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20 November 1991 REF: TRANSCR\0329.tmc

TRANSCRIPT OF DOORSTOP INTERVIEW DR JOHN HEWSON, LEADER OF THE OPPOSITION PANTHER PRINTERS, CANBERRA

E & Ο E - PROOF COPY ONLY

SUBJECTS: Tax Reform Package

J m l s t i

Why the title?

Hewson:

Well, we feel that there is a real challenge on for all

Australians and that is to re-build this country. And we are about bringing about a generational change in attitudes and in values and in policies. From the Liberal Party's point of view, we have got to fight back too.

Jmlst:

How successful do you think it will be?

Hewson:

I think it will be very successful. I think the package has been very carefully crafted to deal with the problems in Australia. There is some tough decisions in the package, there is no doubt about that. I think it will prove to be the most honest

statement of our situation that the country has seen and it is an honest attempt just to do what is right.

J m l s t :

In those tough decisions, have you been forced to back off a little on the defence cuts already?

Hewson:

No. I mean, the defence cuts stand. We have a review of defence policy underway, but there is inefficiency in the defence force, as there is inefficiency in a large part of the Government sector and I don't see why we should turn a blind eye to that

inefficiency.

Parliament House, Canberra, A.C.T. 2600 Phone 277 4022 COMMONWEALTH PARLIAMENTARY LIBRARY MICAH

ί

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We have been very keen to go right across the board and make sure that where cuts can be made, they are made, so that the money could be given back from whenst it came really - back to

taxpayers.

Jrnlsts

Isn't that a bit hypocritical to be cutting foreign aid, when you have been bagging the Government for cutting foreign aid

themselves?

Hewson:

No, we have a policy of cutting foreign aid now for a couple of years. We feel you can maintain the quality of that aid, indeed, improve the aid within a smaller amount. And we have identified exactly how to do that and that is through non Government

agencies and organisations that really do attack poverty at the bottom, where it really matters, directing the money in through those organisations that are at the coalface of poverty in a lot of developing countries is the way to go.

I was very interested in a debate in the Parliament a week ago, when the Prime Minister picked on a World Vision aid program that he visited while he was in Zimbabwe, is exactly the point that we have been making. That is the way to do it and focus it more

on our region. Review the countries that get it, because some of them have done a fair bit better than we have in recent years and spent a lot more on defence than we do and so on. So there

are various criteria we have put down, which would lead you to a lower aid budget, better targeted and we think overall, more effective.

Just putting money at something doesn't solve a problem.

Jrnlst:

Are the promises that you hold out in tomorrow's package, to be limited to the life of the next parliament in all cases?

Hewson:

Look, we have really set down an agenda for reform that goes over the rest of the decade. We are really very keen about solving the country's problems. We don't falsely raise hopes, nothing can be done quickly and some policy decisions can be taken

straight away, but we are going to have to sustain the effort over a period of years. We have set the scene for the first

Parliamentary term, we give you that in detail. We talk about the three year agenda and how we will put those policies in place and at what time we will put them in place within the three

years.

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But we are about changing the whole face of Australian society, as we say, a generational change. We want to put the twenty

years of Whitlamism behind us and get on and restore this country to its true potential.

Jmlst:

So the promises on tax hold only for the life of the next

Parliament?

Hewson:

Oh no. Don't draw that conclusion from what I said. We aren't about increasing the goods and services tax rate, you can be sure about that. We will embody it in legislation and we are very

convinced that we won't need to. I mean, the sort of change that flows from the package of this size, in terms of activity, in terms of growth, in terms of national savings, is phenomenal. And that is really all there to be had if this country wants to

take some of these decisions.

J m l s t :

And that same promise is there for the tax cuts, income tax cuts on ..(inaudible)..

Hewson:

We give income tax cuts very genuinely. We want to give the

money back to people and give them a bit of incentive to get out and be part of this process. See, in order to re-build the

country, it is not just the Government, the Government does it part, it is a small part really, you have got to stimulate the people of Australia to get on and do their part and it is the

average workers in Australia that will have to do that and what we have done is given them a reward for the efforts they have made already and we have given them real encouragement to do more. The lower tax rates, the lower burden provide tremendous

incentive for people to work and to save and if they do, if they lift their game, then the country lifts its game and we all do better, the country reaches its potential.

Jmlst:

I understand there was some concern in the Party Room yesterday about your decision to cut sole parent pensions.

Hewson:

Well> there is always going to be expressions of differences of opinion about particular issues. What we have got to do through this debate, is to make sure that, while we are prepared of

course to debate individual issues, we shouldn't lose sight of the big picture and the big picture is that we really do need to

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re-build this country and some tough choices are going to have to be made.

When you come down to allocating benefits to people, taking benefits off some people, giving the money to other people, naturally you will get criticism. Naturally, you will have vested interest pressure from one side or the other. We have

done it very carefully, we have made some tough decisions and I don't deny that some of those are tough and some of them will hurt some people. We aren't promising any instantaneous

improvement, but if we all pitch in and face the reality of our circumstances and are prepared to do something about it, we can build this country back to what it really ought to be.

Jrnlst:

So you are expecting some sort of backlash from the welfare groups..

Hewson:

I expect that we will get some comment from a lot of

organisations about a lot of decisions. I mean, when you make the sort of cuts that we are making in the public sector and they are big cuts. When you make those sort of cuts, you are going

to have a lot of debate and that is good, we want people to focus on that. But it is not, the cutting is not the end, the cutting is to get the efficiency to improve the quality of the service, to target the service better. And one of things that is in the package that I think will surprise a lot of the cynics, is that we have always said that when you cut into areas like welfare,

that you do with a view to improving, or giving more assistance if you like to those who are genuinely in need. While you make take it off some, while you may tighten eligibility, part of the aim is to actually give more to those that are genuinely in need. And we do that in this package, we actually increase spending on

those that are in genuine need, while at the same time of course, perhaps taking it off some other people.

We stand by that. Society has a responsibility to look after the genuinely needy. But if people are able to look after

themselves, well, we give them every incentive to do that and we really do push a lot of financial responsibility back on

individuals and as individuals start to get a greater capacity to look after themselves, we reduce their dependency on

Government and you will see the way that it has been targeted at both the top and the bottom of the income ..(inaudible)..

Jrnlst:

How final are the decisions in the tomorrow's package? Would you be prepared to review them if people come up with a good case?

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V

Hewson:

No, look, the decisions are very carefully crafted, very

carefully costed and that is what we will stand by going to the next election. Obviously, there is a lot of detail, a phenomenal amount of detail in relation say, to the goods and services tax

and exactly how it will implemented in relation to individual businesses and so on, and that is why we have set up a full time office, a co-ordination and planning office on goods and services

tax. It will be open, it will be there, it will collect all

these comments and questions from people. We will make sure that they are answered.

We will ultimately pull them altogether in a volume, so you can see the sort of issues raised and what decisions we have taken. The idea is to facilitate the implementation for people to be able to get their questions answered, for us to be able to

provide more and more detail, if you like, as we get closer to going into Government and being in Government. It is a full time office and it is going to be chaired by, there is a management committee of that office, Chaired by Sir William Cole, who is an outstanding Australian and an outstanding public servant who has run departments like finance and defence. He has been a senior person in the Treasury, ideally positioned really, to oversee that operation and that is the sort context in which, obviously, we will listen to the argument that people want to put about the

detail.

Jrnlst:

Dr Hewson, just a minute ago, you said some people will be hurt when you were talking about sole parent pensioners. I thought you said that everybody would be a winner, no one would be a

loser...

Hewson:

No, I have given no guarantees. Some people lose in the package. Some people lose, but the aim is to really make the great bulk of Australians better off and to give them an opportunity to lift their game and in that way, lift the country's game. As I say, that when ever make change, there are always winners and there

are always losers.

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