Transcript of Interview with Howard Sattler, 6PR Sattler rile
13th April, 1989
E OE PROOF ONLY
Sattler: Well on July lot Australian households will be awash with new
money, $ 5.7 billion of it as tax cuts announced by Treasurer Paul
Keating last night begin to flow through pay packets. Family
allowances and dependent rebates will go up, pensioners will be able to
earn more tax free money than they have been at the moment, go and get
a f ew little jobs or if Lhey have got investments Lhey woI t be hit by
the taxman. The Government hopes that its new found gratuitousness
will make you thankful, I amn sure it does, so much so that you will
vote for it at the federal election, that has to be held in about the
next 12 months or so. Well we are about to f ind out if you have been
won over by last night's mini-Budget, with me is my guest Prime
Minister, Bob Hawks. Good morning Prime Minister.
PM: Good morning Howard.
Sattlera My calculations and forgive me if they are a bit awry are
that you personally, you and your wife will be about $ 22 a week better
off after t.. h tax cuts. What are you going to do with your money?
PM Well I am fortunate Howard,, I can probably save mine, but I know
that others can't. But it's very interesting that you should raise
that, I think I actually get a bit more, it might be in the order of
$ 26 a week. It is very interesting to compare the shape of my tax
package which means that people like myself and John Howard don't get
very much, that it is concentrated in the middle with him. I mean we
have been waiting like we have been waiting for Halley's Comet for
their tax policy, so the only thing you can do is look at their last
package in ' 87. Now under the Howard package then, I would have got a
straight $ 156 a week tax cut , joward's approach in ' 87, under mine $ 26.
In other words what we are doing Howard, is deliver to the lower and
middle income where the need is greatest.
Battleri The reason I ask you what you are going to do with it is
because I don't believe you want Australians who are going to get the
increases to just run out and spend it all, you'd want them to save a
bit surely?
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PM: Yes that's part of it and I am very thankful for you asking that
question. There are two things, obviously Howard there are going to be
some of your listeners who are going to need to spend some of their tax
cuts and what they get in increased family allowances and I understand
that'. But I hope that as far as it's possible they will save,, but
there is a second point that I would like to make and I hople I can get
your support for this Howard, that the extent that your 11 steners are
going to spend their tax cuts and the wage increases they get and the
increase in family allowances I plead with them as far as it is humanly
possible to spend on Australian made goods. Because that's the way
Howard that your listeners can become involved in getting what we want
and what they want, the best for Australia. I mean we believe that
they are entitled to this increased income, but we don't want to get a
flood of imports with it, so let's all of us Just consciously think
every time we make a spending decision, let's buy Australian.
Sattlers Well you won't have to do any encouraging to get me on side
for that, because I have alway. believed that that ought to be the way.
But wit~ h the savings, I would have thought pethaps you would have
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4epos its.
PM No this question has been looked at all around the world and when
you look at this sort of thing, you have got to look at the other side
as to what you do in regard to the side of income where people pay
interest charges in terms of acquiring the income. It is a very
complex thing and basically no country in the world essentially has
gone to this sort of approach.
Sattlers Well Andrew Peacock said they're looking at it?
PM# Mr Peacock says they are looking at it. I mean isn't it
marvellous what Mr Peacock is looking at. You know the main thing that
Mr Peacock is looking at at the moment is the numbers certainly, but
they are not economic numbers, he has got 34 votes at the moment
against Mr Howard, he wants~ to get up to 41 before he launches a
challenge in the next few weeks. They are the numbers that he is
looking at. Look, when we came into office and they left
Sofice, look at what they left'us and left Australia. A top rate of
cents -in the dollar, the bottom rate was 30 cents in the dollar, they
left us double digit inflation, double digit unemployment, I mean they
had seven years there where they could have shown the people what they
are going to do. And even now, even now they haven't got a tax policy
and the only wages policy that they have got now Howard is the same
one which blew the country apart. in other words, throw it open, let
it be open slather and we'd have a 16 17% wages explosion again like
we had in 1981. X mean they've been there, done it wrecked the economy
once and got exagtly the same lack of policies now and say give us a
chance to knock you around again.
Sattler: I know you were talking to journalists very late last night
in Parliament House, they are the arch cynics, the people who inhabit
the galley over in Canberra, how did they react to the package?
PM Well a mixed reaction, it was basically fairly favorable. I
think the fairest way of saying it is that they were saying well look
Hawke and Keating have kept their promise and that's good, it is
politically sound, they say there is perhaps some economic risk in it.
But if you look at the papers today basically I think it is a f airly
f air coverage they have given us. I have got no complaint about the
media's treatment of it.
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Sattler: Our correspondent said it seemed to him there was an
indication that you had given up on trying to bring down interest rates
in the short term?
PM: No* Look I have said before last night Howard, that interest
rates have to stay high f or some time. I don't want to burden your
listeners with a whole range of statistics, but I will just make this
point. In this last 12 months consumption in Australia has increased
by about that l~ e not just personal cnsumption, but that takes in
investment expenditure and all that type of thing and our production
has increased by so the gap is imports. Now we can't just keep on
with that level of activity and sucking in that level of imports. So
we can't make f iscal policy any tighter, we are not going to cut back
on expenditures any more. We have got real reductions in Commonwealth
outlays. We can't therefore in the fiscal area get tougher and
tighter. we can't get tighter in the wages area otherwise it would
Just explode. So that just leaves monetary policy. I mean Howard I
think you know and every one of your listeners with whom I have got the
pleasure of talking to through you, everyone of them know that whatever
they might think about Bob Hawke they don't think he is an idiot. Now
Bob Hawke would be an idiot if he had interest rates higher for one day
Slonger than was necessary. I want interest rates to be lower, but I
Wknow I would be letting the country down if at this stage I had lower
interest rates. we have just got to get the level of activity down
somewhat s0 that we are not sucking in so many imports and I go
back to my first point Howard. Your listeners can become part of
running the Australian economy for the better if they make decisions,
purchasing decisions which are in favour of buying Australian.
Sattlers You could orchestrate lower interest rates couldn't you if
you wanted to?
PM And I am not going to do it, not going to do it because it would
be the worst thing possible for this country at the moment because if
you deliberately orchestrated a reduction in interest rates now that
would lift the level of activity, lift the level of consumption, lift
the level of imports and then you'd just blow the economy apart.
Sattlers Is the announcement last night timed to win us over for long
enough so the majority of us wvii vote for you at the next election. I
mean how close is the next election after last night's statement?
PM: You will have heard me on ' AM' this morning. I have said no
election this year. Just let me go to this point, it is very important
and I know your listeners are interested in this. I made them the
promise in the middle of 1988, 1 said on July 1 1989 I'll deliver you
tax cuts, provided that in 1988/ 89 in this period between then and now
the wage outcomes have been reasonable and that we can negotiate a
reasonable outcome for next year. Now they have been reasonable in
this period since I made that promise in the middle of last year, we
negotiated a reasonable outcome for this, so I am delivering on a
specific promise that I made to the Australian people 12 months ago.
Now what would be saying if I said now, I am not going to keep that
promise, I mean Johnny Howard and the rest of the cynics would be
saying oh look Hiawkey promised this, he is going to give it to you on
the lst July, he hasn't delivered. I am delivering on a promise made
12 months ago, the election is not on this year, the election is quite
a way away.
Battler: What about the other promise about no child living in poverty
in Australia by 1990. Paul Keating now reckons that he has brought
that forward 6 months. Are you fair dinkun?
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PM1 Yes of course I am f air dinkum. It was accepted by the social
welfare industry) the people with whom we discussed thie, that the way
in which we produced the situation I promised which was that there'll
be no financial need for a kid to live in poverty, was that the
allowances that families would get) the low income families would get
would be a percentage of the married pension rate. That is it would be
for the upper age bracket of the kids and 15% for the lower age
bracket of the kids. Now by the increases that we have made now to the
family allowance and the family allowance supplement we have reached
those percentages agreed upon with the welfare industry, reached them
this year ahead of target.
Sattlers All right, well what are we going to do about all those kids
still living in the streets in poverty?
PM: Well as I have explained, it is a pretty miserable sort of approach
which says Hawke has brought in what is recognised in this country and
around the world as the moot historic delivery of a promise to give the
financial capacity to eliminate poverty which has benefitted millions
of kids in this country and it has involved expenditures of
unprecedented proportions) to say all right Hawke has done all that,
provided the money, but there are some kids living in poverty. Because
Hawke never said, Hawke never said that I can control every domestic
situation, + hat I can create a situation where a kid and his parents
are not going to break up and the kid is going to run away f rom home.
I mean do we want that sort of society where I can command and control
every household? ' The only thing I can do and,* which I have delivered my
promise is that we will provide to every f amily that amount of money
which will mean that there is no financial need for any child to live
in poverty. I have delivered on that promise now absolutely. Now In
regard to those who through a variety of domestic situations leave home
are in the street, now that is something that together we of the
Commonwealth and the States have to address. Wde have got the Burdekin
Report that came out a couple of months ago, now we are working on
that,. we have from our paint of view -since we have been in of fice had
a very substantial increase in the amount of funding for refuges,& a very
substantial increase in funding from the order of about 15 million upto
about 60 I think the figure is, I mean it is a very substantial
increase. I offered at the end of last year another $ 40 million to the
States for increased funding in co-operation with them to meet
W homelessness situations. We'll do all that we can in co-operation with
the States to meet that particular problem, but no reasonable person
thinks that Bob Hawke or any other Prime Minister for that matter can
control every domestic situation.
Sattler: The Premiers are heading of f to Canberra in a months time,
they're not going to get too much joy, I don't think there will be too
much money on offer to them will there?
PM: No and they have got to play their part. We have slashed off now
another $ 360 million of f our expenditures and we are going to ask them
to pay the same, because they are the ones that with us get the benefit
of the lower wage outcomes. All this package is calculated to get
lower wage outcomes than would otherwise be the case and if we get that~
as we willp the States and Local Govt benefit, so they have got to make"
a contribution.
Sattler: Prime Minister our listeners want-to talk to you this. morning
on the day after the night before about the mini-Budget or tax-wage
package announced last night, call it what you will, i am sure you'd be
happy to get some reaction from them?
PM: Sure, love to.
Sattlers 221 1233 is. the number if want to speak with the Prime
Minister. He is happy to speak with you for a few more minutes that he
is on the line and you can tell him what you think of the package
announced last night. We will take a short break and back with you and
him in a moment Taking talkback on this morning after the
announcement last night of a new wages-tax package for Australians and
we have got Prime Minister Bob Hawke and he is taking your calls.
First is Clem, hello Clem.
Caller: Good morning, good morning Mr Hawke.
PM Good morning.
Caller: Thanks for what you have done for the pensioners.
PMe Thanks mate.
Callers But what I want to talk to you about now are the f orgotten
pensioners in the Budget.
0PM: Who are they Clem?
Caller; According to the Social Security Review towards the national
retirement incomes policy, there are approximately a 1,800,000 aged and
service pensioners, of which 13.5% have no other income and in addition
there are other pensioners who have other income ranging from si to
who don ' t have to pay any tax. zIn all I assess there would be at least
300,000 pensioners who receive no benefit from the tax deal. You have
repeatedly said that any benefits should be channeled to those
pensioners most in need, well you must agree that these pensioners that
I am talking about are the needy ones. Will you take this up with Brian
Howe and Paul Xeating with a view to paying these pensioners a special
income supplement to compensate the tax benefits gained by the more
affluent pensioners?
PM: Clem let me, I appreciate what you have said, let me just say one
of the two things that we did last night will benefit all pensioners.
I mean you have referred to the fact that we have moved to relieve the
* tax burden on that income up to $ 40 which pensioners can currently earn
Swithout losing any of their pension and we are going to make that tax
free, now your point you are making is that there are some that don't
get any income. Now let me say the second thing of course that we did
last night benefits them and that is by bringing forward the operation
date. You remember that in 1986 we put in the 6 weeks delay and
pensioners were very good in co-operating about that as a result of the
decision we made last night Clem, we not only going to make up that 6
weeks, bring forward the time of adjustment after the CPI comes out,
but also bring it f orward by another 6 weeks so that by September of
next year all pensioners will be getting the adjustment 12 weeks
earlier than they now get it. Anid that benefits all pensioners, but I
would have to just remind you Clem that the things that we have done in
the area of the pension since we have been in which has been directed
particularly to those in the category that you talk about which don't
get this extra income, don't earn this extra income, I mean we have
made sure there have been significant increases in rent assistance, we
have introduced a carer' s pension a remote area allowance and of course
we have adjusted pension rates for inflation so that in fact in the
period we have been in office the real purchasing power of the pension
has increase by just under 8% against what our predecessors did of
having reduced the real purchasing power.
PM: cont... So we have got in mind the area of pensioners that you
talk about.
Battler: Okay next caller on the line is Mervyn. Hello Mervyn?
Caller 2: Good morning~ how axis you.
Sattler: The Prime Minister is listening.
PM: Good morning Mervyn.
Caller 2: Good morning Bob. Bob I didn't hear or didn't see any
mention in any reports I have seen about us poor unemployed people.
What's in it for us Bob, what have you done, what's happening for us?
We have all got our home mortgage rates, we've still got our shire
rates, we still got electricity and water rates*..
Sattler: Okay Miervyn he has got a lot of people waiting on the line,
can you just let him answer?
PM: Well Mervyn the first thing that I can say in respectAthe
unemployed in this country, what we have done is to reduce the numbers
of them drastically. I mean when we came to office in 1983 the level of
Sunemployment was over 1O% ArWe have drastically reduced that by creating
1.3 million jobs. In other words, the level and rate of unemployment
as a result of the policies that I and my colleagues have introduced
has been drastically reduced. But we haven't then said well okay bad
luck for those who are unemployed, we have significantly increased the
benefits for those who are genuinely unemployed, there has been a
significant increase both in the money payments and the associated
benefits, but the important thing Mervyn in respect of the unemployed
right at this time is that we pursued policies which are going to mean
that we can continue to create jobs. Now, quite simply~ what had to be
done there was to have a tax deal which the workers would accept as a
substitute for wage increases so that they would get increases in their
income but not in a way which was going to be super -inflationary and
create unemployment. So the best thing that we can do for the
unemployed is to make sure that we create more jobs..
Caller2: When you are 57 years old, there is not a great deal of
opportunity there, been retrenched and you are 58 years old what are
you going to do?
PM: Well Mervyn the things that we are doing is in there as to very
significantly increase the. amount of money that we have put into
training programmues and retraining programmes to make sure that those
who unfortunately have been retrenched from one job have more
opportunities for training and retraining to fit themselves for other
positions. We've just massively increased in real terms the amount o
funding that's gone into training programmes of that sort and 1I,
sympathise that there are still some legitimately like yourselves who
in no sense can be called dole bludger or anything like that, that want
a job. All I can say mate is that we have created jobs in the period
that we have been in office four times faster than Fraser and Howard
when they were in bef ore us and we are creating them twice as fast as
the rest of the world. Trhe big thing is to go on creating more jobs
and to have these training progranmes ard retraining programmes which
are going to give people like you the best sort of opportunities. Could
I make this personal suggestion, I don't know whether you have done it,
I guess you may have, but please go to the CES or your Social Security
office and get the details of the training programmes that are
available to help people like yourself, because there is a range of
them which you may not be aware of.
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Sattler: All right Prime Minister, thank you very much for being with
us today and taking some of those talkback calls, I hope I have asked
most of the questions that people wanted to and we will look forward to
your company when you get across here in Perth pretty shortly.
PM As always Howard it is a pleasure to talk with you and through you
to your listeners, thank you very much.