PRIME MINISTER
TRANSCRIPT OF 7.30 REPORT INTERVIEW WITH THE PRIME
MINISTER, THE HON. P J KEATING, M. P.
ABC TELEVISION'S 7.30 REPORT
FRIDAY 25 FEBRUARY, 1994
PL: Prime Minister, welcome to the program.
PM: Thank you, Paul.
PL: Now, this buzzword here in Hobart today, competition
policy, exactly what does that mean?
PH: Well, it's trying to expose to all competitive
forces and the Trade Practices Act those parts which
have formerly been protected, such as state
electricity authorities, water authorities, rail and
unincorporated business enterprises.
PL: So, we're really talking about a big change in the
way our economy works, are we?
PM: It's a very large policy matter and the adoption
today of the principles of these competitive changes
is a very large, economy-wide change.
PL: Are we talking about the professions as well,
medicine, law, that sort of thing?
PM: We're talking about the legal profession, we're
talking about some professions, not necessarily all,
but, now, the Trade Practices Act already applies to
many. But, because the Commonwealth can only
legislate in respect of corporations we need state
legislation for unincorporated people. And, then,
of course, the other area in which the Commonwealth
needs the support of the states is in the state
government business enterprises such as electricity,
water, rail etcetera.
PL: Now, what are the gains in here for the community?
If we really get a lot more competitive and get rid
of a lot of these monopolies and really open the
thing up, how do we benefit and by how much?
PK: Well, at the moment a lot of the electricity
tariffs, for instance, accrue to the electricity
commissions, electricity authorities or they go in
state budgets so they don't accrue. You have reforms
but the benefits never go back to the consumer or
rarely go fully back to the consumer.
PL: And if I'm running a factory I'm, in effect, paying
a sort of hidden tax in higher energy charges?
PM: Exactly, so what we're saying is if we really want
to kick along in the nineties, if we've done all the
things in the eighties, in the labour market, in the
general product markets of this country... we've
now got a huge boost to exports but we'll run up
against competitive problems by not getting these
barriers down. Now, there's only one way to get
them down and that's cooperatively. And that's
basically what has happened here today. It's a very
big outcome with the Commonwealth and the states all
agreeing that we should be accepting these
principles and working on joint legislation up to
the next August meeting of the Council of Australian
Governments.
PL: Of course, many state governments are rather hooked
on the revenue stream they get from these nice cosy
little state monopolies, aren't they?
PM: They are, but just as we, the Commonwealth, have
lost the better part of $ 600-$ 700 million a year now
by reduced customs duty because we've long ago now
brought the tariff wall down. Just as we've paid
money for structural adjustment by buying out
employment on the waterfront and other things
there's probably well over a billion dollars every
year now that we spend on structural adjustment
we've lost the revenue, so the states will have to
lose the revenue too.
PL: Yes, but they don't like that idea, do they?
PM: No, they don't. They want part of the
discussion today was them saying, look, we'll reform
in a sense, if you pay for it. And we were saying,
well, hang on, hang on, hang on, there's going to be
a great benefit for you, in your state, by more
employment, more activity in reforming. But, if
there's a peculiar transfer to the Commonwealth in
some of these things we'll consider some
reimbursement. So, we're saying, " Look, we can't
buy the reform for you, you're going to have to do
some of this yourselves. But, when you do it you'll
find just as we did, in telecommunications,
we've done the reform and what's happened? Phone
charges have gone down and services have come up.
The same will happen to you, you'll end up in a
better state, dare I say it, in a happier state."
PL: So, in future this freeing up, this competitive
regime, will mean if I want to start producing gas
and pumping it into a national grid, I'll have
access to these monopolies will I, to electricity?
PM: Yes. For a start you'll have access, you'll have
fair, competitive rules and there won't be the
capacity to draw down what's called, in the jargon,
monopoly rents. In other words the monopolists
won't be able to charge what they like and then give
it to a state government budget or keep it in their
reserves. With competition, prices will fall and
the public will end up with cheaper electricity,
business will end up with cheaper electricity,
cheaper water and, generally, cheaper inputs. And,
our economy can't really maintain the
competitiveness with Asia unless we have the whole
all of the sectors of Australia. Not just
the corporate sector or the Commonwealth, but all of
the sectors dropping these barriers to competition.
PL: And, some of the premiers have suggested that if
you're fair dinkum about real competition you've got
to have another look at industrial relations?
PM: Well, what I have said during the day is this
product market reform will always precede labour
market reform. If you look at the motor car
industry, if we hadn't lowered tariffs on motor cars
you wouldn't have seen the productivity changes at
Ford or General Motors or Mitsubishi or Toyota.
Because they faced lower tariffs and a more
competitive environment they just had to change.
So, the employees and the unions changed with them
but if there is no pressure to change the labour
market reform is just theoretical.
PL: Yes, but if you have closed shops for example, that
doesn't sound too competitive. I don't think
they're talking about screwing wages down but we
have got a bit of a cosy situation still, haven't
we, with unions in the workplace?
PM: Well, they dropped this item on the agenda today.
They didn't want to press ahead with it. I'm
talking about the conservative premiers, they didn't
want to press ahead with it. I think the main thing
is, I said this week that Australia has to have a
cooperative relationship between the Commonwealth
and-thfe states. Through cooperation much can be
done, already a lot has been done. Now, I think
it's fair to say there wouldn't be too many federal
systems where you could sit down as today say in
Canada or in Germany or in the United States and
get the heads of governments to agree to open their
government business enterprises that is,
expose them to competitive forces as in the rest of
the economy.
PL: Especially not over a three hour lunch.
PM: So, this is an effective device, COAG, but, of
course, what underpins it is, essentially,
cooperation.
PL: On another matter, Prime Minister, Mrs Kelly. How
much more damage can the government sustain on this?
PM: Well, again, it just highlights the point doesn't
it? I mean, here's the government looking at trying
to open up sectors of the economy which have been
closed for all of this century to competitive forces
and what are the opposition doing, chasing around
$ 11,000s from being paid to pipe bands in band
halls...
PL: But, that's what's in the headlines, that's what's
hurting the government.
PM: Yes, but it demonstrates, I think, the difference
between the government which is going all the time
for the main, big policy changes and an opposition
which has got no policy, basically trying to track
down a minister not because of any fraud or any
corruption, because they admit that because they
just don't like the way she administers it.
PL: Well, some would say at two to one on Labor
marginals they had a right to not like the way she
administered it.
PM: Well, most Labor marginals are always in deprived
areas. So, netball courts and basketball courts to
the small organisations of amateur sports clubs... I
mean, after all, this is small money being paid to
amateur sports clubs. Its almost the...
PL: It's two to one, shouldn't she have just fudged it a
bit more than that?
PM: It borders on the essence of civic virtue.
PL: But this borders on the essence of using taxpayers
money to try and win an election.
PM: And here's John Hewson at the Cairns University
saying, I Will1,-wi-thout the Vice Chancellors giving
him any support, without the higher education
authorities giving him any support, saying, oh yes,
I'll give you $ 30 million for a new campus ~ because
it might help us win the seat. It's aliright for
John Hewson to promise $ 30 million. And when asked
by a journalist, Dr Hewson how did you evaluate this
million? Like, was there a whiteboard? He
said, on his fingers, three times ten,
contemptuously. Now, in other words, there's a rule
for John Hewson but the same rule doesn't apply to
Mrs Kelly.
PL: Well, how long are you prepared to hang tough for
Ros Kelly?
PM: Well, there's a House of Representatives report
following the Auditor-General's examinatiif-b-f this
program and that House of Representatives committee
will report next week. And I'll see what that
report says. We have a committee to look at these
things, it has and I'll be taking...
PL: And you'll weigh that report on its merits?
PM: I'll look at the report, absolutely. I have to,
don't I and of course I will.
PL: Yes, but Mrs Kelly's a colleague, a longstanding
friend and you've got the government's face at
stake, haven't you?
PM: But, remember this, I have never minded the notion
that ministers lose their place in the government
because there's been impropriety or there's been
some fraud or something of that matter. There is
nothing of that kind, here. What there is, is
constant attacks by an opposition without any
policies over what they think are allocations which
run against them.
PL: But you will have a look at this report next week
and you will weigh it up on its merits?
PM: I said in Parliament yesterday that this report is
to be presented, it's a House of Representatives
report on which the Government has a majority so, of
course, I'll be looking at the report to see what
they say.
PL: Thanks for your time.
PM: Thankyou.
Ends.