TRANSCRIPT OF INTERVIEW WITH MIKE CARLTON, RADIO 2GB, 22
FEBRUARY 1990
E 0 E PROOF ONLY
CARLTON: The 1990 election campaign and my guest for the
next half hour Prime Minister, Bob Hawke. Morning.
PM: Morning, Mike.
CARLTON: Thanks for joining us.
PM: Pleasure.
CARLTON: Over the last seven years you've asked all
Australians to accept restraint, to tighten the belt in
the national interest and do you feel that they have done
that? PM: Yes they have, there's been magnificent cooperation.
CARLTON: So the average worker, the average Australian
family has done the right thing tightened the belt as
you've asked them?
PM: Well, tighten the belt they've exercised
restraint. I mean, there are a lot of them, many of them
who could have exercised their power to get more and they
didn't. That's the case.
CARLTON: How then can you explain that your Labor
Government has presided over the greatest period of
business and corporate thuggery and piracy that we've
seen since the gold rushes?
PM: Well I don't accept that. That's your assertion,
but if you say that we've had a very significant increase
in profits, that's true, but you want to complete the
equation that increase in profits has been associated
with the largest investment boom in history which has
been associated with the largest employment growth in
history. So the move to profits from wages has gone into
investment and just look at what that rate of job
creation means. It's five times faster than before and
twice as fast as the rest of the world. I mean, if you
are going to talk about it, why don't you complete the
equation, Mike?
CARLTON: Alright, but I'm not talking about legitimate
profit and investment, I'm talking about the fat cats, if
you like, the Bonds, the Skases, the Herscues and if you
like, the John Elliotts. They have piled extravagance
upon extravagance haven't they?
PM: Yes, Mike, well a lot of people have piled
extravagance upon extravagance and claim upon claim. I
mean, I don't want to get personal. I don't know, for
instance, in your case what the improvement in your
remuneration has been over the period, but if people have
the power in a market to get more out of it a lot of
people do the Bonds, the Skases, perhaps the Mike
Carltons they, if they've got a bargaining power
CARLTON: No, mine's gone down.
PM: Well, has it Mike? Well I don't know, but all I'm
saying is that it's easy to point to extravagances on the
part of some and let me say, because I don't have an
extravagant, you know, taste. I mean I don't go looking
for miles and miles more for myself, but I don't like
extravagant lifestyles, I don't like the ostentatious
display of wealth. It doesn't appeal to me, but if
you're going to look at what we've done about it just, I
ask you to remember this. In 1980, you know in that
period before we came to office, Professor Mathews, the
foremost authority on the tax system and what happens in
terms of people being made to pay, Mathews said it's
become a matter of option and choice as to whether the
rich pay their tax.
CARLTON: Yes.
PM: Now we have made them pay their tax through imposing
a capital gains tax. There is a fringe benefits tax
where people avoided and now literally billions of
dollars have been taken from the rich who were able to
flaunt their lifestyle before without paying any tax.
Under my Government, while sure there's still
ostentation, and I don't like it Mike any more than you
do, but what I'm saying is, as a result of deliberate tax
policy we've made them pay where before the independent
authority said it was a matter of their choice whether
they paid.
CARLTON: Yes, but the ordinary bloke out there on his
$ 30,000 a year or whatever
PM: Yes.
CARLTON: Has accepted your call for restraint and as
you've said, magnificently, but watched while your
Government has stood by on these
PM: Well, you're just ignoring what I've said. How can
you say I stood by when the independent authority, not
the Mike Carlton when the independent authority said
before Hawke came to Government it was a matter of choice
as to whether the rich paid tax. I have changed that and
now I have taken billions from them. Now to be fair, I
mean, try to be fair
CARLTON: they were still throwing tax through the
Cook Islands only a year ago.
PM: And that's been closed off. I mean, will you, will
you give credit for the fact that we've made them pay
billions of dollars, that Mathews will not write now, as
he did write before I came to office, that it was a
matter of choice as to whether they paid tax. They don't
write that any more.
CARLTON: Do you think business got out of hand, this
sort of corporate greed syndrome?
PM: I think some of it, Mike. I mean, now let's be
fair. I mean, obviously, I mean if I were to talk about
any group of people and pick out the, you know, the ones
that behave badly, then, and tried to attach that to
everyone, it would be very unfair. Let me give you an
example. I went over to Auckland to the Games. Now
before I went over there, there was this beatup that a
couple of our athletes, it was alleged, had behaved
badly. Now I went over there and I went and had a couple
of hours just sitting down at lunch with all our
Australian athletes and, look, you couldn't be prouder of
them a magnificent bunch but the alleged activities
of a couple at the beginning, the alleged activities of a
couple CARLTON: Smeared the lot.
PM: Smeared the lot. Now I think, Mike, if you look at,
look at the corporate sector, of course there've been
some cowboys and I've been critical of cowboyishness.
CARLTON: You were seen as mates of some of them a while
ago. PM: Well, look, as far as I'm concerned if I have
someone who is a friend that started off long I mean,
Peter Abeles is talked about. Peter Abeles has been a
close friend of mine going back to 1970 when he was
virtually no-one. He was just starting off TNT, you saw
the TNT truck around the place. He has been a close
friend of me and of my family and my kids. Now I don't
give away my friends. I'm not going to condemn Peter
Abeles to be eliminated from my friendship because he
became rich. Now
CARLTON: I wasn't thinking of him, I was thinking of
people like Bond and so on.
PM: Well, look, I've been photographed with Bondy and at
the time like, may I say, 99.9 percent of Australians in
1983, 1 was very proud of Alan Bond. I'd like you to
find an Australian who wasn't, but
CARLTON: Now?
PM: Let me say this, not just now, who was the bloke who
more trenchantly than anyone criticised Bondy at the time
of his Chilean deal? I went public and I said, I mean, I
just think that was appalling. Now Alan doesn't come in
the category of a close, close mate of mine. I knew him
and I applauded the good things he did for Australia.
The things that he did that I didn't like I'm not a
Johnny-come-lately hopping on to some critical bandwagon
I said it at the time.
CARLTON: Yes, alright. A lot of Australians though say
why should we have to pay these high interest rates,
expensive rates paying back our home mortgage when a lot
of the trouble has been caused by these, these cowboys
borrowing these billions overseas?
PM: Well let's, let's get this figure about the
borrowing overseas into perspective. As you are rightly
implying in your observations the great majority of this
overseas debt is in the private sector, but
CARLTON: You're not borrowing it, the Government's not
borrowing it.
PM: We are a net creditor.
CARLTON: Yes
PM: We inherited a debt situation from our
predecessors. we've paid it off, but let me make the
point and it's not my source that I'm going to, it's the
Opposition source Access Economics.
CARLTON: Yes.
PM: Now Access Economics, OK, independent. They just
brought out a publication at the end of last year in
which it showed $ 90 billion, $ 90 billion worth of
investment projects either being undertaken, confirmed or
under serious contemplation. And that $ 90 billion is, if
you like, the good side of the debt picture
CARLTON: Yes.
PM: and they said, Mike, that that will, when it all
comes on stream will be bringing in $ 10 billion of export
earnings. Now, sure, you could look at the debt picture
and say it's bad and in some respects it is. But part of
that represents, for instance, North West Shelf. They
borrowed to get that, but now the ships are plying to and
from Japan, taking the LNG up there and earning us
income. CARLTON: Alright, that's worthwhile investment, but
this, this huge pile we had of borrowings upon
borrowings. Some of these corporations getting into
mountains of debt so that they could buy more debt, the
average bloke is paying for that in his home mortgage
rate isn't he?
PM: Well, it's not a question of the average bloke
paying for that in his home mortgage rate. The country
as a whole, as a whole, in the last year we spent the
increase in spending was eight percent and because of the
inadequate structure that had been built up over the
years we could only produce another four percent more and
that gap came from imports. And we just, as a community,
couldn't keep importing that much and I think the
community understands. I'm moving around amongst them
and they're saying well yes we understand that you had to
slow things down, we don't like the fact that it's
hurting us, and I understand that. But it wasn't as
though we didn't have, you know, tight fiscal policy, the
tightest in history and we had a tight wages policy. All
that was left was having to increase the tightness of
monetary policy, but we've done that. But now the
banking sector itself is saying, not just Bob Hawke, that
interest rates are going to come down and they are.
CARLTON: You reckon? I mean
PM: Well it's not just a question of I reckon, I mean
they've started to come down and the banking sector
itself is saying they're going to come down.
CARLTON: Alright, but they're about to go up in Japan
and the United States and I cannot believe that we can
bring ours down if the Japanese and the Americans are
putting theirs up.
PM: Well we've already got the situation here where the
cost of money, I mean, in the end the determinant is the
cost of the money to the banking system and the cost of
money, of money to them is coming down. When the cost of
money to them comes down then inevitably, as they
recognise, so does what they charge come down.
CARLTON: But surely
PM: Now that's their statement. They expect rates to
come down and so do I because we have been the ones who
have had our fiscal policy tight. I mean, in other
words, we've wiped out the deficit, we've made a
reduction in the demand that the public sector makes upon
savings a massive change-around and over, over the
period we've been in office a turnaround of about
billion. So we've vacated to that extent the savings
sector. Our demand, so, tighter fiscal policy, tight
wages policy and we haven't relied on monetary policy
alone. And the decisions that have been made, mean that
interest rates will come down.
CARLTON: Well why should anyone believe a word you're
saying? I mean, you've promised
PM: Well
CARLTON: before that interest rates will come down.
PM: Well all I can say is that you're not just relying
on me and I think you should rely on that, but I repeat,
why do you not believe what the banking sector says? And
the banking sector says, as a result of what we've done,
interest rates are coming down. Now that's the banking
sector saying it.
CARLTON: You could also get some parts of the banking
sector say it was a quick fiddle, a quick fix before
the election.
PM: No. The overwhelming statement of the banking
sector, you look at the Stuart Fowlers, the whole lot of
them, they've said the conditions have been created for
interest rates to come down and the important contrast is
this I mean, as you recognise it in your questioning,
whether rates can come down or not depends upon what's
happening at other instruments of policy.
CARLTON: Yes.
PM: And as against what we've demonstrated, that is that
we will pay and pay over the next three years for
whatever commitments, spending commitments, we've got
we've done that now. We have demonstrated what we're
going to spend, we pay for by savings. Against that the
Opposition have got a $ 6 billion hole, $ 6 billion and
they've got a wages blowout. So with a blowout in the
deficit and a blowout in wages, inevitably under them,
interest rates must rise.
CARLTON: Do you regret that promise last campaign that
no Australian child will live in poverty by 1990?
PM: I regret that the full statement that was in the
accompanying statement was not the words I used in the
abbreviated speech. But if you look at the as you
know, you've seen it in the full statement I said
there'll be no financial need. And I'm proud of the
fact, proud of the fact that the Brotherhood of St
Lawrence, the Institute of Family Studies, have said that
that promise, which has involved may I say the payment of
more than $ 2 billion per annum, that promise has been
met. There's no financial need. Now what we've got to
do as a community, not just my Government but the States
and the local governments and community organisations,
we ' ye now got to make sure that we deliver the services
as well as paying this money which we're paying which
meets the financial targets. We've got to make sure that
all the services are delivered which mean that for
whatever variety of circumstances may exist where the
money is not getting through, that the kids get looked
after. But Bishop Hollingworth of the Brotherhood of St
Lawrence to Brisbane, put it best. He said the
Opposition should really acknowledge the very substantial
merit of the what the Hawke Government has done in this
and stop making political capital out
CARLTON: There's still a lot of kids sleeping out at the
Cross PM: There's still a situation where in this country it
is recognised by those in the welfare sector that more is
being done and the promise of meeting those financial
targets have been met. Why don't you observe that under
the situation where I am now paying over $ 2 billion a
year to low income families that that means 1.2 million
kids and half a million families, look what it means for
a low income family so it's not just big figures of Hawke
talking about $ 2 billion. Let's take a family, a single
income family on $ 320 with these kids. They now get $ 111
a week tax free which is equivalent to a wage increase of
$ 170 a week. Now that's the reality. And as distinct
from the political cynicism of our opponents who refuse
to acknowledge that $ 2 billion and more that's been paid
where it's needed, I take enormous pleasure out of when
I'm moving around where mothers are coming up to me and
saying Mr Hawke that saved us.
CARLTON: Can we get to the wage-tax deal out of
yesterday.
That figure of $ 50 a week, thrown around, a bit like
the
bunyip. That's a mythical beast isn't it?
PM: No, it's not. If you want to look at it, if you
want to be bored with the components of it I'll go
through it.
CARLTON: Well let's take one. $ 16 of it is already in
the pipeline.
PM: It's coming through I mean it's not staying there
in the pipeline. It's coming through in this period that
we're talking about out of arrangements that were made
before. What was done was that you had your award
restructuring principles brought in which gave you staged
increases, staged increases through the restructuring
principle. And in this period that we're talking about,
out of those arrangements that were coming in
approximately $ 16 a week will come in in this period. So
don't you count it?
CARLTON: Yes, but it's not a brand new gift from the
Treasurer is it? That 16' s been there for a while.
PM: It hasn't. It's come through in this period. it
was negotiated, it was negotiated before. And if we're
talking about what the increases will be in this period
ahead, $ 16 a week on average will come from the
arrangements that were negotiated before. I mean the
people are going to get it in their pocket.
CARLTON: But we don't get the tax cut though till what,
January next year?
PM: From the first of January, in the period that we're
talking about.
CARLTON: And we don't get the second wage rise until
June next year.
PM: Yes, but we're asking I mean what people want to
know and certainly what business wants to know, making
our calculations, is Michael, what's going to be the
aggregate wage movement in that period? And if you look
at that then you've got to take account of the elements
that will operate in that period. And it's accepted that
in that period there'll be this seven per cent increase
on average in the aggregate wage outcome. That is what
will affect both the people in terms of the receipt,
their capacity to buy things, and it will be what affects
the employers in respect of the cost figures that they
will have facing them.
CARLTON: That depends very heavily, doesn't it, on
getting inflation down to six per cent?
PM: That's the assessment that's made. Now let me
CARLTON: You've inflation targets yet. got it
wrong for seven years.
PM: Now wait a minute. We've got our wages outcome
right on every occasion. And as Paul said, I think very
accurately and eloquently during yesterday and last night
when he was questioned about this, it is the case that we
had, you know, an excessive explosion of demand in this
most recent period which we admit put our estimates out.
But let's go to what the Treasury, not Paul Keating or
Bob Hawke, are saying. At the end of December in their
last official roundup, the Treasury said that the
underlying rate of inflation was 5.7.
CARLTON: Well they've been happily wrong for seven years
too on inflation haven't they.
PM: No, they, basically their estimates overall have
been fairly good. But I concede, and everyone has
conceded in the private and the public sector, that
during 1989 and through from the end of ' 88 and into ' 89,
that we all underestimated the strength of demand. Now
in that situation you've got to ask yourself now what's
happening now. Have you still got the high levels of
demand. Answer no. Demand is coming down and we've
conceded that before. Demand is coming down. And in
those circumstances with the Treasury saying at the end
of last year the underlying rate was 5.7, 1 believe that
the figure of six per cent is realistic.
CARLTON: Can we turn to the politics of it all now, away
from the money. The overwhelming reaction I'm getting
from listeners at the moment is they would quite like to
get rid of you. They've had enough of you. Do you
detect that?
PM: No I don't. I mean I do detect that there is some
cynicism about politics generally. I'm not denying that.
Certainly Australia is experiencing what the rest of the
world is, Mike, in regard to one aspect of that, that
there is no doubt that the environmental vote or concern
is increasing in this country, as it is everywhere in the
world. CARLTON: There's a second leg to my question While
they would quite like to get rid of you, they are not at
all in any way convinced that Andrew Peacock is a
sufficient reason for doing it. Do you detect that?
PM: Well all our polling is what the public polling
shows. But I'm not I understand that Andrew's coming
on air later but I'm not here to personally attack the
Leader of the opposition, go to him as an individual.
But there is no doubt that all the polling, publicly and
our own, shows that they don't accept the Leader of the
Opposition as an alternative and that we are,
importantly, that on the issues of management of the
economy and a range of economic issues, and most
importantly on the environment, they just won't have a
bar of the Opposition and the Leader of the Opposition.
If you look at the environment, I mean this is an issue
that I want to have very much in the forefront of
people' s minds. Because, funnily, when you talk about
the environment you're talking about the future and
you're talking about the past. The environment is one
area where you cannot undo the mistakes of the past. You
raised Mr Peacock and myself. Let me just say this to
your listeners. If Mr Peacock rather than Bob Hawke had
been Prime Minister the Franklin would be dammed, Kakadu
would be mined, the Daintree would be logged. Now I've
saved the Franklin, I've saved the Daintree Rainforest,
I've saved Kakadu from mining, I've saved the forests of
Tasmania and I've stopped that awful Wesley Vale mill
that was going to pollute Tassie. Those things are the
future. And it's one of the issues, one of the reasons
Mike why, while they may not be happy with all that I've
done, and I understand that. Because we've had
CARLTON: I think a lot of them are fed up with all that
you've done. I'm not trying to be rude or nasty.
There's disillusionment out there..
PM: Ok, there's an element of that. But let me say
this. I wonder Mike whether you ask whether they are
disillusioned with the fact let's take the categories.
Let's look at the young and the old. When I came to
office only one in three of our kids were staying on in
school, because the prejudices and the preferences of the
conservatives was to look after the privileged. Only one
of our kids in three stayed on. Now it's two out of
three. I wonder, in respect of the aged whether you had
a situation that when we came to office only 22.7% of the
pensioner representative earnings. Now those will be
over 25%, higher than it's been for 40 years. These
things all I can say to you is that when I go around,
as recently as yesterday, people saying thanks for what
you've done. Sure, I understand the concern. I would
rather we'd had a position where we didn't have to have
high interest rates for a period. But we had to.
CARLTON: I bet you would.
PM: Why would I want to hurt people? Why would I want
to hurt myself. But in the end if I hadn't done it we
would've had an economy like the one I inherited, with
the worst recession in 50 years. Now you can't have a
perfect world where you' re going to be able to give
everyone what they want. What you've got to do is to
commit yourself to the hard decisions which are going to
have a competitive economy in an increasingly competitive
world. And that's what's happening. I mean in the last
couple of years, 14% increase in real terms in
manufactured exports. We now have Australian enterprises
going out where they never could before and taking on and
beating the rest of the world.
CARLTON: Yes, you've also going broke at a bigger
rate than ever before too.
PM: On the contrary. We've got a situation, I mean you
certainly can't say that. They've got the highest profit
share than they've had before as a result of the
restraint that's been exercised by your listeners and a
whole range of people. That means our enterprises are now
increasing their manufactured exports in a way they've
never been able to do before.
CARLTON: Last question. Is a vote for you eventually a
vote for Paul Keating or will you stay out a full term as
Prime Minister?
PM: I will serve out the full term as Prime Minister.
CARLTON: No deals?
PM: No deals. And I think Paul put it right. A vote
for Bob Hawke is a vote for Bob Hawke and a vote for
Andrew Peacock is a vote for Andrew Peacock.