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Transcript of interview with John Hewitt and Peter Switzer: 2MMM, Sydney: 5 March 1993

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BJ: Paul Keating is here for the next hour answering your questions about our future. Commentator, Peter Switzer, and Editor, John Hewitt, are also here to follow up on those questions. I am Brian Johnson 1 will be coordinating the program. Mr Keating, welcome.

PM: Thank you, Brian, nice to be here.

13J: Well, to start on a common theme from a slightly different perspective, in the Rolling Stone article recently I read with interest that you nominated the Billy Joel song, Alan Town, as a favourite. Now I am sure you would appreciate that quite a lot of Australians would find the lyrics in that song rather ironic at the moment,

given the recession and where they find themselves.

PM: Well it is a real song about real things. 1 mean the thing about Billy Joel is that he can write real lyrics, about real situations. And if there is anything about public life, it has to be real, one faces these things. But it was a song from an industrial place, you know, they were living here in Allen Town, we are pulling all the

factories down. Well the thing is in Australia we are building all the factories, that has been the difference.

BJ: Dr Hcwson, is he your best political weapon?

PM: No, I am not into slick judgments about opponents. Opponents are opponents, anyone who can push us this hard is not to be taken lightly. I don't. I don't disparage opponents.

BJ: But when you took over as Prime Minister, I mean, you were starting from a lap down really, weren't you, at that point?





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PM: Yes, we were one out and ten back.

BJ: So is the GST a god—send for you?

PM: Without the GST he wouldn't have a policy. Without the GST he would have to adopt our policies. So people say, well if it wasn't for the GST he wouldn't be able to cauipaign. If it wasn't for the GST he would have nothing to say.

BJ: But if he had nothing to say he might have a better chance, it would appear so.

PM: I don't think so. I don't think the public of Australia are going to elect somebody who doesn't have a view. I think they have passed all that up long ago.

BJ: You say that you-.don't rate opponents, do you rate him, though, as the best that the Liberals have to offer?

PM: Well I think the Liberal Party has been in trouble for years now. The best people in their side of public life go and get a quid for themselves, they won't join the Liberal Parliamentary Party. That's why I think he was promoted as quickly as he was, because of a dearth of talent after Andrew Peacock's defeat in 1990.

BJ: A lot of people in this election find themselves faced with a choice between 11 per cent unemployment and 15 per cent GST.

PM; Well I think the choice is between a pro—growth economy with low inflation and unemployment decelerating, coming down. The really exciting prospect of the '90s for Australia and the Asia—Pacific, I think that is what the Government is offering. And on the other hand, a dismal sort of a Party, with a dismal policy, saying well you have got to keep your eyes down, there is no gain without pain, it

is penalties all the way, and for your trouble you can have a GST. The choice is, I think, an obvious one.

??: Mr Keating, you said that in the '80s there was no magic pudding, there is always winners and losers. So inside your policy where is the pain, where's the little bit of loss that is going to have to occur for us to get ahead in the future?

PM: Well it came by way of a change in real wages in the '80s. 1 mean Australians have made those sacrifices, we arc now building on them, that's why we have got an inflation rate of less then a per centage point. It is one of the reasons why we are now hugely, absolutely hugely competitive.

??: So it has all been done? The hard stuff has been done?

PM: Well in terms of competitiveness, yes. I mean we were last this competitive in, god knows when, '60s? If you look at the exchange rate wages inflation, when was

Australia last this competitive? Thirty years ago? And that's why exports are going gang—busters, that's why exports are blasting away. That's why our service capacity, that is, its campacity to service our debt, is improving because we are basically cutting away at that real problem we had of lack of competitiveness. We have got it. Now, John Hewson is running around saying we need a GST to be more competitive, a GST will make us less competitive because it will add about 5

per cent to inflation, that will go into interest rates, and how can you he more competitive if your inflation rate goes up and your interest rate structure goes up? Bcwuse it is going to go up, I mean if prices are rising as sharply as they will under a GST, the statistician is going to measure it. Every quarter he is going to

measure the inflation rate, he is going to measure all those goods in the shop, he is going to measure all those services that have never been taxed before, and he is going to find that we don't have an inflation rate of 2 per cent or 1 per cent, he is going to find it like 6 or 7 per cent. And have you ever seen, ever, the financial markets give borrowers a free ride? If interests rate go up by 5 or 6 per cent, if

inflation goes up by 5 per cent, interest rates will go up by 5 per cent as well.

DJ: OK, well we have been taking some questions off the street, basically randomly selecting people to make a comment. If you just have a listen, we will take our first question from someone in the street.

0: Mr Keating, you have been in power for ten years and I am voting for the very first time. We are in trouble and why should I vote for you?

PM: We are in trouble because you had indolent Governments in the '60s and '70s who decided that they just didn't need to do anything clever. That the greatest resource we had, our people, that they were happy to sacrifice them, only three kids in ten completed secondary school by the early 1980s. We let our manufacturing industry fall to pieces, product innovation was something we had forgotten, the Liberals and the National Party bet everything on commodities, and commodities let us down. This Government has given Australia a future as an industrial country, trading in highly developed products and in ser vices. And that is where the future is. That is, the big wave of structural change which was, if you like, slowed by the recession. As we come out of it that wave is still going, and that's

why people should support the Government. We have been the Party of change in the post—war years.

PS: If we are looking at a slow period of improving unemployment, and we accept that youth unemployment is pretty high, I won't say 30 per cent because I know you will come back at me, but it is pretty high.

PM: It is about 9 or 10 per cent.

PS: What arc we doing about the 100,000 students who don't get into University and TAFE places every year. Because she is a young girl asking you what are we going to? When are Governments of this place really going to have the guts to do


sumcthing? Because even what you offered half way through the year is not going to get 100,000 people into University and TAFE places, you know that. Why don't we add taxes like we do with Medicare to get the kids out of the video parlours,

stop wasting their time and do something about it?

PM: Well that sounds all well and good, Peter, and the sentiments behind it are fine, hut, remember this, that since 1985 the Government has created the equivalent of 19 universities of an average size campus of 10,000, 190,00() extra places. We have put 60 to 70 per cent more places into tertiary education since then. In the last eight or tcn ycars, now nearly H children, 8 kids in 10 complete secondary school, it was 3 in 10. Forty per cent of those are being streamed through university. In a country, a society like Australia, we arc up just about bumping on the top levels of participation in university. The same, as say the United States, about 40 per cent of the secondary school is about it. The problem is that of the other 60 only 25 per cent were trained, and why? Because the TAFE system was basically, in national terms, in a shambles. So what we did last year in a very historic change was to get the States and the Commonwealth agree to build a new National Training Authority, so that we can build beside the universities a new

vocational educational system. So those kids who come out of school and don't go onto university end up with a place in a new vocational education system of status. So they have a vocational training certificate that matters right across the Australian States and in Australian industry. Training them for jobs that actually exist. Because if there are too many graduates there is no places for them. It the vocational education that we need. There is only one Party in this country doing that, that is the Labor Party. You know what Hewson's policy is? You give kids

16 or 17 a voucher, so you have got some young fellow or woman wandering around with a voucher saying, well look, I have got a voucher to do some TAFE training provided they arc paid $3.00 or $3.50 an hour. If they haven't got $3.0() to $3.50 an hour they can whistle dixie for their training according to Hewson. So if you are on $3.00 or $3.50 it gives you a voucher. With a voucher you have got to go and negotiate time off with your employer. Now you know how much experience and capacity and negotiating position a young person of 16 or 17 has, to go and negotiate free time? And then they have got to then design a course for themselves and go to institutions which currently now don't exist. Institutions which arc going to pop up says Dr Hcwson, because all these vouchers are going to he made available to make a business out of education. Well you can whistle dixie to that as well.

PS: Well how many students will miss out next year under yours? If we give you a go and you arc there, will there be 120,000 like this year? Or will there be 100,000 or 80,000?

PM: What do you mean miss out, though?


PS: Well miss out. Every January we ignore the fact that the same story pops up, 120,000 students don't get into university or TAFE. Now next following on what you did will there be 80,000?

PM: But where is the weakness, though? The weakness is in TAFE.

PS: Well the provisional places and the allocation of Government funds.

PM: So, what we did in One Nation was allocate 730 million. Not 7 million, 730 million to TAFE over three years for additional places to pick up some of that stock and some of that slack and then grow the system out. This could only be done with public investment. That's public investment that John Hewson doesn't want to make. He doesn't want to invest in our kids. He says, you get a place in university, you don't go looking in the Sydney Morning Herald in the early hours of the morning to see whether you have got a place in university, what you have got to do is go and look at Mum and Dad's bank account. If they can't afford full fees, bad luck. Bad luck. Now, we say, if you're bright enough you get the chance, regardless of your parents' income, that's university. In TAFE he says, he wouldn't spend the $730 million on education. He said to me it was profligate, that we were spending money and putting it on time payment, all that stuff, putting

it on Bankcard, remember all these remarks? You say, but hang on what about a kid that comes out of school at 16 or 17, or secondary school, that is not going to get a place in university but wants vocational education? Hewson says let them pay for it. You say, but hang on, there's not going to be any institutions, let the private sector build them on full fees. I mean this is the sort of market rubbish he wants to dish up to Australian young people as alternative policy. I mean they would have no chance. I opened a TAFE building two days ago in Mackay, $8 million, which is going to teach people computer literacy, child care management, tourism, the whole of the hospitality industries of that area. In other words, real training for real jobs in places where they are going to need it. John Howson says,

if they can't pay for it, they don't get it.

BJ: Another question from the street, Prince Minister. You have been helping to stoke up the GST debate, just have a listen to this question.

0: Paul Keating, he started the GST, why is he now not backing it? why is he using that as a tool against the Liberals, when he started it, it was his baby sort of thing?

PM: It might have been my baby, but it never made it. I mean, what happened was back in the middle '80s we decided against it. Now I was the Treasurer at the time, and we decided against it. And what I did was then repair the income tax system. We started down the road on one of these, because the tax administration told us that the tax system under the Liberals was haemorrhaging, it was bleeding, that the revenue was only being net by the really honest people who couldn't avoid their

tax, that the absence of capital gains taxation, fringe benefits taxation, made the management of the direct income tax system impossible. So, in desperation the


tax administration was saying, Tax them when they spend it. So we looked at all the options, we decided not to go for a consumption tax. In the years that followed I cleaned up the tax system by taxing capital gains, taxing fringe benefits, knocking out all the schemes and lowering the marginal rates, and when we lowered the marginal rates compliance came back. People said, all right, fair enough, if the tax rates arc less we will pay them. Si) the tax system became very tight in the inter vening years.

We have now got an income tax system which by world standards is in good form. We don't now need a consumption tax. A consumption tax was a late'70s, early '80S, agenda item around the world, when administrations gave up hope of repairing their direct tax systems. That's the problem with the Liberal Party, they are still running on an agenda a decade old. John Hewson is running on Margaret Thatcher's agenda from 1979-80, or Ronald Reagan's. But you don't have to he a

genius to work this point out, if the country needs spending, and demand, and investment, why would you put on a spending tax as a remedy? Because all a spending tax will do is lift prices, cut activity, cut production and cut employment. A GST is bad for business, poison for small business and will create fewer jobs,

that is, it will actually increase unemployment.

JH: Well the tax office might have been desperate for the GST back then, but you were pretty keen on it at yourself at the time. Looking hack now, if it had been implemented there, I mean since '85 things haven't gone, they went well for a little while, but since then they haven't gone very well at all. If the GST had come in then do you think the story would have been any different?

PM: From 1985-90 we had a boom the likes of which Australia has never seen, but that has been part of our problem. Had we not had it, we wouldn't have had problems as deep as we have had them in 1991-92.

!H: But would a GST have worked better then the interest cuts?

PM: Well the fact is we decided against it. I made very strong speeches about it. About why we should not then entertain one, not entertain one. And I made that in 1987 and then again at the Press Club under the title of the phoenix rising from the ashes, the phoenix speech I made at the Press Club, saying why a GST is not applicable to Australia. Now seven years have intervened since then, the

Government has never considered a GST since and won't. It is the wrong policy for Australia now. The Opposition have adopted it to be different, not to be right, to be different.

JH: Dr Hewson says it is inevitable, no matters who wins.

PM: Well he is wrong.

IH: Do you rule it out, absolutely, in say the next term of Government, or ever?


PM: Absulutcly. You will never see my name attached to a GST. Never.

JH: The only way that we might know, in some ways, that you have said that you won't oppose it should the worst happen on March 13, you won't oppose a GST.

PM: No, no. What we have said is this, that because the GST is such a huge tax - it collects an amount equal to half the income tax of Australia, the income tax this year, of the whole of the Commonwealth of Australia is slated to raise $47 billion. A GST will raise $24 billion, I mean, this is a monster of a tax - it will then be

introduced in the Parliament in the form of money Bills. The convention of Australian politics is that the Senate doesn't refuse the passage of money bills. That is the convention the Labor Party has always argued in favour of, and we are consistently saying the same. If the Australian people decide that they want a

bumper tax like aGST imposed upon them and the Government of the day, in which case this would be in that event a Hewson Government, were to introduce these bills, and as those money hills came into the Senate the Parties there, I believe, will observe the convention.

1H: And this isn't a pledge that your making on behalf of someone else should you, I mean, will you stay around after the election if that is the case?

FM: Well I expect to stay around quite a long time after the election, but I expect to win the thing.

JH: There are one million people out of work in this country. I want you to have a listen to this range of people that we have spoken to on the street. The people that we basically just bump into as we go about our business in the street.

Public: The average person in the street doesn't really care about balance of trades figures, or even GST really, they want to know if they are going to have a job or not next year or tomorrow even for some people.

Public: The future of Australia depends upon young people. I think they need a job, they need a job to be able to look themselves in the face and to make a reasonable contribution to the country.

Public: The short-term future for our kids is hopeless with this level of unemployment. The long-term future for our kids is even worse with the debt that they will have to repair over the next 10, 20 years.

Public: if you never get a job you lose hope, kind of thing, so I hope it will be better for young people and that to get a job, and make it better for everybody.

PS: Well, Prime Minister, you know yourself, on one side y ou are fighting against the GST, but your biggest problem of course is y our unemployment record and you


were after a slow down and you ended up with a recession. Now, how arc you going to convince the people, who may well be a hit toey about the GST, that you have learnt your lessons about interest rates and you won't make the same mistakes again and we end up with 11 per cent unemployment?

PM; Of course judgements are made all the time by Governments and Central Banks, and in the late '80s those judgements, in terms of the economy, could have obviously been better. In fact some were wrong. But the reason the economy dipped the way it did was the same reason that it dipped in the United States, in

Britain, and Japan, and everywhere else, that was because the roaring'80s had far more bounce in it then the roaring '20s or any other period of accelerated growth, spending and investment. It was a period of unrestrained credit growth and unrestrained asset price inflation, and in the cnd it was unsustainable, and the correction in the business cycle is given us, around the world, a world recession.

PS: You said growth is coming back, that is where unemployment is coming down. What if we all go out and borrow again, and play that same game again? How will you stop us this time?

PM: Well we are not going to do that again, because banks are not going to line up a second time to cop billion dollar losses by lending on property and stocks, they are not going to do it.

PS: So the banks were the hoof-heads, not you?

FM: The thing is, what did the Government do? Well if you want to put it in those terms, absolutely yes, absolutely. Because what did the Government do? The Government cut back its spending. I mean this is a very important point, what was the Governments 'KOs record? It was to cut its spending by $30,000 million a year, to cut its spending. What was the private sector's record? To spray the savings around like a garden hose.

PS: But you deregulated the banks.

PM: Hang on, that's what happened. Now the banks are now wise after the event, they arc now saying this was chasing market share, lending on virtually anything, lending against inflated property prices, lending against inflated stock price, stock market prices, has cost us dearly, it has cost share holders funds enormously. We won't do it again. So, I don't see them doing it again. In other words I think we are going to end up with the best of all worlds. A fret financial market, but a wise..... one. A mature one, one that has learned some lessons. In other words, in the growing up, I mean we let them grow up, at some cost, but we let them grow up. Now in this period the Government was very abstemious, the Government, in

terms of spending, did all the right things, it cut spending back. But a lot of the big companies who paid anything for takeovers, who pushed up the price of capital city buildings, the banks who spread lending about the place indiscriminately, they


are now saying, well don't look at us, well we have to say, why not, why not? But be that as it may, Governments always have to take responsibility for the place, I mean I always have. But I will take my share of responsibility, I am not going to accept responsibility for the banks that were profligate, or the crazy takeover merchants, or the others that are on the front of the business magazines who are now in disgrace, but who were cheered three or four years ago, three years ago, I mean all the people now in disgrace were on the front of the business magazines.

PS: Do you feel betrayed by them, the banks?

PM: No, I don't think betrayed is the right word. Let's go back to the points which were made, it is vital in my view that young people in particular feel that they can make a contribution to this country and that they can secure employment. Now in truth we are taking up most of the school leavers who leave each year and who qualify themselves, we are taking them up. The people who missed out in between, the ones who were untrained, this is the late '80s to the early '90s, they arc the ones we focussed this package on in middle of last year, to try and give them a training opportunity and a job subsid y through the job—start scheme. That will pick up about the 100,000 who are currently unemployed looking for work in the 15 to 19 age group. But in the kind of economy we are having now, where the focus is on product innovation, elaborate transformation of products, ser vices, we arc going to need a trained work force, and which is the only party doing anything to train them, in universities, in TAFE? The Government. The Liberal Party has washed its hands of them, they don't want to know about them, if Muni and Dad can't afford to train you, had luck.

BJ: OK, well we might take another question from the street if we could, Mr Prime Minister.

0: How can you say the recession is over when every day you hear of people losing their jobs, companies closing down, companies retrenching people? How is the recession over, it will never he the same for these people, half of them will never get jobs again?

PM: We are still living with the effects of the recession, but the recession is over. A recession is when the economy is in negative growth.

BJ: But it is hard for a lot of people to believe, though, isn't it?

PM: Well don't believe me, believe the Australian Statistician who last week said in the four quarters to February that the Australian economy grew at 2.5 per cent. The Australian economy is now growing faster than any Western World economy. The problem is it is productivity laden. Now let nee just de—jargon that, I mean, it is not laden with employment, the growth is not laden with employment because companies arc getting more growth, more output, from fewer people, and the benefit in the middle for them is called productivity. In other words, the


companies arc screwing mote giowtli out of the place and more output with fewer people, but that can only go on for so long and if the growth continues they have to start re—hiring. They are now starting to rehire, and we saw that 87,000 job growth come through in January, and while you can't ever look at one months numbers, but over a period of time, I think what you are going to sec is that the productivity surge is coming to an end. And companies just can't squeeze more growth out of the same level of their workforce, they just have to put more people on. So as the economy now picks up, and cvcn our opponents are saying, that it will accelerate ucxt year towards 3 and 4 per cent. In other words, we will be in the big licks of growth, as we get back to the big licks of growth we arc going to see bigger licks of rehiring, and bigger licks of employment, and that should mean lower unemployment.

JII: If we are to believe both Parties, companies are going to get writers cramp hiring people. Two million jobs the Opposition says, you arc after 800,000 in a shorter period.

PM: Well 2 million was just a cynical ploy to the Australian people. When John Hcwson was pressed on that he said it was only a judgement. And when we mocked him in the Parliament about it we said, but this was something which you took from some model or some economic model, he said, no, no, he said our policies were not modelled. It was just a judgement. So just a judgement turns up in the hands of the Liberal Parties advertising agents as a'_ million jobs commitment, as a likelihood,. They would never be realised, never.

JH: That's by the year 2000.

PM: But even under their policies, I mean, under their policies there would he no prospect of that happening.

JH: Could you get 2 million by 2000?

PM. In the eight years up to 1990, we got just on 2 million.

JH: So it is possible for you to get 2 million by 2000?

PM: But why is it? The answer is because we have an Accord with the Trade Unions and they do not. In other words, we can see the proceeds of growth, we can sec the economy grow, but not have the proceeds frittered away in a price and wage round. Because the Accord restrains wages growth and lets the proceeds go to employment you can run the Australian economy faster by agreement. In other words, the work force of this country agrees that if you get the growth they won't squander it in higher inflation and for a short time higher real wages. In other words, they will commit the growth to employment. The Liberal Party has no such arrangements. It rejects an Accord, it wants no conversation with the Trade Unions. So as soon as the econom y started to grow and inflation appeared they


would ask the Reserve Bank to put up interest rates to cool it off. And when you cool it off, you cool off the employment. So we say we are the only Party with a structure, the mechanism to actually let the economy grow with low inflation and

see the proceed go to employment.

JH: Well if you do get the growth that you are after, even so, would you not agree that unemployment levels, by traditional levels, will be reasonably high? Structural unemployment, 6, 7 or 8 per cent anyway?

PM: Well let's say, [ don't know that I would say that about structural unemployment, but 1 would say of unemployment, yes, it will be for our environment high, too high. But we have got unemployment at the moment at around just under 11 per cent; roughly half of it is structural I think and roughly half of it is cyclical. The cyclical part, the cycle as the economy grows that is likely to cone back more sharply. The structural stuff comes from the change in our industrial sectors.

People change, industry is changing and people changing jobs within industries and that's going to take time to change, but of course, the change is an entirely upbeat, healthy and promising one.

J11: But not everyone is going to get their jobs back?

PM: No, but again even though in the late 19hOs after we had ver y strong employment over that six or eight year period and we had unemployment at 6 per cent the time that people were unemployed had dropped considerabl y . That is, the velocity of people through the pool of unemployment had dropped enormously so people were only in there sometimes three weeks or a month or two months; I mean there arc two things here - there is the level of unemployment and how long people are

in it and what we want to do is both get the level down and get the speed up so people come through it more quickly and come out the other side into a job. But they will come into a job of trained, in other words as the economy changes in transition, they will come into a job much more rapidly. But you have got to have

the institutions there to train them and you can't hope in this economy to ever produce a society smart enough to meet those demands if we arc only seeing three kids in ten complete secondary school as the Liberal party left us.

PS: Medicare is a hot issue and something people obviously have very real concerns about. We have another question for you Prime Minister.

0: I'd like to know, to think that he was doing something about Medicare. It seems that a lot of people arc still having to wait in queues and they are not really getting adequate medical care.

PM: This is a Liberal party beat up by and large. There are 2.8 million operations in Australia, less than 100,00(1 people arc on a waiting list, that's less than 2 per cent; and what is their average duration on the waiting list in NSW - 3 weeks and 2 days. So the Liberal's are saying to us, for a problem which is 2 per centage points


in size and where the waiting period is three weeks, rip the whole of Medicare up, abolish bulk billing, make people pay $32 up front for every doctors visit, charge them $20-30 a week for private insurance so we can have the tail wag the dog, so we can deal with a 2 per centage point problem of a three week waiting list. Now it is obviously, you know why all this elaborate incantation about the waiting list? So the Liberal party can rip up Medicare for the doctors, so the Liberal party can rip up Medicare for the AMA, so the AMA can charge what it likes and ask Australians to ensure themselves against it and pay the premiums to pay the doctors what they think they arc worth. That what Howson is about and that is what Bob Woods is about.

PS: Let's just imagine that Dr Bruce Shepherd will probably tell you to get stuffed after saying that.

PM: Well, it was a hit of scintillating repartee wasn't it? Reall y clever, witty stuff.

PS: Let's just image that most Australian's actually love Medicare but are concerned _ that it is running out of money. Even you Deputy Brian Howe is worried that the level of funding for Medicare is not high enough, he wanted to put the co— payment in and you said no. Health experts reckon the levy should be closer to 2 per cent, people saying Mr Keating didn't have the guts to ...

PM: (inaudible)

PS; Let me finish and you can get stuck into me then. The point is this; if Medicare is worth saving, shouldn't the wealthy people like yourself and possibly myself he going into private health insurance to make space for the poor and battlers to get into Medicare to use it all the time?

PM: I think if I was the leader of a government that advocated a public health system like Medicare but didn't follow it and privately insured myself, then you would have a complaint. I believe in this system. I am not insured, I never have been; in the ten years that Medicare has been here and I have four children, we arc not insured. That is because Medicare works. If you an acute attack of something or you have an accident and the wheel you down to the nearest hospital, are you going to say to the specialists on duty where did you pass your examinations? What sort of pass did you get? i am into doctor of choice. Oh, you only got a pass

from New England? Oh, had luck, no I'll pass you up, I'd better get someone from Sydney University.

PS: But you arc pretty lucky, being Prime Minister they will pick you first and I'll be sitting there for two weeks, but they'll know you and do the operation first.

PM: You wouldn't sit there in truth, if you go in as an acute patient, you will be taken in. But you know what happens in the United States? If you come up to a US hospital and you don't have that blue cross card in your pocket they turn you away.


Now that's the sort of system that John Hewson wants to put on Australia_ There was a report in the newspaper a week or so ago, two weeks ago in the Sydney Morning Herald of someone who had a crushed vertebrae in the United States

being wheeled up in agony to a hospital, refused at two hospitals, refused, was put into the third, he didn't have his blue cross card, his friend gave him his to use his and his friend was then taken to court and jailed for using the blue cross card. That is the US health system, that is what John Hewson wants to give Australia.

PS; Do you think the Medicare levy could rise over the next three years? 1.4 for the next three years for sure?

PM: Medicare is working, the funding in Medicare is working. Medicare, our health system costs about ti per cent of the size of the economy. In the United States it is nearer to 15 or 16 per cent; it is twice as much. You know yourself ten years ago if there was something wrong with you you didn't get a blood test, you didn't have the X—rays like you have today, the diagnostic imaging, the quality has gone up but the pries has stayed the same because of Medicare. Now, the wreckers in the Liberal party want to reek Medicare, the%' want to destroy it, but they don't have the courage to say so, they still go through this phoney business of we are going to keep Medicare, it just won't he the same scheme. In other words they will hang onto the name and change it all, push people into private insurance. You see, there are 13 million people who have access to bulk billing; 70 per cent of all doctors consultations are bulk billed. That means you go to a doctor and you don't pay a cent, the doctor takes the 85 per cent in hulk from Medicare. That will change

from nothing to $32 up front, so you take a low to middle income family who has got two kids sick in one week, they arc up for $64 and if they arc not insured and even if they are insured it will still cost them $14 net.

JH: You say the Opposition wants to scrap Medicare, is your long term scenario for private health cover to he scrapped because the longer it goes on more and more people arc dropping out of private health cover? This is well documented and so the fewer people in there the more money it costs, is it heading down the long road to destruction?

PM: In our policy speech we said we will bu y beds in the private hospitals for pensioner patients.

JH: Will that make a difference?

PM: We can buy 10,000 bed days in private hospital beds which will certainly help those waiting lists. But again, what a dishonest scam it is for the Liberal's to say we've got a waiting list of 2 per cent of people who wait three weeks on average, let's wreck Medicare to change it. Now why would they do? Why would anyone

take one of the best health systems in the world and destroy it? There is only one reason and that is to do the bidding of the AMA.


JH: Would you shed a tear for private health cover if it passed by?

PM: I think the private health funds have been despicable in their advertisements; they have been virtually trying to frighten people. You know those ads about the mother that hears the phone call are you insured? She says no, and then they say well in that case, in other words your child will get second quality treatment. I think they are very low grade and the health funds have behaved abominably and they don't deser ve any public sympathy.

0: You see him on the cover of Rolling Stone magazine with a pair of sun glasses on looking like a dude and then you see him in a newspaper with his wife and his family and then you see him in another photo and he looks like something else; is he a politician or an actor?

PM: I am a multi—faceted character and it sounds like you need a bit of multi—facing yourself because I wouldn't be as depressed as you are about the world. I actually think there is a lot of interesting things to do in life and I have had great interest from music; from popular music, classical music, from the arts as well as from my family, from my work and I can only recommend to the questioner that he summons up a bit of zing, it will do him more good than taking pot shots at dudes on the front covers of Rolling Stone magazine.

JH: It has been said to me a hit this campaign that when you have summoned up a bit zing then the people have responded fairly well. I mean we've seen a real contrast in the cawpaign, for instance you gave your campaign speceh in a very low key manner and at the Toyota factory there was zing everywhere and the response from the people, the workers there; I mean the switch to Vaudeville, do you do it so selectively? Why do you play these different persona?

PM: I think in the policy speech one had to provide a frame work. You had to put it in a way where people could construct the framework as you were unveiling it and then put the policies within the matrix of that framework so it has got to be delivered in a way where people can comprehend it and understand it.

JII: But they have got to enjoy listening to it too.

PM: I think they did and I think our policy launch gave us a great fillip in the campaign. It was the week where we did very well in terms of the polling and what would seem public opinion. But if it is a factory where I am speakine, C1tCtttpol llaeously and I'm hammering a particular point, I will do it with the appropriate emphasis and intonation.

JH: What do y ou like best? Obviously the statesman like figure that you try to put on occasionall y when ...

PM: No I don't try to put it on, it is just that the occasion calls for that kind of delivery.


JH: Aren't you most comfortable when you arc kicking heads though? That's when you feel best.

PM: I'm quite comfortable with this conversation. I haven't kicked any heads, I'm quite comfortable talking about things freely, openly, unscripted.

PS: We do have crash helmets on. The listeners can't see the crash helmets that we have got on.

PM: We'll you've got the car muffs, car phones.

PS: But do you go hack after a day in Parliament and think oh, nailed him with that one?

PM: You can't nail people with presentation; only with facts. Unless there is a forensic, dissection of the argument you can never win. Now, where I too infrequently win in the news presentation is that the media reports the wrapper and not the substance. In other words the forensic dissection which gives me the authority to put the sting in the tail, you can't get seven or eight minutes on television, it has got to all be condensed into about 10 or 15 seconds and the 10 or 15 seconds is the sting on the end. So people think it is all sting and no substance, but in fact if it was anything but substance you couldn't succeed in it. The key to winning public debates is to have the argument, know the case and articulate the case, know the

facts, have the structure in your mind and when you do that then you can use the rhetorical flourishes, but if it is all rhetoric and no substance you could nc,- er ever; I mean how would I have gone 23 years in public life with rhetoric without substance, you wouldn't last a year.

JH: Speaking of cutting things back for the television say or for the radio.

PM: You're certainly not cutting this back ...

JH: No, no, this won't take long. You've had an edited version of being Prime Minister; you've had one year in the job, you've had most of the campaign now, looking hack how much difference would it have made if Hawke had done the right thing and given you at least two years in the job?

PM: The economy could have always stood a stimulus earlier, but I suppose we can all be wise in hindsight.

J i l: No regrets?

PM: No, I've taken the opportunities as they come and quite happy to run with them.




PS: But you were wise at the moment itself. When you went to the back bench you were crying like a voice in the wilderness, now I'm supporting you here, but I'm going to bag you in a minute. You were crying cut interest rates, cut interest rates.

PM: You are going to hag me because you sec, you know the things I said were right.

PS: That's right, but if you had stayed in your proper job as Treasurer the recession would have been shorter, the recovery would have been quicker and the only price we would have payed would he that you would have been Treasurer and we would be stuck with Bob Hawke; less people would be unemployed now because of it.

PM: You can't make those changes I don't think unless they have the authority of the author, you can't get the change in an economy like this that's been in a recession without that sort of if you like authorisation.

PS: But you knew interest rates should come down and you keep saying it and because you went to the back bench we missed out on the benefit of your knowledge. OK, you made mistakes but you were a quick learner, but some people are now unemployed because you were on the back bench.

PM: That may be true, it may not.

JH: Final question Prime Minister, do you think that the 1 million unemployed are going to vote for you and for the broader listening audience who some of them have a feeling that you might get by in the election, get back into the Lodge and go phew that was close and maybe not have tapped into the discontent that is obviously out there and I'm sure yuu'vc seen.

PM: If you can't pick up the disquiet in any of my language either today or at other times, then I think that is a shame. I've carried the anguish of this recession around, I think as few leaders would have. But I said on radio at another time, my role is a bit like the ambulance man at the scene of the accident: the patients don't expect you to be so overcome and so debilitated by the circumstance you can't do the job. You've still got to be able to do the job and that requires presence of mind and to press on and they shouldn't regard presence of mind and pressing on as some dismissal of the genuine concern and dispare and hurt which people have


PS: So you reckon the 1 million unemployed are going to vote for you?

PM: Let me say this to you, before Christmas until John Hewson decided to change his stripes but not his tune, he wanted to turn the unemployed off benefits after nine months; that was in his Fightback I policy, that's what he really believes in before his ad agency put his arm up his hack and his party put his arm up his back; that's what he really believes in. He is saying don't give these people a break, after nine

months out, you arc down to the soup kitchens and St Vicent de Paul, the



Salvation Army, you are on your own. That's what they believe. They will make the unemployed insure themselves for medical protection or they don't get coverage at the doctor or pay $32 a visit on unemployment benefits. That is their policy. What I say is the million unemployed is a great disappointment to the

Labor party which has in vested so much in employment. But one thing we'll never do is that well never leave them in the lurch, we'll never leave them without decent income support, we'll never leave them without the Family Allowance Supplement, we'll never leave them without Medicare like the Liberal party wants

to do and they arc parading those unfortunate people at their policy launch, they wouldn't give a tinkers cuss for any one of them and they'll go hack to Fighthack I as quickly as they can scamper the legislation through.

You can't believe Hewson, he wants to kick people off unemployment benefits after nine months, he wants to knock Medicare away from them and he wants to cut $10,000 million out of social security, education and health to pay for his tax cuts. So I say this to the unemployed; well get you back in a job quicker than the

Liberal party, we've got the only policy structure that can get the place growing and still keep us competitive with low inflation to see the proceeds of growth go into employment and well support you on the way through, we won't take the curs way out of throwing you to one side like the Liberal party wants to do.

PS: So to use your own caaiiiple you arc going to be a better paramedic?

PM: Not only that, better at the point of repair and better on the scene. That is we won't leave people in the lurch, we are not going to say to the victims of the recession that we will further victimise you by making you fend for yourself and find your own income.

PS: And will you drive more cautiously so you don't run over the victim next time?

PM; I will certainly drive more cautiously, but I hope our banking friends drive more cautiously, I hope the big hitters of business drive more cautiously, I hope the business magazines don't put any of these characters on the front page any more and make them the idols and I hope that there is a little more commonsense and judgement brought to the way our national investments and national savings are

made. I think we've been through a very large change, a sea change in attitudes, I think we are going to come out of this very much better off, much smarter, wiser and the result will be a much more interesting economy, much higher levels of growth and better employment.

JH: Mr Keating, thanks for your time.

PM: Thank you Brian, thank you Peter, thank you John.