TRANSCRIPT OF THE PRIME MINISTER, TIlE HON P J KEATING MP,
INTERVIEW WITH JOHN SIIOVELAN, TIE WORLD TODAY, ABC RADIO
27 AUGUST, 1992
E& OE PROOF COPY
JS: Prime Minister, thanks for coming on Thc World Today. Despite the Budget, the
Government is continuing to get a lot of bad press. Indced as we just heard, the
Financial Review today is talking about the tide turning in favour of the
conservatives. What's gone wrong? Do you think pcople out there aren't believing
you any more?
PM: Well, I think that's just a bit of press gallery navel gazing. These introspective
pieces come and go frankly, they don't matter that much. I mean, if you look at the
objective evidcnce, in the last week the Government has in fact narrowed in that
poll, I think the Newspoll, the Government has actually narrowed thc lead with the
Opposition.
JS: But overall in terms of polls, you're still about the same distance behind the
conservatives to what you were 12 or 18 months ago.
PM: We're still within shooting distance of a victory. In difficult circums( anccs, but
within shooting distance of a victory.
JS: There has been a bit of a mood swing around the place though. I mean, only last
week In the Parliament you had the Opposition members telling you to sit down.
That's the sort of thing that would never have happened 12 months ago, 2 years
ago, 3 years ago.
PM: No, no, that always happens whenever people are on points of order. It's
happened, I used to do it with Malcolm Fraser, other people are doing it today.
JS: Yes, but they uscn't to dare to do it to you.
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PM: Yes they have. I've had people doing it all last year and early this year. When one
doe-sn't sit quickly on a point of ordcr they'll try to claim their rights. I don't think
that's got anything to do if you're trying to read into that some sort of thing..
Look, I was at thc Best Practice Program where we were handing out Best Practice
Awards on Monday in Melbourne for the major Companies, BHP, the likes of DUi
Ponts, Toyota, and thcy wcrc sitting up there at their tables with their employees
from thc unions, and the Chicf Executives were coming up to us and saying, look
Australia is now really on the verge of cracking it in terms of productivity, of
making all the sort of ' 80s changes come good, of seeing it all conmc to fruition.
And, you know, the people who are not onto that sort of play are the people who
don't attend those sort of functions.
JS-Is that the sort of reaction you think people are giving to the Budget?
PM: I think the Budget reaction was pretty good. It was about Ik, it was about
making Medicare stronger, fringe benefits for pensioners, 150 per cent for R& D. I
mcan, that got the big splash for newspapers, the TV that night, the next day. I
mean, having a sort of sub debate in the Canberra columns about taxation doesn't
have the impact, T don't think, in the public debate as the big presentations have.
JS: Isn't there a big view out there in business, and generally in the community, that
the momentum that you hoped that wasq going to be there in the Budget hasn't
eventuated at all, and that those things have obviously impeded that.
PM: I don't think the community and business arc looking for big momentums for
Budgets. The average person who picks up the Daily Telegraph in Sydney on the
train going to work, or the Sydney Morning Hcrald who wants to wrestle with a
broadsheet, reads the Budget front page news, the big broad stuff, see it that night
on television, then it basically has a very short shelf life and flips into history. I
mean, I've done more of these than anyone in Australian politics, so I know more
about Budget reactions and what one cail expect fromn them politically. And we
got as much as we could get.
JS: What about the money markets, the money markets have been particularly skittish.
They seem to have, they certainly don't like the idea of the size of thc deficit and
possibly the effect that that's having on our overall debt levels.
PM: That's what you say, John. I don't think anyone in the markets would say the
reason there's been, as you say skittishness, in markcts is about the Budget deficit.
It's about terms of trade, it's about the US$ taking a battering, it's about the
Bundesbank playing the mindless game of breaking European prosperity in the
sort of quest for sort of German low inflation. That's what it's about.
JS: Aren't they, though, undermining your attempts to try to get the economy going in
the Budget to create jobs by tightenin& monetary policy?
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PM: We've got the things in place. Monetary policy is not tightening. It's not
tightcning.
JS: But interest rates are rising-
PM: No they're not, it's not tightening. Look, we've got in place now the One Nation
spending coming through. We just ordered 3 million tonncs of rail steel, a million
concrete sleepers. $ 2 billion road programn $ 400 million more than last year.
That's coming through, you've got the Budget spending coming through, you've
got the labour market programs. We are setting the economy up on a growth path
and we will grow as fast as our trading partners in the coming year that's around
3 per cent, and as you know also in the public debate a lot of people think that's
conservative. So that's what wc'rc about, wc'rc about growth and jobs and we're
getting it.
JS: But haven't we seen over the past 3 or 4 days interest rates slowly rising out there
in the market place?
PM: In the long term bond ratcs, on the long yields not the short yields.
JS: Well is there any chance or any danger that they might just flow over into the
housing market?
PM: They go up and down. They were nearly 10 per cent 3 months ago, they dropped
down into low 8s and they're now sort of high 8s. I mean, they shift around. but
the short stuff hasn't shifted around.
JS: So there's no danger in terms of your economic policy that what the markets are
doing out there is undermining your economic policy at all?
PM: No, no. Look, a budgct deficit of 3.3 per cent of GDP with Government debt to
GDP one of the lowest in the OECD, the market would regard that as vcry
acceptable.
JS: Have interest rates hit the bottom of their cycle as far as
PM: T7hat's a matter for judgment. But, basically I've comc on the program to talk
about the Liberal's car policy.
JS: But I couldn't let you come on and talk about that straight away, could I?
PM: Well you could of if you got onto the topic of the day rather than navel gazing
down the corridor here. Ile fact of the matter is, what we saw today was a
revelation for Australians.
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JS: Hang on, what you're talking about is the Opposition's policy to have 0-5 per cent
tariffs by thc cnd of the decade, Now they're telling us that means $ 1000 less per
car for Australians.
PM: It says this, " Libs Tell Car Firms Revamp or Perish", front page of the Australian.
It says this, ' Mr McLachlan says He got a question, ' do you honestly believe
those companies can exist under those circumstances?' ' It's a matter for them to
decide what changes they will need to make to exist'. In other words, we don't
care. We're not saying, this is the Coalition, the Liberal Party, we're not saying we
want a car industry and we'll keep it as Labor is saying. What he is saying is,
basically they can either survive or perish, it's up to them, we're just going to bring
the imports in, we're going to drop the barriers. I mean, that statement should send
shivers through the city of Adelaide, it should send shivers through the city of
Geelong, it should send shivers through the city of Melbourne. Here is the sort of,
what you're seeing here is the sort of primitive capitalist ideal. That is, just rip all
the barriers down and let them go to town. And on the %, cry same page as his
question and answer is a story, " Ford Formalises; Exports to Japan", where Mr
Nasser has just announced another 70,000 engine blocks going from Ford
Australia to Japan, and where McLachlan himself is talking about the. success of
the Labor Government's lxolicies in Il[ olden sending engines to Germany, Ford
selling Capris to the United States and the Verada Wagons which are about to
follow. In other words, the policies which arc working are ours but in the sort of
naive primitive view of T-ewson and McLachlan, they'll just take this industry and
rip it to shreds.
JS: But he is offering things like abolition of pay roll tax etc which he says will add up
to something like a cut in costs of around about $ 1,000 per car. Isn't his big
mistake is that he hasn't solved, some people would say hasn't solved the need for
some kind of revolutionary change?
PM: John, use your brains. Look you take off pay roll tax and go to basically a zero
-tariff on cars with the world with a glut of car production around the world where
they can sell them at marginal cost into Australia, it will just wipe the floor with
the Australian motor vcbicle industry. Dr Hcwson has attacked big business all
this week and last week, he says big business, he accuses thenm of having an
insidious relationship with the government dependent on hand outs. You see his
view is that he hates big business because he doesn't sec thcem as self made, he sees
himself as self made therefore they're to be opposed. Now hc's saying to BliP,
who were at the Be-st Practice Awards the other day, he's saying to Toyota who's
about to build a $ 400 million state of the art plant in Australia, he's saying to Ford
which is now producing the top selling car, I know better than you, like I'm the
sort of refugee from the financial market but I know better than you and the
great success Labor has had in revamping and renovating and remodelling these
industries basically look we'll throw it open to Imports and frankly if you
survive that's really up to you, we couldn't care less.
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JS: Are you sure that the Jack Nassers of this world arc going to say at the next
election that they think that you and you're government should be rececctcd?
PM: Well look, what thcy'vc said, let me just quote some people Mr Johnson from
Toyota said " if he had known fully what the Coalition policy was his company
may not have committed itself to a $ 420 million invcstnient". I'm going to Japan
in a few weeks time, I'm seeing the Chairnian of the Toyota company Mr Toyota.
What do I say to him? T7hat the alternative government of Australia would
basically wreck his investment. Do I repeat what John IHcwson says when he goes
abroad, that he's ashamed of Australia and Australians? That's what he says, I
mean he is grossldy disloyal wherever he goes. He says rm ashamed of Australia,
its lack of productivity, the attitude of Australians, I'm ashamed of them. I mean
do I smy that? Or do I say to him look, we've got a policy which has taken motor
vehicle protection from 150 per cent to 15, we think that you can live with that
level, but if it goes to zero you get wiped out and the alternative government is
going to wipe you out. I mean what do we say? Sec what McLachlan says today
on the front page of the Australian he says " you arc all too motor industry
orientated". The fact is the Motor industry is the base industry of Australian
manufacturing. He says we have no interest in it, if it c-an survive against a flood
of imports dumped from the excess production of thc northern hemisphere at
marginal prices, well go for it fellas. If you can stay there great, but we'rc not
going to make the claim that we want you there as L. abor says. Labor says, I say,
we want a car industry. Hcwson and McLachlan say we don't care.
JS: Just one quick one before you go Mr Keating, what's happened to your proposal to
take to Cabinet about the flag? Is that Finished, is that buried?
PM Well, I mean, everything in its turn and you know, at some point I will. But again,
rm not going to be operated by someone else's agenda. I mean we are at the stage
now in this country where we've got low inflation, low interest rates, where we're
now very competitive, where we've got a revolution going on in ( he labour market)
where all those Best Practice companies are turning out with inte~ rnational
benchmarks, where we're now cxporting our heads off, where we shipping car
engines around the world, fully built up vehiclcs like the Capri to the United
States. This is unheard of, and yet these mindless zealots who for seven years in
office, with Dr Hewson as an adviser, sat there and did nothing about it, there. now
saying look you don't know best, the country is on the verge of blossoming in the
as a low inflation productive environment as it never has before, but we know
better, we'll rip the lot down, there'll be no support for industry what so ever and
basically we'll let the northern hemisphere car makers and manufacturers rip the
guts out of Australia. I mean if you live In Adelaide you ought to be scared stiff
by this thing, I mean Mr McLachlan is a South Australian member he's going to
basically decimate his own state and Dr Hcwson from the sort of lofty vantage
point of Bellevue Hill, Sydney is going to wipe out the city of Geelong and
Broadmcadows and half of Melbournc in a sort of mindless quest for primitive
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capitalism, a sort of naive view that he has despitc the fact that the whole world
has a different view.
JS: Prime Minister, he must leave it there. Thanks for speaking to The World Today'.
PM: Thank you John.
ends
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