PRIME MINISTER]
DOORSTOP B~ Y THE HON P. J. KEATING MP, PRIME MINISTER
WEDNESDAY 15 JANUARY 1992, !-ELBOU:. NE
PM: The discussions have been very productive and
enthusiastic. I think that people want the economy to
get back to growth, they want growth planned, they want
things which imporve and build on the general
improvements in the economy over the last decade. many
believe that there are a lot of fundamental strengths in
the economy that will come out quite strong when we can
come out, but they want leadership on the real issues
and the real issues are growth, restoration of growth
and employment, a recovery, and adding to our
fundamental structural strengths and there have been
some good ideas proposed. I think I~ f anyone listens
well, and in public life you have to be a reasonable
listener, that there is a lot of obvious stuff said but
there is always the odd little jewel that falls out end
if you're alert you can find it.
The Government is working in this statement in a
framework, obviously the framework we have worked in
from the 80s was to internationalise Australia, to
globalise our markets but what we want to do now is
engender a ' recovery but do it in a way that adds to our
structural strengths and so even though we are working
in a framework and we have our own ideas, those ideas
can be complemented and added to by the practical.
experience of people in Australian business and that's
why this process has occurred and I think it is going to
be a very valuable one.
J: Mr Keating, any jewels today?
PM: A couple of things. A couple of good things.
J: Mr Keating the business people all seem to be prepared
for extra spending, does that fit in to your framework?
PM: Let's be clear about this, there was not spending
greater than the tax cuts we provided in the 1980s,
middle 80s and late 80s, to hold the inflation rate
which we succeeded in doing. We went through a boom
without wages taking of f via the 1989 $ 6 billion tax
cuts. In other words, the surplus was not ñ mnmutible.
Likewise, nor is the deficit depending though upon what
is responsible and sensible, what is cyclical and what
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is structural, these are the qualitative things both
quantative and qualitative, that the government will
keep its eye on. I mean this is the most experienced
fiscal group in Australia's long constitutional history.
Nearly a decade of the one group of people stewarding
Commonwealth fiscal policy and we are going to do it
very carefully.
J: Will you be seeking any of f-setting savings Mr Keating
towards spending
PM: Well, they are all policy choices for the Cabinet, and
for the specialised gruop of Ministers these matters
have not been determined at this stage.
J: But spending cuts are a possibility?
PM: Well, everything is a possibility.
J: Mr Keating will tomorrow's meetings be a mirror image of
today, or does it move on a notch flow?
PM: Well they will be different people from various
different other walks of life including the trade
unions.. But there is a tremendous amount of pride in
what woh have achieved as a structural change, I mean
most of' these pople today have remarked about that,
about how their business is now more productive, even
though the squeeze has made them more productive, that;' s
unfortunately led to lay-off s by many of them, but the
outcoinw has been more productive companies ready to
pick up on any roll that comes through the economy, they
want the economy to spring back into activity, so do we,
it's about trying to find the beat way of doing it.
J: Do you think they are relying too much on wanting the
Government to kick-start the economy, they are not doing
enough themselves?
PM: No I don't think so. A decade ago such a conversation
would have been complaints about protection not enough
of it, complaints about wages. What we saw Is what I
think is what we predicted. valuable contributions by
people who are wide-eyed and constructive and trying to
put sensible and constructive proposals which the
Government ' can do. I mean it is a very nice
constructive quality to the discussion.
J: Mr Keating, what is the prospect of a wage tax trade of f
being included in the statement?
PM: Well it is too early to say, and the hard news game
which I know you are all in, it's too early to say. The
Government will just have to consider its position on
all these matters on inflation, the inflation proopects,
activity, therefore wages, wages prospects, etc.
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J: Mr Keating, are you disappointed that two major opinion
polls show your approval rating to be a record low?
PM: Well, I had not expected to be bouncing out in this
climate with a gaggle of polls sort of announcing my
entrance to the Prime Ministerial stage, but I've
always been best fighting from behind, I've always felt
uncomfortable out in front. It generally slows me down
and while I don't want to be obviously too far behind,
being behind for me is a positive stimulus.
J: Does it surprise you that your
PM: Not really, I don't think. Not really.
J: Mr Keating, is the Government prepared to reconsider
the Coronation Hill decision?
PM: No we have not. The general view of the Cabinet was
that it should not be reconsidered.
J: Mr Keating, the upturn has now been delayed. When is
it your hope and expectation that we'll see reasonable
signs of the economy coming good?
PM: Obviously, the earlier the better in 1992.
J: What are your expectations?
PM: Well, it would be foolhardy for me to be nominating
turning points and then you would be scoring off the
days and weeks. You know I've been around for too long
for that sort of stuff. We'll be trying to engender a
recovery as quick as possible. One thing is for sure,
nobody believes, as far as I know, certainly no one
said to us, that what Australia needs to help itself iLs
a new tax. I mean it would be a novel twist of
priorities if we thought what Australia needed now in a
recession Was just to give it something to go on with,
it was a tax on its food, a tax on its clothing and to
belt up its inflation rate. No one, of course, was
advocating that.
J: Is there a sense of desperation from the talks today at
all?
PM: I think a sense of well placed and good natured
optimism but with cautious optimism.
J: In reality Mr Keating, did you actually hear anything
that you hadn't considered before in all your years
Treasurer?
PM: Yes, a couple of things.
J: special treatment for the States?
PM: Well no, all States will be treated we will be
treating the Commonwealth as a Commonwealth and all
States: equitably. But I do think that Victoria has
taken a large brunt of the recession and confidence
levels, and activity levels are lower in Victoria. I
have said this often. This is still true.
J: Does this justify some special help?
PM: Not particularly, but it justifies consideration about
the State of the economy and Victoria in particular.
J: How about tarriff levels, is there a need to wind back
PM: No, I don't think so and they are phased. They are
predictable and the change in the exchange rate of late
will only, if you like, soften the impact of the
reduction.
J: There is no question of hurting
PM: Well, that might be true but the fact is it is not
hurting the export industries who have got the monkey
of protection off their back. It's not hurting, it's
helping them.
J: Prime Minister, can you give us some scope of
responsible fiscal stimulus might be?
PM: No I can't, and that's something it is very early
days but it was very important for us, I think, to take
the opportunity to say to people who are at the
coalface, what do you think about this?, what's your
view?, give us some of your thoughts. We are working
in this framework, if you have got general ideas about
where we want to go but if you can add to that we would
appreciate it particularly if it fits into our
framework and I think it has been well worth doing.
J: Was the anecdotal evidence you got today generally
gloomier than official forecasts?
PM: No. People think the economy is flat, not falling
further, but flat off a generally low base and they
want to see a pick up in a domestic economy as quickly
as possible as we do. They are not into ideology, they
are in-to a practical purposeful shift of activity in
employnent.
J: Do you have any problem with the risk of over
stimulating?
PM: Not off these low levels of activity I don't think but
that's within reason, of course. But again, I remind
you of eight years of fiscal stewardship by this
Governent, I mean it is without
J: How soon will we see
PM: Well that's one of the things we will be considering
obviously in the course of these approval processes.
J: Jewels more regularly during that period?
PM: Well I did, I was always a good listener. You have to
be in public life to be a reasonable listener. I have
met a lot of people in business, in fact at my luncheon
meeting two of them were reminding me of a discussion I
had a year earlier with a very similar group, two of
the members of which were common around the same themes
at a dinner I had at Pacific Dunlop.
J: ( inaudible)
PM: I did a lot of it. I saw a lot of business groups,
interest groups while I was Treasurer. But that's to
say I thought it was my responsibility to develop these
ideas myself within frameworks from things I heard and
within the general framework the Government was working
in.
J: What's the theme of today then, you have your own main
framework and they'll just add to it?
PM: No, the Government is obviously working in a framework,
but the framework is now the one most Australian
businesses are working in and therefore they are not
coming at you or looking for increased protection, they
are not: coming at you with complaints about wages.
There's a commonality in the framework now so therefore
we are very receptive to things which are put.
J: Prime Minister, where most business you spoke to today
mentioned depreciation and some mentioned special
investment allowances. Are you disposed towards
measures like that?
PM: Well I can't say I am. It's entirely reasonable they
should mention them and therefore their things will be
considered. Thank you.
ends.