PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P 3 KEATING, MP
PRE-RECORDED INTERVIEW WITH ALAN JONES, RADIO 2UE
18 AUGUST 1992
E OE PROOF COPY
AJ: Prime Minister welcome.
PM: Thank you very much Alan.
AJ: Prime Minister, first thing I must just say is
congratulations on the presentation. This certainly
is the best presented set of Budget papers that we
have had. Something has changed has it?
PM: Well we try and improve them over the years, but I
think we have made a quantum leap in the
documentation this time, what are otherwise quite
complex concepts and numbers are presented simply in
graphic ways which I hope will just make, again, the
continuing improvement in the literacy of
Australians and economic policy.
AJ: Yes well people are frightened by the Budget papers,
but I can just say to our listeners if you are
interested in reading it, it is intelligible. Can I
just take the first point then, it did seem to me
that when you and Mr Dawkins opened up and said the
Budget was about jobs, jobs, jobs, that it was a
focus on 11 per cent of Australians, rather then the
89 per cent out there who are working.
PM: Well it's basically about getting employment and GDP
going again and as you know we have just had the
growth numbers from the national account for the
year, they have showed us 1.6 per cent, now that's
good, we are growing but we need to grow faster.
This Budget is about lifting the speed of our
growth, and that affects all Australians not just
that 11 per cent.
AJ: No, but I mean business out there really feels
constrained doesn't it? It doesn't feel any room
yet to manoeuvre, to employ, your wanting jobs. It
really is the most productive sector if we can get
it going. How has this Budget relieved some of the
burden from business?
PM: Well I think they are being relieved in a number of
ways, Alan. One is the low interest rates. Two,
the profit share as you -wilsle e in the Budget
papers is quite high, as high really as the 1960s.
We have got the big tax changes which came through
in One Nation, a very fast depreciation rates for
new investment, and we have got in the Budget itself
an outcome on wages which is really very, very
supportive of more activity.
AJ: But not a word here, you mention in the One Nation
$ 8.6 billion in tax cuts, where are they?
( PM: The tax cuts are here, they are repeated.
AJ: But are you going ahead with that?
PM: Yes.
AJ: Is it affordable?
PM: Yes it is affordable, and it should be because
basically, I mean we say here we shall introduce our
announced personal tax cuts, income tax cuts. But
they start in a couple of years from now.
AJ: So you will go to an election without them?
PM: Well they were never to be delivered this year.
AJ: So you can't be tested on that?
PM: No, no. But we have delivered lot's of tax cuts
since 1983 and all of our promises have all been
kept.
AJ: But is it an election statement when you say we aim
to have zero unemployment which is totally
unrealistic internationally as well as here, when a
growth rate of 3 per cent is really just going to
mop up the school leavers, isn't it at best?
PM: No, we are saying unemployment in this year will be
around 10 per cent. We are not trying to pretend to
be otherwise, but we think it is the right thing to
do in a country like this to keep a focus on
employment. In the ' 80s we achieved so much with
employment, and we have largely kept those jobs. We
started with a workforce of 6 million in ' 83 and we
have still got today a workforce of 7.5 million,
that's a quarter bigger. So, but keeping that focus
on employment as an objective I think is important,
and we should keep it.
AJ: Righto. What a lot of the people listening to you
now don't understand is the $ 742 million has been
allocated here f or training for the unemployed, yet
in the same Budget papers just the Commonwealth
alone has provided $ 2.7 billion for schools, $ 4.2
billion for higher education, $ 900 million for
vocational training, total $ 8.4 billion. Now we are
providing this money for education, is the education
system failing when we find that a whole heap of
people are untrained for the workforce?
PM: No it is not failing, Alan.
AJ: It's double expenditure isn't it?
PM: No, a lot of that is paying for the growth and
participation which we have been able to secure. In
1983 only three kids in ten completed secondary
school, that's now over seven in ten and is now
rising to nine in ten. And then of course, there is
no point in them completing secondary school if a
large proportion are not then streamed into
university, so we have paid for all those extra
places. So, a lot of that expenditure of growth
money taking Australian participation education to
the levels it should have always been but fell back.
We are now well up and above that OECD level, and
that's where a lot of that growth money is going.
AJ: See, people worry about the expenditure don't they?
$ 109 billion, $ 109 thousand million out there,
almost 1/ 3 of it on welfare. Now, are we becoming a
dependent rather then independent society? For
example, you say you are pitching towards out of
work teenagers, but a child now seventeen, or a
young person of seventeen, can leave home because.
they don't like the discipline of the family and get
$ 255.30 a fortnight because they call themselves
homeless. Four of them can go into one home and be
on $ 1,100 untaxed a fortnight. That's more dough
then you can get working. How can we create
incentives to get them into the workforce when it is
so attractive to be unemployed?
PM: Well we created the incentive of keeping them in
school and study, and that's why we extended Austudy
which is the same set of rates as the Job Search
allowance and paid that to university students and
we have now extended into years 11 and 12 for people
at school. And that has had the effect of lifting
participation in school.
AJ: But for the people who don't want to work, and there
are people out there, is the welfare too attractive?
PM: No, no.
AJ: $ 255.30 a fortnight.
PM: Yes, but you have got to be over 18 to get that. I
don't think anyone over 18 is going to say that at
those rates, which are just sustenance rates, that
anyone would want to stay there.
AJ: Well can I just come back to business, because I
mean that is the concern, you have seen, and the
Prime Minister is right beside me so I can show him
rather than talk about it, but that is the tax,
that's the Hewson adjustment that he says he is
going to make, to taxes on business, you are going
to abolish the wholesale sales tax, abolish the pay
roll tax. How politically do you compete with that,
with business when he is saying he will relieve a
burden of $ 20 billion? Independently what burden is
he going to add by the GST, let's just take that
issue there, how do you compete politically with
that?
PM: Look, the income tax in this country is only S50 odd
billion, John Hewson wants to put a $ 30 billion
goods and services tax on the whole Australian
community. I mean it is a monstrous level of
taxation.
AJ: But he is going to take a lot off?
PM: And that is all going to be spent on taki ng away
pay-roll tax and cutting the excise on petrol. So,
if you say to Australians well this is the deal, you
will have 15 per cent on all of your clothing and
your food, and the deal for you is that by and large
the business community would benefit from a
reduction in pay-roll tax and you get lower and
cheaper petrol in a country which already has cheap
petrol. And I think most Australians say that is a
rotten deal.
AJ: But see you move around the business community so
you know this. You have now got the superannuation
guarantee levy, the training levy, pay-roll tax, you
have got a whole range of taxes there, they are the
sector that you have got to get going haven't you?
You have got to get investment in business moving.
PM: Well, Alan, the profit share in these accounts which
in these Budget papers, which you said were graphic
illustration, I am just trying to find the profit
share measure. It's as high as the 1960s. As soon
as there is any voltdme in production it is going to
spring back to higher levels in the 1960s. With
interest rates, bill rates at 5.75.
AJ: Are business getting that though? We have been
through that before.
PM: Yes, some are.
AJ: You see, business are not getting it. What have you
said to the bank about seeing
PM: Bills plus The fact is, if we say to the
business community you have got a competitive
dollar, you have got a competitive exchange rate
mechanism in place, you have got a bill rate of
3/ 4 per cent, you have got lower prime rates, you
have got higher profit share.
AJ: Is the exchange rate competitive yet?
PM: Let me just say all these things. If the business
community says in the face of all that, well I don't
know whether that is enough, you have got to say
well what is enough? I mean what is enough, if a
high profit share, low interest rates, low
inflation, good wage outcomes, good exchange rate
what is enough?
AJ: Well they will tell you though that they are under
pressure. For example, you keep saying here, which
is true, that I think manufactured exports have
doubled, which is an excellent result. But we will
never ever be able to replace the contribution that
the rural sector makes.
PM: No, but we don't want to, we just want to add to it.
AJ: They are in an awful mess aren't they at the moment?
I mean NSW 75 per cent, 75 per cent of them are
drought stricken. There are 70 farmers in one count
of mine, $ 30 million they will never be able to
repay it. Now in a Budget of $ 109 billion, isn't
there room for a greater assistance to the rural
sector?
PM: -We have got funding for drought in there, drought
relief.
AJ: Marginal.
PM: We have got the rural adjustment scheme fundin,
RAS. -Which we also topped up in One Nation as well
as now. I mean the point is Governments can't take
account of the seasons. Look, agriculture has made
a great contribution to Australia. The trouble is
we relied upon it too much. The good thing now is
we now have manufactured exports growing like topsy.
AJ: But you will never be able to replace the
contribution that rural sector makes to our wealth
will you? It has got to be sustained.
PM: It has got to be complemented, Alan. See, what
happened in the ' 60s and ' 70s is that the great post
war trade in goods and services past Australia by.
We were still growing wheat and wool and digging up
minerals. Good as that is, it wasn't enough.
AJ: No.
PM: And you can't employ people in capital cities or in
provincial cities, say get a job in the back of
Queensland or Western Australia, you have got to
have the jobs in town.
AJ: But when rural Australia is strong, Australia is
strong isn't it? That is still true.
PM: Yes that is true.
AJ: It is not strong at the moment.
PM: No, but that is because in a way, in prices the
wheat markets were polluted by European and American
subsidies. The wool industry shot its own toes of f.
AJ: And they were crippled by interest rates.
PM: Yes, but that is gone now for quite a while.
AJ: But it hasn't gone they have still got the debt.
PM: Well some have.
AJ: A lot Paul, a lot.
PM: Alan a large proportion of Australian farms have no
debt.
AJ: What have you said to the banks, I don't agree with
that, but what have you said to the banks though
about passing on any number of reductions in
interest rates that have been generated from the
Reserve Bank, which the business community are not
getting?
PM: Well they have passed on a lot. But I am not going
to be here defending banks. They have passed on a
lot, but they have stuck to too much.
AJ: Yes.
PM: And that is they should have passed on
AJ: To recover some of their debt.
PM: Recover some of their losses from the ' 80s. I mean
they have lent willy nilly, they have suffered
losses.
AJ: And we are all still paying for it.
PM: And made others pay for it.
AJ: And it has effected our economic well being hasn't
it?
PM: It has. We have now seen it come with housing.
Housing rates are now 10 per cent or below, and they
were 17 per cent, so there is a big pass on there.
The prime rates have come down so there is a
substantial pass on there. But the fact is, it is
for the marginal person, who is on a farm, who is a
small business person, is being charged 12 or 13,
14. It is too much. And they should come down
further.
AJ: Right. Have you said that to them?
PM: I have said it and so has Bernie Fraser.
AJ: Just in terms of paying for this, any sleight of
hand here?
PM: No, no.
AJ: Big dividend from the Reserve Bank, $ 2.6 billion.
PM: Alan, You must of have been in the lock-up with the
pointy heads.
AJ: No, I just know which pages to go to.
PM: Look, what happens, these things go up and down.
AJ: $ 650 million up?
PM: Reserve Bank profits go up when they sell the
currency down.
AJ: $ 650 million.
PM: Yes, but it was $ 2.5 billion a couple of years ago,
then it dropped to $ 900 million, then I think it
dropped to $ 400, now it is up again by a billion.
That is just the on's and off's of the Budget.
AJ: -And your asset sales, are you going to get that
though from Qantas and the Commonwealth
Labourites, Australian Airlines $ 1.6 billion, are
you going to get that?
PM: I think so. Well I mean we have this funny debate,
people say you should sell the airlines so they
operate efficiently, and when you put them into the
Budget to sell them they say you shouldn't include
the receipts in the Budget. Look, it is a tight
clean set of numbers, and we started with a starting
point deficit of $ 13.5 billion and we have produced
a Budget of $ 13.4. In other words, most of the new
spending in here is largely paid for by savings
methods.
AJ: Do you thinkc you are hamstrung though by certain
ideological limitations? For example, I know that
John Dawkins has talked about us being a clever and
smart country, everyone has talked about that. But
I have mentioned to you before if your son does not
get the marks that are needed to enter university,
he can't pay to go there. How long can we shut
000 people out of universities, although I noticed
tonight a welcome initiative in relation to open
universities, and studying from television and so
on?
PM: Can I just tell you what that's about Alan. Open
universities means that people who never got into
university, couldn't get the pass mark, but who want
to study away from university and then have a couple
of successful years at that can stream themselves
back into the campus complement on the university.
AJ: It's the only way they can educate university
students in India for example, or the United States
of America.
PM: That is away from the university and, of course, the
way we've got modems available to send back, you
know essays from computers and television and
generally, videos and the rest. It is possible now
to run an education system like that, away from the
actual campus.
AJ: But why should a Chinese student be able to pay to
go to an Australian university and not your son?
Why can't Paul Keating pay to send his son to
university when in fact a Chinese parent can?
PM: Well, I take the view that most kids have a right to
an university edupatio-' regardless of the parents
income. That's the view that John Hewson doesn't
take.
AJ: Right.
PM: I say a kid from a working
AJ: We're not giving them that.
PM: Yes we are.
AJ: No, 50,000 get locked out every year.
PM: Yes but look there's half a million kids today
in tertiary
AJ: More than ever. But shouldn't you be able to say i
you wanted to sell the family car and forgo a
holiday that you can do that and send you kid at
cost to university. For example in your own
electorate we've got that SRA training authority
with that most magnificent assistance apprenticeship
scheme which could be fully facilitated. Now there
are many places there that can't be used, why
shouldn't parents be able to say well look, it
trains them in the best possible skills at Chullora
I'll pay to have my kid go in there.
PM: Look, there's a certain amount of places that are
available for fee paying if you like clients, some
of the universities can now lift their income
independently of the government payments by getting
full-fee paying students. Getting some of those
services sold around South-east Asia is a good thing
for us to be doing. But what we've done is lifted
by 50 per cent the number of places in tertiary
education. We've created the equivalent of twelve
universities since 1986, that's 120,000 extra places
in universities. And the other thing is in
technical and further education Alan, in that great
milestone change of a couple of weeks ago, we are
now with an agreement between the Commonwealth and
the States going to build for the first time a
vocational education system of substance to sit
beside the universities so all those kids that may
not get the university pass mark, but who want a
good diploma or vocational education can get it.
And that's going to matter to those hundreds and
thousands of kids, particularly from working class
areas who mightn't get into university because many
hundreds and thousands will, but those who don't
will now be able to go into a system of substance
and status that just now doesn't exist.
AJ: Alright, one other thing on money in the Budget
papers which upsets people out there, and I don't
think people are as racist as they are accused of
when they make this kind of criticism, but the total
allocation and I've only had a quick chance to tally
it up for Aborigines again, 240,000 Aborigines, over
$ 1 billion. That's a lot of money, that's just the
Commonwealth, now there's a whole range of state
programs as well. Can you understand how people
really get a little upset when there is not money
for other things, but there's an awful amount of
dough for 240,000 every year?
PM: Oh yes, but it's for largely dispossesed people
who've basically had the butt end of what society
can hand out to themi and pull them up to give them
an education and housing and support.
AJ: Do you think they're getting it?
PM: Well..
AJ: Or is it going to a white bureaucracy who is
administer it?
PM: No, well it's now being administered by the
Aboriginal community, A& TSIC is a program, a
Commission where the Commonwealth's funding. You
realise we don't have a Department of Aboriginal
Affairs.
AJ: No, I found it in Prime Minister and everywhere
else.
PM: It doesn't exist you see. The money is paid..
AJ: You hide those figures somewhere where we can't find
them.
PM: No, we pay it straight to ATSIC. We pay it straight
to the Commission, there's the Aboriginal and Torres
Strait Islander Commission and indigenous people run
that.
AJ: But if it is successful, shouldn't each year there
by progressively lesser need? If it was successful,
progressively there should be less need, therefore
less money. We just seem to each year be requiring
more and more money.
PM: But I mean, I don't think when you say successful I
mean, at what threshold level? I mean these are
remote communities often, they've had tremendous
health problems, housing problems. No, I think it
is money well spent and I don't thing we're spending
we've tried to spend as much as we can and we've
increased that by about $ 500 million three months
ago which will be spent over the next four or five
years.
AJ: Just finally, a lot of money for consumption here as
opposed to production in the Budget and there's an
election coming up
PM: Well I'll tell you what there is money in for and
that's for health. I think this is going to be a
very important issue in the election. We've put in
billion, nearly $ 250 million a year for
six years for greater access of public patients to
public hospitals, so elderly people
AJ: I wish we could debate that on another day.
PM: who might have an elective thing like a hip
replacement, they'll be able to get in there and
they won't now be j umped in the queue by a private
patient and I think getting that public hospital
system working properly with full access to doctors
gives a real choice between Medicare and the thing
that Dr Hewson has which is go and pay for yourself
regardless of means.
AJ: Come back to the election, when will there be an
election?
PM: Well when the Parliament runs it course. I think
from our point of view, the longer the Parliament
goes the economies fortunes I think, are on the turn
and for us I don't thing there's any value in short
changing the public..
AJ: You'll go the distance?
PM: This is my intention at this stage, we'll go the
distance yes.
AJ: one final thing which has nothing to do with the
Budget, Mr Kenny, there's outrage out there that a
bloke who could have served for Australia in the war
can be finding himself in the courts defending his
right to certain
PM: Well I think if you live here for 40 years and
you've been part of this community notwithstanding
the fact that technically he didn't have a passport
and the rest that that should be fair enough.
AJ: But see you're a tough guy and that's your
reputation. Why wouldn't you say listen this is
nonsense, will we get this thing out of the courts,
a country that I'm Prime Minister of, no bloke of 68
is going to be put through this.
PM: No, well that's fine. But you see what happened the
Parliament decided about four or five years ago that
there shall be no ministerial discretion in these
matters. There's an Act of Parliament stands
between me and me saying that, that's why. But this
matter is before the AAT, the Administrative Appeals
Tribunal and given the fact that this fellow looks
as though he's got a pretty good case, he's probably
got every chance of getting out.
AJ: So you're confident he's not going to be booted out?
PM:--Well I should hope not. -I mean I think anyone
that's been..
AJ: You wouldn't want that in a country you were running
surely?
PM: I would not, not someone's who's been here for that
long.