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Speech to National Press Club, Canberra [and] Questions and answers



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PRIME MINISTER

SPEECH BY THE PRIME MINISTER, THE HON P J KEATING MP NATIONAL PRESS CLUB CANBERRA - 11 MARCH 1993

I thought he might have surprised us.

I thought, seeing that there is an election on Saturday, he might have come along for a debate.

I thought he might have stopped impersonating American Presidents, stopped running, and come along to answer some questions from the people whose democratic purpose is to ask them.

No such luck.

Dr Hewson has broken one of the traditions of Australian politics: we don't have such a lot of home grown traditions - but one of them is that leaders make themselves accountable to the press in the week before an election.

Dr Hewson has not answered a question of substance since Christmas.

Every time he has been asked a question of substance - and that is about three times - he has fallen over.

Dr Hewson has not been able to accommodate anyone who is asking for facts about his so-called "plan".

His campaign itself has been a falsehood.

His imitation of President Clinton's campaign disguises the fact that what Clinton stands for, Hewson despises.

Dr Hewson has worn a mask in this campaign.

If Australians have not seen behind it yet, they still have two days.

Dr Hewson has been unable to provide us with facts on the GST.

COMMONWEALTH PARLIAMENTARY LIBRARY MICAH

He has said it will create 2 million jobs. He has said it consistently.

There is not one person in this room who believes that.

I daresay, there is not one economist in Australia who believes it.

I would venture to say there are a good many people in this room and a good many economists who believe that it will create no jobs - or, worse, it will cost jobs.

I am one of the latter. I am sure I am not the only one to have heard reports in recent weeks of companies - in my case some of the finance houses of Sydney and Melbourne -which are planning lay-offs of workers when the GST is

introduced.

That is the first great deceit of the Hewson campaign.

They say the GST will create jobs.

The GST will not create jobs.

I would also venture to say that there is not one person in this room, nor I imagine is there one doctor in Australia, who doesn't know that Dr Hewson is going to rip the heart out of Medicare and leave it a universal health

care system in name only.

Dr Hewson would move the Australian health system towards the American system.

The American strategy of publicly subsidising private health care and insurance has left 35 million Americans without insurance, and given doctors and private health insurance companies the ability to unremittingly jack up

health costs.

Just as they promise to do in Australia: in their own journal. In the Sydney seat of Lowe 9 out of 10 doctors promise to increase their fees.

It's your money or your health.

American health care costs are more than 50 per cent greater than Australia's - 50 per cent greater and a fraction of the service.

Last year in the United States employer spending on health care exceeded total after tax profits.

Last year in Australia employers paid nothing and were that much more competitive as a result.

In America a huge part of the population lives in fear of being sick or injured because of the health bills they would have to pay.

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In Australia the only thing to fear is the sickness itself.

There are waiting lists it is true. In the campaign speech I announced action to remedy it by contracting out the treatment of public patients in private hospitals. This is additional to the $70 million we have given the States to shorten waiting lists.

But if those waiting lists were twice as long they would not constitute a reason to adopt the American health care system.

That is the second great deceit of this campaign.

The Liberals say they won't destroy Medicare.

The fact is they will.

I am also sure that there isn't a single person in this room who doesn't know that Dr Hewson's industrial relations program will destroy the cooperative ethic on which industrial relations are based; or that he will

throw people onto individual contracts and destroy thereby their security, their wages and conditions, and their dignity.

That is the third great deceit.

Dr Hewson's industrial relations policy is not designed to reduce unemployment but to drive wages down.

I don't believe there is anyone here who doesn't know that Dr Hewson's plan for Australia is a plan of radical regression.

A plan conceived in the bowels of a computer in the late 1970s, using the Thatcherite software that was all the rage at Johns Hopkins in those days.

Dr Hewson's so-called "plan" for Australia is an old plan that has failed wherever it has been tried - with disastrous economic and social consequences.

My great fear is that the damage he could do in three years, would take us decades to repair.

Then there is the one about selling Telecom to an overseas buyer for $20 billion.

This is the one from the man who talks about national sovereignty and creating jobs and funding promises.

On each of these counts, the Telecom sale is a fraud.

Does anyone think that Dr Hewson will get $20 billion for Telecom?

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Does anyone seriously think that there will be more jobs in Telecom if it is sold?

The only way they could get anywhere near $20 billion would be to sell it overseas and remove all protection for Australian consumers and workers. It would have to mean timed local calls. It would certainly mean huge job

losses.

Creating jobs in Telecom by selling it overseas is about as likely as creating jobs in tourism by making it cheaper to holiday in Bali than it is in Cairns - which is what the GST will do.

So there is another great deceit.

And here is another little one.

On every Fightback pamphlet that has gone out in the last 12 months the Opposition claims that it will abolish seven taxes. One of them, the coal export levy, is a standing joke - because it is already abolished.

There is another one there under the heading "customs duties".

The Coalition says it will abolish custom duty.

That means, unequivocally, zero tariffs.

But when it suits them, they say they are not for zero tariffs - not immediately, in some industries, in some electorates.

Both things cannot be true.

This whole "plan" of Dr Hewson is a deceit.

He does not have a plan, he has an obsession.

He does not have facts, he has gimmicks.

He has only one fact at his disposal - unemployment.

The one big negative of our national life at present.

Unemployment is the great curse of the nineties.

And it is apparent again in today's figures. Essentially, they are "as you were" figures, which makes the point that unemployment is going to be immensely difficult to deal with and it won't be fixed quickly. That's why we need the full focus of the nation's energies; and why we don't need those energies dissipated in a divisive scramble for

a piece of the cake.

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The figures mean simply that unemployment is too high. They also show that the unemployment rate may be flattening out, which is consistent with recent statistics showing that the economy is picking up.

But this is really beside the point. If unemployment has in fact peaked, that is no reason for complacency. It is certainly no comfort for the unemployed.

The central issue is which party is best equipped to deal with unemployment, and that means which party will succeed best at getting the economy moving.

It also poses the question - which party is best equipped to help the unemployed directly?

There is no simple answer to unemployment, but there is no doubt that the best answer in the long-term and the short-term is economic growth, and the way to get growth is by investing and our efforts are aimed precisely at this

point - investment in Australian companies.

By contrast, it seems to me beyond doubt that Dr Hewson's so-called "plan" will not be a remedy - but a new disease.

If unemployment is our greatest problem now, how much worse will it be if we stifle the recovery with a 15 per cent tax on virtually everything we buy and everything we use.

How much worse will it be if we deal with the problem of unemployment in an atmosphere of industrial and social turmoil.

How much harder will it be to find solutions, or to find the concerted national will to solve the problem, if the rest of the population is divided, insecure and rancorous.

If unemployment is a great problem now, how much worse will it be without a universal health care system, or with an unfair education system.

If unemployment is a tragedy now, ho w m uch worse will it

he with $10 billion taken out of the Budget.

How much worse will it be with social security spending cut?

How much worse with funding for regional areas cut?

How much worse with cuts to State services - like State schools?

How much worse with $800 million cut out of funds for the unemployed and people left to wait much longer for their benefits?

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If unemployment is the worst fact of our national life at present, how much worse will it be if Government "gets out of the way" as Dr Hewson says it should, and people are

left to fend entirely for themselves?

How much worse will it be if we put inflation back in the system?

How much worse will it be if we add a tax burden and an accountancy burden and a time burden to the small businesses which we know are going to drive growth and create jobs?

Since the campaign started, a raft of positive indicators have appeared illustrating our economic progress. Tuesday's figures on job vacancies and retail sales were the most encouraging since 1990. Export figures have been

positive.

Today - this very day - if you distil the politics out of this morning's press you will find unequivocally positive economic news. There's a story about our continuing export surge, another about our growing manufacturing

sector, another about an Australian company landing a $1 billion contract in Laos. There is much more - but John Hewson of course won't tell you. For twelve months wherever there has been hope, Dr Hewson has counselled

despair.

That's why today I have released a document accompanying this speech which describes some of the good things which are happening in Australia, and which Dr Hewson refuses to talk about.

There is no question that the direction we are going is the right one. We are going too slowly to lower the unemployment figure, but that is not a reason for changing course.

It's a reason for accelerating progress where we can - and we have done this by lowering company tax rates, by introducing an investment allowance of 20 per cent and by cultivating a new banking culture.

Every sensible thing that can be done to speed the pace of recovery long-term reform is being done, or is proposed for a second Keating Government.

And the things we do are all directed at the goal of creating employment and helping the unemployed through with training and other forms of assistance.

Some of you will have seen the statistics released this week on the success of labour market programs. They are working. They are helping thousands and thousands of

Australians.

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So why wreck the recovery? Why wreck the safety net, the humane and constructive government interventions? Why wreck the social fabric of Australia?

My message for those people who are presently wondering whether to desert the Labor Government is - think very carefully. Think about what you would lose.

In an election the choice is not between one party and a vacuum, it's a choice between two parties.

Ask yourself whether by voting for policies which are proven failures elsewhere in the world, you won't be punishing Australia and the next generation of Australians.

Ask yourself whether the absolute hollowness, the absolute fraudulence of Dr Hewson's campaign is not an indication that a vote for Dr Hewson is a leap in the dark.

To the people of Australia, between now and Saturday, I would say, every time you hear Dr Hewson say he has a plan, ask yourself do I understand. Has he explained it to me. And if the answer is no or maybe - don't vote for

him.

In this forum this week, Dr Hewson had a chance to explain his so-called "plan" - a chance to explain how it would create a single job, how it would not destroy the social fabric of Australia, how it differs from the plans of Thatcher, Reagan, Douglas and Mulroney - he had a chance

to explain it in this forum and he refused. He chose to play soccer and shout slogans instead.

Let me give the oldest advice in the world to the people who are contemplating the big jump. Don't do it. For your own sake don't do it. For Australia's sake don't do it. For your kid's sake don't do it.

I have been to this Press Club 18 times in the last decade. I've been four times in the past year. I don't know how many press conferences I have given in the last twelve months, or how many doorstops that my staff said I

let go on too long.

I don't believe it can be said that I've ever run away from scrutiny, or from the opportunity to explain our policies, or failed to face up to the ramifications of those policies.

As Treasurer and then Prime Minister, I have taken full responsibility for the economic and social affairs of Australia. And all the responsibility that is mine, I will shoulder. All the damage that the recession has done, I will attempt to repair. Every sensible thing that

can be done, will be done. Much of it is already be ing done - and I want the chance to build on this.

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As I said in the campaign launch, fifteen years ago I began to imagine an Australia which not only exported minerals and farm products, but sophisticated manufactures.

The thought occurred to me and a few other colleagues that Australia could be what no one had really ever imagined it could be - that is, a country integrated with the world (you've heard it before I know), focussed on the region, competitive, creative, sophisticated - secure.

And as every one of you know - this is happening. Any one who was old enough and compos mentis in the 1970s will know what a huge change there has been.

You've heard the figures - exporting nearly one-quarter of our total product, exporting 70 per cent of it to Asia, exporting quantities of elaborately transformed manufactures we never dreamed we could make.

Some of you will have seen the McKinsey report on the new breed of Australian company which is emerging. Some of you will have noticed that in the last two months, a $2 billion contract has been signed by BHP with the

Vietnamese Government, and yesterday a $1 billion hydro-electric project in Laos - one of the largest construction projects yet in Indo-China.

These things are happening as a result of a conscious decision by the Australian people to change. These things are happening because we intended them to happen.

The new Australia - the Australia of the nineties - will be different from the Australia of any other era. And the essential difference will be this: the Australia of the nineties will be one entirely conceived by Australians and

brought into being by Australians and wearing the stamp Australia on everything it does.

Now I say that is at stake on Saturday. Our economic future is at stake, and so is the quality of our society -the Australian stamp of our society.

So much is at ris; finally, a right. get equal pay and areas of work and who spend part of people.

. A society where child-care is, A society which believes women should be able to participate fully in all life. A society which cherishes those their lives caring for children or sick

Those of you who know me will know what I believe. Whatever my faults, I don't think hiding my beliefs is one of them.

Very simply I believe in creating a high wage, high skill and high productivity Australia. John Hewson believes in a low wage, low productivity Australia.

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John Hewson believes in dismantling the public sector - he hates the public sector. I believe in making the public sector, as it is in every successful country, more efficient, more people-oriented.

John Hewson believes in fear in the workplace. I believe in cooperation and creativity in the workplace.

John Hewson believes in private health insurance. I believe in sharing our personal health care risks through a national public and private system working in cooperation.

John Hewson believes in zero tariffs as an end in itself. I believe in using tariff reform as a fair benchmark to improve our industry with long term plans and safeguards.

John Hewson believes in American razzamatazz and hoopla and carefully staged passion plays and bunfights, and American advisers, and the constant reiteration of poll driven phrases.

I don't believe in it, myself. I think it's an assault on good democratic Australian traditions. I think it's rubbish. I think one should face the music - scratchy, discordant, unpleasant music though it might be. I think you have to say what you believe and be prepared to defend

it in detail.

This way at least, when people vote on Saturday they will know what they will get with Paul Keating. To judge him by his campaign, the same cannot be said of John Hewson.

Finally, let me say this - if people are not convinced by Dr Hewson's intention to impose a GST, to make Medicare a universal health system in name only, to destroy the basic rights of workers and the cooperative ethic of the Australian workplace, to turn our colleges and universities into businesses, to set back our environment programs a generation or more - if they're not convinced

that Dr Hewson's policies represent a threat to our way of life and our values, perhaps it will help to think of it in philosophical terms.

Dr Hewson's philosophy is based on the idea of self-interest and survival of the fittest. Remember what Margaret Thatcher said: there is no such thing as society, only individuals making their way. This is Dr Hewson's philosophy.

He wants to impose this idea on Australia. That's what he means by breaking the mould.

What he doesn't like about Australia is the humanitarian, community ethos - the one that is there in Australia from the beginning of our European history until now. Think about it. The heroes of Australia have always been and remain the champions of the underdog.

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Now this may not fit well with the economics that Dr Hewson believes in, but it fits well with Australia. It is what we are. It has sprung from our history. It is what unites us - it is the principal bond between us.

I hope I never see the day when our traditions are subverted by the doctrine of unmitigated self-interest. That is Dr Hewson's doctrine - if I fought him on nothing else, as an Australian, I would fight him on this.

So if you're not persuaded that ripping up the social wage and introducing a giant flat tax will irrevocably damage the fabric and the way of life of Australia, be persuaded by this.

Be persuaded by the philosophical change, the change in the ethic - be persuaded by all those statements Dr Hewson has made in the last couple of years, the most telling of

which was that one in the Budget reply when he said, we must not reach back for people because they will drag us down.

This goes to the heart of it. Ultimately this is the nature of the risk. John Hewson has been projecting a more temperate image in recent weeks of course - but perhaps the best reminder of John Hewson's old Fightback 1 persona came in January, in a speech by Ashley Goldsworthy, the Liberal Party Federal President.

Goldsworthy said Australia needed a jolt. ."Life has to become tougher", he said - "with less security and greater uncertainty".

Be warned - this is the brave new world of Dr Hewson. Let dog eat dog. Let the lucky and the rich prosper and the rest gather the crumbs that fall. Dr Hewson is an unashamed theorist of trickle down economics. If he is allowed to become a practitioner of this theory, he will turn Australia on its head.

Call it scaremongering if you like. I do fear for Australia. I fear for the people. I fear for all those things which bind us together, and in which I believe

above all other things.

But it's not scaremongering. It's factmongering. Exposing the facts which Dr Hewson won't reveal.

I am absolutely sure that Dr Hewson will be bad for Australia. His agenda is radical, disruptive, destructive. I sincerely hope and believe that Australians will recognise that they cannot take the risk.

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PRIME MINISTER

PRIME MINISTER PAUL KEATING AT THE NATIONAL PRESS CLUB, CANBERRA QUESTIONS AND ANSWERS

11 MARCH 1993

E & OE - PROOF ONLY

MIDDLETON: There are series of questions from our media members, there are plenty of them, and the first one comes from Julie Flynn.

JOURNO Julie Flynn, Radio 2UE and affiliated stations. Your main argument today has been that the Opposition will make things worse, but you've also conceded that unemployment is stuck in a groove. Today's job figures show last month's growth in jobs has disappeared, the raw number of unemployed continues to climb over the 1

million mark, youth unemployment is up to 32.5%, and we now have the longest period of sustained unemployment - over 10% since the depression. Why would people, who have been affected by unemployment, the recession and high interest rates, trust you for a fifth time?

KEATING: Well, I don't think unemployment necessarily is stuck in the groove. think the way to look at the number is to say that the trend series shows that unemployment has peaked and is flattening out which means that the prospect of it coming down looks, on the latest figures, rather better. That is with retail sales running as strongly as they have, with exports running as strongly as they have, with national production up, with the other figures of recent days and recent weeks - the ANZ Job Vacancies series up 5%, the CES Notified Vacancies up 13% on the equivalent period 12 months earlier, DEET's Leading Indicators - all of these things give you an indication that the figures, the strength coming through the economy in the

labour market mean that we've probably seen unemployment peak, and hopefully we're starting to see it trend off.

JOURNO: Laura Tingle from The Australian, Prime Minister. Most of your speech today has been addressed at Or Hewson's agenda, and towards saying why you would be offering more of the same, essentially, why you think it's worked to date. But what mandate do you think you would gain if you actually did win office on

Saturday? What do you think the mandate would be? Why do you really believe that

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people would be saying: yes we really do want more of the same, when you've given them three years of recession in your last term?

KEATING: Well, what is the same? Is the same the same as the 70s? Is it a same as the torpor of the 60s and 70s? Of course it isn't. It's more of the BHP's getting $2 billion contracts in Vietnam, it's more of the $1 billion contracts in Laos, it's

more of the exports, it's more of the transformation, it's more education, it's more product innovation, it's more best practice in . Australian companies, it's more cooperation at the workplace, it's more productivity focussed, it's more cooperation, it's more decency, it's more collective national strength. Now, to put all that asunder, because we've been through a recession, and to take the greedy, grubby, scratching politics and policies of the Opposition which would put Australians one against the other and lose that whole competitive and cooperative ethos and ethic - would be to

put our future down. And that's why I believe that the Government offers not only the best prospects in the 90s, but the best prospects of getting back to stronger growth and better employment. It's only by getting investment going, will we be able to do that. It's only by reducing the tax on business as the Government proposes and

reducing the company tax rate from 39% to 33%, in accelerated depreciation, in a further investment allowance. It's only by a break to capital, will you get the investment - not by putting the company tax rate up to 42% as Or Hewson proposes, not by putting a $24,000 million GST on business and making them collect it, not by slowing the economy down with a massive spending tax, but only by putting a charge

into the investment and seeing it come down into the economy. And the charge is by way of a reduction in company rates, will give Australia the same company tax rate as Singapore, much the same as the Asian region, while Or Hewson goes the opposite way. This is why I believe the Government can get the economy growing even faster than it is now and it's now growing at 2.5%, why I believe we can get investment

moving and with it employment. So, the aim should be to learn by what happened in the recession and go on to do bigger and better things, but not to take our recessionary experience and regress and go back to the wilful, mindless policies of

Margaret Thatcher's Britain, or Reagan's America, to go back to the sort of "greed is good" syndrome which is where the Opposition wants to take it, with all the problems which will attend it.

JOURNQ: Malcolm Farr from The Daily Telegraph Mirror. You failed to make industrial relations an issue of the magnitude you would have wanted in this campaign. The private polling and your own Labor Party polling shows it's just not sizzling the way as you would like it. Is that because 10 years of the cooperative ethic of the Accord has produced 11% unemployment, and people aren't convinced that what you call the divisive, unseemly scramble of the Opposition's policies don't look that bad?

KEATING: Well, I think that it is an issue in the campaign, and I think it would be a misjudgment by journalists to underestimate it. I think Dr Hewson and Mr Howard's brazenness in sitting on industrial legislation which can affect everyone's income and conditions of employment is understood by the electorate, and they regard that sort of brazen behaviour poorly, and they're worried about it, they're worried about their jobs. And I think the message has got through - that John Hewson has one

policy with two arms, two prongs that is: tax up, wages down. Tax up with a GST, wages down by wage cuts delivered through a draconian industrial relations system -

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one which Sir Richard Kirby said this morning would be unfair and could lead to violence. I mean that's the sort of policies which I think people are worried about. But I've got some details from the Victorian employment contracts and they're very interesting. It says just in one company - the contract is being presented to all new starters - penalty rates, it takes away penalty rates and overtime rates, any limits on hours worked. Paid public holidays - they are either worked at the ordinary time rate or to be taken unpaid. Plus, superannuation is deducted from the base rate of salary.

Instant dismissal for a wide range of reasons including distributing written or printed matter without consent, and loitering in lavatories. And of course it is journalists themselves who would be most at risk by such contracts as they are professional loiterers. And then there's another, where the contract takes away weekend penalty

rates, overtime rates and standard spread of hours, it takes away the 30-minute meal break, superannuation and workers are changed from permanent to casual without being compensated by a casual loading. A worker who is late or absent without two hours notice has to pay the wages of the rest of the workers in that group , for the length of time that worker is absent. Workers will not find out what their base rate of pay will be until they sign the contract. Or if we look in the medical industry, one contract here takes away penalty rates for weekend work and public holidays, shift allowances, reduces annual leave, sick leave and overtime rates. Plus, four nurses and medical receptionists are to be sacked for refusing to accept the contract. The average cut to take-home pay is about 35% or $151.00 a week, and the employers refuse to take the employees Union - a contract recommended by the AMA. That's right. That vicious little organisation. Now, these are the sorts of things which will be par for the course under John Hewson's industrial relations. And is everyone going to accept that in the cooperative spirit of the last 10 years? Or are they going to get in and kick and thrash and claw and tear - which is of course exactly what they'll do, and why wouldn't they? That's why I think industrial relations is a sleeper in this election. think people do understand it and they're not going to be convinced by little Johnnie

Howard's bluster on radio saying; how could I show it to the public without showing it to my colleagues first? I mean, even that I thought would have made him blush, but it didn't.

JOURNO: Randall Markey from The West Australian, Prime Minister. Is it unfortunate and a bad example to the electorate that on the very day it is shown that 1,052,800 people are out of work in Australia, that politicians including the Prime Minister get a pay rise? I'm just wondering are you prepared to scrap it? Given that the wages deal with the ACTU is contingent upon the creation of 500,000 jobs

minimum in the next three years, why not link MPs' pay to future job growth?

KEATING: Well, MPs' pay is linked to public service salaries. An MPs pay has fallen behind the rest of the community over the last 10 years. The fact of the matter is, that MP's are now no longer treated specially or separately, they are only adjusted with the whole of the Commonwealth Public Service, and.of course they're adjusted only on community standards by any measure, and at 1.4% you'd hardly say that that's an extravagant claim even with modest inflation. So, I don't think it's right or decent to draw the link between today's unemployment figure and the 1.4% - it's a sort of gimmicky question that I expect from the worst newspaper in the country - The West Australian,

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JOURNO: Tony O'Leary from The Herald Sun, Prime Minister. You've been describing the GST as the most pernicious tax in Australia's history.

KEATING: Yes.

JOURNO: I wonder why you're insisting also that a future Labor Government can't unscramble the egg, why you won't commit a future Labor Government to abolishing it? And also during the election campaign you've also been insisting that there's a push into Asia. I wonder if you could tell us then why Singapore Airlines

didn't get a slice of the Qantas action under your Government?

KEATING: Let me deal with the second first. Because they wouldn't pay for it and we weren't going to give it away, Tony, it's as simple as that. They were given every opportunity, they were encouraged, I actually saw their chief executive officers in Singapore during my visit there. They were encouraged, in the end they thought they could have it on the cheap and they found otherwise. As it is, with British Airways -•

most British investment in airlines in Asia were tied up in Cathay Pacific. And when that went to other owners, the former BOAC or British Airways, had virtually no routes in the Asia/Pacific area. There is a very nice fit between British Airways and Qantas, and it's because of the niceness of that fit that British Airways paid more money and that's why they received it. But let me go to the other question which is the question of greater significance, and that is the question of why a consumption tax can't be

repealed. The fact is, when you take $24 billion from people and set up a system like this and then disperse the proceeds - that's the end of it. There is no way of reversing it. There is no way that any Government could come in and reimpose the kind of taxes that we have with the likes of payroll tax or change the changed outlay priorities of a Government, based on those sorts of revenues. Once this thing is in, it's in forever, and I think that's what the Australian public should know. They may say: we've had the recession, why should we re-elect the Government? But if they re-elect the Government, in three years time they get another choice. They never get another choice with a GST, it's here forever, and that's the point I made the other day with John Hewson. He said: what could be worse than another three years of Labor, and it's a very simple answer - a GST forever. And . that is the fact of it, this is an enormous step. This is the first country in the world that will have a free choice about whether it has a GST - all the others were imposed by Governments in office without choice. ' Those other communities never really had a chance to say no. Australianshave a chance to say no, they've got a chance to think about it and they've beenwarned. They've been warned by the Canadians, they've been warned by NewZealand and they've been warned by the British. I don't know whether you noticedtoday in a wire service report, Britain is now considering increasing its VAT from17.5% - increasing the rate - and it said: on VAT there are various options including a widening in the tax base to cover such items as magazines, newspapers, food, energy and children's clothing. And it went on to say: an increase in Britain's value-added tax - which is a GST - is high on the agenda for next week's UK Budget - which comes three days after Australia votes. So, here's another warning signal from Britain, as ifthe large one we had from Canada wasn't significant or sufficient, or the constantdeclarations and protestations from New Zealand don't give us the warning, that we'vegot a free choice in this matter - don't take it, don't take a GST. This community canmake that judgement and can make that decision and not be locked into it to find that

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we're stuck with it forever.

JOURNO: Peter Charlton from The Courier Mail, Prime Minister. Queensland's a State that seems to have weathered the recession better than many others, yet Wayne Goss has warned of a collapse in the Labor vote. Do you share that pessimism? If so, what do you put it down to - the collapse in the Labor vote? Do

you find such a warning as helpful?

KEATING: Well, I don't think the Labor vote has collapsed. It might have gone off the boil somewhat, but again that doesn't necessarily imply we'll lose any seats from it. And I'm not sure that the tactic of saying to people - trying to hurry them back into the tent as it's put, telling people that one Party or another is off the boil so that their traditional supporters will sort of scurry back to them - is a tactic of worth. I think the public are smart enough to make their own judgements about all these things, and that's why I believe that the Government's position is strong enough to see it returned, that the seats can be identified and have been identified by people on both the Labor.

and Conservative side of politics.

JOURNO: Tom Burton from The Financial Review, Mr Keating. Could you outline your intentions regarding your Ministry if you are re-elected? How extensively do you intend to re-shape the Cabinet and the Ministry, and what principles will you use to choose your Ministry? For example, will you be wedded to the normal factional split where Members get a Ministry not necessarily because of ability but because of factional alignment? And will you also reject the traditional distributions which have often led to the same result, and demand that you should be free to choose the best

Ministry possible?

KEATING: I think the return of the Government provides the Federal Parliamentary Labor Party with a great opportunity, particularly as is well known, quite a number of Members of the current Ministry will either not be contesting the election or retiring, So this creates a number of natural vacancies and as well as that, after each election, there is always the option of the Parliamentary Party to choose new people. And I would think this presents an opportunity for choosing younger people, fresh people and I think it would give us a great opportunity to re-invigorate the Government from a Party which has in its backbench quite a number of people who will make a major contribution, and can make a major contribution, to our national life.

It's a great opportunity for us and I'm quite sure the Parliamentary Labor Party would not let it pass by without taking that opportunity up.

JOURNO: Brendan Burns from The Press, New Zealand. Prime Minister, if you win on Saturday will there be an improvement in the relationship with New Zealand? Or do the differences over industrial and other policies mean that will continue to be marred at a political level and at the CER level?

KEATING: I don't think there are any problems in relations between Australia and New Zealand. This is not a Party matter. We've got members of the Labor Party in New Zealand coming over to sell us their barren creed, we have members of the Conservative Party over there trying to sell us the same stuff - it's all taken with the sport I think that we know and understand it to be. But essentially, New Zealand's

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place in Australia is best reflected of course in those Constitutional caveats which are there, always there, waiting for New Zealander's to join us in the most complete way possible.

JOURNO: Ross Peake from The Canberra Times, Prime Minister. Immigration numbers have gone down because of the recession. If you're re-elected, can you give us an idea of what immigration numbers might be, given that we've now got growth in the economy? Do you think in mid year they'd be set to go up, stay the same, or come down further?

KEATING: Well we've cut the migration intake back from about 140,000 a year to about 80,000 a year, so it's just on half of what it was two and a half of three years ago, and that's because the economy is not producing as much employment therefore we're not taking as many people. But we don't abandon the program altogether, because you can't wind it up quickly when you need it to make those additions to the labour market - that complimentary quality to our society which immigration has. brought. I think we'd just make a judgement as time goes on about the strength of the economy, the lift in the labour market, and see then whether we can make a judgement to increase the intake. But that would be a matter for seeing at the time.

JOURNO: Ray Brindle, Knight-Ridder Financial News, Prime Minister. You mentioned in your speech the unequivocally positive economic news, yet only about 10 days ago Mr Dawkins virtually endorsed a post-election rate cut. What caused the big change in your Government's view? And indeed, is economic growth now sufficiently strong to preclude any further interest rate cuts?

KEATING; Well back in January, I think the Bank itself said there was case for, they could see a case for a reduction in interest rates - except for the exchange rate, volatility on the exchange rate. Well, the exchange rate has settled down in the meantime, and can I say also that this Government doesn't have a wages problem. If a Coalition Government is elected with a GST, and an inflation problem rattling down the road and a huge wages problem, I think the Reserve Bank and its Board would be

most loathed to cut interest rates, But I think upon the return of a Labor Government where we don't have such problems, it might be then possible for the Bank and the Government to make an early move on rates. That is - given the fact that we've got Accord Mark 7 in place, we've got a low inflationary environment at the moment, and heaps of productivity.

JOURNO: Ken Davidson from The Age, Prime Minister. You've painted Dr Hewson as an economic rationalist, warts and all. Are you really also an economic rationalist who's attempting to paint yourself with a pretty face at the moment?

KEATING: Well I'll tell you what I'm not Ken - I'm not an economic irrationalist. But nor am I a slave to the nostrums of the market so that the market is only right and always right, and I never have been. When I was party to the decision which made the cross media rule in our media, I thought that intervention in that industry was necessary because the market wouldn't sort it out - well it would sort it out all right. It would have been all owned by two people. And that's why I believe that one had to make such a decision. It's why I believed that prudential supervision of Banks should

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be put into legislation, that it was no longer appropriate to have a phone call up and down Martin Place and everything would be hunky-dory - that we needed actually to put into law. So, never have I believed that the market and the pursuit of income and the pursuit of rewards is the sole way to go - that's what John Iiewson believes. But the great furphy that he's putting to us in this, is that he's saying if we introduce a

major GST and we cut the price of petrol in a country which already has cheap petrol in world terms, and we abolish payroll tax - a relatively minor tax which has not been in the public debate until now, not until recently - if we abolish payroll tax and cut petrol - presto, we'll have a new society and a new country. Now what total rubbish, what total and complete rubbish! That to change an economy like Australia to a sophisticated manufacturing and services country fuelled by a good education system, to change all that and deal with all of those sectoral areas of the micro-economy -transport, wharves, air transport, land transport, telecommunications, workplace culture • they're the things that have to change. But to think you can change all that by abolishing payroll tax and cutting the price of petrol. If I'd have stood up and said that to you in any one of 16 or 17 statements in the last 10 years you would have laughed-

me out of this room. And yet that's the central thesis of the Opposition's Fightback policy. It's an absolute fraud of a policy. And it's supposedly all relying upon - if we clear the decks and let the rich have a clean go at it, we'll be all better off. Now that's the reward and the greed stakes, that's the 'Gordon Gekko' view, and that's why John

Hewson's still chanting incantations at Liberal Party rallies because he can't defend that policy - it's indefensible. How could you say in a country that doesn't need a consumption tax that we'll load it up with a $24 billion GST and then we'll abolish payroll tax and cut the price of petrol, and all of sudden - presto, we have a new country. That's what he's told us - it's rubbish.

JOURNO: Don Woolford from Australian Associated Press, Mr Keating. I'd like to ask in the context of what you've said about fairness, a question about Accord 7 and its links between job growth and wages. Isn't it true that under the Accord, it will be those workers who've failed to secure an enterprise agreement and who thus

require safety net provisions, who will be asked to forego wage rises it your job growth expectations aren't met? Doesn't that mean therefore, that the full burden of wage constraint will fall exclusively on that part of a workforce which, almost by definition, is the lowest paid and the industrially weakest?

KEATING: Well I think it means, Don, that those in the more competitive areas of the labour market, find their own wage increase through a productivity change. In other words, there's no cost to the employer, they negotiate an enterprise agreement where productivity increases and the reward is split between profits and wages. So that's the position we're talking about. But if we're talking about costs to business and costs to industry, we're saying let there not be costs, other than the event that we can see progress in the economy and progress towards higher levels of employment. And where we can see that - well then fine, those sort of costs are not going to impair our national progress. Now I think that balance is pretty good. And I might add, mind you, that a lot of those people will find - that is people in the lower deciles of the

income system - will also have the benefits of our tax cuts which are cutting the middle rate from 38 cents to 30 cents in the dollar without a GST, let me repeat - without a GST. And that will also supply them with benefits, and that's why in Accord Mark 7 the tax cuts are regarded importantly for those reasons. But if we are growing and we

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have demonstrable progress towards an achievable minimum of 500,000 jobs over 3 years, therefore then, the costs to be borne by business in general we think are reasonable ones, because the volume that will come from the economy will see their bottom line be in much better shape.

JOURNO; Bradley Perrett from Reuters, Prime Minister. Last night when Paul Lyneham asked you to say sorry for the million unemployment, you explained those parts of the problem that weren't your fault, such as the international economy. wonder if you'd explain to us which parts were your fault?

KEATING: Well I think that no Government can go through a change like this without making mistakes, a change like this - a huge magnitude. And I think interest rates stayed on too high, for too long. But again can I say, monetary policy is not operated exclusively by the Government. Let me say that I would have brought the rates down much more rapidly, but I could only do it by dragging the Reserve Bank along with me. Now, nobody in this election is inputing to the Reserve Bank, no-one' in this election is inputing any blame for the unemployment to the Reserve Bank. It falls upon the Prime Minister, or the Treasurer in my case, having been both, on to me. And yet monetary policy is actually decided by an appointed Board that's not elected, and has no reference to the way in which the economy operates. I think that it may be possible to design a different system of monetary management in this country. One where the accountability is clear and one which also takes account of the needs of sensible monetary management. Because, I think that in the end, to

have the Government of the day bearing responsibility when the responsibility is shared for these things is not good, and also it's not democratic. Secondly, can I say though, that I don't accept and will never accept responsibilities for the Bond Corporations, the Elders takeovers, the State Banks of South Australia and Victoria. I

had a State Bank under my management - it was called the Commonwealth Bank of Australia, and it finished the 80s in fine fettle - its price is booming. It's share price is now booming on the Australian stock exchange, that's what the stock market thinks of it. After all, there was no profligacy on the part of the Government. We cut Government spending back by $30,000 million a year, we cut it back by 6% to 7% of GDP ipso facto making the private sector $30,000 million a year better off. They sprayed it around like a garden hose, and in the end they want me to take responsibility for their behaviour. Now most of them, of course, are no longer

managing the companies - most of the people who perpetrated it are no longer managing the companies - and at least their shareholders caught up with them, if the electorate didn't. And I think this is a lesson that Australians have learned, particularly the financial system - and that is: that one can't go chasing growth without cost, indiscriminate growth without cost. And that's the lesson that Westpac and the ANZ and other Banks have learned to their cost. And we'll end up with a result of a much smarter banking system and a better financial market, and a much saner country. But these are the good things to focus on and not say: well, we had those problems, let's turn ourselves to the 60s and the 70s of the 'them and us', let's rip and tear and claw, and let the doctors in for their chop, and let the companies rip away at workers pay, by individual wage contracts, let's have the survival of fittest contest, let's go back to the bad old days of Australian industrial life because we happen to be beset with the same problem as the United States, Britain, Canada, Western Europe, Japan - and that was a business bubble that had to burst - and in the change in the cycle, we've all worn

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the down cycle. And it's that down cycle I say learn from. But don't use it as an excuse - as John Hewson wants to - to retreat backwards to bad policy and the bad old days of industrial confrontation and division.

JOURNO: Michael Millett from The Sydney Morning Herald What will be your major priority if re-elected on Saturday? What will be your first legislative measure? And just in response to your last question, isn't that what Or Hewson is proposing in relation to monetary policy?

KEATING: No. Or Hewson's saying: let's give an independent Reserve Bank draconian powers, then the Government hide behind it and let a group of appointed people rip the economy to pieces as they see fit, in pursuit of inflation-only objectives, with no objectives in there for employment. We've had a balance between the

employment and price stability objectives of the Reserve Bank as described in the Reserve Bank Act. He's saying: let's remove that balance, let's get employment out of there, let's focus just on inflation. So you could imagine with a GST adding about 4%-to 5% of inflation to the economy, and the Reserve Bank being told that it must reduce that to under 2% and not take any head of employment consequences, the Reserve.

Bank would just hop into the economy with high interest rates. That's what John Hewson has in store, That's not what I'm talking about at all. I'm talking about continuing that focus upon employment, and getting that balance between employment and price stability in the right kind of way.

JOURNO: Your first legislative measure?

KEATING: Well, I think our legislative priority would be to see that the things that we have undertaken to do, in respect of companies - the 33% company rate, the further additional depreciation allowance of 10% - that those things go in quickly, so that we can get that investment moving. That people can see that they're going to be taxed at Asian tax rates, and that, therefore, with a further investment allowance on top of the 10% that already exists for projects over $50 million - that the whole thing will get started. And I think that is the key thing to get that $130 billion of projects

nominated by their proponents off the stocks and into expenditure.

JOURNO: Bruce Juddery from Campus Review Today. You've just dumped on the Reserve Bank and said that they wouldn't take your line on the reduction of Interest rates?

KEATING: I didn't dump on them, I'm just making a point, that it is not exclusively the Government's preserve.

JUDDERY: Do you want to bet what is in The Financial Review and Business Australia tomorrow?

KEATING: There is only 40,000 that read those things.

JUDDERY: Okay, that is your problem. It is not getting a run. Give yourself a chance to really spread it around the country.

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KEATING: Come on Bruce, get to it.

JUDDERY: The Coalition's policy Paul, I always address men if they call me by my first name, I'll call them by theirs.

KEATING: As long as you get to the question.

JUDDERY: And if you'd stop interrupting, I'd do so. The Coalition promises independence to the Reserve Bank. It is independence to do one thing and that is, control inflation. They are also promising independence to the universities. Is there any evidence that they are being less generous there? Is there any evidence that they are promising universities independence to do anything other than what they tell them to do? That's on behalf of my three days a week employer.

KEATING: They want to turn universities into business organisations. They want to make universities fee-charging institutions - full fee-charging institutions - so• they can become business organisations selling the services of education, that is what they want to do. But in doing that, they would pass up one of the central tenants of Australian life, and that is: that a child of ability has a right to a tertiary education, regardless of their family's parental income or circumstance. And of course, in vocational education they want to do something else - they want to provide vouchers to 16, 17 and 18-year old young people, to go and design for themselves their own

place in vocational education - to negotiate with an employer time-off for training away from the job, from institutions that won't exist because they don't want to fund them, but they say will spring up commercially if there are enough vouchers around to receive them, or to provide an income to fund the investments of a private TAFE college. What would happen is, that many hundreds of thousands of young Australians would never be trained. For a start, their negotiating position with employers particularly in a labour market like this is, would be so weak as to mean they wouldn't be able to negotiate time off. You can imagine a 16 or 17-year old walking around with voucher looking for an institution to go to, and even if they are able to design the course for themselves we just wouldn't have the capacity to take them, because John Hewson is not committed to the $730 million that I put in One Nation for our vocational education system. ' Therefore, it would mean that the

unfairness in tertiary education was extended to vocational education - but under the same principle that the market will work to provide education where, in fact, it is not a market matter - this is the point Ken Davidson made earlier - it is not a market matter. The market has its place, but it doesn't have its place cutting across one of the central nostrums of Australian life - and that is a right to an education.

JOURNO: Abe Korbo, I write for several ethnic newspapers and I am also an executive member of the Ethnic Communities Council. I am sorry if this is too parochial a question two days from the election, but why should migrants vote for Labor and not the Liberals? What are the most important reasons? And the other one is, there is a number of recent studies that show that intakes of migrants are good for the economy of the country even at times of recession, so why would you reduce the numbers, if it is not because of public opinion pressure or some other reasons?

KEATING: We are not reducing them beyond where they are now. The

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question I was asked was, when would we put them back up? And I said, that would depend upon economic circumstances. As to why migrants should vote for the Government, I think the Government believes in a multicultural society. John Hewson said multiculturalism is a mistake, to use his words. To quote him, he said that multiculturalism is for certain a mistake. He doesn't believe in the whole multiculturalethos of the country, and of course one of the largest communities that would be mostaffected by a change in the social wage are migrant communities, and particularlythose who are not fluent in English, or who have come to this country untrained andunskilled. They would lose Medicare, which is a basic health protection device forthem, They would lose a lot of the award benefits and protections which come to theiremployment, by virtue of the award system - particularly migrant women would bemost hardest hit by the abolition of awards and the movement to individual contracts.Programs like English as a Second Language (ESL) on which we have spent a veryvast amount of money trying to improve the educational opportunities and work accessopportunities of migrant people would be cut under a Hewson Government, and itwould mean that basically those supports which do exist in the social fabric of.Australia, by way of such things as English as a Second Language, health, educationand the rest would all be things which I think the absence of would cost the migrantcommunities in particular very dearly. And that's why I think the migrant communitiesshould vote for the Government, but most particularly because we actually believe in amulticultural country. We actually like having them here, and the Liberal's don't.JOURNO: Alan Sunderland from SBS Television, Prime Minister. In recent days it has been a feature of your speeches and addresses to the public to talk about the chaos that would ensue where a Hewson Government to be elected. Given theamount of social disruption you have talked about, and also Parliamentary disruption interms of the Hewson Government legislative ambitions, do you think in the widelyhypothetical event of a Hewson Government, we would see a full term Government in Australia? Would it last the three years?KEATING: Alan, I don't think I can help you with that. The thing that I can sayis and must, is that the election of a Hewson Government will see Australian life as weknow it change. We will see all the tenets of fairness and decency and equityabolished. We will see a system that he wants a model that he proposes and that hisFederal..president Ashley Goldsworthy made very clear in that quotation I read fromhim, and that is where it will be ready, steady, go and everyone is to go for it. Thedoctors will go and grab money off the patients. The companies will go and grabmoney off the workers, particularly the weaker ones - women particularly, low paidpeople - they will go and grab them and push them onto peasant wages, and there willbe a snatch and grab operation right across the whole economy. The whole decadeof decency and fairness and equity and co-operation will go, and as it goes, it will begone - probably for a very long time, if not forever. We will have a different sort ofcountry and we'll try Thatcherism and Reaganism, as John Hewson said, it was nevertried before. That is what he said - it was never tried properly. He is going to try itproperly. That is, he is going to make the going really tough and the pace reallywilling, so that the goers as he calls them can go and snatch what they can, and thestrong can have the most, and what will be left will be others. The point I'm making is,how in that environment can we summon the energy to focus on unemployment? Howin that environment can we get a million people back into work experience, to get them

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trained and back into work? They will be just swept to one side in this milieu which would follow. This country needs tranquillity, it needs focus, it needs all of its energies brought to the one point to do with unemployment. You'll never deal with it in a greedy snatch and grab operation of the kind that John Hewson was begging

Australians to invoke. And that is why I say, that whatever they do on the weekend - if they vote for that - that's what they'll get. And whether you can truncate it in the course of one Parliament, only time would tell. But I don't think Australians will. think they understand that Dr Hewson's non-appearances at the National Press Club,

his failure to debate his incantations at these chaotic, disruptive, disturbing gatherings he is having, are a bad sign for Australia and will worry Australians as they might, and that they are not going to be switched on by that appeal to preference and greed -which is what Dr Hewson is really offering.

JOURNO: Camille Funnell, ABC Radio News. Two days out from the poll, do you think you would be in a better position now - if you had been in the Prime Ministership longer, and given your call for the environment movement to take a stand.. in your comment in the Toorak bookshop the other day - that some people are

standing back merely waiting for the result? Do you think that you have been deserted? Or do you feel deserted by interest groups and the business community?

KEATING: I think a lot of people have stood up. The Arts have stood up, the people associated with the environment today made very strong statements - quite a lot of groups have actually stood and been counted. The National Book Council on that day was standing up, and I think this is important, that people actually say: we don't like this, we are not going to regress back to some sort of dark past, we are not going to go back to the bad old days of them and us and confrontation and division. So that is true, there could be more of it of course. There can be more of it. People should stand up and have their say, and a lot of the business community who have been principal beneficiaries in this Government have been quiet or they have been talked down by their organisational leadership, so that individually they have been discouraged from saying things - less they fear discrimination from an Opposition which has been, as they said themselves, taking a list of all those who have demurred from their policies. So, this sort of implied intimidation from the Opposition has no doubt kept many people quiet, but that is the kind of country you would get if they get up. That's why I say, if anyone of the media wants to do what I think is right by this country, in terms of its future, they should expose the Oppositions true policy weaknesses. And in these last days remind the community that we have something

better in Australia than the 'greed is good' notion, and that Dr Hewson doesn't have a policy which will stand the test of time - and it won't change Australia for the better.

ENDS