. o
PRIME MINISTER
TRANSCRIPT OF INTERVIEW WITH HOWARD SATTLER, RADIO 6PR 27
FEBRUARY 1992
E AND OE PROOF ONLY
SATTLER: Good morning Prime Minister.
P14: Good morning Howard.
SATTLER: Does it apply, the statement I just read?
PM: Absolutely. I mean there is no point in being
in this game buat trying to move the common wheel along to make
things better and this is a time to try and get the economy
out of the recession into a recovery and we have done it I
think in a way which adds to the productive f ocus of the
place, by the big rail, road and port infrastructure
development programs which will provide work and make
Australia stronger and better.
SATTLERi But are you doing it for us or are you doing it
to save your own bacon?
PM: Obviously we are doing it for the country.
There is no election campaign on now,, it's 15/ 18 months away.
SATTLER; You are kidding. The election campaign is
underway it got underway when Dr Hewson delivered his
atatement, surely.
PM: Let Dr Hewson go for his life. The fact of the
matter is this government has continually moved through these
large economic changes in the economy and now we are on to all
these so called micro. changes like airlines, ports, wharves,
rail, road and it is these things which we think we can do
more with and we have now as a result of this package, for
instance you will be able to bring freight into Perth and take
it right across on a standard gauge railway to Melbourne arid
Sydney, and vice versa. We will be building ring roads around
the capital cities so that the cars are not driving right
through the middle.
SATTLER: But i have to ask you why have you waited till
now, just one year out from the election?
PM: We have been doing a lot of this over time.
The rail freight corporation we did a couple of years ago.
What we are doing now is quite dramatically adding to the
stock of capital which that will have and its charter to do
more things. Airline deregulation we started on a couple of
years ago we are now completing it by letting Qantas f ly
inside Australia and the domestics f ly out. I mean this is a
continuum of change but again it's the difference between
Labor, the party of builders in this country, it always had to
build the bicr national projects and do the big national things
and the coalition which is basically about a miserable
exercise in accountancy.
SATTLERt But Prime Minister we have had eight Keating
budgets and we have had a series of economic statements
inbetween and we have had with all of that the worst economic
slump since the Great Depression.
PM: Yes but you also had eight years of phenomenal
growth and phenomenal employment growth.
SATTLER: well what went wrong then?
P14: well what went wrong was that in the end there
was too much lending and spending.
SATTLER: You were the government why didn't you stop it?
PM: But this was an international thing. Banks
create credit. We had credit growth running at 20% a year in
1988/ 89 and 1987/ 88 and this was happening also in the USA, In
Britain, Canada and Europe and that is why now they are in
recession for the same reason we are.
SATTLER: So you are saying Australian banks included are
out of control, out of government control?
PM: Well they were. We are now down to credit
growth rates of about 1-2% a year, we were running at 20 and
that's what happened. I mean in 1989 we had spending running
at twice the capacity of the economy to produce. Now if I had
been any Treasurer worth his or her salt the only thing to
have done was to try and pull it back so that is was
affordable and that's basically what we did. But the reason
it got there was not because of any extravagance by the
government. Remember this/ Howard in those years I cut the
public sector back to produce large surpluses, this spending
happened in the private sector. But the main point is that we
had f ive timeB as much job growth in the first eight years of
this government as we had in the last seven years of the
former government, the Fraser government, we had twice as much
economic growth in the 80s as we had in the 70s. Now we have
PM: ( cont'd) had an 18 months to 2 year slowdown, a
recession, what we are now doing is getting out of it to get
back on with the growth which Labor has always been committed
to.
SATTLER: You are talking about producing 800,000 jobs
but what is the good of that if more than 800,000 fall out the
other end of the pipeline, that's what has been happening in
the last 2 years hasn't it?
PM1 No what we are saying is that unemployment will
stabilise and fall and with
SATTLER: I hope so because it's 11.3% over here at the
moment. PM: Well ok but the fact of the matter is we have
got to do two things. You have got to have the economy
running fast enough to take up the jobs of the new entrants to
the workforce, that's the school leavers as they come on and
also take up some of the unemployment which is now pooling in
the economy so you have got to be running the economy at some
speed. SATTLERi Ok, but what about immediately for instance
cutting immigration because how can we keep bringing people
into Australia and putting them on the dole queues?
PM: Migration is a long term program for this
country. Migration has made Australia bigger, stronger, it's
grown faster, it's wealthier as a result of it.
SATTLERt In the good times.
PM: No, in all the times. What the program does is
that we lift it and lower it to look in terms of the economic
cycles and that's why we lifted it in the good times of the
and we have been lowering it ever since.
SATTLERt Well doesn't it need to be lowered even more at
least in the short term?
PM: I think it will be lowered more.
SATTLERs When?
PM: When our annual review is completed in April.
SATTLERi In April and you will make an immediate
decision? PM: We do it every April, we make a decision every
April.
SATTLERa So we can expect you think to see some sort of
reduction in immigration in the short term
PM: it was 140,000 at its peak about 18 months or 2
years ago. This year it's down to 111,000, it's down to
111,000 and we have got the review procedures on now looking
to business. The people that mostly argue for higher
migration intake is the business community who look for the
skills they need and skills in demand and it's the skills in
demand and business migration program which has been part. of
the general ' buoyancy in the migration issue.
SATTLER: But surely you would want young Australianst to
take up those positions. I mean you are creating all sorts of
new positions in technical and further education to train
young Australians. Surely you would want business to take
them before migrants?
PM: The answer to this is economic growth and
that's why in this year we forecast at ' 92/ 3, that's from July
1 this year for this 12 months following. July 1 this year we
have got 4.75% growth a year. Now f or this year we have had
zero growth, the economy has just stayed where it is but we
will have wa think a conservative 4.75%. If you look at any
of the graph of this over the years, employment and growth
in the economy are tied almost together. When growth in the
economy goes up employment goes up, when growth goes down it
goes down so if we get growth in GDP up and we get growth in
the economy up we will get growth in employment which will be
enough to take up the school leavers, chop into unemployment
and handle what comes from the migration
SATTLER: Yes but Prime Minister not surprisingly tha
economists are jumping out of the woodwork today and one of
them a Chase Manhattan economist reckons your forecast for
growth in the first year out of a recession are too
optimistic. PM: I was Treasurer in 1983/ 4 coming out of John
Howard and John Hewson's recession and we forecast 6% growth
through the yea~ r and we got it, we got 6.1% in fact.
SATTLERt ' And you will get it again.
PM: No we are not even seeking that much we think
we will get 4.75, that's what I say
SATTLER: I mean you will get your prediction?
PM: Yes I think we will get our prediction, yes I
think 4.75 is a conservative number. Look, a bank economist,
understand this Howard about these fellows it's off the top of
the head
SATTLER: SATTLaEreR : nYootu a big wrap for the banks are you.
PM: I They don't have an econometric model, this is
put together by the Treasury, the Reserve Bank,, the
statistician,~ it's the most complex national income
forecasting model in the country, no economic commentator in a
bank has such servicing available. It's just an opinion, just
basically ignore them.
SATTLER: Can we talk about the easter egg worth $ e317
million to people on family allowance supplement. The cynics
are saying lie is doing this just before the by-election for
Bob Hawke's old seat of Wills
PM It's got nothing to do with Wills, look this
was decided a couple of weeks ago before Bob even announced he
was retiring.
SATTLERi Only a couple of weeks ago?
PM: In the Cabinet process a couple of weeks ago
when we decided this for the Statement.
SATTLER: What do you expect people to do with that
money, go and have a good time for a week?
PM: I think they will basically spend it. What we
needed to do before the big railway, road, port projects build
up through 1L992, we wanted to get the profile of spending up
in the early part of the year. Now how can you put money into
the economy to give a stimulus to it in a sort of one of f way
and do it early. It's not very easy. See if you do a tax cut
it's very slow it comes out per week and it's very slow.
SATTLER: But what do you want people to do with the $ 125
or maybe $ 250.
PM: They will do with what they like but the people
who are getting it, families, people on family allowance and
people on the family allowance supplement, both groups,
generally what they will do Is spend it.
SATTLER: What in one hit?
PM: I don't know but I think so.
SATTLER: Have one big week.
PM: They will spend it in one hit or maybe little
hits I don't know but they will certainly spend it. we took
the decision we needed a fiscal stimulus early in the year and
we said who will' we give it to and we said people who can use
it and need it, families. NOW if it were John Hew-son he would
give it to the top end of town he would throw it to the
business community or the millionaires, we are giving it to
families.
SATTLER: But it's pretty short term thinking isn't it?
P14: No it's about trying to get spending moving in
the economy. It's simply about that task, it's about an early
injection of funds to get spending moving, that's the point of
it. Now if you say to yourself well look that has to happen,
and I believe it does, how do you best inject some money into
the economy and the best thing is with a one of f payment. if
you make it per week it's too little it doesn't have the
impact, it takes 12 months. V'ou are doing over 12 months what
you can do in a day.
SATTLER: Apart from the consumption tax what is the
difference between your policy and the Liberals?
PM: First of all". the main thing is this is a big plan to rebuild
the basic infrastructure of Australia. Taxing income or
expenditure a la Dr Hewson's consumption tax, taxing it as
income or whether when you spend it will make no difference to
the Brisbane, Sydney, Melbourne, Adelaide, Perth railway line,
it will make no difference to the ports around the capital
cities, will make no difference to the roads, will make no
difference to the national highways, will make no difference
to technical training for children, for kids, will make no
difference to' any of these things it is basically an exercise
in accountancy to tax the low paid to give a tax break to the
high paid. It's got no national vista about it, that is the
difference here and he offers, you go and pay this 15% slug on
everything you put in your mouth, everything you put on your
back and he offers you a 30% marginal tax rate. We are
offering the same 30% marginal tax rate but no consumption
tax, no 15% string attached.
SATTLERt But you have got a hidden sales tax?
PM1 What do you mean hidden?
SATTLER: We go to the supermarket and there are sales
taxes on goods like soap and we don't know what it is.
PM: But not on food, not on food, not on clothing.
I mean the f act, is that wholesale sales tax has been there
right through the Commonealth's history from the 30a and the
fact of the matter is it works and it works efficiently and
you can decide what's low taxed. Like last night we decided
to reduce the tax on motor cars we took it from 20% to
SATTLERs To save Joan Kirner in Victoria?
PM: No no to give the car industry a f illip, to
give the car industry a fillip. Do you realise that the
average age of our car fleet is 17 years. We have got one of
the oldest vehicle fleets in the world because people find the
price of cars too expensive and they are belching out leaded
PM: ( cont'd) fuel emissions, they are expensive for people to
run and so we are trying to give the motor vehicle industry a
bit of a f illip. But you can do that if you have got a
wholesale sales tax to change and that's why the wholesale
sales tax has been useful. But the main point is we will be
saying to the great body of Australian taxpayers from $ 20,000
to $ 40,000 we will give you a 30% tax rate the same as Dr
Hewson but no 15% consumption tax.
SATTLER: Prime Minister the last Budget, John Kerin's
Oudget was a. disaster and is now largely irrelevant. T just
wonder whether this Atatement will obviate the need for a
' Budget in August?
PM: No no,, and it wasn't a disaster it wasn't a
political success but it was in economic termsr it was a very
carefully crafted Budget. No we will still do another budget
this is not the be all end all.
SATTLERs You are saying it was as the budgets that you
produced? PM: Politically it never had the impact but in
terms of its's economics. I mean the judgement was that the
economy was recovering and their judgement was wrong,
therefore the Budget
SATTLER: Who judged it was recovering?
PM: The government at the time. I wasn't part of
that process.
SATTLER: Well the government at the time was not much
different to the government now, the sanme advisers. Have you
got rid of them?
PM: Well there is a different Prime Minister there
is a different Treasurer and different views are being taken.
SATTLERs And different advisers?
PM1 In some cases yes abesolutely, in some Ca13es,
but not in the key departments. But the point is simply, but
that doesn't make much of a point though Howard. The fact; is
Australia does need a stimulus. Now I notice Dr Hewson
running around saying this is a, he is using some ridiculous
expression like-it's a Bankcard proposition it's sort of you
know-SATTLERs That's the one, Bankcard.
PM: We can't afford this. When he and John Howard
cleared off, cleared their desks out in 1983 and left me that
wreckage to pick up they left me a $ 10 billion budget deficit
PM: ( cont'd) at the time, just on $ 10 billion when the budget
was about $ 50 or $ 60 billion. Now the budget is over $ 100
billion this is 62 billion, two in one hundred compared to ten
in fifty or sixty. Now the fact of the matter is this is the
right thing f or the government. I mean he is the only parson
in Australia saying nothing should be done. The banks said
the government should spend about $ 2 billion,, the ANZ Bank
said it, Westpac said it, the business community have said it.
The business community have said they want faster depreciation
rates, Hews-on said don't talk to them, don't talk to the
business community, the Prime Minister shouldn't be talking to
the business community they only want a tax break, nothing
should be happening. He would prefer to see the country sink,
live in more troubles, stay in trouble than see the government
do something about it lest it reflect well on the government.
SATTLER: How long before any of your plan will start to
work. Will it start to work before the next election because
it if doesn't
PM: That was the point of the payment to families
it will start to work from April.
SATTLER; Yes but will it reduce unemployment before the
next election?
PM: We think so.
SATTLER; Because if it doesn't you are in deep trouble
aren't you?
PM: I think our job is to stabilise Lhe rise in
unemployment and to see the trend head down.
SATTLER: And do you think that will happen before the
next election?
PM: I think so, yes.
SATTLER: Why don't you just call an election now. I
mean all the major policies are out in the open, why don't you
just let the people decide now who is best and then you can
get on with it?
PMt W4hy, the parliament doesn't expire until June
93.
SATTLERt Would you be afraid to go to the polls now?
PM: It's not a matter of being afraid. The point
is we won an election just on two years ago and this
parliament has got a long way to go and I think the public
would take et dim view of parties going to elections at their
whim and caprice.
SATTLER: Why won't you debate Dr Hewson publicly on the
respective packages now they are both out?
PM1 I debated him in the House yesterday. He came
in yesterday petulantly and moved a censure motion on me for
having dare, point to the fact that the principal
economitrician who examined his GST Fightback proposals
pointed out that under all of his scenarios GDP or the product
of the economy falls, unemployment rises and inflation rises
and of course having been stung by that revelation from one of
his own authors he then jumped in petulantly yesterday and
called me a . iar, a cheat, a distorter
SATTLER: He didn't, did he?
PM: He did.
SATTLER: He used words like that?
PM: And did just exactly what I said a day or so
ago, it would take him a day to turn nasty once there was a
bit of pressure on him. This guy has had a dream run he has
been wandering around, see he actually thinks that politics is
a very easy caper. He dropped Fightback on the table, there
was no response from the overnment, he has wandered around
for a couple of months with people saying well yes, what is
your views about this Dr Hewson, what is your views about that
Dr Heweon, all of sudden I turn up and say your principal
economic author says this reduces GDP, increases unemployment
and increasen inflation. What's the point of Fightback and he
said this is a shocking thing to say so he moved a censure
motion on me.
SATTLER: Sounds like he has pinched your acid tongue and
you have become contrite.
PM: No what he has done is run true to form and
that is he is a very sensitive, brittle little petal and once
you go and touch him or say anything about him or criticise
him, I mean the old jaw locks and the face gets mean, well
it's going to get a lot meaner before I am done with him.
SATTLERt You are back are you, are you back?
PM: What do you mean am I back?
SATTLER: The real Paul Keating, not this one that is
sort of is wandering around the place acting contritely.
PM: No no don't give me that stuff about acting
contritely. Look I always
SATTLER: I couldn't believe what I saw after you got
elected.
PM." No no but the thing is you don't see me up
close, lioward. I mean at the press conferences here in
Canberra I have always been the one that had to entertain
them, teach them, cajole them, but what always got run was the
second grab on the balance of payments or something. But
the discursive Paul Keating, the talkative, the one that sort
of you know has to sort of get a result out of the Cabinet and
the government and the press gallery and what have you, thatoften
is never in my case very rarely been shown to the
public, What you have seen of me of the last few months is me
really as I am. Well a broader side of me, a broader view of
me rather thian simply the 30 second grab on the monthly
balance of payments.
SATTLERs An all round nice guy.
PM: Well I would like to think so dear boy, I would
like to think so.
SATTLER: Now while you are there i have to ask you one
question, you can tell me to go to hell or whatever, but over
in England i have to tell you and you know that the gutter
press over there are saying you are an awful person who
breached protocol when you laid your hand on the royal
personage's waist. Did you know you were breaching protocol?
PM: I was not really laying a hand on Hler Majesty I
Was Simply guiding her from down a long corridor to the people
I knew that she knew like Dame Patty Menlzies on one side and
there was John Gorton on the other side and she wasn't
expected to know where they were or who they were and I was
trying to sort of, which I succeeded in doing I think, that
was point her along and I think she had a very interesting
morning, she enjoyed it immensely.
SATTLER: I have to tell you that as a result of that
calls to this radio station overwhelmingly said Paul did the
right thing.
PM: Did they
SATTLER: You got more votes yesterday for that little
act than all of the economic statements and budgets over the
last nine years.
PM: Come on.
SATTLER: True, true.
PM: That's a bit of hyperbole there, a bit of
hyperbole there.
SATTLER: SATTLEwRe: Tdriude , p olls on it.
11. P? 4: You did.
SATTLERt Yes.
PM: Well anyway the thing is I think Her Majesty
had an interesting visit to Australia and the point I made to
some of the sort of forelock tuggers and British bootstrappers
around here like Dr Hewnon and Mr Howard and others is that
Her Majesty is the Queen of Australia and in fact The Age said
it very nicely in an editorial yesterday. It said when the
Prime Minister ' addresses the Queen he addresses her as Queen
of Australia And it is entirely appropriate for him to
articulate independent Australian attitudes. I mean she is
not visiting here as the Queen of Great Britain she visits
here as the Queen of Australia and to be saying that Australia
is now more3 independent of Europe, that 80% of its trade is
with the Asia Pacific area, that we are a country making our
own way in our part of the world is of course a message she
understands well. It's only all these sort of people that
would like to be up there sort of you know doing business in
Whitehall and trotting down to the city and picking up their
sort of knighthoods and things. It's all that brigade who are
Baying isn't this shocking the Prime Minister Just actually
talked abouit Australian independence from Europe, isn't this
terrible. I
SATTLERS You will never be Sir Paul Keating.
PM: Never, If you ever see me, for a start
knighthoods are not permitted any more
SATTLERI Good.
PM: But if you ever see me take an award you suay he
has had it, he's gone, forget him, it's all over.
ENDS