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Transcript of interview: ABC TV: 7 March 1993: The Great Debate

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KO: I'm Kerry O'Brien and I'll be moderating this discussion here in the ABCs Sydney Studios. By mutual agreement we've discarded the strait jacket formality of the first debate. This time the only restriction on time is that each of the leaders must finish answers to any question within two minutes, although they shouldn't feel compelled to use the whole two-minutes. It's my job to see that we get through as many questions as possible in the next hour, that we stick to the point, if that's not too forlorn I hope, and that by the end of the debate both men will have had roughly equal time. They've also agreed on the right to ask questions of each other, if the urge arises. So, lets get down to it.

Last time John Hewson won the toss. This time it was Paul Keating's turn, he's won the toss so although my first question will go to both of you, John Hewson will be accepting it first.

John Hewson, I heard a comment on talkback radio the other day that neatly summed up the attitudes of many Australians today. This person described the two of you as "bulldust in stereo". So, what is the core difference between you both that people still seem to have missed?

JH: Well the main difference is of course that we have a plan, a detailed plan for the future of Australia and the Government doesn't. They've been there for ten years and all we have is an economy of queues. Dole queues with over a million unemployed, hospital queues over one hundred thousand who can't get treatment in hospital, education queues with kids who can't. get into university or can't get into TAFE colleges or can't get apprenticeships even though they've qualified.

KO: But they still think that as I say, "Bulldust in stereo" and that's evidence by the fact that apparently, according to polls, sixteen per cent of people still haven't made up their minds.






JH: Well the undecided vote is high, I'm not sure it's that high but I think people are in the process of making up their mind and the choice will come down to a group that's been there for ten years. They've had their way for ten years and then the Prime Minister says he's had the Reserve Bank in one pocket and the Treasury in the other and he's pulled all the levers, and that hasn't worked. And we've got the worse situation since the great depression and the comparison is ourselves which we have a plan. We've been open and honest about it, we've laid it all out for people and we've set the agenda now for three years, we've argued all the tough decisions.

KO: You still haven't convinced a lot of people.

JH: Well, we'll see next Saturday.

KO: OK. Same question Paul Keating, "Bulldust in stereo". What's the core difference?

PK: I don't think it's about us. I think it's about what kind of ... I think the real issue will be what kind of society Australia will be in ten to twenty years time because this election's deciding that. And I think that all of those Australian values of tolerance and a fair go are basically at risk in this election because we've been through a recession, an international recession, we're coming out of it, we've turned the corner . .

KO: I think yours came first

PK: Yes, we're coming out of it, we've turned the corner and I believe we don't want to go to a dog eat dog, survival of the fittest society. That is, because we've been in a recession we throw off all of the values the nation's had of decency, tolerance, fairness, fair go, throw it all to one side to go for a set of values which says, if you're socially fit and financially fit you're right, but if you're not, you're out. A dog eat dog mentality.

What I say Kerry is this. We want to see Australia progress without wrecking Medicare, we want to see Australia progress without throwing away the wages and conditions of Australians, to go to Asian wage rates. We want to see Australia progress without massive cuts to the social wage, to education, to hospitals, to schools, and we want to see it without an unnecessary burdensome killing GST.


JH: Can I ask a question? What's fair about a million people being unemployed or seven hundred thousand kids living in houses where neither parent has a job? That's one in five kids under the age of fourteen who live in a house where neither parent has a job. What's fair about one hundred thousand people who can't get treatment in hospitals? What's fair about all these kids who can't get university


education, TAFE education or apprenticeships? I mean where's the equity and social justice?

PK: And what's fair about a flat rate of tax on unemployment benefits or low incomes who pay exactly the same rate of tax as a millionaire? What's fair about that? What's fair about saying to kids if your mother and father can afford to send you to university or get a place, if not you won't get a place? What's fair about saying to a sixteen or seventeen year old kid ...

KO: Well hang on, let's take the education. What is your policy?

JH: In terms of places, more places, more taxpayer funded places at university. Two hundred and twenty thousand more places at TAFE college, more apprenticeships, and sure, I mean after all those additional taxpayer funded places are provided we will allow universities to charge fees and why shouldn't we because right now they can charge fees to foreign students. Foreign students who get into our universities today where an Australian student can't even though the kids are qualified.

KO: Where's the fees? Not the equity fee?

JH: Where's the equity in that. Well were keeping the HECS scheme, we're adding to the number of taxpayer funded places, and then over and above that. We're giving people a chance to get a university education where today they're denied it, yet a foreign student can come into Australia and get an education, one of our kids can't.

PK: Kerry, what John wants to do is to turn universities into business organisations. The Government's created the equivalent of nineteen universities of an average campus size of ten thousand. That's a hundred and ninety thousand places, a sixty five per cent addition to university places in the last seven years. I also allocated seven hundred and thirty million in the One Nation statement to technically further education, vocational education. You said it was proliferate. We say there should be a national vocational education system for kids, we've built it up for them. When they leave school if they wish to vocationally educate themselves they can go into it. You say they can only go with a voucher. A sixteen to seventeen year old kid with a voucher trying to design for themselves a TAFE course in college of the day it exists because you wouldn't commit the seven hundred ......

KO: OK, because I don't want us to get bogged down for too long on one issue when we've got many. But just tell me this very very briefly. John, is there anywhere in the world where a voucher system similar to yours has actually worked effectively?

JH: Don't misrepresent the voucher system. We're giving vouchers to young people who get their first job.

KO: Does the system work anywhere else in the world?


JH: Look I don't think it matters. I mean we've designed a system that works in Australia. And don't forget the vouchers are going to go young people who presently can't get a job, they'll get a job at our youth wage, our youth training wage, they'll get a voucher for a TAFE course and they'll get on the job training. That's better than our kids being couch potatoes. That's the choice that the

Government's given.

KO: Yours is a first?

PK: World first. They've never worked anywhere. You're going to give a voucher to a kid on three dollars to three dollars fifty an hour and if they're not on three dollars to three dollars fifty an hour they don't get a voucher. Can you imagine sixteen and seventeen year old kids trying to design for themselves a course in institutions which you won't fund. In other words, there's got to be a commercial development of TAFE to take kids ....

KO: We can spend an hour on anyone of these issues but I'm going to chop this one off here.

Paul Keating you've made noises that are beginning to sound like an apology in the past few days. This may be the biggest audience you'll ever have again so in plain language, can you spell out the extent to which you do owe this country an apology?

PK: Well Kerry look. The thing is this. When this economy was running at an unaffordable rate, when credit growth was twice our capacity to produce, when we were absolutely deluged with imports, I took the decision to slow the economy down. Australia would have been into a recession now no matter what had happened. The whole of the international economy went into a recession.

KO: But you acknowledge that that recession would not have been as great?

PK: Just a second. The United States, Britain, Canada, New Zealand, Europe, Japan are all in recessions because the boom in the 80s was unsustainable. We would have been in recession. What we would have been debating now is the depth of it. Now, I mean in hindsight, I would have brought interest rates down faster, but again I always had to have the Reserve Bank to agree to do that. But the key thing is, the key point is, we are growing again. The Australian economy has been growing now for five consecutive quarters.

KO: Paul, for a lot of people out there, the key point right at this minute in regard to this question is, are you sorry? Do you owe them an apology?

PK: Kerry, I've said I've taken responsibility both when I was Treasurer and as Prime Minister. But I also took responsibility when I became Prime Minister to get the


economy restarted, which I have done. We've been growing now for five consecutive quarters, and last week the Australian Statistician revised up the growth for the year to 2.4 per cent. We're now growing faster than any western economy. Now that's undeniable and I don't think even Dr Hewson will seek to deny that we've grown now for five consecutive quarters because he did say two weeks ago, we're going to go into a double dip recession, which he knows is untrue because we are growing strongly and we're growing faster, and that's where the employment will come from.

KO: Are we going into a double dip recession?

JH: Kerry, saying his sorry will not create one job.

KO: ...... to say they're sorry for a mistake?

JH: But if he apologised to one hundred of the unemployed per day to take him over twenty seven years to apologise, there would still be no jobs. He has no plan to create jobs. That's what this election is about. It's about economic management and whether or not they've got a plan compared to our plan for creating jobs and solving the unemployment problem. Now we can do that. As far as a double dip recession goes, there's no evidence to suggest that we're in strong growth. None whatsoever.

KO: What is the evidence that we're headed for double dip recession which you've now said on at least a couple of occasions?

JH: I said we're in danger of double dipping because we've seen some pretty poor profit figures, we've seen some pretty poor motor vehicle registration figures, we've seen some pretty poor building figures. I think there's a lot of other anecdotal evidence that suggests that employers are still laying people off.

KO: How many other economists in Australia are agreeing with you and Peter Reith that we're facing the potential of double dip recession.

JH: Let me just go back. When we predicted there would be a recession in the last election campaign, nobody agreed with us. When we said it would be the worst recession in sixty years nobody agreed with us. We were right both times and we're still right when we say this economy is not out of recession. It is still bumping along the bottom at best and although growth picked up it's quite possible in the December quarter growth has slowed down and he knows it. I mean he would be the last bloke to tell you. At the last election campaign he guaranteed there would be no recession.

PK: Kerry, the Australian Statistician's quarterly National Accounts have us growing for five consecutive quarters. Last week the Statistician said we're growing at 2.4 per cent. That happens to be the fastest in the world at the moment.


KO: That's fifteen months John, is that credible?

JH: There's no significant growth there at all and he knows it.

PK: Come on Kerry, its denying the undeniable. It's an all face denial of the undeniable. And as well as that, we are slated to pick up towards three to four per cent next year. Even their opponent Access Economics said, who did the work on Dr Hewson's policies, say we'll be growing three to four per cent next year. The Economist magazine has us at the front of other western nations growing at three per cent. The jobs have started coming through in the January job figures. We're

off. We've turned the corner.

JH: ..... saying that unemployment could go to 12 per cent and you know it because the unemployment numbers they have not yet seen the impact of school leavers. The school leaver impact hasn't come through to the unemployment numbers. We've seen some pretty bad anecdotal evidence about people shedding jobs.

KO: That's school leavers and you get ...

JH: Well they still want jobs.

KO: That may be so but that doesn't mean the economy is not growing.

JH: But the economy is not growing. Look, there's been some measured growth but it's been sporadical. We've got very flat consumer expenditure for example. We've got motor vehicle registration which I think are about as low as when he came into office we'll have to look at the number but I mean the economy is as flat as deck. Investments at or near its all time low.

KO: You've got twenty seconds.

PK: Well How come I've only twenty. Kerry, the thing is this. How would a $24 billion spending tax help? The key thing is if the economy needs more spending and more growth. How could a spending tax, a GST raising $24,000 million, equal to over half the income tax of Australia, how would that do other than push us back into a recession, cut activity, cut spending, cut sales, cut employment. A GST, Kerry, is bad for jobs, it's bad for business, it's poison for small business, absolutely poison for small business. There's 836,000 businesses out there, only 90,000 get any. In regards to Dr Hewson's policies, the other 730,000 carry a GST around their neck like a ball and chain.

KO: You've introduced the GST, let's get onto the GST. I'd like to deal with it for a couple of minutes.

JH: In 1985 he argued the exact opposite of everything we've just said.


PK: Different times, different policies.

JH: Oh really?

PK: Different times, different policies.

JH: It's not what you said in 1985.

KO: We'll argue that again in a moment. John Hewson, you have had a bad run on the GST in the past week or so. Labor's negative campaign has bitten to some degree. Suddenly you've announced that you'll have a GST summit if you're elected. Everyone can sit at the table. But will you be prepared to change any of the fundamentals?

JH: No, and the policy was announced that the idea of a community panel and this would be the first meeting of that. A forum to establish that panel was announced in December last year. We didn't suddenly decide. But what we're saying to people is look, the GST doesn't come in until October 1994. We've said consistently that we will need to take the community with us into that period. That people will have to be educated in detail as to how it will effect their business, how it will effect their lives when they get their tax cuts, when they get their pension increases, when they see the abolition of payroll tax and so on, and the best way to do that is to pull the community together and after the devisive election campaign this guy has run where his .... where it's important that we pull people together in pursuit of that common goal which is reform.

KO: You won't vary the rate of 15 per cent. Would you add to the list of exemptions?

JH: No, I don't believe we will. There are a few details being discussed with various industries as to where you precisely draw line but they are very small, they are minute. The list of exemptions is as it's been identified. The main ones as you know being food and exports and so on.

KO: OK, so you're not really going to change anything significant. Why have it at all? You've already had one extensive inquiry anyway. Unfortunately, that inquiry was secret.

PK: Well, it will remain secret.

KO: Hang on.

JH: We've announced our decisions on the Cole Committee Report that you're referring to, but I mean the reason you do it is that you want people, as I say this is being one of the most devisive election campaigns in our history.


KO: John, you've been selling the GST on and off for three years, you've been selling Fightback for eighteen months and you've been selling Fightback II for four months. And all of that has included the GST.

JH: We have a lot of support for the GST. But you see our package is not just GST. It's a twenty point plan. One point is tax and one part of tax is GST. So we sell cuts in immigration for example, we sell three billion dollars more into education, we sell an improved health system.

KO: That's selling the GST. What I'm on about now is why you've suddenly decided to call this summit in the last week of a three year effort to sell the idea of a GST.

JH: I say we announced it in December last year we didn't suddenly decide in the last week. There was newspaper speculation about whether or not we'd hold a summit and I said we were planning to hold the first meeting of that panel in the early days of a Hewson Government. I've been talking for days about an educational program which is an important part of what's got to be done.

KO: But you won't change anything?

JH: No, the policies ... It's not a summit in the Hawke sense because they had no policies.

PK: It's an apologia, it's a con. In other words, what he's about is a policy he has decided upon which is going to be across the economy, which is going to raise $24,000 million with a fifteen per cent GST. The details were to be examined by the GST tax committee, the Cole Committee. It's produced a forty chapter report. Dr Hewson has kept it secret right the way through the election campaign. That is how the GST will apply to every minute sector of the economy and each sector of industry and Australian life. He's kept it secret, he won't tell us. He has it in his draw and yet his got the gall to say, look, don't worry after you vote for us and after you're stuck with this thing after you've got it for the rest of your life, I'll have a nice little discussion in a couple of months time about how you might wear it. And of course, that discussion can include all sorts of things. For instance, you might be telling us how you can't run it with a food exemption. So food might go back in. If it was unfair to tax food why is it fair to tax water? Why is it fair to tax clothing? Why is it fair to tax power? These are all the things which have been decided by Dr Hewson and the Cole Committee, which is kept secret. We've got this sort of shambles Opposition.

JH: What's fair about your present taxes

KO: Before you go on John, but why wouldn't you release the Cole Report? Why can't you put that on the table?


JH: What the Cole Committee did was to collect three hundred odd submissions from various industry groups and give us recommendations in relation to those submissions. We have had a long process of going back to those various groups and talking to them and we announced the changes that we thought should be made to Fightback I in December last year and all the others we've said we're not changing. We have, as I say, some committees working on the detail as to where you draw a line but it's a minute detail and we've responded to all those submissions, and those industry groups are happy with the progress that we've made in response to their recommendations to us to change. A lot of them are very strong vested interests ...

Just on the $24 billion. The Prime Minister has a sales tax which raises nine and half or nine billion dollars. There's a payroll tax .. .

PK: That's what the States have. Not the Commonwealth.

JH: And there's also a fuel excise .. it adds up to nearly twenty two billion dollars. We scrap all of those three in the development of the Goods and Services Tax and he knows that. And he seeks to misrepresent the situation by saying that this is an additional tax and it won't be. You know when you'll get an additional GST? In the unlikely event that he is re—elected he would have a GST. Have no two ways about it.

PK: You're so proud of your own policy. You're telling us its the best thing for Australia but then you've got to inveigle me in and say of me which you know is untrue, that I'll support your policy. I won't support a GST, I'll never support your policy.

The key point is this. The $24 billion is collected from Australian men and women and families but it doesn't go back to them. It goes off to other people. It goes off to the top end of business. It goes off the big consumers of fuel, it doesn't go to them.

KO: Let's address his point first.

PK: It costs the average Australian family, I mean this thing is going to raise money on the day it starts. It will cost them $75 a week. They then have got to punt from Dr Hewson that they'll get some money back. But what it is going to cost them is $75 a week and the greatest burden of that cost is going to fall on Australian women. They're going to have to secure that from their husbands. They are going to have

to secure that from the family budget. They have got to meet that cost on day one and when they meet it, for a start it's eighteen months away. It's not going to add one job. It can't even start for eighteen months. By that stage we're well and truly back into growth and recovery but Kerry the key point is this. Once a GST is

introduced in this country, it's there forever and every small business, 836,000 businesses will be tax collection agencies. It will cost them $6,000 a year, costs to


simply collect and collate this thing, and the impact of it is grossly unfair, inflationary and regressive.

JH: His tax system is there for ever as well. Can he explain to me why under the sales tax system you tax cotton buds and not cotton wool? You tax above ground swimming pools, not inground swimming pools? You tax exercise books for kids at school and you don't tax pornographic magazines? And I also remind you. of. what you said back in 1985, you had been ruled by the unions on taxes reform, you gave a speech in the Parliament where you said, and it was reported in the Sydney Morning Herald at the time, 'honestly it is no good saying one thing one month and something else the next, I would never say, I would never say that a consumption tax is no longer appropriate.' That was you in 1985.

PM: One simple fact, the wholesale sales tax raises $9 billion. The GST raises $24 billion. And that is Dr Hewson's numbers.

JH: Add payroll tax.

PM: The Commonwealth doesn't levy pay roll tax. Payroll tax is levied by the States.

JH: We are abolishing that.

PM: If you cut the price of petrol and you take from the State, say the State of NSW, $500 million, or $380 million for Queensland. They will simply add the excise on.

JH: They will not.

PM: They will put their petrol franchise fee on to recover the cost of the cutbacks that you are giving them.

JH: We say quite explicitly that they can't do that.

PM: John, you would have to believe in fairies at the bottom of the garden to think that States wouldn't jack up the petrol tax the moment that you took money from their financial assistance grants. Of course they will.

JH: Why would we believe you?

PM: We don't have this silly situation, if you have a hot pie it is going to be taxable, a cold pie isn't. A takeaway chicken is going to be taxable, a frozen chicken from Big W is going to be untaxed. I mean this is the kind of nightmare that you are


going to put through every retailer in this country to try and decide which is taxable and which isn't. There was a tremendous letter in yesterday's Sydney Morning Herald from someone in Britain who operated a food business in Britain, that went right through all this nonsense about how a VAT, a-GST operates in the economy. So, don't talk about the problems of a wholesale sales tax, it is a minnow of a tax compared to this monster you have, John, $24,000 million after income tax.

JH: Well, Kerry, this election is not going to be fought on whether the price of a pie goes up on down by about 2 cents. It is about jobs and it is about unemployment, it's about economic management.

KOB: John there are a lot of people out there who believe it is about GST.

JH: Hang on, I was picking up the anomalies he drew attention to. He is sitting on a tax system that he has put up 200 per cent. He has increased sales tax revenue by 200 per cent.

PM: We are the second lowest taxed country in the world.

JH: He has put petrol excise up from 6 cents a litre to 26 cents a litre. He has never given anybody a bean in compensation. Not one dollar has gone back to them and he knows, as he said in 1985, that system is a lousy system, it ought to be scrapped. That is precisely what we are doing, and scrapping payroll tax and putting money back in peoples pockets from a 25 per cent cut in income tax, the doubling of family allowances and a host of other benefits and he knows that. It is a better package then he advocated in '85 when he said it was essential.

KOB: We can go backwards and forward on this point, I would like us to move on.

PM: This is the second lowest taxed country in the world. We share second last place with the United States and we are a decimal point from Japan, the lowest taxed country. This country has a relatively small public sector, it doesn't need a GST. A GST is recessionary. It is vandalism of our inflation rate. It is a flat tax, it is regressive, it is unfair, and as well as that that is not the only cost Dr Hewson has.

KOB: But when you say it was regressive and unfair, Paul Keating, you were going to introduce one in 1985.

PM: But nothing like this package. All the proceeds went back to people. It was over-compensation, we assumed for low income earners that they spent everything, we assumed they saved nothing. In fact we assumed they ran their savings down, but we decided against it.

KOB: Others decided against it.


JH: You got rolled.

PM: I had seven years in between to come back to a GST.

KOB: You are older and wiser?

PM: Too right. The thing is this, Kerry, I have been there with a GST, I know what a mistake it would be.

JH: That's not what you said in 1985.

KOB: Let's not keep with ...

JH: Well I will just pick up a couple of these.

KOB: Briefly.

JH: The inflation effect he says is going to be significant, 2 per cent..

PM: 5 per cent.

JH: 2 per cent.

PM: You will add 5 per cent.

JH: And inflation under you has averaged 6 per cent every year since 1983.

PM: Five.

JH: And secondly we are going to cut total tax burden by about $4 billion.

PM: You are going to lift the tax burden.

JH: We are not. We are cutting the tax burden because we are putting money back in to people's pockets, 25 per cent personal tax cut, a doubling of family allowance, an 8 per cent increase in pensions.

KOB: John Hewson, specific question and I am not going ask you about birthday cakes again, but I have had a lot of people asking, ringing, faxing about rent, particularly in flats and units. Now my understanding is that rent itself is not taxed by the GST.

JH: That's right.

KOB: What about body corporate fees?


JH: In terms of, say in a retirement village, they are not taxed either.

KOB: What about everywhere else? There is a lot of people renting in places where body corporate fees are a part of their rent, there are a lot of people on fixed incomes in units and flats who pay body corporate fees, what happens then?

JH: Well it depends what the body corporate fee is, but the body corporate fee in general, if it is taxed, will experience some real benefits in terms of the abolition of some of these taxes which lowers the cost of running the units.

KOB: Ok. Well this has been put to me, if you have got a plumber who comes to fix anything in the units, if you have got a painter who comes to repaint, a lift maintenance person, any of those things, they are all taxed at 15 per cent. I have had one person who said ...

JH: But it doesn't go up 15 per cent.

KOB: Hang on, but the body corporate rates on their block of units was $80,000 a year, 38 units, and their body corporate fees $80,000 a year, he has estimated on advice from his local Liberal MP that they, that building will be paying about $10,000 a year extra in GST.

PM: That's right.

KOB: Now surely that permeates back through the system for all renters in units and for everybody, retiree or not, who is living in a unit or flat?

JH: All the plumbers and the people who provide the services will see their cost base fall, right, because when you abolish payroll tax, sales tax and petrol tax it gets built into the costs of everything they use. Second point, there is very large increases in tax, a 25 per cent cut in personal tax is just one example, a 25 per cent cut. People are better off, significantly better off.

PM; Much worse off.

JH: They are significantly better off and you know it.

PM: They are $75.00 a week worse off.

KOB: Do you think on the basis of the problems you have had at times in this campaign selling the GST that you will persuade renters in units and flats, and owners of units and flats ...

JH: Well rent doesn't attract a GST.

KOB: No, not the rent but the body corporate fees largely do.


JH: Renters do not pay GST on their rent. And to generalise the way you are is wrong, and as I say there are a lot of cost reductions that come through the system in a situation where people have more money in their pocket. Look, he knows it, he advocated it in 1985. We have got a better compensation package, we have got bigger cuts in personal tax, we have got bigger increases in pensions.

KOB: But you also said on March 3 absolutely nothing will go up by 15 per cent. I assume you mean that business will pass on any savings from the tax as you are giving back? But not even an army of tax police will guarantee no profiteering.

JH: Well just let me answer that in some detail. Firstly, competition, competition will. I mean if somebody in one shop is trying to increase the price by more then the one around the corner, people will go around the corner, that is the first point. Secondly, we have a competition commission that if you are guilty of price fixing you can suffer a $10 million fine. Thirdly, we will have the Prices Surveillance Authority which will have real teeth and which will investigate any claims by people that there has been any profit taking and failure to pass it on. And fourthly, we have said that we will have a compact with the business community and a

number of the major retailer groups and others are already saying they are happy to sign that to ensure that the system is past on.

KOB: I want to get away from the GST and I have got to give Paul Keating ...

JH: Let me make one clear point though, the essence of this reform is working together. I think people will work together to make this reform significant.

KOB: You have got enormous faith, John.

JH: Well I do believe in the Australian people, I do.

PM: It is because of the things you described that is why the GST raises $24,000 million. This is over half the income tax. This will change Australian life forever. This is the most intrusive tax in the history of the country. Now John is asking us to believe again in the fairies to say that the Prices Surveillance Authority, a body which he has aiway opposed and John Howard has always opposed, will — a small agency — cover 830,000 businesses. 830,000 taxing points, 836,000 businesses, it is nonsense. They will not give back the payroll tax, the big companies, they will hang on to it, they have virtually said so. Dr Hewson's own numbers are predicated on only part of the wholesale sales tax going back. This will be just an additional tax to the income tax. And let me tell you this, Kerry, he is trying to say that in some ways the Goods and Services Tax provide tax cuts. It has got nothing to do with tax cuts, it is all given away. The Goods and Services Tax raises $24 billion. Divided by the number of Australian families, 3 million odd families, that will cost the average family $75.00 a week. And that doesn't include Medicare, that doesn't include $32.00 a visit to the Doctor.


JH: The average family will be $56.00 a week better off after the GST. After the GST.

PM: Kerry, that means that John Hewson has got to get back to them $130.00 after they lose $75.00. Frankly, if anyone believes that .. is going to give them back $130.00, if they believe in that frankly they deserve to pick up the GST.

KOB: Can I move on. Let's talk employment. Paul Keating, John Hewson says you have got no plan, and certainly no one on your side seems to know how many jobs you will create, or how much unemployment down. The Treasurer says one thing, the Industrial Relations Minister says another, the Finance Minister says another again. Where will unemployment be by the end of your next term?

PM: Well, a few percentage points, I think, down. Let me talk about it in jobs. In the Accord we signed with the ACTU about a week and a half ago, we said that there would be no wage increase paid unless there is progress towards a minimal achievable figure of half a million jobs over three years. We think that is the

achievable minimum. Half a million over three years. Now, the economy is growing again, it hasn't been laden with jobs, it has been laden with productivity, but that is about to change because companies can't keep squeezing more production from the same work force. We are growing, we have got a large stock of investments which can be triggered by a further investment allowance and a cut in the company tax rate to 33 per cent, John Hewson wants to put the company tax rate up to 42 per cent.

KOB: Let's talk about your plan.

PM: Our plan was from One Nation to get the economy re—started, that has happened, it has grown for five consecutive quarters.

KOB: Let's just dwell on One Nation for a second.

PM: It has grown for five consecutive quarters, it is now growing at 2.5 per cent a year, we now intend to cut the company tax rate back to 33 per cent, provide a further 10 per cent investment allowance for investment, provided it is done quickly, and we believe that that growth, plus the investment, plus the cut in the company tax rate which will lower the cost of capital, will encourage more investment and more employment.

KOB: Well now let me put to you, your record.

JH: Can I ask him a question?

KOB: In a moment. You have already said what went wrong with the recession, but let's put the recession to one side if you can? Take One Nation, you said One Nation


has worked, you have now got growth going at 2.5 per cent. What you said with One Nation originally, only one year ago, was that growth would be 4.75 per cent.

PM: Kerry, you and I have had the most monotonous conversation- on Lateline ..

KOB: Well it is not monotonous to a lot of people. It goes to your credibility, Paul.

PM:. Kerry just answer this, just listen to this. We went through this on your Lateline program. Why did we revise down the growth? Because the rest of the world slowed up. Japan went into recession in October. Now what are you saying to me, Kerry?

KOB: Hang on, deficit forecast wrong.

PM: Hang on, you asked the question, listen to the answer. You are saying that because the Treasury and the Department of Prime Minister and Cabinet forecast a 4 per cent through the year growth rate in February, but Japan and the rest of the world slows down in the second half of the year, therefore we are not entitled to say that 4 per cent through the year growth would be 2.5 per cent. 2.5 per cent, it is faster than any western economy.

KOB: Your foreign debt is growing faster than many other western economies too.

PM: You are quibbling over a forecast versus an actual ...

KOB: I was going to put the forecast as one of several things that you have got wrong.

PM: But the fact is, you are quibbling over a forecast. My job as Prime Minister was to get the economy restarted and growing. That I have done. It is now growing, as I said, faster then any other place, and it is slated to grow into the big licks of growth in the coming financial year between 3 and 4 per cent. Once that happens we will get the bigger licks of employment growth. We have turned the corner already, Kerry, and that is the point I am making. For people to throw that away now, to throw that away and go down the GST binge, which we don't need, would be absolute vandalism.

JH: Can I just ask a couple of direct questions? You say that you can aim to create 500,000 jobs, how much will the labour force increase over the next three years?

PM: Well in the years that I was in office, it went from 6 million to 8 million.

JH: What will it do over the next three years, the next three years?

PM: Don't talk to me about growth and employment. It went up by 2 million in the '80s. When you toddled off out of public life in '83 leaving three quarters of a million people unemployed behind, I didn't hear any apologies or apologias from



you. You left with a workforce of 6 million, it is now 8 million, and the country you tell us which is the model, New Zealand, has actually got fewer people in work today than it had in 1983. As we see that half a million jobs added over the next three years, at least half a million over the next three years, is a steady, achievable cooperative way. That is, cooperating the work force. Look at the Accord we signed with the trade unions. Low inflation, we have got an inflation rate the lowest in the world.

JH: He is ducking the question because he knows that in the next three years the labour force is going to grow more than 500, 000, and that Accord document admits ...

PM: Of course it is going to grow by more.

JH: Is ... going to grew more than 500,000?

PM: The labour force is going to grow, the labour market.

JH: No, the labour force is going to grow more then 500,000?

PM: Well I am not sure about the labour force.

JH: Because you are admitting in saying that that unemployment is going to go up. Unemployment is going to go up under you.

PM: It is going to grow by at least half a million.

JH: You are only going to create 500,000 jobs. Unemployment, you're saying to me is going to go up. And you know why, because you said once that if you didn't get 4 per cent growth you ought to give the game away, and you are not going to get 4 per cent growth, and you are not going to get the unemployment numbers coming down. You know, and you have just admitted it, that unemployment is going up under you, it is going up under you, it must go up under you. It must, on the numbers you have just given me it must go up.

PM: Kerry, how could Dr Hewson hope to get 4 per cent growth by putting a 15 per cent spending tax on the economy. Now let me make this point, we will add at least half a million jobs to the workforce of this country in the next three years and we will do more, which will more then meet work force growth, it will bring unemployment down.

JH: It won't bring down unemployment, you know that.

PM: That is not true.

KOB: You have just appointed labour market economist, Judith Sloan, to your kitchen cabinet. On Lateline last year she said ..


JH: She is an adviser, not kitchen cabinet.

KOB: She said 7 to 8 per cent unemployment was the most likely picture through the '90s no matter who is running things. She also said the other day that your promise of 2 million new jobs was optimistic, requiring at least twice the job growth of the '80s. That is hardly a ringing endorsement from your own Adviser, is it?

JH: But I don't look to my Advisers to give me ringing endorsements. They were appointed because of their standing. Their outstanding credentials.

KOB: Not because of their knowledge?

JH: Their knowledge, and their judgement. But the Business Council of Australia says our 2 million jobs number is in effect, conservative. a .

KOB: Is she a credible economist, a labour market economist?

JH: Absolutely and so is the Business Council.


KOB: Well she is saying 7 to 8 per cent through the decade, most likely outcome.

JH: Well we believe in terms of our policy you can halve the unemployment rate by the end of the decade, which is significantly lower than 7 to 8 per cent. Over 2 million jobs and we have shown you industry by industry where those jobs can come from. And of course we have the policies that will do it. Now the Prime Minister has been talking about payroll tax, he estimated that the abolition of payroll tax alone, just one decision out of hundreds, if not thousands of decisions in Fightback, that one decision would create 200,000 jobs.

KOB: Who is saying that, John? Who is saying the 200, 000 jobs?

JH: The Prime Minister said that in the past.

KOB: It was said in 1977, wasn't it?

PM: Yes without a GST.

JH: There was a fellow in Queensland last week a ... economist who said 257,000 jobs.

KOB: And there is a fellow named John Freebairn who is, I think, a friend of Fightback generally, isn't he?

JH: Well he is an independent commentator to.


KOB: He questions that. That book of 24 leading Australian economists that came out last week, I think the best forecast for jobs through the payroll tax was something like 55, 000 over about 2 or 3 years. That was the best forecast out of 24 leading Australian economists.

JH: I think the Chamber of Manufactures put it at about 175, 000, a business economist last week in Brisbane put 257, 000. But my point is, it is a tax on jobs, right?

KOB: But who knows?

JH: No, hang on, it is a tax on jobs, and surely the abolition of a tax on jobs is create jobs. Then we have a whole host of other things which will actually kick start the economy, our investment allowance come accelerated depreciation is a $2 billion injection into the economy in the next financial year, the rebuild Australia fund puts $3 billion into infrastructure over the next couple of years. We bring forward half the pension increases and some of the family benefits and tax cuts to July ... put money in peoples' ...

KOB: Hang on, let me put one thing to you.

JH: We cut immigration which takes pressure off the labour market.

KOB: Let me put one thing to you. The micro—reform program that this Government has set in place you say has been too slow, too ineffectual, yet the process of micro— reform that has been going on in the economy both privately and via government policies has lead to some of the structural unemployment we have not got. You know as well as I do that productivity in this day and age means fewer people doing the jobs, means fewer people doing more work with the aid of ...

JH: It does under recession.

KOB: It does when you are restructuring the economy. What you are promising this country is what he's done in spades.

JH: No, not at all. Absolutely not at all.

KOB: You are promising a much faster pace of micro—reform.

JH: Now hang on.

KOB: You are not promising a faster pace of micro—reform?

JH: We are promising a faster pace of micro—reform of course; faster reform. But we aren't going to be dictated to firstly by the unions, they will not be able to block reform and we will ensure that the benefits of reform do flow through to people in


terms of lower transport costs, lower water front charges, lower telecommunications.

KOB: I understand that, you've said all that but ...

JH: Secondly, the reason that there will be no productivity growth in Australia is their wage system. The Accord has destroyed productivity.

KOB: John, one of the things you are going to do is sell Telecom. British Telecom in the next four years is going to shed 112,000 jobs. New Zealand Telecom which is also being sold is going to shed three quarters of its work force in the next three to four years.

JH: But Telecom as it stands in Australia is shedding labour, it has been shedding it for several years.

KOB: No, no, no, not as much as that.

JH: You said it has shed a dramatic amount of labour.

KOB: Let me just finish the point and then I will shut up. If Australian Telecom after you sell it sheds as many people as New Zealand's, that's 57,000 jobs.

JH: Hang on.

KOB: And that's one illustration.

JH: But that is not right. Firstly we are building a bigger and more dynamic telecommunications industry. We are not just privatising Telecom. Look, we have a unique capability in Australia of actually expanding our telecommunications market into the Asia—Pacific region which means more jobs not less jobs. Secondly, Telecom has already been shedding a lot of labour. Under the existing structures, they have shed a lot and they have a plan to shed more I'm told quite independent of any privatisation. So I believe if you privatise in the context of an expanded market and a more competitive market, you can have more jobs and not less. You only end up in this ridiculous situation of shedding people

if you are run by the union movement and if you are tied to an Accord which had destroyed productivity. There is only one way to get productivity back in Australia and that is to go to work place negotiations where there can be a direct link between the wages people pay and their performance. And until you get that system you are not going to have productivity growth.

KOB: All right, at this point let me get onto industrial relations.

PM: Kerry, let me just deal with this thing about employment. The key point is here the GST is bad for jobs.


JH: No it's not.

PM: Now Dr Murphy who did the work on Fightback modelled it on an econometric model.

JH: Didn't model it.

PM: And what he shows is that after five quarters unemployment is up 2 per cent and growth is down 4 per cent. Now that is what he shows — your own person.

JH: He did not model Fightback and you know it.

PM: Can I also say, yes he did. A shift from income tax to consumption. You know it to be true.

KOB: Now hang on.

PM: Now Kerry can I say this.

KOB: Briefly.

PM: The 2 million jobs, when Dr Hewson was asked about it, this is a report in The Australian in March, he said Dr Hewson also admitted yesterday the forecast 2 million jobs the Coalition trumpeted when it launched its Fightback package was "only a judgement", it has no status what so ever.

JH: We have now released a paper to show you where those jobs have come from.

PM: It is an absolute fraud, the 2 million jobs Kerry is an absolute fraud.

JH: Kerry can I give one example.

KOB: One example to answer that one.

JH: No it is not because we released a paper to show where those jobs have come from, right across the board. Just take one example, under our plan we can quadruple the number of foreign tourists to Australia by the Year 2000.

KOB: How do you know that? Where does that figure of 10 million foreign tourists coming into Australia come from?

JH: It is an assessment of where ... I mean there will be 140 Asians travelling in the Year 2000 and we've done a lot of work.

KOB: You've done the work?


JH: We've done a lot of work and we have drawn on the best available evidence.

KOB: So the 10 million figure is your figure?

JH: Yes, sorry the 2 million figure.

KOB: No the 10 million.

JH: Oh the 10 million figure

KOB: The 10 million foreign tourists who are coming to Australia.

JH: Yes, absolutely.

KOB: That's your work?

JH: Absolutely. But hang on you get that that's worth about 400,000 jobs in tourism alone by the end of the decade.

PM: That's just silly numbers.

JH: OK, the 400,000 jobs, one industry. Now we can put more into the car industry, more into the textile industry ...

KOB: But that is based on your figure of 10 million tourists.

PM: The GST will produce less employment that is the key point.

KOB: OK, I want to move onto industrial relations. Paul Keating, you have been very critical of Opposition policy on IR but the truth is you didn't even start to reform outmoded, inefficient work practices until at least 1987. You had to be dragged kicking and screaming into the new reality, you were pushed from behind, you were pushed by debate that was really sparked by conservative forces in this country no matter what gains you've made now, surely you should have gone


PM: I was not at all. What we had to do between 1983 and 1987 was to get the economy growing, to get profits up and get investment going. The first couple of Accords were basically about restoring the profit share and getting investment going. Under the Liberals profits have fallen to pieces, investment had stopped, unemployment was rampant. That was the first task Kerry. In Accord III I think it was we started on the productivity cases, moving flexibly through the labour market. What have we got today? We've got enterprise bargains being struck all across the country co—operatively; managers and unions and their employees working towards corporate objectives, common objectives without any industrial


disputes, we've got industrial disputes at a 30 year record low, we've got inflation running at a third of a percentage point; its the lowest inflation rate in the world, a third of a per centage point and we've got productivity running at 3 per cent for the year. What else have we got to do?

KOB: OK, if I understand it correctly what you are saying is.

PM: Kerry, what else do we have to do?

KOB: Let me get this clear. Are you saying that when you introduced your financial market deregulation processes, despite the fact that many people including some of your own advisers were saying you can't do this without doing labour market reforms.

PM: Nobody said that.

KOB: Nobody said that?

PM: No, of course not.

KOB: That wasn't in your head either?

PM: Kerry, look.

JH: This is an absolute ...

PM: This is a history of the great changes which this Government has made — financial market reform, labour market reform, waterfront, Telecom. All of those things have all been done by us, and this is the point, the point I was making earlier; Australia is essentially a remodelled economy. It is now growing again, it has turned the corner, it doesn't need these sort of draconian policies filleting people off onto individual wage contracts where their only recourse are the master and servant provisions of the 19th cCntury common law.

KOB: Let me put the question to you John. Let me put the question and you can talk.


KOB: On the other hand the breadth of change that you would force has created enormous disquiet, there are already stories in Jeff Kennett's Victoria of employers saying to workers take a pay cut or a cut in conditions or you are out the door. I know that you have promised that anyone with a genuine grievance against a boss, that you will help them fight the case in court, but what that means in the end is that they join the court queue as well as the dole queue and that doesn't sound like great joy to me.


JH: Can I just pick up a couple of points that the Prime Minister made and then I'll answer that question. This talk about productivity being boosted ...

KOB: When John's finished we'll have to move on.

JH: You know why? Because you are throwing one million people onto the scrap heap.

PM: Because of changes ...

JH: No, only because you have had the worst recession in 60 years and its unemployment. Secondly, this notion of enterprise bargaining is a fiction. You. have to be a member of a union to do an enterprise bargain, a Section 134 agreement, certified agreement under you — you know that's right? You have to be a member of the union and only one third of the private sector is unionised. It is 3.5 million people out there in the work place with no access to your enterprise agreements. What you are saying you know to be a fiction, it has absolutely no substance what so ever.

PM: Kerry, how much

KOB: Paul, I said we are getting very tight on time. I said that it was one question each, I'll have to cut that down and move on.


KOB: On health. John Hewson, one of Australia's most respected clergymen the Rev Allan Walker, and I don't think that is an exaggeration, gave you a huge serve on Thursday over health policy. He says the bulk billing by doctors will be abolished for all but a few categories. He says that many struggling families will have to pay higher doctors' fees up front, many families that don't have that money and that they'll have their Medicare refund reduced from 85 to 75 per cent. What do you say to Allan Walker?

JH: A number of things. Firstly, Medicare stays.

KOB: We are talking bulk billing.

JH: Hang on, and secondly Medicare is going to be improved as we deal with the hospital queues. In terms of bulk billing, it is not an insignificant number of people who stay on somewhere about 4 1/4 to 41/5 million people stay on bulk billing.

KOB: Out of how many?

t. I


JH: That is pensioners, all social security recipients, low income earners and so on are protected, they stay on bulk billing.

KOB: Low income earners up to what point?

JH: Well, you know, people who receive benefits of various sorts; the sole parents benefits, disability pensions.

KOB: So less than $20,000 a year?

JH: It would be yes.

KOB: So if a family is on $25,000 a year they have got to cough up?

JH: Wait a minute.

PM: $32.

JH: No, the $32 is wrong, you know that to be wrong.

PM: Up front.

JH: I have a letter here from the AMA saying on behalf of 20,000 doctors that our policy is not going to result in them changing their fees. They are not going to change their fees this is a Labor lie in this election campaign, that fees are going to go up, doctors fees are going to go up.

KOB: You are placing enormous trust in business to be honest. You are placing enormous trust in doctors to do the right thing.

JH: Doctors are respectable people, they write me a letter and they say on behalf of 20,000 doctors we can say we are not going to change our fees and that this is a Labor lie in this campaign. I think that is a pretty persuasive statement and I think importantly we are going to deal with the question of hospital queues, now with

100,000 people, look does the Prime Minister have private insurance? Do you have private insurance?

PM: No. You know I haven't.

JH: But you should have, shouldn't you?

PM: Why should I?

JH: Because.

PM: I believe that the public system works, why should I?


JH: But the very fact that you don't have private insurance means that you and your family can take beds in public hospitals that should otherwise go to those people who are waiting in the queues and you know that. You know-that don't you?

KOB: I'll ask you a question in a moment Paul, you can answer then.

JH: Can I make a point, it is a very important point.

KOB: This goes to that point and the fact is that under your system you will hit a family where the husband and wife are earning between them $50,000 a year, if they have got two or three children it doesn't matter. Let's say they have got three kids. You are going to penalise them $800 a year if they don't take out private health

insurance. $50,000 a year for a family like that I would suggest to you is right smack in struggling middle income territory.

JH: But hang on, they get tax cuts

KOB: They'll pay $1000, maybe more, for their private insurance. You are saying they don't have a right to a public hospital.

JH: Now what I'm saying is and let me say two things. One, the point I was making about the Prime Minister is wealthy people like the. Prime Minister ought to pay for private insurance ...

PM: I believe in the public system.

JH: So that people do not die in queues waiting for public hospitals.

KOB: You've said that.

JH: People will not die in the queue waiting for public hospitals.

KOB: You've said that.

JH: ... wealthy people should.

KOB: You've said that.


KOB: What about the case I put to you?

JH: OK, so you have to make a decision as to where you cut off and at what point is appropriate for people to start to take out private insurance. We made the decision at $40,000 for a single and $50,000 for a couple on the grounds that at those



income levels they are getting very large tax cuts and if they have got kids they are getting a doubling or a whatever their income level is, they are either getting a doubling or a 50 per cent increase in family allowances. We've got a lot of money targeted into the system, but to make the system work you've got to get people to take out private insurance. He should be required to take it out and so should all the wealthy.

PM: That's right, force people.

JH: But hang on, he should be required to take out, penalised if he doesn't so that the money can be actually channelled to those in need and for low to middle income earners who don't have any access to private insurance are going to get tax rebates, money in their pocket to take out private insurance.

KOB: OK, we are getting close to time.

JH: Can I make a point, they will get treatment which they don't get because they are sitting in a hospital queue and you are keeping them in the queue by not taking insurance.

KOB: Paul, let me put the question to you and you can answer him at the same time. The evidence is clear that you haven't been able to contain health costs or you wouldn't have had to put the levy up. You can't keep doing that every time the bill gets too high so how do we know that you won't have to change the system yourself in the future?

PM: Because it has been stable at around 8 per cent of GDP.

KOB: But you've had to put the levy up

PM: But services, diagnostic imaging, pathology, has all improved over time.

JH: ... but it costs.

PM: I know, we've largely, we've got it at half the American system, it costs half as much to go to a doctor and have an operation in Australia, which is half of what it is in the United states

KOB: But the trend is up.

PM: John Hewson wants to send the Australian medical, health insurance system towards the American system. Can I just tell you this Kerry, let me deal with this. John Hewson wants to abolish bulk billing for 13 million people who now pay nothing at a doctor, nothing.

KOB: Should everyone be bulk billed.


PM: Yes, they ...

KOB: Isn't that contributing to over use of doctors?

PM: Hang on a minute, that is the 85 per cent back. That is going to cost them $32 up front; if they have two kids who are sick it is $64 in a week.

JH: That is wrong.

PM: If they are on an income over 45,000 he has admitted tonight he is going to make them wear a penalty of $800 a year, or $16 a week penalty, for not being privately insured. He is going to force you to privately insure yourself and then it is going to cost $20-30 a week to privately insure yourself and even after you do it Kerry, the consultation is going to cost you $14 net. Now if you are poor and you can't afford it, it is $32 up front and you get nothing back.

JH: It's not.

PM: But if you are insured it costs you $14 net. At the moment that costs nothing or it costs 15 per cent of the consultation if you don't bulk bill it.

JH: Less than 3 per cent of doctors charge the $32. Less than 3 per cent and here's a letter from the AMA saying on behalf of 20,000 doctors.

PM: They will write anything down that you ask them.

JH: That is a blatant lie and you know it.

PM: They will write anything you ask them to write.

JH: That is a blatant lie.

PM: Anything you ask, they'll write.

JH: They will say or do anything to get re—elected.

PM: They will write a letter for you, anything you ask them to write they will do because the doctors' union is what you are bidding for.

JH: Rubbish ... 20,000.

KOB: We've got a few minutes left, can we move on very quickly?

h I

PM: Kerry, can I just say


KOB: No, we are out of time on that Paul, we are out of time.

PM: [Interjection inaudible]

KOB: Mandate. If you get into office, we've got the Democrats saying point blank that there are a number of key elements of your plan that they will reject in the Senate outright. Not that they'll sit on quietly and toss over in their minds. They will reject. They will reject your interference on Medicare in their terms, they will reject the GST, they will reject key elements of the industrial relations. Now, on the basis of what you've said in the past about that, what John Howard, at least one of your senior Shadow Ministers has said about that, you will force another election if your key elements are thrown out. So that means that this country. will face another costly election process in a year or possibly even less.

JH: I don't accept that because I don't believe firstly that the Democrats are going to matter and I think it is a good point that both of us.

KOB: They have already got 5 Senators for the job.

JH: Hang on.

KOB: They have already got 5 Senators sitting there.

JH: The vote is polarising so we'll see what happens. I haven't given up our hope of winning the Senate or winning enough in the Senate to have influence. Secondly, he has said, the Prime Minster has said that in Opposition they will vote for our package, they will vote for it, so it doesn't matter what the Democrats do. He is going to vote for it, he reiterated it today, he reiterated it today so this issue will not arise. And thirdly, surely, by going out there and openly and honestly saying what needs to be done, we not only will get a mandate, we deserve mandate and if democracy means anything in this country we ought to be allowed to implement our policy and that's where we stand.

KOB: Very briefly Paul Keating, you are going to stick by what you said in the Parliament, you will support the GST through the Senate from Opposition?

PM: I expect to win the election Kerry, there will be no GST.

KOB: We all know that ... Paul

PM: [Interjection inaudible]

KOB: It is abundantly clear to everyone that you stand a second to none chance of losing this election and you stood up in the Parliament late last year and you said we will support the GST through the Senate from Opposition. You were prepared to canvass losing the election then, you must canvass it now.


PM: What I'm simply saying is that the Labor party always observes the conventions and the conventions are that the money Bills of the government of the day are passed.

KOB: So you'll support the GST?

PM: A GST which is a tax Bill of $24,000 million, half the income tax, is a money Bill of the Opposition and I believe it should therefore pass the Senate.

KOB: OK, we must come to the final question.

PM: Even though I am vehemently opposed to it and am campaigning it.

KOB: OK, we must come to the final question to each of you now. John Hewson, you are proposing a number of policies, a very broad and radical stretch of policies across the whole cross section of society, you are doing it in the 1990s, many of those policies reflect the policies and the philosophies of Thatcherism in the 1980s and of Reaganism and they do represent significant change. Two things; can you really ask the people of Australia to take you on trust, that you will deliver the changes, the radical changes that you say you can do after they have already suffered themselves a decade of change? And secondly, why should they have confidence that you are right when governments are being rejected in other parts of the world who have been pushing many of those policies for the last decade?

JH: You can't translate the experience of any other country to Australia. There is no attempt by us to be a Reagan or to be a Thatcher. That is just dead wrong.

KOB: Margaret Thatcher has addressed your own party.

JH: But so, a lot of people have talked to us. But the fact is that we designed a policy package for the circumstances today and why did we do that? Because we are absolutely appalled at the prospect that is in Australia today. They are under the sort of policies you've seen of this Government, we are about to see our kids inherit a lower standard of living that we have in fact enjoyed ourselves. It is already harder for them to get a job, for them to get an education, for them to buy a home, for them to settle down, for them to prepare for their retirement. It is much harder than it was for us and that is absolutely unacceptable in a country like Australia. We are a wealthy country, natural resource wealth, great mines, great

farms, great manufacturing industries, great tourism and other service sectors in Australia. We are well placed on the edge of the fastest growing region in the world — the Asia—Pacific region. We owe our kids a better break. They deserve a better break, they have had ten years these guys and they haven't done anything but make it worse. In the last election they promised no recession. Today we've got the worst recession in 60 years, unemployment has gone up by nearly 500,000, it has nearly doubled since the last election and our living standards have been cut


by about 3.5 per cent. We are going backwards and all the countries in our region — Singapore, Taiwan, Hong Kong, China, Malaysia — they are all out performing us. And if you had said that to me 15 or 20 years ago I would have thought you were out of your tree. How on earth could they out perform us? But they have and we have become marginal, and the bottom line is our kids are facing a more restricted range of opportunities, and I for one will never accept that situation. That's why we've done what we've done.

KOB: Paul Keating, you have been hammered through this campaign by John Hewson saying you are tired, you've run out of steam, you've gone off the rails, you've got no plan and the reason they are saying that is because they know that your credibility out in the electorate on the economic management of his country has been shot to pieces. You've concentrated mostly on a negative campaign. Do you deserve to be re—elected on that basis?

PM: Yes, because the economy is growing again, we are going to get back to stronger rates of employment again. The economy is growing now, not in the future, it is happening right now. We've kept the social wage together, Medicare, a decent social security system, co—operative industrial relations not confrontation, we are not pushing people onto master and servant common law contracts, we have got that co—operative spirit still in the economy. We changed all of the micro areas in the economy as no conservative government could ever have done, we've given Australia an industrial future where the Liberal party gave it a past, as a farm and as a quarry. It is now able to lock itself into the Asia—Pacific selling innovative products produced from the products of our education system because only we have decided to bring Australian kids through secondary school and put them into tertiary education and into TAFE. The kind of society John Hewson wants, the policies he wants, is a radical shift for the worst. It is not change for the better, it is change for the worse. It is a radical shift back to the policies of reducing the Australian national values to the lowest common denominator of an individual, just on the model of Thatcher 1979 and 1980. The whole co—operative spirit

would go, we would lose the impetus that we've not got. Australia is largely restructured, our future in the 1990s is profound, we are in one of the best parts of the world, we are now growing faster than anywhere else.

KOB: Wind up.

PM: And that's why I say the nation, and can I just say, let's not kid ourselves.

KOB: Five seconds.

PM: Let's not kid ourselves. My kids have got a much better standard of living than I ever had as a child and I'm sure that's true of every Australian kid. Let's not have this nonsense that we are actually worse off today than we were 20 or 30 years ago. We are miles in front.


• A


JH: A county of queues.

PM: We are kilometres in front.

KOB: That's where we leave it. The debate is over. Thank you both very much to Paul Keating and John Hewson. Thank you for persevering with us through these two debates and good luck for the next week. Thanks very much for joining us tonight.


ROE Record

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Title The 1993 Federal Election great debates Date 14 Feb 1993

18 Feb 1993 7 Mar 1993 Source Press Release by Paul Keating 14 Feb 1993 The Great Debate Age 15 February 1993 p.1 Leaders' grim showdown A Current Affair 18 February 1993 [865907 - transcript]

SMH 19 Feb 1993 Debate that fits the bill of 'rowdy sport and behaviour' Australian 20 Feb 1993 Judging debates a media bonanza Press Release by Paul Keating 7 Mar 1993 [transcript] AFR 8 March 1993 Keating wins a battle, but not the war More info

Information file: Elections, Commonwealth Notes Televised debates between Paul Keating and John Hewson. The first debate took place on the ABC from which Channel Nine took a feed and added

its own scoring system based on the reactions of a selected panel of swinging voters armed with perception meters. This produced what was known as the 'worm'. This device was not used in the second debate on A Current Affair. The Library has not verified whether the worm was used in the third debate on ABC TV.

Subjects Election, Federal, 1993 Election campaigning Enrichment

1993 Federal Election Debates Great Debates Worm Indexer Rob Lundie Status OK Entered 27 Oct 1993

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