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Transcript of Dr John Hewson MP media conference

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Leader of the Opposition

27 December 1991 REF: TRANSCR\bmca



SUBJECTS: Keating Ministry


Dr Hewson, your initial reaction to the reshuffle.


Well today's reshuffle won't do much for the predicament of the Australian economy. It's the same crew in the same deck chairs, the same "Titantic". The Australian people have been left to go down with the ship. It's a good example, I suppose, of what you can expect from Paul Keating, which is "payback" politics. He's looked after his mates, those who worked hard to get him to

the position, he's put himself ahead of the interests of the people of Australia.

..... (inaudible) in four months, what sort of signal does that send to overseas markets and business?

Well it shows what is the problem in Australia - a very, very significant instability in this Government and no clear sense of direction for dealing with the problems and indeed, to put John Dawkins in that position - one of the most dangerous people who have held the job of Treasurer, for his known beliefs against

standard economic thinking, he disregards both our structures and framework, thinks economics is something for politicians to manipulate, and that sends a very bad signal to the rest of the world.

He's had a lot of experience in terms of being in charge of

Finance in the past.




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Well he has been in charge of Finance but if you read his major speeches of the last eighteen months, where he's really shown a total disregard for economic thinking or approach and believes that we should have a world where he and people like him run the economic system in Australia you've got to be very concerned.


His comments on the exchange rate ....


Yes, well Mr Keating's actually disagreed publicly with Mr Dawkins on a couple of occasions and it poses some real questions for Mr Keating as to what he believes. Does he still support the floating currency or does he believe, as Mr Dawkins seems to believe, that we should re-peg the currency or at least control the currency and Mr Dawkins has made a lot of other statements

as well about how industry policy should be conducted - a very interventionist line where the Government should pick winners and target assistance to particularly successful industries and ignore the rest. Is that what Mr Keating wants to believe?

Is that the direction in which he wants to take economic policy in Australia? And they're fundamental questions which are raised by the appointment of Mr Dawkins.


Mr Willis and Mr Beazley in particular are regarded as being fairly fine performers in Cabinet. Has this reshuffle weakened Cabinet?


Well Mr Beazley has been given an incredibly odd appointment, you might say, Employment Education and Training - a portfolio that Mr Dawkins made a complete mess of. Mr Beazley's got a very

difficult job, I think, turning that around. The basic

education constitutency in Australia has disowned what Mr Dawkins was trying to do. We hope that that will show a new sense of

direction in education policy, but we doubt it because of the influence that Mr Dawkins and Mr Keating will have over those decisions.


Just saying Mr Dawkins is in appropriate, who would be the

appropriate ... ?


Oh, Peter Reith of course. Don't ask me to pick one of their




What do you make of Graham Richardson?


It's like putting Goldfinger in charge of Fort Knox, isn't it? And Graham Richardson's had a history of doing deals. He's never handled a portfolio particularly well and he obviously hated Social Security - he had to deal with real people. Now

here he can do deals and my guess is that he's been put there to try and do deals with media barons, to try and resurrect their electoral chances. He certainly won't have any interest in the transport element of the Transport and Communications portfolio.

I think his focus will be on communication and his focus will be on deals.


What about Mr Kerin in terms of .....


I was very surprised - not so much by the fact that he got Trade, because he's had a long history, I guess, on at least

agricultural trade matters and you can say that he had some qualifications for the position - but to drop him out of Cabinet was a bit rough. I was very surprised given that he's been a

very senior Government Minister, handled some portfolios very well - I think particularly Primary Industry where he had a reputation for doing a good job and what it seems to say is that the Government doesn't think trade is important, which is rather

novel given that we've got to boost our trading performance - its the single most important way of turning our circumstances around. So to leave a Trade portfolio out of Cabinet, or to

imagine that Senator Evans can adequately deal with a Trade portfolio in Cabinet, I think is again the wrong signal.


What about Mr Kerin in terms of the coming Uruguary Rounds of GATT?


Well, Mr Keating seems to be satisified with the progress that has been made, but it's true that we're all still reading the fine print in terms of what has been decided. But it's an area where we've got to do a lot more, not just in the multi-lateral

trade negotiations, but on a regional basis where we need to use organisations like APEC, I think, to lower trading barriers within the Asia-Pacific region and of course on a bi-lateral basis we still should complete the common market with New



We've got a lot of trading opportunities in countries like Taiwan and other parts of the Asia-Pacific region which have not been exploited, so one would hope that they'd elevate the Trade portfolio, not kick it down the bottom of the list.


Internally in the Party, obviously a few noses will be out of joint.


Well it reflects the fact that Mr Keating has not had the courage of leadership to organise a spill of all positions and has

therefore left him with the task of allocating the existing crew across different deck chairs and in that sense you get what you got, which is an obviously cobbled together deal to try and pay off some of those who supported him and downgrade some of those who didn't, so you see people like Dawkins elevated, you see

people like Beazley given strange portfolios and you see that he couldn't make the numbers add up, so he's added four

Parliamentary Secretaries - people like Peter Duncan and Laurie Brereton, Gary Johns, Steve Martin - four people who are known co-conspirators with Paul Keating. He's given them a job, but not much of a job. My guess is that this Ministry won't last.

My guess is that at some point in the early months of the Keating term as Prime Minister he will organise another reshuffle and he'll do that by organising a spill of the positions so that he can shed those he doesn't want to keep in the Cabinet or the

Ministry and put in those who've worked hard for him. Take one from South Australia - Chris Schacht, I mean I'm sure Chris would be bitterly disappointed that he didn't get up this time and do you think he'll back there and wait his turn. Laurie Brereton,

Parliamentary Secretary, he won't be happy with that. Gary Punch left out all together. All those who've worked so hard and so long to get Keating to the job that he's got won't

contemplate their last days in Government from the Backbench. They'll want to get involved and I don't think this will be

sustainable. I think you'll see a spill in the early months of the year and I think you'll see those people coming in for their chop.


it would have been more approriate to leave Ralph Willis in as Treasurer?


Well Willis was starting to find his feet. We didn't think he was doing a particularly good job, but he was certainly doing a better job than the others who've held the job and it's rather novel, as I say, to kick him aside. Obviously, Willis is the

key - he was the difficult one to fit in. In Keating's press

conference today he mentioned several times the role that Ralph Willis had played, which I think means that he finally agreed to


take Finance and give up Treasury and make the package fit the .... and in that sense he will still have some influence, but I

get the feeling that Keating is going to let Dawkins run that economic portfolio, the Treasury and Finance portfolio, and the best you can say for John Dawkins is that he's dangerous in that job. You just read his major speeches of the last eighteen

months or so - his Press Club speech, the Australia Day speech, a couple of others - and you get a pretty clearcut statement that he would jettison standard economic thinking and go off on his own. And in that sense he could prove to be a Treasurer that

really has no concept of the job at hand.


..... reshuffle has .... in a sense of panic?


Well, it has all the indications of pressure and lack of

leadership. The thing that amazes me most about Paul Keating is that he's schemed and connived for the job of Prime Minister for two or three years; he arrives on deck, you stick a

microphone in front of him and he's got no idea what he wants to do next. He doesn't know which direction he wants to take the country, he doesn't have any clearcut ideas of the portfolios that he wanted to allocate, there were rumours that he would restructure the Ministries - that didn't happen - there were rumours that he'd put his own people in - he's only been able to put some of them in - and he didn't organise a spill, he was

asked simple questions today about policy directions - it didn't matter whether it was in relation to Indonesia or foreign policy generally, in relation to trade, in relation to immigration - he had no answers. He just said I'll have to have a look at that,

I'll come back to it, I'll see how circumstances respond. In those circumstance - I mean, here's a guy whose only interest has been getting the job. He said to the NSW Right, the job is the end in itself. And they want to be Prime Minister and .... on

that sort of influence, it's an end in itself, it's the power, it's the job that they're after. They're not interested in the interests of the people of Australia. The job ought to be a

means to an end, it ought to be to improve our lot and take us

out of the worst recession in 60 years - not in their case,

they're only interested in the job and the trappings of office. As I said a few days ago, when Paul Keating became Prime

Minister, that you wouldn't have to wait long until you got clear cut evidence that he'd put himself above the position, his own interest ahead of the people of Australia - you've already seen it in today's reshuffle, that he's looked after himself, he's got a few of his mates in the key spots - as many as he could under

the circumstances - and you know, the job is an end in itself.


How long do we see a Keating Government?



Until the next election. There's no doubt to my mind that he will not be able to turn our circumstances around. What he'll do is he'll stitch up a whole host of deals and he'll put a

facade of economic respectability over the top. He'll start to talk of different strategy, he'll start to say how we're chasing value-added industries, that we're going to back our strengths like resources and tourism, that we're going to target tax

assistance and other government assistance to these key

industries, we're going to cut immigration, we're going to have a new wage tax deal, you know the whole bit. But it'll just be a facade over what will be a whole pile of deals fixed up with businesses by Graham Richardson. I'm sure they're hoping to work with some of the media barons to repeat the success that Neville Wran had in the late '70s in doing similar deals. I mean,

that's what it's all about for them. The New South Wales Right are not interested in the country to the benefit of average Australians - they're interested in taking over key positions to their own personal benefit and gratification and that's what

you're seeing.


What's specifically wrong with Dawkins' economic policy in terms of ... (inaudible) and standard economic theory, ..(inaudible)?


There are a lot of elements to it. One of them was the idea of

picking winners, saying that the Government knows somehow better than individuals or individual business people as to what industries to develop, what areas to pursue and he uses the Accord as an example of the success of the

Hawke/Keating/Kerin/Willis Government which is wrong. The Accord has been a massive failure from the point of view of giving us internationally competitive wage outcomes, from the point of view of looking after the interests of average Australians or average workers I should say and certainly its elevated people like Bill

Kelty to a very powerful position as de facto Cabinet Minister, which again has blocked most of the reform in Australia. So the Accord has been a failure, he sees it as Accord-style, Japanese ..(inaudible) style process central to successful government. We see that as an anathema to Australia. Really you've got to

put your faith in individual Australians to create the

circumstances where they can get out, pick the winners and back the winners themselves rather than having governments do it for them. So that's the basic thrust - it's increased government control, increased regulation - I mean you want an example of the way John Dawkins thinks and acts, look at what he's done to

education. In education he took total control, he centralised the process, he even got down to the stage of telling you what books your kids could read, I mean it's ridiculous influence by one particular person, and look at the reaction of the

universities around Australia as they've come to the view that this is against their best interests.