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Prime Minister discusses mining; Mersey community hospital; Dr Mohamed Haneef; federalism; and water security.



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PRIME MINISTER

2 August 2007

TRANSCRIPT OF THE PRIME MINISTER THE HON JOHN HOWARD MP INTERVIEW WITH MATTHEW PANTELIS RADIO 5AA, ADELAIDE

Subjects: Mining boom; Mersey Community Hospital; Dr Haneef; federalism; National Plan for Water Security.

E&OE………………………………………………………………………………

PANTELIS:

Prime Minister John Howard, good morning.

PRIME MINISTER:

Good morning Matthew.

PANTELIS:

Now you have a new report, which I am not sure if you have commissioned this report, but it reveals some interesting information about the mining industry and the mining boom in Australia?

PRIME MINISTER:

Well it wasn’t commissioned by the Government but it is very interesting. It’s been written by Professor Ross Garnaut who was Bob Hawke’s principal economic adviser and a highly respected economist. He’s also the man who is doing the climate change report for the Federal Opposition and all of the state Labor Governments. So he has, as well as a good reputation as an economist, he is seen as broadly sympathetic to the Labor side of politics. I am not saying that to in any way impugn his professionalism, but what is interesting about this report, is that it says contrary to what Mr Rudd is predicting that there is no reason why the resources boom, if we handle ourselves

correctly, should not go on for a very long time.

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Now much of Mr Rudd’s rhetoric over the last seven months has been on the basis that the mining boom was going to end fairly soon, and we hadn’t as a government, done anything to prepare for the end of the mining boom. Now my view is that the mining boom should continue for a long period of time, particularly if we keep the right policies in place, especially in the area of industrial relations. And what the Garnaut report says is contrary to Mr Rudd’s predictions. China will have an almost insatiable appetite for resources for years into the future. The message out of that for Australia is very clear, if we are smart, if we keep our economy strong, if we keep our reputation as a reliable exporter, we should be able to profit from China’s demand for our resources for many years into the future. Now having said that the mining boom is not the only pebble on the beach and our economy is strong in a lot of other areas but this is a very interesting report, particularly for what it says from a favoured economist of the Labor side of politics, for what is says about Mr Rudd’s own predications.

PANTELIS:

Well I’ve always been puzzled by that predication of the mining boom coming to an end because that goes contrary to what we’re told constantly in South Australia, especially about BHP ramping up mining at Roxby.

PRIME MINISTER:

Well it is, it’s one of those arguments that Mr Rudd has put forward for his own political purposes. I mean, what he said on the 25th of January is this and I quote, Mr Howard’s approach to the long term prosperity of this country is this, we can rely on the resources boom. But do you know something? The boom’s finished. Now not only had the boom not finished on the 25th of January but all the evidence is that it will go on for a long time but of course it’s not the only issue, it’s not the only thing that’s sustaining our economy. The service sector of the Australian economy has generated far more jobs over the last 10 or 15 years than has the mining industry and manufacturing is still a major employer of people. So I don’t argue that the resources boom is the only thing we have going for us, but I do argue that if we keep the right policies in place there’s no reason why we cannot benefit from the resources boom for many years into the future. That’s what Professor Ross Garnaut is saying.

PANTELIS:

Has that boom though, both in mining and the services industry created a countering albatross if you like in making housing so much more unaffordable for many people?

PRIME MINISTER:

Well the general prosperity of the country has meant that the value of houses generally speaking has risen. Now you can argue that prosperity always carries some negatives. If you have a strong economy, which we do have, then that pushes up the price of assets and that’s happened. Most people in Australia have benefited from that because most people own houses but it does create greater difficulties for people trying to get into the home ownership market for the first time, I accept that. But, what, the alternative is that we go back to eight or nine per cent unemployment, surely

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not. I mean, the alternative is to try and find policies that make it a little easier for people to get into the housing market in the first place but part of the situation we now have is a product of prosperity because the value of real estate has increased but the alternative is far less palatable and that is that we, what, go back into recessionary conditions. Nobody wants to do that.

PANTELIS:

No. Can I move on to health?

PRIME MINISTER:

Yes.

PANTELIS:

Yesterday you were in Tasmania and you’ve announced the takeover of the Mersey Community Hospital I think in Devonport. Could we see this happen elsewhere in the country?

PRIME MINISTER:

Well it will depend on how the trial or the test case of the Mersey hospital goes. What we’re doing is funding the local community to keep open a full public hospital. There’s been a full public hospital there for a long time, the Tasmania Government announced it was going to downgrade it. The local community is very opposed to that. We were approached by the local federal member and representatives of the local community and we have decided to fund it directly for $45 million, which is our estimate, that will be made available, will be made available directly and only to the local community trust to run the hospital and we’re going to fund it directly. It’s not something that we’re doing in partnership with the Tasmania Government however the Tasmanian Government will have money freed up as a result of our intervention so the Tasmanian Government will have more money to spend on health services in northern Tasmania or indeed anywhere else in the state. The question of whether it’s

done elsewhere will be influenced by our experience with this. We take the view that the Commonwealth has an overwatch role in relation to things like public hospitals. We have certain responsibilities in health, so do the states, but given the strong budget position the Commonwealth has and given the strength of our economy, people in regional communities say why should we lose basic public services? And they don’t care who delivers the service as long as it gets delivered. People are not very hung up these days about whether the state government or the Federal Government delivers the services, they just want the service delivered.

PANTELIS:

But the criticism being levelled though is that you’ve done this in the lead up to the election obviously and this is being seen by obviously the Labor Premiers in particular, and the Opposition Leader federally, as cynical vote grabbing.

PRIME MINISTER:

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Well I think you can be certain of this that if you had a federal Labor government in power at the present time they wouldn’t be proposing to do this because they wouldn’t act contrary to the wishes of a state Labor government which rather underlines the point that it’s not a good thing for the country to have the same party in power everywhere.

PANTELIS:

It seems to me though that federalism to some degree has been turned on its head because for generations the Liberal Party’s been arguing to decentralise the Federal Government, Labor has been trying to centralise it and now you’re both arguing the opposite.

PRIME MINISTER:

Well I take a very practical view of federalism. What people want is outcomes. I don’t find anybody marching in the streets for states’ rights and I don’t find people marching in the streets for centralism. I do occasionally encounter people marching in the streets to preserve their public hospitals and what we’re concerned about here is the right outcome. Now I’m not arguing that you should change all of the arrangements, what I’m arguing though is that where the state has not met its obligations, then the Commonwealth should intervene. We’ve done that in the Northern Territory, it was a Territory but it’s the same principle. We’ve done it in the Murray-Darling Basin; we’ve had a cooperative arrangement in the Murray-Darling Basin now for years that has not worked. No part of Australia’s suffered more than South Australia, no state has a greater interest in our plan succeeding than South Australia and I for the life of me can’t understand why Mr Rann doesn’t get onto the Victorian Premier and say look mate, South Australia is going to suffer if you don’t sign up. I mean this is, you talk about the run up to an election, Mr Rann’s obligation should be to get this plan up and running as soon as possible. The fact that he hasn’t done so might have something to do with the election also, I don’t know. But he’s agreed, he’s signed up, New South Wales has agreed, and Queensland has agreed but Victoria is being stubborn and parochial and it’s not helping.

JOURNALIST:

Well John Brumby’s suggesting that the Federal Government is considering caving in on the national water plan.

PRIME MINISTER:

Caving in? I don’t know what he’s talking about, where did he say that?

JOURNALIST:

Well I have it from AAP at the moment.

PRIME MINISTER:

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Well AAP is wrong.

JOURNALIST:

Alright so that’s not the case obviously?

PRIME MINISTER:

No.

JOURNALIST:

The stock market at the moment I was just speaking to an economist from CommSec just before 10 o’clock, he says that things should be fine in the long-term, is that your view also?

PRIME MINISTER:

Well the Australian economy is strong. The first and most important thing I say to all of your listeners is that our institutions are strong, our financial institutions, and because of the careful economic management of the last decade, our financial position as a country is very strong. We have a balanced Budget, a Budget in surplus we’ve paid off all of that debt and this is a strong economy and that is the most important underpinning we have and I have no doubts that we will be able to absorb and handle these changes coming from other parts of the world, the impact of stock market changes in the United States. That doesn’t mean to say that no government can, any government can guarantee that everybody’s share price will remain the same, will continue to go up. I mean the stock market has an element of speculation, that’s the nature of the beast. But the fundamentals of the Australian economy are very strong and something like the last, what’s happened over the last few days is a reminder that you can’t take economic prosperity for granted. It’s a reminder that you need to have very strong and experienced hands in charge of things and you do need to remember that economic strength and prosperity is not something that comes by accident, it is a product of good management and careful work.

JOURNALIST:

Locally yesterday, a South Australian Aboriginal man was awarded half a million dollars, he’s a member from the stolen generation. Are you concerned, although this is primarily a states’ issue, but are you concerned that this could open flood gates across Australia?

PRIME MINISTER:

What I thought I would do with that is get some advice on what the judgement of the South Australian Supreme Court means. I’ve read the reports and it’s an interesting case, it’s an interesting outcome. I’m getting some advice on it at this stage, therefore I can’t offer a view.

JOURNALIST:

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And finally, the Mohamed Haneef case, the AFP has been criticised heavily as has the Government to some degree, the Immigration Minister primarily, over his decision to suspend the visa, but the information released last night on the SBS program Dateline, does that suggest…to some degree suggesting that Haneef may have Al Qaeda links, does that in some way vindicate the AFP primarily and also the Government to some degree?

PRIME MINISTER:

Well I wouldn’t make a comment about that. I knew nothing of that suggestion until it appeared in that program, I have no way of knowing whether that claim about a link between Al Qaeda and Haneef is valid and therefore I am not basing any assertions on that.

JOURNALIST:

Has the AFP copped criticism unfairly do you think?

PRIME MINISTER:

Yes, I defend the role of the AFP. It is difficult work, we are living in a completely new environment and people should remember that the agency more than any other which is protecting the Australian people against potential terrorist attacks is the Australian Federal Police so when people put the boot into the coppers they ought to keep that in mind.

JOURNALIST:

Prime Minister John Howard thanks for your time today.

PRIME MINISTER:

Thank you.

[ends]

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