PRIME MINISTER
TRANSCRIPT OF INTERVIEW WITH PAUL MURPHY, ABC PM
14 MARCH 1990
E OE PROOF ONLY
MURPHY: Prime Minister, you head a government but
yesterday you and the Treasurer were trying to talk
interest rates down. Is this an indication of how
worryingly tight this election is for you, that you and
Mr Keating decide to comment on interest rates within
hours of each other, something you've previously been
reluctant to do?
PM: We've been talking about interest rates from the
beginning of the election Paul. I was doing no more,
neither was Paul Keating, than to state the obvious. The
obvious is that interest rates have been deliberately
high last year, not because we wanted to have a tight
monetary policy as such, but to help slow down the level
of activity in the economy. We were stating the obvious
that that policy had been working, the economy was
slowing down, and in those circumstances that the
conditions were right for a fall in interest rates. That
was not only appropriate for us to say that as a f actual
situation, but we would've been failing in our obligation
as leaders of our Party if we didn't put to the people of
Australia that factual position, which factual position
Paul, I am pleased to say, has been endorsed as you would
notice by the comments that have been made this morning
f rom within the banking industry.
MURPHY: But you don't think unfair pressure might have
been put on the Reserve, trying to lock it in, by the
comments particularly made by your Treasurer?
PM: No, not at all Paul. The Treasurer I think has a
proper and effective relationship with the Reserve which
l ~ s been established over the years under a head of the
Reserve that was appointed by our predecessor and then
under the head that we've appointed to replace Bob
Johnson. It has always been a proper and effective
relationship both with the Governor of the Reserve and
the members of the board.
MURPHY: But ironically of course while you and your
Treasurer were making the comments you were yesterday,
some banks have been raising rates on fixed rate
mortgages.
PM: Well yes, but we dealt with that effectively
yesterday. Those fixed rate mortgages are financed by
the banks by fixed rate securities. And because of what
happened af ter we lowered the Par ratio and there was a
selling of f of those securities, the rate on the bonds
went up and that was reflected in the decision they made
in regard to their fixed rate mortgages. But it was
quite clear that it had no impact upon variable rate
mortgages. And indeed the statements that have been made
this morning I mean I just don't go to all of them
but if you refer to the statement by the St George
Building Society that said, the spokesman there said the
trend is still positive, a fall in interest rates is a
reasonable expectation. The ANZ Bank said the direction
of change will be towards lower interest rates. So what
Paul Keating and I said yesterday, I repeat, was an
observation as to the factual position. Those
observations that we've made have been endorsed
subsequently. MURPHY: Before moving on though Prime Minister, in the
end the markets will decide the level of interest rates
PM: But Paul
MURPHY: But politicians certainly influence the
markets don't they. I mean politicians
PM: marginally. Paul, marginally. I mean, when you
say the markets determine, that's right, but also
governments determine the environment within which
markets set rates. And that's the point that Paul and I
have been making, that we had been running a tight
monetary policy during last year not because we wanted
to. As I've said so often, I don't either want to hurt
myself, I'm not a masochist, and I certainly don't want
to hurt my fellow Australians. But it was necessary,
given the enormous increase in imports which had come in
to fill that gap between the eight percent growth in
0 consumption and the four percent increase in production,
we had to lower the level of activity to lower the level
of imports. Now we've set the policies in a way
calculated to be best for the future development of the
Australian economy. It required a lowering of activity.
That's been done. So the markets aren't totally
autonomous in that sense. They do depend upon having a
gbvernment which sets the right envi-ronment. That's the
basic point, Paul, that I've been making together with
Paul Keating in this campaign. Why the banks are able to
say that interest rates will be coming down is because
we've got the policy settings right. We have fixed the
position where the banking industry, employers and
employees, know what the wages outcomle is going to be in
the period ahead in the twelve months. They know that
we've got the budget under control. That's why they can
say in regard to our policies that the rates will come
down. But under the Opposition the position is quite the
opposite. There would be a wages explosion and the
budget surplus would be blown.
MURPHY: Prime Minister, we are half-way through the
second last week of the campaign and there's not much
movement out there in the electorate. Either voters
really can't make up their minds or they're utterly
disillusioned with both major parties. What can you say
to voters who think neither of you have anything to offer
them and they don't believe what you say anyway.
PM: I think that your first statement is an
overstatement, that there is no indication of what's
happening out there. I think there are some indications
that the people are understanding that the policies that
I am offering on behalf of the Government offer the best
alternative. What I can say in answer to the last part
of your question why should they come to the decision,
more of them now, to vote for the Government it's
basically very simple. Do you want a continuation of job
growth, where we've had five times the rate of job
creation that the conservatives created. If the answer
is yes then you must vote for us because the basic reason
why, under the Labor Government, you've had this
explosion in employment and record investment which is
recreating the Australian economy for the future to make
us more competitive, all of that is basically because we
have had a wages policy that's worked. Now Mr Peacock
has had the question put to him before the campaign and
during it ' can you tell us Mr Peacock what the wages
outcome will be?' He's had to say ' Who's to knows. He
doesn't know and he can't be detailed about it because he
knows that there will be a wages explosion. So the
central issue in my judgement for the people of Australia
is, in regard to the economy, you'v e got a government
which can in fact deliver an appropriate wages policy.
The alternative can't. I mean you have the nonsense in
this morning's press of Mr Blunt talking about wages
policy. I mean you've never seen anything so ridiculous
in your life. He said, well of course a lot of people
won't be able to get any wage increase because they can't
get any more productivity. And he of ferred the
scintillatingly brilliant suggestion for hire car
operators that they could increase their productivity by
buying stretch limousines and get more people in their
cars. MURPHY: Returning to disillusion, the Party's own
research plus mainstream polling organisations do show
there's a lot of disillusion out there, that they look at
you and Andrew Peacock and they're not excited. I mean
have you lost the ability to inspire Australian voters?
PM: Let me say Paul, if you say they are looking at Bob
Hawke and Andrew Peacock, I invite you to see and then
reveal to your listeners what the judgements are and the
straight comparisons between Bob Hawke and Andrew
Peacock. You've raised the issue Paul that they look at
Bob Hawke and Andrew Peacock and they make conclusions.
Well I'm too modest Paul to spell out what the
conclusions are when they look at Bob Hawke and Andrew
Peacock. But you know what they are and perhaps you
could tell your listeners.
MURPHY: But you don' t accept
PM: comparison.
MURHPY: But you don't accept that there is disillusion
out there?
PM: I accept, and I've said all the way along, before
this campaign started, that politics in this country and
around the world are undergoing quite a considerable
change. I've never tried to hide that fact. I mean
there are a number of issues emerging as matters of
importance in the minds of electors Paul that weren't
there before. The overwhelmingly important issue that
has changed the structure and character of politics in
this country and around the world is the environment. I
mean a lot of people are saying that for them that's the
fundamentally important issue. And they are casting
their votes or indicating that they'll cast their votes
to non-major parties to give effect to their major
concern on the environment. There is a conclusion which
follows from that though which I want to put to your
listeners, and it is this. If your major concern is the
environment and you wish to express that by voting for a
party other than the Labor Party with your first
preference, remember then that it is either the Labor
Party or the conservative parties which will form the
government. And on the issue of the environment my
record leaves the conservatives for dead. I saved the
Franklin against their opposition. I saved Kakadu from
mining against their opposition. I saved the Daintree
from logging against their opposition. I've saved the
tall forests of Tasmania against their opposition. So as
far as the election is concerned with people wanting to
register their first concern about the environment, I'm
not upset about that, I understand it. But please make
sure that the second preference goes to the Labor Party
because we are the ones with the positive record and the
conservatives have an absolutely appalling record.
M$ RPHY: Yes it's interesting that you mention
independent standing and green candidates and the
Democrats of course and you keep on putting emphasis on
the second preferences and the importance of them.
Obviously you want them to flow your way or as many as
possible. But what about the first preference? I mean
that's even more important isn't it. I mean really,
you'd be appealing to people to vote for you, wouldn't
you, on the environment rather than independents?
PM: Well I would. But I've got to accept the reality
that some people are going to say that they regard the
I environment as so important that they want to vote for a
party, the green candidates, who have the environment as
virtually their only issue. Now obviously I think it
would be wiser for people to cast their first vote for us
because it's either Labor or the coalition which is going
to form the government. I certainly believe Labor. So
it makes more sense if environment is your concern to
make sure that Labor gets elected because we have a
record which has led the World Heritage Bureau to say
this let me quote it. They said ' no country has done
more to advance world heritage values than Australia'.
Now that's the judgement of the World Heritage Bureau.
And if you want that record to be maintained then a vote
for Labor is the best way of doing it.
MURPHY: The best way. In other words you're not
suggesting to people if they're really concerned about
the environment they should vote for an independent or a
green or even a Democrat?
PM: No, no, I'm saying that the best way of voting to
protect the environment is to deliver your vote straight
to Labor. Because we're the ones that can form the
government and we're the ones that have got the record.
So deliver the vote straight to us. But I'm simply
saying if they won't do that, and I urge them to do it,
go straight to us, if they don't, make sure that the
second preference comes to us.
MURPHY: Yes indeed. Of course preferences are vital,
particularly the Democrats because they seem to be
polling very strongly. You must have got a rude shock in
the West only yesterday.
PM: But you might notice, if you read the transcript, I
was a little prescient. I mean I said well I'm not sure
that that decision will stick. I don't think I was being
unduly brilliant In saying that. I mean I was simply, I
was analysing it and saying well how can the Democrats
adhere to a decision which involves giving a second
preference in the majority of seats in Western Australia
to the conservatives, which would mean Democrat voters
voting for a uranium enrichment industry, voting for
mining in Kakadu, voting for the abolition of the capital
gains tax. It didn't seem to me that they could stick to
that decision, and they haven't.
-4i
MURPHY: You've been asked this before, but I'll ask you
again. If you win on March 24, how long will you stick
around? PM: I will stay the full term of the next Parliament. I
notice in their increasing desperation the conservatives
are trying to breathe some life into a dead horse. They
tried this earlier on and said that a vote for Bob Hawke
was a vote for Paul Keating, to which Paul gave the
eminently clever and accurate response that a vote for
Andrew Peacock is a vote for Andrew Peacock. Now I think
everyone accepted that I knew better about my future than
Tony Eggleton or Andrew Peacock. I'd like to hear their
estimate about Andrew's future, by the way, after the
24th. But that's another issue. I'm simply saying that
I will go the full term of the next Parliament.
MURPHY: And resist any temptation there might be, say 18
months on, to retire and hand over?
PM: Yes indeed. Well, when you say any pressure
MURPHY: No, temptation.
PM: Well, temptation. I mean you don't understand Paul
the enormous pride and pleasure I derive from being Prime
Minister of the best country in the world. I mean
Australia is the best country in the world. To have the
honour of leading it is not something that either you
take lightly or discard lightly.
MURPHY: Alright, if that honour continues after March
24, that would mean then that you'd be looking at an
election in ' 93 or perhaps even ' 92. How long would you
expect Mr Keating to stick around if that's the scenario?
PM: Mr Keating is a man of great dedication and he's a
man greatly misunderstood. He is a man who is an
outstandingly capable Treasurer in the macro-economic
sense and in terms of thinking of micro-economic reform.
But he's also a Labor Treasurer in the great Labor
tradition. I would just love some of the commentators to
be able to sit in on some of the Cabinet meetings and the
Expenditure Review Committee meetings where we are
dealing with the issue of the least privileged in the
community. Brian Howe, the outstanding Minister for
Social Security, has no greater supporter amongst the
other Ministers than he does in Paul Keating. Now this
man is a person who obviously, if he'd wanted to pursue
his own personal ambition and his own personal
S aggrandizement, could easily have done that at any time,
but he hasn't. He hasn't done that because he's got a
vision about, he's got a depth of commitment and love for
this country and a vision about how we can make it a
better, stronger, more competitive country. And I think
it's those considerations which will determine Paul's
continuing commitment.
MURPHY: Prime Minister, you just said though that he's
misunderstood. Why is that though?
PM: I think, well, it's fairly easy, historically I
mean Paul is not the first Treasurer of this country to
be easily miscast. It's very very easy to miscast
Treasurers because when decisions have to be taken in the
fiscal area that are a bit tough, well the Treasurer is
easily painted as Mr Scrooge. It was always
historically, I mean you go back over all your
Treasurers, go back to the post-war period, Arthur Fadden
7
and so on, the whole lot of them, they were always the
easy butt. Paul of course is reasonably direct in the
things he says. He can say things directly which may,
again, easily lead people to paint him in not the most
congenial of
MURPHY: Right
PM: But all I'm saying is that I know Keating well.
He's my friend as well as my colleague. I know that he
is amongst the most compassionate of Ministers that has
ever been in a Federal Cabinet.
MURPHY: And happy to stay where he is?
PM: He, as I've said, has got the legitimate ambition at
some stage to be Prime Minister of this country. That's
a legitimate aspiration. But Paul Keating and Bob Hawke
have never worked more closely together than they have
been over recent times, and are now, and will through the
life of the fourth Hawke Labor Government.
MURPHY: And if you do get that fourth Labor Government
Paul Keating will be waiting a long time to realise any
ambition, any further ambition he's got?
PM: Yes, but remember, Paul Keating went into Parliament
very very early. He's one of the longest serving Members
of Parliament, but still a relatively young, fit,
intellectually able young man. And would, on that
timetable that you're talking about, come to the Prime
Ministership at, I would've thought, less, significantly
less than the average age that people have become Prime
Minister in the past.
MURPHY: You've just annointed him.
PM: No, I haven't. I've answered your questions. I've
always said that the Caucus makes the decision, the
Caucus makes the decision. But I'm responding honestly
and directly to your questions.
ends