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Transcript of interview Dr John Hewson, MP, leader of the opposition with John Brown on radio 2UE 'John Laws' show



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Leader of the Opposition

4 January 1991 REF: TRANSCR\bmca

TRANSCRIPT OF INTERVIEW DR JOHN HEWSON, HP, LEADER OF THE OPPOSITION WITH JOHN BROWN ON RADIO 2DE 'JOHN LAWS' SHOW

E & 0 E - PROOF COPY ONLY

Brown:

The big winner, according to 'The Australian', was John Hewson. I think that's probably pretty correct. I described John Hewson a couple of weeks ago as the most attractive leader of the

Liberals since jolly John Gorton and I don't think anybody would argue with that. Well we'll be back with John Hewson in just a moment.

John Hewson, the Leader of the Federal Opposition here with me this morning. G'day John.

Hewson:

Good morning John, how are you?

Brown:

Good. You look well.

Hewson:

And so do y o u . Been playing some golf, have you?

Brown:

Yes, I've been playing some golf actually. You've been

gardening by the look of those blisters on your hands.

Hewson:

Yes, I've got blisters on my hands. That's right.

Brown:

Well you've got to get a little dirt on your hands, you know.

Hewson:

That's right.

Parliament House, Canberra, A.C.T. 2600 Phone 277 4022

Brown:

This is the property down at the Southern Highlands somewhere?

Hewson:

Y e s . And we put in a watering system over Christmas and I rented this thing called a 'ditch witch' - I should rename it, but I won't on your programme - and it took control of me for the best part of two days, but it was a lot of fun. Had all the kids

involved.

Brown:

Well all of those things, 'ditch witches' or bitches or

wheelbarrows or lawn mowers are all instruments of torture - you realise that, don't you?

Hewson:

Yes. Well they're good therapy compared to politics. I mean you need some break.

Brown:

John, you were born 28 October 1946, education Carlton Primary School, Beverly Hills North Primary School, Kogarah High School. Nothing very spectacular about that, would hardly fit the image that some people give you of being a 'silvertail'.

Hewson:

Well it's hardly 'silvertail' background, as you point out. I enjoyed those schools though, Kogarah High was a tough school. Growing up in the St. George district of Sydney you couldn't go through that period with the St. George team winning about - was

it 11 State Premierships?

Brown:

Oh don't remind me - they kept beating Wests.

Hewson:

Somewhat close to the team and living in hope that they'd repeat that. Yeah, it was very much an ordinary background.

Brown:

Strict Baptist family.

Hewson:

Very strict Baptist family.

REF: TRANSCR\ 3.

Brown:

Didn't drink till you were 27 - something like that?

Hewson:

Twenty-six, I think.

Brown:

Twenty-six? Very abstemious.

Hewson:

That's right. No, I ..

Brown:

Welcome to the club, I didn't drink till I was 27, but I wasn't a Baptist.

Hewson:

No. You probably didn't need to be a Baptist, but it was a very strict religious background and I attended church at least twice a day on Sundays and Christian Endeavour and Sunday School and taught Sunday School and you know, for many years my whole life was the Church, really, and in fact at one stage I flirted with

the idea of becoming a missionary.

Brown:

Hmm. I did that when I was about nine. But when I started to

get precocious I gave that idea up very quick and lively.

Hewson:

Y e s .

Brown:

You were 20, I see in a report. You were thinking about

becoming a missionary when you ...

Hewson:

Yes, I had very good friends who were with the W . ...cliff Bible Translators in New Guinea and they were in Australia doing . . in fact the husband was doing a PhD in linguistics . . and I was

somewhat influenced by what they were doing and they seemed to be making a very important and valuable contribution - going out

REF: TRANSCR\ 4.

and living in a village and learning the language from scratch, not knowing a word of the language, and then ultimately writing it down and writing down a grammar and, you know, a very

worthwhile contribution.

Brown:

Hmm. John, you've only been a member of the Federal Parliament since 11 July 1987 when you became the Member for Wentworth following a very distinguished gentleman, Bob Ellicott.

Hewson:

Bob Ellicott, then Peter Coleman.

Brown:

Peter Coleman after that, right of course.

Hewson:

That's right. Yeah.

Brown:

So your tyro in terms of political experience, except for the fact that you've spent a lot of time working on the staff of

Phillip Lynch and John Howard and a lot of time in Canberra in Treasury and other places.

Hewson:

That's right. I mean I've been around the political system for a large number of years. I did work for Phillip Lynch in '76/77 and then for John Howard on and off as an adviser through to

about 1983. So I've seen it from the government side and you do learn a lot in that process. I think that was very important background for me.

Brown:

More attractive from that side, isn't it?

Hewson:

It's better being in government, much better. It was a lot

easier being a staff member too, when you could say to them go out there and answer this and say that and when they stuffed it you could, you know, say well look, I told you to do this, I told you do that, and it's now quite a lot different when it's you

that's out in front and your staff are repeating ...

REF: TRANSCR\ 5.

Brown:

And they don't ask the right questions.

Hewson:

They don't ask the right questions.

Brown:

They put a curious twist on them.

Hewson:

That's right.

Brown:

Bachelor of Economics, with Honours, from the University of Sydney, MA, University of Saskatchewan in Canada, Master of Arts and a Doctor of Philosophy from John Hopkins University in USA. It's a very distinguished academic career.

Hewson:

My father encouraged me to get as much education as I could as fast as I could and I think I achieved the ambition in that

respect. Yeah, nine years at university, with four degrees, is a long time and I personally, when I think back to those years - they were great years, of course - but you kept living from hand to mouth and I suppose it's an important part of building your character, but I wouldn't have passed up that experience, particularly the mix of universities that I was able to get as well. It seemed an odd choice at the time to a lot of people

that I went to Saskatchewan, but it was - we had the gap between academic years between the southern and northern hemispheres and I hadn't applied to an American or British graduate school in sufficient time, so I had the gap I decided to fill in eleven months in Saskatchewan, and it turned out to be a fascinating

eleven months - some of the coldest and hottest days in my life were experienced there, and I learnt to play ice hockey and soccer - I played soccer in Western Canada - as well as enjoying the university life. It was a great period.

Brown: -

Well then you came back to Australia and after your sojourns with Howard and Lynch you then got into the commercial world. You were the Professor of Economics at NSW University, you were a director of many important companies, you got in the commercial world with a restaurant ..

REF: TRANSCR\ 6 .

Hewson:

Yes. That was a great experience.

Brown:

.. and merchant banking - you've had a long and varied career. What made you give all that up to go into politics? I mean it's a question that's always asked of me, because I was one of the very few businessmen in the Parliament in my time. You'd be one

of the very few people there now, that's come from a hard

commercial background.

Hewson:

That's right.

Brown:

With the academic background as well a s .

Hewson:

I think, when I'm strictly honest with myself my principal interest is in public policy and I've spent a lot of time either in the Reserve Bank or in working for Government Ministers or the International Monetary Fund and places like that in public policy and that's the first reason. The second reason is I - after the Fraser Government went out in '83 I went, as you say, went into the commercial world, I also wrote a weekly column for Business Review Weekly and I was quite critical in that column of both the Government, although at times I was very supportive of things they did, I was also quite critical of the direction of policy, and I was quite critical of the Opposition and the need to re­ build the Liberal Party in particular and build an effective Coalition. So a second factor became 'put up or shut up Hewson'

and a lot of people put it to me in just those terms, so when the seat of Wentworth became vacant I decided to give it a r un. And thirdly, I think ...

Brown:

Those marginal seats are just the thing, aren't they?

Hewson:

Yeah, well it's not all that safe. But the third reason, I

guess, is the sort of point that you yourself have made, I think, over the years and that is that, if you've got a contribution to make in Australia you should have a sense of community about you and make the contribution, even if you fail and get out of the

way and give somebody else a go, but if you feel that you can make a responsibility at some point to put a bit back into the

REF: TRANSCR\ 7 .

system, so that was the third reason and a combination of those three reasons, and I've probably had to face up to the fact that, you know, the 'put up or shut up' has been a principal factor.

Brown:

I had a person on the 'phone here the other day criticising the standard of politicians - they're all mediocre. I said well, I mean, what you're voting for is the pick of those who are

prepared to concede all sorts of other privileges in order to become a member of Parliament and if people are very critical about our politicians, put themselves up. If they're prepared to surrender an income, if they're a successful businessman or

a high position, well that's the odds you take. And that's the odds you've taken to ..

Hewson:

I think one of the things we've got to do with our youth in

Australia is to encourage them to get more involved. Not

necessarily in politics, per say, but in their community. We became very selfish, I think, in the 1980's ...

Brown:

Well we're going to become very selfish here now, we're going to get a bit of money for the station, John. This is a hard

commercial capitalist world here.

Hewson:

Good to see.

Brown:

We'll take a break. Back live with John Hewson in the Studio at 22 after 9. John, the polls would indicate that you've a

very big chance of becoming Prime Minister of Australia next time we have an election. What's your vision for Australia under John Hewson as Prime Minister? How would you see Australia then different than it is now?

Hewson:

I believe that we're a country that has tremendous potential and I think one of the great disappointments of a lot of people is that we've failed to realise that potential over many years. We are well endowed with natural resources, are uniquely endowed

in a sense in terms of land mass and minerals and so on, our

climate, our very highly educated and articulate population and a number of other advantages, yet we always seem to fall off the pace and our relative performance has been much less than many of our near Asian neighbours let alone some of the other major powers of the world and our relative standing has slipped.

REF: TRANSCR\ 8.

So my vision would be that we should be able to re-establish our position in the world, particularly I believe in the Asia/Pacific region by the year 2000, and I believe if we, Government or

Opposition, now put in place policies that would create the circumstances for that to happen, it's an easily achievable goal over the five to ten year period. I think our future is in the Asia/Pacific region, that's not down playing the significance of Europe and ties there and the potential that exists there, nor

in relation to the United States, but our particular growth region is Asia.

It will be the fastest growing region of the world for the next forty or fifty years and there are opportunities there in all areas - in traditional agriculture, in mining, in value added in those areas, in manufacturing and of course in an area that you know a lot about, services and particularly tourism, where we have a phenomenal potential and we've done very well in recent years seeing tourism emerge, for example, as our major exporter, but barely scratched the surface in terms of what we could

achieve if we set out to build ourselves as a major tourist

destination. So the opportunities are there and that would be the economic thrust to that and off that, then, spins a lot of the other values that are important. I think, in social terms, we have to create a circumstance in which people are less

dependent on government.

I mean I think that attitudinal shift was a very unfortunate one of the ' 70's and carried into the 80' s , although those who are in genuine need should be assisted even more by government, because I don't think that these days the genuinely needy get enough. It's very hard to live, I imagine, on a pension in a

city like Sydney or Melbourne and so that the genuinely needy I don't think get enough out of our system. And a lot of that has come over the years of restraint, where everybody's been

restrained and the relativities have fallen out of line. So in the course of the next five to ten years by generating a growth potential and re-establishing our standing in the region, and thereby in the world, we would have the capacity to take better care of those who are in genuine need.

Brown:

John, just on that particular point - were you disappointed that you couldn't carry your Party on that attempt to reduce Family Allowance for reasonably well off. I mean as I understood it, your own view was that it was a reasonable proposition.

Hewson:

Well we'd had a long debate in our Shadow Cabinet about that particular item because we didn't like the decision per say and there was a lot of evidence of that and a number of our people spoke in the Parliament about that saying that you know, to

impose an Asset Test on the farming community in a very ad hoc

REF: TRANSCR\ 9.

way wasn't necessarily going to work. I think the initial test cut off point was $300,000 value of farm, where the average farm value in Australia is nearly a million dollars - at least on last taken prices - yet average farm income is only about $20,000, so

it's a very difficult concept to introduce. That was the first point, so we had expressed a lot of reservations and put a lot of pressure on the Government to raise the limit, which they did.

Secondly though, I didn't see it as - and I know the Press have represented it the other say - but I didn't see that as a

backdown or a loss on my part. To be honest, John, we've had

two positions on Family Assistance in our Party now for a long time. You go back to Malcolm Fraser's days where he rolled the old Child Endowment and other child concessions into Family Allowances and made them an Expenditure item on the Budget, took

away the tax rebates that were there and so you've had Family Allowances increasingly - as an Expenditure item and has been subject to an income test - and then treated, increasingly, as welfare and the other side, in our last election campaign for

example, we promised tax rebates for children and for child care and so on which were not means tested, so that if you were rich or poor you would get the assistance for having children.

And the choice that our Party needs to make, as I believe the Government needs to make, is to decide whether you want to treat family assistance as welfare, and thereby income or asset tested or both, or you want to treat it as what the economists call

horizontal equity, that is to recognise that there are costs of having children, that these costs are borne by people

irrespective of their income and that this transfer is something that the economy should support, that the electorate wants. It's been in, I think, Labor Party policies since the 2 0 's or 30's , it's been in Liberal Party policy throughout most of that period as well but we've now ended up with a hybrid system.

Some family assistance is asset and income tested and some isn't. And so all I said to the Party Room is look, two things - one, if we don't back this decision and it costs us $25 million, we've got to find $25 million when we put down our final budget, and secondly, let's take this opportunity to review that issue and come up with a position one way or another on family assistance.

If you want to go and treat family assistance as something as an across-the-board transfer from the rest of the community to those with children, let's do that and let's look at family allowances in that context or let's go the other way, treat it as welfare,

income and asset tested, and so that decision will be taken in the earlier part of this year.

Brown:

Yeah that' s right. But there must be some dichotomy in your mind when you said that you want to get away from government assistance for people who don't need it and provide more assistance for those that do.

REF: TRANSCR\ 10.

From my memory, that Assets Test case was about a family with a house of any value - could be worth anything - assets, apart from a house, of $500,000 free of debt and no specification on income and removing Family Allowance for families in that position. Now, despite the fact that farm incomes are lower at this stage because of drop in commodity prices, it would have seemed to me that in line with what you said about taking government

assistance away from those who don't need it and given to those who do, that that would have been a pretty good case for you to have proved your point. So really I'm disappointed that what seemed to be your personal position didn't become the position

of your Party.

Hewson:

What I'm really saying is that, you know, if you want to - it's a bigger question - recognise the significance of the family unit and you want to use the taxation system as a means of achieving that objective, and fostering the development of the family unit and encouraging Australian families to have children, then you do that without income or asset testing and you make a conscious political decision, if you like, that the electorate wants to

foster families, they want to foster children and they want to encourage children and they want to thereby give that transfer for that to occur. Now that has been in our policy - it was an

element of our policy in the last election campaign, but it has been in both Parties' policies for decades that family assistance is something that's quite different from welfare or for other government assistance which would be limited.

Now, it does raise a lot of issues because if you take that view, are you going to take a similar view about assistance to

industries or other forms of government assistance, and then should they in some sense be limited or constrained given the size of the industry or the performance of the industry or

whatever. These issues have been sort of swept under the carpet for decades in Australia and I think we need to make up our mind, and really what I said to the Party Room is okay, you must make up your mind in a clear cut sense, do you want to treat all

government assistance, really, as subject to limits, as subject to income and asset tests and so on, or are there certain things that you want to foster or encourage in this country that you

don't want to limit and doesn't matter whether somebody is rich or poor, the cost of having children is an additional burden, they get ...

Brown:

You're telling me brother, I've had five. You've got three.

R E F : TRANSCR\ 11.

Hewson:

. . they've got a fixed amount that they have to meet, the

children can't supplement their income up to the working age - you know, they are an expense on the parents. That was the

philosophy that came out of the 1940's .

Brown:

Listen yours aren't old enough yet. Let me tell you that past­ working age is still expense on their parents. You never cut the umbilical cord - only in a symbolic sense.

Hewson:

Oh caring parents are always subject to the soft touch.

Brown:

I think we're going to another break now, we've got to earn a bit more money for this poor radio station.

Brown:

John, history is yet to judge the Hawke era, I guess that's for the future. It judged the Whitlam era rather harshly as being well described by Graham Freudenberg, crash or crash through. I think critics are now finding the Fraser years 8 wasted years

in terms of Malcolm, for one of the few times since Federation having a great thumping majority in both Houses of Parliament, and really the capacity to do anything he wants to do to alter this country to suit his Liberal philosophy, yet not much

emerged. I take it that the Hews on era would be much more

dynamic than that?

Hewson:

My view about future is that politics is going into a different period in Australia where we will be judged fairly harshly on performance and standards. I think that one of the clear

messages, for example, of the last election campaign was that there was a plague on both our Houses. People are tired of

politicians being politicians in the sense of playing political games for the entertainment maybe of some people in the Gallery, but not dealing with the problems that are major issues to the people of Australia.

If you look back over the past Governments, there has in a sense been a feeling of disappointment that's grown, a crisis of expectations has now arrived if you like, where people have been promised things for years, and the Governments haven't delivered

- and you know, I can talk about the commitment not to have a

recession, for example, now to find ourselves in the midst of a recession is a good example of that.

REF: TRANSCR\ 12.

But what we will be judged on now is, I think we'll be given a

chance and I think the electorate will be ruthless when they change. They'll say, OK, Hewson you've got 3 years, you do what you said you were going to do, otherwise you're not going to get another 3 years. Now I think that is a good thing, I think as

long as we set out consciously to raise our own standards of Parliamentary performance and public accountability, and as long as we genuinely are prepared to do what we're there to do, that is manage the country, and provide a lead, we'll stay there, and

if we don't we'll get turfed out. So, the way I look at my first 3 years will be that I'll have to deliver to a substantial

extent.

Now given that there is that perception you mentioned about the Fraser years, I've realised that one of things I've got to do between now and the next election, is to build credibility as an alternative government and convince people that we will do it. That we will actually put in place the policies that we say we

will put in place and, in that sense, I believe, unlike the past, we can't rely on Hawke and Keating losing, we must win in our own right. If they lose, over and above that, if they fall over and as you say they're doing a good job of that now, OK that's icing

on our cake, but we must win in our own right.

So I'm about building a credible alternative government. I'm calling policy shots which are difficult from Opposition. To advocate a broad-based Goods and Services Tax, is difficult; to advocate a significant change to the telecommunications industry,

as we've done, is difficult from Opposition. But we will go on doing that in relation to a number of policy areas to build that credibility, recognising that when we get in there, of course we will have to deliver against those expectations or we'll only get

the 3 years, so we've got to be ready to go on day 1, we've got

to put in place the policies as a matter of urgency, and we've got to do what we say. From a political point of view, I need

a Fraser style win, I need a 75 majority as a minimum, I want to carry both Houses and you know on the numbers how tough that i s . . .

Brown:

... very, very tough.

Hewson:

.. but I need control of both Houses in order to put in place the policies that I'm talking about.

Brown:

Because you're playing in a different political landscape too, aren't you? I mean from 49 to 72 Menzies and Holt, Gorton,

McMahon were Prime Ministers and virtually unchallenged by a succession of fairly ordinary Labor oppositions.

REF: TRANSCR\ 13.

Then Whitlam arrived, and we had 3 years of Whitlam Government and that was seen as an aberration. I mean that wasn't normal, and I'm sure what Fraser thought when he became Prime Minister, you know, the Labor Party had had their 3 year flick, they've probably gone for another 20.

Now, you've had the Hawke Government now for 8 years and its got another 2 years to run, so it makes it a 10 year Government which indicates that the people of Australia do see the Labor Party as a credible Federal Government. In your next election, you're dealing with a total different political landscape than Fraser had in 75 after that disastrous constitutional crisis and Menzies had through most of the 50 's, 60 's and 70 's.

Hewson:

It's always difficult to generalise. But I think that there are a lot of good people coming into politics today on both sides. That has been the case and we should capitalise on that. I think it is an opportunity to actually raise the standards of

Parliament and public performance.

Brown:

Well, you've got a few new players haven't you? You've Kemp, Costello, McLachlan?

Hewson:

That's right. And see I gave them a run up front. I've put those three straight into Shadow Ministry and that again changes the nature of the game because the idea that you had to serve a

period of apprenticeship on the back bench and then on this Parliamentary Committee and on that and so on, I just figured that these people have established their reputations outside.

Admittedly that doesn't necessarily carry over to politics ..

Brown:

That doesn't always translate automatically.

Hewson:

I mean you can be a great screaming success outside and a

screaming failure inside but it's important that you give people like that a chance. And, as a result of that, I think I'm now

seeing a lot of other good people encouraged to come into the Party either to stand for pre-selection down the track or

whatever and to get involved in the organisation which is a sort of rebuilding of our Party that we've had to do. I don't want to go back over the past to who was good and who was bad. I

think that Malcolm Fraser did do a lot of good things, I think his reputation has been beaten pretty hard by this Government, but they've played politics very hard on that.

REF: TRANSCR\ 14 .

I would rather now look forward and say, and I think this should be the focus of the debate this year between Hawke and myself, what vision have you got for this country, what are you going to do this year to turn the situation around? And I think the

recession as we have, although it will be the deepest and most protracted since the Second World War, offers unique

opportunities, and that is that we can, and Australians are good at times of adversity, very resilient people, pull together and let's take some of those decisions and turn this country around and in a very genuine sense, I will offer bi-partisan support for the policies that will turn the place around. Uniquely, one of the things that's changed between the Whitlam, the Fraser days, and the early Hawke days, is that there is now very widespread agreement across the political spectrum as to the sort of

policies that need to be put in place.

Brown:

And there seems to be a great deal more co-operation now between Federal and State Governments ... (inaudible) ... which does

help.

Hewson:

And you've got the chance, as you correctly say, with the

Commonwealth/State relations process that's underway, to solve problems that have bedevilled this country for 90 years. Unable to decide on the distribution of responsibilities in, say,

corporate law, or the environment, or industrial relations. We've now got a chance in this decade to do that, and we will

support the Government every time they go in the right direction.

Brown:

Let me take you to a couple of areas in which I'm vitally

interested, one is tourism, the other is sport. When I became the Minister for Tourism back in 1983, tourism didn't exist in Australia virtually, certainly in the Government's eyes because the budget was $9m. I managed to get it to 38 in five years with

an enormous success in building a new industry and now with the recent addition of $23m, the budget is now 63 million, so it's gone from 9 to 63 in eight years. One of your predecessors,

Howard, in the 87 election, was talking about removing some Government Departments and the first one he mentioned about moving was Sport and Tourism. Now I take it, given your

statement a little while ago, that tourism is now looked upon as one of our economic saviours, that you wouldn't share that view, that you would believe that tourism is a very vital part of the economy and is entitled to that sort of Government support through the Tourist Commission.

REF: TRANSCR\ 15.

Hewson:

Well, I am a very strong believer in our potential in tourism but I don't think that a lot that needs to be done relates to how

much the Government spends on tourism, although I can see that part of the promotional role that's been played and will be played does involve Government. But there are a lot of

impediments to the tourist industry which could be removed and see that industry blossom without Government support.

Brown:

Well, there's one just been removed fortunately, the Two Airline Agreement.

Hewson:

Yeah, well the Two Airline Agreement. If we could get to a

situation in Australia where we didn't have a 20-30% cost

disadvantage on domestic airfares which is sort of the number that people have talked about, we'd see tourism boom, I think, as part of that. But there are a lot of other changes too.

Brown:

But the point is that you, as Prime Minister, would have an

abiding interest in the continuation of the tourism boom. That's a radical change in your Party's thinking and I'm pleased to hear that.

Hewson:

To put it most specifically I think. As I said, tourism was

emerging as a major, indeed the major export earner for

Australia, but we take about a couple of million tourists a year, a bit over 2 million tourists a year ...

Brown:

2 2 2 3 · · · £» + Λ» ξ 4 > · · · ·

Hewson:

... on a population of about 17 billion. Now, an· of that ..

Brown:

17 million.

Hewson:

17 million, sorry. And we take ..

REF: TRANSCR\ 16 .

Brown:

Geez, I knew we were fairly ... I didn't know we were that good.

Hewson:

Shows what you can do with Family Assistance. No, it's on 17 million. But of those, we get about 350,000 Japanese I gather

Brown:

... 400,000 this year and growing ...

Hewson:

but nearly 12 million Japanese travel overseas a year and ...

Brown:

... 5% of the market we're getting only, that's right ...

Hewson:

... and my point is if we doubled our intake of some of those

very active tourist countries, we could see our industry boom and if you really ask yourself well what do we need to do in terms of changing labor market practices or airline policy, and that's domestic and international airline policy, attitudes to foreign

investment, whatever, in order to facilitate the growth of that industry. You can do an enormous amount which doesn't involve additional Government assistance but it does have a high

priority.

Brown:

Let me take you to sport. The budget for sport when I became the Minister was $6m it went to 36 the first year, it's now 60. I

take it that sport is very firmly on the political agenda not to be removed any more?

Hewson:

Yes. But don't hold me to the detail of the . . . (inaudible) . . .

Brown:

The point I'm making is that it was ignored for all of those

years and it's only in the last 8 years that it's had proper

funding and that's a great credit of one of your predecessors in Wentworth, Bob Ellicott. He set up the Australian Institute of Sport and I had the great pleasure of making him the first life member, and well entitled to be too.

REF: TRANSCR\ 17 .

That's now a thing which requires continual funding. I take it that you wouldn't be reverting to the view that your Party

traditionally had previously in Government that sport should fund itself?

Hewson:

Well, again, you know, a lot of the great bulk of sport funding should be outside of Government and it is, and it will continue to be. That is not to say that the Government doesn't have a

role to play in relation to sport. I've got Michael Baume as the Shadow Minister looking now at precisely what we would do in relation to sport because there is an active debate as you know in relation to the so-called illegal sports and so on, and I think we need to keep up the speed on that.

Brown:

One last subject that I want to get you on to. A lot of your

ambition to be Prime Minister turns around your desire to reduce Government spending by about $3 billion. Given that about 80% of the Budget is made up of Health, Welfare, Education and

Defence, there's not too many areas to move there, or are there? How do you find it in the other 20%?

Hewson:

Well, it's not strictly my ambition based on that. But we have in the past identified about $3 billion worth of cuts that could be made and that was on last year's figuring and that did include about a billion in Welfare, it didn't include any in Health. It was across the board $3 billion worth of cuts. I think that

where it is Welfare spending you can make savings by targeting it better, and that was our unemployment benefit proposal. But there are a lot of other areas of Government expenditure that can be reduced or eliminated and you've mentioned one before, duplication between the Commonwealth and the States.

There are big savings in the medium term sense to be made there. We don't need that duplication in the provision of a lot of

services. In terms of Health, I think over time you will see people put in a situation where they pay more of their own health costs ... either the Government or ourselves and that is another way that it has to be saved because Medicare right now is only

about 25% funded by the levy and 75% funded by general tax

revenues so the pressure is there for more of that to go ...

(inaudible) ...

Defence is a different o n e . Defence, I think under Beazley, there were a series of real cuts in Defence expenditure. Now that could be a real problem, given, as we're seeing now in

relation to the situation in the Middle East, that it has exposed some of the limitations of our defence capability so we didn't

REF: TRANSCR\ 18.

support I think the most recent real cuts in the Defence budget even though we were in the context of bringing expenditure down by about $3 billion.

Brown:

Well given that the present Government has got Government expenditure as a percentage of GDP down around now to what it was in the early 7 0 's and by next year they claim it will be in the 50's, you still think there's room for another $3 billion worth

somewhere?

Hewson:

I think that's an exaggeration because they came into Government in the early years as you would remember, blew Government

expenditure out quite dramatically, and they have been pulling the line back on that, but they've done it by cutting payments to the States which hasn't been reflected in the same degree of restraint by the States. They've done it by selling assets and

saving the interests on the public sector debt associated with those two things. Now, they are not cuts in the sense that we're talking, they are cosmetically. I mean when you sell a

Government asset you make the numbers look better but you don't actually reduce Government expenditure. I mean the fact is, the Government Budget has gone up consistently. It's now over $90 billion and most Australians would take a fairly clear view I

think that it could be cut and trimmed.

Brown:

I'm being told to wind up here.

Hewson:

Yes, I think I'm getting one too. I think it's time.

Brown:

Well John, I can say to you this, that good Government requires good Opposition. Quite obviously you can't have good Government without good Opposition and I must say that in my eight years as a member of the Government, five years as Minister, that we

sometimes didn't have good Opposition. I'm sure that the

Opposition you're providing is much better, it's got the

Government on its toes and you're well in front on the polls. So I guess you're entitled to feel very confident about being the next Prime Minister of Australia.

I can say this to you that if you're able to achieve the things that you're trying to do, if you're able to put the policies in place you speak of, I think you'd be a very good Prime Minister. So, good luck.

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I think everyone in Australia wants good Government, I don't think most people are terribly fussed about who provides it, as long as it's good Government.

And as I said earlier, you're certainly the most attractive Leader of the Opposition since Jolly John and I wish you luck in the ensuing 2 years.

Hewson:

Thanks very much John, I've been delighted to be here. Keep up the golf practice.

Brown:

I'll do m' best. I've been speaking to John Hewson, the Leader of the Federal Opposition in Canberra and the man whom a lot of people think might well be Australia's next Prime Minister.