TEL: 24. Aug. 92 18: 08 No. 018 P. 01/ 0.
PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P J KEATING MP,
DOORSTOP, COLLINGWOOD FOOTBALL CLUB, 24 AUGUST 1992
E& OE PROOF COPY
J: Mr Kcating, is this the first of many regular occurrences in the State election
campaign by you?
PM: Well, there will be many and they will be rcgular, probably, yes.
J: How often to you intcnd on coming here?
PM: Well, I don't know, I havcn't got the itinerary straight out of my pockct, but short
of that it will be a few.
J: Do you bclicve you're an asset In the Victorian election?
PM: Wcll tbc national economy is on the risc, we saw that with the National Accounts
a wcck or so ao. Wc'vc just brought down a Budgct which I think most
Victorians should feel happy with. I mean, wc'rc expanding the public sector at
the moment, wc're expanding spending, we're lifting spending on pensions and
Medicare and jobs, in particular. Our opponcnt, Dr Hewson, wants to cut the
Budget by $ 7 billion, so he will send the rccovery into a flat spin. It would go
down and of course Victorians would hurt as a result.
3: Are you worried about being associated with Victorian Labor, which is historically
unpopular at the moment?
PM: Well rm happy to be here, I can answer that.
I: But do you think the Victorian Labor Party dcscrvcs a full tcrrn in Govcrnmcnt?
PM: Yes I do, of course I do.
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J: The Victorian economy is not going very well at the moment, and the Government
Is rather tarnished. Are you worried that this may have some rub off on your
Image?
PM: The fact of the miatter Is this elction will come and go long before a Federal
election, so I'm pleased to be involvcd. But most particularly pleased to be in
Victoria propagating Labor's message.
3: So this election Is suitably distant from your going to the polls.
PM: No, no. you're seeking to nmake an implication that this will have some sort of
Implication for the Federal election, Well, fpso facto it can't because it's separated.
3: Mr Keating, taxes.
PM: Well, wc're the people who are offering tax cuts in 1995-96 without a
consumption tax, and we went out of our way to make it clear that fiscal policy
could afford thosc tax cuts to be paid. On the other hand, Dr Ilewson can only
provide tax cuts with a consumption tax. We're offering exactly the same tax cuts,
same rate 30 per cent at $ 20,500, no consumption tax. He Is saying 30 per cent
at $ 20,500 with a consumption tax.
J: Well why would the explanation of the withholding tax only become clear today?
PM: No, thc thing is thcsc arc nmcasures which we may not need to adopt, or only somc
thereof. It just depends on how fiscal policy is. But I just make this point,
whatever point fiscal policy may be at in 1995-96, whatCVCr things the
Governmnnay need to do to make fiscal policy tighter in 1995-96. so too does
the Opposition. So, Dr Hcwson has a 10 billion funding task for his tax cuts
which hc says hc'l cut from public spending. You can just imagine how
Commonwealth outlays, particularly in the social arca, will look with a $ 10 billion
Cut, and he's got to ind another couple of billion for the starting point because
whatever is our starting point, would he win an election it would be his starting
point as well. So how is he going to find a couplc of billion?
J: You have told us how you arc going to makc a decision whether the adoptions arc
needed by the time of the election. Is that practical? Surely you won't know that
until 1994 or ' 5 or whatcvcr.
PM: We can make thc details of it clear at any time that suits us. But again, we've
taken a conservativc approach, that is wc want fiscal policy to be tight. Thc
Opposition is urging, also having a tight fiscal policy so if it docsn't like thesc
measures, what measures does it have in its back pocket, that Dr Hewson and
Mr Reith have not told us about, where they will reign in fiscal policy In 1995-96?
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I mean, it's not good enough for them to say look, this is the Government trying to
tighten up the Budget for 1995-96 with tax cuts, and say wc don't have to do it.
Well of coursc they have to do it.
J: How will you be in a position to judge by the time of thc next election whether
you want to keep these options on the table?
PM: Well, look we have thc option of explaining what they would be in the event of us
adopting them.
J: But if It's appropriate to be conservative this year in your forecasting, why not next
year?
PM: Because, well the conservatism is in the fact that wc want what we're making
clear to everybody Is we arc determined to pay thcse tax cuts, that they'll be paid
without a consumption Iax. But at the same we want fiscal policy in good shape,
we want the Budget in good shape. So what we've Contemplated hcre, what we've
flagged here is tidying up basically existing taxes, existing compliance measures.
J: ( inaudible)
PM: Well, I'm not here to be
3: Are you annoyed about the political advantage the Opposition seems to have
gained in thc post-Budget period particularly over their campaign on secret tax
which have only been explained today?
PM: The thing Is, if it was secret you wouldn't know about it would you? ipso facto if
they were secret you wouldn't know about them. T'hey are not secret because they
arc In the Budgct papers. Now It's not for you to be parroting the Opposition's
mindless phrases. Thicy wcrc written in the last paragraph of onc of the relevant
text from thc Budget, I mean it's been quite clear. But the point about it is this,
people don't senm to understand this point, the consumption tax will equal half the
revenue of thc currcnr income tax half; 15 per cent on food and clothing and
services is actually in terms of revenue half of the current income tax. Dr Hewson
want's to put a tax equal to half of the current income tax into place and at the
samec time still then have to cut $ 10 billion out of social security, health and
education to pay tax cuts. we're doing none of those things, we're saying we can
afford a 30 per cent tax rate, cutting thc middle incomes without a consumption
tax, but we'll need to do a few sensible house keeping things to make it happen.
J: Mr Keating, if you want to keep [ 1isca0lj c ii . ht, does that mean you're prepared
to loosen monetary policy to boost the economy if it looks like it needs boosting?
PM: Well we've been looscning, haven't you noticed? We've been loosening monetary
policy on 13 consccutivc occasions since January 1990. Rates are now, let me
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remind you, 5.75 pcr cent for 90 day bills, or haven't you beard? They arm down
from 18.5.
J: Can they go lower?
PM: Here we go, there's one in every group, isn't there. You know, doorstop monctary
policy. OK, wcll if they can I won't be telling you.
J: Why not?
PM: Because you're not entitled to know at a doorstop.
J: Mr Kcating, what chancc do you giveMr'sKinier at winning this election given
the polls?
PM: Well look, I think the alternative with this sort of mindless, ideological, sort of
heartlessness of the current Liberal Party, where nothing matters only but the
market, nothing matters where rich people, other than to allow rich people to
succeed, where we now throw the rights and protection of workers via awards,
holiday pay, sick leave, all the rest, out the door, I think a lot of Victorians will
start to think twice about that sort of policy approach. And given the fact that they
saw Dr Hcwson's rabid, almost frothing, uncontrolled Budgct reply last Thursday
night, which had no substance and was all about idcological rantings, I'm sure a lot
of people arc quite frightened of him. And they ought to be.
ends