or FHOS or whatever it has been called over the years. Years ago, I actually used FHOS when I brought my first home. I think it was, to be frank, I think it was probably a Fraser Government initiative back in the Mesolithic period of Australian politics when I was buying my first

home.

I think for first home buyers, those grants can help. We said prior to the election that we would retain that. The first home savers account is in addition to that.

There are two benefits, I believe, which derive from the First Home Savers Account.

One is, it encourages a savings culture on the part of young people in particular.

And secondly, in terms of housing affordability, enables them over time to accumulate a more robust nest egg to enter the market.

If you add that then to what’s available through FHOG or FHOS, then, it makes it easier. But can I say, the dream of owning your own home is very important for us as a new Government of the country, and what we see from the data produced and published in some of today’s papers in the housing

affordability index produced by the Real Estate Institute of Australia, is that affordability is going backwards, not forwards. We’ve got to do everything we can within the powers of Government to turn that around. And as I’ve said before, many of the challenges that we face have been building for a long time and it’s going to take a long time to turn them around.

JOURNALIST: You’re going back to Queensland to celebrate 100 days with a major speech up in Brisbane, I think, after a Cabinet meeting. Why have you chosen to do that?

PM: Well, I’m a Brissie boy, and I like going back home when I can. So, that’s one reason.

But, the QUT in Brisbane extended an invitation to deliver a speech. We’ve accepted that invitation. Queensland has particular challenges, of course. The other reason for going there is that we have an upcoming Community Cabinet as well in South-East Queensland.

JOURNALIST: Mr Rudd, we expect another interest rate rise next week. Would you hope that -

PM: What intelligence do you have on that, Michelle?

JOURNALIST: If that happens, would you hope that that is the last rise (inaudible)

PM: When we said prior to the election and subsequent to the election that we support the independence of the Reserve Bank, we meant it. And, we continue to mean it. In fact, we enhanced the independence of the Reserve Bank with some of the initial measures outlined by the Treasurer, Mr Swan, just after the election - including the regular publication of RBA Board Minutes.

Our job, in the fight against inflation, which is core business for the period ahead, is to do whatever we can to make the job of the Reserve Bank easier. That’s why within the first month or so of forming a new Government, we outlined our five point plan of attack on inflation.

Let me just go to those facts again. When we took over Government, inflation was running at a 16 year high. When we took over Government, we inherited the second highest interest rates in the developed world. When we took over Government, and very soon afterwards, the RBA told us that those inflation rates beyond the three per cent tolerance level were projected to run at those unacceptable levels through ’08, through ’09 and into the middle of 2010.

That’s the economic challenge we’ve inherited on inflation.

Within a month or so of taking office we indicated clearly our plan of attack on the inflation front.

Two, on the demand side, to do with the fiscal stimulus in the economy, projected budget surplus the other in terms of what we can do to boost private savings. And three on the supply side, vis-à-vis skills infrastructure and workforce participation.

That’s our framework for dealing with the inflation challenge.

The core reality is this: if inflationary pressure continue to build, then there will be upward pressure on interest rates. Our challenge is through what is available to us, is to bring about maximum downward pressure on inflation so that there can be therefore downward pressure on interest rates. That is core fundamental economic business for this government. It’s the cornerstone upon which all else is constructed.

JOURNALIST: (Inaudible) quickly enough, do you think to put that downward pressure?

PM: Well can I say having been the Government for just under three months, I’ve spent more time on this I the last three months than most other things. Because the data is objectively challenging, I ran through the three core stats before. As I said, the first Cabinet meeting of the Government in 2008 in Perth, where I delivered a speech on this subject, outlines our approach to dealing with the inflation challenge.

JOURNALIST: Mr Rudd on the crisis facing ABC learning. Is it your view now after a couple of days of this that the Federal Government needs to take more of a regulatory role in the child care sector? And does it concern you that market volatility is affecting parents (inaudible)

PM: On child care in general, this is really important stuff for working families. We understand that, and you would have seen what we had to say about childcare prior to the election. Both on the supply side, the child care places, the supply of child care workers, and the various fee HECS arrangements for childcare workers that we had proposed.

And on the demand side, to make it easier for parents by increasing the child care rebate from 30 per cent to 50 per cent. These are significant measures.

Secondly, that’s reflected in our decision to establish also the Office of Work and Family, which is also monitoring closely the situation, providing updates on developments as they unfold.

The Government and relevant authorities continue to monitor closely developments concerning the ABC Learning Centres.

The company is currently under a trading holt and it’s inappropriate for me to comment on the financial aspects. It’s inappropriate for the Government to comment on the financial aspects of the company. The Government remains committed to working with providers to deliver affordable, accessible and high quality child care for Australian families.

JOURNALIST: But if ABC Learning closes it’s doors, there are a lot of families who will be bereft with their child care. What will the Government do?

PM: Well, we regard it as core business for us to do everything possible in the powers of Government to deliver high quality, affordable child care to working families.

When you’re dealing with market sensitive matters, as you are dealing with in the case of ABC Learning, we have to be exceptionally responsible in what public comments we make. And I propose to be responsible.

JOURNALIST: Mr Rudd, you describe a lot of things as be core business does that (inaudible) non-core business?

PM: You’re suggesting some different vocabulary. As I say, we’re not in the business of core promises and non-core promises. But there are some fundamentals which are really important and we all have our different way of emphasising it. But the most fundamental thing on the economy is to fight effectively the fight against inflation. And I cannot overstate to you the difficulty of that task.

When you look at the combination of the global economic environment which we now face and the unfolding inflationary pressure’s which have been building now for some years. This creates big challenges for us, and that’s why it is core economic business for us to deal with that challenge.

JOURNALIST: (Inaudible) You’ve got defence quarantined from cuts, you’ve got and education revolution on the way which is going costs more, you’ve got health your going to spend more money on, the tax cuts (inaudible). How do you get to your position where you can say that fighting inflation is the absolute number one priority when you’ve got these other things? (Inaudible)

PM: Let’s look at the (inaudible) elements of the inflation challenge. They are on the demand side and the on the supply side.

Go to the demand side first which is what do you do to boost public savings, you set an ambitious target when it comes to a Budget outcome. Considerably more ambitious than was alive in the previous projections by the previous Government. That’s point one. Within that, then you adopt an implement a razor gang in terms of unnecessary outlays. And some of those outlays will be regarded by some as painful, I can understand that. Some of them won’t be very politically popular, I understand that. But we’re serious about this. Remember prior to the election we nominated billions of dollars worth of savings in contrast for our opponents. And we are in a process since the election of identifying savings of a considerable magnitude as well.

That’s on the demand side of the economy. Also in terms of private savings we’ve already indicated what we’re doing in the First Home Savers Account, because that’s based on some projections that we had prior to the election capable of generating further private savings of something like $4 billion.

Go to the supply side, this is where you seem to regard these things with a mutual contradiction. You are not dealing effectively with the inflation challenge unless you are boosting the supply of skilled labour, unless your dealing effectively with unleashing some of the infrastructure bottlenecks in the country, and doing what you can to boost workforce participation.

Therefore, the art and the science of this is to get all of those things underway simultaneously. Is it easy? Nope. But let me tell you, that’s the course of action we’re embarked upon, which is to deal with the inflation challenge, but also, boost the economy’s long term productive potential.

JOURNALIST: You have all these working groups. Lots of them. Now, you’re talking about a transparent Government. Now, when we called some members of those working groups, they say, oh, sorry, can’t comment on that, we’ve been asked not to talk.

PM: You mean COAG Working Groups?

JOURNALIST: No, not COAG Working Groups, the various business individuals who are members of various advisory -

PM: David I can’t be in the business of saying to various people who are just participating in collaborative work with the Government, what they’re saying or not saying, I mean it’s that’s almost an impossible question. Look, you know what the best process for Government decision making is in my view:

One, articulate clearly what you believe the policy direction of the nation should be.

Two, pull together your brightest and best people from within Government or outside Government and seriously shake the tree and see what ideas flow out, and do that as transparently as possible. Some of it will be either market sensitive or might be national security sensitive, so you got to be mindful of that.

Three internally then within Government work out which way you’re going to go ahead.

And four, get on with doing it.

If we’re going to extend to you and the Financial Review a front row seat at every internal deliberation of the Government, probably not mate. But we’ll seek to improve on past performance.

JOURNALIST: Have you been invited as an observer to the G8 summit in Japan this year?

PM: I understand that the Government of Japan has announcements to make on that and I wouldn’t wish to pre-empt formal statements by the Government of Japan.

JOURNALIST: Mr Rudd were you disappointed to learn today that an Australian magazine leaked details of Prince Harry’s deployment in Afghanistan?

PM: Actually I was unaware of that, so I wouldn’t comment on it. I’m just unaware of the facts

JOURNALIST: Can you confirm that Commonwealth Government departments are already asking for voluntary redundancies? And can you tell us how many there are likely to be?

PM: On the question of the razor gang and the 2 per cent efficiency dividend across Government departments, we fully accept that that’s going to cause some pain and dislocation across Government agencies. How that’s met within individual agencies, I can’t give you a blow by blow account across each of the Commonwealth departments of State. But I’m sure when it comes to voluntary redundancies that will be part of the proposal in some agencies.

But I’d be misleading you if I said that I can give you a blow by blow within each Government department, I can’t.

JOURNALIST: Mr Rudd on the Health Ministers meeting today. Does it not underscore the point that the fact that we have Labor Governments in all jurisdictions, will not make governing any easier for you here in Canberra?

PM: I didn’t say prior to the election that it would be. I said it presented us with a unique challenge and opportunity to get something as fundamental as health and hospitals right within a window of opportunity which we have in calendar year 2008.

There will always be argy bargy on the way through, that’s life, that’s politics, that’s reality. This isn’t sort of the central Soviet presidium whereby everyone’s going to have a uniform view on anything at any time, it doesn’t work that way.

But, what I encountered with the Premiers is a spirit of cooperation to try to get this thing as right as possible, consistent with our pre election commitments to: one, establish a National Health and Hospital Reform Commission, which we’ve done within our first three months, under Dr Christine Bennett.

Two, to initiate the COAG working group that is currently being chaired by Nicola Roxon.

And three provide an initial up front performance based payment, namely the $150 million we put on the table to draw down elective surgery waiting lists beyond clinically acceptable times.

So, it will be tough, there will be argy bargy and a bit of scrapping on the way through but life is not a perfect institution, neither’s politics.

JOURNALIST: Mr Rudd can I ask, you’ve been in almost 100 days, has it been what you expected? Have you enjoyed being Prime Minister? And we have a vision for Australia 2020. Do you expect to be Prime Minister in the 2020 Government?

PM: I’d be very, very happy if I make it through the current term. Let’s just take this one step at a time, just one step at a time. All I’m saying is, consistent with my remarks at the beginning of this press conference today, we said to the Australian people we’re offering new leadership for the future.

New leadership from my point of view means being up front and accountable about what we said we’d do and what we’ve done while recognising there are some things we can do better and there’s still other challenges to deal with.

Secondly, on top of that, to say it’s not just new leadership but it’s for the future and there are at least five core challenges for the future which our predecessors didn’t really touch.

Climate change. We face an enormous challenge in dealing with work left undone. When the rest of the world was moving forward we were spinning our wheels in this country.

The productivity revolution and education revolution. When did you ever see apart from the pre-election budget from the previous Government education figure prominently in Budget statements on Budget night?

Health and hospitals. Our predecessors played the blame game with the States because that was the best political strip available.

Fixing the federation? ‘Well, no, don’t want to do that because it upsets the blame game.’

You see these are core areas of work for the future which have been left to languish. If there is one motif for our predecessor’s in Government it is a Government with squandered opportunities. Quite apart from the poor economic record reflected in the statistics I ran through before.

With the enormous yield that we had with the public revenue coming out of the resources boom, hundreds of billions of dollars beyond the Budget forecast over many years, it is a crying shame that that was squandered and not invested in future productive potential of the economy and dealing with long term challenges like climate change and water.

So, in answer to your question, these are very big challenges. What I’m determined to do is have a clear cut direction about where we want to take this government in dealing with these challenges for the future. Open the doors of Government as much as possible to get as many ideas from outside about how we deal with them, hence the 2020 Summit, and get on with the business of Government.

We’re not going to be a perfect Government, but we intend to have a pretty dammed good go at it against some clearly key set directions for the future. And our organising principle is building a modern Australia to meet the challenge of the future, but always with the object in mind of securing the future for

working families.

[ends]