A I
PRIME MINISTER
TRANSCRIPT OF IUTkRVIEW WITH ALANI JONES, 2UE, SYDNEY
3 JUJLY 1987
E 0 E PROOF ONLY
JONES! 4 A week tomorrow Australians go to the polls. Every
election for a now government is significant s0 its perhaps
cliche ridden to say that this Is one of the most significant
elections in a long time. I've said before that in maq# ways
Australia is in the ambulance chronically ill. This
election isn't about finding blame, but finding answers.
Like every election the polls are playing their part, and
today they suggest that the gap between the leading parties
is closing. In 1990 at this time in the campaign Bill Hayden
was well in front. Malcolma Fraser changed direction, Bill
Hayden ignored the advice of Noville Wran and decided to
tough it out and lost. Remember that Bob Hawks only needs a
handful of votes and about nine seats to go against him and
his government could lose. The real test of the gamble he
took in calling the election is about to be reflected in
eight days time on the political scoreboard. The Prime
NinisLar is my guest this morning. Good morning Prime
Minister. PM: Cood morning Alan.
JONES: Prime Minister, could we just forget for the moment
perhaps if It's possible that you're Bob Hawks, Prime
Minister, and just imagine that you're, say, Bob Adams from
Annandale and there's a bloke out there called Hawks who's
saying I want you to vote for me in this next election, and
he says, well ON, I'll listen to your story. The story he's
told is that when Bob Hawk,-first came to office, the foreign
debt was about $ 29 billion and now Its about $ 105. For the
first time almost every month we've had a current account
deficit for many months. We find that interest rates have
escalated. Inflation In relative terms is worse than it was
when they threw out Malcolm Fraser because they said he was
managing the. show unsuccessfully. What do you think this
bloke at Annandale would say if that record was recited to
him? PH: What that blolce would say that's Alan Jones who is not
putting an Impartial story. He's putting his loaded story
and not putting it accurately.
JONES: Could we take those points through?
PM: Yes, s~ ure, of course we can.
JONES: $ 29 billion to $ 105. Is that accurate?
PM: Can 1 go through them all? The fact is that there has
been an increase in debt and the overwhelming proportion of
that has been in the private sector. The net debt for which
the commorxweatlh is responsible,* the net overseas debt, is
billion. JONF'S: So you're not responsible for-
PH: Woll., if the private sector in fact increases its
borrowings overseas, as they have, that is a decision Alan,
as you realise, that is made on commercial grounds. They
assume that they are going to be able to finance out of the
Investment and service the debt.
JONES: So you've got no control over that?
Pk: You have got no control over the private sector. if
S that's the sort of economy you want when you're going to stop
the private sector borrowing overseas, well then so be it.
What we've had to do, and what we will continue to do is to
exeroise on our own economic front, that is the
coymonwealth, a bringing down and I'd tell that chap out
there that when I came to of fice the deficit that John Howard
left me was $ 10 billion.
JONES: Not really. on tho forward estimates. You know
that. PH: And I know that the chap who was standing on the same
platform last night with you and John Howard, that is John
Stone, came to ne the day after I was elected that John
Stone, not someone else and told me that's what's In
prospect and we've got to do something about it. Nov I would
tell this chap out thero, Alan, that you're talking about, so
that he didn't get a I'd say now look, in the area under
my control, I have brought that down at a rate of descent of
deficit that hasn't been seen before to a point where instead
of having nearly $ 10 billion that John Howard left me, I've
got $ 3.5 in 86--87, it'll be down to S2bin 1987-88. As a
proportion of gross domestic product, I've brought the
deficit down from St to less that It. That's what I'd tell
him and I'd tell him also, that that's a significantly better
thing that's been done In any other western country. And
then on the inflation where I've been given
JONES: Could I comie to the debt? So you can't control,
you're saying because I find this difficult to believe
you're saying to Australia and middle Australia, who Is
terrified about this escalating debt which Is affecting
interest rates fairly dramatically, which is affecting the
prices of houses and all that stuff, that Bob Hawke can only
look after the commonwealth debt and there's nothing else
they can do.
PH: Now wait a minute. Let me finish the answer. I'm
saying that in respect of the area that I can-directly
control, that is, what the commonwealth's net position is in
terms of its oconxiu operation, that's * what I can directly
control. And I'ma telling the story of what I've done, of
thait largo Inherited deficit which I've brought down from St.
51 of the gross domestic product, to less than 1*.
JONES: How?
PM: By the biggest cutting in commonwealth expenditure
that's ever been seen.
JONES: Whon you came to government, commonwealth outlays
were $ 43 611liun.
PM: Why do you need to point the finger Alan?
JONES*. I'm not. I'm asking a question. $ 43
PM: Well that's what you were doing Alan.
JONES: Wcll OX, I don't want to point thut finger at you. I
ivight do that later, but not now. $ 43 baillion were your
total commonwealth outlays. In five years they've doubled to
about $ 86 billion. Now does that mean that you are the
biggest spending government In history?
PH: It means that what we have done is that In 1987-85
commonwealth outlays as a proportion of GDP will be It lover
than they were a few years ago. Next year we will have
brought them, as a proportion you seem to think that as the
economy grows, we have more pensioners, as we inherited, as
we did, more unemployed, we had 250,000 thrown onto the
wiemployuuent scrapheap in the last twelve months of Howard
but as the econotay grows, expenditures contract. I'm telling
you that in 81-86 Alan, the commonwealth outlays as a
propuition of GDP' will be a percentage point lower.
JONES: It took 81 years to get commonwealth outlays to $ 43
b. mllion. You have extended It, you've doubled that. Are you
voaying that you can got around that argument about your being
a big spending government, at a time when this election is
about whether you want lower government expenditure, not as a
percenitage of anything, In real terms?
PH4: Of course you've got to say Its an expenditure of the
total product. if population grows, does that mean less
oxpenditure? if yo'vs got a growing population, and if
you've got an increasingly aged proportion of that
population, then the obligations on government of any
political persuasion are going to be greater. Simply because
of the fact of population growth.
JONES: So we can't cut that expenditure?
I'M: Woll what I'n
JONESt You havo, but can you cut It more?
PM: What we have done in to cut It mure In that last May
statemount than ever had been done before. S4 billion of
expenditure. It wax the greatest expenditure reduction Alan,
in tho last 30 years. Thatt's what's been done.
JONES: Many people are saying you need even more severe
structural. and expenditure adjustment to get us out of the
difficulty we are in, which your own Treasurer has said, and
you said, put us almost on a war footing were your words, and
your Treasurer said like a banana republic. Now can you do
better? PH: if you've finished your advocacy which is all thIs is so
far -I
JONES: No, I'm questioning you.
PH: No you're not. You' ve advocating.
JONKS: No I'm not.
PH: Now donot let's argue with ones another. This
JONES: I'm questioning you arnd it= offering fact.
PH: What I'm suggesting Alan, if you read the transcr~ lpt,
you'll see that this is Alan Jones Advocate. And I'm not
worrying about that. It's what I expected. Just give me a
chance JONES: No, well I mean, you're under contest, you're
standing for Prime Ministership. I'm entitled to question
you. PM: Yure entitled to be an advocate. Lot MG
JONES: No I'm not being an advocate, I'm being a questioner.
PM: I nee alright.
JONES: If that's too difficult for you say so.
PM: No it's not too difficult.
.0 JONES: OR, well lot's answer the guestion.
PM: Well wilil you give we -a chane. Let's come to the
Interest rate aspect of what you're saying. You're
saying that as a result of what we're doing In the area of
expenditure, the people have now got these record interest
ratos. The facts are that the highest interest rate in the
1980s was under John Howard. It peaked at 221. After I came
to office don't furrow your brows, that's a fact. It
peaked at 22t under Howard. Now when I came to office we
broUqht Interest rates down until we got hit by the declining
terms of trade. Now what's happening, as you know, that
Interest rates are coming down markedly, falling, and that the
statement of the banking industry is that they are going to
continue to..
JONES: Some. Some. Wall Street said last week that there
have) to be greatar adjustments. You launched your campaign
here in Sydney, didn't you...
S
PM: You tAaid I could answer.
JON( ES: OK, away you go.
PH: As far as interest rates are concerned, they are
failing. You're saying that the statemeant put to gentlemen
o. ut where~ ver he Isi Alani what'n ' is Flame we were giving
him a picture, he had to be given a picture of rising
interes; t rates. Tho faut is that interest rates are falling.
The fact Is that inflation is falling. The fact is that
government expenditure as a proportion of GDP Is falling. The
fact is that employmuent is rising. The fact is that we've
had double the rate of employment increase In this country
compared to the rest of the world. The fact is that
investmuent Is rising. Those are the facts. Those are not
the putt ing of a piece of propaganda.
J3ONES: I'm not propagandaising, I'm asking you questions.
I Im simply saying that you launched your campaign here in
Sydney. There is a massive housing crisis hero In Sydney and
1. wundor whe~ ther you wliderstand that. Otnuu upon a time you
were identified with the little bloke. Now you've had a tax
ia~ batit, and we're talking about tax policy. That's got
advertised everywhere. No bloke under $ 20,000 gets a cent
out the tax policy changes on July 1. This follow out In
middle Sydney whore you launched your campaign finds himself
PH: Can we deal with that. The fell. ow out there has already
got. his tax cut. You're Implying In your question that what
happens on July I is tho only stage of the tax cut, as you
know, and you should be dispassionate enough to say so.. Its
the second stage of the tax cuts and that bloke that you're
talking about is getting a $ 10 a week tax cut. And if you
want to compare I just wonder whether you'll interrupt
JONES: No I won't interrupt you.
PM: Just look at that.
JONLWS! ON, what do you went no to r& Ad to them"
PH: I want to 0% read the comparison Alan, of
JONES: betwecen Liberal and Labor.
PM: Liberal or Labor -the comxparison of net benefits on
Liberal and Labor family packages.
JONES: Well, let's take a break and I will read it.
Break JONFS: The Primec Minister is suggesting I should have been
more subtle.
PM; Not should have been, I expected you to be.
JONES: You expected me to be more subtle?
PM: Yen.
JONES: Revs Juspt presented n with a statement about the
relative positions between the Liberal tax cut and the Labor
Party tax cut. Now I'm not hore to argue the Liberal
position. If I want to argue that I'll argue with John
Howard about it. I'm hors to talk about your position and I
wonder whether, I'm simply asking you, in this tax cut that's
out on July 1, in the current economic environment. should a
bloko on $ 50,000 because you're criticising John Howard for
offering tax cuts when in fact we should be reducing the
deficit and we should be making sure the debt quotient is
reduced should a bloke on $ 50,000 be getting $ 26 tax
rebate? I mean, who does Bob Hawke represent? You've had
andorsement from the millionaires, from Alan Bond and lorry
Packer. Is your constituency saying, many of the Labor
people, Bob Hawke's lost touch with us.
I'M: No they're not. On the contrary, and all the evidence
shows that they're not. WIX t .1 y understand is that they
were the ones who in 84 weT~ i re tax cuts $ 7.60 skewed
down to the bottom all loa~ ded down to the bottom. That was
the first stage. Then they got the tax cuts last year in
[ December. They got theirs. $ 10 a week, a bloke on average
weekly earnings. Here you're now getting the impact of the
benefit for the people with the rate coming down from 60-49.
That's not just iDomething that's happened out of the clear
blue sky. it's been a matter that's been a part of the
public discussion and with the trade union movement, as well
as business.
JONES: ILookIng after the rich'?
PM: Not looking after if you want to ask the question of
looking after the iich, just let's look at the comparative
package. Will you examine the fact that under the Howard
package it's not until you're at $ 75b0 a week that you get a
net benefit out of the combined tax family package of Howard.
14ot until you get to $ 750 a week. If you want the comparison
between Hlawke and Howard, lot me give it to you. As far as
the Prime IMinister IVr conflrnind. the flot inpint upon as an
Prime M( inixter wan a loiss of $ 5s4 a week, because I taxed that
part of the allowances, which under the Inherited Liberal
position, was untaxed. I got the benefit of coming from
cents to 49. That's more than of fset by the fact that I
taxed the whole package. Under the Howard package, as Prime
Minister, there would be nearly another $ 400 a week going
into his pocket. So If you want to look at the question of
whero you actually help the poor, and where the rich get
hurt, it's again the Howard package which Is loaded in favour
of the rich. Under his package, until you're on $ 750 a week,
you don't get a net benefit oLA'of his package.
JONESi Right, but we can confirm that yesterday, on July I
whenever July 1 was, the bloke under $ 20,000 got nothing. So
in spite of the fact that he might. have got something before,
fie got nothing yesterday.
PM: We]) 11f you want to keep-
JONES: But you're not telling the people that.
PM: I've told themn
JONES: You're telling then now.
PM: I'va told them that they got the second stage ot the
whole tax reform package on July 1. The first stage was in
December and as a result of the total tax package, the bloke
on average earnings in regard to tax is $ 10 a week better
off. What he's got to choose now is a position whether under
Howard he wrants a tax and family package regime where you've
got to wait until you're $ 750 a week before you get a net
benefit, which is the position under Howard, or whether you
got a significantly greater benefit under the labor package.
JONES: Wall let's talk about Bob Hawke.
PM: Sure.
JONES: On the fringe benefits~ tax. Now you've defended this
high and low. I initially didn't believe that you didn't
believe in It, that it was pushed onto you, but you've
defended it.
PM: yov.
JONES: Now the fringe benefits tax being paid by the
employer. Now this means that Bob Hawke goes enjoying
] KIrribilli Houses the Lodge, stationery, office space, cheap
meals, free cars, drivers, VIP aircraft. Most people out
there would say they don't deny the Prime Kinsiter the
entitlement to those benefits. Nonetheless, they're not
being taxed. But out there, if a bloke is giving someone a
motor vehicle to do his business, the employer in paying tax
on that. Now what's happened is, that they have then stopped
giving that benefit, and the motor vehicle lndue-ry as you
know, is in disarray, just as the housing industry.
PK: OX. Nov you've finished that particular part of your
Let's look at the facts rather than the advocacy.
JONES: They're questions Prime Minister and you achieve no
benefit to yourself or anyone else to suggest that I'm an
apologist for anybody. I m simply challenging you and I'm
asking questions that others don't ask and you must allow me
the right to at least Well don't use the work advocacy if
you don't mind. I'm here to question the Prime Minister
and if you don't like the heat of the questioning, really we
shouldn t be here.
PM: I'm quite prepared to stay here.
JONE. S: OX, well if you can't take the heat you should
get out of the kitchen. But it's a nonsense to say I'm
advocating. What I've just proposed to you is the truth.
You are not paying a fringe benefit~' u ] Kirribilli House or
the Lodge, you're not paying it on your VIP flights.
PM: Alan, you won't got me upset by this. Let me just make
the point.
JONRS: Well answer the question.
PH: NOW I would lust suggest Alan, when I can resume
Answering the question, if you look at your transcript you
will œ ftS that it's not an asking of a question, it ic an
assertio. n in regard to the motor vehicle industry that it's
In disarray because of the FBT. Nov I'm answering that, in
I. fact, what this government did in 1985-86, not because we
wanted to, we brought in a tight monetary policy.~~ a
situation where the world wiped $ 9-1b1i11l io ofah~ eoo
capacity of this country. Not through any fault of any
workors or employers or farmers or miners. They just started
suddenly paying us very very isuch less for our coal, our iron
ore, our wheat, our dairy products and our sugar. That was
$ 9 billion wiped off. We had to bring back the standard of
living In this uountry. we had to lower the level of
economic activity because we weren't earning enough to pay
for the imports that we were bringing in. So not because any
politician Alan, or any Prime Minister, likes high interest
rates. We brought in a tight monetary policy to lower the
level of activity. And part Alan, of that increase of
intarovt rates, a deliberate thing to do, was reflected in
the motor vehicle industry. All I'm saying to you Alan, is
tlhat if you look at the statistica of motor vehicle sales, it
was the result of that, plus other things that were happening
within the motor vehicle industry, but particularly high
Interest rates had their imapact it was not the FBT.
JONES: OR, can we take the FBT. You said to me once before,
that the reason the FBT was paid by the employer and not the
V14-1 will. But don't say that when you say the motor
vehicle industry is In disauray because of the FBI' that's
what you said the motor vehicle industry Is in disarray
because of the FBT
JONES: Well, why Is It in disarray?
PM:: Let me just point out tou you, that in fact if you look
at the compononts of the muotor ve hicle sales, that the area
where the FBT applies is not the area In which the loss of
cAles has occuxred. it is in the consumer, the ordinary
consumer, not In the fleet sales. That Is a fact, which-
JONES: . high Interest r-ates are stopping the consumer
from borrowing muoneiy to buy a vehicle.
P14: ThatL's right. That's absolutely right. And in fact
what we'did in 1985-86-
JONES: So It is your fault?
PH4: Well
JONES: Hligh interest rates.
PH: Well can I finish or are you just going to keep
interrupting and make your advocacy. I can finish can 1,
good. JONES: word, advocacy. You can be an advocate and I
can't. Away you go. DD OUI IUU4 DO r U4
eiapluyee was that the unio~ n movement wouldn't wear it. Why
should a tax be imposed on someone who doeon't enjoy the
betiefit? if' you're going to have a fringe benefits tax, whay
shouldn't and that's your entitlement because you're Prime
minister -why shouldn't the tax be paid by those enjoying
the benefit and why shouldn't then real leadership say, by
JBob Hlawke and Paul Keating and everybody, I'm going to pay
tax on my benefits. My Xirribilli House, my Lodge# my free
cars, my VIP aircraft? Then isn't that legitimate
leadership? Why do we say the rules apply to others but not
to Je?
PM: That's not accurate. What in fact happened is, that
what I did to myself In respect to the composition of my
Income was to inpose a disadvantage on myself. As a result
of the Hawke/ Keating tax reform, I was $ 54 a week worse off.
So don't try and say that I didn't apply to myself a
disadvantageous rule. if you want the comparison-
JONES: Tax Isn~' t paid on all those things.
PH: But let me. put the point to you-
JONES: There's no tax paid on Xirribilli Houve, thu VIP
aircrafts, the free Stamps.
PM: Of course there'a no tax because that is part of the
naecessary discharge of the duties of office. In. the same
way, If in business you have an interest cost, that Is tax
deductible. Do you suggest, in other words-
JONES: Well what Is a fringe benefit?
PHf: A f-rinqe beunefit. is something where an emolumenat is
paid to someone as a substitute for a norm. 1al'vq b~ alry. Now
let's just be clear. What has happened as a' esult ot the
bzinging in ot the fringe benefit is that you are having a
change of' the cimouent structure. A lot of companies said,
alright here'n execuitive. Instead of paying him $ 150,000
a yeax, whicb~ tract, full tax as their ordinary employer
Llauy bdy well we will givo luu 4 was, ww will giv ytau fr& 6
educ ion, we'll give you the education of your kids. we'll
pay tor the education o~ f your kids In a private school -I
JONES: Prime Hinivter. Not your educ~ ation. We say look
it'is nonsense to ask the Prime Hinister to work for $ 100,000
but how we make it attractive is we say we'll only give you
$ 100,000 but we'll give you a house here, a house there.
That's how' we got people Into office.
H: o not at all. It's been a deliberate decision of past
Prino Mnisters, past governments, under all governments to
say that. to discharge the duty of Prime Minister there's a
rosidence in Canberra. They also say a residence in Sydney.
But they say that you fly in VIP aircraft. Nov that's been
going on under successive It's not a perk, it's not a
substitute for my salary. It is a necessary part of doing
the job, the same way as if In a executive's position, there
is something that's he's doing which is a necessary part of
hig job, then that's not a fringe benefit. It ' s where there
is a dioivion that instead of paying you a salary, you will
-Aa oidthe situation of attracting tax on salary. Well1
instead pay for the education of your kids. It's not in any
sense a necessary part of the doing of your job.
A: 116 20 to 10 and its Alan Jones with you till 12. 1
am spieakin~ g with Australia's PM, Mr Robert Hawke.... on 1' ritige
PM: Yeah
A j Bob Hawke's got a question about FBI
PM: Nu. I just wanted to point out thut thc rrco of theLlb
Party Mr John Vaider, good friend of yours I iblnk....
Aji what was, that?
r w Your eyes blinked*
Aji Cati I just stakc the polni. If you have an uffliation
with the lab Party ( inaudible) it you have It with the
other side you are not. Does that disqualify ine?
PM-. I just wondered wheuther you were at freind of john's.
Aji He would be able to tell you that better than 1.
PM1 But I just wanted to say tljuL the Pies of the Llb party
& greet, witli me opi the 00
Aji Who have you Ijeen talking to?
PM: John Volder has been talking and this tip Out lie has to
say, lHe talks about the whole deseaee of FD. " I have got to
say that it to a fair and just thing in this country to get rid
* of it"..,. and that Is what( hie is saying. His words.
* AJ: What you tre talking about is fair about school feet;
and all that stuff is right.
PM1 But letp see what the Prcs of the Llb Party says. Let
me remind you of what he says. He said " I would like to see
them ( thats tle Lah Party) do thes v. hard things ( gietting rid
of F11) because electorally that is the fact of the matter they
are going to get into trouble. They are not easy to do.
So I have said nany times, let tiC Lab Party get on
imaplemeinting the more necessary but the los popular
patt of our policies. And lets hope they get thaem into place
and promiptly Ilo~ office. And I think that would be a v. good
Oeeflo. .1 In1 other words any political leader who says, that has
no political morality wbatso ever. Arid I uni t1ulte prepared
to say that to Mr Valder. That is an unacceptable rofWvpiaO to put
to anybody.
PM: WL-11 that Is the Pre& of the Llb Party.
Well that is & nr unacceptable proposition and would be
unacceptatble to decent and fair minded people In the community.
Can 1 just take the second pilt Okough about policy positions.
A] ( con td)
You ald then that tlie motor vehicle industry. arn You acknowledse
11 It; iti dIfficulty or In cr1 vis, but not as a resu t of FUT.
What about Ini this rotate thc housing industry? Negativye gearing.
Negul~. ve genrlng dOeff apply arnd a lot of people don't understand
it, do 1tlICy1 that you can make a loss on an investment and write
if Off Igainst income. I can do that if I own a boot shop at the
end of the street and if am 1oosIn8 money on that I can write
it off against Income I have earned elswhere. I can't do that If
I put mny snoncy in & anoime. Now you don't come from thin etate
but you launched your canqpaIgn here and there is an awful mecss
In the housing Industry. On thc on c hand you can't got money into
it and on the second hand because people have got the Ir iloney I ii
it and now scan't negatively genr they hove got to charge high rentals.
So we liave ucitioalelevels or rental and the incapacity for
people to buy and money in the industry drying uap. Are you saying
that neg. gearing In the housing industry haui't produced that
Covlsecuernce? ARe there any circumstances under which you would
reconsider the neg. Searing propoeal?
P~ i I , acknowl eddc the part Iculcir problerrit Ifr Sydney. YOu are
quite right In saying in regard to the retital. matrket thecrc are
difficultiep In NSW. Before coming to tho final part of your
question -" whether you would reconsider I just make
a couple ot points about the housings. uio rtl n~ hcn
we have donie. When we came to offl tt 1' h ou a In % sBit I crlO~ MH Ft ly,
it-had dropped to 105,000 I~ tarts. That wats pel annum
rate Lfl the last year or the Fraser/ Howard ot. We lifted that
V. bubsitatiially.... it got up to nearly 150,000 a 147,000.
But in the same circumstances I talked to you & bout before wherc
wehdd thet lowe~ r ativity we brought that back, it will
flow be running OVUL' 120,000 this year. The 1 g ene rnI y
speak ii. With regard to public housinig, we have as you know very
VVL-y substantilly tnereasea the number I think It Js 40 odd tp
In real termst, the tunding for public housing. So we are
conbcious of the problem that exists, We have had! particular
policics Including the firot home owner~ policy which has Sot
now I ntillioij yvunig Austrdlians into homes and acknowledged
* Liy the housing-industry to be the best piolicy that has been
brought In. Now that to the position of what we have done
with regard to housing Senerally. In riegard tu tieg. gearing
the problem wds that process was used by somne people to
provide renital aLCvirsnneuodaia but it was a substantial tax
avoidancc measure. So we were faced with a ffituntion where
we wanted to sash the tax. avoidance industry in this countr.-
NeS Searinag was o tax avoidance mechantsnm and we therefore
Well it was Alan.....
Weoll yov, kqow yourself thbtliflypuv. ptl your tiney
Into housing, Just suppose that rieg. Searing didn't exist
now, the return you would get would be 5% ur money.
You could get 15% somewhere el se. People Yent in there. because
they wcrc & ale sort of people bricks aan inort r people.
It there were eole speculating arid Lurnilg ovc in housing
purchornes wel you can trap them anyway,, I fil e takcin
money, etnd I am sure you would, out of t ie housing industry.
Iaw not going to put It In here for 4 an~ 5% andh iie people
AJ ( contd)
k-ick miy walls down. And thot Is the problem. Would you
consider changing it In the light of the problettii Lsatt e Iis t?
M; I What I am prepared to say is that and its not just
Into the future but we have wIth thle treasurer and the minJi 4ter
bven looking at this. whole jum~ t ion. We have bccn doing it
witin the last period of 6 monlths when we were considering
the may statemecnt what sort of things that we may be able
to do to assisat the renital market, And I muust say that oneC
of the thtnRqs thut was put Up wILI& someC , oditlc~ tion of
the position with regard to neg gearing, tha; was suggested
as one of things that. we should perhapt; recu,) 5AidCU to see
whether there could be some modifications LhNLt could be put
around It which stopped that element which did represent tax
avoidaitur fio you are not off the playing field by saying tbat
0ofnething hnx.
AJ: We have got to ge L . iiV. s5ector moncy into It, haven't
we? PM. Well or course you have got to get prlv sector money
in. T e whole thrust of my 8ovts policy has been to encourage
thle priv. sector.
Well yeah, we are Setting It into the stock market
tout we can't get it into housing.
PM1 WV. ALC Kettil-) j it into jobs. We are getting it
into 800,000 Jobu Ala;;.
Ajt Not allI priv sector jobs.
PM: Over 85% Into the priv sector.
Can we go to the Opera H~ ouse launch?
P11. Go where you like Alan -1am your willinA guest.
Wv are talking about symbols of Sovt extravagance
allI the rest of Lt. Do you think that the way in whichi
you launched yur ceapaign was symbol of extravagance which
the country could do without? Wc have never seen 30 many
white corr. and it was real ly ' scened' and after all political
life IN KbOUt dFPV& a-ance -but it seemed an indulgence. Is
that the sort of thins that we can afford give' the kid
oI ei~ orsouiC environment you say we are confronted with?
I'M: What we can't & ifford ond of courve It was riot
an indulgencc not at a] Il. But what we can't afford -arid
Ltii is riot noy jud cuient thia tot the Judgemcnit of an organtsation
which Mr Howard cal Is a reputable org U 11ii I U11 anid that ts
Goldman Satchs~. What we can't afford is the Llb Party pohlicet.
Dcvausc ut NY~ which I Howard says is a reputable org.
which is visit* every time he Soes to NY, just said in the
last 48 hours, that Autitralia cannot afford the policiev of
j H46word It io a recipe for disaster.
That is was thc pub) ic have to duvido, haven't they?
PM: Wcll G. Suche has mawde a decision
I just wonder that Bob Hawke used to have a grog
anid used to swear at people and so on arid I a he seeiung hliramelf
as some sort of messiah? 1 vay that to you because one writer
last week described your poulicy i5pccch no ' brachish pond
coagulatcd with cliches". What did you meati whin you said
that " we are on the ibreshold ol' one of the most iemrkablc
experimrentrs in nation building ever atterptird ir the courae of human
* history". I mean you are nor a stupid mani. What ) ltstoty are you
talkinA about. Is this bisser than the Christian Civillsation?
Bigger than the fall of Romie?
* PM: We were talk iii. ina the context Alto% that we were on the thres-'
hold of tbe 3rd century of European set tlemenit, This is the last
year of lte 2nd century of Europe. an settlemecnt. We ore on the
threshold of the 3rd century. It to our bi -; ctituraiy next year,
Australian history or human history?
PM: I Lhirik lit Ituuanara history this lit one of the mioot exciting at-d
unique nation but ldliag experimients that wc have seen.
Aji What you have done 7
PFtz Nu. No. NO. Not I am t 0 kinge.... not,~ we have done my
spechwas about the 200 years -it rstarted iii v. unpromitsing
t: I L-VuII1I CftIC5. I wais reportin~ on the fact that here we were a
land at the far end of the wor) d KU fa ' ab EUi'Ope Was conrcerned,
They veit theilr convicts out here. People tume fromu all ovc&-theI
place and I Knld Lh~ b Wdb all uiapruO~ IIjlj; s~ t. Mt and it b) CLS
been one of the most exciti. ng things that has happened in humanu
hIstory. The way the Austrttllati uatiort flab beel Fbuilt. I was
riv. Itnl k i lg about the 4 years of my govt I was saying " nlow we
arc oil the threshold of the begtnnin8 of a 3rd century.",
Ajt S you haveu ' t sorsie over the to p with your langlage?
PM: 1 don't think so. It you think I was talking there about
the miowt. excitinga thaing is what we have done -Iwdsn't saying that
at all.
Aj; A bit me.. y I would bay,
IPM: It you look at what I say y ou will know that. I wav Lulklzag
tiboui the ZO0 yealrs of Australia's history.
AJ: You will be flattered to know that I did read It.
PM. And you also know that I was talking about the 200 years?
1 didn't get that imjireatslon otherwier I wouldn't have asked
t question. B~ ut you have answered that. The 31 promises0
el. re etrswered today. 1 am just interested in statement, like thia
for example. TaIn reletio to the comlntg year thal 10,000
trainee ships walhl be avatlabe. Youvanswer is " the govt has
AJ ( contd)
already acknowledged that the first's yeaus torgot was overarnhttious".
PM: yes, it was,
AJ: D~ o you think that too many of the statemento that you have
made ini the past, about cap gains tax, about levels of interest
rates.' For example, you have said that interest rateii are going to
fall in the next 12 months. And yet you have also said that you
will m'ointairi the real value of wages. Now how the hell can you
maintain the real value of wages and pay for that arnd presumably
pay for It1twf burgeoning deficits and at the samc time reduce
the level of interest rates. It seems to me that they are completely
Incompatible... uflless of coursc you are speaking out of another
cCo9noffltC text book?
PM: Now let me pick up the first p~ art of your long queon,
and I will accept that It i* a question. You refer to what I said
about cap gains tax... that iv Implying on your part that there was
a broken promise there. 6.. fow that is totally dimi seed in what you read
from.... ow come on let ine finish
AJ; Do you want me to tell them what you s-Aid?
PM1 Yoi, Aure.
1A3 Th riia coiritment was given in the contaxt of the
rM; Wril let mc finish.
* AJ; You broke It in the next campaign.
PM; Ok. Why can I read it rather tiadl your intrepretatian
of Whatf I said?
* AJ; YOu wouldn't read it as Well as I Would
PM: But I would read it accuraitely. Respones Original
W commitment was given in the context of the 1983 election caumpaign.
There was no capital gains tax In Labor's first term, the period,
for which the commitment was made. Labor's position on tax reform
during the second term was made clear in the 1984 campaign. Labor
pledged to overhaul ( inaudible) and reform the tax system after
process of consultation based on the national tax summit. Labor
spelt out 9 principles of taxation reform which included that any
reform paCkage must have wide cominunity support. A cap p gins
tax was Introduced in our 2nd term as part of the package developed
by the govt in the light of those consultations, In othar words
the promirie in 1983 was kept. No cap gains tax In our first term.
I said when I went to the next election the whole questiLon of tax
Including cap gains tax is on the table there is no breaking that
promi se.
AJ: No groping of the hands* under the table you don't think.
You didn't tell them that you were goingi to introduce cap gains tax
because you would hftve been knocked off.
PM: In 1984.....
11' you had said in 1964 under Peacock that you were going~
to introduce cap gains tax they wculdv'e gonse after you.
Wouldn't they?
PM: In 1984 1 said It is on Lhe table the whole question
including Cop plan3 tax, is oni thc table.
Do you trust the Austn people?
IPM; 1 Certainly do. Arid Infinately 111UL't than John Howard
because I tell Lhoai what is going to happen.
Aj: You are not going to tel I thcm wha. t is going to be in your
budget. PM; On the contrar'y it is 4ll there. It to done.
So we can't have any muore expcnditure cuts. Wo & r6 Aoina
to lace interest rates as they are?
? NJ: No we aire not we are going Lu face intereat rates falling...
Aji But you bald
PeM: Let me quote you what Mr Cullen said....
Aj; but for every one you quute in your fAvour there 1Is
muost probably one against
PM: No there Isn't. YOu find me the banker who aus~ e
AJ: But banikerb are not Bletty Bloggs at Dairnair are they?
Who 1,6 out there paying interest rates and taxed to the eyebullu.
P'M: The bduskerai Alan, the bankers net the interest ratoo.
And all I can say Is Mr Cullen, Austu baiikers assn. ML-Cullen weas
asked, after I said the day before, that I expected inter-tvt rates
to0 all1 9 4
A] Hdve you ductieseed t hese people though?
PM; Now colse on be fair....
AJ. Well have~ you, have you, have you?
PM: No I haven't Alan. I don't know Mr Cullcn,
AJ. What about your media 1egielat'ian.?
lPg atOW? Como 117A Did you speak to the. barons over the media
I. Don't dodge away
* AJ: B~ ut did you speak to the med~ ia barons over the legislation.
PM.-I w1ill talk to you In a minute about.... en I finis4h
interest ratcB?
Well therc's your next quetionw... I will put It On noticei.
PM: Mr Cullen was asked after Mr H~ awke * dd that rtat
rates would fall. He was asked whether Mr H was, entitled to say
that arnd he went on and said that " the beat judAement of the moment
is that the trends look favourable.. Gnd we would certainly hop
to be able to reduce mortgage rates before the end of the year.
lie wits asked, " would you 5say that the trend towards lower interest
rates is as a consequence of the Hawke Labor govte economic
policy", lie said: " not entirely because of us but he said that
the Sovt policy in a number of rcivpects has undoubtedly contributed
to the present situation". Now you see that is a spokesman for the
banks. They are saying that interest rates are going to be falling,
They are saying that the U~ s judgemnent is one that we agree with.
AJ; But listen. If productivity to lgoingt to be around about
inflat ion and you have said yesterday and I can't believe,
that wages will maintain their real value how are you going
to pay for those wages? Because productivity is not going to pay
for themr. Are you going to pay for It by Increasing the debt?
And if'you do that can you possibly reduce interest rates? It
4J e fn ' t irike acee to me.
rM: Now will you listen while I tell you?
Ready to listen.
PM: Good. Lets look at the Jebt vitumt ion, when we broultht, fr
the last buidget we made an estimate of what the current accourid
deficit figure would be in 1986/ 87. As a result of the policies
that we. are bringing in that current account deficit for 86/ 87
will be $ 11 bn less than we estimated, in Aug of last yeair and It
will fall further in 87/ 88. So the currenit ac deficIt is falling.
Our increases in exports arc beyond expectations. And most importantly
in the area of manufactured exports 34% Increase. So all those
trends on our external situation are in the right direction. Internally
with regnrd to your question about wages.... the situation is that
we expect wages and prices, during 87/ 88 to move by about the
same proportion about 6 Now the important thing. Not
only does that mean that you hold the real value of wages, here in
Aust, at about their level, but importantly we are going to improve
our competitive position with the rest of the worldiat. Bvcause
while Inflation Is coming downa In Australia,..
Still not competitive with the real ol the world this.
IBM1 Can I finish? That is exautly what I am goiig to talk
about before you interrupted. Thbe Inflatioi in Aust Is comning
down moving down, and it is $ joing up In the rest of the world
amofl~ st our trading competltors. In other words.
Aj; From the lower bass...
P'M; The gap, in oter words ts narrowing cigntfi'cantly.
Al: I concede that.
Phi: And what is happening Is thatt ix ts; beig relctecl in
our capacity, Alan to conipcte in & L-CaS of export that wa could
never do berore. I don't know whether you have had the opportunity,
but one of the most etcciting t hingsa thtt is happening In the Lountry
now and I ought& a take you arounl with me sometime and you could
see it to go to manufacturing enterprises in Auistralia which are
now going out anrd beatinug thd hell out of the AItbertcanik, the Japu
and th. e Europeans in the most Competitive markets in the world.
For instance I was un in Bundaberg last week, a really excit ing
cane cutting equipment sophisticated trench digging equipment.
Now they are selling those can* cutters now in the most competitive
markets. On th~ e other side of this most sophisticated Ltrogich
digging equipmcnt we currently had been Importing that equipment from
the USA. Now the fella himself says he says as a result of your
govt policies and the specific assistance yuhave given to Industries
like ours we are now going to take the hole of tat market off
the yanks here in Australia. Without the rhetoric Alan it really
to v. exciting to see those things happening,
AJo How do we get more conapetitivat NOw Bob* Hawke * aid when he
was Pros of the ACTU that there should be no sanction~ s. The sanctions
that apply to other people... for Instance, t'drive dowa the wrong
side of the road$ 1 am hauled over. Drive down the wrong side of the
industrial road should there be sanctions? Should the union movement
be above the law?
Pie No it certainly shouldn't be. And under the peoposals that
v, were putting in under the industrial relations bill not only
d'ii we not say that but we Increased the sanctions. Now the employers
said Chat they didn't like the way we were doing it and I said after
discussions with them that I thought It was against their own interests.
Alawni1l sa to ou honestly that I just don't understand what
the employers are bout. 0 Because what we were doing, was in effect
to bring in a tougher set of sanct ions. But the employers didn't
likkI that and they said that they would prefer to keep it as it was,
With access to conwaokalaw. With access to,.,
Aji out you took that awayt
PM: No I didn't. What we did do was to bring a& situation where
you wouldn't conteunperonerously have 2 sets of actions available but
they still would've been able to have gone welt they still would've
had access to the trade practices legislation but it would've been
within the framevwork of the labour court. They said. they didn't like
St so I have given them Alan,* the unequivocal conxnitmeuit which the
W ness, Council of Aust and the CAI accept. I have no argument
h them at alli. -They accept what I say and said the posit ion
will stay as It i G" ( PM:
A~ tSo the legislation is out. W( We'll taka a broak.
Mr Hawke one of the issues that has been raised fairly regularly on
this show, through calls, and I don't quite kitow its origins,
concerns the whole question of FAbian Socialism. And Ithink I
have an obligation, and many people have asked this, to clarify a
few things,-if. you can. You said in your 1984 centenary IT eech
to the FAb ah Society and I quote: " I gladly acknowledge the
debt of my own govt to Fabianism".. Yet the philosophy of that society,
written in 1887 and I am sure you are aware of this, says and I quote
again: " the Fabian society aims at the re organisation or society
by the emancipation of land, and industrial capital from individual
and class ownership." it went on. " The society works for the
extinction of private property". Now I may that because Neal Dlewett
last year at the ALP SAustn. branch conference said and I quote " Let
me say as a socialist that Its the interests of the commiu'. nity that shoulwi
cogme before the Individual. We shouldn't get too hung up as eoicalistt.
on privacy because privacy in many ways is the bourgeois right that
is v. much associated with the right to own private property". Your
presence at that dinner would seem to endorse the notion of FAbian
sOC. lal isri)...
PM; Which dinner?
AJ: The Centenary Dinner of the Fabian Society in Mdlb In 1984/,.
PM: I completely reject any proposition, explicit of Inhorent
ogalinst the right to own priv. property. 1 don't only have to make
that observation which is so clear....
Aj: YOU knew that Neal Blewctt said that?
PM: I don't Know the exert words of Neal Blewatt.
AJi Kerctuble, wouldn't you think?
PMi I certainly wouldn't have said those sorts of things in
those words. But a. qain to be fair to Neal, it is easier enough
S for you to say, and I am not saying that you are doing this
deliberately, all you have got is some quotes In front of you.
It may be if you look at the whole of what Neal had said that
thut sort of thing....
S A] Jl We should'nt get hung up en privacy??
PM: What I am saylng.... could take an Alan Jones address to
his players, 1 would think, I have never listened to one...
AJ: You should come along oamatlme.
PM; 1 am not good enough to play.
AJ: Why do you send a teleA to Patrick Cash in the 1ut
round of Wimbledon wishing him well, but rever to Andrew Slack?
S PM: That& not right. I have scnt a message to you pople and
you know that. So on't...
S AJ: 1984.
PM: Let me say this. If I took a paesage out of Alan Jones'
speech just one, god look at that'. It would make you look terrible.
But I guess If I put It in the whole context of your speech it would
look fairly inspiring. L. cts get to the point of private properly
and prlv. entereprise. From Day I I said to the Austn. people and
I say it again, unless we have a healthly priv. sector we won't have
a healthy Australia. And that is what 1 have been talking about since
Day 1 to stimulate the priv. sector. To get jobs and investment In
the priv. sector. 75% of all people who are employed In this country
arc employed in the priv. sector. That is why for instance as I
was saylng to you off air, I brought in the most generous research
and development taxation schme for the priv, section. Because unless
we have that priv. sector in this country investing in research.
Investing in development. Being able to become more profitable...
Look what we have done. When we came to office the profit sector
of the CDP' wa's the lowest it had been In mamory and I Wad that wc
had to hiv e a move back to prof it. Because unless you have a move
' back, you won't have investment. YOu won't have employment arnd that
to what we havo don.
AJ So you are agin the FAbidn notiori of getting rid of priv.
property? Ph I~ Certainly.
Aj: just one final thing. I knouw you have to go. Voter Sawyer
when he said there was massive rip offs in soc. security. He was
described by your minister Mir Howe as talking ' Otatements of ' sheer
fantasy end hysterical nonsense'. Was described in parlianc-nt as
A ' dishonest person'. Yet now youhave Introduced hit squads trying
to clean up about 5,000 dole cheats a week, Was Sawyer right or
wrong? P'M: He was wrong in respect to sonic of the tlluotaation. he
gave, Mr Howa rd di dni't. say a I tha t stag e or at a ny sta~ e. lie
* was saying about what this fella was saylrag.... He wasntt soyinag....
Hwas there was social welfare fraud but what we say Is 2 thitn SO
* We have done more to deal with social welfare fraud than, aiy other
govitinas done. We have reduced the numbers by more than haag been
done..... The one thing we need now to make sure as a society that we
can totally eliminate welfare fraud is the Australia Card with
ph ot 08 raph.
AJ: The F~ ed Lib6 say that they can do it and they have got
a report which says $ 4rin and they reckon the report has been
destroyed. Why can'rt we see what the report say*?
PM: You are inaccursto.
They said it was dcotroyed.
PM: They did not say that the report has been destroyed.
A] All but 2 copies they said had been destroyed to me
rin the show.
PM; But that is a different propostiton thjan saying the re~ port
ha s been destroyed.
All Well why have oome been destcoyed?
PM: I don't accept that any have been destroyed. What I am
saying is that the treatment, not just of thait report buL any stuff
which comes Into govt in a period before an election goeb on hold.
That report will be dealt with. Wha't we have done Is provide inore
resources a greater~ incrcae in resources to the Fed police than
any other govt has provided. We have done more to crack down on
fraud Incl, tax fraud. We inherited a tax avoidance Industry which
was the fastest growi1np industry in AusLI WE have smashed it v.
substanliolly. 1;. e one thing we need Alan 4s a community Lo finally
smash welfare fraud and tax fraud is the Australia Card with photo and
tke reatmajority of Austn people have indicated in poll after poll
41 hysupport ta. Adthey rightly do.