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NETWORK 10 MEET THE PRESS 1130 08-05-94
Subject: INTV Prime Minister Keating
Compere David Johnston: Good morning across Australia, and welcome to Meet The
Press our guest today, the Prime Minister Paul Keating.
Four days after the release of the Government's White
Paper on employment, the dust is starting to settle.
Promising subsidised employment or a training position for
all of the three hundred and fifty thousand long term
unemployed over the next four years, the ambitious six
point five billion dollar jobs package has been described by
the Prime Minister as Labor to its bootstraps.
Immediately lampooned by Doctor Hewson as
Whitlamesque in its excess, and criticised by some as an
election strategy, financial markets endorsed the gloomy
assessment by sending bond rates through the roof a
reaction angrily described by the Prime Minister as
lemming-like and irrational.
Prime Minister:
Compere:
Prime Minister: Dismissing claims of big spending excess, Mister Keating
said the jobs compact will deliver a large bang for the
buck. But just how many bucks will be revealed in
Tuesday night's budget.
Our panel today Paul Bongiorno from Network Ten;
Michelle Grattan, The Canberra Times, and Geoffrey
Barker from the Melbourne Age.
Welcome Mister Keating to the programme.
Thank you, David.
Well now, the dust has had time to settle a little. Are you
happy with the way the White Paper has been received, or
are you still angry with the financial markets?
Oh no. I think we've had probably as good a reception to
this document as we've had to any of the budgets or most
statements the Government's done over a decade. And, I
mean, the last editorial I read was the Sydney Sunday
Telegraph this morning, which said it was a bold step
which deserves community support.
I think that's pretty typical of the reaction, and I'm very
happy about that, because I'm happy about the fact that the
media and the community and the business community in
particular has been very warm to the idea of including the
unemployed in Australia's progress.
Paul Bongiorno:
Prime Minister: Treasurer Paul Keating used to say that the deregulated
financial markets would keep Governments honest. Has
Prime Minister Paul Keating changed his tune?
No, no. No Paul, no, no. I mean, what's happened I
think people need to understand what's happened. First of
all there's the business community, which is actually
employing people, and they've been very supportive of
this. Then there's the financial markets which are selling
securities. So, in terms of the impact of this with the real economy,
it's the business community's reaction that we look for,
and that was a very positive one.
What's happened with the financial markets is simply this.
From about the end of 1989, early 1990, we had interest
rates at eighteen percent, and they fell to four and three
quarters in one percentage point falls from eighteen
down to four and three quarters.
Every point drop was an increase in the capital value of a
bond. One point down, one up. So each way down it was
a picnic for bond buyers and bond holders.
They've now got a belly full of bonds, and they're at a
point where now interest rates have bottomed and in some
places in the world are going up. Where the world
economy is picking up, where they think inflation over the
Compere: Prime Minister: longer run may pick up not in Australia necessarily, but
the world. So they're saying well the party's over, the
capital improvements are finished in bonds. We're now
looking at a prospect of interest rates rising so the thing
to do is get out of them.
So what we're going to see is a lot of bond selling which
has nought to do with the White Paper, nought to do with
the budget simply the fact that the eighteen percent to
four percent beano, which the bond market has had now,
predictable profits for eighteen months to two years has
finished. And bond holders are now saying well that
picnic is over, let's get back now into equities and other
things so they'll sell them.
But wasn't their question over funding, over the funding
of the plan?
No, not really, no. Look, this sell off would have been on
no matter whether there was a White Paper, a budget or
no White Paper or a budget. Because it was sparked by
the US Federal Reserve taking the rates from three percent
to three seven five. And the US bond market is saying
well look the big interest rate reductions in the US,
they're over too. And what we're really seeing in the US
is a pick up in the economy, so therefore we the bond
holders believe we're going to be in a position of rising
interest rates and therefore capital losses. So they try and
get out.
Michelle Grattan:
Prime Minister:
Geoff Barker:
Prime Minister: But there has been worry about funding. Are you
convinced that Tuesday's budget will provide a convincing
answer on the funding question, or do you have a big
selling job ahead of you?
No. Look, the government I don't think has any peer in
the OECD in terms of fiscal consolidation. And one of
the reasons why Australia is growing at four percent plus
is the fact that fiscal policy was consolidated in the
eighties, and we did have a chance to wind it out in the
recession, and hence cushion on the shock and restart the
economy. So we've had, I think, a great record as budget managers,
and I think next week will simply confirm that.
Prime Minister, with the economy in recovery, do you
expect next Tuesday's budget to be a good news budget,
or how do you think the community and the markets will
react to Tuesday's budget?
I think well. I think well, because the budget shows that
we'll be well and truly within the target of one percent of
GDP by ' 96/' 97, and Aust will go back into surplus in the
balance of the nineties.
Now, as far
comparable advantageous as I know there'll be virtually no other
country, or very few, in that very
fiscal position.
We'll be back on that good news point after this break.
commercial break So, will next Tuesday's budget be a good news budget
Michelle.
Michelle Grattan:
Prime Minister:
Michelle Grattan: Mister Keating, how would you characterise the thrust of
this budget?
I think the budget is principally a macro-economic
document. There will still be substantial, some substantial
policy in it, but of course a great block of the policy has
been delivered last week, and the numbers for that will be
consolidated in the budget.
So instead of the budget being largely a policy document,
as well as an accounting document, it'll be more of the
latter, and less of the former by virtue of the fact that we
separated the two statements.
So, I think the budget will be seen as a positive step by the
business community towards the target the Government has
set for itself, and give Australia a quite advantageous
position. And a good news budget? Can I press you on that?
Compere::
Prime Minister:
Geoff Barker:
Prime Minister: Well I think you'll probably have to wait on that. I
certainly don't think it's going to be a budget which is
going to be in any way gloomy.
Given that you've separated out the jobs compact, will the
budget have much more in it in terms of Labor's vision for
social and economic reform? You said it would please the
business community will it also please the people who
have less in this society?
Well I think yes, yes the answer to that's yes. But the
bulk of what we wanted to do, in terms of unemployment,
we did last week.
Could I just say, in terms of the last election, the
government said it would do the following things. It
would provide cuts it's done so. First tranche is paid.
It would legislate for Mabo it's done so after a very
large debate. It's introduced a Home Child Care
Allowance, the Generalised Child Care Rebate, and now
in fulfilment of the commitment to the unemployed, we've
introduced the White Paper. And we're also bringing the
budget down as promised.
So, I mean, Government's come in for criticism for not
meeting election commitments. This government has met
the major election commitments.
Paul Bongiorno:
Prime Minister:
Paul Bongiorno:
Prime Minister: There's a lot of discussion over just how firm your
forecasts are going to be in this budget. Some people say
that already the figures in the jobs paper are a bit rubbery.
I mean, what is your attitude to forecasts on inflation,
employment, and growth? Do you see it as something that
you should be more up about, rather than down?
No, I think they're all just best estimates, but the
important point is that on inflation, which is an important
indice in this country, as in all countries. I think we're in
a fairly good position.
With that , CPI-that came out a couple of weeks ago, the
CPI is now around two, or just under two percent point
four percent for the quarter. The underlying rate is a little
bit higher, but by and large, the portents there are very
good. On the wages front, in terms of wages flexibility,
in terms of prices, in terms of productivity you see the
prospects for growth-
But on Thursday you spoke in terms of growth at four and
a half to five percent, and we've had two leading
forecasters since then say that's two ambitious.
Well the Australian economy grew on average at four and
a half percent between 1983 and 1989. Over six years, six
to seven years, it grew at an average rate of around four
and a half percent.
IF-.
Michelle Grattan:
Prime Minister:
Michelle Grattan:
Prime Minister: Now, we've got now much more competitive product
markets with low tariffs; we've got a much more flexible
labour market than the rigid one we had then; we've
already broken the back of inflation, that's down to low
numbers; we've got the lowest interest rates in thirty
years; we've got a very high profit share; a thirty three
percent corporate tax rate. If all of that doesn't add up to
doing as well as we did in that six years, well there's
something wrong with all of those influences. And
nothing can be wrong them.
How tough are you going to be with the minor Parties
after this budget? Do you take the attitude they've had
their say during the consultative process, and that's it? Or
will you give them further ground if you need to in the
post budget period?
Well I think we've got a good relationship with the minor
Parties, and we have in this budget round I think done
something new, and that is that we have consulted the,
they've given us their views on what should be included in
the budget this has never happened in Australian federal
history-But what happens if their Oliver Twist like, calling for
more when they see the document?
Well that's got to be just weighed up. I think, I mean,
this invariably happens, but I can't predict what the
Democrats or the Greens or any of the Independents in the
Senate might say.
Compere: Did you have compromise with them much?
Prime Minister: I don't think so, but I think there's a lot that the
Democrats and the Greens in particular, and Senator
Harradine, would find to support in the White Paper, I
mean generally. I mean, if you look at the Parenting
Allowance, which will put a hundred and thirty three, up
to a hundred and thirty three dollars a week in the hands
of a supporting mother I would have thought for
instance Senator Harradine would support a measure like
that, as I think probably the Democrats and the Greens
would. I mean, there are many things there. By and large I don't
think anyone should assume there's some sort of
adversarial situation there, because I think the policy
outcomes are pretty much heading in the directions most
of these Parties think they should be.
Compere: We'll continue on Meet The Press after this break.
commercial break So, if it's a good news budget, could it possibly be an
election budget Paul.
I
Paul Bongiorno:
Prime Minister:
Michelle Grattan:
Prime Minister:
Compere: Prime Minister: Well Prime Minister do you get the impression that neither
the Opposition nor the minor Parties really want an
election soon, and probably your budget will get through
for that? But does that tempt you to perhaps go to the
people sooner rather than later?
No, I don't think so. No thinking about it certainly
not. This is, Labor Governments residing over a growth
economy with a prospect of doing a lot of important things
like Mabo, like the White Paper these are opportunities
that shouldn't be missed or lightly passed up.
So are you committed to full term March ' 96?
Well, I'm committed to seeing, sensibly seeing the balance
of this term out. That's not a matter of cutting off any
options the Prime Minister enjoys in this system, but
certainly, I mean I'm not saying to day, to the month, day
or week no-one ever does but by and large I don't
believe that the Parliament should run half its course and
have an election for what point-
But this White Paper is electorally important the success
or failure of it, isn't it, really?
No, I think the White Paper is a very altruistic attempt to
give Australia the kind of society that many other western
countries have passed up, and that's an inclusive one-
Compere: Prime Minister:
Geoff Barker: If it fails you don't think that's important I mean for
your electoral chances at the next election?
Well I don't think it'll fail. But I think it's important that
there is a notion of inclusion, that people do not feel
alienated, cast to one side, forgotten and in a callous
way the rest of us move on and say well they carried the
brunt of economic change.
I think this is a statement about Australian values; about a
fair go; about egalitarianism so that we move along as
a society inclusively.
That's what the White Paper's about it's done just after,
a year after the election. This is not set up in the cycle
of an election, it's not six months before an election, it's
not there for all of that and I think it is because of that,
its timing and its content, that the community has given it
a warm reception.
So this is a good thing, we feel better about the fact that
these people are not going to be forgotten.
Prime Minister, part of the funding for the jobs compact
will involve the sale of some government business
enterprises airports have been mentioned and
certainly that seems to have left the Left of the Party fairly
angry. Are you confident the Party's behind you on that
sell-off and others that might be in mind?
Prime Minister:
Michelle Grattan:
Prime Minister: Well, I mean, the Labor Party in policy terms and
ideological terms is more united now, Geoff, than I've
ever seen it in my lifetime.
When you look at the things that we've accomplished in
the last few years, I mean getting back to growth we've
had nearly a quarter of a million job growth in the last
year; a huge piece of cultural and property law like Mabo,
which is a great breakthrough for Australia as a society
and for Aboriginal people, and something which the Left
would feel that it was important they had a role in, and we
did. The same is true on the White Paper on unemployment-
But you are pre-empting the conference, aren't you-
Can I just say, Michelle, now these are very Labor
outcomes. I mean, these are very Australian, good
Australian societal outcomes but they're very, of their
essence, Labor outcomes and I should imagine people
on the Left would feel as though they've been part of a
process which has been significant and important.
And therefore I think these other matters like asset sales,
and we've had some big debates now, as you know, about
QANTAS, TAA, Australian Airlines which is now
incorporated into QANTAS these sorts of debates. I
mean, the competitor to Telecom in 1990-
Michelle Grattan:
Prime Minister:
Paul Bongiorno:
Prime Minister: But how do you answer the point, Mister Keating, that this
sale of the airports will be approved by the Parliament
before it goes to the ALP conference, which should
approve it in terms of policy, which is required to
approve-Well there's always, I think there's always these, you
know, cart and horse things but by and large the
directions are pretty right, and I don't think any wise
Cabinet gets beyond Party or community opinion.
Well the Left are meeting in Canberra today, and they're
telling us that the factions are not all that happy, and
they're going to try and fight this in the Caucus. What's
your message to them today?
Well I don't expect complete harmony on every issue of
policy, but if you take the Left of the Australian Labor
Party, and look at the Left of the British Labour Party or
the political Left of Germany and these other countries
who would do anything like the White Paper in western
world terms? I mean, who would take on a matter like
Mabo you know, such a huge issue as that?
I think that the Left feel very comfortable, by and large,
about the direction of policy. And yes, there'll be a little
bit of chattering about this sort of stuff, but you've got to
see it in the bigger context.
Comere: We'll continue with the Prime Minister in just a moment.
commercial break Our guest on Meet the Press, Paul Keating.
Geoff Barker:
Prime Minister:
Michelle Grattan:
Prime Minister:
Michelle Grattan: Prime Minister, two important issues at the Labor Party
conference in September will be quotas for, specific quotas
for women Labor MPs, and the Party's uranium policy.
Will you support a motion for a specific number of women
MPs within a specific time, or do you agree with those in
the Labor Party who say that's sacrifices merit for gender
equality? Well I think that's complex issue. The underlying thing is
that there is not enough women in public life, and not
enough on our side of public life, and we want to improve
it. And we're only going to improve it by some
affirmative programme, and it is that which the Party's
now considering.
So what about quotas, though? Are you willing to go
down that path?
Well this is an organisational matter that I can't simply
embrace or dictate, but-
But you can have a view.
Compere:
Prime Minister:
Compere: But I think that we will have to decide for an affirmative
programme, to leave it other than to the vagaries of the
selection systeme in each state-
It would have to be fifty-fifty, wouldn't it?
Prime Minister:
Geoff Barker:
Prime Minister:
Michelle Grattan:
Prime Minister:
Michelle Grattan: Well, that will not happen quickly. But it's a matter of I
think the Party getting focused up to the task, and women
are being, as candidates, coming forward and being in a
position to take the selections for House of
Representatives-How about uranium policy, liberalisation of uranium
policy? Do you think that's on, would you support further
liberalisation? I haven't, Geoff to be frank with you, I haven't thought
about this for years, and I didn't know, I mean other than
the sort of protemps things that come on you probably
know more than I do about this. But it's coming up at our
conference. But it usually does.
It usually does, and it usually goes-
Isn't it time to liberalise the policy again?
Prime Minister:
Michelle Grattan:
Prime Minister:
Paul Bongiorno: Well I don't know. There's been an oversupply of
uranium in the world. I don't know that the big issue
has always been whether you can develop the large mine
in the flood plain of the East Alligator River of Kakadu.
What's your feeling?
Well I've always, frankly, had great reservations about it.
That is, you know, how you handle a tailings problem
from such a large deposit in a region like that.
Now once we decided upon Roxby Downs years ago,
effectively we opened up uranium mining in Australia
because of the huge bulk and the sheer size and scale of it.
So whether it's one big one in South Australia or some
little ones somewhere else really in a sense doesn't matter.
So to that extent I don't think an x number of mines policy
is something that should be holy grail.
But then it gets back to the Pan-Continental site Jabiru
is it? Or Jabiluka? I can't remember which one it is now
and I think that's just got big engineering and
environmental problems.
There is one issue that you haven't given a lot of thought
to, and that's the republican one. It's now May we
were expecting the response from the Cabinet to the
Republican Paper earlier in the year. Has that been put on
hold?
Prime Minister:
Compere: Prime Minister:
Compere: Only to the extent that the White Paper has been such a
time consuming, Ministerially intensive process.
Remember this, Paul, we're doing something novel this
year we've never done before we're having a budget
before the beginning of the financial year.
So Ministers, and they're often the same Ministers, have
been involved in the ad-hoc process of the White Paper
and the budget. So from the last week of January we have
done nothing but those things. And we really haven't been
in a position to be considering the Turnbull Paper, or take
opportunities to proselytise on the issue.
Mister Keating, Robert Ray on this programme a few
weeks ago spent some time talking about your successor.
Was talk of your replacement a bit premature, do you
think? Well I think it is. But again, I've always taken the view,
I've said to people privately, I don't mind saying publicly,
no-one will have to knock on my door to carry me away.
And I think the life cycle of government should be more
than the life cycle of the leader or Prime Minister or
Premier as the case may be.
So what do you have in your mind, after say the next
election that you think you'll win, of course. How long
after that do you think you'll stay?
Prime Minister:
Compere: I think that from this point of view, I think you should
take three years at a time. I mean, I like to have the next
Parliament, and set the Labor Party up. I mean, the one
thing I think, the thing that gives me great pleasure out of
this is the zest and energy in the Cabinet room. I mean,
everyone's jockeying for speaking positions, every view is
contested. I mean, papers are well prepared, it's got so
much energy.
And that big change after the election in personnel has
been a tremendous fillip to the Federal Parliamentary
Labor Party, and I think it speaks volumes for turnover
freshness. But it will take a while before they turn me
over. And on that point we'll leave it. Thank you very much
for your time this morning.
Prime Minister: Good.
Compere: Our guest today has been the Prime Minister Paul Keating.
Thanks to our panel Paul Bongiomno, Michelle Grattan and
Geoff Barker. Til next week, goodbye from Meet The
Press.
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