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Prime Minister maintains the Government's commitment to Medicare

PRU GOWARD: The Prime Minister, John Howard, marking his first 100 days in office on Monday, the Queen's birthday. It has been a beginning marked by the terrible tragedy of Port Arthur and an extraordinary debate about gun law reform, which has followed - a debate in which the Prime Minister personally has played a very decisive role.

But it's also been about plans to cut $8 billion from the Federal budget over two years, without breaking election promises; a new industrial relations Bill; and legislation to sell a third of Telstra. None of this, surely, the stuff of honeymoons.

Well, John Howard, welcome to Radio National.

JOHN HOWARD: Good morning, Pru.

PRU GOWARD: Well, John Howard, let's just start with the gun laws. Rob Borbidge has called on you to explain the new laws to next month's National Party State conference. Will you do that?

JOHN HOWARD: I will go to the conference .. called upon - it's not quite the right expression. I've been invited by the Queensland National Party to go to the conference. I think that's a courtesy they would have extended to me, no matter what the circumstances, and I'll be very happy to go to Townsville to address the conference and to talk about other things as well.

Rob Borbidge also told me, yesterday, and he told the public that the Queensland Government continues to support the Police Ministers' resolution that was agreed in Canberra a few weeks ago. Rob and his colleagues, given the constituency they have, have really been very strong and very helpful, and I thank them for that. And I take the opportunity of saying that my own commitment to these changes has not wavered; it won't waiver. And people should understand that the overwhelming majority of Australians, including the overwhelming majority of Australians in rural areas, want tougher gun laws, and I am determined to do all I can at a national level to bring them about.

Ultimately, the States have got the constitutional power; so, we need to keep the States together on the issue. But it'll come up next week. The Premiers will be in Canberra to talk about some other matters as well; so, I'll take the opportunity of raising it with them to seek endorsement at the head of government level.

PRU GOWARD: And we'll get to Premiers' Conference in just a moment, but I mean there has been enormous fuss made by dissenters in National Party ranks. You would have to concede it will cost you some votes. The question is how many. Could you possibly lose a Senate position to a new party?

JOHN HOWARD: I don't know that it will, but, Pru, it's one of those things instinctively it's the right thing to do and I've committed myself to it. The Federal Government is committed to it and....

PRU GOWARD: And you're not worried about the vote?

JOHN HOWARD: No, I'm not.

PRU GOWARD: And you don't concede that there is now a ground swell for a new Right party, in reaction?

JOHN HOWARD: No, I don't. I'm unconvinced about that. I mean, Graeme Campbell is .. I mean, some of the things Graeme Campbell says I agree with: his attacks on political correctness echo many of the attacks I make on political correctness. So, he needn't imagine that he's sort of got a monopoly of those sorts of issues. He's really tramping over ground that is already occupied by the broad spectrum of the Coalition. There's some of his views go far beyond mine.

PRU GOWARD: Sure. But how damaging do you think this dissent is? I mean, the Bob Katters?

JOHN HOWARD: I don't think it's very damaging at all. Look, Bob Menzies had people like Ian Wood who attacked everything he did; Billy Wentworth, God bless him. You know, I've got Bob Katter.

PRU GOWARD: For your sins?

JOHN HOWARD: Well, no, no, no. Bob attacks everything. I predict now that just about every major decision that we take, Bob will attack. But any way, I mean, you have those and the best thing is not to lose any sleep over that, but everybody factor that in from now until the turn of the century, sort of thing.

PRU GOWARD: In a way, though, I wonder if the gun laws was an easy decision to take. I mean, you have the backing of the Labor Party and you've got 80 per cent community support. The $8 billion budget cuts are a very different proposition. And, I mean, I think the big mystery for most people is how you are going to achieve cuts of that order without breaking election promises or cutting programs?

JOHN HOWARD: Well, I haven't said that we won't cut some programs, and we have already foreshadowed some programs - small ones it will be. It is an aim and to get the budget into underlying surplus by .. or underlying balance in two years; that is the aim. I place a very high store on keeping the sort of commitments that we went to the people with at the election, and I emphasised the other day that when it comes to the crunch, keeping faith with the people is the most important thing. It is difficult. I understand that. And we are well into the nuts and bolts of what is involved. We're going through that difficult stage where you can't....

PRU GOWARD: No, you're using the word 'aim'. I wonder if that's....

JOHN HOWARD: Well, I'm not using the word 'aim'. I'm just reminding you that that was the word Peter Costello used on 12 March, and I'm not re-inventing it.

PRU GOWARD: I know. I'm just wondering whether this suggests that....

JOHN HOWARD: I'm just reminding you that that was the language that was used. I mean, it's very easy in these sorts of debates for people other than us to redefine what we have said. Now, that's happening in relation to alleged election commitments. I've read in the paper that I've made election commitments that I've never made at all.

PRU GOWARD: What about higher education, though?

JOHN HOWARD: Well, higher education will obviously have to make a contribution and it is possible to get a contribution from that area without breaking any of the election commitments that we made.

PRU GOWARD: What, so without raising HECS or....

JOHN HOWARD: Well, you've got to remember once again the commitment in the HECS area was that we wouldn't change the goal posts after the game had started for current students; that was the commitment. So, the way I keep reading it in the press is that we gave commitments in that area to touch absolutely nothing. Now that wasn't the case. If you read the higher education policy, you will find the commitments were in relation to operating grants and they were in relation to HECS affecting people who had already started, and in relation to the HECS contribution that they made during their course, the level of that contribution. Now that was where the commitment was. Now....

PRU GOWARD: So new students....

JOHN HOWARD: Well, look, I'm not going to .. I'm simply pointing out, Pru, that it is possible for a contribution to be obtained without breaking commitments. Now, the final shape of what we do in higher education will be determined, for example, after I've met the vice-chancellors, which I will do in a couple of weeks time. I'm quite happy to sit down and have a lengthy, calm, rational talk to them. They are a well organised group of men and women, and they know how to play the political game. I don't blame them for that. And I'll be very happy to sit down and talk to them and listen to what they've got to say, and I hope we can have a sensible discussion. And I want to say that I think Amanda Vanstone is handling a difficult job in this area with considerable application and guts.

PRU GOWARD: Isn't the problem with something like cutting higher education that for 20 years Australians - it's a middle class thing, really - for 20 years Australians have had free university education? It would be very difficult to really take that off them. I mean, I know there's been a HECS contribution, but essentially they've seen it as free.

JOHN HOWARD: Can I say I think that was a good reform by the former Labor Government.

PRU GOWARD: Can we still afford it?

JOHN HOWARD: It's a great pity that the Australian community was ever sold the myth of free university education years ago by the Whitlam Government. I think it was a terrible mistake; it was a delusion. It is difficult and we'll try and do it in a fair manner, but....

PRU GOWARD: But as they would say 'Why should university education be cut when defence is not going to be?'.

JOHN HOWARD: Well, the defence has already been cut to the bone.

PRU GOWARD: By Labor?

JOHN HOWARD: Yes. I mean, we are down to 2 per cent of our GDP. We live in a region of the world which is potentially less stable, not more stable, as a result of the end of the Cold War, and the idea that you can cut defence further and hold yourself as a responsible government, and let me say now that you've asked me the question, we have said there will be no overall cuts to the defence budget. There'll be a cut in the administration of defence and the money that will be saved there will be shifted to the front line, to the soldiers, not to the bureaucrats. Now that will involve labour shedding in the bureaucracy of defence, but the money saved will go elsewhere.

Now, I make no apology for that, and that policy will remain because it's a very important national priority.

PRU GOWARD: Bearing in mind that in Opposition, you did not anticipate cuts to areas like higher education, is it time over the next few months to talk to the electorate about why that's necessary?

JOHN HOWARD: No, look, I would agree more talk is needed from me and my Ministers about why budget cuts are necessary.

PRU GOWARD: But why some rather than others?

JOHN HOWARD: Oh, yes, yes. I will obviously do that. But all of these things involve value judgments. There will be some of your listeners who won't agree with my value judgment about defence. They will say 'Well, rather than cut a few hundred million out of higher education, you should cut another few hundred million out of defence'. My answer to that is that's already happened. It's already down to the bone, but there'll still be people who will say 'So is higher education'. I mean, in the end, somebody has got to make a decision; somebody has got to allocate the priorities. I would argue that there is a greater national need to preserve the current level of defence spending because it's already been cut to the bone.

PRU GOWARD: Now, next week you've got the Premiers Conference. I guess the Premiers will be expecting a pretty rough time too, when it comes to money?

JOHN HOWARD: Well, obviously an area like that can't be completely immune, although I'm very conscious of the previous government's guarantee. I mean, there are some areas where the financial relationship is causing me a little bit of worry between the Commonwealth and the States. I mean, for example, there's quite a bit of cost shifting going on between the Commonwealth and the States.

PRU GOWARD: What do you mean?

JOHN HOWARD: Well, for example, there's plenty of evidence to me that, you know, you no longer in public hospitals get the pharmaceuticals on the hospital premises. You go next door to the pharmacy and get them.

PRU GOWARD: And that's then the Commonwealth.

JOHN HOWARD: And the effect of that is that the Commonwealth has to pick up the bill. I've seen estimates of up to $300 million of cost shifting involved in that. I think some State government departments are using things like sales tax exemptions on motor vehicles to give very generous salary sacrifices to many of their employees, and the net effect of that is to ransack the Federal revenue.

PRU GOWARD: Oh, look at the smile on your face! You're getting ready to.

JOHN HOWARD: No, but there are things like that, that they will have to be put into the equation. Now, look, I know that a lot of the States have gone through very rigorous cost-cutting exercises themselves. And can I say of what we are doing at a Federal level - and I don't like the fact that there are redundancies in the Federal Public Service; I don't enjoy it one moment - but what we are doing there is no different from what many of the States have already done on both Labor and Liberal, and what private enterprise has been doing now for the last 10 or 15 years. The idea that restructuring stops at the door of the Federal bureaucracy and doesn't go in there is just, I'm afraid, unrealistic.

PRU GOWARD: The diesel fuel rebate? You've got a very unhappy rural community.

JOHN HOWARD: Well, I understand the importance of that. Look, I can't .. I can assure the farming community that I am very, very well aware of how important that it is to them. Pru, the difficulty you always have at a time like this is you can't rule things in or out while they're still being considered....

PRU GOWARD: Sure. I guess what we're drawing....

JOHN HOWARD: ...and one has to live through that. But I'm not the first Prime Minister that has had to deal with that, and I won't be the last.

PRU GOWARD: But we're drawing a picture of, as you have said, lots of upset people -hardly a climate, if you need a double dissolution next year, and a very unfortunate beginning. And I guess the final question on the Budget is: are you still sure that you need to cut $8 billion? I mean, are there not some....

JOHN HOWARD: When you say 'a very unfortunate beginning' .. I'm sorry, I don't even begin to understand what that statement means.

PRU GOWARD: To have to take things off people when you've just started.

JOHN HOWARD: Well, I never pretended that we were going to be a government .. there isn't a government around that can credibly say 'We'll never have to take a hard decision'. And we will deliver in the Budget our family tax package; we will deliver the private health insurance rebate commitment; the capital gains tax reduction for small business. We will deliver those. We will not break our commitments in relation to Medicare. I mean, I want to make it perfectly clear that none of the changes I will discuss next week with the State Premiers will involve compromising our commitment to the retention of Medicare, the retention of community rating and the retention of bulk billing. If I made any commitment in the last election campaign, it was a commitment to leave Medicare intact. I repeat that commitment this morning; I will repeat it next week. And I want to make it perfectly clear to you - anybody who cares to listen - that we will not touch our commitments in relation to Medicare. And any speculation that has been around to that effect has been misplaced, and I have a very strong sense of the obligation I have with the Australian people in relation to that.

PRU GOWARD: Now, you've got other commitments - industrial relations and the Telstra....

JOHN HOWARD: Yes, and we are going ahead with those.

PRU GOWARD: How do you feel you're managing the Senate? I mean, do you think you might have to change tack? I mean, she's not going to go away. She's there with the balance of power.

JOHN HOWARD: Well, I think we've only just sort of begun the Senate debate. The real test will be when those Bills come back from those committees. The criticism that I have of what the Senate has done is to apply this so-called 'cut off' rule where you won't debate something .. you won't decide on something unless it's been....

PRU GOWARD: It was your rule in Opposition, you know.

JOHN HOWARD: Hang on, Pru, but it can't by definition apply to a first term of a new government, because we don't have a previous session in which we could have introduced the legislation. On that basis, I think they're being a bit unreasonable. But, Pru, I mean, we weren't in power the last session the Senate sat, so it's a bit rough to apply that rule to a new government. It was never applied to the Labor Party in its first session. So, I don't think it is fair for you to say it's our rule being applied against us; it's a new rule being applied against us in the first session of a new government. However, I think we'll probably see some discussions between myself and the minority parties over the next few weeks and few months.

I'm patient. I don't have inexhaustible patience. I don't want a double dissolution. I don't think the public wants a double dissolution. The public doesn't want another election. The public wants us to get on governing. They decided to make a change of government; they did it in a big way. We still have a great amount of goodwill in the community and they want us to get on with the job, and they don't want to be distracted by a double dissolution.

PRU GOWARD: And just a final one on an issue that's almost off the planet, if you like, for a lot of Australians, but I think in the long run is a very important one and that's your response to greenhouse. Now, it is a difficult issue for Australia, but are we being a little bit timid? I mean, do you not think Australians couldn't bear some increase in tax for their future generations?

JOHN HOWARD: I don't think we're being .. I mean, the situation is that we faced being trapped by an international regime that suited the Europeans and the Americans and the developing countries, but was manifestly unsuited to this country, and I wasn't going to allow that to happen. We have achieved a lot and we are committing ourselves to a lot, but I'm not going to have a situation where the rules are made by the Europeans, the Americans and the developing countries to the detriment of Australia.

PRU GOWARD: Prime Minister, thank you very much for coming in this morning.