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Transcript of interview with Neil Mitchell: 3AW Melbourne: 24 July 2013: Election; Better Schools Plan; FBT changes; PNG asylum seeker deal; debate with Opposition Leader; Defence Minister; economy

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Subjects: Election; Better Schools Plan; FBT changes; PNG asylum seeker deal; debate with Opposition Leader; Defence Minister; economy.

HOST: Mr Rudd, good morning.

PM: Good morning, Neil.

HOST: Do you understand, after years of frustration, I think people from the left and the right want an election as soon as possible?

PM: Well, there’s a thing called a Constitution, Neil. It says when it can be held: it can be held anything up to October/November.

I’m in the business of governing, and there are things still to do.

Once of the reasons I’m in Melbourne is for discussions with Premier Napthine on trying to get an agreement on the Better Schools Plan which would benefit every school where the kids of your listeners go.

HOST: But Prime Minister, there is a frustration over the hung Parliament.

You were not elected Prime Minister by the people. We were promised September 14 - is that still a chance?

PM: Neil, there is always speculation about election dates prior to any election.

I’m adopting a practice no different to that adopted by John Howard and before him, Paul Keating.

HOST: But the different matter here is you were not elected Prime Minister.

PM: The Constitution governs these things.

We can all have different opinions, but it says when an election should be held and contains absolute limits in terms of when that should be had.

But to answer your specific question about why we’re not having an election now, there is the business of government to attend to.

I’ll just point you to a pretty important one, which is the Better Schools Plan.

And if that’s agreed by us and Victoria, given a few days of negotiation to go ahead, you’re talking there about $3 billion or $4 billion worth of additional investment into every school in Victoria. That’s important.

HOST: I agree it’s important. But do you understand the frustration of people in wanting an election soon?

PM: What I understand is I’ve got a responsibility to govern, Neil.

And I think with all this, listeners are more interested in whether they’re going to get an outcome for their schools.

I was at a school called Aquinas College yesterday out in Ringwood.

And Aquinas, as a result of the agreement Bill Shorten has reached with the Education Minister - with the Catholic School system - will be more than $6 million better off over the next 6 years.

That can only be done as a Government, not in a campaign.

HOST: Prime Minister, we haven’t got long so I’d like to get through a few other issues.

The FBT changes to cars: do you accept the Government misjudged the impact on jobs, the impact on lower income earners, and the impact on the car industry? You got it wrong.

PM: No, I don’t accept any of those propositions, Neil.

This has been worked on by the Treasury, and by the Treasurer, over quite a number of weeks. And went through the Expenditure Review Committee of the Cabinet and was deeply considered.

I remember the difference here, Neil. On the one hand, it’s between whether you’re going to continue a loophole which benefits the private use of motor vehicles…

HOST: Prime Minister, it’s not a loophole. Your own Government introduced this two years ago. That’s unfair to call it a loophole. You introduced it and boasted about it.

In 2011 - May 10, 2011 - you said this will be good for Australian families.

PM: Through a loophole in the tax system - a tax concession - which makes it possible for you to claim a tax benefit for the private use of a vehicle as opposed to continued and legitimate use of tax concessions for those who are using their car for business purposes.

HOST: So do you accept jobs will go…

PM: Let’s put it in a bit of context: there are 3.6 million workers in Australia who are employees, self-employed, sole traders, claiming deductions for work-related travel…

HOST: Prime Minister do you accept it’s going to cost jobs in the car industry and has already cost jobs in the packaging industry?

PM: Well, about the car industry is that this Government introduced, Neil, a $5.4 billion new car plan and Mr Abbott is threatening to pull half a billion dollars out of that.

That is so important, Neil, for the future of the car industry.

HOST: Do you accept this will cost jobs in the car industry?

PM: Neil, every industry in Australia is constantly subject to one adjustment or another because of tax changes, policy changes, or changes in the global market.

It’s quite wrong to say that new challenges in the car industry are solely attributable to changes…

HOST: The car industry says this will cost sales and jobs. Is the car industry wrong?

PM: The car industry - as any industry lobby group does with the Government in Canberra, Neil - will come to you with a series of requests that they want. Some of which you can accept, others you can’t.

The one that we accepted was this: several years ago we needed long term certainty with a $5.4 billion car plan.

HOST: Prime Minister, with due respect that’s got nothing to do with it.

PM: It has everything to do with it Neil.

HOST: The point here is you’ve introduced policies that are costing jobs.

PM: Because the absence of a long term policy supporting the car industry, what they have told us over many years is the future of the industry would be deeply uncertain.

We’ve gone in there, co-invested, new car plan of $5.4 billion, and now Mr Abbott, the alternative Prime Minister, wants to rip half a billion out.

So there’s no difference between a car industry coming to Canberra and saying, ‘Please look after us through one form of tax change or non-tax change’ or any other industry group.

HOST: Ok, so do you deny it will cost jobs in the car industry?

PM: There will always be adjustments in the way in which businesses operate and that’s because of a whole range of factors and I think people understand that.

HOST: Do you accept that this is - the majority of people caught up in this - are earning under $100,000, are not fat cats?

PM: Of course I’m not going to suggest that is the case.

What we’re talking about here is 320,000 people who use this current tax concession as it relates to a tax concession for the private use of motor vehicles. Of whom, I’m advised by the Treasury, two-thirds of these folk earn over $100,000 a year.

HOST: So you deny the 70 per cent are actually earning under $100,000 a year - low paid charity workers included?

PM: I’m working here, Neil, on the basis of advice I’ve received from Treasury.

I’m also advised by the Treasury that 3.6 million workers will not have their claims of reductions changed one bit for work-related travel.

What’s the principle here: A tax deduction for private use of a motor vehicle or a tax deduction for business use?

HOST: Well your Government introduced it, Prime Minister, the 10th of May 2011, saying it would save $1 billion and was good for Australian families. What’s changed?

PM: Well you might recall that back in the period of 08,09,10, the economy - including the car industry - coming through one of the most difficult global economic crisis was in need of all sorts of support.

HOST: But you said it would save $1 billion.

PM: We did a whole range of things to support the economy during a very important and difficult period of transition.

HOST: You said it would save $1 billion in 2011 and now you’re dumping it.

PM: Motor vehicle industries around the world, in countries in Europe and elsewhere, did appallingly during the global financial crisis.

We undertook a whole series of measures in order to go out there and support the industry: $5.4 billion, Neil. That’s what we’ve invested.

HOST: Prime Minister, are you aware the reports of rape, abuse, violence on Manus Island? How do you fix it?

PM: The first thing I’d say about that is we don’t apologise for our policy of saying to people smugglers that if you bring people to Australia by boat then they will not be settled in Australia.

Secondly, what we say is that under that policy, if you come to Australia by boat then you will be assessed in Papua New Guinea, including on Manus Island.

Unless you’re proven to be a bona fide refugee, the agreement that we have with the Government of Papua New Guinea is that you’ll be settled there.

As for the reports confirming Manus - and the Minister of course is investigating that - I’m advised that the Minister asked the journalist for evidence of this a week or so ago.

As of then it wasn’t forthcoming but any allegations of this nature, particularly serious ones, we’ll investigate it properly.

HOST: Do you have any idea what this deal will cost Australia over the forward estimates, next 4 years?

PM: The Expenditure Committee Review of the Cabinet works its way through these things methodically - particularly in terms of what is ultimately at stake here, which is the proper implementation of the regional settlement arrangements.

What we are seeking to do is reduce the number of boats coming into Australia - each of which costs the taxpayer a lot of money.

HOST: Do you have any idea of what it will cost?

PM: That’s why we have the Expenditure Review Committee. And look, the Treasurer’s already indicated, and the Finance Minister too, that will be made clear when we’ve produced economic and financial statements.

HOST: So has the deal in fact been done without knowing what the cost is if they’re still working through it?

PM: We have all the variables at our disposal, all the costings, and that will be done in the normal, proper processes applied to the Australian Government.

None of which disciplines, by the way, seem to apply to the alternative Government at this stage.

As you said at the beginning of this interview, Neil, an election isn’t all that far away.

I don’t see much scrutiny, for example, of Mr Abbott saying he’s got a $70 billion black hole and how he expects to fill it.

HOST: You can’t tell us what it’s going to cost in Papua.

Let’s get to the subject of asylum seekers which I think is of great interest, I think, to our audience. Would you be prepared to debate Tony Abbott on this?

PM: Absolutely. Any day. Tomorrow - your studio.

HOST: So you would sit down, with the Opposition Leader and debate what, asylum seekers specifically? Or anything?

PM: Asylum seeker policy. That’s what you’ve just nominated.

Mr Abbott has said he’ll go out there and campaign on three things.

His first lie is about debt and deficit being out of control - I challenged him to the National Press Club to debate that and he said no.

He’s also campaigned upon the carbon tax. Well we abolished the carbon tax and I challenged him to a debate at the National Press Club on that and he said no.

Now you and I are talking about asylum seekers. I put my policy forward, which is aimed to destroy the business model of people smugglers around the world.

So, you provided the forum. I accept the challenge. I’ve got a few things on in Tassie tomorrow - I’ll push those off, I’ll stay on in Melbourne and I’ll be in your studio for it if he accepts.

HOST: Ok, well we’ll ask him.

What other countries will be used for a similar deal to PNG?

PM: Well what we’ve said, Neil, is that our job in the regional resettlement arrangement is to destroy the people smuggler’s business model.

What that means is that the people smugglers can’t go to any country of origin and to any person in various circumstances and say, ‘Come with us, and we’ll give you a virtual guarantee of landing in Australia and being settled there ultimately’.

HOST: You will use other countries in a similar deal to PNG?

PM: I’m trying to explain to your listeners, Neil, the actual basis for the policy and therefore why we need the cooperation of those countries like PNG.

So if other countries, for example, have also ratified the Refugee Convention and are therefore, under the terms of the Convention, providing proper protection for asylum seekers - as we should, and people should be treated humanely which is why we take the allegations concerning Manus Island very seriously - then we’ll cooperate with them.

So that invitation remains open.

HOST: Prime Minister I know you need to get away. Couple of quick ones.

There’s a suggestion of reports coming out of Canberra, unconfirmed reports, that you’ve already chosen your Defence Minister if you’re re-elected. Is that correct?

PM: Haven’t chosen anybody, but let me tell you, we’ve got a situation where the Minister for Defence, Stephen Smith, who has served very well as Defence Minister of Australia and prior to that as Foreign Minister, is not recontesting the election.

And therefore, if the Government is returned and with support of the Caucus we’d need to look at who would replace him.

And my view and I’ve said this privately to colleagues over a long period of time, is: the best person around to do that, if the Government’s returned, is Mike Kelly, who is currently the Minister for Defence Material.

HOST: The member for Eden-Monaro.

PM: The member for Eden-Monaro. But more importantly a former Army Colonel, previously served in Iraq, and also a PhD, nice bloke, with direct military experience.

So I think he’d be good, but I think it’s important we have strong hands around that particular responsibility.

HOST: If I may - very, very, quickly - we’ve had a couple of questions from callers.

One, will you stay as Opposition Leader if you lose the election?

PM: Well you know something Neil? I’ve got one interest in contesting the election and that’s to be re-elected as the Prime Minister of the country.

That’s all I’m focussed on; I’m not answering any hypotheticals.

HOST: Ok. The other point: a caller who has already lot their job through the FBT. They work in the salary packaging industry.

What do you say to her? She rang in wanting to talk to you. We haven’t got time for calls. What is the answer to her? She’s lost her job because of this.

PM: Well, the circumstances of any business are going to be very different. I recall one firm making a similar claim the other day.

Let me tell you there’s going to be a whole lot of reasons why businesses are restructuring, and tax changes might be one of them. I accept that.

Any anyone losing their job for any reason is a bad thing, and that is why we need to grow the economy, diversify the economy, create new jobs and new sectors to deal with the big economic transition that lies ahead which we call the end of the China mining boom.

HOST: But you do accept tax changes are one of the reasons people are losing jobs?

PM: Tax changes have occurred at a lot of times in the past, Neil, and they’ll occur a lot of times in the future.

Hard decisions have to be made. Hard decisions on the economy.

And the bottom line is your listeners have said for a very long time, they want to see an abolition of the carbon tax which affects every household in the country.

It affects people, so by abolishing carbon tax you therefore save families about $380 a year - better off in the first year - and that costs money.

And unlike Mr Abbott who thinks he can just print it or pull it out of the air, we’ve got to fund these changes and that’s what we’re doing. It’s the responsible approach to being the leader for the country rather than just pulling things out of the air.

HOST: You mention hard decisions: is it right your razor gang is already working on further cuts? And that if re-elected you’ll have to introduce some pretty tough cuts to the Budget?

PM: Well, Neil, I make no excuse for the fact that every Government in the world - because of the impact of the rolling global economic recession - is finding it difficult with their budget.

Revenues are down in most countries in the world. We’re not alone and we’ll continue to make the right decisions - the right decisions in the global financial crisis which prevented the economy from falling into recession, mass unemployment, and people’s living standards collapsing.

We intervened, we changed that.

Now we have a new economic challenge, called the end of the China resources boom. We’ve got to adjust again, and that means: diversify the economy, growing new businesses, constructing services, health services, and education services.

All those things are going to generate big things in the future, including in manufacturing - new jobs.

And that’s the economic policy we are preparing. That’s what I outlined at the National Press Club the other day.

HOST: Thank you for your time. We’ll get on to Tony Abbott’s office. If it’s possible we’ll get back to your people for a debate tomorrow.

PM: Thanks Neil.