TRANSCRIPT OF THE PRIMIE MINISTER, THE HON P J KEATING, NMP
INTERVIEW WITH CTAIE ARTIJURS, RADIO 4QB, BUNDABERG, QLD,
16 NOVEMIBER 1992
E& OE PROOF COPY
CA: It is a big pleasure to welcome this morniing to our Bill Macarthy studios in
Bundaberg Prime Minister, Paul Keating. Good morning.
PM: Good morning, it's very nice to be here.
CA: We are going to take some calls in talkback this morning and I will just give our
listeners our number again it's 071 532800. Prime Minister before we go to calls
can I go to the qucstion which a lot of people are wondering this morning and of
course the election, if you were to bump into Governor General, Bill Hlayden, in
Brisbane at the airport this afternoon you still could call a December election.
PM: Yes I could hut that wouldn't be quite the place to do it and I have not made any
arrangements to see him.
CA: Then no decision or arc you ruling out a December election all together now?
PM: Well as I said yesterday, it's a funny thing in this business, everyone wants you to
rule things out. One of the prerogatives thc Primc Minister has in this system of
our-, is the option of deciding thc election date so I never rule anything out.
CA: What are you reading into thepoll1s released this wcek which put you and the ALP
ahead of the Coalition?
PM: Well$ I think that we are seeing a trend deterioration in the Opposition's position
and I think because their policy stance isn't the appropriate policy stance for
Australia at the momecnt. It may bc that thcy say that we have got to do more on
employment and economic recovery and we certainly want to see that
strengthened. But putting a goods and services tax, 15 per cent on everything,
cutting thc Commonwealth bdgt_ back by $ 6-7 billion which would have a very
regressive effect onl the economy, all those of those things are basically the wrong
policies for the current condition of the economy. T think what has basically been
realised that people don't want a 15 per cent tax on everything they buy, food,
clothing, services, and they don't want people thrown off unemployment benefits
after nine months, they don't want the budget deficit cut back so that the spending
from the public sector is withdrawn, and as well as that I think they don't like
the fact that Dr Hewson has attacked almost every group in the country.
CA-Prime Minister let's go to the phones, if you would like to pop your headset on we
will have a chat to Bob who is our first caller this morning. Good morning Bob.
Caller: Morning, morning Paul.
PM: How are you Bob?
Caller: I am all right. My question concerns unemployment, Paul, and I ami wondering
why we perhaps can't embrace some scheme wvhcrcbyo3ncmployment beniefits
continue to be paid for anyone that goes back into the workforce with the
employer making up the difference between their bcnefits and what the applicable
wage might be for that particular industry or job they go into. For instance
suppose an unemployrment beneficiary is on say $ 300 a week that's a benefit, and
the job that is offered. is say paying $ 500 the employer pays the difference between
the two, say $ 200, this continues for say 12 months and after that time the thing is
reviewed and if the economy is coming out of recession then perhaps this can be
continued but on a smaller benefit from thc Government and the employer making
up a greater percentage of the wage?
PM: Yes I understand what you are saying. Wcll look we have things called labour
market programs and Job-Start, which may be a name that rings a bell with you, is
basically just what you aelcribed. It is a wage subsidy which the Commonwealth
pays to any employer taking somebody on. Now, the labour market programs of
the Commonwealth this year will handle roughly 400,000 people and that's a very
large proportion of thosc unemployed. So, we have got quite a comprehensive
range of policies out there now and we added to those in the One Nation program
and in the Budget. So there is nearly 1.5 million of expenditure there now on
labour market programs which either provide a combination of training and thle job
subsidy or the a straight job subsidy. So, they arc out there and we are now
operating those programs to try and get the maximum take-up, which is I say
about 400,000.
CA: Airight thanks very much for that call Bob and we will move on to Roy. Good
morning Roy.
Caller: Good morning. We have had a small business for a long time but bard times had
come and we owed a $ 20,000 dcbt in 1983. Ever month now we seem to
increase our debt by about $ 1000 more or less. When it is less than $ 1000 the
bank is happy, we arc now in debt to the tune of 160,000 and the Manager of our
business wants his employment contract resigned. My question to you should I
sign to re-engage him even though he is managing our business into a worse
position month by month?
PM: You have a business which you havc turned over to somebody else, is that the
idea?
Caller: Yes we have turned our Australian business over to you and the Labor Party and
you arc managing it month by month into a worse position, should we re-cngage
you at the ncxt election?
PM: Well, I will just say this to you, if it wcrc not for the L-abor Party, Australia would
be still punting on simply agriculture and minerals. We were a farm and a quarry
in the early 1980s and that's all we would be. We were exporting then 14 per cent
of all we produce, today we are exporting nearly 25 per cent of all we produce.
We have actually made the big change to an externally oriented country which is
now exporting heavily and we will be able to pay our way in the world, which was
not the case a decade ago. Now we have been in a recession but we are coming
out of it with a low inflation rate, we have also kept most of the 1980s jobs. In
1983 the workforce was 6 million people in sjze, today it is nearly 8 million, it is
nearly a quarter biggcr and even though we are not cecating enough new jobs as
new entrants join the workforce, that is, as unemployment is rising we have kept
the stock of jobs that we produced in the ' 80s. Now what we have to do is to go
back to growth but we are living through what we call a surge of productivity, and
what that means is we are getting more output more production from fewer people,
so at this stage of the cycle as we grow we would normally be taking people up
more rapidly into employment, we are not at the moment because of productivity.
That is we are getting the came output or production from a small workforce so
because the whole country is now more productive it means it is not laden with
employment likc it was in the past. So, we can only grow more strongly, more
rapidly and as that happens the employment will be taken up, productivity or not,
do you understand?
CA: Can we follow that because last night you were talking to ALP members at an
informal function you talked ahout the fact that Australia had crossed the Rubicon
some ten years early in relation to our attitude to our place in the world. We tcnd
to talk more these days in terms of the things we have to address about the growth
In employment and the growth in unemployment. What about the possibility of
gctting some recognition of the fact that there will always be an unemnployed pool
and teaching our young people to cope with life which includes not having a full
time paid job.
PM: The key point here is what is today full employment? The Reserve Bank Governor
said last week he thought it was somewhere bctwcein 5.5 and 6 per cent, we've got
unemployment at around just over 11 per cent so half of that he thinks is what we
call structural unemployment, that is unemployment which is there because we are
going out of some industries and into new ones. The other half of the
unemployment is from the cyclc of the recession the boom and the bust. As we
grow we'll take that employment up, that unemployment will come down, but
whcther we can get below 5.5 to 6 per cent is a moot point and it will take some
years. So we are going to certainly be living with a higher level of structural socalled
unemployment than we were in the past. The main thing is that people are
trained for the sorts of jobs the Australian economy will offer in the future, but the
key point is Australia has crossed a Rubicon, we were a country really without
hope in the early 1990s, we'd relied for nearly all the post-War years on mining
and agriculture and as good as they have been and remain good, they were not
good cnough to pay for our imports and they were not good enough to employ
people, that has now all changed.
CA: We might be a country with hope, but there are an awful lot of individuals coming
out of school this Christmas who don't have hope and they might even agree with
you that things might all change in five or ten years, but meanwhile they have got
mouths to feed.
PM: I can only take about the 1980s experience here and that is most young people
found a job quite rapidly and particularly those who were trained. There is a link
betwecn growth in the economy and employment, we've just got to have the
economy growing to take them up. Again a lot of young people arc finding jobs
out there, it is only a minority who are not and the fact now that we've got a much
higher proportion of kids completing secondary school and then going on to
university and to TAPE means their prospects in finding a job are greatly
enhanced.
CA: Let's take some more calls, Lorraine is waiting to talk to you.
Caller: Good morning Paul and welcome to Bundy and first I think you arc doing a pret
job despite the media bias and the promotion of Hewson especially by Lyncham
and Bomnhorst on my belovcd ' 7: 30 Report'.
PM: That's nice of you to say, thank you,
Caller: If the OST is so great in New Zealand, why are there 250,000 Kiwis living here
and approximately 510,000 of them on our dole? But to help Australia we need to
buy Australian goods and less population and only exchange migration, it's ovcr
breeding that causes unemployment because you can see that by the population
explosion in Australia.
PM: Can I say a couple of things, you often hear New Zealand compared with
Australia. I just said a moment ago to a gentleman that called earlier that our work
force in the last decade has grown by nearly a quarter, it started at six million, it is
now newrly eighit million. In New Zealand the work force is actually smaller today
than it was in 1983, there are actually fewer people in work today than there was in
1983, where we have nearly 25 per cent more people In work today than in 1983.
So the goods and services tax and all that sort of hard-hearted economics have not
stood them in the stead that the policy mix we've had has stood Australia. I
believe that we don't need another tax base in the tax system, putting 15 per cent
on people's clothing and food and services, every service they have whether it be a
bus ticket or a railway ticket or a hair cut, or whatever it might be, is all going to
be taxed as to 15 per cent. It's inflationary, it's going to add about six to seven
percentage points to inflation at a time when we've got inflation the lowest in the
OECD, the lowest in the world, under one per centage point, and that extra
increase in inflation will go straight into interest rates which will only slow down
any recovery we have. So we think it is absolutely the wrong policy miix and as
well as that it's being paid by one group of people but the benefits are going to
another group of people. In other words the people who pay don't get the benefits
by way of tax cuts and the rest, basically it's a switch in income from low and
middle income earners to high income earncrs so we think it is the wrong policy.
As to population, this country can obviously carry a larger population than it has
and we've been complementing our natural growth in our own population with a
migration program. We've cut that roughly in half over the last few years largely
because the labour market is not growing strongly enough to take migrants up as
well as those who are coming out of our own labour market, but the migration
program remains an important long ternm program for our economic strength and
the growth to a critical mass in our population.
CA: Thanks for Your call Lorraine. Prme Minister, speaking of policies, the reason
you are in Bundaberg and in this region today is to talk suigar. Now with the report
into the sugar industry due for release, in fact just about ready to be released,
what's the point in holding taks?
PM: Claire, the point is, I've not meet the groups of cane growers myself and I always
think it's bad form for a government to be making decisions without those
primarily involved, having the benefit of the sort of discussions which some of our
colleagues have. Now Brian Courtice, your member here, is of course, the
Chairman of this group and Brian knows the sugar industry back to front, and he
and the group have spoken to cane growers and cane grower rcpresentatives and
the sugar industry in general. What I want to do is pick up a feel on that, pick up
soeof the feel so when Brian presents the rcport it means something to me and
the Cabinet, that we've got an actual feel of the issues. That I think is the virtue in
seeing people, so that the report has some sort of contcxt when it is presented. I
haven't had that opportunity and I'm looking forward to it today.
CA: And on the ground Prime Minister?
PM: On the cane fields.
CA: And another call now, and it's good morning John.
Caller: Good morning Prime Minister.
PM: How are you John?
Caller-Very well thank you, my discussion is savings in relation to the pension. The
Australian Government in common with most overseas governments which
provide peniions for retirees realise that in the future the ability of government to
pay for pensions will he greatly reduced therefore the Australian Government has
said make a personal effort to prepare for your retirement. My two questions are
connected with that personal effort part Personal savings: why does the Labor
Governmnent not provide an incentive in the form of income tax deductions on
savings invested on which income tax has previously been paid.
PM: You mean that..
Caller: As someone who is an employee shall we say, I'd be income taxed on my wages
regularly then make a saving and I'd be income taxed again on the investment from
that saving.
PM: Right, the principle is we tax income and interest income is income the same as
any other sort of income.
Caller: What about the personal effort if I and others save from my original income as we
are being requested to do, surely we should receive some incentive to do so.
PM: It's all a matter of whether or not a cost to the Budget will add to savings, that is,
would people save a certain proportion of their income prudently and, if we gave a
tax deduction for it, would that not just make the Budget so much harder to finance
and would we have any more savings for it. The one placc where we think we can
add to the savings in a discretionary way is through superannuation that is, by
encouraging people through the tax system and through the labour market under
the Accord programs for employer sponsored supcrannuation and there, as you
know, by later this year cvery person in the work force will have five per cent
contributed for and on their behalf by their employer, and that will rise to about
nine per cent by thc end of this decade. That sort of contribution system going into
their account which is then preferentially taxed superannuation income is vcry
lightly taxed will mean that as it accrues there is substantial bencfit accruing
there for every person in the work force. So when we reach the position where in
about 2010 or 2015 when my generation is retiring, that is the post-War baby
boom generation, therc will be twice as many of us of retired aged than there is
7
today, and that will put a very big strain on the Commonwealth Budget to pay
aged pensions. We are taking the opportunity now, prudently, to provide for our
retirement income to add to our retirement income, to add to pension in 2010,
2015 through superannuation, And in the meantime for those who are retired now
we kept the pension up, we've got it up to above 25 per cent of average weekly
earnings per person and we've got Support for the aged in our general programs
such as the hostel, nursing home, dementia and all these other programs as well as
home and community care.
We think we've got both bases covered, but the growth in investment and funds
coming Into the superannuation system will do more to add to savings than any tax
preference we could give td savings accounts in banks and if we give it to savings
accounts in banks there is no guarantee we'll actually add another dollar of savings
to that which would have been saved without the tax concession.
CA: Thank you for that, we'll take another call and next this morning is Jean. Good
morning.
Caller: Good morning Mr Keating.
PM: Hello Jean.
Caller: You said last night on ' 60 Minutes' no one has done anything to change the amount
of pornography and violence on TV and videos for the last twenty three years.
Then why havcn't you heen listening to the womens organisations and churches
and the families who have been pleading for you to change these rules?
PM: I didn't say no onc has done anything for twenty three ycars. What I said was I
think that the networks are finding that programs which have more real-life, shall
we say violent, situations tended to believe that these things add to ratings and
they buy a lot of the product which comes from Hollywood which today is more
violent in content than it was say a decade ago. We have had, to this point, self
restraint on the part of the networks in deciding what they put to air, lately they
have been pushing those limits out. What I'm saying is I don't want to be deciding
what adults can see, but I think it is very important that films arc properly
classified. We've now got a dual classification system, we've got one set of
classificat ions for television and another for movies and videos. We need
basically one set of classifications and one which givcs you an accurate idea of
what's in the product -so if parents arc then looking at the television program and
deciding what their children can see they have a fair idea of what the film is likely
to provide, whereas at the moment they don't have much idea at all. Thc other
problem is confusion bccnuse we have this dual classification system and that they
don't provide a good idea of what's in them. Many children are exposed to what
are so-called real life violent scenes which I think basically dulls their scnscs
about these things, that is they become unsensitised to it and I think that is a bad
thing. Perhaps the answer to this is we put adult films on later so that children are
not likely to he watching them and better that we classify the films so that
everybody has a chance to know what is in them. But can I say though, I know
some organisations havc gone on about this subject over a long period of time, it is
a very difficult one to handle.
CA: Prime Minister, while you arc on the subject of media and while you are in
regional Queensland can I ask two questions about media and of course, the ABC.
Does Canberra appreciate the importance of the ' role of the ABC in regional
Australia and what are your concerns or views on the future of the AB3C
particularly with funding for the region?
PM: We pay the ABC nearly half a billion dollars a year, we pay the ABC more than
we pay the State of Tasmania in Commonwealth grants, so it is a very large thing
and we do it for the public interest broadcasting. I think onc of the things that
most of us in Canberra would think is that it is a regional network, that is onc of
the valuable things about the A. BC that is it is providing a service which in many
places is the only scrvice, in some places the only service.
CA: Does your Government agree with the Coalition that the ABC needs to become
leaner and meaner?
PM: No, we reject absolutely Dr Hcwson's vicw that you can cut a substantial
proportion of funds from the A. BC. Because if you take a substantial proportion as
they want to to fund their program from the ABC, that will simply mean a cut back
in services and that must mean across the whole spectrum not just television but in
radio. I don't think this is appropriate and I don't think it's the time to be doing it.
CA: We'll take another call and coming up now we've got Bill on the phone. Hi there
Bill, thanks for waiting.
PM: How are you Bill?
Caller: Well Paul. Paul, I'm a retired grain farmer, a small farm I might say, my only
source of income is from interest on invested capital, income which is diminishing
with falling interest rates. As my investments mature I'm hard pressed to pay my
way aftcr tax, would your Government consider allowing self funded retirccs
private health insurance costs as a taxation rebate? The present cost is $ 870 per
year.
PM: I think we are coming at this problem a different way. Brian Howe is trying to
negotiate with the States better access by public patients and public hospitals so
that those who are aged don't feel that they nccd to insure thcmselves to cover
themselves for elective surgery, so if some onc needs a hip replacement or
something like that they can reasonably find entry into a public hospital and have
it done, so that we relieve people in your position of the burden of paying for
private insurance. Now that is the aim, that is to sit down with the States and
conclude in the Budget we provided $ 1.5 billion over the next five years, about
$ 300 million a year for enhanced payments to State governments for better access
for public patients in public hospitals and of course, thc aged are an important part
of that. A lot of aged people cover themselves for private insurance when quite
often Medicare is going to stand them in good stead.
But on the underlying point you raise about interest, it is true that the real rates of
interests have come down and part of it's been that we've succeeded with inflation
so the inflationary floor sitting under interest rates has come down, so what's called
the nominal interest rate, the posted interest rate has dropped and that's the effect
you are feeling now. I can only say this to you, that with inflation running at
around one per cent or less, your prices have dropped too, so it should mean that
while you have suffered a loss year in nominal income, it should be compensated
in pant by the fact that prices are not rising at the pace they were a year or two
years ago which should help you carry on; that is, your income is down, but the
growth in the price lcvel is down with it. hope that if we can conclude a
successful set of agreements on Medicare enhancement for public patients in
public hospitals you'll find that you just don't need to cover yourself with private
insurance.
CA: Thanks for YOU Call Bill, Prime Minister we arc going to have to let you go soon
becausc you are off to sweet talk with the sugar growers, but before you do go just
two weeks ago in that vcry chair John Hewson was talking about personality in
politics and we spoke at some length about the selling of his image and he made a
comment that he doesn't believe there is anty winner in personality politics, would
you disagree with that?
PM! I think the issues are what matter and that's why it is important to articulate those.
One's motives will always be called into question, whether you are a Labor leader
or a conservative leader, in proposing for instance, cut back to the ABC, cut back
in funding for the aged, a thing like the GST, we will refer to their motives as tlhey
will to ours for the policies to which we are associated. I don't regard that though
as personality politics, I regard that as part of the sensible cut and thrust of public
life in Australia. I think thc public are quite reasonably impatient about what they
think is a senseless focus on personalities and they do want value and they do want
the system to work. By and large, our political system does work and a lot of the
static gets transmitted. All too often the mnedia will always pick the juicy bit and
not the forensic bit, if the ncwservice had the time to carry it all, it would look
much more balanced and presentable. So, for our part, we can only do the best we
can to keep the focus on the issues, but at the same time make the whole debate
intelligent to people.
CA: We have people marching in the streets in Victoria against an elected government,
we have business leaders in court, wc have politicians before royal commissions,
do we have a crisis in leadership in Australia?
PM: I don't think so. I think the Australian political system has served Australia pretty
well in the last decade. We were a country that was flipping under the waves ten
years ago, as I said earlier, we were relying on a group of industries we
traditionally relied on to look after us and they were unablc to and at the eleventh
hour wc had to switch the whole productive basis of the Australian economy and
we've done it. We arc now ini a low inflationary context as well, we've changed
the habits of nearly a century. So I think the political system is working, better in
Australia than perhaps in any country; look at the United States, the problems
which Governor Clinton is referring to there now education, access and equity in
education, aces and equity in health, thcse are all things that were a problem in
America ten years ago, were never touched. They've all been dealt with in
Australia, by arnd large, and the same with thc productive base economies. So I
think the political system in Australia is working. There will be problems in the
States; we've got the problem in Queensland with the corruption enquires, you've
got the problems in Western Australia et cetera. But if you look at the national
Parliament, in the big cockpit of Australian politics where the big decisions are
made, I[ think, by and large, the system has served the country pretty well.-
CA: Prme Minister, thank you very much for joining us this morning and for taking
those calls and spending some time.
PM: Good Claire, I'm sorry I was late starting, but we are late finished so we've made
up the time.
CA: We'll leave you to a day in Bundaberg.
PM: Thank you very much, nice to be here.
ENDS