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PRIME MINISTERA
TR-ANSCRIPT OF THE PRIME MIN1STER* THE HON P J KFATING MP,
INTERVIEW WITH KEITH CONLAN, RADIO SAN, ADELAIDE,
TO AIR 10 AUGUST 1992
E OE PROOF COPY
KC: Prime Minister, thanks very much for your time.
PM: Good Keith.
KC: I guess there are only two things that matter in a sense at the moment for all of us
-Ih and the economy, and the recovery. But first could I just pass by some of the
topics of the day, so to speak. We've all been troubled as I'm sure you have, by the
news from Yujoslavia, the holocaust as it is now being called. Is there a role for
Australia? Do we have a position as the United Nations?
PM: We've had an immediate role in the peace keeping force and opening up the airport
in Sarajevo to essential goods and medical supplies, and we've had people
Involved In that. That service I think Is coming to an end, either has come to an
cnd over the last day or two or will be in the next day. I think we regarded it as
largely an European matter, wc thought that European forces would make the
difference there, but they haven't to date unfortunately. But I'm not certain
whether any diplomatic solution is capable of being achieved or weather another
course of action will be sought, but military action is being proposed by some
people and resisted by others.
KC: Do we have a position on that?
PM: No, not at this stage. We're not being asked to get Involved in any such thing. To
see, I think, from our point of view is to sec what approaches are made to us.
We've played I think a good citizen's role in the thing to date, but it's not in our
area of influence, it's not In our sphere.
KC: Well, back to local matters, you've been at the ALP Convention privatisation
means Sagasco in South Australia at the moment, it mcans internal disruption,
cries of traitor over tradition, industrial embarrasment perhaps in the future for
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John Bannon. It means Qantas to you on this weekend, does the Qantas
privatisation mean potentially the same sort of problems for you?
PM: I don't think so, I think that people are getting much smarter about all these things.
I mean Qantas is a company which is debt laden and it doesn't have enough equity,
it's been left to trade outside of Australia, not inside Australia. ' This Government is
the first Government ever to actually give it rights within Australia by letting it
acquire Australian Airlines. We can't recapitalise it, it would cost too much
money off the Budget to do so and we're not, I don't think, getting the sort of
management culture Into the thing that it deserves. I think there's got to be a
distinction in the minds of people, including people in the Labor Party, about the
value of an instit ution for its institutional value itself as distinct from Its value as a
government entity. The important this is are we building a better Institution.
Institutions are very hard to create In a country like Australia and when we lose
institutions, for instance in the last decade or so th; eBank of Adelaide disappeared,
we've seen the Elders Pastoral Company almost fold, I mean they are both sort of
Adelaide based institutions. All too often Australian institutions evaporate and go.
What we're trying to do hcre is to take one and build a new one. I had the
privilcge of doing so with the Commonwealth Bank. T'he Commonwealth Bank is
now the largest domestic bank, it was largely an Institution that flew on one wing,
it flew on its big deposit base in NSW, it didn't have the big deposit base In
Victoria. We've now acquired the State Bank in Victoria and sold down 30 per
cent of the stock. Now this was resistcd in the first instance, but it's now worth
150 per cent, 70 per cent of it is worth 150 per cent of what wc started with, we've
created something biggcr and better, we've created a new institution, a better bank.
In the same way this will be true of Qantas. Owning Australian Airlines, giving it
the rights to fly domestically and to make those links to its ongoing carriage to
international services will make Qantas a company that it could never have been.
And the other thing is, I think a lot of people have got a very romantic view of
Qantas. It's got about forty odd aircraft, companies like British Airways have got
400. It's a relatively small carrier but we can make it a successful one, a
reasonable carr ier and a successful one for Australia, Australasia. But it needs
money, it needs capital and I think It needs some private ownership.
KC: ' Prime Minister, the John Bannon Government is looking to the NFP as an entity
which will rise from the swamps at Gillman, it will rise in a lot of other places too
it hopes as a national body. Is it dead in the water nationally as Ian McLachlan
says?
PM: No, I made it clear that we were supporting it by nominating it for funding in the
, one Nation' package, to give it that national support.
KC-But is that tided up or was that really just a little bit of better cities diverted off into
Gillman?
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PM: No, it wasn't. The fact is had we chosen to make purely a South Austraian matter
we wouldn't have so nominated It. Now there is all sorts of things that will cross
the trail of the development ovcr time of the NFP, but I think it Is a very good
opportunity for South Australia and it's one of the best sites in the country. I don't
know a site like this in any capital city with this proximity which Is capable of
being developed. So we've played our role we provided the funds to get the
basic developments started so that there Is an infrastructure there of which the
Government of South Australia can use with private investors developed further.
KC: Finally before we got on to some of the very big ongoing Issues, the Olympics.
John Major's one to bat for Manchester, why not Paul Keating going to bat for
Sydney in 2000?
PM: Well I've just had more pressing things here to do. In the weeks the Olympic
have been on rve been able to put together fortunately, with the help of some of
my coleagues in the States, a ncw National Training Authority, a national
vocational education system to sit up there beside universities for ever, so to speak,
a revolutionary route and branch change to our education system. Those things are
on the go and to leave them and go to the Olympics was not really a possibility for
me. But I did support NSW, we gave NSW $ 5 million to support the bid, and
better $ 5 million now than $ 5 million later, and I think we have at this stage kept
our options open. I'm told by those who wcrc there that they think that if there was
a poll taken now we'd be in front, that is Sydney would be in front, but it's another
year to go so a lot of water will go under the bridge. So I don't think too much will
be lost in me not being there and I don't know at any rate whether the International
Committee is going to be persuaded by Prime Ministers whoever they are.
KC: Prime Minister, to one of the big on going issues the health issue. I'm not going
to ask you if you're going to raise the -Medicare levy because you won't tell me, but
in South Australia now we have less than half the people we used to have on
private medical benefits and they are flooding the hospital system, we do have a
crisis. What's the equitablc way out of this? Is Dr Hewson right that we ought to
give some sort of tax relief to those who look after themselves?
PM: No, 1 think if you take on the Hewson approach which is to say remember Dr
Hewson went to the Australian Medical Association one Sunday about eight
weeks ago and said you csttecommo~ n e. Now that was a direct way of
saying to the doctors you can charge what you tle, you can add to the national
health bill as you sec fit and the rest of us will pay to cover ourselves. We either
pay directly or we'll pay indirectly through Insurance. This Is not a way of holding
down the national cost of health, this is what happened in the United States. The
United Statcs health care is now so expensive that if you're taken acutely sick to a
hospital, if you don't have that blue cross card in your pocket they turn you back.
They just won't deal with you, they will not support you, they will not care for
you. Now I would hope wc never have that in Australia, that the System we have
gives people access to medical protection, that is consultation with doctors and
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access to hospitals regardless of income. And the Medicare levy which you Asked
me about is for a husband and wife and a couple of kids, I forget exactly the
threshold where the levy starts, but I think it's about $ 24,000, you don't pay any
levy under that, tUnder the scheme proposed by Dr Hcwson Is people would pay a
set price for pfivate insurance regardless of Income, so the low Income family, the
low income person pays as much as the high income person. There is no capacity
to pay augmentative, you pay flat and basically you're paying to keep the Incomes
of doctors how doctors think It should be. Now on the other hand the Gove rnment
has kept the national health cost, the cost of medicine at a very low proportion of
national GDP by largely making certain that over use, abuse, fraud, but most
importantly the fces charged by doctors are reasonable. And so It's on that basis
that the system hangs together, that people can have that affordability and in terms
of public hospitals I think Statcs have got to decide that they should more
adequately and effectively stream people through the hospitals without accruing
waiting lists, only to be answered with the hollow charge well if you're all
privately insured you'll be ok. They wouldn't be ok, they'd just pay much more.
KCC: What about public hospital patients being fed Into private hospitals where the beds
are waiting?
PM: I'm not sure whether they're waiting, but there's no reason why the States cant
accommodate public patients in private hospitals if they so choose.
KC; There's not philosophical divide for you?
PM: In the end, what does a private patient have, for instance in a public hospital? You
can have a private patient sitting in a room, multiple person room, the idea once
that you had your own private room, as a private patient and doctor of choice.
Essentially the way the medical profession operates the system these days, if you
go to a specialist and that specialist is accredited for services the public hospital
and you admit yourself. The greatcr possibility Is in the majority of cases that
specialist will serve you. So people are going needlccsly insuring themselves and
because fewer arc Insuring themselves it means that those who are left privately
insured and in some cases sicker people arc paying a bigger premium because the
other healthier people have left the system. Now this concerns us, it concerns the
Federal Government and we'll be in signing new agreements with the States later
this year, that is renovating the Medicare agreement, to try and deal with this
problem. We will try and deal with it and talk to the States sensibly about it, but
we don't want to throw the baby out with the bath water, say well look there's a
problem in the efficiency of streaming people through public hospitals, therefore
what we'll do is we'll take every Australian person and family and charge them
through the nose for health protection so that in the end what we're really doing..
I mean this is what really gets me about l-cwson, he's so savage on unions, he
wants to cut young peoplc's pay to $ 3 an hour, he wants to cut workers to three
quarters of their incomes, he thinks unions are an abomination except the doctors
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union which he goes to on a Sunday and hands over to them the check book of a
nation and says write your own check.
KC: When It comes to those agreements later in the year, will be there some relief for
what is now a public hospital crisis here. We are talking about going backwards
by several per cent, closing hundreds of beds. Is there relief In sight?
PM: Keith, the Commonwealth is prepared to talk sensibly to the States about
improving that position, but it Is going to be in negotiation and if I were to say to
you look, this is what we are prepared to do, the States would simply put that
straight in their pockets and come and ask us for something else. T1hey've got to be
in this too, it's no point in them simply weighing In the Commonwealth for
inadequacies in the management of the health system across the country, rm
talking about South Australia, but across the country. So there is a role I belief for
private hospitals, there is also a clcar role for the public hospital system and I think
the thing that worries people most and particularly the aged, that is for elctive
surgeryy which is necessary like hip replacements for instance.,
KC: It's really a crime to call it elective isn't it?
PM: T7hat's right. It's necessary surgery, it may not be acute, immediate, but it still is
necessary and those things I think we would like to try and deal with.
KC: Prime Minister to the economy and ' One Nation': we know about now the pluses
for tax payers, we know about the tax deductions to come, we know about big
national projects, some more announced on the weekend in Adelaide, the Indian
Pacific project and so on. That's all based, is it not on money coming Into the
Federal coffers which would be as a result of healthy growth in the economy over
the next three years. You've had to back off some of those projections, so what has
to go on the give away side?
PM: Keith, in the 1980s when growth was strong and privatc investment was stronger
than the nation could stand and the demand for goods and labour was higher than
we could afford and we were satisfying a lot of it by imports. When we didn't
need a public stimulus, this Government turned the Commonwealth's budget into a
surplus. In other words we withdrew the fiscal stimulus from Commonwealth
spending and we've put about $ 20 billion away In a surpluses, In the savings
account of the country. We're now using them for when we nccd to use them.
KC: Didn't we pay off the foreign dcbt with that? Isn't that what we said we were
doing at the time?
PM: No, not the foreign debt, we just rcduced the Commonwealth domestic debt. But
we've got it now down to v'ery low levels, in fact if we were to produce surpluses
for three more years we will have no Commonwealth debt whatsoever. Tuat is, no
bond would have been outstanding from the turn of the century onwards. What
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we're saying now Is with the private economy slow with private Investment down
this Is the time for public Investment, but not only In a stimulatory sense, but In a
micro-economic sense as well. It just matters to Australia to have a standard
gauge railway from Perth to Brisbane via Adelaide and Melbourne, I mean as a
trading company it simply should be therc for large containers or heavy items that
need to be carried around the country or even light ones which can be carried well.
There is a case for developing an electricity grid, it's not going to be done by a
private company, the railway is not going to be re-established by a private
company. This notion that Dr Hewson has with the that it's all private Initiative,
private reward all we will.
KC: But these arc arguments for maintaining the Infrastructure side and so on.
PM; It's not just maintaining them but doing them when private investment is down.
KC: Ycs, and maintaining these projects within your ' One Nation' package. But now
that the growth figures aren't there, thc critics say you could drive a truck through
it because you won't have thc income to do It.
PM: No, what we're saying is thc deficit will be larger than we envisaged in February.
KC: And that's dangerous because the overseas markets look at it and say..
PM: I don't think its dangerous because in this sense, I mean it's there naturally, the
Federal Budget's a shock absorber, it's a cushion, it's a buffer at thc end of the
station that when the economy is languishing and you want that extra stimulus, it
cushions things by lower reccipts, higher unemploymecnt benefits, higher outlays,
higher spending. In other words in cushions the shock. That's what it should be
there for, it should be there doing. Now we'll carry a bit more debt,
Commnonwcalth debt than we envisaged in February, but again, our debt to GDP,
to the Commonwealth is very low by world standards.
ICC: Some want you to go further, some including traditional Labor voters who phone
say we don't want tax deductions now, this country nceds so much of what
you're talking about that we'll forgo those. What's your response to that?
PM: think you've got to find a balance betwecn those things. Two weeks ago we set
up this National Training Authority. As I said earlier that will revolutionise the
education system of this country. We will develop a system which we'll set beside
the univcrsities for a root and branch branch change to the education system. It
will cost us some money, but it is money well spent and It Is the role for
Govenrncent. This is what find curious about the Librals. Dr Hewson Is saying
' I want to run the Government so the Government can do less, so the Govcrnment
can withdraw from the problem'and will hide behind this sort of ideology, if you
throw enough money to the wealthy and to the companies they'll all get out thcre
and do things and in the doing of it pull the rest of us along. It won't happen,
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companies wouldn't rebuild the rail highways of Australia, they won't build the
road highways, they won't refurbish the ports, they won't build a national training
authority, it will only be done by Government. So there Is a role for Government.
What I think the Labor has done this decade, it's done two things. It's for the first
time and the great irony of all this it's taken a Labor Government to get Australia
an open market economy, but it's done it with a social heart, it's done It with a
heart, theres a social policy grafted on to it: access to health protection, access to
education, aged care, child care, occupational superannuation. We've taken the
place along together, forwards together and the notion that therm's no role for
Government, that you drop out and if there isn't a quid in It for somebody then it
shouldn't be done, will mean that most of the social and micro-economic things
we talk about, rail, road, air just wouldn't be done. I don't believe we can be the
sort of country we need to be, that is an efficient trading country with an educated
workforce, without that public investment and all those things.
KC: Prme Minister, you're talking about the heart around the country, that's the
difference you're telling us between you and the Hewson alternative, but to the
mature adult full time workers or the ones who would like to be who are out of
work at thc moment, some 60-70,000 of them in South Australia, wheres the heart
for them? Where's the heart for the kids who go through your smart country Idea,
who go through the training authority only to come out the other end to find that
the job that is offered, if there is one, is part time, is casual, Is not Career orientated.
What's in it for them?
PM: This may be true in some cases Keith right now, but if you look at the 1980s it was
not true, the kids who qualify themselves in the 1980s found themselves jobs. I
think a lot of Australians look the unemployment is sad, it's to be regretted, that
we haven't been able to keep the growth in employment going. We are sharing
this position with just about every other comparable country, Britain, United
States, Canada, Japan, Germany, France, they are all in the same position, all
growing less than two per cent for the current year as we've been. We kept most of
the gains of the 1980N, people I think just focus on the fact that in 1983 when this
Government came to office the work force was six million In size, today It Is 7.6
million, it's over twenty Five per cent bigger. We've largely kept those jobs, gross
domestic product the size of the economy In 1983 was 200 billion. Today it is
over 400 billion. T7here has been a huge impetus to growth and wealth In the
1980s. What's happencd is that the growth for the last 18 months has stopped. We
haven't been topping It up, we haven't been taking up the ncw entrants to the
workforce. By and large we haven't lost most of what we created in the 1980s and
we've kept all the social policy up there as well, the childcare, the Medicare and
the child support agency and home and community care for the aged, 25 per cent
AWE for the pension, occupational super, all those things are there industry
policy, award restructuring all those great advances have been theme, what's
stopped is employment g. owth. But once we gct that started and in the last two
months we've seen 86,000 job growth and certainly unemployment has risen in the
period because more people are looking for work, but at least we are starting to see
% b sje.. S. Pointaa.
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that employment come throush now and if it comes through more strongly as I
believe it will over the course of this financial year then Australian will be going
back on the road to being aspin, a more fully emiployed society, but one where
we're not letting anybody fall behind. We're not taking the view that Dr Hewson's
saying, if you're on unemployment benefits after nine months, sorry you're out,
down to the St Vincent de Paul or Salvation Army. We're not taking that view, we
believe that a whole country has got to move together and stay together.
KC: Prime Minister, when It finally comes to the campaign, we are on about the image
it's you versus the Doctor and it's going to be that way until you the name the date
until you come to the election. Is really the best chance of this Federal Labor
Government that the Liberal Opposition will once agan shoot itself in the foot and
that's why you're there now really, they shot themselves last time. Is your only
hope that Dr Hewson won't hold the troops together, won't hold his vision
together,
PM: No, I think these days and it has been for many years now that people basically
vote on the parties. I don't think matter all that much in the way in the end the
national tally is taken. I think people see the parties for what they institutionally
stand for. Dr l-ewson has basically one policy. It's got two prongs. One is to
increase prices, higher prices through a consumption tax and the other is lower
wages, abolishing awards, cutting rates of pay. I don't think that making people
poorer, making them pay more is a policy. It's not going to change education,
health, you just mentioned hospitals, not going to change that, not going to change
enterprises, not going, to make thc place more efficient, it's going to produce
rancour, division, disheartening and for what? To guarantee that those who've
already got a buck get more and those who haven' t or who are unemployed gct put
to the back of the queue.
KC Or is he offering the short term pain that would see us go into the same ranks as
New Zealand which is now on very high, if not at the top of the competitive list
according to some of the world forums?
PM: Let's just make this clear. We had more growth in Australia in the 198N than
there is total GDP in the New Zealand economy. When I was Treasurer we
provided more growth than there is total product in their economy. They have
about the same number of people in work today they had in 1983, we have 25 per
cent more people in work today than 1983. Forget New Zealand as a comparison.
It doesn't matter to me New Zealand. If Dr Hewson wants to run over there fine,
but let everyone understand what happened over there. A generation was left
behind, this didn't happen In Australia.
KC: Prime Minister thanks for your time today.
PM: Thank you very much.