CORDEAUX:
Prime Minister, good morning.
PRIME MINISTER:
Good morning Jeremy, it is very good to be back.
CORDEAUX:
Nice to see. You should come to Adelaide more often. You come to
Adelaide the inflation figure goes down....
PRIME MINISTER:
And the businessmen and women are more optimistic now than I have
known them for a decade.
CORDEAUX:
Yes, well we need to be.
PRIME MINISTER:
Well, you have every reason to be because this State has a lot
going for it and the national economic conditions are very strong.
We do have record low inflation, we have much lower interest rates,
we have strong business investment, we are getting our debt down
and we are weathering the hurricane that is blowing through Asia,
and that is something to be optimistic about.
CORDEAUX:
And when you get tax reform on the table and done, we should be
cooking with gas shouldn't we?
PRIME MINISTER:
We should be. Well we are now but we will be cooking with even
more gas when we have reformed the taxation system and that is the
biggest piece of unfinished economic business in Australia, giving
this country a fairer, refashioned, modern taxation system.
CORDEAUX:
Now I make that point, because I was there last night at that little
reception and I was very impressed with the stuff that you were
saying. For example, on tax reform that you....
PRIME MINISTER:
Well, let me make the point. There is something fundamentally crazy
about a tax system that imposes a 12 per cent wholesale sales tax
on orange juice concentrate but nothing on caviar, and taxes the
family car, and this is very important for Adelaide which is the
home of motor vehicle manufacturing in Australia, at 22%. But, if
you can afford to buy a Lear Jet, and there aren't too many
can even afford to do that, that is completely free of wholesale
sales tax.
CORDEAUX:
Well, how did all this happen?
PRIME MINISTER:
Well, it happened because we, over the decades, we allowed wholesale
sales tax to grow in a ramshackle fashion and put increasing reliance
on income tax. When I left school in the mid 1950s the top marginal
rate applied at nineteen times average weekly earnings. Now it applies
at about 1.4 times average weekly earnings. In other words, if you
are just a little bit above average weekly earnings, and there are
a lot of people in that category, you can be on the top margin rate
of tax.
CORDEAUX:
So you are the Prime Minister, you can fix all that.
PRIME MINISTER:
And we are determined to give Australians a better and fairer,
more modern a more progressive, more productive taxation system.
CORDEAUX:
Let us into your thinking of it. Do you favour a flat tax of say
25 cents?
PRIME MINISTER:
That's unworkable, that particular proposal. What we are in
favour of is much lower personal income tax. We clearly have to
look at a broad-based, indirect tax to replace some or all of the
indirect taxes. We have to address some of the problems of Commonwealth/State
financial relations. The people who will suffer in the scheme we
are going to introduce will be people who are tax cheats.
CORDEAUX:
[inaudible]
PRIME MINISTER:
Yes, it will be much harder to evade, there is a lot of tax being
lost through the present system.
CORDEAUX:
But you said that no one is going to be worse off.
PRIME MINISTER:
Except people who are cheating.
CORDEAUX:
Well, they deserve to be worse off.
PRIME MINISTER:
Of course. I mean, I make no bones that they will be very adversely
affected. But, if you have a more efficient taxation system, and
you make certain that people who are meant to be paying their fair
share do pay their fair share and that can work to the benefit of
the honest taxpayer.
CORDEAUX:
Now, you and I have talked about tax added onto things, and I have
said to you on many occasions that that is a good thing. And you
have said "No, can't do that, the people have voted against
that, we will never do that again". Where was the change and
what was the point that changed in your mind about a tax on goods
and services?
PRIME MINISTER:
Well, we supported it before 1993 and we accepted the verdict of
the 1993 election, and therefore I said at the last election that
we wouldn't introduce a broad based indirect tax during our
first term. Now, I am talking about something that will come into
operation if we are re-elected. What we are going to announce this
year will operate from a date after the next election.
CORDEAUX:
Would you agree that the only thing wrong with it was the inability
of certain people to either understand it or sell it to the general
public?
PRIME MINISTER:
Well, I think there was that too much emphasis on one aspect of
it and not enough emphasis on the enormous benefit, particularly
for average wage and salary earners of lower personal income tax.
CORDEAUX:
So we can look forward, under your Government, a regime that will
not tax energy, will not tax enterprise, will not tax enthusiasm.....
PRIME MINISTER:
You can look forward to a system that will give people a very,
very important commodity and that is incentive. And that is what
is lacking increasingly in the present system. You are talking here
about people in the average wage bracket. They complain about working
overtime because they lose so much of it in tax. Now, if [inaudible]
those rates lower, and you only have those rates lower if you reform
the whole system, then you will put a lot more incentive back into
the lives of average workers in this country.
CORDEAUX:
And if it is made simpler, you maybe.....
PRIME MINISTER:
And fairer. And getting rid of the Lear Jet/family car anomaly.
CORDEAUX:
And the billion dollar tax avoidance industry.
PRIME MINISTER:
All of those things. A lot of tax avoidance has been gotten rid
of but there are still, particularly in the area of the black economy,
and there are some other arrangements that can't be supported.
CORDEAUX:
Now, that's one problem and you are going to fix that. What
are you going to do about the wharves? What are you going to do,
I'm looking through the wires now, the latest wires and it
looks like they are going to dig their heels in on the wharves,
and they threaten war and a nasty confrontation. What are you going
to do?
PRIME MINISTER:
Well, let me talk about what we have already done. And that is
that we have changed the law of this country to remove the monopoly
on the supply of waterfront labour, formerly held by the wharf union
or the Maritime Union of Australia. We now have a situation in this
country that it is legally possible for non-union labour, as it
should be, to be employed on the waterfront. And we are not in the
business of stevedoring. Governments are not stevedores, they are
Governments. But what we are saying to the National Farmers Federation,
or indeed to anybody else, that if you want to start up the business
of a stevedore, then you have a perfect right to do so. And the
law is there to protect your right to start a business. And I can
sympathise with people who want to start new businesses on the waterfront,
because the Australian waterfront is very inefficient. Our crane
rates are well below world average. This is hurting our economy.
CORDEAUX:
I know, we talked to Peter Reith about it yesterday and he went
through all of this. But these people are a law unto themselves.
PRIME MINISTER:
Well, nobody in a democracy is ultimately a law unto themselves.
CORDEAUX:
Well, what are you going to do?
PRIME MINISTER:
Well, what we are going to do is stand by the principles that the
law is there to protect people and to help people who are carrying
out lawful activities. And let me say to the MUA: "Don't
damage the national interest in your own selfish interest".
The national interest of Australia demands that we have more competition
on the wharves, the national interest demands that we have the cheapest
crane rates, the national interest demands that we have the opportunity
of selling at the most competitive prices. And people and companies
that want to go into the business providing a better and cheaper
service have got a right to do so, and nobody in this country has
a right to threaten their fellow Australians with economic damage
and economic destruction if their monopoly position is threatened,
and that basically is what the MUA is doing. The only people who
are talking war and belligerence and confrontation are the wharfies.
CORDEAUX:
And picket lines.
PRIME MINISTER:
Of course. I mean they are the people who are using the language
of the class warfare and the language of confrontation.
CORDEAUX:
And the language of thuggery.
PRIME MINISTER:
Exactly. Nobody else is doing that. The farmers aren't doing
it. I mean, heavens above, farmers over the years have seen their
produce rot on the wharfs and their livelihoods affected because
of the activities of people on the wharves. And I can understand
how they feel but let me say that they are acting within the law.
It is very important that it be understood that it is like any other
business. If somebody wants to start a radio station in, [inaudible]
and so forth, you have got a right to do this. Somebody wants to
open a shop, somebody wants to open a professional practice.
CORDEAUX:
This is key reform.
PRIME MINISTER:
Yes and it is long overdue.
CORDEAUX:
Do you remember the photograph of an aerial shot of, I think it
was Sydney Harbour and there were 70 or 80 ships in Newcastle. It
is absolutely scandalous.
PRIME MINISTER:
Of course it is. And given what is happening in our region it is
all the more important that we get ahead with further reform. The
last thing that we can do, now that there has been this meltdown
in Asia, the last thing we can do is say: "Well, the time for
further reform in Australia is over". I mean that's what
the Labor Party is doing. What the Labor Party is trying to say
to the Australian people is: "Because the world is economically
falling apart in Asia, that is the time that we can relax, we can
put down our oars, we can stop performing, we can stop doing anything".
It is the exact reverse. It is because there is a meltdown in Asia
that it is all the more important to fix the waterfront and to fix
the taxation system.
CORDEAUX:
I put it to you though, that when Bob Hawke broke the pilots'
strike, he sent in the airforce, he sent in the military and he
broke the pilots' strike. What's wrong with sending the
troops into force?
PRIME MINISTER:
Well, there is no suggestion of any need.
CORDEAUX:
I know that, but what's wrong with the principle?
PRIME MINISTER:
Well, look Jeremy, I don't see the circumstances where that
would arise, and I think it is a diversion to the debate that is
now going on. I'm not threatening it, nobody's threatening
it, nobody's speculating that it is going to occur. There is
a law there, there is a civilian authority that deals with breaches
of the law.
CORDEAUX:
I heard you say the other day that you thought the long-term, or
medium to long-term outlook for interest rates was good. Not often
you hear a Prime Minister or a Treasurer making a prediction about
interest rates.
PRIME MINISTER:
Well, I was responding to a suggestion that they were about to
go up, and nobody can sort of give a one-hundred-year guarantee
about those things and I have never tried to do so. But, what has
happened is that we created the condition where interest rates could
come down because we cut Government debt. And when you cut Government
debt you leave more room for other people in the private sector
to borrow and therefore interest rate pressures are eased and that's
why they came down.
CORDEAUX:
Okay, I am going to take a quick break, but things generally are
looking pretty good.
PRIME MINISTER:
Economically they are very strong in Australia.
CORDEAUX:
Access Economics, which must have been good news for you .....
PRIME MINISTER:
Very encouraging. I mean, the domestic economy in this country,
its foundations are as strong as they have been for 25 years.
CORDEAUX:
And you think we can weather whatever problems may arise?
PRIME MINISTER:
Well, so far we have done extremely well. I mean in the globalised
world, economic collapse is contagious if your own economy is weak.
And if your economic immune system is weak and is broken down then
you will catch the disease. But our immune system is very strong
and we haven't caught the disease.
CORDEAUX:
And do you think we will end up with a balanced budget?
PRIME MINISTER:
Well, all the predictions are that the budget that Peter Costello
will bring down in May of this year will contain a healthy surplus.
Now, to turn around a $10.5 billion deficit that Kim Beazley left
us into a surplus in two and a half years is not bad.
CORDEAUX:
I heard $3 billion.
PRIME MINISTER:
Well, it is a little hard to put a figure on it at the moment,
but it will, on current predictions, I stress that, be a healthy
surplus. Eighteen months ago the best we thought we would do was
a bare balance. So if we end up having decent surplus, that is $10.5
billion in the red to comfortably in the black in two and half years,
without increasing taxation.
CORDEAUX:
I will pass this over because you might find interesting. This
is just in a key employment indicator released today it shows increasing
rising demand for skilled workers, which is good. Department of
Employment, Training, Education and Youth Affairs.
PRIME MINISTER:
We have had 140,000 new jobs created in the last three or four
months.
CORDEAUX:
Up 1.8 per cent.
PRIME MINISTER:
All the indicators on the employment front at the present time
are very strong. And the other thing I am very happy to report is
that in 1996, it's the first year that we were in Government,
the number of industrial disputes was the lowest we have seen in
Australia since 1940, that was, of course, just after the outbreak
of World War II. And we were told by our union opponents in the
election campaign that if we implemented our industrial relations
reforms, there would be widespread industrial disputes and stoppages.
The reverse has happened. I mean you really have a very interesting
situation in Australia at the moment where we are seeing big industrial
relations reform, we are seeing minimal industrial disputation as
those figures indicate and we are also seeing a moderation of wage
claims. And I thank the workforce of Australia, I thank them very
sincerely for the moderation of those wage claims. And the reason
why they are making moderate wage claims is that interest rates
have fallen and they have got more money in their pocket. I mean,
if you are paying $250 a month less on your mortgage and that's
after tax money you are immensely better off and you don't
feel the same need....
CORDEAUX:
And when you fix the tax thing.....
PRIME MINISTER:
Exactly, you don't feel the same need to pursue a wage rise.
CORDEAUX:
Now I know there are young people who can't get jobs and it
must be a terrible experience to go through and demoralising, debilitating
kind of experience, but these current affairs programmes that from
time to time show people at Byron Bay, and they don't want
to get a job etc etc, I take it that these reforms that you announced
yesterday, particularly the relocation one, will do away with that?
PRIME MINISTER:
All of the measures that we have announced in the mutual obligation,
Work for the Dole area, they are designed to do two things. They
are designed to entrench the principal of mutual obligation. That
is, we are prepared to provide, income security, for people who,
the basic support for people who can't get a job. But what
we are determined to do is to say to them in return: "We will
support you providing you put something back". And putting
something back can take a variety of forms. We are not going to
have a situation where people draw the dole and do nothing in return.
And that is the principal. And we are going to expand the Work for
the Dole scheme, 25,000 new places. We are going to introduce new
literacy and numeracy programmes, because a whole lot of people
have left school who can't properly read and write, and that's
the main reason why they don't get a job, or if they get one
they lose it. And what we are going to say to those people who can't
properly read and write: "Okay that's the main reason
why you can't get a job, we are going to make sure that you
fix it, we are going to offer you help at our expense, but there
is one condition attached to it, if you don't take that help,
then you can be penalised so far as your dole payment is concerned".
CORDEAUX:
Well, in the court of public opinion people will regard that as
incredibly fair.
PRIME MINISTER:
Well, it is right, and it is in the best interest of the young
people concerned, because every survey tells us that chronic inability
in areas of literacy and numeracy is one of the main reason why
people can't get work. And employers will know, as it is common
sense, that if you are not up to scratch on literacy and numeracy
you can't hold a job. Now, what we are saying to those people,
is "Don't despair, we will put more resources, we are
not asking the system as it now stands to absorb these people without
extra resources, we will put the extra resources in, we will provide
remedial courses, including distance education for people in country
areas. But in return you have to understand that if you are assessed
as not having the right literacy and numeracy standards and you
don't pick up these remedial courses then you could suffer
a reduction in your dole payment". I am absolutely certain
that is fair, it is right and it will help the young people concerned
and I think the public will see the common sense of it.
CORDEAUX:
Now, while we are talking about reform, I have a listener who is
hot on this, and I must admit I am pretty hot on this as well. When
the Prime Minister resigns, it is incredible to think that the can
get more in benefits and pensions than what he was getting when
he was on the job. My listener has decided to put a petition out
and what has provoked him was the bill to keep Mr Keating, $624,000.
PRIME MINISTER:
Yes, the $600 odd thousand.
CORDEAUX:
Don't you think that is a bit obscene?
PRIME MINISTER:
Have you got Mr Keating on to ask him about it?
CORDEAUX:
He doesn't really, I don't think he ever particularly
likes me....
PRIME MINISTER:
And perhaps at the same time you could ask him for the recession
we had to have. I think always a good thing to get people to apologise
for things for which they were directly responsible.
CORDEAUX:
Now, this petition says that all past and future ex-Prime Ministers
would be limited to no more than $1000 per week of taxpayers'
money on their privileges. And the idea was to get you to have a
look at that, the thought is mine as a man who cares about the public
dollar to sign the petition.
PRIME MINISTER:
Well, I will tell you what I will do. I would like the lady to
let me know what she means by $1000 per week of taxpayers'
money on their privileges. I mean, retired Members of Parliament,
including retired Prime Ministers, have a good superannuation, nobody
will deny that. Equally people will argue, I won't talk about
myself, but I will talk about other people who hold some of the
positions that they do hold in politics, their actually salaries
compared with people who are managing directors of large Australian
companies are nowhere near as high as those salaries are. The Treasurer
of Australia earns about a fifth or even a tenth probably of the
chief executive of the major banks of Australia. Now, he is not
complaining, I am not complaining, but I think whenever you talk
about politicians remuneration, that side of it.
CORDEAUX:
Absolutely.
PRIME MINISTER:
I think former Prime Ministers, are entitled to reasonable provision
given the responsibilities they used to hold. But, like everybody
else they should not abuse privileges. I work on the principle that
privileges are nothing more than a gesture from the people and you
don't have a right to them and you have an obligation never
to abuse a privilege.
CORDEAUX:
Let me pin you down.
PRIME MINISTER:
I am not going to be pinned down. The last person I am going to
pinned down in relation to is Paul Keating.
CORDEAUX:
But it is not just Paul Keating.
PRIME MINISTER:
If you have got a beef with him you are going to have to take it
up with him. I am not answering for him.
CORDEAUX:
But you can change the rules. The rules are basically he is not
doing anything wrong.
PRIME MINISTER:
Well, I don't know. When I say ......
CORDEAUX:
[inaudible]
PRIME MINISTER:
Well I am not suggesting that he has done anything illegal, I am
not suggesting that. I don't know the circumstance of it. But
now that you have presented me with petitions I will look at it.
CORDEAUX:
But you do agree with us that is ...
PRIME MINISTER:
Well on the basis of it is seems a very large bill. And I should
say that having said that I don't know the background of it.
It does seem a huge bill and I don't think the battlers out
there would think it is anything other than a very big bill.
CORDEAUX:
Well it would seem, without sort of annoying you, that one Australia,
with one law, one superannuation arrangement, one group of real
estate laws, leaving Wik to one side, we are all Australians, we
should be all treated the same under the law.
PRIME MINISTER:
Yes, of course we should, I am not suggesting otherwise. I mean,
what happens with a former Prime Minister, he gets his superannuation
......
CORDEAUX:
Generous.
PRIME MINISTER:
A generous superannuation. But put against that, many would argue
that the salary is below what people are payed with comparable responsibility.
I mean these are travel expenses.
CORDEAUX:
Yes, well I know you well enough to know that that will get up
your nose and you will go away and look at it.
PRIME MINISTER:
Well, it is certainly a very big bill. Huge.
CORDEAUX:
Now you've said publicly, in fact I think you said last night
when somebody asked you when the election was you said "I will
hold it at the right time".
PRIME MINISTER:
And I will! Like you hold it at the wrong time! No way, no way,
I will hold it at the right time.
CORDEAUX:
Well, they say July.
PRIME MINISTER:
Well, people can say what they like.
CORDEAUX:
You can't really get the tax thing out on the table by July.
PRIME MINISTER:
Jeremy I am not going to get into speculation on when the next
election is going to be held. And the reason that this election
speculation has started, and it normally does start about the beginning
of the third year of a government's term, is that the Senate
blocked our Native Title Bill. Now if the Senate lets it through
in March, a lot of speculation will go away. And that is the only
reason I had to talk about what [inaudible] rejected again.
CORDEAUX:
Prime Minister we have to go, but thank you very much for your
time. I know you have got a busy day in Adelaide but with the cricket
aspect it will be a very enjoyable day for you.
PRIME MINISTER:
Well, opening the Bradford Exhibition at the Museum will be quite
an experience.
CORDEAUX:
Good to see you.
PRIME MINISTER:
Thank you.
[Ends]