PRIME MINISTER
TRANSCRIPT OF RADIO INTERVIEW WITH DON CHIPP, RADIO 3AK,
CHANNEL 9 STUDIO, RICHMOND j-g c-rL~ 1e4910
CHIPP: My big moment of the week, the Right Honorable
Prime Minister of Australia, the Right Honorable R J
Hawke, good morning Prime Minister.
PM: G'day Don.
CHIPP: How are you?
PM: Feel great thanks mate.
CHIPP: Gee you're looking well.
PM: Thank you very much.
CHIPP: Except for that scar on you elbow, how did you
get that?
PM: I was having a game of tennis, the first in about
three or four years with my old mate Singo, your mate,
and went diving for a volley and took a bit of skin off.
CHIPP: You like to win don't you?
PM: Beats the hell out of losing mate.
CHIPP: Its more than that, it is almost a fanaticism
with you isn't it, winning?
PM: I think it is an insult to yourself and to your
opponent not to try to win.
CHIPP: And how do you feel after, if you lose?
just try to win next time.
CHIPP: I got beaten for the gift once by half an
inch and I have no regrets whatsoever because I tried my
hardest. PM: Thats right, that is what I mean about trying to
win. I mean I think it is an insult to yourself and your
opponent not to try your hardest to beat him.
CHIPP: You have got a good opponent this time, he is
coming up well as he did last time against you.
PM: Yes ' 84 I think was a pretty unreal sort of
campaign, I think some, he'd set sort of expectations
about this year which I think were rather unrealistic
expectations.
CHIPP: You think you're ahead?
PM: I don't want to make that sort of assertion, just
let me say this, that going back to your first point,
I've tried my hardest, I've given it my best shot and we
seem to be travelling pretty well Don and I will be going
flat out until next Friday evening.
CHIPP: I don't know whether I represent the typical
swinging voter out there in those marginal seats that are
going to determine the winner. But to me the biggest
issue by far is the foreign debt. In 1975 it was
billion. In 1985, ten years later it had grown to $ 67
billion and now in 1990 it is $ 118 billion growing by
about $ 2 billion a month. Does your Government take any
responsibility for this, after all you have been there
most of the seven years, during the last seven years of
your Government the major growth has taken place.
PM: Ok, let's look at whats happened in respect of the
Government part of it. I have wiped it out. I, in the
last three years, have done what no government has ever
done before and that is had a surplus in the Government
business, $ 17 billion. We have used that $ 17 billion to
wipe out our debt, we are in fact now net creditted at
$ 4.4 billion.
CHIPP: When you say we you mean the Commonwealth
PM: Commonwealth Government and we are net creditted as
far as the Australian people are concerned, through the
Commonwealth Government, they owe not a cent we are net
international creditors. 65% of the debt is in private
hands, now lets understand what that means, it means that
the private sector, enterprise in the private sector have
made commercial decisions, they believe that they can
with the decisions they have made, the borrowings they
have made, can generate the income which will cover their
debt. Look at the other side of it. Access economics,
billion Don, $ 45 billion of projects which they
i-dentify that are actually under way, or for which the
actual commitment has-. been made and they say in respect
of that $ 45 billion it will generate $ 5 billion per annum
of foreign earnings. So its been used to restructure
Australian industry and earn us more income, that doesn't
mean we should be complacent about it, but we are doing
the things that are necessary from a Government's point
of view to lower it.
CHIPP: I put to you that up to ten years ago I would
agree with what you have just said, that that capital
inflow or the private indebtedness, was private
investment coming in but isn't it true the last ten years
has been essentially borrowings which has just been
brought in to hold up the balance of payments on current
account deficit.
PM: But it is borrowings which is being used.
Borrowings which are being used to restructure Australian
industry. CHIPP: By Mr Bond and Mr Skase.
PM: And also, what about Mr Jackson for instance
yesterday who just announced a massive profit. A man in
an enterprise which is operating with spectacular success
in Australia overseas, and who I might say made the
observation that the industrial relations climate created
by my Government is the best that it ever has been and
which has been an important part of their success.
CHIPP: I will concede that your Government, per se,
hasn't run up the debt but it has been run up by private
enterprise during your tenure, now what a Government has
got to do surely, is to set the economic climate that
those private enterprises who did run up the debt can
export more than we import as a whole over the past few
years. PM: OK lets look at what we have done as a Government in
those circumstances and compare it by way of contrast to
the Opposition. Three elements. Firstly, we have got a
wages policy which has meant that Australian industry can
become more competitive, a 12.2% reduction in unit labour
costs which has meant in the last four years a 54%
increase in the exports of manufactured goods 54%, we
are exporting now Don, we are exporting cars and car
parts, Australia is, to Japan and the United States,
unheard of before. Steel industry, you know, when I came
to office in ' 83 BHP were going to shut down the steel
industry, we now in this last year, three quarters of a
billion dollars worth of steel exported overseas and in
the next three years it is going to be trebbled. So we
have got the wages policy which is secondly, we have
got our budget policy right, as I said to you just a
moment ago $ 17 billion surplus in the last three years.
We have got the situation where the Government is
reducing its calling on the savings of the community so
thert that has been available to the private sector, they
don't have to call to the same extent now as a result of
what I'm doing on the overseas market and thirdly, we
have got the plan in place for the future for savings
with superannuation. Don when I came to office
superannuation $ 17 billion, now $ 100 billion-and by
the end of this decade $ 6-700 billion. In other words,
mobilising the savings of the community so that there
will not be the need for Australian industry to call on
overseas. Now in respect of each one of those the
Opposition hopeless.
CHIPP: Conceded that, but surely you would have to admit
that in the field of removing restrictive work practices
which are rampant in export industries like meat, like
coal and many others, you haven't made the progress that
you would like to.
PM: Absolutely wrong. Well no I'm sorry
CHIPP: Come on there is a meat factory just closed down
here in Victoria through union practices.
PM: Wait a minute. Certainly we would like to have done
more. Always, any Government would like to have done
more than it has done and I don't condone restrictive
work practices wherever they exist, but, what I am saying
to you in terms of what we have done. I remind you of a
challenge which I issued at the end of last year Don, and
you are a man who likes challenges and you like
challenges to be answered. I issued a challenge, a very
specific one to the Opposition at the end of last year,
we are talking about micro-economic reform. I said when
I came to office 30 of the previous 33 years you mob ran
this country, now I said to them, you point to me one
period in your 30 years in office where you came within a
bull's roar of doing in terms of micro-economic reform
what I have done in seven years and Don that challenge
was made at the end of last year and hasn't been
answered, why, because they can't. The reform that we
have brought about
CHIPP: It has been answered in terms of their
alternative industrial relations policy
PM: No it hasn't
CHIPP: It is a policy it hasn't been tried I admit but
it has been answered to that extent
PM: My challenge was you show me one point in your
years when you did anything which came within a bull's
roar. In other words what I am saying is their record
where they had 30 years and didn't do anything
CHIPP: But not look at the past, lets look at the
future. Their industrial relations policy on paper
PMt Is a recipe for disaster.
CHIPP: Well who says so?
PM: Sir Richard Kirby. You heard him yesterday. Sir
Richard Kirby said it is a recipe for disaster.
CHIPP: I wouldn't go that far
PM: I will tell you who else said it yesterday, Allan
Jackson. Allan Jackson of BTR Nylex who just announced
this over a billion dollar profit, one of the most
successful enterprises in this country and operates
overseas as well and he said that the Hawke industrial
relations policy had created the best industrial
relations climate that they had ever had and that the
Opposition policy didn't match it.
CHIPP: Well I'll give you a bit of music for a change
Prime Minister. Sir Richard Kirby, former President of
the Arbitration Commission, actually said that the wages
accord which you struck with the ACTU was the greatest
industrial relations triumph since 1907 Mr Justice
Higgins set the basic wage. Look I come back to this
debt. Look ordinary people are suffering and you know
they are suffering and you have said you wouldn't make
them suffer unless they had to suffer by high taxes, high
interest rates, inflation
PM: What's this high taxes?
CHIPP: High taxes in terms, not in terms of what it was
but 48 cents in the dollar is a high tax.
PM: Well lets come on. Lets do this tax thing in two
ways. Firstly, lets look at what I have done and the
simple fact is that you know because we have talked about
it before. They walked out of office with a top rate of
cents in the dollar and a bottom rate of 30 cents in
the dollar, why? Very simple Don, because they refused,
they refused to get the tax from those with the greatest
capacity to pay. Just let me Don give you one quote,
because I know you will be appalled by it
CHIPP: But you are still comparing yourself with them.
I'd rather you the question is naked and unadorned
and tell me what, don't you agree
PM: I'm telling you what I'm doing, I'm telling you what
I have done and what we will continue to do but it is
legitimate in terms of pointing out what we have done
when you talk about high taxes to show what we have done.
This quote
CHIPP: In relation to the Liberals
PM: Yes but this quote that I give is one of the most
damning indictments, one of the most damning indictments
of' our opponents. And this is not just about the past,
this-is about the future because this is what they would
go back to. This is what Professor Russell Mathews said
Don, just read this, this is what he said at the end of
their period of office
CHIPP: Well he's hardly a left-wing radical is he?
PM: Thats right. He's certainly not a labor spokesman,
he said this " the essential problem is to make the rich
pay any income tax at all" now why? He was saying that
why the essential problem to get the rich to pay any
income tax at all was you had the absence of a Capital
Gains Tax. Now I brought the Capital Gains Tax in, which
means that those with the greatest capacity to pay are
paying. That is why in part we have been able to bring
the top rate down from 60 cents in the dollar that they
walked out of office with, 60 down to 47 and the lowest
rate from 30 down to 21, because I'm making those with
the capacity to pay, pay. Now that is the past and the
present and what is the future? This mob are promising
to take Australia back to the disaster of Australia being
the country of the tax avoidance system and the rich not
paying. CHIPP: Point taken, point well made. I repeat I am
paying too much tax Prime Minister. I have got a job New
Year's eve reporting the election, every dollar I earn of
that money I have got to pay 50 cents in the God damn
dollar, now if that is not too high tax, tell me what is.
PM: I'll tell you. What if I give you the facts about
the OECD, that in the whole of the OECD there are only
three countries, only three countries, with a lower
taxation regime than Australia. In other words we are
the fourth lowest in terms of taxation impact in the
OECD. CHIPP: Ok you have made that point. I will leave high
taxes out of this equation I don't need it. High
interest rates, inflation, tight monetary policy, many
bankruptcies, now ordinary people are suffering and I am
not suggesting, in the context of this question, that is
your fault, what I am saying is, essentially, it is the
fault of the high-flying greedy entrepreneurs who have
been allowed to borrow billions of dollars overseas and
that is why these ordinary people have got to pay high
interest rates, that is why I have got to go into
bankruptcy. It doesn't seem fair.
PM: Wait a minute. That is an over-simplification.
CHIPP: Its not to them
PM: Well let me put the point to you. What are the
facts about growth? The facts about growth are these,
that we have been having a rate of economic growth of
4.4% per annum which is twice as fast as it was before
aY~ d in that last year Don which is relevant to this
period you-are. talking about, we just had an explosion of
demand and consumption. Consumption actually increased
by now production only increased by Now that
meant the imports were coming in at a level we couldn't
sustain and so I had to have higher interest rates
because if we hadn't had it the economy would have
collapsed. Now you talk about the fellows that have
collapsed, your Bonds and so on, but at the same time as
they have been making decisions which have been
commercially unsound apparently, your Allan Jackson's
that I talk about and a whole host of your other
companies in Australia have been making sound decisions
which are making the Australian economy more competitive.
Out of all these imports that were coming in, a whole
stack of them are going into making our Australian
industry more competitive and enabling us to increase our
exports. To have a situation Don, I know you are proud
of it, I don't have to say you should be proud of it.
Surely we are all proud of the fact that now Australia is
exporting cars and car parts to Japan and the United
states. That we are now exporting steel, when I came to
office they were going to shut the steel industry down.
Now they are exporting steel all over the world. Don, I
went to an enterprise in Adelaide last year, just an
Adelaide suburb, manufacturing optical lenses. Now I
can't tell you how proud I was about that. We went in
there and they told me we are exporting all over the
world. The United States, the toughest market in the
world, took it over 50% of the market. Now those things
are happening as part of the restructuring of Australian
industry. CHIPP: Prime Minister you have got no argument from me
that you should bring high interest rates down, you can't
bring them down. Any other options you have got are all
unpleasant, import restrictions, devaluing the dollar,
they are just not on I agree with you, I agree with
your policy, but all I am saying is it just seems unfair
to me that the ordinary guy out there is paying high
interest rates on his mortgage just to pay for the
extravagances and the indulgances of a few entrepreneurs
who borrow too much overseas.
PM: That simply isn't right that that's why they were
doing it. The level of demand is not simply the actions
of one or two entrepreneurs, I mean if you look at the
aggregates of the Australian economy it simply is not the
case that why we have got high monetary policy is because
a couple of people have blown their top. It just simply
isn't true.
CHIPP: Given that high interest rates are necessary at
the moment for the reasons that you have given, to dampen
domestic demand, you have predicted a fall of interest
rates, your opponent Mr Peacock, extraordinarily has
predicted a massive fall whatever that means
PM-He is trying to jump
CHIPP: Can you explain to me in simple language how with
the balance of payments of $ 2 billion a month in deficit,
inflation in our country as high if not higher than most
OECD partners, a monthly foreign exchange shortfall still
haven't been met by borrowings, how in the name of God
are you going to reduce interest rates in the next 12
months? PM: Very simple. Let me tell you the basic economic
reasons and then I will give you a couple of quotes from
within the banking industry to confirm what I am saying.
The reason why interest rates can come down is very
simple, is that the policies that we have had in place
are working, that is the level of activity is coming
down. We had to have high interest rates, as you
understand and accept, to lower the level of activity,
that is happening the level of activity is coming down
CHIPP: But your car sales for January were a record
PM: I am telling you that the overall economic
indicators Don show a decline in demand. If you look at
the aggregrate figures it shows a decline in demand
recognised, no-one is arguing that, the Opposition is not
arguing it that the decline in demand is happening. The
second thing Don is that the price of money to the banks
is declining, that was decided before the election
started and the prime rates have started to come down.
The cost of money to the banks is declining and as the
cost of money to them declines so they will move to a
position where the charge that they make for money that
they lend will come down and so you have got the
combination, the inter-related combination of facts of
the lowering of the level of activity, the lowering of
the cost of money to the banks will mean that it will
come down. Just let me give you the quotes from within
the last 24 hours. St George Building Society the
trends are still positive, a fall in interest rates the
reasonable expection. The ANZ Bank spokesman the
direction of change will be towards lower interest rates.
These are the statements coming from within the banking
industry on the basis of the fundamental economics that I
have just put to you.
CHIPP: You do not resile from former statements that you
do not rule out a fall in home mortgage rates before
Christmas. PM: Of course I don't.
CHIPP: Prime Minister do you mind if my salary is paid
for by playing an ad now. Could you just for about
one minute.
PM: I know you need the money.
CftIPP: Prime Minister, can you give me an unequivocal
guarantee that if you win, and health permitting, you'll
serve at least two thirds of the next Parliament?
PM: I can go further than that. I will serve the whole
of the next Parliament, Don, and I've said this
consistently and it's interesting what the environment is
in which it'ls been necessary to repeat that, because
paradoxically the reason it's coming up is because the
Liberals have a leadership crisis. The Liberals have a
leadership crisis and you know that. John Howard ousted
by Andrew Peacock, unreconciled to it, who said he
doesn't trust him and so you ' ye got this terrible pinch
in there and they know there's a problem, they know
there's a public perception of the Liberal Party that
can't govern itself and therefore can't govern the
country. So what's, they try and divert their attention
in saying oh, this bloke Hawke, you know, the mob seem
to like him a bit so we'll try and create a furphy that
you're not really voting for Bob Hawke you're voting for
someone else. The fact is that I will run this full term
CHIPP: My question is fair because you, in my view
would be absolutely entitled after serving two years at
least in this term to say well, look I'll give it away,
I've got something else to do, but if you give a
guarantee at least two thirds, but you've gone further
than that, you've given three years out of the three.
PM: Yes.
CHIPP: Yes, well if you lose will you continue on in
Parliament or will you resign?
PM: Look I just simply don't think we, we will lose and,
you know, that's, that's a hypothetical, you know, I
don't really prepare to go to. Can I ask you a question?
CHIPP: Well it's not an impossible situation is it?
PM: No, of course it's not.
CHIPP: I think it's fair to ask
PM: Fair to ask.
CHIPP: Prime Minister of Australia if he loses the
election, will he continue
PM: Well I've indicated and the straight, fair and
honest answer is this. I mean, that's hypothetical I
simply say to you this. If that were to happen I would
put myself in the hands of the Party and if the Party
thought and if they pressed me to stay in those
circumstances, I would consider it and if it were their
judgement that they thought they could do better with
someone else, I would gladly accept that. I mean, the
L-ftor Party in those circumstances wouldn't find Bob
Hawke scrambling and gnawing away to try and stay in
office and I would simply say to them in that, what I
regard as a hypothetical situation, I'd simply say to
them look, if you want me to stay on I'll think about
it CHIPP: You go no further than that?
PM: Well, I mean, obviously
CHIPP: Because you know Labor Party tradition and it's
loyal to leaders and future, and former leaders.
PM: Yes but I would be in their hands. The Labor
Party has been very good to me and I love the Labor Party
and my position would simply be, Don, well if it's your
wish that I stay on in those circumstances I would
seriously consider it. I don't know that in the end that
I would, but I would seriously consider staying on. But
on the other hand if their judgement was in those
circumstances they thought they could do better with
someone else, that would have my wholehearted
endorsement. CHIPP: Prime Minister, in my judgement there's three big
issues here in this election the economy and high
interest rates and whatever, the environment and health.
Now health, could I just ask you what's wrong with me,
Don Chipp. What's wrong with you allowing me to..
Medicare, Medicare levels, the levy, provided I give you
evidence in my taxation return that I've taken out
private health, private health care and that you make
that private health care premium tax deductible. What's
wrong with that?
PM: Well, we've been there, done that as a country. You
know really what the answer to your question is because
we had a situation where that concept was tried.
CHIPP: It was never compulsory though.
PM: Yes, but what happened, Don, is, if you look at the,
if you look at the statistics that were brought out
yesterday and published in today's paper, the estimate is
that 25 percent of taxpayers paid half of the Medicare
levy. They pay $ 1.3 billion and the next 20 percent paid
a quarter. In other words, those people who are best off
in the community pay, as it would be expected, the
greatest proportion of the Medicare levy. Now you allow
those people to drop out in the way you're talking about
and you just move straight back to the repetition of the
situation I inherited when I became Prime Minister in
1983.
CHIPP: Except everybody would be insured, it would be
compulsory I4
PM: But you can't, you can't work it that way. What
you're saying is really a repetition of what I inherited
in ' 83. The concept that you'll allow people to, to opt
out and the people that are best situated do that and you
have, what I inherited, 2 million of my fellow
Australians when I came to office, 2 million of my fellow
Australians were uncovered, uncovered. Now that is an
absurdity and that's why the overwhelming majority of
Australians are in favour of the situation of Medicare.
Why? Because it has the two features that the
conservatives have never been able to bring in in all
their jumping and changing and hopelessness, the two
features are universality, that means that not one of our
fellow Australians, Don, not one of our fellow
Australians has to fear the doctors' bill or the hospital
bill. CHIPP: So if they're knocked over in the street, no-one
need fear they'd be let lay there. I happens in most
States of America.
PM: Yes, well
CHIPP: But both parties have got that in their policies
haven't they?
PM: They've got what?
CHIPP: Universality.
PM: No, no they haven't. As far as, as far as the
conservatives are concerned, they haven't got a policy.
They haven't got a policy. They've been seven years in
Opposition and you had Mr Shack getting up and saying two
things, two things Don. Firstly he said and the words
will be, you know, down in the tablets of political
history won't they, he said the record of, he said the
Liberals and National Party haven't got a particularly
good record in health and I don't need to remind you, he
said, of our period in Government. In other words he
said their record was hopeless in. Government and
Opposition and the second thing he said, well we haven't
got a policy yet, he said what we'll do if you elect us,
we'll appoint a committee. They had seven years in
Opposition, to get a, get a policy, they haven't got one
and they've said well, we'll have a committee. You know
who'll be on the committee? The representatives of the
private health funds and the doctors and what a nice
little, you know, they'll cook up between them, never
have the interests of the, of the ordinary Australians at
heart CHIPP: Prime Minister, would you mind taking some calls?
Our switchboard has lit up like a firestorm?
PM: Can I ask you a couple of questions first?
CMIPP: Do you fancy yourself as an interviewer?
PM: No I don't, but I mean
CHIPP: You do, you know.
PM: You've said that publicly
PM: I'd like to do it yes.
CHIPP: I think that would be fascinating. You have in
mind with the reputation you have worldwide that you
could interview top, top world players, Gorbachev?
PM: I don't want to get into an argument about it, but
CHIPP: ( inaudible)
PM: I don't want to but as Prime Minister
CHIPP: your question?
PM: Well, just a couple.
CHIPP: Carlton's the answer and they're going to be
Premiers. PM: Couple of questions. Now look, you know, you
founded the Democrats. What do you think of the idea of
the Democrats which you set up to go in the Senate to
keep the bastards honest, to you know to quote that
memoral phrase
CHIPP: Well it kept you honest a few times.
PM: Yes, and you're a great bloke to deal with I must
say.
CHIPP: Thank you.
PM: What do you think about the idea of the Australian
Democrats contesting seats in the House of
Representatives? CHIPP: I've always been opposed to it because it puts
the temptation before the candidates of the Democrats to
be all things to all people. Now one of the things I
used to love as a Democrat was that I only had to court
percent of the vote to get the balance in the Senate.
If you have to go out the House of Representatives,
then you've got to go soft on those pressure groups that
I once despised. For example, the Reverend Fred Nile's a
sincere bloke, but part of my, part of the few joys of my
Parliamentary career was getting stuck into Fred. Now I
couldn't do that if I was looking for a House of
R~ presentatives seat, the temptation and, to her credit,
Janine. Haines has resisted it to my knowledge, but the
temptation would be to dip your principles just a wee
bit. PM: Could I ask you a second question? You founded the
Democrats, I assume you'll vote the Democrats, but taking
the particularly the issues like education, health
and the environment, they're fundamentally important to
the Democrats. Where would you say the second preference
should go?
CHIPP: Well, that's I'd find it intolerable if you
pressed me for an answer on that because how I vote is my
business and it would be totally improper of me as a
broadcaster to be advising my listeners how to vote. All
I'd say is this in response to your question. I think
I'd be fairly confident in saying it Democrats are
thinking, sensible people. People who vote Democrat,
they've thought about the issues, they've thought about
the Parties and they cast their vote for a Democrat.
They would then go through the policies of the other
Parties, particularly the nuclear policies, particularly
the health policy and particularly, more than anything
else, the environment policy. I would have thought that
the Democrat voters would give their second preference
after voting Democrat to that Party that had the better
environment policy, the better industrial relations
policy and the better health policy.
PM: And there's no doubt which Party, that comes the
Labor Party.
CHIPP: Well there is no doubt in your mind.
PM: ( inaudible)
CHIPP: Sorry?
PM: Are you
CHIPP: No comment. Prime Minister, do you mind taking a
call or two?
PM: I'd love to.
CHIPP: We go to Richard and for those of you calling in,
we've got a firestorm on this switchboard. If you could
keep your questions very brief, I'd be grateful. Richard
of Doncaster, talk to the Prime Minister of Australia.
CALLER: Good morning, Don, Prime Minister. Thank you
for this opportunity.
PM: Thank you Richard.
CALLER: All the obvious catastrophe, catastrophes of
your Government concern me high taxation, record high
home loan interest rates, some of these in part have
increased, this week through the banking sytem, record
high business loans that I believe are directly
contributing to business failures, 10,000 since Christmas
and continuing high inflation, particularly by world
standards one of the highest, and so on. So these all
affect the average Australian standard of living. What
really worries me, however
CHIPP: Come to your question please.
CALLER: What really worries me is the absence of any
plan or commitment by the Government to solve the root
cause of these cancers on our way of life and that is the
continuing horrific balance of payments position.
CHIPP: Alright, Richard, let's answer your questions and
get rid of your mistakes and I'll do it in order.
Taxation, you've already heard me talking to Don. The
facts are the opposite of what you say. The facts are
that when the conservatives walked out of office they
walked out of office with a top rate of 60 cents in the
dollar and the bottom rate of 30. I've reduced that
to 47 and the bottom one from 30 to 21 and as I pointed
out to Don, and Don concedes, basically because I have
made those with the greatest capacity to pay pay where it
was a matter of choice before by having the capital gains
tax which these people now say they'll take of f and put
billions of dollars back in the hands of less than one
percent of the population which will mean very simply
that ordinary people would pay more. The fact is that
Australia is one of the lowest tax countries in the OECD.
There are only three that have more. In regard to
interest rates, record high. Untrue. 90 day bill rates
reached 22 percent in April 1982 under the conservatives,
they've never reached that under us. Inflation? When I
came to office I inherited an inflation rate of 11
percent and we have brought it down from that. It has
never reached 11 percent under us. So unfortunately,
Richard, on what you've paraded are prejudices and not
facts.
CHIPP: Helene from Carlton. Good morning, Helene.
CALLER: Good morning Don. Prime Minister, a lot of
people are worried about the foreign debt and balance of
payments and the influence these have on interest rates.
In your policy speech you said a lot of interesting
things in relation to your future Government science,
education and general social policies. While these are
interesting in themselves, what impact if any can they in
a practical sense really make on the economic issues
which we're all so worried about?
PM: Well, Helene, let me make the point that in my
policy speech that was not the only time during this
election campaign where I've addressed the issues that
y~ u are talking about. And in fact we have three
. fundamental,. three. f undamental.. policies in place directed
towards the question of our foreign debt problem. Now
let me just go to them quickly and point out for each of
them the position of our opponents is disastrous. I
pointed out to Don, we've got a wages policy in place
which gives predictable outcomes which means that our
industry has become more competitive and you've heard me
talk about the things that we are now exporting, the
manufactured goods we couldn't before. Against that
tight wages policy, against that, you've got the
certainty of a wages explosion from, from our opponents
which would mean, again, not only in regard to foreign
debt but in regard to the economy, disaster. Second,
you've got the budget policies. I have produced $ 17
billion surplus in the last three years which has wiped
out, wiped out, eliminated the Commonwealth Government
overseas debt. We are credited to the tune of $ 4.4
billion. The policies of our opponents would dissipate
the surplus, they've got a between $ 6 and $ 7 billion
fiscal hold and they'd give billions of dollars back out
of the capital gains. And third, superannuation. We
have a savings plan for the future which the Liberals
would destroy.
CHIPP: Des, from South Yarra. Good morning, Des.
CALLER: Good morning Don.
CHIPP: Talk to the Prime Minister.
CALLER: Mr Hawke, you've stated that high interest rates
are needed to reduce spending. I want to make three
points. PM: Yes.
CALLER: The first is that before high interest rates
affect the importer, which is the real spending you're
trying to get at, they destroy-the man in the street who
can't pay his mortgage, the building industry that can't
afford the costs, manufacturers have become
uncompetitive and can't pay for their new machinery,
exporters are no longer internationally competitive,
farmers, retailers and so on. And the last person to be
affected is the importer. Everyone else goes bust before
them. The second point is that by stating strong
economy you've proven you're incompetent of running a
strong economy and what we want is a Government that can
run a strong economy, not one that has to give us a
poison pill high interest rates.
CHIPP: Des, we've got to leave it there.
PM: Let's deal with that. You're saying you destroy the
export competitor. The fact is if that were so we would
not have, as we've had over the last four years, a 54
percent real increase in the export of manufactured
gt~ ods. We have a situation now where we're exporting
steel to the world where before, after seven years of my
opponents they were going to shut down the steel industry
Des, we have a situation where we're exporting cars and
car components to Japan and the United States. Not
compatible with your prejudicial assertion that export
competiteness is being destroyed. I mean, it's a good
idea when you're talking on these things to get rid of
the prejudices and go to the facts. Now as regards the
situation that you're talking about of people being
destroyed, before you get to your, before you get to
importers and it simply isn't the case. Let's look at
16
what has in fact happened about running a strong economy,
that you can't run a strong economy. Just let me give
you the facts. The rate of economic growth in the seven
years of my Government and these are facts, not opinions,
Des, so please write them down and remember them and
substitute the facts for your prejudice. The fact is
that the average rate of growth in real terms of GDP in
the seven years of my Government, 4.4 percent against the
2.3 percent of the conservatives in their seven years,
the rate of employment growth, Des, 3.5 percent per annum
against their 0.7 percent per annum. In their last 12
months the economy went into its worst recession in
years with an additional quarter of a million people
being found on the unemployment scrapheap. They
destroyed the economy. Did what has never been done
before in the history of this country, had simultaneous
double digit unemployment and double digit inflation.
We've rescued the economy and given a rate of employment
growth which is twice as fast as the rest of the world.
They're facts, facts, facts. So substitute facts for
your prejudice, mate.
CHIPP: Thanks Des. Go to Norm from Doncaster. Good
morning Norm.
CALLER: Good morning Don. Prime Minister, I'd like to
ask you to clear up some confusion I have on capital
gains tax.
PM: Yes.
CALLER: The Liberal Party advertisements from spokesmen
quote some figures and percentages in relation to this
tax, such as John Howard's ad strategy on four million
Australians will be affected. Also the tax will be
levied on people with salaries as low as $ 35,000 and
superannuation payments will be by the tax. I agree
with the principle of the capital gains tax where people
with capacity should pay, but I don't hear any clear
rebuttals from the Libs, on the Liberals claims by Labor
Party people. Mr Hawke, I'd like to ask your comments
and a clear definition of Labor's policy on capital gains
tax. Who will it affect and its impact on
superannuation?
PM: Well, I'll tell you who it will affect. It will
a& ffect basically less than one percent of Australian
taxpayers,. basically less than one percent and those
figures have now basically been accepted by Mr Peacock
and Dr Hewson after they tried to waffle around in the
first place. And as far as superannuation is concerned,
the situation with it is the industry itself conceded
through its major funds that, properly managed,
superannuation funds can more than offset any tax impost
by the of imputation credits. But just let me give
you two quotes which will in fact tell you, Norm, why in
fact we must have the capital gains tax in this country.
And you've heard me, what I said to Don before, as to why
it was necessary to make the rich pay. But let me just
quote from The Age and the Melbourne Herald. The Age
the principle the coalition is defending is the right of
the rich to pay taxes only if they so choose. This
principle is clearly abnoxious. And the Melbourne
Herald, Norm, not one that's normally out there starving
Labor policy this is what they said at the end of last
year Mr Peacock proposes to turn back the clock and
once again unleash the might of the legal accounting and
financial professions in the drive to turn otherwise
taxable income into tax free capital gains of five years
standing. That is unacceptable, not only on equity
grounds, said the Herald, but in terms of the very
changes necessary to make Australia more competitive and
more efficient.
CHIPP: Prime Minister, I'm sorry we've got to leave it
there. The clock is rolling on to ten and we've got to
go to the news. I want to tell you how honoured I am and
grateful I am to you for appearing on the program.
PM: Don, it's been my pleasure to be with you and I
thank you very much and to your listeners.
ends