PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P. J. KEATING MP
DOORSTOP, AFTERNOON BREAK, COAG, PARLIAMENT HOUSE,
DARWIN, FRIDAY, 19 AUGUST 1994
E& OE PROOF COPY
PM: In the early afternoon, as you know, at lunch time, we hadn't made
much progress here. The States wanted a fundamental realignment of
Commonwealth payments to the States before they would discuss the
Hilmer recommendations. For the Commonwealth's part we said well,
we wouldn't agree to that, we would be prepared however as we said
this morning to try and quantify the benefit to the Commonwaath
budget flowing from competition policy changes, but this is not, of
course, economy wide changes on the Federal budget. And, were that
not to be agreed by the States, we, the Commonwealth, would go back
to the drawing board and think about what position we should take
ourselves ie, whether we would legislate ourselves.
At that point, I think, the States thought that, well frankly, thought
better of ht and said that for their part, a number of them NSW, OLD,
WA, the ACT said that they could actually agree to some of the core
matters if, indeed, we sought to quantify the funding, the extra revenue
the Commonwealth might receive from the Hilmer competitive
changes. So, we said that's fine, ok, we are prepared to think about
that, but we have to have agreement to the core issues and, of course,
I then started to move down them.
Now, the primary one is the first point. Council agreed to a package of
reforms that comprised
the revision of the conduct rules of trade practices legislation
and their extension to cover business and state and local
government business enterprises and unincorporated
businesses.
That is your essential core Hlimer principle. The second dot point
2
establish a national system to carry out surveillance and to
provide access to essential facilities such as electricity grids,
pipe lines, airports, rail networks under an agreed set of
national principles.
That was agreed by the same group of States. The establishment of
an Australian Competition Commission has been agreed. So, those
core bits are there. Now, there is many more elements of them, but
they are ancillary to, they tend to round the points out. They are the
core points. Now, if we get throughout the balance of the day, further,
if you like, written confirmation of the agreement of a majority of States
to these points, we will then look at the legislation, amend it where
necessary and then circulate it for discussion with the States so that
when we come to our next meeting, by that stage we'll also have a
financial offer on the table based on some quantification of the value to
the Commonwealth of competitive changes.
Now, what all that means is we are making progress. This is a very big
issue and it is hard to make progress on. The States authorities are
one of the last places left where monopolies exist and where free
competitive disciplines are curtailed. It was never going to be easy to
crack that nut, this was the way to do it I think. And, we were, sort of,
giving the nut a bang all morning and we got a crack through It in the
afternoon.
J: Why did it take five hours to come to the point which the States
already wanted? Why did it take five hours to nut out?..
PM: Because they thought they would stare us down on the claim that half
of future gains to Commonwealth revenue would go to the States.
Nothing to do with Hilmer, just general economy wide revenue
changes. And, of course, we were not going to agree to that.
J: Prime Minister, the States say that they have got from you a guarantee
that they'll get a percentage of the revenue gains. Is that right in
principle?
PM: What I've said to them is that we are prepared to share with the States
the benefit to the Commonwealth budget that might flow from
competition changes as a consequence of these discussions.
J: On a fixed percentage though?
PM: but that is a whole lot of difference than half of the future growth of
total Commonwealth receipts to the States.
J: But how do you guarantee them fixed a percentage share?
PM: No, no, it Is not a fixed percentage. It is a matter of us trying to assess
what the value to the budget is. Now, let me just repeat the point
again. This is a tough set of issues and the first thing the States did
was walk away from the communique and say well, that was only our
officials. Well, you know, the Commonwealth has been encouraged by
the fact that States officials have agreed broadly with the communique,
but the Premiers are making it clear, no, well, officials say one thing
and we say another. OK, well we understand what an argy bargy is all
about, but let's try and get some national progress here. Now, I think,
we are going to get that, but we are going to get it around some decent
principles because the thing you do in here, I mean, I'll sit here all day
and night if I have to to screw the points down and get them out of
there. Just like we did at subsequent meetings of COAG and I hope
that we can get enough core principles adopted here to say that one of
the last bastions of privilege and position in commercial terms in this
economy is going to be opened up.
J: Prime Minister, do you concede that the revenue share that you are
now considering will be more than the $ 700 million that you originally
offered the States?
PM: No, it may not be, but It may be.
J: Prime Minister, are you saying that some States haven't signed on for
this yet?
PM: That's what I'm saying. Just-like that.
J: Which States Victoria and Western Australia?
PM: Godi I like your questions. ( Fran Kelly, ABC Radio)
FK: I'm glad.
J: Prime Minister, they've all said It was a fairly acrimonious meeting.
PM: There hasn't been a tough word exchanged all through it to be honest.
J: No voices raised?
PM: No, no. in fact it's what shall I say. I'm searching for adjective. It is
very, very polite. It's a very polite meeting. It is exceedingly polite. It
is insufferably polite.
J: Is there any great ( inaudible) for the general revenue sharing or is
that what you think you've knocked on the head this morning?
PM: Well, we have knocked that on the head. Look, bear this in mind and I
think this Is an important point. You might remember after the
February meeting of COAG we said the States have agreed in
principle to Hilmer, they've not adopted it, but they have agreed in
principle to the issues. Therefore, we will show some bona fides at the
Premiers Conference financial meeting when we consider
Commonwealth payments to the States. We did that. We gave the
States a completely new deal, real terms per capita which will cost us
about $ 1 billion. So, we've actually made a commitment already about
revenue sharing and we are happy to make it in the context of cooperation.
But, we are not about to say, when we've now got five per
cent economic growth In the economy, we'll hand to the States, here's
half the revenue and what, for the Hilmer changes because they are
not going to come through for a couple of years, but as from now, we
were never going to agree with that.
J: But, do you believe you will reach a figure today?
PM: No, not today, but look, there is going to be some consequential
benefit at the Commonwealth budget. We are quite happy to share
some of that, quite happy to, but that is a world of difference in saying
to the States well, here's half of our future revenue growth. I mean,
we've got to bring the Commonwealth budget into surplus and the only
way we are going to be able to do it is to make sure that when the
economy does pick up and the revenue yield does rise, that it gets
devoted to turning the deficit Into surplus.
J: And what are the implications to the States that didn't sign onto the
agreement today?
PM: Well, I think, their position is not very strong because they have got a
majority of states signing on, we'll have a national Act and if they are a
co-operating State under the Act they get a whole lot of benefits
including money. The first thing the State doesn't get who doesn't sign
up is money.
J: Who hasn't signed on?
PM: Well, there's Victoria and Tasmania and South Australia at this stage
to some of things but, some are on some points and others are on
others.
J: Western Australia has signed.
PM: Western Australia has on the main point, yes.
J: Is the political reality that the agreements you are getting now on these
substantive points are conditional on this money being sorted out in
February?
PM: Yes, I think that is fair enough. I mean, how do you know and how
could you accurately access how much the Commonwealth budget will
benefit from this. Well, that is pretty hard to say, but we can make a
good guesstimate at that.
J: Did I hear you say that Western Australia was one of the main
PM: No, no, Western Australia is part of the agreed on the principle
point, is one of the agreeing States, but on other points is not. You
see, some agree on some points and not on others.
J: Mr Keating, can I ask you what you think of the new Parliament
House?
PM: I think it is a very nice building and with a wonderful view too.
ends
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