S
I PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P. J. KEATING, MP
INTERVIEW WITH PAUL LYNEHAMI 7: 30 REPORT, 4 MAY 1994
E& OE PROOF COPY
PL: We'll go now to the Prime Minister who has just joined me here in the
studio. Mr Keating, thanks for joining us.
PM: Thanks Paul.
PL: Chifley had a vision. Where's Paul Keating's vision in all this?
PM Well, the vision here is of a cohesive society where we don't take the
callous view that half a million people, lo~ ng. 4erfrLuner( npoyq1, pqople
can be the people who carry the burden of economic change and you
keep a society, you keep a country together by letting everybody
believe they are part of it. And this is particularly so with young people
so that they don't grow up believing they are alienated and that no one*
is interested in them.
PL: But, you've produced more Budgets and statements and packages
than most of us have had hot dinners over the years. Doesn't this
suggest it's taking a hell of a long time to get this right?
PM: Paul look, the Australian economy today is not to be compared with
what it was 10 years go. I mean, it's exporting its head off.-It has got a
2 per cent inflation rate, it is growing at 4 per cent. We've had two
million job growth in the ten years, we had a work force of 6 million in
1953, we've got a work force now of over 8 million. Employment is
going to pick up again strongly, but it is not right and it--is-ndt dieent
and it is not efficient to leave a large body of people untrained,
unc-ared for, unthought of. Now, this program; we are going to be
personally case managing 504,000 people next year.
PL: This is really one-on-one stuff is it?
PM: One on one 504,000, I mean, if that's not a vision of getting people
back into the mainstream of Australian society I don't know what is. I
mean, I don't want to see Australian cities like New York or Los
Angeles.
PL: I'm sure no Australian does.
PMV: No, and the way not to do it is to reach out to the unemployed and to
give them this work experien0ce and to train them and to give them self
esteem and confidence and competence and see them taken up
because, I think, in this recovery another point that needs to be made
Paul is this, that the complement toA~ jI1~ formation, when we are going
to need skills in this recovery is not going to come from migration, it is
going to come from within Australia. In part, it is going to come from
that pool of long-term unemployed people.
PL: And If we start running into skills shortages then we are going to end
up with a bit of a bottle neck?
PM: If we run into skills shortages, you'll have wage cost pressures and
you'll have higher inflation. So, the way to deal with it is to get this
pool of under employed resources and unemployed people trained and
back into the mainstream labour market.
PL: All right, while we're on the big picture, the long bond rates hit an 18
month high, they went into panic mode this afternoon after your
statement.
PM: No they didn't.
PL: Well.
PM: Look, they have been rising for a couple of weeks on notions of what
the American Federal Reserve Bank is doing and frankly, here we are
when the low inflation rate came out last week at 2 per cent, it made
monkeys of them. I mean, the long term bond market has got no
credibility..
PL: This document, Prime Minister, the cost of the White Paper measures
are covered by the growth dividend, this leaked draft of the Budget. Is
that right?
PM. That document, God knows how old it is. It is as old as Methuselah I
think given what's in it. It bears no relationship to the Budget, but I
made the point very clear in the statement today, Paul. When one
makes the judgenment of saying is the economic efficiency and equity
point of picking up the young people of Australia between 15 and
and the long term unemployed and giving them a place in our society
and growth in our economy and a complement to the labour market
better than the short term financing effects of another $ 1.7 billion off
the Budget. There is no judgement to be made, none what so ever.
PL: But we have got six days now until the Budget. Are you going to be
able to assure the markets that interest rates don't have to go up again
because we could jeopardise growth, the real growth and prosperity
we need to get real jobs in there.
PM: Paul, just ' on the markets. The market has got the long bond rate now
at well over 8.5 per cent. We have got a 2 per cent inflation rate, we
have got a real rate of interest of 7.5 per cent. The average real rate
of interest in the last 30 years was about 4 to 4.5 per cent. It is the
bond market that has basically got to wake up to the fact this is not the
United States, that what the US Federal Reserve does has nothing to
do with Australia's inflation rate and that the Government will bring in
the Budget, as I say in this White Paper, and meet its target of a
Budget deficit of around 1 per cent of GDP by 1996-97.
PL: And will the cost of the White Paper measures today be covered by
the growth dividend, Prime Minister?
PM: It will be covered by the things which any sensible society, the
resources, any sensible, efficient, compassionate society would spend
on its people who are carrying the brunt of unemployment. All these
people who incode say, I mean, Professor Sloane, she Is confused
about whether it is young people or It is all about saying, " look,
forget them", she talked about substitutions forget them. You forget
them and you end up with a Los Angeles on your hands.
PL: Yes, but there is going to be churning Isn't there?
PM; That's what happens to you, you end up with someone breaking your
window in.
PL: But, there is going to be a lot of displacement. People will displace
others in this.
PM: But, we'll have in a strong economy with low inflation a lot of aggregate
employment growth and that is the key point. But, are these people
entitled to be part of the stream? Well, the answer is of course they
are.
PL: To what extent though will all these training schemes and so on mask
the real level of unemployment? Your critics say it is another Keating
' ace up the sleeve trick'.
PM. There wouldn't be an OECD government, a western government,
undertaking a package of this size and this comprehension. It is only
in this country that you can get a nit-picking debate on this sort of
thing.
PL: Well, Margaret Thatcher is pretty good at massaging the figures, some
say you are learning tricks from her.
PM: Well, after that load of old codswallop you started with at this program
. I mean, that Is the most absolutely irrelevant statistic I have ever
seen in my life, but anyway..
PL: What. the manufacturing trade deficit has no relevance Or did you
see the figures today?
PM; You are trying to outdo Elle McFeast. You better make your mind up
whether you are in entertainment or news, Paul.
PL: OK, well how entertaining were the trade figures today the
merchandise trade figures?
PM: I'll just give you a couple of simple numbers. Manufacturing production
has doubled since 1983. Manufacturing exports have tripled since
1983 80 per cant of our economic growth comes out of services not
manufacturing. That chart is completely Irrelevant.
PL: And what did the figures show us today. We had merchandise exports
up 5 per cent and Imports up 13 per cent. r-1-
PMV: I don't mind you trying to make a sensible point, but why make a daft
point? We are all short of time. We are all busy, why make a dumb
point?
PL: Because the point is our economic future..
PM. Because you don't know what the real point is.
PL: Our economic future is determined by our export performance. You
keep telling us we have got a record deficit in manufacturing trade.
PM: Paul, 10 years ago we exported 14 per cent of all we produce. What is
it today? 21 per cent.
PL: Record deficit.
F M: Today. What's today mean in the long you mean, one month's
balance of payments numbers?
PL: No, we have a record deficit 1992-93. It has been getting worse as
you see there.
PM.-That is the manufacturing sector, but what about the mining sector, the
agriculture and services. As Professor Sloan said why point to that?
PL: it is one part of
PM: Paul, look, I don't want to have a silly argument about a silly point. Let
me just make this clear that the Australian Chamber of Manufactures
said today the job compact will ensure that a persons need to find a
job will merge sweetly with an employers need to fill one. The Metals
Trades Industry Association said they regard the Government's White
Paper, ' Working Nation', as a constructive contribution to public policy
which will provide new directions for industry et cetera. This is fulfilling
the commitment the Government made during the election and on
election night to keep faith with the unemployed, to have a more fair
and equal society and a more efficient one. That is the point of today's
message.
PL: Thank you, Prime Minister.
PM: Thank you, Paul.
ends