PA C -M.
PRIME MINISTER
TRANSCRIPT OF INTERVIEW WITH BRIAN WHITE, RADIO 2UE, 2 MARCH
1989 E & 0 E PROOF ONLY
WHITE: Good afternoon to you Sir.
PM: Good afternoon Brian.
WHITE: Good to see you.
PM: Good to see you.
WHITE: You're looking well.
PM: I've never felt better.
WHITE: Have you had a chance yet to look at the report from
the Institute of Family Studies?
PM: No I haven't been able to study it yet but I've had
just a couple of notes put in front of me of what has been
said on behalf of the Institute and apparently they go out
of their way to commend the Government for the initiatives
we've taken in the area of the family allowance supplement,
which is not surprising when you think that by the end of
this year we are going to be spending $ 1.5B to deliver on
the pledge. That is there won't be any financial need for a
child to live in poverty. It's an enormous amount of money.
WHITE: Yes that's true but one major point that they make
is that in the ' 77 financial year the family on the average
wage with two children paid 46% less tax than a single
person on that wage. Today that family pays only 26% less
tax.
PM: Well I've got to look at the report in detail I
understand just a very brief note that I saw that the
Treasurer had at question time that the comparisons in
percentage terms have, I think, a fair bit to do with the
timing of the base and the end point as to it being the end
point with the conservative government being taken just
after a tax cut and before so I think that I just
wouldn't be fair to you and I must say to your listeners to
try and make a detailed comment until I've seen it. I'm
more than happy to talk to you at some time later after I've
had a chance to study it.
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WHITE: Yes well perhaps one general thing that I could
raise about what they say though is that their proposals
would cost $ 5.5B in government revenue. They're looking at
the financial year after this one. Is that a feasible
amount for them to be looking at or anybody?
PM: No I don't think that is feasible but what our approach
has been as you know is to adopt the targeted approach to
try and put the money where the greatest need is but in
the work that we'll be doing now Brian as we look at the tax
cuts, there'll be associated decisions about the whole
question of family allowances and what we can do to best
help families and how to target it and I think the consensus
will be after the decisions that we've taken and which will
involve a final delivery on the pledge in regard to child
poverty concerning the family allowance increases, I think
the judgement will be made it's inevitable that what
this Government will have done will far surpass anything
that's been done by any other government in the history of
this country.
WHITE: Will this report from the Institute be part of your
consideration of how tax cuts are to be
PM: Certainly we will obviously we must look at what
they've had to say, yes.
WHITE: I mean one wonders of course whether they haven't
already had an input?
PM: What is being done in this whole area of the
formulation of policy Brian, my colleague Brian Howe, the
Minister, is to undertake consultations with a whole range
of in the social welfare community. I mean for instance
in what we're doing in regard to the aged. We had the
report from Bettina Cass which came out last year. Now what
Brian is doing is having consultations not merely with
pensioners groups but with the superannuation industry, with
going around and talking to and listening to individual
pensioners. I mean everyone who's got a legitimate basis
for input has been listened to.
WHITE: Yes. Of course the general impression I mean the
Sydney Daily Mirror as I understand it, has got this family/
tax institute report all over page one and page three today.
The impression of course that I suppose is going to be
created is that the families of Australia are bleeding?
PM: Let me say as I've said quite obviously before that for
some people there is no doubt that there has been a decline
in standards. The interesting thing if I may say so in
terms of the political situation is that if you look at the
document, the much touted Howard document about which he
calls Future Directions but which is properly entitled
Futile Diversions, is that he actually criticises the
Government. in the Parliament that he actually
criticises the Government for the attempt that we've made to
protect those in the community who really need assistance.
( PM cont) They say that as a result of the change in the
balance of trade there's been a decline in the national
income and we're wrong to try to protect people. I mean
just let me read it, " This has been aggravated by Labor
policies which have attempted to shield certain groups in
the community from the effects of a reduced national
income". I mean there it is starkly in this document what
they say is their central document. They say there has been
this decline in the national income associated with the
external situation, a loss of national income, a loss of
national income and criticising us for attempting as they
say to shield certain groups in the community from the
effects of it. Now we make no apology for the fact that in
a difficult situation where the national income did go down
in that period that we and that meant that some people
were hurt we moved Brian, to try and protect those who
needed help most.
CALLER: Speaking to you as a member of a family who has
gone back for absolute generations of very active Labor
Party members, my dad was a foundation member of a
particular branch of the Labor Party
PM: Which branch was that?
CALLER: Bankstown.
PM: Bankstown, oh yes. That's in Paul's electorate.
CALLER: That's right, he worked very hard for years, we had
all these gentlemen, worked very hard. But the
part that upsets me at the moment, I have four sons ranging
from 33 to 25 who all their life worked hard distributing
pamphlets and working in booths with great pride as part
of a working part of the Labor Party. But at the moment
they're getting quite disillusioned, they now have young
families and trying to get homes and get ahead in life and
it just disappoints me that I'm finding my sons becoming
quite disillusioned with the Labor Party and also in
particular with Paul Keating for whom they've worked so
hard. PM: What's your name by the way.
CALLER: Pat.
PM: Let me say to you as briefly as I can Pat why I think
you and your sons should just think about what this
Government has done and why they should have pride, if I can
put it that way, as I do in the achievements of this
Government and they are achievements in the Labor tradition.
Just let me briefly, if you'd like me to Pat, just go to
some of the things that I regard as important in the Labor
tradition and important in terms of what the real needs of
this country are. First of all you referred to them
working. what this Labor Government has done, and it's not
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PM ( cont): just done it sitting here in Canberra but it's
done it in cooperation with the other part of the Labor
movement, the trade union movement, we've had an accord
which has meant that we've created in this country in the
period we've been in office one and a quarter million new
jobs. I wonder Pat if I could just tell you so that you and
your sons can understand just what an enormous achievement
that is in creating one and a quarter million new jobs in
this country. That's four times, four times, not just one
or two, but four times as fast a rate of job creation as in
the seven years under the conservatives before us. It's
more than twice as fast the rate of job creation as in the
rest of the industrialised world. Now the best thing Pat
that any government can do for your sons and for their
children is to run an economy which is having a rate of job
creation faster than we've had before and much much better,
twice as good as the rest of the world. That's what we've
done. Just let's look at the question of education Pat
which I'm sure for your sons would be regarded as
fundamentally important. We've thought it proper Labor
policy to try and create a society in which it's easier for
the kids of lower to middle income parents to be able to
stay on in the education system. So what we've done is very
substantially increase from $ 23 a week to $ 50 a week the
secondary education allowance. Now what's that meant Pat?
It's meant this, that when we came to office the number of
kids that stayed on in the education system at the end of
that seven years of Tory rule was only 36%. In other words
only a third, just over a third of our kids stayed on in the
education system. Now as a result of the decisions that
we've taken that 36% is up to 58%, to more than half. As a
result of the policies we've got in as we go into the early
part of the 90s we'll have that up to 65%. Let me look at
the other end, the elderly people. Under the Liberals in
their seven years, let me take the four years of John
Howard. The real purchasing power of the pension under
Howard was cut by That was deliberately, they made a
decision through not making the rich and the wealthy who
could afford to pay their taxes, letting them avoid paying
their taxes, it meant that they cut, one of the things they
did was to cut aged pensions. We've brought in a fairer
taxing system which meant that those with the greatest
capacity to pay pay and the aged, instead of getting a cut
in pensions as they did under John Howard, have had an
increase of 7.7% in real purchasing power. So I could go on
Pat but I've just mentioned three things that I thought
would be important to you and I respect what you say about
Labor tradition. Jobs, four times as fast as the
conservatives, twice as fast as the rest of the world,
education for kids and looking after the elderly. That's
all in the Labor tradition and it's all the sort of thing
that I think ordinary decent Australians want.
WHITE: Let's move to another caller.
CALLER: Good afternoon Mr Hawke.
PM: Good afternoon. Who am I talking to?
CALLER: Peter's my name Mr Hawke. I'm an airlines clerk
presently on holidays at the moment. I'm having a nice
relaxing time, I'm reading a book called The Fall of the
Third Republic by William Shirer.
PM: Third Reich isn't it?
CALLER: No, that was one of his other books.
WHITE: This is about France is it or what?
CALLER: This is about the French one.
PM: I wish I had time to read books like that mate.
CALLER: done it for a while. In it it mentions about
one of the reasons with the movement of French capital
overseas before the Second World War, the French didn't
keep their capital at home. I was worrying a little about
how capital in this country, how when we earn interest on
our savings accounts, how we're taxed at the marginal rate
and I was thinking a better inducement for people to save
even small amounts if there was some sort of concessional
rate on interest that you earn. I know a chap at work, he
won't put money in the bank at all. He says the interest,
Paul Keating gets it all. He's paying a marginal rate of
about 40%. Any interest you get you're paying your marginal
rate of tax and even if small sums up to $ 2000 if some sort
of concessional rate of tax was like on the capital gains
tax.
0 PtMh: i s Tchoiusn triys abu ts uging esottiheorns . t hatC'asn bIe emna kea rotuhne d ponoitn t ontol y yoiun
that it's interesting I think that it hasn't been done
anywhere in the world and that's no accident. Could I just
point out to you there are enormous technical difficulties.
You need to look at the question of it's put in terms of
taking account of inflation and only if you're imposing some
tax on real interest for instance. But you've got to look
at both sides. You have a position in terms of the
conduct of business that interest costs are deductible as a
business expense. Are you, on that side, if you're going to
do it on the side that you're talking about, are you going
to say in regard to business that only their real interst
costs will be deductible? The other point that needs to be
taken into account Peter is this, that there is no guarantee
that what you're talking about would in fact add to the
savings of the community because what you must appreciate is
that what is paid as tax is a form there of public saving by
definition. Now what is being suggested is that if you
allowed the tax deduction for interest that that would mean
that it would be at least compensated by private saving.
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PM ( cant): There's no guarantee that that would be the case
and this I think Peter is really probably the most
compelling reason why in fact what I admit to you has some
superficial attractiveness has not in fact been adopted.
WHITE: Can I pick up on one thing that you just said, if I
understood you correctly, that that hasn't been done
anywhere in the world, because the Japanese did not have any
tax on savings interests from the end of the Second World
War until a matter of a few years ago when they introduced a
flat 15 percent and they've recently kicked it up to
PM: Well my understanding and I obviously say this subject
to correction, but my understanding from just a note I saw
the other day Brian was that this general proposal has not
been adopted elsewhere in the world and that's certainly the
information that I have and I think that's accurate.
WHITE: Yes, well
PM: I mean as you can see there are obvious difficulties, I
mean there are technical, administrative and conceptual
difficulties. The last one I mention is really I think the
major one because when tax is paid, that is by definition,
public saving. I mean, it's withdrawn.
WHITE: Yes, well it's public saving as against private
saving. PM: Yes, but you see the assumption, all this is based upon
what is a real problem and Peter is correct and I'm indebted
to him. It's one of the real problems we've got in this and
and in a number of other countries that what we technically
refer to as a savings ratio is low, that is the proportion
of peoples' income that they save rather than the consumers'
low and therefore your investment pool is down and in our
country if you don't save enough there we borrow from
overseas.
WHITE: Well, one of the main things that results from it of
course is that we nowadays have every month in our balance
of payments an interest bill going overseas, with various
other payments going overseas of a like kind, which comes to
about $ 1 billion a month which is matched up against the
fact that the fall in savings in the last 15 or 20 years
also works out at about $ 1 billion a month.
PM: Well it's true, you've got to recogn ise that what is
happening in Australia in terms of a lot of this borrowing
is that the great majority of it, the overwhelming majority
of it, is because we are now as a result of our decisions as
Government, the public sector borrowing requirement is zero
as a result of reducing our deficit and moving into surplus
and we more than compensate for what the States are doing.
So the borrowing now is private sector borrowing. Now these
are decisions by the private sector that they are borrowing
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PM ( cont): and that they will be able to meet that interest
commitment out of the earnings which are generated by the
investment and it's also part of what you must take account
of when you look at this current account question that you
talk about and which I'm sure is partly in Peter's mind, the
gentleman who raised the question. Obviously we can't go on
with the sort of current account deficit figures that we've
been seeing but on the plus side of it what you've got to
remember is this and it's interesting. I've just been
talking to the metal trades employers today and they are
saying, confirming to me that what's happening is that they
are undertaking massive re-equipment of industry. They're
bringing in new capital equipment to make Australian
industry more competitive, both import competitive in this
country and competitive in export terms. Now, OK, so
currently it's a minus but what is happening is that as a
result of so much of this import of capital equipment,
Australian industry and the Australian economy is going to
be a very very much better place in years ahead.
WHITE: We don't have time for very many calls, but let's
have what we can. Good afternoon it's your turn.
CALLER: Good afternoon, good afternoon Prime Minister.
PM: Good afternoon, what's your name please?
CALLER: Brenda.
PM: Good afternoon Brenda.
CALLER: I just wanted to speak to you. I probably identify
with the first lady that you spoke to, Pat.
PM: Yes.
CALLER: I come from a long Labor tradition and a long Labor
background too. Amongst my friends, I probably belong to
that group that has been identified as the gender gap-
PM: Oh yes.
CALLER: to the new election and you'll be happy to
know I'm not interested in talking about tax cuts or
anything to do with money
PM: Yes.
CALLER: a philosophical thing.
PM: Sure.
CALLER: This is more in terms of a statement than a
question. PM: Yes.
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CALLER: As a long term Labor voter the singular thing that
has upset me and my friends most is the concentration
of media ownership in Australia, in particular the print
media. PM: Yes? That's interesting.
WHITE: Now let's see if Prime Minister you'd like to handle
it as quickly as you can so we can get one more caller.
PM: I mean that is interesting. I would, you talk about
the concentration of media ownership. I wonder do you
realise Brenda that no Government in Australian history has
done more than we have to lessen the concentration of media
ownership in the regions of Australia. By that I mean that
up until my Government came in, you could have a situation
where one person, that's my beaut mate Brian White
Brian could in one region, he could own the television
station, the newspapers and the radio stations. He could
totally dominate for a community what they were going to
get. Now what we've done is to break up that cross media
ownership by legislation Brenda, so that for the first time
in Australian history that concentration of media ownership
across the media is not possible. So with respect I think,
that's why I sounded a bit surprised, because no Government
has done more than I have and with my colleagues to break up
the concentration of the media ownership.
WHITE: Now Prime Minister we really don't have enough time
to take any more which means we've only got three calls in.
We'd better do this again if we're going to talk to the
people. PM: Love to Brian.
WHITE: John Howard has said today that it's not the fault
of his statement about Asian immigration that the number of
business migrants has fallen.
PM: Well, rather than just relying on my assessment that he
is the culprit and the hypocrite, could I just quote
Michelle Gratten, The Age, 14 September 1988. " The real
villain in the immigration debate is their own leader, John
Howard" and Steketee in the Sydney Morning Herald " Howard is
exposing his own hypocrisy". Now this is the judgement and
of course John Stone has made it quite clear when he talked
about the debate. He said " we didn't go through this to
leave the policy as it was" he said " what a lot of goats
we'd look wouldn't we". So'he was asked " do you think that
the bottom line is fewer Asians" " that is so"
WHITE: Mr Hawke, thank you.
ends