PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER THE HON P J KEATING MP
SBS DATELINE WITH PAUL MURPHY
26 FEBRUARY 1992
E OE PROOF COPY
J: You are asking Australians to take you on trust aren't;
you that your projections tonight, in this document,
are goiLng to be right?
PM: Well Paul, the economies generally respond quite
favourably and rapidly on the way out of the recession.
Nearly a decade ago, when I picked up Mr Howard's
recession, ' in the first year we had 6 per cent growth
in GDP, growth in the economy. We have got it here
4 3/ 4 per cent. It is really quite a modest
assumption.
J: Every 1year?
PM: We did that in the 180s. We ran about 4 1/ 4 per cent a
year a. 11 through the ' 80s and we believe that given the
strong profit share that exists basically in the
economy, the fact that there are no structural budget
deficits over-hanging it, that we have basically good
productive1 wage arrangements, that the benefits of the
economy now can produce a 4 per cent growth through
this period.
J: OK Prime Minister, as you say when you came out of the
last recession that you inherited from your
predecessors, you have got good growth, you've created
jobs, -then the economy overheated, then you had to take
the action you did.
PM: It over-heated Paul, with the globalisation of financial
markets, growing credit at 10 or 20 per cent a year
through the satellite shifting of funds, the
fundabiLlity of money. That's gone. The financial
institutions have pulled their head in. That sort of
credit growth is not on, and we are not going to have
any of that overheating. What we want now is
sustainable low inflationary growth and we are the only
Party that can deliver it. We are the only Party that
broke inflation, and we are the only Party that can
deliver it.
J: OK, and yet I think by your own admission you will go
into the next election and what, you have got 15, 18
months time with an $ 8 billion deficit and still 10 per
cent unemployment?
PM: Coming clown. Coming down to 7 3/ 4 over the period and
with a clef icit turning into a surplus by 1995. In
other words, as the cycle picks up growth, activity,
receipts, salaries, supplements etc. and as
unemployment benefits come down, the budget goes back
into surplus in ' 95 with very large tax cuts.
J: But will enough happen in the next 15 months for you to
leap the enormous political hurdle that faces you at
the moment?
PM: Well, there's no way that a switch from income to
expenditure, as Dr Hewson proposes, will do anything
for recovery. In fact his own economatrician
demonstrated this week that it will actually contract
employment and contract GDP.
J: There is some disagreement about that
PM: No, no. I
J: the argy bargy in Parliament.
PM: There will be no disagreement about the computer model
printout which says, under any scenario, Fightback will
reduce growth and lift unemployment. So this
proposition, a stimulus from a budget which can afford
a stimulus, to get the economy moving but which comes
back to surplus is sensible, and I believe, the only
thing to do.
J: Now, Dr Hewson has criticised your tax reforms and the
big ones as being hogwash?
PM: Well, let me put this to you. When I sat back and
said, ' what should we do here, what can we do to make
Australia move now, what can we do which at the same
time is productive, like rebuilding the railways, the
ports, the roads, TAFE, all of these things at the same
time produce low inflation, we produced this document,
One Nation. What Dr Hewson did was sit back and say,
not what does Australia need, but how can I be
differEtnt from Labor? What can I have that they won't
have? He said, a consumption tax. And if he thinks
that taLxing your food and your clothing and your drycleaning
is going to change the railroads, the roads,
the ports, the wharfs, the airlines, get growth going,
it's not. The fact is, Paul, it's a sterile exercise
in accountancy. This is the only proposition that will
get Australia cracking.
J: Alright, if I can take you to the one-off payment at
between, I think I'm right in saying, $ 100-200 for
families which really says, OK, we know you are
hurting, isn't this what some commentators have most
feared, back to the old Hawke bout.
PM: But in a program of $ 2.3 billion, it is $ 300 million.
It's 0.3 of the 2.3. And why is it there? It's there
so that at early we can get a stimulus in the economy,
because the rail projects and the road projects will
take 6 or 9 months to build up. We don't want to lose
6 or 9 months. So we want to give money to the people
who can use it best, and that's families.
J: Now unemployment is, by your own admission, will still
stay at 10 per cent but coming down. But how many jobs
will you create, meaningful jobs from this package?
PM: In the period, about 880,000, in the forecast 4 year
period 880,000.
J: That's almost close to the million that was achieved
last time.
PM: Well, we achieved a million in about, I think, about 3
years last time, 3 1/ 2 years.
J: Now, if you can't get that 4 per cent growth, and if
something goes wrong with the indicators, you've had it:
haven't you?
PM: Well, we'll get the growth this coming year, which is
the year that matters to the economy, and of course,
politically matters to the Government. 4 3/ 4 is a
conservative assumption for an economy this well off
coming out of recession, low inflation, low interest
rates. Coming out of the last one we had 10 per cent
inflation. Coming out of this one, we have got 1 1/ 2
per cent.
J: And you think the back, as you put it, the stick of
inflation will stay broken?
PM: With the wage arrangements we have concluded with the
ACTU, yes. But it will not stay broken
J: Can you tell me more about that, Prime Minister, by the
way.
PM: Well, the ACTU are saying we will look at, we'll make
the inflation rate of our trading partners, our yard
stick in wage claims, if you give us a reasonable tax
environment. That's the sort of proposition that's
been put. That's what we'll accept. But of course,
there'll be no reasonable wage environment with the GST
doubling the inflation rate. Dr Hewson by his own
admission, doubled the inflation rate. So, that means
interest rates go up, the economy is slower. In this
economy, low inflation, the budget in good fettle, a
high profit share coming as soon as the economy picks
up, the place will grow quickly.
J: Are you going to attract back all those ALP traditional
supporters whom you've lost?
PM: Well, I think, this program is very much a traditional
Labor program. It's building Australia. It's the kind
of reforming building which Labor was always famous
for. A national rail highway, a national electricity
grid, taking over Commonwealth funding of technical and
further education, an international airline policy, a
change to the depreciation to make the private economy
stronger. These are all the things, and of course,
support for families, Labor market reforms. This is
very much a Labor package. But a Labor package at the
right time to pull the nation together and not divide
it, not to cut it up, interest group against interest
group, under some sort of Thatcherite ' survival of the
fittest' strategy which Dr Hewson has adopted.
J: Well, perhaps you are treading this careful line, you
say it is very much traditional Labor but also you give
them the banks that they wanted, there is every
indication that business is going to be pretty happy.
What about the markets?
PM: Well, I think the markets will probably expecting a
package of about $ 3 billion and this is And a
lot of it is on long term productive things, like the
Brisbane-Sydney-Melbourne-Adelaide railway line, like
ring roads around the capital cities. Like support,
infrastructure programs for schools. These are things
which will be there in 5 years from now and in 20 years
from now. In other words, it is not going up in a puff
of smoke, so I should think the market would regard
this as responsible and sensible.
J: And the micro economic reform that business has been
screaming for?
PM: Well, it has taken all the big ones on, Rail, road,
ports, airlines, we are knocking over electricity, we
are knocking over that micro agenda as we knocked over
the macro agenda.
J: Prime Minister, on a completely different subject, the
British Press has gone rabid about you and your
welcoming address to the Queen in Parliament a few days
ago. Are you a rabid republican or a realist setting
up the changing conditions facing Australia and
Britain?
PM: Well look, I have got the Age editorial here, it said
this today, and it's very sensible, it said, ' when the
Prime Minister addresses the Queen, he addresses her as
the Queen of Australia, and its entirely appropriate
for him to articulate independent Australian
attitudes'. I was not addressing the Queen as Queen of
Great Britain, I was saying to her, we've changed, we
are in a. changing part of the world. We are in a part
of the world that's growing rapidly and we are more
independent of Europe, but she is the Queen of
Australia, our Queen. So of course, in that sense, it
is not understood by the editors of the British tabloid
press. An editor of a British tabloid newspaper is a
particularly low form of human life, and no doubt we
will see other similar distorted headlines from them.
J: OK, I hope they don't see a tape of this program, but
Prime Minister, thank you very much indeed for coming
on to Dateline.
PM: Thank you.
ENDS