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Transcript of interview with Greg Cary: Radio 4BC: health and hospitals; global economic recession; bank deposit guarantee; unions; people smuggling; community cabinet; July 1 tax cuts; Joe Hockey; sport.

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Prime Minister of Australia


Transcript of Interview with Greg Cary Radio 4BC

01 July 2009

Subject(s): Health and Hospitals, Global Economic Recession, Bank Deposit Guarantee, Unions, People Smuggling, Community Cabinet, July 1 Tax Cuts, Joe Hockey, Sport


CARY: We’re joined by our Prime Minister Kevin Rudd. Good morning.

PM: Good morning Greg, thanks for having me on the program.

CARY: Good to see you. Beautiful morning in the river city, right across Queensland if you have a call for our Prime Minister give us a buzz - 13 13 32. Now we just promoted an idea, I was thinking about it coming in this morning with the beautiful sunrise, what a great place to live, 1,200 people coming across the border every week, have been for-

PM: You’re sounding like Joh.

CARY: Well it was Joh’s idea.

PM: Are you channelling Joh?

CARY: Well I just had this thought, you know, all this burden on all of us, extra rego for the roads, extra money for the schools, extra money for hospitals. Just thinking about a surcharge for newcomers-

PM: On southerners?

CARY: Southerners? Oh anybody coming here, they can be Westerners.

PM: An SS - a surcharge on Southerners.

CARY: What do you think?

PM: Ah no.

CARY: I don’t have the Prime Minister’s approval. I guess that is out.

PM: What it goes to is look, Queensland is a huge growth state. One of the challenges Anna Bligh has been wrestling with is how do you invest in the infrastructure to support such a burgeoning population? What we’re trying to do as a national Government, it’s not perfect but for the first time really the Australian Government, partnering with the states and territories in big infrastructure investment.

What we did in the budget, that $35 billion investment in road, rail, ports, national high speed broadband, university infrastructure, hospital infrastructure, school infrastructure. You see right around the country, not just here, it’s starting to creak a bit because the population is growing in so many parts of the country including in the West by the way. And so you need the Australian Government to partner with States and Territories to try and lift some of this burden, there’s still a long way to go.

CARY: Just on that point though, in view of the damning reports and there are now three of them on how our money is being spent here in Queensland, and it is similar in NSW and I imagine other States - as the Prime Minister, are you happy with the way the States are spending federal money, our money?

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PM: Across the board there’s always going to be problems, and let’s just be frank about it, I don’t pretend to gild the lily on this stuff, there is always going to be problems.

One of the reforms that we’ve brought in, in the health area and the education area in the last 12 months of negotiations with the States, is to make our payments, let’s call them outcomes based. That is, it’s not just here are a series of financial inputs into what you do, it’s going to be part of an agreement where we measure how many elective surgery procedures actually occur. How many people are attended within minimum specified times at accident and emergencies departments and hospitals.

This is new and we’re only just introducing this and but I think it’s a step in the right direction to make sure the dollar is driven further.

CARY: Just on that question then because we’re now reading that 20,000 more Queenslanders are waiting to see a specialist than this time last year, 20,000. 62 per cent of patients classed as urgent are receiving treatment within 30 minutes, now the national benchmark I understand is 75 per cent. So in those two key areas, Queensland continues to lag badly. You said you’d be looking at the possibility of taking over the responsibility for health from the States if they couldn’t get their act together. Where are you, where is your thinking on that now?

PM: Well let me answer it in three quick parts. The first is, the hospitals report that we, the State of the Hospitals report that we released yesterday or the day before, I can’t remember the day now, is us putting out a transparent report saying there are problems across the hospital system nationwide, not just here in Queensland, also some good things being done. So let’s just be frank about it and you’ve just pointed to a couple of the statistics and I don’t have it in front of me but I won’t dispute the statistics you’ve just rendered.

Secondly what have we done in our 18 months in office? A new Australian Health Care Agreement which is a new investment of $64 billion, a 50 per cent increase on where it was before. You see that hospitals report that we’ve just been referring to, refers I think to the 07-08 year, that’s if you like the end of Mr Howard’s last health care agreement, where they actually took - the Australian Government - a billion dollars out of the public hospital system across the country. We’re now reinvesting in the public hospital system in the country with a new agreement we agreed last year and has come into play this year.

Now the third part of my answer is what about the future? Well, what we’ve said is a National Health and Hospital Reform Commission to look at the long term future of the hospital system and who should do what within it; the Federal Government and the State Government. And we just received that report yesterday.

Now we’re going to take our time with this to work our way through it about what the best system is for the future. But let me tell you I know there are problems, there are real problems.

I also know that there are strengths in the system when you compare it with other systems around the world and we’re determined to get this absolutely right. But because it’s so important to each of your listeners, we’re going to be careful, methodical, work our way through it, talk to the States and Territories about it through the course of the months ahead and then reach our decision on what should be the shape for the system for the future.

But you know, turning the ship of state around on hospitals in 18 months is tough. But we’ve made a solid start with as I said a 50 per cent increase in the Australian Government’s investment in hospitals.

CARY: Prime Minister do you put a timeline on it then when you’ll make that definitive decision as to whether the federal Government would take over the state responsibility?

PM : I think what we’ll do with this report, the one that we got yesterday and they’ve been at work for more than a year -these are health experts from across the country - is we will release it by the time parliament goes back, we’ll work our way through it internally.

Then subsequent to that we’ll work our way through it with the States and Territories because they actually deliver the system. But we’d be looking towards reaching conclusions on this you know in the not too far distant future beyond that.

On a precise timeline - no, but you’ve got to be clear about what the analysis is, discuss it with the States and Territories about what they are prepared to do and what they are not prepared to do and reach a decision.

And I’ve got to say that the Health Minister Nicola Roxon has been vigorous in her leadership from this right from the beginning and we are determined to get it right.

CARY: Our guest is the Prime Minister Kevin Rudd, a new financial year begins today, many will be happily waving goodbye to the past one. Reports published today say more people are confident about life after the financial crisis than was the case a few months ago. And I am just wondering if you share that confidence and in asking that, your thoughts on the year ahead?

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PM: We’re not out of the woods yet, I think that is the most important thing to say Greg, it’s still a long way to go. But here is a couple of good points for Australia. Global financial crisis, worst economic recession globally in three quarters of a century and just so that people understand this is the first time this year that the global economy is projected to shrink since World War II, actually shrink in size.

Secondly, Australia is doing better than most of the other countries. We have the fastest growing economy of the major advanced economies, the second lowest unemployment. We also uniquely among them have avoided recession so far and we have the lowest debt and the lowest deficit. What you see also coming through in the last two confidence surveys, which does directly to your question, business confidence and consumer confidence in part I think because our policies have helped so far avoid the recession which the rest of the world by and large has fallen into, is confidence has increased. But there is still a hang of a long way to go.

My real worry is, my real worry is that we’ve still got a big problem on our hands with rising unemployment and I, the measures we’ve taken for which we’ve been criticised a lot are designed to keep another 200,000 plus people in work who would otherwise be losing their jobs. But we’re I fear we’re still going to see rising unemployment for a while ahead.

CARY: Alright just on that issue then because I think it relates totally to it. We read on the front page of The Australian today that the Australian Manufacturers Working Union is pushing for pay rises of four per cent across 1,300 different agreements and up to six per cent on companies that can afford that six per cent. Now the implication surely there is at a time when unemployment is rising that they want that four per cent even if companies can’t afford it. Is that responsible?

PM: I haven’t seen the detail of that report, I honestly haven’t read it, but what can I say about that is what I’ve said more generally. It is important for unions and for business at this stage to exercise restraint. This is a very difficult global economic circumstances.

Let me say something really positive about what I have seen from so many employers across the country. In very difficult times, employers running businesses decided to shrink their profit margin and to keep staff, often doing quite creative things within their workplaces to reduce working hours but just to keep staff through very hard times and I commend them for that.

And there has also been restraint by many unions across the country. I could point to what for example General Motors Holden have done at the Elizabeth plant in South Australia. Huge example of management working together with unions to put the whole business and everyone’s jobs number one. But you’re always going to have people being irresponsible and I can’t comment on the details of this one but I think restraint is the order of the day.

CARY: Okay just on the detail though, if those figures are correct doesn’t it just logically follow in light of what you’ve just said that it would be totally irresponsible to be asking companies who can’t afford a pay rise to pay you even more in this environment?

PM: I think what I would say again, not having read the report, is that all unions and employers need to be exercising restraint at this difficult time because everyone who has been clear-sighted about the extent, the continuing extent of the global economic challenge we’ve got should be exercising restraint.

I mean there’s a long way to go. The reason the Australian government has gone out there with this economic stimulus strategy for which we’ve been criticised; cash payments to families, biggest school modernisation program in the country’s history, long term infrastructure projects, is because we have stepped into the breach while the private sector is in retreat in order to lessen the economic and employment impact, that’s what we’ve done.

And as soon as the natural economy or the private economy recovers let me tell you, we’ll be drawing back what Government does, as we’ve already indicated in our budget strategy. But on the way through it is really important that people exercise restraint. We’re doing our part as Government, we need everyone else to be part and parcel of this response to the global economic crisis because the truth is we’re all this together.

CARY: Absolutely. Notwithstanding then that we all think teachers should be paid more and notwithstanding that they deserve more, not only money but respect etc - is this the right economic climate for them to be asking for a pay rise and now to have strike action, more strike action if they don’t get it?

PM: Well I suppose Greg we could go through every industrial negotiation in the country from A to Z -

CARY: This is the one affecting us now.

PM: - no no, state by state and territory by territory and I would not have a clue what the detail of the industrial ask is of the Queensland Teachers Union against Education Queensland and for what reasons and what’s justified and what is not. All I can say is this, in terms of national economic management, restraint is necessary, absolutely necessary. State budgets are under huge pressure, the Australian national budget is under huge pressure.

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In our case we have lost $210 billion in tax revenue because of the global economic recession. To give your listeners an idea of how much that is, that would equal the amount that we spend every year for the states and territories on health and hospitals - that is how much we’ve lost in tax revenue.

So all Governments are feeling this strain and therefore when you’re looking at public sector employees like teachers, we need restraint as well. But I don’t know the details of their ask and I am very reluctant to get into the argy bargy. For example what is the union here, the Media and Entertainment Alliance, what are they saying on behalf of you? I wouldn’t

have a clue.

CARY: Well I don’t think anybody in the media right now would be putting up their hand for a pay rise.

PM: Well I’ve got no idea where unions on individual negotiations are or enterprise negotiations. I’ve got no idea, they’re going to vary across the country. Although I can say nationally, restraint is necessary.

CARY: Okay just on areas where some are doing better than others, the banks would seem to be doing very well. You gave them the guarantee which at the time I think most people agree was a good thing, a very smart thing to do. But many are now asking-

PM: (inaudible) necessary.

CARY: A necessary thing to do.

PM: We were, the global financial system was on the edge back in October.

CARY: Alright but let’s see where we’ve gone. Many are now asking whether you’ve made life too good for them. That’s been an unintended consequence. Before the financial crisis, the big four had 57 per cent of the residential mortgage market, they now have 72 per cent. Before the crisis the big four had 69 per cent of bank deposits, they now have 77 per cent. So they’re doing okay. So I guess the question is, with smaller banks struggling, the big four are only going to get stronger, does that worry you long term in terms of competition?

PM: Greg, the challenge we faced last October was, let’s call it the stability of the system and you’re right to have said that most people said these were a necessary set of actions, that is to underpin the stability of the financial system. Two guarantees. Every one of your listeners’ deposits in their banks, building societies, credit unions for the first time in the history of the Australian federation guaranteed by the Government - first time.

Now the second thing we did was to guarantee the banks inter-bank lending, not just the big four banks, all banks - okay? Because all banks frankly, were in shall I say challenging circumstances last October because of what was happening in global financial markets. So that’s what we did, the stability of the system was really important.

Second point that you raised is about competition. I fully get that, we need to constantly have under review other measures to enhance competition in the finance industry generally and I know the Treasurer and others continue to work those options through in our discussions with the banking industry. We want to make sure that the system is stable but we also want to make sure that customers also get the best deal possible.

CARY: Our guest the Prime Minister for a few more minutes, there is evidence Prime Minister of an alarming rise in illegal boat arrivals. I am just wondering if you’re totally satisfied that the policies you have in place are adequate? And if the problems continue to grow, are you prepared to perhaps admit you’ve underestimated the extent of the problem and readdress those policies?

PM: No we’ve had a very sober understanding of the global, let’s call them push factors at work not just for Australia but countries right around the world in terms of the number of people, illegal people movements right around the world. Affecting countries in South East Asia, countries in Europe, now this is just the reality.

Since then the Government has introduced hundreds of millions of dollars worth of new measures to work at country of origin, to work at our cop on the beat, the navy on the high seas and remember these vessels are being interdicted and they are being taken to Christmas Island for processing. And also a hardline system which says, if this is not a bona fide asylum seeker then they go back, go back to the country concerned.

Now we’re working our way through all of those things methodically, hardline approach. But you know every head of Government I talk to in the region or the world is faced with exactly the same challenge because of, if you look at south Asia the enormous civil strife in Sri Lanka recently, people are just taking you know points of exit from the country.

Still also, in countries like Iraq and Afghanistan, push factors out of those countries and the rests of us in the world have to deal with that. One of the ways you deal with it is to bring greater stability in the countries of origin so that the push factors are not as huge.

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CARY: Are they paying attention though? Those countries of origin.

PM: Well I have been on the phone in most recent times for example to the Head of Government in Sri Lanka and elsewhere and also discussions soon with the Prime Minister of Malaysia as I have done recently on the telephone with the President of Indonesia, we work through these things all the time. And most critically our immigration, security and intelligence officials and our defence officials are working these things through too.

A lot of what occurs is so pardon the pun, below the radar that you know they’re not ever in the public debate because so much work is being done. But can I say I am not going to underestimate the problem, it’s there, it’s real, it’s growing around the world, but we intend to be hardline and sensible in the way in which we handle it.

CARY: Let’s take a call. Erwin has rung in from Yeppoon for the Prime Minister. Go right ahead.

PM: G’day Ewen how are you?

EWEN: Good Kev. Look without being rude-

PM: Sounds like you’re going to be but off you go.

EWEN: No I’m not going to be. Just talking about, Greg asked a question about the state that Queensland is in and you sort of (inaudible) with the global recession. But the problems we’ve got in Queensland have been happening for the last five to 10 years when boom time has been on. We’ve had massive resources boom, money everywhere but it’s all gone, it’s disappeared and all of a sudden it’s because of the global recession which happened what 18 months ago?

PM: Well can I just say look I can’t, your question is a very general one but let me just go to one specific response. As I look around Brisbane and the rest of Queensland, what I see before my eyes is a massive investment in the public hospital system and that is a change which has occurred frankly in recent times. If I look at the Royal Brisbane, I look at the Mater, I look at the PA and various regional hospitals around Queensland I see there is a huge investment going on. None of that happens for free.

But there was a huge underinvestment in the capital stock of our hospitals going back decades and decades. There is a lot of catch up football here and therefore it costs and therefore that obviously has an impact on budget.

Nothing is perfect, we’re not perfect either mate but can I say when I look at sort of physical evidence of things changing, investments like that, also what I see in some of the road systems in south-east Queensland you know just keeping pace with the Cary idea of a surcharge on southerners -

CARY: It’s looking better by the minute isn’t it, really?

PM: It is. Mind you people in north Queensland would have a different view as well, southerners could mean anyone south of Rockhampton so there you go.

CARY: (inaudible) that’s alright but we’re nearly out of time. A couple of questions out of left field. You’ve had a little bet I think on the future of Peter Costello. I think you might have put up $20?

PM: Oh yeah I lost that with Julia.

CARY: Well it showed you’re a betting man. If you had that same $20 on who you’d back to be your opponent at the next federal election-

PM: Oh here were go, here we go. I haven’t had that bet with Julia yet, she’s already one up on me so I am a bit nervous about putting money on with Julia. I’ve got no idea. It’s a matter for the Libs, they’ll sort these things out, I think look I was at a community cabinet last night down in Beenleigh -

CARY: Good turnout.

PM: Yeah there was a huge turnout and taking questions. What people want from all of us, both sides of politics is to get on with job. You know get on with the job of helping families who are struggling with keeping their jobs, small business under real pressure, paying the mortgage, making sure that kids’ education is affordable and the hospital system is in a reasonable state. That is the basic stuff people want us to get on with.

By the way - one other point. Today 1 July, tax cuts come through, education tax refund comes through, also it’s the end of Work Choices as of today.

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So for working families these are important changes. For the education tax refund, I’ll just say this to your listeners, it is very important that people keep their receipts for education expenses, $750 for primary schools kids, $1500 for secondary school kids, you can claim up to half that back in a given year and go to the tax office website for your information.

One final point as well, Mr Hockey and the Liberal Party today have said that they probably would oppose these tax cuts being introduced. I don’t understand that. I thought they were saying that they were the party of lower taxation.

CARY: Yeah I haven’t seen that so I can’t really respond to that but maybe there is a wider context. Final question and I know -

PM: And there usually is.

CARY: I know you’re -

PM: May have to do with your earlier question.

CARY: I know you love your sport, I know you love your cricket, admire Ricky Ponting. Lleyton Hewitt, one of our great battlers, goes into the quarter finals of Wimbledon -

PM: A friend of mine texted me about him, he’s over at Wimbledon at the moment.

CARY: I was going to ask you. Your favourite athlete and why?

PM: Oh look. You mean over time?

CARY: Whenever.

PM: I’ve got to say in cricket I can’t go past Gary Sobers. There you go.

CARY: Why?

PM: Just a stupendous batsman. I will always remember him as a kid knocking up I think 256 not out and I think this guy -I also remember watching on television once the proverbial six sixes in an over, a six ball over and I thought this guy has got the gift, the gift of the gods about him. So there you go, he’s not an Australian. Gary Sobers.

CARY: Kevin Rudd. Prime Minister of Australia, thanks for your time.


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