TRANSCRIPT OF THE PRIME MINISTER, THE HON P J KEATING MP
ADDRESS TO THE NATIONAL PRESS CLUB, CANBERRA
27 FEBRUARY 1992
E OE PROOF COPY
Thank you Ken ( Randall), members of the Press Club, Ladies
and Gentlemen. Well, Ken it is always a pleasure to be back
and when you are back here, you have generally been invited
because yout have got something to say. And on this
occasion, I hope I will not disappoint you.
Last night on behalf of the Government I offered a plan for
Australia, a 4 year plan. A plan for recovery, a plan for
growth, a plan that will create 800,000 jobs over the next 4
years. A plan that will make us stronger, more productive,
a better economy, a plan that will provide a partnership for
government and business, a plan where the unions have a
place in the scheme of national affairs. And this morning,
that plan was met with reactions from various sectors of the
community, some of which I would like to just read to you if
you haven't seen the reactions, and one which I think are
generally approving.
From the Managing Director of BHP, the largest industrial
company, has ' welcomed the initiatives to facilitate a
restoration of growth and employment in the Australian
economy and to regenerate our industrial base. He said, the
improvement that depreciation regime and the introduction of
a development allowance would encourage investment in
productive -capacity and efficiency. We need both the
recovery and sustainable future growth. He said, these are
much needed changes. The efforts to lift capital investment
in Australia will benefit the whole economy, including major
industrial companies, such as BHP. He said, BHP believed an
issues upgrade and modernise Australia's infrastructure, in
particular, rail, road and port networks, will contribute to
the nation's efforts to become more internationally
competitive. We also applaud the encouragement of
participation by the private sector in new infrastructure
investment projects'. And he went on to say some r1ather
general supportive things.
The Commonwealth Bank said, ' in an overall sense, this is a
clever document, this is something, there is something in it
for everyone. Yet with the cost of the Budget, that is
within expectations and therefore unlikely to create shockwaves
in financial markets. In the real world, it should
also have a mildly favourable impact on business and
household confidence. From the perspective of a restrained
fiscal shat in the arm, with favourable medium term and
effects irL building the economy's capital base, the
Statement therefore rates well.'
The National Rail Corporation Chairman, welcomed the
Statement and said ' it is an opportunity to upgrade the
national network and to finally complete the standardisation
of the inter-capital city rail links and port connections
will be a great boost, to firstly, the community, rail
clients and rail employees. He said, for the first time in
Australia's history, we are seeing the opportunity for
balanced development in national rail and road networks.'
ACOSS said, ' the one-off boost to family allowance is a well
targeted way of stimulating economic activity whi'le also
relieving significant financial stress. The ongoing
increases in assistance to low income families, will be
welcomed by many struggling families. The removal of most
of the remaining waiting period for rent assistance is also
an important reform.
The Housing Industry Association said, ' the Economic
Statement -targets confidence. A commitment to sustain low
inflation : Ls welcome. Additional spending, thankfully, is
more modest: than earlier speculation suggested, might be the
case, and r-uns off quickly by the time private business
investment, hopefully, will be responding to new incentives
and improved investment. Additional of funding for training
and retraining programs will be valued to the long-term
unemployed. The Motor Traders Association. There are significant
welcome initiatives. The measures for reform depreciation
will be welcome, the capital gains tax exemption, the
firming of company tax for small business by up to 9 weeks
and including the taxation measures'. And of course, part
of that reference would have to be to the change of sales
tax on motcr vehicles.
But all of that, can I say, was not good enough for the
Leader of the Opposition. He said, ' it was one of the most
irresponsible packages that I've seen contemplated in
Australia'. The fact is, when you look at our opponents,
when I listen to their reactions to the Statements., I think,
they haven't changed, they never change. What has to be
understood about the ' One Nation' statement is this, it
addressed thie future as Labor always does, and the
conservatives never do. It's a statement of Government
engagement and not Government withdrawal as his policy is.
It is a statement of inclusion, not exclusion. It's a
statement about making this country strong and self-
respecting. In other words, it is a statement in the
traditions of Labor. It is nation building, governmentally
active, socially inclusive, it's about a greater degree of
social and economic cohesion. It's about giving greater
meaning to the idea of Australia. All these things are the
traditions of Labor. The idiom has changed. It is a modern
economic idiom, but as fits the tradition, it is we as
always who are doing it.
When I look at the others, I am amazed at how familiar the
pattern is. They want to fight an accountancy solution.
They want -to leave the draw bridge up. Don't include the
unions, don't include business, just gallop around the
country every now and then, and collect the tax on the food
they eat and the clothes they wear.
Don't kick--start the place with a payment to families.
Don't build rail highways. Don't do the macro things, or
the micro things. They think we shouldn't do anything about
the recessiLon. The fact is, there is a great philosophical
gap. We can close a lot of the gaps in this country, but
I'm sure we can't close the gap between us and them.
Dr Hewson says, this is one of the most irresponsible
packages he has seen. He said he's disappointed by it. But
the question I have to ask is, where is it irresponsible?
And why is he disappointed? Does Dr H-ewson think we should
not build a national freight highway from Brisbane to Perth?
That we should not rebuild our national road highways? That
we should riot create a national electricity grid, and
introduce competition to that system? That we should not
improve our ports or waste treatment centres or schools?
Does he think we should not transform technical education in
this country? ' That we shouldn't put it on a equal footing
with universities and colleges? Does he think that it's
irresponsible and disappointing to do those things? Does he
think we should not offer a better depreciation schedule to
business? That we should not help business with long-term
investment? Is he disappointed that we have a tax cut on
cars? Does he want that to stop too? Is he disappointed by
the equity funds for small business, by the new bonds to
help private business build electricity grids? This man is
very hard t~ o please, but I might say, easy to disappoint.
Does he think we should not help farmers and families and
particularly, one-off payment to families, to help their
spending? Will he try to stop that in Parliament, when we
introduces the Bills, or the Bills giving help to crop
growers and wool growers? What does unfunded mean? Does it
mean we should hold on to fiscal drag? And if it does mean
that, is it the same fiscal drag which is funding his
proposed tax cuts? Is it unfunded for us but funded for
him, on the same things?
The fact is, Mr Chairman, Dr Hewson has reacted to this as
he has reacted to most things. But basically, the
conservatives are always as they have always been-the
conservatives. They just simply are not about the kind of
changes which Australia needs. They are not about the kind
of vista and program which Labor has provided.
We had John Howard talking this week, and Dr Hewson, who
said, I did not learn respect at school. And John Howard
said, I was disgraceful, and that the ' 50s was a good period
and a ' golden age'. These are remarkable statements coming
from people who fancy themselves as a Government for
Australia in the ' 90s. Nothing could better illustrate the
difference between us and between them. About John Howard's
' golden age'. The ' golden age', for instance, when GDP per
head was half in the ' 50s what it is today. When 85 per
cent of our exports where commodities, instead of 68 per
cent today. When telephones where only available to half
the community. When there were only half the number of cars
available to Australians. When pensions where half of what
they are in real terms today. When only 10 students per
thousand, and not 30 went on to university. This is their
' golden age'. But as we know, it is the age when the
Liberals put the country into neutral. When many
Australians didn't get a look in. When women didn't get a
look in. When migrants were factory fighters with no voice.
When AborigiLnes were excluded from the system. When the
Liberals were zenaphobic and provincial. This was their
' golden age'. The year of the awful cultural cringe, which
stifled our spirit and ate away at our self confidence.
This is the ' golden age'. And I mentioned on AM this
morning about the Old Parliament House becoming a
constitutional museum or a museum of Australian artefacts,
and household utilities, a sort of Smithsonian, and I
suppose we could set up John Howard and John Hewson down
there as the exhibits, with the Astor TV set, and the
radiogram, and the Morphy Richards toaster, and the Qualcast
mower. And the kids could come and look at them and say,
' Gee Mum, is that what it was like then?' And John and John
can say, ' no kids, this is the future, this is the future'.
John Hewson said I didn't have any self respect when the
Queen was here, I didn't have respect for the Queen. But I
said to him the other day, and I will say it again but I
have self respect, and self respect for Australia and self
respect for Australia' s interests which are not about
bringing the draw bridges up, about locking Australians out
of the process, about trying to banish unions of not talking
to business, of not getting the partnership together, of not
keeping Australia one nation. He is about breaking it up,
fracturing it, abolishing Unions, not talking to business,
not helping business. There is no depreciation schedule in.
his program. He's got, in fact, an increase in the company
tax rate to 42 per cent. And what have we got, we've got
what we havet always had from the golden ages a sterile
exercise in accountancy. Taxing completely the low and
middle paid, who spend all of their income, so whether you
tax their income, or expenditure is immaterial. All you do
is make the tax burden heavier on them to make it lighter on
people up the scale. No vision, no vista, no rail highways,
no ring roads, no new national road highways, no electricity
grids, no creativity as there is under Labor, no changing of
the airline system as we propose it, no thought for the
hundreds of thousands of kids who can't get technical
training. No,' no, that's irresponsible. But his proposals
which do nothing more than simply flatten and attack the way
of life of every Australian family, well they have great
vision. Well, we'll let the Australian people judge, and I
will be happy to take questions about it all.
ENDS
Questions and Answers
Q: Bruce Juddery, Prime Minister, freelancing courtesy of
the recession we had to have.
PM: You were freelancing before.
BJ: Don't tell Mr Packer, he was paying me at the time.
Prime Minister the Tuesday of the week before you
ascended to your present eminence you spent two hours
in your office with Senator Terry Aulich. The next
morning he went out and held a doorstop, curiously
coincidential with a speech/ talk be given on radio in
Adelaide by Peter Duncan set the hares running by
saying; that we had to settle this leadership business
quick smart. Then he upped the anti and said it before
Christmas. He set the hares running, now he has been.
dumped to number five on the Senate ticket for Tasmania
and even with Federal Executive intervention, it is
unlikely that the Federal Minister will even get up to
number three. What are you going to do for him, is the
double disillusion a useful solution?
PM: Well, the point of this one does escape me Bruce, and I
wouldn't want to say Kerry was too hard on you, but if
he heard you put that question, you know what a TV
junkie: he is, if he saw you put that question, you
certainly would have gone today if not earlier. Now
could I just say, Terry was a late convert, but better
later than never as far as I was concerned. I don't
like what has happened to sitting Senators in Tasmania
and I've made my position clear about that and it's a
matter then for the Federal augurs of the Party as to
whether they believe that is a satisfactory situation.
That will be resolved in due course.
Q: Tom Connor's from the Canberra Times Prime Minister, I
don't care if Kerry Packer is watching or not.
PM: No he sold your thing didn't he?
TC: Yes that's right. I was wondering if I could ask you
about last night's Statement. Was there a possible
alternative to do nothing on this occasion, I mean so
lot of your Minister's have kept telling us that the
economy was on the road to recovery if you did little
last night or just a little bit of fine tuning, would
we not keep more in touch with what's happening in the
real world rather than possibly head for some uncharted
waters with the current account deficit?
PM: Well I don't think so Tom, I don't think so. We have
got in there for demand 5 per cent through 1992-93 from
minus one this year and I think the place did need a
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stimulus, it did need a break in this cycle of gloom
that's been around the place, it did need a spur of
confidence and this is a sensible way to do it, to
provide a stimulus while doing two things helping
families, but principally re-building a lot of this
basic infrastructure. Now it is important to Australia
now where a lot of the big macro-economic challenges
have been defeated, and we have been now, for a number
of yeEars moving into the micro-economy. It just does
matter how quickly you can get a container through a
port. Whether you can develop a block train with
containers to go from city to city, it does matter to
Australia. And that's not going to be changed by
taxing someone's food or clothing, I mean it is just
not going to be changed. It's not going to be invested
in by the private sector. It can only be changed by
government, it can only be improved. We've got the
rail system run down over a quarter of a century and we
have an inadequate highway connections in the country
and we've decided to do these things and other
efficiency things like electricity etc which I think
are both productive, long term and fit the bi. ll in
terms of the stimulus.
So as you know there was a lot of mixed reaction today
to all of these various issues, we had a few quotes
here somewhere, I don't know where they are now, but we
had for instance people saying it was entirely
appropriate, I won't go through them all, others saying
not, but by enlarge there was I think an acceptance
around the commentators and the papers that the
stimulus was worthwhile and sensible and that it will
help the economy into recovery and that's what we need,
but doing i. t in a way which adds to the basic
productive strength of the place. So when we believed
in the end of the first quarter of 1991 that the
recovery would come through under its own steam, under
the power of lower interest rates and the automatic
stabilisers and that's fine. But that's not the case
and was not the case later, certainly not the case now
so I think it was a timely package and the size of the
package and the way in which it's spent is, I think,
good for fiscal policy, good for the economy, good for
confidence, good for activity, and most importantly
good for jobs.
Q: Randal Markey from the West Australian Newspaper,
according to the tax scale released in your package
yesterday, people earning up to $ 350 a week seem to
miss out on any tax cut, yet under Dr Hewson' s tax
packagE! people on $ 350 a week will get a tax cut of
$ 14.30 according to the scales. Why should middle and
high irLcome earners gain at the expense of the lower
paid?
PM: Two answers to that question. The first is as
Treasurer I devoted enormous fiscal wealth to -the low
paid. When I become Treasurer that bottom rate above
-3
the ta. K free threshold was 30 per cent, it is now
per cent. So I did all of the tax changing for the low
paid years ago, years ago. The ACTU style of tax cuts
always were about directing money to the low paid. As
well as that in this Statement we've got a substantial
increase for the family allowance supplement which is
$ 250 million a year ongoing on top of what we have
already done, which is now substantial payments to low
income families. The people who I think deserve the
concentration of the tax cuts now are the people
between $ 20,700 and $ 40,000 and we'll cut their rate to
per cent, which is the rate which is in Dr Hewson's
package but without a 15 per cent consumption tax.
Even the people you speak of below $ 20,000, they'll pay
per cent consumption tax. Now down there are all
sorts of tax payers, income splitters etc in terms of
people on full award wages, full-time award wages,
there would be very few now below about $ 20,000, very
few below about $ 20,000.
So the point is having spent 6 or 7 years directing
money " to that under $ 20,000 area. This time we are
going -to direct it to the $ 20-40,000 and we'll do it
without a 15 per cent string attached, without a
consumption tax.
Q: Peter Reece from the West Australian Mr Keating. This
morning your Treasurer said the Government was
considering a youth wage to encourage employers to take
on more youzng unemployed. Isn't this an
acknowledgement that the Government has been wrong on
this issue? What have you got in mind? Have you
discussed it with the ACTU, and further to that why did
you pass up the opportunity to reverse the Coronation
Hill decision last night?
PM: Well I don't think it's an opportunity at all. It's a
small raine that had a lot of national publicity because
it suited a lot of people on both sides of the argument
to give it to it. But in terms of the mineral
industr-y, in terms of it's volumes it was
insignificant, it's in the catchment area of the East
Alligat~ or Rivers region of the Kakadu National Park,
that was its principle problem, and also the
development was of difference with the opinions of the
Aboriginal people in the area. Now the Government went
through a very long debate about this, decided against
it and as far as I am concerned that's that. There is
no major mining project being held up and this hides
the sort of self flagellation that some people in the
mining industry are giving themselves is not bourne out
by the fact that Marandoo, for instance, is a huge, a
huge deposit. Coronation Hill is a thimble full of
mineral. s compared to Marandoo, is going ahead, is going
ahead. So I am not just going to be part and parcel of
this debate about Coronation Hill. There are bigger
and bet~ ter things to get on to and to get onto them
quickly.
4-
Now the training wage is an issue which has been around
a long time. We've had conversations with the ACTU
about it, I believe we are still having conversations
about. But again we've got in this package a lot of
suppor7t for, if you like, young workers particularly
through the labour market programs, we have got $ 44,000
going in there under Jobstart and under Jobskills
another $ 45 million over the next two years. These
will be important influences, I think, in the labour
market but the training wage question is a longer term
issue and something which we have got to look about, I
think, in a longer term context.
Q: Brad Crouch, Sunday Telegraph. Prime Minister you
outlined some of the warm reactions from your Statement
from some of the large organisations at the start of
your speech, a lot of the benefits from it will take
time t~ o flow through. In light of that do you concede
that there might be a large body of people out there
who maty simply say we've heard these big promises
before! we have heard the rhetoric and you still steered
us into a recession so why should we believe you this
time?
PM: Well the whole world has been steered into a recession.
The United States is in a much deeper recession than
Australia., Britain is in a deeper recession than
Australia, the world went on the most enormous spending
spree in the ' 80s and when the spending stopped, when
the music stopped and the party finished, did everyone
really think that property prices, stock prices,
activity, employment would stay where it is? We did
our best to fine tune that decline. We wanted a slow
down, it turned, unfortunately, into a recession. But
what did the Government do? Was it the Government
priming the economy in the ' 80s. No. We had
surpluses, we were pulling the public sector back. We
actually handed the private sector $ 30 billion a year.
It was not the Government that kicked all the activity
along by running big budget deficits. We're the people
that actually pulled the budget deficits back into
surpluses. The fact is the globalisation of markets
produced an explosive mixture world wide and this was
just as true of Australia as the terms of trade pickedi
up in 1988-89 and we did our best to knock the top off
it, to get' back to where we could afford spending
within our savings and that has unfortunately lead to a
recession.' But again, you say why should we be
believed? Were we entitled to be believed when we said
in 198: 3 we created half a million jobs but in fact
created 1.8 million? Were we entitled to be believed
when on all of those 15 other occasions I've stood up
with these Statements and delivered everyone of them t~ o
the letter, in Bills for Acts of Parliament, or
Appropriations, this is not a sham? These are a set of
proposals which will be acted upon, payments will be
made for projects to the States and you'll have these
kind of consequences from it. It will pull Australia,
I beliLeve, out of this recession and into a recovery.
That's the important thing, getting on with it. But
the fact of the matter is, just remember this, that in
1983 ' the total size of our economy was $ 170 billion,
it's now $ 400 billion, it's doubled in nominal terms
and in real terms has risen by about 25 to 30 per cent.
Now that's what Labor gave Australia in the ' 80s and
five times as much employment growth even to this date,
even t: 0 this day including the recession and the
unemp: loyment, five times as much employment as there
was in the 7 years of John Howard and his adviser John
Hewson, including their recession 1982-83. Looking at
their 7 years and our 7 or 8 years, five times as much
employment. So why shouldn't we be believed? We tried
to produce a slow down not a recession, that wasn't
possible so what do you say, forget the previous 8
years, well come off it!
Q: Tim Dodd, Financial Review, Prime Minister. Last night
you outlined a four year plan to return the Budget to a
surplus but it crucially depends on you achieving
strong growth over these years and the magical
combination of low inflation and a stable current
account. Last time, in 1988, you told us that you
brought home the bacon and your forecasts were blown
out of the water by a swing in the terms of trade, how
sure can you be that another shock of that nature is
not going to upset your forecasts and if the shock
occurs where will it leave your plan to bring the
Budget: into surplus?
PM: Well the terms of trade are always unpredictable, let's
make that clear and after the presentation of the 1988
Budget: when I stood here, the Financial Review of that
day said Governments factored in a 9 per cent rise in
the terms of trade, this is terribly optimistic and is
unlikely to happen. It turned out it was 16 per cent
rise Zand gave the economy a huge boon. So the leader
writers and the journalists of the Financial Review in.
those days were not more perspicacious about the terms
of trade than of course anyone else was. But be that
as it may, the point is still worth making that the
terms of trade are unpredictable, but what we've got in
here is 4 3/ 4 for GDP for 1992-93, 4 1/ 2 for 1993-94,
4 1/ 4 for 1994-95 and 3 3/ 4 for 1995-96. Now frankly,
if you. can't do 4 per cent in this country, if our
thinking is oh that is a high rate of growth, if we
can't do 4 per cent, we ought to pack it in the lot of
us. We ought to pack it in. What sort of country do
we want to live in? You'd need about 3 per cent growth
a year, just to take the school leavers up. So let's
say we say oh look 4 per cent is too ambitious, we'll
go back to 2 3/ 4, that means that we won't even take
the new entrants to the workforce so we'd have a
continuing rise in unemployment. I mean that is not a
possibility for Australia. All the countries near us
-6
are gr7owing at 6 and 8 per cent, 6 to 8, and their
economiy is not spilling into imports. In other words 6
to 8 per cent they can afford and we've got in here 4s
basically and we've got the sort of debate oh that's
too fast. I mean frankly if we can't do 4 we ought to
give i~ t up, the lot of us, the commentators, the
politicians, the public service, the lot and say let's
get a whole new bunch to try and run the place at a
decent: speed. So I don't regard 4 per cent as being
outrageous.
Q: Alan Thornhill, A P Dow Jones News Services Prime
Minister, Australia has never had the great
polytechnics such as Britain and the continental
European countries have had, do you see Australia's
TAFE colleges taking that application and at last in
Australia registering inventions being applied in this
country?
PM: I shouild hope that the development of TAFE with the
funding of the National Government can develop a system
as sophisticated and as strong as we have in higher
education. That must be our objective. Now in higher
education since the middle ' 80s we have created the
equivalent of 12 universities, about 120,000 extra
places: in higher education to take the kids coming out
of tha~ t very high participation, retention rate now in
secondary school. But, of course, the great gap is in
vocational education, technical education and training,
and it. is that offer which we have made to the States
to turn TAFE into a properly funded sophisticated
systemi of vocational education and it may well be,
Alan, that the polytechnic type development is
something which the Australian TAFE system in the
future emulates. But again can I make the point it's
Labor making another vital change in our society,
giving our children a change to train themselves for
practical work and useful jobs. And I contrasted again
with the sterility of the Coalition, where you will see
Dr Hewson and his economics spokesman saying they ought
to have private places, let their parents pay for them.
If they want to go to university let them pay full fees
and what are full fees for a course of substance?
$ 12,00? $ 15,000? What does a private university wish
to charge?, And what have you got to earn pre-tax to
pay $ 12 or $ 15,000 for your child in university
$ 30,000 a year, $ 25,000 a year? So how does a two
income family earning $ 40-$ 50,000, $ 40,000-$ 45,000 go
when $ 30,000 of their gross income goes to keep one
child in university? That's the incentive and freedom
to achieve Hewson style. That's the nasty, vicious
sting of the Hewson rhetoric and ideology. Where were
saying we'll fund these places in tertiary education,
when you get a job pay us back part of the fees, part
of the fees, but what we're saying with no strings
attached we'll fund TAFE into a decent system. Dr
Hewson says it's irresponsible. Well I'll leave you to
judge about the irresponsibility of it.
7
Q: Martin Hirst, SBS Television, Prime Minister. You'eve
invited a comparison between your One Nation package
and the Fightback package released by Dr Hewson late
last year, one area where a comparison, I think, needs
to be made in talking about infrastructure is with
immigration because there is a debate at the moment
about, for example, Sydney and Melbourne the
infrastructure cannot cope with any more migrants into
those communities. Dr Hewson's package claims to have
what he describes as a sensible immigration policy,
they're talking about a cut of between 50 and 70,000.
You have not really made any comment about this in your
package, can you just today make some comments about
that?
PM: It was not something I thought a recovery package was
about. I made it clear that in the normal annual
reviews of this program, which occur each year after
the consultation process with the various States, the
institutions, business etc, that we will debate the
matter and produce a program, composition again, this
year as usual in April and that's, I think, the
appropriate way to do it and the appropriate -time to do
it. The real issue is that migration has made
Australia bigger and stronger than it would have evexr
otherwise been, but the program has varied from over
time. Both Governments have varied the intake from
time to time. It peaked when we needed skills and
demand at about 140,000, about two years ago. That's
now down to 111,000, and it will probably go lower.
But if you take Dr Hewson s 50,000 number it would
simply mean that there would either be no family
reunion or no skills in demand or no business
migration, it will be one or the other. And what he
has never faced up to is the compositional consequences
of those kinds of utterances. So you might have heard
a ball park figure from him and you didn't hear it in
his policy statement, you heard it about a week ago,
rattled of f on a radio station, vague, vague and no
compositional details. Well that's not what we are
about, we are about a proper review and we'll do it in
time, but it has been the case that the program has
come back and will probably come back further.
Q: Don Woolford from Australian Associated Press, Mr
Keating. You have said a lot about the need to make
our transport system more efficient. When will the
Government be doing something about cabotage,
particularly on the trans-Tasman group which is causing
difficulties with our New Zealand friends?
PM: Look, we are the ones who have had to crack all of the.
difficult ones in the micro economy. By about
Christmas this year there will be a 50 per cent
reductiLon in water front employment within about two
years, the last eighteen months to two years we've seen
a 50 per cent reduction in waterfront employment.
8-
Australian ships now have below OECD level crew manning
about them, crew sizes. So a lot of that is behind us,
in adopting that shipping package we have free entry
onto the coast for new trades and even for other tied
trades onto the coast, foreign ships have been brought
onto the coast and are now going around the coast in
various trades. So there has been a substantial change
and single voyage permits have been issued frequently
now for various trades. Again, can I say waterfront,
shipping, aviation, road, rail, electricity, I mean
who's in there breaking the barriers down? And who for
years was confident with this creaky structure? The
boys from the golden age of the ' 50s. It was always as
it was in Ming's day, no company hiring on the water
front, big pools of labour, very high manning levels,
companies and unions getting together to rip off
shippers, very high crew manning levels on ships, no
conversation from the Coalition Government, you never
heard John Howard talking about it. Don't remember
John Hewson advising him to do something about it,
don't remember even talking about the rail system,
about the fact that we couldn't even shift a container
between cities without changing gauges and bogies at
various places along the way, don't remember any
conversation about that before I sent the Industry
Commission a reference on electricity generation and it
came down with its recommendations. I didn't hear
anything from the Coalition about electricity grids. I
mean tiale fact of the matter is these people have no
imagination, no imagination and when it's all said
what's the best they can come up with well they'll
tax the food you put in your mouth and the clothes you
put on your back. That is about the long and short of
them and that's what they call real reform as Dr Hewson
Australia, real reform for Australia, real reform for
Australia. Well I don't call it real reform for
Austra. lia I call it simply praying on people who can't
protect themselves from the ravages of a sort of
Thatcherite ideology of survival of the fittest. if
you're not a millionaire you're a loafer, if you're not
a millionaire you're a loafer, and freedom to achieve
means freedom to send your kids to a university
providiLng you can pay the bill, freedom to achieve, to
look afEter yourself means you can have private health
cover and if you're low paid or you've got a large
family or you're sick too bad for you. I mean this is
what this is about, it's the same stuff the other day
we should have been polishing the British boot straps
up, tugging the forelock, I mean this is them, they
have always been the same, Menzies put the country to
sleep for 15 years. For 15 years we had this cultural
cringe that we never had an identity, I mean all this
talk of Australia returns to Britain as an infant,
growing up and now wants to be included in the
fellowship of European countries, I mean the craven
cultural cringes of it all and we have still got it
with these relics, these ideological relics like Dr
Hewson and Mr Howard.
9-
Q: Laura Tingle from The Australian Mr Keating, you've
clearl. y drawn a distinction last night between yourself
and the Coalition in terms of the role of government in
Australia in the next few years, but I'd just like to
ask if you could define that a bit more clearly for us
in ter7ms Of government policy. First of all what is
the limit on fiscal expansion as far as Labor is
concerned? What are the factors which limit how far
you can go? Will you rule out any further expansion in
fiscal. policy for either economic reasons or to make
reforms to other parts of the tax system or for the
socia. welfare system in the Budget or in the lead up
to thet election? And third could you just clarify for
us your anti-inflation strategy because the Coalition
is nowr making this a major election issue and your
basing yours on a somewhat still undefined new
relationship with the trade union movement?
PM: Laura come off it. Ours undefined? At 1.5 per cent,
an inflation rate second lowest in the world undefined?
Undefined with an Accord process which has taken
Australia's inflation down from the 10 per cent they
left us with after the last recession and all through
the ' 7' Os, through the early ' 80s and after a big
depreciation of the exchange rate in the middle
we've got it down from 10 per cent to 1.5 with a
combintation of tax cuts through the Accord and monetary
policy and they are by their own admission about to
double it with a consumption tax and we're the ones
with an ill-defined inflation policy. I mean their's
is very highly defined, they are going to double it.
They'll take inflation from an underlying rate of at
least 3 per cent to at least well over 6 or 7 per cent
and as Dr Murphy the econometrician that Dr Hewson
bragged about on the day he launched his Fightback
proposal had to say the other day, if any of it goes
into wages, that is if the price effect of the GST, the
per cent on bread and milk and food and clothing and
dry cleaning and everything else goes into wages, then
inflation rates are likely to go back to 10 per cent.
And what can they do about it? Other than draconian
interest rates which will simply slow the place down
and produce a continuing recession. I mean they don't
have any discussion with the unions, I met 40 people
from the Wages Committee of the ACTU last week, they
gave a commitment to the Government that their target
will be with the Government's, keeping an inflation
rate around the average of our trading partners and
making their claims accordingly and their activity in
the labour market accordingly. What commitment could
Dr Hewson secure from the unions? He wants to destroy
the unions,. He said he wants to wipe them out, he said
there will not even be a national wage case, I mean
they have no anti-inflation policy other than to get
the Governor of the Reserve Bank to jack interest rates
back up to very high levels to try to squash activity
to cut inflation. That's their sole policy. But fancy
10
breakiLng the back of Australian inflation after two
decades and getting it at a statistical rate of 1.5 per
cent and then let someone let it out of the bag again,
let it out again by willfully adding substantially to
prices and to inflation, that's what Fightback is
about. It's a vast macro-economic risk, but it's more
than a risk it will be a disaster because they have got
no possibility of keeping it out of wages, none. Why
would a wage and salary earner who's been dudded under
their tax cuts say oh yes I'll give you a wage
discount. Why? Of course they won't. They're not
going to cop a bar of it, if there was a GST it would.
go straight into wages, bang, in a decentralised
bargaining system, bang, straight into wages. And what
would Dr Hewson do about it? Put a press statement out
in the press boxes, attack the ACTU on the steps of
Parliament House, have Peter Reith do a doorstop? I
mean compare that to the proven success of Labor in
getting inflation down and by using the mechanism of
bringing business, unions and government together as I
say acrain, ' One Nation', to get over a major impediment
inflation, which we have done and which they could
never hope to do.
Q: Glenn Milne from the Australian Mr Keating, if I could
continue on the inflation and wages theme, you've
secured agreement from the unions to keep inflation in
line with our major trading partners, could you give us
an indication on what the upper limit of that rate
would be and what would be the sort of broad across the
board wage increase that would underpin that number?
And taking the wages and taxation question a . little
further, does this mean the statement last night, that
you've got no room left to move on personal tax reform
in the August Budget or is there still some scope for
that?
PM: The Government is governing, is going to have a Budget
in August. It always has policy prerogatives available
to it, I mean we have never seen Australia's change in
the post war years and the possibilities of reform has
been all tied up in one statement and while this
statement ' One Nation' is about taking Australia back
into recovery with reform it will not be the end of
reform under this Government, we will do other things
and we will do them as needs be and as opportunities
arise. Now you are asking about wages this year,
average weekly earnings are running about 3.5 per cent
and depending on what productivity is and can be, and I
think we have got a great opportunity for high
productivity growth in the 1990s. It's entirely
possible that you will see sectors of the workforce
getting wage increases with quite low inflation rates,
with quite low cost consequences because of that
productivity, so the yard stick will be not aggregate
wages but trading partner inflation rates, and as you
know that will be the competitive inflation rates of
the developed low inflation OECD countries.