TRANSCRIPT OF NEWS CONFERENCE, LAKE LODGE RECEPTION
CENTRE, BALLARAT BOTANICAL GARDENS, LAKE FORESHORE, 6
MARCH 1990
E 0 E PROOF ONLY
PM: Well ladies and gentlemen, yesterday Mr Peacock
managed in one day to massively insult both the
intelligence and the commitment of the Australian people.
He insulted their intelligence by parading before them a
policy speech which had a $ 6 billion credibility gap, $ 6
billion at least of unfunded promises. And in that
regard, let me say this people will remember the 1987
election campaign and Mr Howard's arithmetical error.
The gap, the $ 6 billion gap, of Mr Peacock is much worse
than the arithmetical error of Mr Howard in 1987. It is
much larger and it is no arithmetical error. It is a
deliberate con job on the Australian people. The
Australian people are entitled to an answer to the
question ' where is the money coming from?'. But, as
usual, Mr Peacock has no answers.* So that is the insult
to the intelligence to the Australian people. I don't
believe that ever before in an election have you had a
party so deliberately coming before the Australian people
making massive unfunded promises and not giving any
answer as to where the money is coming from.
Secondly, and in a sense more deeply repugnant is the
insult to the commitment of the Australian people. In
his policy speech yesterday Mr Peacock said that
productivity growth in Australia had been to quote him
' virtually zero'. That is a deliberate untruth as is
revealed in today's paper. Both Australian independent
studies and now the revised studies of the OECD show that
under this Government, productivity has been increasing
by the order of three percent per annum. Now that
represents a combination of the work of Australian
workers and the commitment of investment by Australian
entrepreneurs. Together, over this period of Government,
productivity increasing very substantially, but in their
attempt to write down their country and to write down
their fellow Australians, Mr Peacock says productivity
growth has been virtually zero.
It's not a bad achievement by a man who would be Prime
Minister of this country to at one and the same time
insult both the intelligence of the Australian people to
think that he can get away with a $ 6 billion unfunded set
of promises and at the same time to insult their
commitment to their country in terms of saying there's
been virtually no productivity growth in this period.
I believe that Mr Peacock and those around him will pay
dearly for this insult to the Australian people.
JOURNALIST: How do you make up the $ 6 billion?
PM: Well, let me, let me take that up. He of course
purports to fund his first year, but even, let me remind
you in respect of his first year, the Department of
Finaince found, as you will remember, the $ 825 million,
$ 835 million hole in regard to the first year. But in
regard to the second and third year he identifies no
fundings. Now let me just make the point before I go to
the details of that to say this. Why will Mr Peacock and
Dr Hewson not submit their proposals to the analysis of
the Department of Finance as we've done. The stark
contrast is there between the Government and the
Opposition. We tell you before the start of the
campaign, there are the savings, they're identified and
with each commitment that i make during this campaign,
it's set of f against those savings. Every commitment by
Hawke and the Government in this campaign, every new
commitment, totally funded and the process verified by
the Department of Finance. And I demand, on behalf of
the Australian people, that the opposition should subject
their proposals to exactly the same scrutiny. Now let's
look at the major components of the $ 6 billion hole which
is a conservative estimate.
About roads, first of all. He talks about his $ 1 billion
commitment to roads, it's made up of $ 230 million new
expenditure in the first year. But then that's added to
by another $ 115 million in the second year and then an
additional $ 115 million in third year. So there's $ 230
million in regard to roads, unfunded. Then we come to
two tier tax scales. Now you Will recall that when they
made the promise to bring in the two tier tax scale
months ago we said that that's at least $ 2.8 million
involvement. They've conceded that themselves. Now that
is something they're going to bring in, within the three
years, the two tiered tax scale, and they concede that
that's $ 2.8 million involved in that. And that's quite
separate, as they concede themselves, quite separate from
the return of bracket creep. So there's $ 230 million for
roads, $ 2.8 billion for the two tiered tax scale.
Next the changes to the health insurance system. That,
of course, involves the opting out of Medicare and the
analysis of the cost of that is somewhere between
and $ 2.6 billion, between $ 1.5 and $ 2.6 billion. And of
course, I don't add to that what you would need to add to
it and that's the cost for tax rebates. so there's that
for the opting out of the Medicare levy, between $ 1.5 and
$ 2.6 billion.
Now just add those things up and you get the figures.
There is the funding hole in the Economic Action Plan,
$ 835 million, roads $ 230 million, the two tiered tax $ 2.8
billion and the changes to the health system between
and $ 2.6 billion, which gives you a total of between
$ 5.3 or $ b. 4 and $ 6b billion. And that's without taking
account, as I say, of the cost of the tax rebates and you
look at the odds and sods that I haven't even counted
there. Breast cancer screening if they're going to
match the Government as they seem to be talking about
another $ 20 million there. Education at least
million there. And local government, they say they're
going to increase the share of money going there, but
that's unmentioned, no figure attached to that. Other
unfunded commitments, look at those. Sales tax free
shopping for tourists, more support for the Federal
Police, the National crime Authority and the Customs
Service and the contingent liability involved in
underwriting for the wheat industry, so by any analysis
whatsoever, the $ 6 billion is a most conservative
estimate of the unfunded spending commitments of Mr
Peacock and the opposition.
JOURNALIST: Prime Minister, last night Liberal Party
television advertisements Are you also worried it
could be very effective?
PH: Well, in the end, Peter, you've got to ask yourself
the question. What judgement do you make about the
intelligence of the Australian people? I mean, you can
have you can have Mr Peacock getting up and running
the line, the answer is Liberal. The same Mr Peacock
refusing to answer questions. Now, are the Australian
people going to be impressed by the proposition, the
answer is Liberal, and he runs away from full scale Press
conferences. He will not make himself available to the
sort of analysis that I regularly make myself available
to. The whole Press corps you've got me. Any
questions you want to ask on economnica you ask. I deal
with them, no running away from them. Now
JOURNALIST: ( inaudible)
PM: Now let, let me, let me finish. I'll come back to
your question. They are people about whom you've got to
ask the question. Are they going to be impressed by' what
you call a slick television presentation. But a slick
television presentation which doesn't answer the
question, where's the money coming from. The Australian
people have a record of wanting to know of political
parties when they make promises, where is the money
coming from. And in 1987, you'll recall, they marked
down Mr Howard very, very much indeed for what as I
recall was about $ 1.5 billion. Here is $ 6 billion. Now
at least you can say in defence of Mr Howard that it was
incompetence. I don't believe there was any intent by Mr
Howard deliberately to mislead the Australian people in
1987. It was incompetence and he was marked down for
incompetence as he should have been. But here is a
deliberate con job. Well I don't my judgement about
the Australian people Peter, my very, very profound
judgemnent about the Australian people and I've been in
public lire for 30 years is that they will not buy con
jobs.
JOURNALIST: You sound rattled.
PM: That may be your judgement that I sound rattled. I
can assure you 1im not rattled. I feel very, very
profoundly concerned that a party that would seek to
offer itself as an alternative government and a leader
that would seek to offer himself as an alternative prime
minister can so insult the intelligence of the Australian
electorate that they can have this $ 6 billion funding gap
and think that they will get away with it. Now that
moves me very deeply. And I'm certainly not only not
rattled, I can assure you that in terms of straight
political analysis this is the worst mistake, the worst
mistake the coalition could possibly have made. I mean
they should have attempted to say just where the money
was coining from.
JOURNALIST: Prime Minister, the upward revision of
Australia's productivity, the private sector did better
than the public sector with productivity at about 3.8 per
cent. This could be a fairly strong argument could it
not for privatisation? more productive Australia,
well to the private sector.
PM: it adds nothing to that argument whatsoever.
Because as you'll appreciate, that in so much of the
public sector the assumptions, the statistical
assumptions that are made are of zero productivity
growth. And so much of it is services area. That
statistical assumption is made. That's a large part of
the explanation for that fact.
JOURNALIST: The Opposition wants to sell of f Qantas.
Given reports today that Qantas may make a loss, what's
your view of selling off the airline?
PM: Well, there are these points to be made about their
selling off proposals. Before I go to Qantas may I just
pick up the point about another weakness in what happened
yesterday. They've plucked the figure of $ 550 million
out of the air for the proposed sale of a second cellular
mobile telephone service and we've seen what people in
the industry have had to say about that. If ever there
was a rubbery figure, it's that $ 550 million. They've
plucked the figure out of the air. Now in regard to the
airlines, you ask well we're in a situation where
there may be a loss involved and what figures would you
attach to it. That's one question, but I would simply
make this point. That in regard to the fundamentals of
the Australian economy, the fundamentals of whether
you're going to blow the budget surplus by unfunded
promises, those things are at the periphery. I mean what
you've got here is the certainty of the budget surplus
being blown for two reasons. One, the $ 6 billion hole
that I've talked about, but on the other hand, on the
revenue side, they are going to throw away the capital
gains tax which over a period of time was billions of
dollars. You take the two things together, take the two
things together and they are going to mean that all the
hard work we've done together to accumulate ft surplus,
which I have used to pay off debt, is gone. The budget
surplus will be blown. And there's no possibility that
some peripheral income they may get from talking about
the sales of some public asset like the airlines can deal
with those fundamental problems. They are ideologically
driven by the view that necessarily public enterprise is
bad and private enterprise is good. Let me say this, as
far and particularly it's appropriate out here in an
area, a rural area that any suggestion that you would
play around with enterprises like Telecom and Australia
Post, which provide services in a cost subsidised way to
rural Australia, is very very dangerous for nonmetropolitan
Australians.
JOURNALIST: Journalists are all saying that Mr Peacock
is promising relief but not promising any pain in order
to get there. Are you prepared to say to the Australian
people at your policy speech there will be pain, that it
won't be an easy road?
PH: I, I don't have to say that in terms of the
comparison with Mr Peacock. I've already made the point
that where we are making new commitments we have funded
them. People know if we are, as for instance in the area
of women's affairs, $ 64 million over three years for
early screening in regard to breast cancer. We have paid
for that. And very importantly, in regard to the States,
we are not imposing now virtually another half a billion
dollars pain upon the States. We've done it ourselves.
This is particularly important to the states and I'd
suggest particularly important for a small state like
Tasmania. Tasmania is going to have, leaving aside what
individuals it will cost them, it's going to cost them
about another $ 17 billion in grants taken away. Look at
NSW. I mean have you ever seen anything so ridiculous as
the proposal in regard to the beaches in NSW. He's going
to let them borrow more money. But he's going to take
about $ 120 million off them in State grants. Where we
make new proposals they are funded, are funded. People
know how we are going to meet our commitments.
JOURNALIST: Coming back to the $ 6 billion. You say
you've been talking about that figure since the last
session of Parliament, but is it because you don't think
your message is getting through, that your profound
concern is so much more manifest today?
PH: No, today is the day after they've announced the
policy speech. one was expecting and hoping Graham that
they would discharge their obligation at the policy
launch of explaining where the money was coming from.
Now there was a deafening silence. My responsibility to
the people or Australia is to point out, and point
vehemently and effectively, that silence. which means
that all that we have done together in this country to
transfer the inherited deficit of $ 9.5 billion, which
I've turned around to a more than $ 9 billion surplus,
which live used with my colleagues to pay off our
overseas debt. Australian citizens in respect of the
Commonwealth Government owe not one net cent of overseas
debt. Because we've got a surplus, we've paid it of f.
But now they're going to blow that apart with the $ 6
billion unfunded promises and throwing away the proceeds
of the capital gains tax. That's foundational to the
future welfare of this country. And any person who is
the Prime Minister as I am and who intends to continue to
have the responsibility for the Government of this
country has a responsibility to explain and explain
strongly to the Australian people just what has been
promised to them. What's been promised to them is the
collapse of the Australian economy. The Australian
economy must collapse. Interest rates must go through
the roof when you have a bursting of the deficit and a
wages * explosion. Those two things together, the blowing
of the budget surplus and the wages explosion, mean that
interest rates must go through the roof.
JOURNALIST: Mr Hawke, has there been any discussion
between the Federal and Victorian governments about how
the loss of the State Bank
PM: No.
JOURNALIST: Mr Hawke, can we talk a bit about Ballarat
issues while you're here.
PH: Sure, sure.
JOURNALIST: The Small Business Association o f Victoria
claimed that you revolt in two weeks time.
PM; Claims what?
JOURNALIST: They plan a Eureka-style revolt. In two
weeks time protesters by the Government.
PM: That is a singularly ill-informed approach. Letts
just look at the facts in regard to business, small as
well as large. the facts, not these, none of what I
say now opinions, every one of them facts. Let's look at
them. Growth, economic growth under my Government
economic growth twice as fast as under the conservatives.
Employment growth 1.6 million new jobs, five times as
fast as under the conservatives. And of those 1.6
million new jobs, 92% of them in the private sector. Most
of them in the small business area, most of them in the
small business area. So employment growth
unprecedented growth. Taxation, taxation, let's look at
that. When the conservatives walked out of office, what
was the top tax rate? I'll tell you what it was
cents in the dollar. What is it now 47 cents in the
dollar. Bottom rate 30 cents. What is it now 21
cents in the dollar. When the conservatives walked out,
what about division seven tax and undistributed profits
a massive impost upon small business. we've removed
that. JOURNALIST: what about commercial interest rates?
PM: Ok, well what about commercial interest rates?
Never at any point under my Government have they reached
the peak that they did in April ' 82 under the
conservatives. 22% for 90 day bill rates. Never
reached. They are now 16%.
JOURNALIST: Home loan rates?
PM: Home loan rates. The situation there of course is
that under the conservatives it wasn't a question of what
interest rates were, the money wasn't available. You..
people under the conservatives simply by locking of f the
supply of money. There was no money available. If you
want to test it over the period of government I suggest
you test it by the number of houses built. The fact is
that under my Government on an annual basis there's been
9% more homes, 12,000 per annum more homes built under my
Government than under the conservatives.
JOURNALIST: The Master Builders at the moment are saying
the industry is stagnating.
PM: The Master Builders are wrong. it's certainly not
what the Housing Industry Association is saying. It's
very difficult to say that in the light of the figures
I've just given you. The statistics do not support it.
JOURNALIST: On another issue, one in four country
children in poverty, living in poverty in country
Victoria. PM: No, the question of child poverty is I guess best
answered in this way. Don't rely on my assertion that
the commitment that there be no financial need for a
child to live in poverty has been met. Rely on these
three statements, I suggest to you. I don't know that
you would want to question the integrity of the
Brotherhood of St Laurence, I don't know that you'd want
to question the integrity of Julian Disney of the
Australian council of Social Services, I don't know
whether you'd want to question the integrity of the
Australian Institute of Family studies. But what have
they had to say? Let me quote them. Bishop Hollingworth
from the Brotherhood of St Laurence in 1989 said that ' in
strict income security terms, there's no doubt that the
Prime ministerial promise will be achieved'. That is
I
Bishop Hollingworth. Mr Julian Disney of the Australian
Council of Social Services ' it is without doubt', his
words, ' it is without doubt a remarkable achievement
first to have set and then to have achieved the payment
of the benchmarks to the children of low income
families'. And thirdly the Australian institute of
Family Studies ' by these means', they said, ' the
benchmarks sent by the Government have been met'. Now if
you want to question the judgement of those people who
are working in the area that the financial commitment
that I made has been met then do so. The fact is of
course they are saying that on the basis that in this
year over $ 2 billion, over $ 2 billion have been paid in
the Family Allowance Supplement to low income families.
An example of what that means a one income family on
$ 320 a week with three kids, that means that under the
scheme that I have brought in, indexed, they get $ 110 a
week tax free which is equivalent to a wage increase of
$ 170 a week. Having said all that, in discussion with
the Brotherhood of St Laurence, the Australian council of
Social Services and the governments, we realise that more
has to be done. What we've got to do is to make sure
that services get delivered where they are needed. And
that includes in some country areas where they don't have
the same access to services as they do more readily in
the cities.
JOURNALIST: Mr Hawke, you've said you're prepared to
answer questions about your economic policies. we know
where the conservatives stand on privatisation. Can you
tell me whether you support the sale of airlines?
PH: I can tell you what I've done there. I've set up
the Committee of the Labor Party to look at that and that
is being looked at. I obviously will wait till those
processes are followed through. We'll get their reports
as what's the appropriate way of dealing with the capital
needs of the airlines. But let me make the point, you
know, the quite fundamental point, that what is done or
not done there is entirely peripherial, entirely
peripherial to the fundamental issues of economic
management. ' rhe issues of economic management in this
country, the most important issue is wages policy. And
there YOU still have the situation where we are now just
over two weeks away from the election of this man who
would be Prime Minister still saying that he doesn't know
and can't tell you what the wages outcome would be. At
the same time as he's also giving you a $ 6 billion
funding hole.
JOURNALIST: Dr Howson did a rather skillful job
presenting economic problems and his solution. Do you
accept that the Government has a presentational problem
in trying to explain to the Australian people what's
wrong with the economy?
PH4: I don't accept that we've got a presentational
problem. But I would say this, that it's always
difficult to cover the whole gamut of considerations that
are involved and the complexities of running an economy
as large as the Australian economy, and covering all the
issues. There will always be a chance of doing it
better. I mean I don't claim perfection in any way in
terms of being able to present all these issues. But I
do say that I'm entitled to ask the Australian people to
compare and contrast the presentation and analysis by
Hawke and Keating with that of Peacock and Hewson on the
issues. I mean the fundemental issue that will determine
the future welfare country are these things. There's
wages policy. Now you don't have to be theoretical about
that. I mean we've had the decade of the 180s.
Australians going to this election are fortunate in being
able, in a sense, to test Hawke and Peacock against the
experience of the ' 80s. What Peacock is offering is a
return to the beginning of the ' 80a. Let the strong
exercise their strength. He would've let the pilots have
their 30%. No wonder that the pilots, everywhere I go,
they are out there barracking for Andrew. So they
should. They'd be out of their cotton-picking minds if
they weren't barracking for Andrew Peacock because Andrew
Peacock was barracking for them and said you have your
That's what happened at the beginning of the
and that's what gave us the worst recession in 50 years.
Now against that our wage predictions are always right
there in the ball park. And where we say the wages
outcome will be seven percent, that's what it will be.
And therefore workers and wage and salary earners and
employers and governments can plan accordingly. Now
that's an essential you can compare and contrast Hawke
and Peacock on that. You can compare and contrast Hawke
and Peacock on fiscal responsibility. I am the first
Prime Minister with my Government ever to run the
business of the Australian Government in profit. I
inherited an enormous accumulated deficit, commonwealth
deficit from the conservatives who'd never been able to
run at a profit. We've run at a profit of $ 17 billion in
the last three years and we've used that to pay of f debt.
But now he's promising a return to the past $ 6 billion
hole. Give away capital gains tax, the surplus blown.
So with wages explosion and surplus blown, interests
rates through the roof, collapsed economy.
JOURNALIST: Following on from that, are you concerned by
comments suggesting that the wage-tax deal has made
little impact?
PHI That what?
JOURNALIST: That suggestion that the wage-tax deal
has made little impact.
PH: If you look in detail at the polling they show that
clearly more are impressed by it than are not. I
would've hoped obviously you'd always hope that you'd
get a bigger impact than apparently there is. But I have
no doubt at all that the message is coming quite clearly
through. And our polling shows it, shows it
unequivocally that the people out there believe that
Labor is more competent at economic management than the
Opposition. JOURNALIST: Would you be willing to relax global
borrowing for Victoria if you don't do you
acknowledge that it's going to have to mean big cuts
program. PH: That issue simply hasn't been addressed. We've made
no commitment to that. It hasn't been addressed.
JOURNALIST: Are you worried about seats in Victoria,
about losing seats?
PH: The polling shows that Victoria is our weakest area
but I believe that as the campaign comes to conclusion
Victorians are going to be influenced by the same sorts
of considerations as the rest of Australia is. I mean
Victorians, just as much as the rest of Australians, are
surely going to be concerned about a $ 6 billion hole.
Victorians, just as much as the rest of Australia, are
going to be worried about a wages explosion. I think
that when we get down to the l. ine that the degree of
discontent that there may have been in Victoria, for
particular Victorian issues, will tend to, I think, be
ameliorated by their concern as Victorians for these
fundamental issues. As Victorians they would suffer like
the rest of Australia if there's a wages explosion. As
Victorians they'd suffer like the rest of Australians if
there's a $ 6 billion blowout in the Budget.
ends