Transcription of Finance News Network Interview with Former Prime Minister of Australia, John Howard
Lelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me at the World Business Forum in Sydney is Australia’s former and second-longest serving Prime Minister, John Howard. John Howard, welcome to the forum.
John Howard: Thank you, pleasure to be here.
Lelde Smits: You’re about to give a presentation titled, “The Global Economic Future” but where does Australia fit in the modern globalised marketplace and what headwinds are we likely to face?
John Howard: Australia is a very active participant in the modern world marketplace, not only because of our commodity exports but also because we are a free trading open country and we benefit from the dissolution of trade barriers.
Headwinds, yes, we always face headwinds, you’ve always got to fight for market share and domestically you’ve always got to remain up with the latest reform requirements. No country can ever afford to take it easy when it comes to economic reform.
Lelde Smits: Mr Howard, you led Australia as Prime Minister from 1996 to 2007. How have the economic changes that you implemented impacted the economy today?
John Howard: Well the greatest benefits of our economic changes was that when Australian went into the Global Financial Crisis in 2008 we were left largely unaffected because this country had no debt. It had a surplus and we had $60 billion put aside to met the future obligations of retiring public servants, in other words, Australia was in superb physical condition when the Global Financial Crisis hit and that’s one of the major reasons why were we left relatively unaffected by the downturn.
Lelde Smits: In the time since you left office the mining boom has peaked. Do you think the country took full advantage of its prosperity or has it missed its golden opportunity?
John Howard: I don’t think we missed a golden opportunity at all. We continue to get the benefits of the resources boom. What we have to do is manage the readjustment process. But, the mining industry will continue to be a big earner for Australia. We have to keep in proportion the way in which the mining boom is leveling out. It’s not going to disappear.
Lelde Smits: Certainly, but the Minerals Resource Rent Tax (MRRT) barely generated any money last year – Is this a sign perhaps that we haven’t gotten all that we should have from the mining boom?
John Howard: No, I don’t think that’s a judge of that at all. Because, the existing taxation system, leaving aside the Mining Resource Rent Tax, means that mining companies pay an enormous amounts of tax and that people they employ pay tax. It earns an enormous amount of export dollars for Australia. So, any suggestion that we haven’t taken advantage of it is misplaced.
Lelde Smits: But Mr Howard, irrespective of mining remaining strong it has come off its peaks. What do you believe will support Australia’s economy moving forward?
John Howard: Well, we’ll continue to have very strong growth activity in mining, so we have to understand that. It’s not going to disappear. It’s just not going to keep on growing exponentially.
We will need to further develop our capacity in the service industries. We will need to maintain the strength and encourage the development of the strength of new niche manufacturing capacities. The old manufacturing industries are not going to be for us in the future, but there are plenty of new niche manufacturing opportunities we sometimes miss the significance of that, we sometimes ignore the reality that we can get benefit from some of those niche manufacturing industries.
Lelde Smits: There is a lot of belief that the Australian economy is overregulated, especially in the finance and banking sectors. Do you belief this overregulation is negatively impacting our economy?
John Howard: I don’t hear as much about that as perhaps as you might hear in the more closed, financial banking circus/circuit. I can understand why people would want fewer regulations, and there is always a case for reducing regulation. My starting position is that everything is probably overregulated, but once again on a world scale, I don’t think Australia is overregulated.
Lelde Smits: It has been said by many economists that small to medium enterprises are the future of our economy and indeed our country. What do you believe the government should be doing that it isn’t already to support the future of these businesses?
John Howard: One of the things that the government does need to do, and I know it’s foreshadowed this, is to revisit industrial relations issues. Because employment laws, restrictions on things like unfair dismissals and the like, we all know that they have a negative impact on small and medium business. Now the government is certainly going to examine that, and if it’s got changes it will take it to the next election.
Lelde Smits: Finally Mr Howard, you have said before that being Prime Minister is honor enough but when you look back at your achievements what are you most proud of?
John Howard: That I left behind a country that was stronger, prouder and more prosperous than the one I was elected to lead in 1996.
Lelde Smits: Mr Howard, thank you so much for speaking to the Finance News Network here at the World Business Forum.
John Howard: Thank you.
Ends
