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PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P J KEATING MP
INTERVIEW WITH JOHN LAWS, RADIO 2UE, 26 JULY 1995
E& OE PROOF COPY
JL: Good morning Prime Minister.
PM; How are you, John?
JL: Pretty good, how about you?
PM: Going well, thanks?
JL: Have a good break?
PM; Not too bad at all.
JL: Did you pick the right State? It was a pretty hectic time to be in
Queensland with Wayne Goss with his worries.
PM; I picked the right weather, I can tell you that, and that is what really
matters.
JL: And the right area too from what I hear.
PM: That is right.
JL: Listen, it is interesting when you look at the situation there in
Queensland, Now, had ten constituents in the Townsville seat voted
for the Opposition and not Labor, Wayne Goss wouldn't be
Queensland Premier today. It was pretty cfose, wasn't it?
PM: Yes, it was and I think, as Wayne said overnight, I mean this is part of
the problem of incumbency these days. So much is expected of
governments and they can, in a sense, do so much. But it is then a
matter of trying to adequately articulate what has been done.
JL: Yes. Looking at some of the questions what we have decided to do
here today is, you would be aware that on occasions in the past when
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1 interview you though, are those people out there who say well you
just give him an easy ride, you don't ask him the tough questions.
PM. Well that is only the Tories.
JL: That is right.
P M; When you give Howard an easy ride, the Labor people don't say that.
JL: Yes, but nobody rings up to tell me I have done that.
PM: I know because a lot of the audience supports the Coalition.
J L Well I suppose that is the way of the country too, at the moment, if you
take any notice of the polls. But in order that it could be considered to
be all fair, so their friends can ring them up and tell them how easy
they were on you, I thought we'd
PM: But you have never been easy on me, that is the point.
JL: Well, no, I don't think I have been particularly easy on you.
PM: Well sometimes 1 get off air saying things under my breath about you.
JL: Sometimes you have said it and not even under your breath. I have
had to pick up the phone.
PM: That is right.
JL: Anyway we will do it this way and just see how it looks. Questions,
obviously, will be put to you that may well be outside your realm.
But if you can go close to the answer we would appreciate this.
This one comes from Robert Woods, obviously somewhere in Sydney,
" I wish to ask the Prime Minister why he persists with comparatively
unimportant issues, such as the republic, and side steps or avoids the
most pressing issues of the current account deficit, the balance of
payments and Australia's poor performance in controlling its
indebtedness? What is the Government doing to address these
issues?"
PM: Well it is doing the major things. The current account deficit is a major
issue for which we have put in a major change. And, that change is a
Budget surplus and a superannuation scheme, the likes of which the
nation has never seen. That is, that everybody will be putting away,
within seven years from now, 15 per cent and we are already at 6 per
cent, heading for 9 per cent, but will then be 15 per cent of their
Incomes which will add to $ 2 trillion in savings, that is $ 2,000 billion.
Now the national debt is about $ 160 billion. We are talking about
$ 2,000 billion and when you look at the Budget deficit change, that is a
change of about 4 per cent of GDP, that is about $ 20 billion. In other
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words, the two changes, John, that matter for savings are the Budget
deficit and super. But, look, the real point is this, our friends in the
Liberal Party run around saying " Oh, look at the debt and you know
the current account deficit". But the fact is this is a big island
continent. This is a country which is always going to need capital. It is
a bit like people saying " Oh well look at that fellow up the road, he has
Just bought a house for $ 200,000. you know, and he is finished. He is
massively in debt." What he is doing is borrowing to make himself
stronger in the future and to provide a benefit for himself, a roof over
his head and an asset.
JL: Okay.
PM: That is exactly what Australia is doing.
JL: Okay, except that when the fellow up the road buys the $ 200,000
house, he does pay it off and the amount that he owes does reduce.
Our's doesn't reduce, it keeps climbing.
PM: Oh, yes it does and remember this, our capacity..
JL: Well why do we have increases?
PM: Let me just make this point. Our capacity to pay it off has doubled.
Eight or nine years ago, only about 22 per cent of our exports
22 per cent of the proceeds of our exports were spent servicing our
international debt. Today, that is 11 per cent. In other words, we are
like somebody who has got roughly the same mortgage, but has a
doubling of income. It is all about your capacity to service it.
JL: But why do we see it constantly increasing?
PM:-Because there is more Investment in Australia coming through
because more Australian companies want to invest more in this
country. That is where the jobs came from. See, John, this questioner
says I don't concentrate on the big issues, on things like the republic,
I mean the republic actually is a big issue. But I will leave that to one
side.
JL: Apart from that, I think everybody has got to be aware that
governments have got to be able to, and are capable of, doing more
than one thing at a time.
PM: Exactly, exactly. But what was the big commitment that I made at the
election? What was the issue of the 1993 election? Employment.
The right to a job. And even though, perhaps, it is now I mean we
had these dreadful headlines last week. We had 50,000 job growth
and the headline in one newspaper national newspaper was
" Jobs surge dashes hopes for rate cut". In other words, isn't it terrible
we have got all these jobs, it is bad for rate cuts. And then the next
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one, another one said, " Dollar surges as jobless rate falls to
pre-recession level". John, what in the biggest commitment that the
Government has made and I made at the 1993 election was to restore
employment to Australia. We have had, since the election, 630,000
jobs. Now let me just put that in some sort of context. When I became
the Treasurer a decade ago, we had 6 million in the workforce. It took
us 200 years to get to 6 million. It has taken us 2 1/ 2 years to put
per cent more on that 600,000. 1 mean it is the most phenomenal
level of employment growth. But you see any opponent I have, and
the questioner you can bet is not a Labor voter, will say, " Well look
2 1/ 2 years ago employment was all the go, but now we don't want to
hear about it. The next test for you is the current account deficit."
JL: Okay, just back to this employment, the jobs that have been created.
Are they jobs that have been created on credit, from money borrowed
overseas?
PM: No, I mean they are jobs created by investment and the pick up in
demand in Australia. You see, John, you have got to understand this.
This is not Singapore, this is not a city State, this is not Hong Kong.
This is a country, this is an island continent. It has got long railway
systems, it has got power, it has got water, it has got ports, it has got
all sorts of things.
JL: Why do you mention Singapore? Do many people mention
Singapore?
PM: 1 I mention it because some countries run surpluses because they don't
have the need for that continuing demand for investment.
For instance, I mean you have just seen BHP announce a new iron
plant for Western Australi Another company announced the same.
That wouldn't happen in a country that doesn't have iron ore reserves.
Now what do we say, that we are better off with that billion and a half
investment, or we are not better off with it?
JL: But how does that billion and a half investment affect the people
listening to this radio program?
P M; It lifts their employment and it lifts their real wealth.
J L: And does it lift their debt?
PM: Well it may do, it may do but it really just depends. I mean it depends
whether we can add to our national savings. In other words, what I am
trying to say is we have a level of domestic investment, bigger than our
national savings, do you understand? In other words, we have got a
country which is now investing strongly and though it is bigger than our
national savings. Just as you have somebody who buys their home
down the road for $ 250,000, which is bigger than their personal 0 ) 4 P 0 4 -C
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savings. But are they massiVely in debt and are they ruined?
Of course not, they are just building an asset.
JL: That is right.
PM: And we are building an asset.
JL: Yes, but we would be better if we built it with our own money, instead
of borrowing it from overseas and we don't have enough of our own
money because your Government doesn't encourage saving.
PM: Oh, well that is completely wrong.
JL: It is not.
PM: It is completely wrong.
JL: It is not. You tax people on savings.
PM: Oh come on, John, come on. But, listen, there are two sorts of
savings. There are public savings.
JL: But you do tax people on savings.
PM: Well, of course, we tax people. We tax people on income, mate.
JL: Well why is it..
PM: Hang on.
JL: H-ang on, well why is it wrong?
PM: Well, okay, let me tell you. You said, you know, we discourage
savings. Look, the biggest saver is the public sector if it wishes to be.
By pushing the Budget into surplus, we have pushed up the big
generator of savings, that is the public savings. So we are talking
about a national savings pot. So we are talk* ing about public savings.
Then we are talking about superannuation. Do you think my dull
opponents could ever get the workforce to put 15 per cent of their
income away as savings and give them a retirement income equal to
the one they retire on at average weekly earnings?
JL. But when will all this come to fruition and another question from, I have
got to give credit to the questioners, B and J Rathborne of
North Sydney ' will the foreign debt drop permanently, permanently
underlined, this financial year?"
PM. What was your first question, sorry?
JL: Will the foreiyri debt. I I Z i 4 o 0 0 4 P ID 5. 1,
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PM: No, no, but you asked me something before that. Sorry, I was
concentrating on that. But, look, understand this point, John.
Superannuation is already at 6 per cent. On 1 July..
JL: The question was when will we see this come to fruition.
PM: Yes, that is right, that is what you said. On I July it was at 6 per cent
and then it goes up by I percentage point over the next three years, to
which the Government is then paying 3 per cent by way of the tax cuts
into superannuation accounts and then employees are paying
3 per cent themselves. So it is 9 per cent, plus 3 per cent, plus
3 per cent that is 15 per cent. That 15 per cent will give us, by the
turn of this century, $ 1 trillion in savings and by 2020 $ 2 trillion.
Now, John, that is a level of savings, private savings, this country has
never seen, has never seen. And not only are we doing it, if someone
retires on average weekly earnings, which is now about $ 33,000,
in other words their working income at the week they retired was
$ 33,000, they will actually have a retirement income of about $ 33,000.
In other words, we are giving people, through our superannuation
changes ours an income In retirement comparable to the one they
have been on at work and we have built up a pile of national savings.
What does John Howard want to do to that, put the slipper into it. He
said he wants to abolish award superannuation, he wants to go back to
tax concessions.
JL: Okay, well now let me just get to this other question because I have to,
I owe it to the listeners. Will the foreign debt drop permanently this
year?
P M. No. No, but the thing is it depends whether you are talking about
absolutes, or our capacity to pay it. The fact of the matter is what was
required of the Government was two things. Look, in 1993 people said
get the economy restarted. We got the economy restarted. We have
had strong rates of growth since that time.
JL: Okay, but..
PM. The main requirement was employment. We got the employment there
and that comes only from investment. We got the strong investment
there and the other requirement was to put a medium term fix into the
savings problem, which we have done with a Budget surplus and long
term superannuation. I mean that is the answer.
JL: We won't be seeing the effect of it in this year, or next year?
PM: Well, of course, we won't be seeing the effect this year because we
have still got a flood of investment. But see, John, look, you get all
these sort of Jeremiahs. Let me just take the last week.
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JL: Okay, listen I have got to hurry you up a little bit because we have got
a bundle of people who want to talk to you, a very popular man.
PM: Alright, but let me just take the last week. On Saturday I launched a
ship with Jim Bolger, the New Zealand Prime Minister.
JL: His dollar is good.
PM:-That is a world ranking, state-of-the-art frigate, an Anzac class frigate.
On the previous day, Rupert Murdoch announced the establishment of
the Fox studios, the Fox movie company 20th Century Fox, the largest
set of studios in the world, outside of Hollywood. Earlier that week, the
Ford Motor Company announced a $ 1 billion investment in a new
Ford Falcon and a new paint facility. Two weeks before that,
American Express announced that Australia would be the
headquarters of its whole East Asian operation. The same week we
had 50,000 jobs and the stock market hit its high for a year. I mean
what are people going on about?
JI: I don't know, but they are.
PM: Well, maybe they are going on about it because they hear all the time
this sort of morbid Tory stuff about we are all ruined and the fact is..
JL: We are not.
PM: the economy is at a sustainable rate, we have got low inflation, we
have just had an Accord which is going to run wages to produce a 2 to
3 per cent inflation rate, you have got huge endorsements by major
American and international corporations.
JI: And we tell people about it all the time. But it doesn't alter the fact that
they still want to have these sorts of questions answered. Let me just
take
PM: I am happy to answer the questions, as long as people understand
when I focus on them, this is not the whole scene. The whole scene,
the scene we have at the moment, of sustainable growth and low
inflation is probably as good as we have had in 20 years.
JL: Okay, we will take a caller. Hello.
C: Hello.
JL: Yes, you want to talk to the Prime Minister?
C: I certainly do.
JL: Here he is. 6 3u I 951: 33 N0.004
TEL: 2 i6.3 uI. 51 j1: 3 No C04 F. C/ C
C; Hello Mr Keating.
PM: How are you doing?
C: I am doing well it is a great privilege to be able to speak to you.
PM: Well you sound nice.
C: Mr Keating, first of all I would like to say that I have a great admiration
for your political skills. I think you are a mastermind political strategist
and certainly without..
JL: Hey listen, you had better lay off this, or it will sound like some people
will be ringing up and saying it is a set up. Come on, get on with the
question. If you have got a question to ask, ask the question.
C: I am trying to be nice before I stick the knife in. Mr Keating my
question is I am an average man with a wife, paying off a mortgage,
and I am becoming quite disillusioned with the state of the economy in
our country in that you have been in power now, your Party has been
in power, since 1983 and I am wondering whether we have seen
another decade of lost opportunities? I have spent a lot of time doing
business with people in countries like Singapore where they have next
to no Inflation, full employment, zero debt and all they hear from
yourself and your colleagues over the past ten years is rhetoric that
just isn't matched with performance in the broad macro-economic
indicators?
PM: Well let me put it to you as politely as you gave me the introduction,
that is simply not true. Ten years ago, this was an industrial ruin.
Ten years ago, Australia was just a lump of industrial archaeology with
an old secondary industry that was completely uncompetitive, which
had a managed exchange rate which was massively overvalued, which
had a tariff wall which had no international competitiveness
whatsoever. Do you realise in that time we have added to a labour
market of 6 million, we have now added over 2 million jobs? We have
got the highest rate of employment in this country we have seen.
C: We have also got one of the highest rates of unemployment.
PM: No we haven't. We have got unemployment now at around
8 1/ 2 per cent against a massive participation rate, particularly
amongst women in the workforce, and we have got an inflation rate for
the last four years under 2 per cent. So when John Howard left office,
the inflation rate was just on 11 per cent. After the 1981/ 82 recession,
he left us an 11 per cent inflation rate. Ours has been, for the last four
years, 1.9 per cent and as I have just said earlier in the program, we
have had 630,000 jobs. Now let me also tell you this. Exports, which
is basically the meat and drink of our future, ten years ago we
exported 14 per cent of all we produce. Today that is 22 per cent of
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GDP. Let me just give you a simiple number. GDP is a total economy.
This year GDP is at $ 500 billion. We have taken exports from
14 per cent to 22 per cent. So we have gone up by 8 per cent of GDP.
We have gone up by $ 40 billion in exports $ 40,000 million in exports.
Where do you reckon we would be if the Labor Government hadn't
been able to regenerate and modernise Australian industry, restore
our competitiveness and get all that export growth? What do you
reckon the current account would be now? And what do you reckon
interest rates would be? And where do you reckon you would be?
C: Well interest rates really aren't anything to be boasting about at the
moment.
PMV: Well they are a lot lower than they used to be when Mr Howard was
around by a very large margin.
C: Yes, but I think you know I can under-stand you need to make
comparisons with them.
PM: Well you're making them, why shouldn't I? You have made the claim
that nothing has happened in ten years, why can't I respond?
C: Well I think in terms of foreign debt a lot has happened.
PM., Oh, you are back to the debt. You see you have asked me about
growth in employment and basically I have given you the answer there.
We have had just about, next to the United States, the fastest
employment growth in the western world in the last decade. We have
had a huge, complete, change to our industrial base. We have had a
revolution in the labour market. The lowest level of industrial disputes
now since we have been keeping records back to the 1 940s. We have
got an inflation rate under 2 per cent and now after my commitments at
the last election to get employment back, the most solemn commitment
a Government can give to employment which has been more than
matched by any objective the Government had, you are back now to
the only other argument which is about the current account deficit and
the debt. To which I said, as I said earlier, we now have twice the
capacity to service our debt that we had ten years ago.
JL: Okay, Prime Minister and caller I think we have got to call it a day
there in light of the fact that we have got a heap of other calls there
and a whole rot of faxes. Thank you, Prime Minister. Dear Ralph
( that's me, when they fax me) please ask Paul Keating if he is serious
about creating more jobs why the Government punishes the small
business employer by making us pay employee superannuation
contributions and for heavens sake ask him to get rid of that stupid
17.5 per cent holiday loading. Just removing those two burdens would
immediately create new jobs. At least, I know I would employ more
people. 26 i u 1 c'l I ci 0 0 4 F 0 9
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PM: Well, the world is not made for, simply, employers to make the profit
share in the economy higher than it now is. John, I mentioned to you
earlier..
JL: But, it is pretty important to have people wanting to employ others.
P M: We have just had 630,000 job growth. We are neck and neck with the
United States as the fastest employing country in the western world.
JL But, we have still got 8 per cent unemployment, so we have got to take
care of the 8 per cent.
PM. OK, so we need to get more, but the way to do it is not to basically hop
into ordinary people again. During my break, John Howard had his
headland speech.
JL But listen, aren't small business people ordinary people?
P M: Yes, but the people they employ are ordinary people too. So, you talk
about the holiday leave loading, You take someone who is on $ 20,000
or $ 22,000 a year, they are just making ends meet. They have got a
couple of kids and they have their holidays. Without the leave loading,
In other words without the normal overtime and the various penalty
rates they enjoy in work across the year, when they go on holiday they
take a big reduction. That is where the holiday leave loading comes
from to protect their income during this period.
JL: Yes, but even the man who introduced it says that it was a mistake.
PM: John, it was not a mistake and let me just make this clear to you. That
is all taken care of in the overall wages system because this small
business person, if he wasn't paying the holiday leave loading he
would be paying more in aggregate wages. That is where the Accord
comes in. How do you reckon we have got an inflation rate of 2 to 3
per cent if we have got a tear-away wages system?
JL Russell from Albury Why is it the harder you work the more the
Government wants to take off you. If I was unemployed and not
working the Government gives you everything all the benefits
instead of me working three jobs seven days a week to try to stay
ahead, I'd be better off on the dole. It is very hard to keep the dream
alive. How do you feel about that sort of attitude?
PM: I can only say that we have given Australians a growth economy now
for over a decade, apart from 18 months of the recession. You know
that in Ralph Willis' Budget the Treasury are forecasting, not only
growth this year, but for the next three years. So, from 1998 back to
1983 which is 16 years, we have had an 18 months dip in growth in the
recession, we have had growth as high as and around the highest 0 0 4 F 10 2 C
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levels of the western world for 16 years, we have had huge
employment growth and we have had reasonable income growth.
JL: But how do we keep Russell of Albury happy because I imagine that
there are hundreds of thousands of Russells listening to us. If he feels
and he is working three jobs seven days a week that he would be
better off on the dole. How do we accommodate the fears of Russell?
PM: When I came to government, again let me talk about Mr Howard who is
always talking about me. His top marginal rate was 60 per cent. It is
now 47 per cent. The middle rate was in the high thirties per cent. It is
now much lower and the bottom rate was 30 per cent and it is now
per cent.
JL So, all you are saying to Russell is it could be a lot worse?
PM: No, I am saying to Russell we have had huge tax cuts through the
1980s for people like him and they have stayed there. Those rates
have stayed there. The bottom rate was 30 per cent it is now 20 per
cent. The middle rates in their high thirties have declined. The top
rate has gone from 60 to 47 per cent. The company rate has gone
down from 46 per cent under John Howard to 36 per cent under us and
we provide full dividend relief for share holders as well. So, whether
you are in small business or you are an employee, John, this is second
lowest taxed country in the western world. Our tax revenue to GDP is
the second lowest in the western world than is an OECD statistic.
JL I understand all this, but it still doesn't placate the Russells of the
world who feel that they are getting a raw deal and he would be better
off on the dole. Not a healthy feeling to have is it?
PMV: But, I mean, that is not' the majority view obviously, otherwise we
wouldn't have a workforce of eight million people. It is a view, but I'm
telling Russell that revenue, that is all the revenue of the
Commonwealth under this Government has fallen sharply and that the
tax rates themselves have fallen, including the ones that most affect
him that is the tax free threshold which has gone up from $ 4500 to
around, from memory, $ 5400. The bottom rate from 30 per cent down
to 20 per cent, and substantial tax relief in the middle ranges which
affects him.
JL So, you are saying it could be worse? I mean, that probably is the only
retort it is not a bad one, I am not criticising it but that is what you
are saying?
PMV: I'm not saying it could be worse, I'm saying it is much better than it
was. Much better than it was. 0 4 P . IKIC/
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C: I have three children and we are expecting our fourth child in January.
That means we will miss out on the maternity leave that will be coming
in in February, is that right?
PM . I'm not sure, I'd need to go and check that one. Let me just say I was
very pleased to be able to announce the new maternity allowance in
the Budget.
C: I'm just wondering how the country can afford to pay that and where is
the money coming from?
PM: We are not only paying it, but we are actually in surplus as well. I am
very proud of the fact that we have supported families.
C: But, wasn't this brought in before in the 1 970s?
PM: No, we have need had ever in this country, ever, a maternity
allowance. This is to help families through the period when a child is
born, when a woman has that time away from the labour market, from
work, in that period afterwards. It is for six weeks and our objective
over time is to move it up to 12. But, that fits in with a broader set of
policies to support families like yours. That is, the Family Allowance
Supplement or additional family payment, the general family allowance
and, of course, if you have a child in child care for instance, the
generalised child care rebate or the fee relief. Can I say to you, I have
seen much of my mission as a Federal Minister and as Prime Minister
of being out there on the front foot to help families, to help people on
low to middle incomes. Because the people on high incomes can help
themselves. I am talking about people on low to middle incomes.
Giving them a right to medical protection through Medicare, having
that income support when they need it, giving them support now when
they have a child and we'are doing all that with government spending
to GOP that is government spending in the whole economy at really,
In an underlying sense now, at early 1 970s levels. On the forward
estimates of this Government's budget in two years time, we will have
government spending back to the level that existed before the Whitlam
government came into office and yet we have got that targeted to help
the people who really most need it.
JL: Are you getting the answer you want here?
C: Not really.
PM; What would you like? What would you like me to say? We can't
afford it, it is a shocking thing to pay money to families?
C: Well, we decided to have this child because we think we can afford it.
PM: Good. TEL
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C: And I don't expect any money from the Government just because we
are having this baby, well we won't be getting it anyway.
PM: Do you class yourselves as a high income earner?
C: No. We are just an average family, we are paying a mortgage.
, JL: Can I ask how old you are?
C: 32.
JI. OK and you husband is working and you don't expect any money from
the Government, so what you are saying in essence is you have
decided to have this child because you believe you could afford it and
why don't other people wait until they can afford to have children?
PM: Well, your husbands income must be such that you can believe that.
But lets say
C: He works very hard, and he pays a lot of taxes.
PM: OK, but where our policies..
C: We are paying for it anyway in the long run aren't we.
PM: Our policies are directed, but it is a matter of who pays. It is a matter
of whether the tax treatment and the benefits of tax payers with
children are more advantageous than the tax treatment and payments
to tax payers without children. It is called horizontal equity. On this
question of horizontal equity, we believe that tax payers with children
or people that have children through direct benefits from the
government get supported. Our policies are directed towards one,
two, three and four children it ' is* paid per child. The Family
Allowance Supplement or additional family payment is paid per child.
The policy of the Government is to look after the children, but in doing
that, of course, we buttress the income of the family. I am surprised
you don't think it is worth doing.
JL I'm not sure that she doesn't think it is worth doing, you are just asking
can we afford it.
PM: No, the lady said to me that she doesn't think that the Government
should pay for it.
C: Well, the national deficit is so bad..
PM: No, but it isn't so bad.
C: on all these things and, I mean, If it is a great thing why can't we
introduce it later and why does it have.. T: 26. JuI2.5 1 33 N o. 00 4 1 3/
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PM: Let me just say, the national deficit isn't so bad. That is the Budget is
in surplus and government debt to GDP is amongst the lowest in the
western world.
C: Well, don't you think that money would go better towards
unemployment programs.
PM: We are already doing those and we have had this year a very big
underspend on government programs because we have got so many
more people back to work. You realise that in Working Nation which is
the big program I introduced when I said we wouldn't leave the
unemployed behind, particularly the long term unemployed, we have
just in this Budget yielded substantial savings from the forward
estimates because of the underspends here because so many people
have gone back to work. So, I don't think we should worry about the
state of the Budget. The Budget is in surplus and these are
affordable. Can I just say this to you, when John Howard said a week
ago in his headland speech he was going to have deep cuts in
government spending, he means on these programs. He won't pay for
payments to families, he'll cut payments of pharmaceutical payments
for pensioners which is the big burgeoning growth area of the health
scheme. He'll cut payments to schools because they are the only
places you can now cut government spending without really to raise
money and where there is the room to raise some money.
JL: There would be a lot of people who would think that you could cut
government spending in the area of welfare.
PM: Well, we are now delivering John..
JL: Are you still there?
C: Yes.
JL OK
PM:. You could have said that and made that stick in 1983 or 1984, but after
the 1980s reforms and the targeting of the social security system.
Remember the big fight we had over the assets test.
JL: Yes.
PM: After the introduction of those things, and the fact that we now have a
targeted system, for instance, just take the additional family payment.
We pay it from about $ 17000 and it cuts out at about $ 26000 or
$ 27000. In other words it is targeted. We don't pay it to people who
are getting $ 37000 or $ 40000. J004 P .141 -C0
TEL: 26 JUI.' D5 1: 33 No 0C4 P. 1r. i
JL OK, would you just explain to our caller, my listener there, again what
you mean and if you could do it briefly because we have got a bundle
of calls, but I think it would interest her and it would clarify it, when you
talked about tax payers with children as opposed to tax payers without
children?
PM: It IS this notion of horizontal equity. Do you provide the same level of
assistance in tax and direct payments to a tax payer without children or
do you recognise the burden of a family having children?
JL Ok, is that clear to you?
C. I don't think it could help the people that are unemployed if they had
more children.
PM: No, that is a different argument again. Let me just assure you of this,
we have got an increase in unemployment benefits now which has
been a massive Improvement over what it was when John Howard and
company left office. We have now got these labour market programs
which he says he will cut, these are the ones that are directed towards
pulling the long term unemployed back into the labour market. In fact,
we are having so much success with them, a quarter of all the jobs this
year have gone to long term unemployed people. That is, people
unemployed for 12 months or more.
C: Well, you haven't bought my vote, Mr Keating.
PM: No, but I don't think I'm going to am I?
C: No.
PM;. That is the point. I don't* mind having discussions with people of the
conservative bias, but understand this, there are families out there that
need support and we are giving it to them.
C: Yes.
PM: Thank you.
JL: A fax from Queensland. Mr Keating, why does your government
contrive to discriminate against the white working class man in regard
to a number of issues, but not in the least Aboriginal legal aid,
particularly In civil cases such as the one at the moment regarding the
poker machine fiasco. Are you aware of the poker machine fiasco?
PM: No, I'm not John.
JL: Two Aboriginal women having a fight over who put the 10 cent piece in
the slot and who is entitled to the $ 48000. It is now in front of the
Supreme Court, both of them are in front of the Supreme Court
TEL 26 . Ju I 951: 3N. 0 1F/
16
because of Aboriginal legal aid. H-e finds that offensive when he
couldn't get the same thing.
PM: Legal aid is generally available. It is set up on a criteria, we have
added financially to the budget of legal aids dramatically through the
1 980s and 1990s. It is there for people when they really need it, there
are tests of course.
JL:* Yes, but it is not there for civil cases such as this, but Aboriginal legal
aid is. That is the point he is making. If he wanted to have a fight
about who put the money in the poker machine, he would be paying
his own way whereas both these Aboriginal women in front of the
Supreme Court, which doesn't come cheap, are being supported by
Aboriginal legal aid and Aboriginal legal aid is supported by the tax
payers of Australia.
PM; I must have missed that one, but the fact of the matter is that, of
course, there are Aboriginal legal aid services there and they are there
because as a class of individuals they suffer more discrimination than
is the case with the rest of the community and so the Aboriginal legal
aid services have mattered enormously to improving the equity of to
the lot of Aboriginal people. But, I mean, there is not much profit on
this program going to every case and who has got what.
JL: No, there Isn't but you understand the point he is making.
PMV: I'd have to know the details to understand the point. John, I
understand the broad point he is making and whether it is right or not I
don't know.
JL: Yes, it is right, but to another fax. Can the Government assist private
health fund members through tax rebates. We are forced to withdraw
because of Increasing fees, the cost of Medicare will increase
dramatically anyway.
PM: Tax rebates will only do two things. It will lift the cost of private
hospital services and lift the incomes of medical practitioners
practising privately in those hospitals. It will not improve the overall
tone of the health system and that is the key issue. What will happen,
people will pay, they think they get a tax deduction, it will simply just be
paid away in higher premiums. This is the point we have been arguing
with the Coalition now for a decade,
JL: I understand the point he is making however. If people are In a
position to be able to afford their own health care, if they were
encouraged to take out their own health insurance, wouldn't that then
be for the betterment of the people who can't afford their own health
care, wouldn't it improve the quality of their treatment. I 3,3 N o 0 0 4 P 16
TEL: >. cju1. 1: f4lo. O04 F. 17/ 2L_
17
PMV: We have got a proportion of the community, a substantial proportion
taking private health insurance.
JL Yes, but again, like saving they are not given much incentive to do it.
PM. A lot of this comes back to the whole principle of community rating.
You have heard of this expression community rating and that is
whether Australia should have a private market in private insurance.
That really means whether young, healthy people pay less for their
insurance than older less well people. In other words, there is a
market. Now, this community has generally taken the view that the
private insurance rates should the be same for everybody and that
older people in the system were once younger people who have paid
for 30 or 40 years and now expect the system to support them in their
old age and where they have health problems. But, while ever that
situation remains the young and healthy people will say, ' well, what's
the point of me paying this premium when I'm not likely to be using the
system'. So, what happens is the system generally gravitates towards
older, less well people. So, It has more costs.
C: I'd just like to say to Paul that he is doing a great job. I have been all
over Australia with my job.
JL: Where are you now?
C: Emerald, Queensland. I've been up to the Territory and down to NSW.
I've seen what his money has done and where it has been, but a point
for the people is that what would they rather a government that does
the work with a bit of irritation or a government that bows to all of the
do-gooders and all the righteous groups? If they done that there
would be no progress, there would be no jobs, there would be no
wealth for the country, they would just be bowing to all the do-gooders.
JL: So you are happy with the Prime Minister?
C: Yes
PM: Well thank you for the compliment. I mean I am not sure there is such
a great body of Labor voters out there in John's audience. But you are
one. Thank you, indeed.
C: I have seen with the Aboriginal funding, I have been up to the
Territory, I have seen all the new houses in places like Elliott and
Katherine and Darwin and all that and there is a lot of funding there.
But if you bow to all the do-gooders, there would be no money for the
houses and the builders who build them well they wouldn't have any
jobs because there would be no houses to build.
JL: Okay.
TEL: 2 L. Ju I. 5 1 : 337 N o. 004 F,. 1 2 C
PM; Thank you for the compliment, but the main thing is that this is
economy has grown at a clip for now 12 or 13 years, bar 18 months,
and it is going to grow for the next 3 years and we are now at a
sustainable rate of economic growth. You see how John Howard got
into the Governor of the Reserve Bank for having the temerity to ping
his cynical lie that we had five minutes of sunshine. Of course, we
have had years of high economic growth. We have had, now, nearly
3 and 1/ 2 years of economic growth since the recession and we have
got 3 years in the forward estimates ahead of us and we have now, I
think, succeeded with the policy changes this year of actually getting
the economy back to a sustainable growth rate, taking the pressure off
interest rates and getting the Budget back into surplus and seeing low
inflation pinned into place, of course, through productivity rising in the
economy and through the Accord with the unions. I mean, we have
got a most stable economic situation, growth situation, the likes of
which we have rarely seen.
JL: Okay, our caller in Emerald, thank you very much. It was good to hear
from you and I am sure the Prime Minister was delighted to hear from
you too. Just back to your statement about you wouldn't find too many
Labor voters out there in John Laws' audience. If you wouldn't, you
have got a big problem because this is a big audience, 70 stations
across Australia. What makes you think that there aren't going to be
too many of your supporters?
PM: I think there probably are, but they are not as noisy as some of the
others. They don't ring in and make faxes and needle you after the
program.
JL: Well I don't know that I am entitled to be needled today. I didn't ask
the questions, they did.. This one comes from Michael Tyres,
" A number of years ago you wanted to introduce", and we are going to
have to be very quick we have got'about a minute to answer this " a
GST package into our country. You failed to do so with your Party.
Why don't you bite the bullet, introduce a GST package into Australia
and fix the overseas debt problem?"
PM: Because that wouldn't fix the overseas debt problem. Rather than
simply put more revenue into the system, what I did then after that
policy change failed was to actually cut the size of Government
spending. So, now we don't need a large second base in the tax
system to fund the Government sector. It is now much smaller, it is
much smaller and doesn't need a second tax base. So, when I was
refused a 081-type tax in the middle 1980s, I took the hard way out
and that was actually go root and branch through the Commonwealth
spending and outlays and cut it back.
JL: Okay.
PM:-And now we don't need it.
TEL: 26.3u1 .95 1 : 33 No .004 F 1'
19
J L. When will you be available to do this again, I know you can't wait?
PMR Well I don't mind doing it, as long as you make all the others do it too.
JL: What, John Howard?
PM: Well no soft rides for others.
JL: No, no, well I don't give anybody a soft ride.
PM: Okay, I will keep you up to that.
JL: Okay, well it would be good because there is a bundle of questions
here.
PMV: Well I mean, look,
JL: There is a board full of questions.
PM: I mean let me just repeat one of the things I started and just say, John,
you have just got to look at the last week, you know. A ship we
couldn't have hoped to produce 20 years ago; a world ranking set of
studios, the largest in an English language country outside of America;
$ 1 billion from the Ford Motor Company; American Express, the
largest credit card company in the world, basing its whole East Asian
operation in Australia; 50,000 jobs for the month; and, the stock market
hitting a high for the year. I mean it is not a bad week.
JL: No, it was a terrific week and I think the people should be aware of it
and proud of Australia too in these instances. But they still, obviously,
have a lot of concerns and it would appear that the main concern is the
overseas debt.
PM;* But that again, like we say, you move up in this country by getting a bit
of debt and buying a house and you move up as a country by getting a
bit of debt and buying some investment.
JL Interesting analogy and I hope the people take it to heart and
Prime Minister good to talk to you.
PM: Thank you, John.
JL Are you coming to my party?
PM: It's your party and you'll cry if I don't. Won't you and I wouldn't like to
see you in tears. I think there is somebody else who used to cry all the
time and I just couldn't stand it.
JL So does that mean yes?
26. Jul. 95 1: 33 No. 004 P. 20/ 20
PM: I think it does.
JL: Good on you.
PM: Okay.
JL: Thanks for your time.
PM: But you have got to be choosy about the other people who are coming.
JL: Oh well, do you want to check the list, do you?
PM: Well if you offer it to me.
JL: Okay. Bye.
ends TEL: