P M
PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P J KEATING MP,
DOORSTOP, HILTON HOTEL, SYDNEY, 12 MARCH 1992
E& OE PROOF COPY
J: What's your reaction to the latest unemploymentfigures?
PM: Well, I think it shows there is no further
deterioration taking place in the labour market. Now,
over the last few months we've seen a reasonably
stronger trend in employment that was interrupted
this month, but the unemployment rate is marginally up
on last month, that one would have to say that the
trend rate is about the same. So, overall, happily, no
further deterioration in unemployment.
J: Is there brighter news around the corner?
PM: Well, we expect the economy to grow over the course of
1992-3, because employment is so closely tied to GDP,
the product, to the economy, as the economy grows, so
too will employment.
J: Mr Keating, will next week's GDP figures show that the
recession is over?
PM: I don't know, let's wait and see. I've not really been
in the business of predicting National Accounts, as you
know.
J: Prime Minister, John Hewson's campaigning style,
particularly his challenge to you last night to debate
him
PM: I think he is rattled, as I said to you yesterday, I
think he is rattled. He is now willy-nilly adopting
our infrastructure proposals, which a few weeks ago
were irresponsible, he is now going to use the proceeds
of our growth which he said was unlikely to happen, and
I think he is not sure what model he is working in. I
think more power to him, let him continue this way.
J: What's your response to his challenge to a debate?
PM: Well, I wouldn't want to do to him in public what I've
been obliged to do to him in the privacy in Parliament
House, in the House of Representatives. So, you know,
we can't be too unkind to him.
J: Mr Keating, you had a go at Dr Hewson's fiscal
discipline. In the Budget, would you undertake to
offset extra spending by spending cuts to keep your own
fiscal discipline?
PM: We're the people who brought fiscal discipline to
Australia, we're the first people to produce surpluses,
structural Budget surpluses, we're the people who spend
7 years cutting government spending, and we will do
that which we think is sensible and reasonable to the
economy. I made it clear in the One Nation Statement
that the deficit will come out probably beyond that
which we have, in forecasts there, as the Government
considers other unavoidable new policy over the course
of the Budget preparation. Now how much of that we
offset will remain to be seen. But I certainly don't
believe it should necessarily be offset.
J: In that case your deficit figure would blow out?
PM: No, no, just understand. We've got a ball-park number
there, and that's fine as far as we're concerned. But
it's really gilding the lily for Dr Hewson who left me,
in the last recession the one who he advised Mr
Howard on with a deficit twice as large as we have
now, the GDP, twice as large, to be giving us little
homilies about fiscal discipline. I mean, anyone else
with any self regard would crawl off into a cupboard,
and never mention the word " Budget" again.
J: Is the $ 6.8 billion forecast on the deficit immutable
or is that
PM: I think if you read the One Nation Statement you will
find there that we say that this is the outcome of
these changes as it is. But again, there is always, in
every Budget, a round of considerations on the outlays
and savings side. And, you know, there will be in this
Budget again.
J: Should Mr Willis have spoken out in public on his
demise as Treasurer like he did?
PM: Well, I think he was asked a perfectly reasonable
questions, and he gave, I think in the circumstances, a
perfectly reasonable response. I wouldn't blame Ralph
for being disappointed. But the measure of him is he
has put his back into that One Nation Statement as few
Ministers would. And he has been one of the principles
in it. The three principles were myself, the
Treasurer, and Mr Willis.
J: What do you think he meant by his being dismissed for
reasons other than his ability'?
PM: Prime Ministers have the difficult task of making
judgements about Ministerial places, and I can assure
you it would be a moot point who was hurt the most in
the decision me making it or Mr Willis with the
change. I mean it came as no pleasure to me and I had
to make a judgment and I did, and he, in a most I think
responsible way, has taken up again the Finance
Ministry duties with great relish and fervour.
J: How long do you think it will be before you know for
sure that the Australian economy is on track, and we
have reached the bottom of the interest rate cycle?
PM: Well, we'll just see what happens with the National
Accounts, which come out soon, and then the quarter
after that. The best guide to how we are going is the
official data.
J: Prime Minister, should the markets read anything into
your comments about the future of interest rates, vis a
vis your comments today about the relatively tight
stand in monetary policy?
PM: I was just reminding people that at this stage in the
cycle of the last recession, inflation was at 10 per
cent. Inflation now is at 1.5 and an underlying rate
of about 3 per cent. So we are 7 percentage points
lower, but the shift in interest rates has been 12, the
same as in ' 82-3, which means, necessarily, that
monetary conditions have been, if you like, less
relaxed now than they were then. And that's why I
think the markets ought to appreciate that and
understand that that the Government is intent upon
keeping inflation down, and we are about a sustainable,
low inflationary recovery.
J: But the markets have been speculating about the
possibility of another interest rate cut. Do you think
they might draw upon what you've said that there is
some flexibility in monetary policy?
PM: Well, that's up to them. That's what they're paid all
that money for to make those judgments.
J: Do you think there is that flexibility?
PM: Well, that's what you just asked me. As I said that's
for the markets to make those judgments.
J: Prime Minister, what about immigration? The numbers
are out, what are you going to do to combat that?
PM: What do you mean, combat?
J: Dr Hewson says that it is out of control.
PM: Well, that's a comment which is basically made in
satisfaction of that part of that debate which is
cranky about the migration program. It's not a comment
which pays due regard to the difficulties of running a
program like this.
J: But 35 per cent of recent immigrants are going on some
sort of government benefit because there is no work.
PM: The thing is, look, migration programs are for the long
run good of Australia, of its economy, of its
population, and of course the program goes up and down
during economic periods in boom times when we need
more labour it goes up, in recessions it goes down.
That's what's been happening now.
J: But it's not going down.
PM: No, what he wants to do is basically destroy. He wants
to basically destroy the program. And we'll be making
a Judgement about this in April. In April each year we
make a Judgment about what the numbers should be for
the following year.
J: Can we expect a cut?
PM: Well, you can just expect the statement in April.
J: What's your reaction to the East Timor peace trip, the
way that's turned out? Are you satisfied we didn't
step on any toes?
PM: Well, I'm very pleased about the fact that there was no
overt problem there and that the matter was, in many
respects, dealt with sensibly by the people operating
the vessel.
J: You said the unemployment trends remained much the
same, in Victoria in fact it hasn't, the participation
rate has slumped. Is that indicative of how the
employment rate will go for the next few months?
PM: Participation rates jump about, it's very hard to make
a judgment about them, they dance all over the place.
The main thing is, the trend in employment is for this
month no deterioration, no deterioration over the last
2 or 3 months.