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Prime Minister discusses the 'Tampa' case in the Federal Court; US free trade agreement; and lamb tariffs.



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www.pm.gov.au

7 September 2001

TRANSCRIPT OF THE PRIME MINISTER THE HON JOHN HOWARD INTERVIEW WITH ALAN JONES, 2UE

Subjects: Tampa court case; US free trade agreement; lamb tariff.

E&EO………………………………………………………………………………………

JONES:

Prime Minister good morning.

PRIME MINISTER:

Good morning Alan.

JONES:

Before we get to the free trade, can you understand the public concern that the plaintiffs in this matter before the Federal Court can’t name any one who’s represented? Now, you’re a lawyer, my listeners want to know how does this matter get before the court? There are people who are waiting 18 months for a worker’s compensation case, if you’re injured in a car accident it takes until you’re in your grave to get into court, this mob just walk up and walk in.

PRIME MINISTER:

Well that is a matter entirely within the control of the courts. The question of whether anybody is given a right to appeal before a court or appear before a court is entirely in the hands of the courts.

JONES:

They can’t name their client.

PRIME MINISTER:

Well, that is true, that is true. They have not told the court as I understand that they’re acting for any individuals, they’ve put certain points of view. But Alan, I don’t want to talk about the court proceedings if you understand the decision might be brought down by the judge in

PRIME MINISTER

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the next day or two and whatever views I have on that issue I don’t think it’s the right thing to talk about them.

JONES:

Ok, people are also writing to me about this issue which I raised with you last week about piracy. Because this captain of this ship defied instructions from the Australian Government and defied accepted maritime law when he entered Australian waters. What happens to people when they do that?

PRIME MINISTER:

Well he certainly did defy our instruction and everything that we have done was, on my advice, perfectly legal and we stand by it absolutely without any qualification. We don’t have advice to the effect that he was guilty of piracy, I don’t think that would be an appropriate interpretation of what is involved. But can I just say one thing…

JONES:

He’s heading in one direction and turns the boat around because of the behaviour of those on board.

PRIME MINISTER:

You mean piracy by the people on board?

JONES:

Yep.

PRIME MINISTER:

Well some people would argue that, I haven’t taken detailed legal advice on that because at present it’s not directly relevant, although it’s something where behaviour might at some time in the future become relevant to decisions which are being made about how they are processed and what the consequences are, but right at the moment it’s not something that I’ve directed my mind to. Can I just say one thing about the law in all of this: if the Government’s Border Protection Bill had been passed by the Opposition and the Democrats then any argument about the legality of what the Government had done would have been totally and completely academic.

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JONES:

Correct. Just one final thing, The Daily Telegraph ends an editorial today by saying the broader issue is the right of the court, on a court to act against the best wishes of the elected Government. In the eyes of the public it’s the role of Governments to determine policy, not an unelected judiciary. Under our constitutional system the powers of the state and judiciary are separate. This is the way they should remain without the lines being blurred by the legal profession, both parties should withdraw and the case be abandoned. 90% of Australians I think would agree with that.

PRIME MINISTER:

I’m sure a lot of people would agree with that. I, because it is something which is in front of the court, I don’t want to buy specifically into that. But certainly I hold tenaciously to the view that we do operate in this country under the doctrine of the separation of powers, there are things for the courts and there are things for elected Governments but I don’t want to extrapolate that principle into this particular situation for reasons I’m sure your listeners will understand.

JONES:

Thankyou, you’re off and amongst other things you’ll be talking about a free trade deal, bilateral free trade deal with the United States of America. Earlier this year the New York Times indicated that farm subsidies in America last year were $22 billion and the Times then said law makers have already made one fundamental decision, they’ll keep the subsidies, phase-outs are a thing of the past. How can you have a fair-dinkum trade deal when the agricultural sector in America is getting $22 billion in subsidies?

PRIME MINISTER:

Well you’ve put your finger on one of the hard big hurdles of negotiating any free trade agreement if we’d started it. There would need to be concessions for Australian farmers for there to be any prospect of us negotiating a free trade deal with the Americans. I’ve said that all along and I’ll say it again now, we need concessions for our farmers if we are to make any progress. But you won’t find out if you’re making progress unless you start. President Bush telephoned me last night and we discussed my coming trip and we talked about the free trade issue and as I indicated a day or two ago, right at the moment the administration is negotiating with Congress to get trade promotion authority which really gives them their legal underpinning to negotiate the whole gamut of bilateral and multilateral trade arrangements on behalf of America. And for that reason that timing problem, a coincidence of my visit with that negotiation, I don’t expect, neither of us expect that we can have a firm agreement to begin negotiating a free trade agreement but it is an issue I told him that I would expect our two countries to return to once the negotiation between Congress and the Administration was out of the way.

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JONES:

Yes, one Texas farmer last year got subsidies totalling $2.3 million. When he was asked the question about this he said ‘we do make a living as farmers but actually it would be hard to farm without subsidies’.

PRIME MINISTER:

Well Alan, the unfair thing about the world trading system is that other countries, big countries like America and the European Union and Japan, they can afford to massively subsidise their farmers, they make it very hard for us. Although we do get breakthroughs, I mean we’ve had a great breakthrough on lamb, that will disappear in November.

JONES:

The tariff will but the subsidy to the lamb farmer will stay.

PRIME MINISTER:

With the tariff gone we’re in a position and in fact our lamb exporters have been doing very well over the last couple of years.

JONES:

They could compete on quality independent of the price.

PRIME MINISTER:

Well on this particular set of circumstances they can, but look Alan, I find the world trading system massively biased against Australian agricultural producers. It’s biased against agricultural producing countries generally and it is particularly biased against Australian farmers and there’s no way we will sign a trade agreement with anybody that doesn’t contain some improvements, some enhancements for Australian farmers. I mean that is an absolute. But you have to find out what you can get, there’s no point in saying that you will never achieve a free trade agreement with the United States and therefore you should not start to negotiate. That is really just absolutely foolish. And all I’m saying is let us sit down, let us explore it, let us negotiate it and see if we can achieve something. Now if we can’t well we know that and then we try other strategies.

JONES:

You have a withholding tax arrangement of 15% from profits from Australian investments in the United States. You’ve got Australian businesses hammering on your door saying if you add that to the tax rate, the effective tax rate becomes something like 50%. Are you under pressure to do something about that level of withholding tax, reducing it from 15% to 5%?

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PRIME MINISTER:

That whole area has been under study over the past few months and it’s under negotiation with the Americans in the context of our double taxation arrangements and that’s something that we continue to look at. I understand the views of the Australian business community on that, they have a point and it’s very important in globalised economy that it be as easy as possible for Australian companies to expand into the United States. Globalisation flows in both directions but when we talk about foreign investment we tend to think in this country just of other countries investing in Australia, what about Australian companies investing in the United States. And if we want to keep Australian companies in Australia, keep their headquarters in Australia, we have to make certain that the tax regime is as even as possible between Australia and other countries so that there is no incentive for companies to relocate elsewhere.

JONES:

Now of course you’ve got withholding tax, your dilemma, haven’t you, on royalties remitted by American subsidiaries here which is a 10% thing so if you had to yield to the American views on that 5% you’d be short on revenue.

PRIME MINISTER:

Well they are things we’ve got to take into account, but it is an issue that is legitimately put by the Australian business community and let me say this to them we haven’t ignored what they’ve put to us but it’s not something that gets solved overnight.

JONES:

And you won’t be here on the weekend for St George, Prime Minister.

PRIME MINISTER:

I won’t indeed. I wish them well, I’m going at midday on Saturday and I hold my breath and wish them well.

JONES:

Good to talk to you, thank you for your time.

PRIME MINISTER:

Thanks Alan, bye.

[ends].