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Transcript of interview with Peter Kennedy and Gerry Gannon: ABC Radio: 8 December 1992: Keating policy

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KENNEDY; Prime Minister, with regard to yesterday's meeting of the Council of Australian Government you must have been disappointed that not even the Labor States sided with you on the issue of industrial relations reforms.

PM: They did on the one part but not another. That is there are two parts of this. That is that we extend or make it easier for people to have access to the federal jurisdiction of the Arbitration Commission where no arbi tral

structure exists. This is nationwide legislation but for inl!ltance in Victoria, the thing which would trigger it would be when the awards under the Kennett government expire in March, Victorian employees can seek coverage and have an award to protect them by the Industrial Relations Commission,

Now it seemed to me the Labor states were not so much worried about that, the y were a bit worried about the legislation under what we call the external affairs power that was legislation giving effect to International Labour Organisation

conventions on equal pay, minimum ra tee of pay and terminations of conditions. But they hav e got nothing to fear from that, and the other thing ia Australia has ratified these conventions. They were all ratified with the agreement and consultation of the States and we are leg islating to impose

international minima. Sor said to them ho w could you object, does anyone object to it being equal pay for equal work or minimum rates of pay or prop er redundancy in termination arrang ements.

KENNEDY: you wanted Christmas.


You said at the lunchtime news conference that to legislate on some of these· issues before Are you still going to be able to do that?

the drafting considerable.

We have got a very large legislative load and task is always, with a thing like this, But if we can get it drafted in we will/; but we



EILEEN: What concerns me more than anything is the

health problem th�t we have. It's all very well for Medicare and all that sort of thing but we here in Kalgoorlie we have a wonderful hospital, good administrators, nurses, whatever we need. But not so long ago the hospital administration had to close a ward because there wasn't sufficient money to run it. we are lacking in doctors because we are so far from the

medical centre which is Perth. What is in it and what's going to happen especially "for the pensioners please? That is my question I am a bit worried about that.

PMt As you know Medicare is a national health

insurance system. It covers the provision of medical services with doctors and also accesa for patients to public hospitals. Medicare is not the management system for the public hopsital system they are managed by tha States and what the government

has proposed in the new Medicare agreement, which will now run for 5 years, in the Budget, we proposed in the Budget to pay the States another $300 million a year or Sl,500 million over S years for enhanced access by public patients to public hospitals.

That is to make the taking of public patients into public hospitals more attractive and I am pretty confident those agreements will be signed and it will mean I think that those particularly elderly patients who may have a need of elective

surgery of some kind, it means that their access should be speedier through the public hospital system because it will be more in the interests of the public hospital system to take them. Now of course some people will wisely insure themselves

as well but the insurance helps in relation to elective surgery it doesn't matter that much of course for acute. If you have got an acute condition you are rush�d to a hospital well than if you go in a.a a M�dicara patient you go in

basically the same room and you are treated by the same

doctor. So these are all matters for judgement but we will make the public system much better by providing to the States $300 million a year for the next 5 years.

GANNON: So will that mean the prevention of the

scenario for somebody who has got to wait a year or even 2 yeara for a painful hip replacement?

PMa It should shorten it, it should shorten it

considerably because I think the States will then and as wall as that we provided yesterday as a matter of fac t SSO million to the States to reduce waiting lists by setting up systems, computer systems, time management sytems in state hospital administrations where perhaps you might have queuing at one

hospital but not at another where people's desire for surgery can be accommodatad at a range of hc&pitals within the city for instance. So that was done yesterday. All this I think should help very much in improving public patient access for things like elective surgery.


GANNON1 scope in the


So you believe that there is still a lot of

state management of the hospital system for

PM: I think that is true of all systems but again I

think if the Commonwealth makes it more attractive for the public hospitals to take public patients they will and by adoption of this scheme yesterday on waiting lists it should be that we won't fin'ci a position where someone has to wait

quite awhile at one hospital but at another there is virtually no waiting time. We can arranqe better the queuing more effectively, more eff iciently. Between the two it should make a very big change.

TAFFY: What I wanted to speak to you about is that I

commend your action you have taken regarding the television violence for our children. Were you influenced by the good relations that you have and close knittedness(?) with your wife and your children?

PM, The thing that influenced me on this was

exclusively my own experience with my children because I think that when you sit down to watch a movie a 8. 30 at night you should be able to eit there with your family and not be

embarra ssed by what you see, not have to go and switch the dial to another channel or s hoo the kids off to somewhere else and that is why I think that what hae been happening in

chasing ratings and revenue the TV stations have been pushing the limits and the edges out to what was acceptable in terms of violence for showing it at 8.30pm. \

Now what has happened now we have now developed two

categories. First of all we have developed a sole single classification system for video, film and TV so that the commonweal th f ilm censor will determine what classification goes on a film to go in the theatres. That will be the same

classification that goes in the video shops and it will be the same classification that goes on TV. Md essEmtially what it will mean is that what used to be called AO or adults only on TV will now be split into a category called M for mature

audiences which is the softer part of AO and the harder part will ce called MA and they can only be shown after 9.00pm. So what it means is one system, so everyone will know more

accurately what is in the film and at 8. 30pm, for an 8. 30pm showing which is now nearly every night of the week in most Australian cities people will not see the violence they would have seen three month� ago.

GANNON; So you were influenced by your own �amily situation and your own family viewing habits?

PM1 I watched them, I eee what my kids have on and

I watch them like hawks you see to switch off the things which are violent and I don't think they want to see them and

children 7 and 11 and 13 they shouldn't be subjected to that


PM1 (cont'd> sort of stuff and particularly during the school holidays I think TV stations should use a bit of sense about what they show and to have kids sitting up obviously a little bit later in the school holidays watching stuff which is quite

violent is just not a goer. So my children are seeing less and less TV by virtue of the fact that a. lot of it is not

worth watching. I hope this changes.

GERRY; In the" light of this country's desperate need

for foreign currency, tourism and offshore business, how can the government justify the difficulty being encountered in the UK in relation to visitors' visas? Regular family visitors now hava to renew vieas annually and a business friend and

frequent visitor applied to extend a 2 year visa to a 3 year one and got a 6 month visa instead. Why are we making it so hard for visitora and business to help us make ends meet? Immigr ation control is one thing, cutting off our nOSQs to

spite our face is another don't you �gree?

PM: Who could not agree with that but I am not

familiar with what change we have made there but I don't think that anybody that wants to come to this country as a visitor has any real problem and countries do run immigration laws to suit their national interests and I am sure many Australians,

it wasn't that many years ago when people from so called commonwealth countries had ease of access into Britain but now what you find is that when you arrive at Heathrow it is the European Communi ty queue that has ease of access into Britain and all the colonials wait on a long line. Now we don't do

that to anybody so I don't think access into Australia is a problem a.nd whatever the visa arrangements might be they are not onerous.

JOHN: My question rel a tee to the goods and services

tax. I am a self funded retiree and have some distinct

reservations on the GST and I also believe that many of the initiatives that you undertook in your early years ae Treasurer made a very positive contribution to this country. However, on the GST maybe the electorate has a short memory

but in 1985 a GST was your special project, your baby, you ran with it, you fought for it, I think you called it the

Taxca.rd( i) Ok you lol!!lt out to the ACTU. Now in respect of this and the fact that now is a period of record low inflation I submit that your credibility in opposing this tax now is lees than -PM1 Let me explain -

JOHNt Could I just finish my question. My question

is that in the event that Dr Hewson wins the election/and a GST is introduced would you give an undertaking that as opposition leader that you would campaign in the 1996 election for its abolition?

6 .

PM: Let me just explain things this way. In the

middle 1980s the former government, the Liberal government of which Dr Hewson was a princ:ipal adviser to John Howard, left the tax s ystem in a dreadful state of haemorrhage. Very few people in the Australian tax administration felt, it had been

left in neqlect for so long, it was capable of repair. So

perhaps a gloomy view was we want to collect it when they spend it. Let's put on a consumption tax because we won't fix the direct side tax system and we have a very large budget def icit to fund. Two things, when the GST was denied to me

because the fact I couldn't give the guarantee that the inflationary effect wouldn't go into wages and I might say Dr Hewson certainly can't give that guarantee.

If a Labor Treasurer under an Accord couldn't give the guarantee to have the workforce discount the GST for inflation certainly a conservative leader could never give such a guarantee, anyway leave that point to one side. When it was denied to me I then decided to repair the tax system, root and

branch on the direct side with things like the fringe benefits tax, the taxation of capital gains where most tax schemes relied upon the non taxation of capital gains. Changes to the tax system in terms of a whole range of concessions. The

abolition of entertainment as a deduction, a whole stack of thing!5 which have now made the Aul!ltralian direct tax system one of the most secure in the world. In the intervening

period we also raducad the size of the public sector

conunonwealth spending by about $20 billion a year from about 28/29% of GDP to 23.

So by the time I finished and that is a couple of years ago we had a very small public sector, a much smaller level of

spending therefore requiring much lQ&li tax. We had a direct aide tax system which was as tight as any in the western world, a tax share to GDP the second lowest of the 27

countries of the OECD so you as k yourself the question why do we need a consumption tax? The consumption tax's period has passed and to now take the macro economic risk of pushing another 6 or 7 percentage points into inflation and then seeing it go onto wages and then into ongoing inflation and a

6 or 7 percentage point addition to interest rates that will come with it is now not worth doing.

It's quite wilful, no Liberal leader can give a guarantee that the price effect of a consumption tax won't go into wages and into ongoing inflation and interest rates. And if you can't give the guarantee it's just vandalism to proceed with it. I

couldn't give the guarantee in the middle sos and I gave it up but now we don't need the thing, We have got the second lowest tax share in GDP in the total economy in the whole of the

OECD, We have now got a very tight direct side tax system, we don't need a tax in consumption, we don't need an expenditure tax and that is the reason why I have opposed it.

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GG: Well )'OU me•tloned. today 11 po&. Prime Minister. a 7 point lead tor Labor and a 13 point bnak on Dr Bew,oa u prefemd htme Mbdster. You must be rearettlng yon dldn•t take Jobn Dawkin'• adYlce and 10 to a poll before Chrbtmu.

PM: Th at poll today ls 1ood to r u1, •• I 11id eariitr In tile yur l think the pub lic are entitltd to see the Parliaments run their course. Thia Government wat elected three yean .qo in Marcia ot 1990 an d that three yean b ju st about comln1 up In aot IO loq.

GG: It i, comin1 11p ro l: both Dr Lawrence ia Wettern Au1tr alla and your ulr fe de rally, you must go to the polll early ne1t year , ls It goln1 to be a cue of ladiea bef o" pntlemenf

PM: I don't know, it depend• when Carmen wants to put her toe into the pond, so to 1pta.k..

GG: But you would be chdthl& at the blt., wouldn't you, fo r a poll In Februal")' next yetr?

PM: No. tw ill see whai b happening In the aener al poHtical environm ent and when it i1 opportune fo r the Government and make a ded1lon about It.

GG: But the lo n1er you leave it the areater tht chance Dr He wson and the Coalition have of peaf.n1 you baek.

PM: I think the lonaer we are leavin1 It, In a sen,� the more opportun ity we have to pea binl baek.

GG: How do you mean by that, beea111e the poD• sho w you ne tlear1y in trontt

PM: But if you look at tbat three month• •ao, we wen not •• fa r in front a, w, "� now. The loapr we have p ne the better wt h•ve aone.

GG: How do you 1.1plal11 the 11p that you have opened up in these polls with unemploy ment at auch a blah level, 11. 3, and possibly Ukely to go higher!

PM: I think peo.- dunk tllat tlae Liberal Party doesn't have •�Y ans wers. Can 1 Ju st make this point • wh•t la their policy? Their policy ii a simple tax 1wltc:h from income to apeaclltan, they an aoina to tas. people'• food and cloth Ing, their servic-., and tlaty an aolal to pve thdr procetd1 to the abolition of

pay roll ta:1 and tbey are aoina to tey to cut the price of petrol. Doe, •nyone in Aultralla ... you don't have to be • • eeonomk pniu1 to undentand this point. and tut II tbls "' that abolllbln1 p.lf roll tu and cutting the prke of


.,.tro& ll not r,oia1 to remake AUIU'llla. What It 1oin1 to remake Au1tnU1 11

a GO\'tnameat behl1 lnvolffll lll all or the aeeto.n tllat are reaJ.I)' 1olng to

chaap the place, tbe Jabour market, like we were ac the Pmnien Conrerentt

)'ettffllay • la water, ia the provhtoa of power in e1tablbhf111 a proper market for electricity in Eutern Auatralia. Thue are the thing, which have

• role for Govern meat. Now, Peter, we are already 1rcnn n1 t'ut er than 1ny

other country in tlae OECD. wt are 1rowln1 at 2 per cent a year. Many of tbe otb,r couatriu, Ja pan Ja1t week went into a recession ••• I think many people in Austral'- now uudentand and know that the ,conomy lt srowing , that employment will pick up aad that the big stru ctural change, the

reorien tation into Ai la, the reb uildin1 of our educ ation system, all of these things are the tbinga the Gover nment i1 doing and the thi ngs Australia needs to be done tut wou't be cured by a ,tmple t11 switch.

GG: But you need a 1rowth rate of 3 per cent. don't you, to prevent unemployment from riainaf

PM: Aroun d 3, yes that t, true. But we are already over l, we have had tour quarters of powth to 2.1 per C!ent and our fonca,t b for that to accelerate. That being t.hc Ute; we wm nan to aee employme11t riai ng, havfns then it1 impact on unem plo yment, a favo urable impact on unemployment, I think the

Govern ment bu a structure la place, it has changed Australia, It is still changin1 A111tralia and l think that many people think the 1terile policies of Dr Bewao ai, on tile GST and cutting w11t.1 fa not a solution.

GG: I uadentaad ;you have a couple minu te• to IJMnd with metropolitan listenen after the n8W'.1, we wm be bapP)' to avail of that, Prfme Minuter, in the mean time it is nnn time. ' o•c1oek.

PM: Thank you am,,.


GG: The Prime Minister is •till with u,. Prime Minister, on the 19th of December )'OU mark one year In the Job as Prime Min ister. how would you look back and how woald 10a characterise that yurt

PM: It has been a year ot quite 1ubttanda.l chanae, We put toaet ber the One Nation package earUer In tile 1ear to tdmulate the e1:onomy and to set ft movlna and 1 dl ink we 1ucceeded 111 tbat bteaUH In the �tional account, which came out la1t week, the ftnt bit ot objective evidence for the year, one

of th! large tontributon, the Jaram contribu tor to arowth is what la wled In the Jaraon, public demand. which mean, the publ k sector has bten pulli ng the ec:onomy alona,. So the 1tr-ategy, I thlnk, hu wor ked and ls wo .. kinw. Aa well u that we have been able to continue the enormous chauges whkh tht

Gov enment introductd ha tbe •30tt we did 10 much tbll year. For instance, we estab Usbed a nadonal traioin1 authority In tbe One Nation packa1 e to


nmodel total>' our TAR and voeadoaal educadoaaJ l)'ttem. nat wil be

the greatest ebap, probably, ot th• )'Ur which we wiD HI over tbe nut 20

or 30 year, alld wm mw a bup dtfferena to the educadon of Aumallaa

lddl. The denplatloa of the ahilftt synem, letting Qanta1 take ewer

Au,tnJian aad.,become an intearated national and international curiw. Allfftt now applytn1 to become the second iatematioul �trier where

fonnally we only had Qanta. So we are 1otn1 to have real competition in aviation which we have never redf bad bef ore. A new deprcciadon schedule fo r taution tor b111baeu which I tbblk it mald111 • ditf ereace to tbe economy. It baa been a year or very substantial ehan1tt and the Govemment la adll 1ttd n1 thou chanaa into placL At yt1terday '1 Jtremlen Conference we

made a lot of dttillo111, a1ain, on powe r 1enmtlon and distribution, water quality, a ranae of thoae sort of national iduet which yun •10 )'Oil wouldn•t have touched one ha a decade. or oae ta 20 yeu1. We are doin1 four 11nd five ff!ajor thinp Ub thb in our every year.

GG: The 'SOI have beetl dtfflibed u tbe end of the 11e or certainty. do you upett

this npid chup to conti nue throu1b the '90s! Is It a reform program that bas to be drinn alot11f

PM! It haa, but I tlalnk we are now quite well Ht up, AJ la ii the fa1te1t zrowina part ot the worid, we ate better placed now ia the AJiu area tb,-n we ever been. la terms of the ffl)llo-,,. tllb year we es.ported nearty 2! per ceat

of aD we produce. nearly a q'1art er or everythl ns we produced we exported.

A dec:ade •10 that wu 1, per cent. You can Jmi imqine where we would be now il w e were only nportin1 14' per cent olw bat we produce. So the

a,owth of Asia ahouJd tu& Austnlla alon1 providing we an 1et up to uploit

It. and we art.


GG: That trade debt tbouall, I mean it ii •tiD growtn1, It 11 ltiH a massivt

problem. Bow eu It be reiped t.f

PM: But the debt servielna ratio. our capacity to pay for it hu bffn comina down, and th•t hu been eomlag down u our trade performance impro ves. There Is

only one way oat or an, the,e problemt • tha1 ii basically aro'Wth and trade.

The Government 11 committed to arowth •atd lt II committed to maki ng Au1tralia a compe titive 1ociety IDd I· believe that our greatest comparit i'vt advantaae b pine ta be bl education. Tbat h why now nearly 8 children In

10 complete Neoadary scllool. When I beeame Trea11trer it was only 3 In 10.

40 per cent t4 tboee are now 1treamed throu11t. unlvenitiea and the bis weakneta, vocational education, TA.FE, only 29 per cent or kida now are TA.FE or voeadonaJly educated, we hope that will be to per cent by about the

year 2000, 280!.

\ I.

GG1 But ther'e haven't been Job• tor 1011111 people in die last few )'tan and this

h11 been one tJ'IUllltllt put forw ard to r the hl1her reteati oa ra te. When will tboae Job, ,tart to apptart

PM: 1 don't that la quite rtpt Peter, hi the •so. we had plenty of jobs then for young people when tlle eeonom)' waa powin1 strong ly, it hu slowed up lately, but agabt a lot ofyount people an flnd ln1 Jobt, particularly those

wbo ate trained, 10 we nttd to train them. But the big point is that in a muth more completely edu cated . fully educated todet>', where the educadon levela are hlper, yo11n1 people make their OWi Job opportunldn. They will

be the employers, they will be the people who are actually out there creating the new btililltltft. The idu ibat we bave pt to have traioed kidJ titting

waltln1 fo r someone to come a.Iona to employ them, eveey other country which hat f nvated la educ ation wtD fflld wt it II the traintd kid• that actually end up employma tbemsdvea and others. The aprin& in the step of the country will come from the education system and Labor bu totally tra"afonned education In this country. Row could you ev.r claim to be 1 smart country or • capable country, or a country to uploit the opportu nitie, ,vt have in the A1f.a...Paciftc, with only 3 kld1 m 10 eompletio1 •eeondaey ttboolf That ii what II wu 8 yMl'I .. o.

GG: But Prlaie Mlalster , what do you u, to the almoat one mlDlon wbo are

unemployed today, many of whom fffl that they will nevtr work a1a,n? The chanpt that you talk about, tbat you have praided ot thlt put year, they mean nothln1 to tho,e people. to people 1lttin1 i11 Baleatta and Ba111 today that have bHn out of work for two years, how do you traoalate all or that down to their level!

PM: Gerry. what happttaed In tbe ·ï¿½ theft wu a bute amount of arowth and

expenditure and a bi& arowth In credit, not just in Auttralia, in the United Satet, Japan, Britain, Gvmany , all round the world. When the credit growth rtopf*I, wht\11 the music stopped we found our companies and our industrie s \'try heavil)' indebted, or u th")' ss.y, hlahly ltteraaed. It hu

taken abou t 1a montlu to· 2 yean loa&er 1 tb.lnk any or us expected to

deleve�ae thote eompuiel, that's wlut ii happening In tile United States today, that it wbat i1 happcnin1 In JApu today. Bat 1 am happy to aay in Au1tralia we .ttre rucbba1 the point lk)W when the balance between equity

and debt in a bUIUINt '* oow aetdn1 back to a proper balance and we are 1tartin1 to tee Auatrallaa companiea look around to r opportunitlest and as that happen• the growth will 1tart apiJL Ir you look at our unemployment rate, rouplf ulf of it comes from tht down cycle ln the economy and half or

ft comes from the stnactural cbau1e of' t be ehumin& of diff erent lnduatriet. It is called cyclical and ,tnactural unemployment. It we can pull the ftnt one down, the cycle, a.a tile �onomy picks up to pt that 11 per cent .· unempk,,-me 1d rate beadin1 back toward, 5 and 6 we tben bave to-work on

''2.- •

the Ions run c:ha n1e to pt it below tut. That ii the atnaetaral cba•a,. So

people should not bl too atoomr about It. We had buae emplof ment ill the

•101 and we kept mott of tbe Jobi. I think a lot of people fo rpt we started with a labour market ot 6 million ln 1913, today that is 7.6 mlW.ou. it II a qNrler blgfr, we have kept nearly all or those johA. Sure we have pt t t

per eent unemployment and wt bad nearly 11 in '13 , but we had 11 per cent in '83 off a level of 6 mWloa, we have pt 11 per cent today off' a level or 7.�

mlHlon. lt1 1 die old rata aad levell comparitona. So, Au1tn.Ha ii a more

fully employed country wday and D101t or the Jobs of the 'SO. we have kept, what we have now aot to do to tbem ii add to them. We will only add to the111 with IJ"O'ff'th. But you wUI only aet srowth in a cooperati ve environme nt, you won't pt It by buleaJJy �werin 1 pt0ple. Tiu, i1 the point

that I make about tht Liberal P•rtr, they want to cower peo ple, knock off

their minimum rates, conditions. redundancies, rishtl of appub. the 1eneral

award pro tecdonL The way we are 101111 to &et Auatrall.a workJn1 iJ by everybody workln 1 to1etber to a aet of national objecttvct, Just u Japan hu do11e, Korea tflu done, Slappore bu done, Germany had done, United

States 11 now, under Clinton, atardng to do. I think that ii what we have 1ot to do. $41 It 1w 1ot to M a cooperative effo rt, and that it why the big

community thinp like we wtre dealina -,vitb yeaterday at the Prtmien conf erence an the tklql wbkb are Pl to matter.

GG: You have aot about 2 minute. ltft with 111. let's see lf we can squea. in one

or two (alll. nla ii Fred.

Caller: Good mornia1, .Printe Mlailter, I would like to atk • question of )'OU if 1 may about 1uper a11nuati0tt and the GST. I wanted to 11k Mr Chaney latt week but I coul dn't get 01&. I retired In 1'91 in Victoria and I rolled over a lump sum in the State 111perannua tio1t,fund of Victoria. Now that Is payable in

September or 199.t and it wW be aoout a $300,000 payout. Now recently Jn Parliament l uard yo11 "Y that I would have to pay S4S,OOO tax on that SJ00,00 0 under the GST and at present I am tokl It wJll bt len then S l!,000. h that ,o?

PM: Well what it means If thfa, that any block of uvinp. u of the day of the introduction of the GST, are automadcally dmitn uhed by the pric:e effect or

ihe GST because they almply buy leu I11 the eeonomy. So there ia a one ofl' loss to savinp wblt b will nner be replenished. that wu the point I wu

makine. Coald I juat itt•ke tbll anodated point, tbere will al10 be a continuina 10 11 to ••vinp in the detlp or the GST under the Liberab. So there b an unavoidable one off lou to r anyone wbo fl livin1 off their savinp, ,omeon, who ii ,upenuln uated aa you are or anyorw, living from the income

off a block of uvinp, those aavinp •ill simply buy lest imd earn leaa day one upon the lntroductioa of a GST.

GG: But it la aot a lltnjpt 1! p,r Cftt • II itf Some ltema bave 20 per ctitt

Ml• tu now, other lteaa bav, aotblna.

PM: The prke effec t wffl be about 4'o'7 Pff eeat.

GG: 4.7 per ceat 1eeordl111 to tta. lJben.11.

PM: Ye1. but tbat dou11•t ladudt MtdkaN, th, •bolition of Medic are and th e fact that you have to privately fmure ... Tbe Trea1ury' 1 admate it that if you put the healda ckange"S in the net eff ect of' the so-called Flahtbaek packa ae ii 6-7 per ctntap points. wldch ft 1ubltantiaL

GG: Have y�u got time for one moref Let'• make it Peter from Du.ncraf& . be will

b� our lut caler. Good mornla1 to you Peter.

Caller: Hello.

GG: Petet you are on.

Caller: Thank you very much.

GG: Your question to the Prime Minis ter pleut be is runni111 out of time.

Caller: Prime Miniater I would Uke to lay that l Alll a person that would like to go

Into bu1lne11. Now I have a house worth abont St!0.000\ I can raise $100,000 on dais ho111e and 10 hdo a butfam, b'1t il t do that and then later or within two your Govennneat h1create1 mterett ratea &pin. not only

would I loee die bu1lne11 but 1 would lose tbe bouN. II tben uy po11lbD1ty. ever. that you could pat 11y a two year moratorium on Interest rates?

PM: One of the 1ovemtn1 fm on In interest ratu ii the undertylna rate or infla tion, 10 obviously If Inflation were to riH it would ha�e an impact upo n interest tatet. But I thlnk at thla sta,e we .,.. at a ,taae in the cyde where lnftadon ii down, .and I think will stay do-wn. 10 Jt l1 probably the best Iona

run 1 low interett rate. tow nominal lateresi rate horizon we have 1ern Cor tome time. But I tlllnk the belt thiq for you to do would be to try to secure som• medium term ftnance. You could lock In aome debt now on • ffve year ba1i1 takin1 advu«ap of the prevallhlg bluna-t rates, whicb will 1Ave you

quite 1ub1taatial protection apm,t tome 111ovement hi margin• over the period. Now it may coat you a little pnmium to pick up a ftve year fina ncing, . medium term ftnance pacbge, but you could do it nlther than be left to the va1arie1 of 119adng rate debt.

GG: Ok, thanks tor your eall Peter, and tu tbe Prlme Minister thank yoll--f or your 1c uerot!ty with your time thia n1omlit1�

PM: Good Gtrr)'. It II nke to be here. I bave alway, eajoyEd Wkin1 to you and Peter, and Vlt')' mueb tor botbertn ..