* 2
PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P J KEATING MP
INTERVIEW WITH JOHN STANLEY, RADIO 2UE, 1 JUNE 1995
E& OE PROOF ONLY
JS: Mr Keating good afternoon.
PM: How are you John?
JS: I am very well. Has John Howard been a hard target for you given that
he hasn't given you much to hit at?
PM: Well I said the other day I thought, rather well, that there can be no
honesty or credibility in politics without policies. I mean how can
anybody go around saying I am honest and credible if they are too
cunning or too devious to say what they stand for. As John Howard,
wanting to be Prime Minister of Australia, says he is trying to say
" I am not going to show that Prime Minister my policies". What he is
really saying is " I won't show the Australian community my policies". So
it is not me he is being tricky with. He is tricky with the whole Australian
community.
JS: And yet he is saying that he will outline those policies in the course of an
election campaign and he says he is going to give his broad philosophy
which I think people do know that, don't they?
PM: Well, I mean, his broad philosophy he has only ever had three
outlooks, three political philosophies since he has been here. That is
cutting the wages of people under $ 30,000. What he calls true labour
market deregulation, meaning no award safety net. Letting them fall just
as theyfall 1in America and other countries. The other thing is throwing
top-end benefits to families on very high incomes. And the third thing is
a They're his three things since he has been in politics for twenty
years.
JS: Well can I just take those three things up? The first of those is lowering
wages. He would argue that the true believers, the people who support
Labor, have seen real wages fall under your Government.
PM: That is completely untrue, completely untrue. The best measure of
average living standards in Australia is the measure we call real
household-dTsposable'income and the reason it is the best measure is
because it includes wdg-e salaries, supplements, pensions, social
security benefits, it is also after tax and it is per person. And between
1983 and 1995, that is the twelve years the Government has been in
office, real household disposable income increased by 40 per cent. Now
there wouldn't be another country comparable to Australia with numbers
such as that. I notice today that Peter CostelIlo was running on any radio
station that would take him. He was saying that incomes had fallen and
he said that, I will quote him, " we are as poor, in fact, Australians,
comparable to people overseas, are now as poor as they have ever
been". Well that is just a straight lie and let me just expose the point this
way. If we look at the per person change in real disposable income,
household income, it was 19.8 per cent per year, over the period 1983-
When the Coalition was in office, the best they could do was 2.1 per
cent. So we have been doing in every year that which the Coalition was
able only to do in seven years.
JS: But what people who might be on middle to low incomes who hear all of
these figures say well look I am not 40 per ient better off, I don't feel
better off, I feel like I have gone backwards? What is the problem with
them because you talk to them all the time?
PM: Well you might but the fact of the matter is we have got now very low
inflation, you have had wage adjustments through the period.
Remember this, John Howard has opposed every wage increase since
1983. 1 mean it is just a disgrace for the Liberals to be up there you
see their advertising agency has given them this word ' battler'. And this
is the people who were opposed to every wage adjustment since 1983.
In fact, Peter Costello went into the 1986 National Wage Case arguing
for a reduction in all award rates to $ 25 below the lowest award rate then
applying. You know that they wanted to abolish bulk-billing for the
lowest income people who go to doctors who don't charge them. They
want to put a GST of 15 per cent on their backs for everything. You
know they wanted to kick people off the dole after nine months in their
last election policy. And they are still telling us they want to cut $ 10,000
million from outlays and that will, of course, come out of payments to
families, transfer payments, payments to the aged, to pensions,
payments to schools and they are out there of all people, the Dollar
Sweets man, Costello, talking about battlers.
JS: And yet when they say I mean these are their policies which they say
were rejected at the polls and, therefore, they are not going to proceed
with them. I mean what is the difference when saying that, John
Howard, he wants to put a 15 per cent consumption tax on? Couldn't
that be equally said that you want to put a12 112 per ent one on? You
had your option C.
PM: Yes, but we had over-compensation. We assumed that these people at
the time, low income people, were dis-savers. You know what that
means? That is not only were they spending all of their income, but they
were also spending extra income given them by relatives, or by debt
which they had, or by savings. When the consumption tax came out
from Dr Hewson, Mr Howard and his friends, they had these people on
the most modest income, with savings ratios of somewhere between
and 40 per cent from memory. I mean they never save. Do you
understand the point? In other words, they were saying " the impact of
this tax will be only modest on you because it is only hitting the part of
your income you have got for these savings'. The truth is, under our
arrangements in the 80s, we had massive over-compensation to make
sure that the lowest income people were most protected. These
characters, when they are putting a 15 per cent, right on their backs, at
the same time as they are knocking off bulk-billing.
JS: But that is why they lost the election. They are saying now that they
won't knock off bulk-billing, they won't bring in a consumption tax and, in
the end, isn't it you trying to dredge up their baggage from the past, to
match your baggage? People want to hear what you stand for now, not
what they stood for in the past.
PM: What do you mean people want to hear what we stand for now? What
we stand for now is a 15 per cent superannuation scheme in the Budget.
I mean that is what we stand for. We stand for a person on average
weekly earnings, picking up a lump sum of $ 460,000 at the end of their
working life. Hear what John Howard said about it, he'd cap it he said in
his reply to the Budget two weeks ago. I mean we stand for access and
equity in health through Medicare. Access and equity in education. Do
you know that only three kids in ten completed secondary school in
1983? That is now eight in ten. We have now added 60 per cent of
places to university. I mean, do you know that we have supported every
wage increase and we have now got, again, a safety net sitting under
the system that John Howard is opposed to?
JS: Sure.
PM: So on what basis is he going around talking about battlers, other than on
the basis of complete hypocrisy.
JS: Well what I am saying to you though I mean the opinion polls and I
mean you say you don't believe the opinion polls, but they are across
the board.
PM: No, I say, not that I don't believe them, that journalists don't understand
them, that is what I say.
JS: Well could you expand on that then because I mean they do seem
PM: Well because let me say in the last election, if you look at all the polls,
the Government would have lost the election and the Government was
certain by the second last week of the campaign that they had the
election won.
JS: Well but with the poll ' s on the last day though of the last election, the
polls on the day before, suggested that you were going to go very close
to winning.
PM: On the last day. But our view was we had the election basically, we
thought, won a couple of weeks before the polls and at the start we
thought we had a chance of winning it. Whereas the commentators and
the polls gave us not a snowball's chance in hell.
JS: So the polls now don't reflect what is going to happen in the future?
Nobody is changing their mind?
PM: Well what happens is if you go and say to people I mean a lot of
members of the public have worked it out and they say they there might
be an election at some time in the next 12 months. Who would you vote
for, the Coalition or the Labor Party? And they say " well look there is a
way of sending the Government a message here". In other words, they
put a little needle into the Government always. Whereas in by-elections,
or whether it is in polls, they always underestimate and undferstatethe
results. And, of course, the other thing, a lot of these polls are taken by
telephones, which distort the result as well.
JS: Isn't there also an argument that the people have decided twelve or
thirteen years they want anyone but Paul Keating? That last time there
was a GST factor entered into it and if John Howard runs on basically a
very bland policy mix, he will get in?
PM: Well I think you are dead wrong about that, John. That is the simple
stuff that you might think. But look at yesterday's National Accounts.
Right on target under the Government's policies. A sustainable
3.7 per cent growth in GDP. In other words, not only have we done the
principal thing we said at the last election to get the economy growing
again, we have created 630,000 jobs, we've got the economy on a
sustainable rate. As The Financial Review said today, putting into doubt
completely Mr Howard's cynical line about five minutes of sunshine.
JS: But the people who pay interest rates. I mean mortgages, for instance,
most of them don't read The Financial Review.
PM: No. But, I'll tell you what, anyone who has got a memory will know that it
was 22 per cent under John Howard.
JS: Yes, but they also know that they have taken three hits of increases in
interest rates in recent times.
PM: But off very low levels, John. They were 4 1/ 2 per cent. The cash rate
at the Reserve Bank, at the bottom of the system, was 4 1/ 2 per cent.
You have still got housing rates now at 10 per cent, or under
per cent.
JS: Yes, but it is still a couple of per cent higher than it was say twelve
months ago.
PM: But we were then coming back into strong growth. You can't expect
rates to be, now, in the face of 6 and 5 and 4 per cent economic growth,
what they were when it was 2 per cent.
JS: Yes, but I am simply saying that people who twelve months ago had a
higher disposable income, given that they were paying less in their
mortgage payments, are going to say well things are not better for me
today, than they were twelve months ago.
PM: Whoa, whoa. In 1993 we gave people a huge fall in interest rates for
housing a huge fall. And a huge increase in disposable income and,
because of the wage arrangements and low inflation you know we
had inflation running at 1.5 per cent and 2 per cent we have had
wage settlements running at around 4 per cent. People have had a
real increase in disposable income, from wages, and from disposable
income and lower interest rates. Let's not get away from the facts.
And that's why, I think many people understand, that in fact this is
happening. Why would somebody take John Howard, who had a
double digit inflation rate, a double digit unemployment rate, the
biggest Government spending in the history of 1the Cbfifri6ihwealth,
and where we had one-fifth of the employment growth in his years that
we have had under these years do you know we have had nearly
2 million jobs created since 1983?
JS: But that's....
PM: Just a second when I became Treasurer in 1983, there was a
workforce of 6 million. Today, it's just on 8 million it's just over
8 million. In the period of 7 years, they had one-fifth of the
employment growth under John Howard, that we had under this
Government.
JS: That's right. That may be right, but that was...
PM: It is right.
JS: But that was in the 70s and the early
PM: No up to now. Up to now. We have had 1.9 million jobs since 1983.
JS: But are you going to rely on the election campaign on continuing to
talk about John Howard's record?
PM; No. I'm talking about ours. That is, a good Budget a strong Budget
the Budget back into surplus strong employment growth 400,000 in
the last year, 630,000 since the election I'm talking about the only
national savings scheme that the country has ever had, 15 per cent
contributions on behalf of everybody to occupational superannuation,
so that from here on, every generation of Australians will not have to
worry about their retirement income. That's what I am talking about
I'm talking about real progress.
JS: I guess what I'm talking about is in terms of the election is perceptions,
and there is a perception there in the community that people no longer
believe you they have heard you talk about bringing home the bacon,
they have heard....
PM: Hang on a minute we have had 13 or 14 quarters of economic growth
do you realise that? We have had about 13 or 14 quarters of
economic growth, and we have just had another one. Don't believe
me believe the record. Surely you are not trying to insinuate this
discussion conveyed to your listeners that there isn't a growth
economy out there?
JS: No. But what I'm saying is that there are people, and there is a
significant proportion of people, who no longer believe you that no
longer believe assurances. I mean, you may say that, but they will say
" oh, we have heard that before we have heard that things are going
to improve before"?
PM: They have though they did improve. Let me just take this go back...
JS: So why is this
PM: You put the question let me just get the answer. Go back to 1983
we have had growth every year, bar 18 months. And the 18 month
period was in 1991-92. From 1983 to 1995 now and the Treasury is
saying for the next 3 years to 1988 that is, for 15 years under the
Labor Government, you are going to have growth strong growth bar
18 months: 2 million jobs, enormous increase in the national income. I
mean, when we have said these things, they have happened.
JS: So why is there that perception, and why are you so far behind in the
polls?
PM: Because.. . well, this time in the last parliament, we were 20 percentage
points behind in the polls this time we are about what? 5 per cent or
6 per cent?
JS: A bit more than that isn't it I thought it was more like 8 per cent?
PM; No. I don't think so been on average about 6 per cent something
like that. Look, are they going to task John Howard, who had no ideas
as Treasurer? [ He was] a complete failure as Treasurer, didn't open
up the foreign exchange markets, didn't float the dollar, didn't
deregulate the economy, didn't lower tariffs, didn't deal with micro-
economic change, didn't touch education, didn't have a decent health
scheme are they really going to go back to that? Someone from the
1970s who believes in the policies of the 1 950s?
JS: So he is not entitled to have changed, to have learnt
PM: But he hasn't.
JS: We don't know what policies he is going to be putting forward, though,
do we?
PM: But you can hear him every day in the house the questions, the
intonations. Here he was yesterday, on Monday, up supporting this
character in Western Australia who is trying to lock these people out of
the Western Australian waterfront. John Howard never learns. This is
a country now with the lowest level of industrial disputes that probably
we have ever had. Did you know that in yesterday's National
Accounts, average weekly earnings was 2.2 per cent growth for the
year, and on the statisticians survey basis, they are running at around
4 per cent. So, somewhere between 2.5 per cent and 4 per cent. Yet,
these people want to adopt American style policies did you hear what
the American Labour Secretary said? I thought it was very instructive,
and I will just read it to you: this is the labour market system that John
Howard wants, and has spent all these years talking about he said
this Robert Reich, US Secretary of Labour: " We in the United States
are proud of our record in creating jobs", he said, " but not of the
continuing decline in medium wages. While we know lead advanced
countries in growth and productivity, and have lowered inflation, the
average hourly compensation of American workers trails 10 foreign
economies, and this average masks a more disturbing reality. While
inequality is growing in every advanced country, the distribution of
income and wealth in the United States has become most unequal of
all". He goes on to say this, " In contrast, the European Ministers
complained of very low employment growth, high rates of
unemployment, and high levels of long-term unemployment", he said,
" the choice between America's low unemployment with falling real
wages, and Europe's high real wages and high unemployment is a
diabolical trade-off'. Now, John, we have got the right mix right down
the middle. High employment growth, and decent wages growth,
because we have got award underpinning's in our enterprise
bargaining system the very thing that John Howard wants to take
away.
JS: So, if the situation is so good, and the polls aren't looking bad for you,
could you win an election today?
PM: I have never spoken about an election.
JS: No. I'm just asking. I'm just asking you
PM: Why should I give an answer to it? I have always taken the view that
these elections are too hard to win without giving away time, and the
public want value from the Parliaments and from the government.
They have asked . what was the Government's principle
commitment in the last election? To restore the economy to growth,
and to deal with unemployment. Our target was 500,000 jobs in
3 years we got to the 500,000 in 2 years, we are now at 630,000, and
what yesterday's National Accounts show is that we have got a
sustainable economy. So, John Howard's line about 5 minutes of
sunshine is just a cynical, advertising agency lie.
JS: So really, there is no justification to have an election before next year,
is there?
PM: In this system, the Prime Minister has the option of going to the polls
at a time of his or her choosing, and that is obviously a prerogative
that I will maintain.
JS: But unless something extraordinary happens, from what you have just
said that you are going to give value for the mandate you have got
there is really no justification to go before next year, is there?
PM: The full Parliament so-called comes about when the House of
Representatives and half Senate can go to an election, so it is then a
matter of choosing by the Prime Minister of the day.
JS: But in terms of giving 3 years value, you would have to call next year,
wouldn't you?
PM: Value is when the 2 come back into the cycle, and they come into the
cycle sometime later this year.
JS: Yeah.
PM: But the key point is has the Government kept complete fidelity with
its commitment to get growth and employment back into this economy,
and has it produced a sustainable growth economy? And the answer
is yes, and yes.
JS: Well, let me just ask you one final question then on another one I
know you normally wouldn't answer on interest rates can you see
them falling later this year?
PM: John, one thing I always think about you is that you can ask a good
and sensible question recitation of questions about interest rates
don't do any of us any good.
JS: Okay.
PM: The thing is, let's get the conditions right. What are the conditions?
Basically, underlying inflation. Yesterday, we had the statisticians
National Accounts for the economy, and for the year to the last
quarter, the broadest measure of inflation, and non-farm product
deflator, was 1.4 per cent, and the private consumption deflator the
measure of private consumption inflation was 2.2 per cent. That's
the best answer I can give you.
JS: Okay. And you agree with The Financial Review we are going to
have a soft landing?
PM: Well, 3.7 per cent means that we have got the sustainbability which
John Howard said was going to disappear with 5 minutes of sunshine.
I mean, there ought to be a lesson in this for Howard don't take you
lines from an advertising agency.
JS: So how much sunshine are we going to have, then?
PM: You have had 14 quarters now. And the Treasury says you have got
36 quarters coming up?
JS: 36 quarters?
PM: Sorry 12 more quarters coming up.
JS: So, 12 more quarters of economic sunshine coming up?
PM: They say the Treasury's best estimate is that we will have
3.7 per cent and 4 per cent growth in that order over the next
3 years, that was in the Budget forecast.
JS: Prime Minister, we are out of time. Thank you.
PM: Thank you very much indeed.
ends