TRANSCRIPT OF THE PRIME MINISTER, THE HON P J KEATING MP
INTERVIEW WITH JOHN LAWS, RADIO 2UE, SYDNEY, 10 MAY 1995
E& OE PROOF COPY
JL Prime Minister, good morning and welcome.
PM: Thank you, John, good to be here.
JL Are you happy with the response to the Budget?
PM: Well, I think we've had a round of editorials as good as I can
remember for a while and I think that's because that the key aim of the
Budget was to keep the growth we've had for the last three years going
and I think it becomes apparent to any reader of it that the rate of
growth we've got now is sustainable, it's slowed as we wanted it to, it's
sustainable, we've got low inflation, we've got the Budget back into
surplus and we've got a major change in there on superannuation and
long term savings and retirement incomes.
JL Well, maybe you've been looking at different editorials. I've looked at
a couple and some of them are reasonably scathing, I suppose, would
be a way to describe them. Geoff Kitney; in the Sydney Morning Herald
says, let me quote it, " If Mr Keating gets away with this, he'll have
pulled off one of the greatest political escape acts".
PM: Yes, but that's not editorial, that's a comment from a journalist. Well,
but I think he in his article also pays credit for the change here. I
mean, what we've gone is from a Budget deficit last year of $ 12.9
billion to a surplus of $ 700 million. Next year we'll have surplus there
without reliance on any one-off effects, that's a recurrent surplus, and
the following year we end up with a surplus next year we end up with
a surplus of $ 3.4 billion, the following year $ 4.5 billion. Now, what that
means, John, is this it means that the public sector of Australia is not
out there bidding for Australian savings. Therefore we are not putting
pressure on overseas savings in the current account deficit. That's the
linkage. In other words, if the Commonwealth Government isn't out
there in deficit bidding for Australian saving รต , we are not therefore
putting pressure on to bid for foreign savings through the current
account deficit.
JL But when Ralph Willis announced a surplus last night, you could hear
an audible intake of breath not just from the Parliamentary chamber,
but from around the nation. The best prediction has been for a deficit
of what, $ 2-3 billion, I think?
PM: Yes, and without the I mean, what you've got here is basically, we
want to make the point that the Budget was in surplus virtually
forthwith. That is, we are not out there bidding for savings right now
because we think while we've got a medium term focus on the current
account and our national debt and we've got the remedy in there on
the Budget change and superannuation to meet it in the medium term.
We also want to do it quickly.
JL The surplus is brought about really, I mean, if you look at the fine print,
to achieve this you've flogged off the family silver as they say, in
particular selling the Commonwealth Bank. Without the asset sales,
what would the deficit have been, because it would have been a
deficit?
PM: If you took the Commonwealth Bank out of it, we'd have a deficit of
around about probably two and three quarters to three billion dollars,
but next year we would have a surplus without any asset sales. So in
other words, see, in this Budget...
JL But you won't have any assets.
PM: Oh yes, oh yes there is.
JL Well, I mean Qantas...
PM: No, no we are only putting half the Commonwealth Bank in this year,
half next year.
JL But you've only got half the Commonwealth Bank, first half s gone.
PM: We're putting a quarter, well we're putting half of what we have left in
this year and half next year.
JL Okay, so you've already sold half the Commonwealth Bank, but that
means you've got a remaining half...
PM: We've got half to sell worth about $ 4.5 billion we'll put $ 2 billion in
this year and $ 2 billion next year.
JL Okay, so that last half, in other words the remaining quarter, will then
be sold when?
PM; That would be sold in the year 1996-97 Budget.
JL Well, what happens when they're gone and there's no more assets to
flog?
PM: Well, that's what I told you. When they're gone we are still in surplus
without them. Next year, in 1996-97, the Commonwealth Budget on a
recurrent basis is in surplus without the asset sales.
JL Is the sale of the Commonwealth Bank anathema to you? It was in
1986 I think you used an expression, or Bob Hawke did, either one,
that Ben Chifley would spin in his grave if he knew that the
Commonwealth Bank was going to was that you or Bob?
PM: No, I didn't say that. No, the thing is, look, the Commonwealth Bank
was always a sort of show flying on one wing. It was the old,
essentially the old State Savings Bank of New South Wales which the
Commonwealth Bank, then a fledgling bank, took over in the
Depression and the preponderance of its assets was in New South
Wales. In the late 1980s, it bought the State Savings Bank of Victoria
and it was then flying on two wings in the two most populous States.
At that point, it turned into a real major institution. We then floated off
a quarter of it, we've since floated another quarter off and in an
institution which we began with being worth $ 3 billion, is now going to
be worth $ 7 billion and it's working now as a completely commercial
bank and there's no policy reason why we should keep it.
JL Why didn't you sell it in 1986?
PM: Because it wasn't, as I said, it was only flying on one wing it was
essentially, what Europeans call, a post office bank and it's not that
today. It's a full commercial bank and therefore we decided to sell it.
But, John, leave the Bank to one side because it's already priced and
in the market. The shares are in the market and everyone knows what
the price of them is.
JL Well, what about Qantas?
PM: Well, Qantas again Qantas has a great opportunity to be the premier
airline in South East Asia, but it needs capital which the Government
can't give it. I mean, we can't take money away from pensions
payments to families to put capital into Qantas. So, what we've done
is merged Australian Airlines into Qantas and we are now selling the
merged airline Qantas and when it goes to the market when it needs
capital for aircraft or for on ground facilities or route expansions
around South East Asia it will be able to go to the Australian stock
market and get the capital.
JL: Okay, well you've talked about selling Qantas before, how many times
can you claim a return from the sale of Qantas is this going to be the
last time?
PM: Well, we're not selling things out of cycle we won't sell them when the
stock market is bad, we won't sell them when the profits of the
company are low. We wanted to get Qantas' profitability up and time
it. You've got to take some advice from the underwriters and we've let
that now go into this financial year rather than last financial year. But,
the key point, John, is there's a $ 3,000 million recurrent change in the
Budget. That is, a net $ 700 million from cuts in Government spending
and $ 2.3 billion on the receipt side. So, there's a $ 3 billion change in
the Budget on a recurrent basis. That's what brings the Budget into
surplus next year. So, if I give you this point the current account
deficit problem is about two percentage points of GDP, and that's
around $ 10 billion. The Budget will change, the Budget balance will
change, by 4 per cent of GDP in the next couple of years. That is,
from a deficit of around $ 2.5 billion to one of surplus of around 1.5 per
cent of GDP. So, we've got a fix in there for the current account
problem through the Budget. The other fix we've got in there is this
enormous change on superannuation. For the first time ever, every
Australian working person will have a 15 per cent superannuation
contribution coming into their account. That's 9 per cent from the
arrangements the Government's already put into place, the
Superannuation Guarantee Charge, and last night what we announced
is a further 6 per cent 3 per cent from people themselves and 3 per
cent from the One Nation tax cuts...
JL: Yes, well that seems to mostly be getting applause. That's where the
tax cuts that were L-A-W went?
PM: They're going to go to people's superannuation account and as a
consequence, for the first time ever, you're going to let me just give
you the figures because this is the first comprehensive private savings
plan...
JL: Okay, don't make the figures too big or too complicated.
PM: No, no, but let's make this point: this is the first Government that's
ever given Australia, all Australians, a comprehensive private savings
plan or scheme. What this does is, what it will mean is, that every
Australian working person will be able to build up for their retirement a
level of income which will be roughly double the pension. So, I will
give you an example of personal average weekly earnings: a person
on average weekly earnings, which is around $ 33,000, will end up with
a benefit of $ 461,000 if they joined the scheme today and were in it for
years. Or, if they take it as an annual annuity, it's worth $ 30,000 a
year to them. So, you take a person on $ 33,000, they build up a bank
of $ 461,000 in today's dollars today's dollars and they go out with
$ 30,000 a year. Now, that could only happen with a big national
scheme like this, and let me say this John, it would only come from a
Labor Government.
JL: Why didn't you do it before?
PM: We did. We started in the ACTU, and the Government under the
Accord Mark V in 1985-86, that was the first 3 per cent. Then we went
to 5 per cent, then we went to the Superannuation Guarantee Charge
to go to 9 per cent, and now we're adding another 6 per cent 3 and 3.
JL: Well, as I say, that certainly is...
PM: Can I just add to the point?
JL: Sure.
PM: This is where, I mean, we get all these criticisms from our opponents,
but could you imagine the Liberal. Pa~ rty sitting down thinking of an
arrangement, talking to the workforce, getting them to agree to put
income away to save it and that working from 1985 to 1995 and then
under the arrangements to 2000, to come from nothing to 15 per cent
for every person in the country. Now, what that will do, not only will it
lift their retirement income, but it lifts our national savings. In 1985, we
had $ 40 billion in super funds. This year, we'll have $ 186 billion. In
the year 2020, we reckon we'll have $ 2,000 billion $ 2 trillion. And
you notice in today's Financial Review on the front page, it's a $ 2tr
bonanza. That's the first time I've ever seen that expression on an
Australian newspaper tr means trillions $ 2,000 billion. Now, what's
our national debt? $ 160 billion. So, the Government last night put the
seal on a savings scheme that will put for the nation $ 2,000 billion
compared to a national debt of $ 160 billion.
JL: Martin Ferguson, speaking of the ACTU, said it was a tough Budget a
bit better than saying it wasn't his job to defend the indefensible which
he said a couple of years ago but, tough. Where's the pain for Martin
Ferguson in there?
PM: Well, it's a Budget which, there's cuts in Government spending...
JL: Not too many.
PM: Well, yes, they're there...
JL: By .6 of a per cent
PM: No, the Budget is around about, outlays are I think about $ 120 billion...
JL: And you've cut it by $ 700 million.
PM: And we've cut it by, we cut it in gross terms by $ 1,500 million this year,
$ 2,800 million next year, $ 2,000 million the year after and just on
$ 2,000 -million the year after that. But with the various new policy,
that's new policy and unavoidable new policy, the net change this year
is $ 700 million. In other words, we've saved $ 1,500 million gross, the
net saving is $ 700 million.
JL: Yes, it must seem strange to people, and maybe Martin Ferguson
meant it was tough when he sees things, not that he minds the left
wing too much, but when he sees things like a quarter of a billion
dollars suddenly being found for Brian Howe's pet project, this Better
Cities program. I mean, if you were really being tough, programs like
that would have gone under the razor, they wouldn't be getting extra
funding?
PM: No, that's not right, John. Look, let's take one of the projects it's doing.
The railway, we are funding in part the railway from Brisbane to
Robina on the Gold Coast. This is the fastest growing area of
Australia. It's an area of enormous development of sub-divisions,
there's enormous traffic build-up and blockages and that whole Gold
Coast area, that whole Gold Coast corridor is a real problem for
Brisbane.
JL: Yes, but isn't that a Queensland problem?
PM: Queensland is not going to be able to afford to do it by itself. So, we
are doing that. We're doing similar things I opened the interchange
recently in Melbourne at Maribyrnong which is giving a rail and bus
interchange for the new rail service out beyond Dandenong, and
without the Commonwealth money it just wouldn't happen. So, in other
words, there are parts of the country in, if you like, in public
infrastructure where the State and the municipal governments can't
afford it. I mean, but the key point is this, John, Australia's spending,
Australia's government spending is the second lowest in the world.
Now, I've got the table here in front of me let me tell you what it is.
JL: How do we manage to have the second lowest in the world when we
have far more politicians per head of population than any other
country?
PM: Well, let me politicians....
JL: Well, it's pretty important to us, we're paying.
PM: Yes, I know, but it's a major diversion Let me just say this, look,
the United States has got 33.6 per cent of its GDP in Government
spending all sectors. Australia has 35.7 per cent. Now let me go
down the others: Germany 48.9; France 55; Italy 56; UK 43; Canada
48; Austria 52 et cetera and it rises up to 56 per cent. Australia is at,
this is the Commonwealth and the States, is at 35 per cent of GDP. In
other words, and the Commonwealth is at 24 per cent. So John, we're
delivering an efficient, effective public sector including great schemes
like Medicare, for 24 per cent of the nation's output.
JL: Well, imagine what we could do if we didn't have all those
unnecessary politicians?
PM: But, the thing is this, you can't in a country like this, you can't have
roads, rail, health services of this quality, at less than 24 per cent. All
these people, you'll have John Howard on the program later, he'll tell
you, " oh we haven't cut Government spending". But the thing is every
time you say to these characters, " well do you want to cut into
pensions? Do you want to cut into payments to families?" Because
that's what you have to do to go any lower than this. So, what the
Government did was a tough, reappraisal of the spending over
weeks, a 10 week meeting of the Expenditure Review Committee, and
as a consequence of all that, we have changed the Budget balance on
a recurrent basis by $ 3,000 million. And we've done it, I think, fairly
and while we've done that we've at the same time developed within the
Budget that wonderful change on superannuation, you know, which, I
mean, countries just don't get breaks like this. There are not many
national governments around the world setting up for their community
anything like a 15 per cent contribution to private savings.
JL Would it not have been possible to cut Government spending more?
PM: No, I don't believe so and Ralph Willis very eloquently, I think, took his
critics on in the Budget lock-up yesterday for those people to say we
ought to cut Government spending. We've got Government spending
back at where it was before the Whitlam Government came to office in
1972. Now, you know, we've had 1.3 per cent population growth on
average, we've had an enormous change in participation in schools. I
mean three kids in ten were completely secondary school in the early
1980s it's now nearly nine in ten. We've got this massive throughput
into universities, into TAFE. We've got the major sophistication over
years in the health scheme and we're still delivering Commonwealth
Government spending at around those early 1 970s levels.
JL Yes, I know you're not terribly interested in discussing the number of
politicians we have in the country because you see it as not being
important, but when you talk about our good record which is, according
to the figures you've given me, a terrific record, the amount that we are
able to do with the spending that we make, the Government spending
we make, imagine what we could do if we didn't have the excessive
number of politicians that we've got who must have bureaucracies...
PM: But that's not a Budget debate, John, that's a debate about the States
and the Federation and everything else, and I've only got 40 minutes
with you so I want to keep it can I make this point to you: what the
Treasury said last night was this, it said the economy is now growing at
a sustainable rate and it is expected to remain in a growth phase over
the forward estimates period that's three years. Now, we've had 3
and a half years of growth since the recession, the Treasury is now
saying we've got 3 more years coming up. That gives the lie to John
Howard's cynical opportunist line that there were five minutes of
sunshine. I mean, what does he say now when we've had 4.5 per cent
growth for this last year and we've got 3.75 per cent coming up and the
Treasury is forecasting three more future years of low inflationary
growth. I mean, that's what the Government was re-elected for in
1993, to keep growth going and to keep employment going. What
we've done is make that growth sustainable and that's turning up here
in the forecasts. We've adjusted the Budget to keep it going, to keep
the pressure off interest rates so we don't need to grab the monetary
lever.
JL: Can you think of a Budget in the last ten years that's been brought
down by you or your Government or somebody else that hasn't been
applauded the way that you people applaud your own Budgets? That
hasn't been coloured to be the perfect solution to the problems of
Australia the day after the Budget's been...
PM: But I don't think they're perfect, but they work. Look, let me just say
this, here's Mr Fischer, the Leader of the National Party, last year
there's his last year's press statement, I'll leaWe it-wityou it said,
" The Government won't get it's 4.5 per cent growth if it doesn't get it's
forecast 14.5 per cent growth in business investment." What was the
outcome for the year? 4.75 per cent growth and investment was
per cent, not 14 per cent. He said, " and no-one, including Treasury,
believes that investment growth number", we nearly doubled the
number.
JL: Yes, but that's what I'm saying. All the Budgets that you've been
associated with, all the Budgets that have been brought down, have
been going to be the solution to the problems that the country has, that
people still believe that the country has problems. So what's going to
be different about this one?
PM: Well, John, we've been growing, we've been having this sort of
unreality debate, you know, that the country's got troubles. Well, it's
been growing at 4-5 per cent with 2 per cent inflation.
JL: Why do people perceive it has troubles?
PM: Well, just record this fact, It's been growing at 4-5 per cent when
Europe is growing at 1 per cent with 2 per cent inflation and 4 per
cent employment growth. I mean, that's the sort of trouble that about
another 100 countries out there would like to have. I mean, that's the
sort of benefits that have come from the Government's policies over
the last couple of years. I mean, we've never been in a position of that
sort of growth with low inflation since the middle 1960s.
JL: Yes, I'm aware of this. But the question I put to you is why do people
perceive, because I hear it constantly, that this country has problems?
Why is it all doom and gloom?
PM: Well, I don't think it is all doom and gloom, but they saw the monetary
adjustments, the interest rate adjustments last year and they thought,
hello, here goes again, but in fact, what was happening was we were
slowing the growth down not killing it off slowing it down. That's
what the Budget forecast and the out-turn for the year, I think,
establishes that weha siuccessfully slowed it down. And the doom
merchants, I mean, take John Howard he's been running around now,
I mean, cynically, opportunistically saying, " oh look we've had five
minutes of sunshine." In fact, we've had three years of growth at about
four times the rate of Europe. Japan is growing at half a percentage
point. We're growing at around 4 percentage points, four times as
much, well nearly four times as much, and the Treasury is telling us
we're going to be growing now on a sustainable basis for three more
years. So, I mean, when you've got characters like Howard wandering
around saying, oh look don't worry, the sky's falling in, the sky's falling
in doing this Chicken Little number all around the country.
JL: But why do people believe it?
PM: Well, I don't think they do, John. I don't think they do, I mean, the
culture of criticism in the media today has become of, sort of, epidemic
proportions. I mean, nobody is prepared that's why I think that
programs like this are valuable because people can actually hear what
the policy-makers are saying, what the institutions like the Treasury or
the Reserve Bank are saying and they can make their own judgement.
They can hear what the unions have to say, they can hear what
business have to say better they hear that than these noisy, voluble,
opinionated comment pieces from people in the media.
JL: Now, tell me...
PM: Because they're a dime a dozen.
JL: Do you people hear them, however?
PM: Do I hear the people? That's all I listen for. I mean, one has got to
listen through the screen of comment, the sort of culture of criticism, to
listen to what your conscientious Australian person is saying and
thinking.
JL: Are you aware, I understand you're a terribly busy man, but are you
aware of what people say generally on program like this, are you
aware of what the Australian feeling is?
PM: Oh yes, because I try and listen to them wherever I'm travelling around
and the other thing is, you see, when I go to things people sidle up to
you and they say, listen Paul, I'll tell you this and I always listen,
you've got to be a good listener in public life. I always listen because,
say over a couple of weeks, I do many functions, I see many people.
And each one, you pick up a little bit at each one, and you put it
together and you get a fair idea of what public opinion is and what
concerns people and what their aspirations are. Now, you know, I can
only say this to you John, I mean, this Government is listening all the
time and here we are last night, we've been in office 12 going on 13
years, this is a Budget from a Government that could have been in
office 12 months. I mean, it's got all the freshness in the world about
it.
JL: It's being called by some an election Budget, but that's not necessarily
criticism is it?
PM: Well, that's a great compliment. I mean, if they want to say they
thought the Budget was so good it was an election Budget, though it is
a serious Budget, a serious Budget to deal with taking the pressure off
interest rates and the current account, if they want to pay us a
compliment of saying it's so good it's an election Budget, well I'll take
the compliment and thank them for it. But the truth is the Government
sat down seriously to relieve the burden of higher interest rates on this
country by putting the burden onto the Budget's policy and giving us,
filling that savings pothole we've got outftHer-e a-round the late 1990s
and the year 2000, and the thing we got for that is the Budget surplus
and superannuation.
JL: Last year's Budget said that the deficit would be about $ 18 billion. It
turned out to be $ 27 billion. They're the sorts of things that I think
concern the public. They say, but oh but last year he said it was going
to be $ 18 billion and it blew out to $ 27 billion. What happened there?
PM: No, that was the current account deficit. Yes, well what happened
there was we had the drought which lost us a heap of agricultural
revenue and the investment, I already read Mr Fischer's comment, the
forecast in the Budget for investment was 14.5 per cent. It turned out
to be 25 per cent. Whenever you have a big investment bubble, the
investment goods, the producer goods, you know, the digitally
operated machines, mainframe computers, which we do not make
here, all come in at once. So, if you look at, a couple of things
happening we've got a big investment bubble and we had the
drought. So that threw the current account out. But the main thing is,
John, not last year's current account or this, John, the main thing is the
trend.
JL: That's right, but it doesn't alter the fact that people are going to leap on
to a that the current account deficit is tipped to be...
PM: I know, but let's go back, you and I had these discussions in the
election campaign of 1993. It's just over two years ago. At that stage
unemployment was 10.5 per cent. It was all about employment and
jobs. I was elected as head of this Government and this Government
was re-elected principally to deal with growth and employment. That is
what we have faithfully done. Unemployment is now down to 8.7 per
cent from 10.5 per cent and we've got it going to 8 per cent in this
Budget. So in the space of three years, we'll have taken
unemployment from 10.5 per cent to 8 per cent and falling. And we've
done that with a high growth, low inflation economy. You know, it's as
if people don't want to hear that these good things are happening.
When we introduced Working Nation last year, that was to deal with
the long term unemployed. Do you know this year, John, we've had
100,000 long term unemployed people that's people unemployed
more than 12 months 100,000 back to work. I mean that's a fantastic
thing for this society.
JL: Yes, I agree and it's difficult to argue with that. Just quickly, the lift in
the company tax rate is as you say to cash in on the increasing
profitability of Australian companies but when you drop that company
tax rate, that was because you wanted to give the same sort of tax
regime for companies here that they could get in Asia. Does this mean
you're no longer worried about losing business, moving it offshore to
take advantage of lower tax regimes?
PM: Well, I think we worry about these things but again, you can only do it
years ago when I became Treasurer, when John Howard left me the
Treasury job, the company rate was 46 per cent. We reduced it to 39
per cent and we gave the shareholders full dividend imputation that's
no double tax on dividends which the Liberal Party never gave them.
Then we reduced the rate from 39 per cent in one go to 33 per cent.
This is when John Hewson was campaigning on taking it up from 39
per cent to 42 per cent. In the 1993 election, the Liberal Party's policy,
John Howard's policy, Hewson's policy, was to take it from 39 to 42 per
cent. We took it from 39 to 33 per cent and we're now putting it back
to 36 per cent because the Budget does need more revenue and the
big package we gave business in that tax cut plus two investment
allowances plus accelerated depreciation cost us $ 3 billion a year.
Now that the company profit share, the profit share in the economy, is
a record high again, we think it's reasonable that companies should tip
some money in. And what are we asking them for? $ 300 million this
year and $ 1,500 million next year.
JL Okay, but if that...
PM; Which is pretty reasonable.
JL If that tax increase comes from companies, what's in this Budget for
jobs? I mean, the revenue is coming from companies so obviously
they're not going to be in the position to employ perhaps as many as
they could have been.
PM: Oh no, I mean, all those changes are taken into account when we
make the forecast. The forecast we have, the Treasury forecast for
1995-96, is for 3 per cent employment growth.
JL Yes, now, a lot of parts of the forecast last year were terrific but there
were a lot of parts of the forecast last year and the year before that
weren't too terrific, so...
PM: Not many, not many. I mean, the only thing that went astray on us is
the current account deficit. The rest of it, in fact, we did better than the
forecast. We did much better on growth, we did better on inflation.
JL We did too well then in some areas and had to increase interest rates.
PM: Well, I mean, better too well than not good enough. I mean...
JL Tell the people who are paying the mortgages.
PM: Yes, but I mean, also understand this, John, this was when we had
interest rates down to, we had mortgage rates down to 8 per cent.
They had an enormous increase in disposable income when
mortgages went from 15 per cent down to 8 per cent. They've gone
from 8 up to 10 per cent. I mean, and the job now is to stabilise that.
JL Do you believe that....
PM: And do you know this, in the last week you've seen two banks reducing
their fixed housing mortgage rates the National Australia Bank and I
think Westpac have reduced their fixed housing interest rates. So I
think there's a very good trend, there's some very good signs there.
JL Why the increased tax on building materials?
PM: Simply because the tax base has been declining on us. You see,
when we, let me explain this, for very good policy reasons, the
Government has taken down the tariff wall. But the tariff wall was
expressed in Customs Duty which you paid on imports. That's now
costing the Budget, that policy change which is a tremendous change,
it's completely changed the nature of Australian industry for the better,
but that policy change is costing the Budget this year $ 6 billion and
every year $ 6 billion. The company tax changes I mentioned to you
cost us $ 3 billion a year. So just those two things have cost us $ 9
billion. We've got to get some of it back somewhere. So what we've
done is put what I think is a sensible expansion into the Wholesale
Sales Tax base into some hardware and building products.
JL: But why building products? I would have thought that...
PM: Because most other things, most other electrical goods and
whitegoods and those things, are covered. But it covers things like
nails and taps and...
JL: Yes, it's going to increase the cost of a house.
PM: Yes, I know, but it's not on bricks, it's not on concrete, it's not on tiles,
it's not on timber, it's not on the basic building, it's just on the bits and
pieces that go into it.
JL: Okay, well I appreciate your time very much. Maybe somebody in your
office could list off some goodies for us about Australia that we could
offer. I mean, I hear you deliver these figures and I know that the
figures that you're delivering are accurate and they are also interesting
maybe it would be an idea if we reminded people every now and
again, and surely the Opposition would agree to the odd reminder
every now and again, that there are areas that Australia in fact leads
the world and we should perhaps have a better opinion of our own
country.
PM: Well, we are, John. You know I was in Germany recently and I met the
Premier of Lower Saxony and that's in Hanover. And in Hanover, near
Hanover is the city of Wolfsburg which is the basis of the Volkswagon
plant, the Volkswagon city of Germany, and he said to me, you know
Mr Keating, he said, we've got great community spirit here, he said,
we've all agreed to work a four day week because we've got to put
people off at Wolfsburg to get the productivity up. And I said, but why
aren't they getting other jobs? He said, because there isn't enough
employment. They have three quarters of 1 per cent employment
growth in Germany, in that part of Germany.
JL: Three quarters of 1 per cent?
PM: And you know what we had last year? 4 percentage points. In other
words, we had five or six times as much employment as that country.
Now, how would I be talking on your radio program saying well, John,
I'll tell you what we want people to do, we want everyone to work a four
day week. I mean, many Australians should understand that the
Australian economy has been one of the best performing in the world
in the last three years with high growth and low inflation and high
employment. And when you get around Europe and you look at 30 per
cent youth unemployment in France, long term, massive long term
unemployment, declining rates of economic and employment growth
and see what this Labor Government has since we introduced the One
Nation statement in 1992 to kick start the economy, and got ourselves
re-elected in 1993 with complete fidelity to reduce unemployment and
lift growth and now to put in a long term savings plan for the country
forever, that's the sort of policies you get from a Government that's
listening and thinking.
JL: You say that payments to the States will be rationalised does that
mean cut?
PM: No, it just means that we have these disparate indexes for how we pay
what is called Specific Purpose Payments and the Commonwealthowned
payments.
JL: Are they going to get more or less?
PM: No, they are going to be less and they are going to be less because
some of the indexes for instance, the CPI, when we pay, a lot of
these programs are simply, the costs are simply labour costs, the
labour costs elements of them are much lower real costs to the States
and to the Commonwealth than say a CPI adjustment which will have
in it fresh fruit and vegetables, mortgage interest rates all the things
that don't apply to States or Commonwealth delivery of programs. So,
in other words, we've put indexes in there which are better tailored for
the sort of programs that we actually spend.
JL: Would you think that the State Premiers are going to have to do
something about their own tax levels?
PM: Oh no, I think the States,.. we're running into a very good cycle at the
moment. I notice that Victoria has got it's Budget back into surplus,
Queensland is into surplus, Bob Carr, I'm sure, will grab hold of the
New South Wales' budget. As I said to you before, John, when I read
you those numbers earlier, that was for the whole of the nation's public
sector, the Commonwealth Government and all of the States and
Territories and we are the second lowest spending country in the world
that's all of us together. So, I mean, I think the happy news out of
last night and the round of State Budgets is that Australia's public
fiscal position is now going to be in surplus and this is a great thing for
the country at this stage of the cycle.
JL: Okay, Prime Minister, again thank you very much for your time. Good
to see, I'm sure you're in great demand today.
PM: Thank you, John, I appreciate the opportunity and the opportunity, can
I say, particularly to talk directly to people and not have it sort of
filtered, cut, you know, shredded to opinion...
JL: Well, it will be by the time it gets on television tonight.
PM: You know, by the sort of sub-editors and the rest. The fact of the
matter is, on your program, as you say, dial-in democracy...
JL: You like that, don't you?
PM: I like that line, dial-in democracy, it's also dial-out conversation about
the things that really matter. And I hope your listeners have found it
valuable as I have. Thanks John.
JL: Okay, let's see if we can organise for you to come in in the not too
distant future and perhaps take some of these calls from some of these
listeners and speak directly to them. Is that possible?
PM: Glad to do it.
JL: Okay, well we will talk about that in the not too distant future. Prime
Minister of Australia, Paul Keating.
PM: Thank you.
Ends