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Transcript of media conference Dr John Hewson, MP - Leader of the Opposition ParkRoyal Hotel, Brisbane Friday, 24 May 1991

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Leader of the Opposition



SUBJECTS: Labor leadership challenge, Destabilisation of Federal Government, Economy, Jeff Kennett, Home loan Interest rates, Value of $A, Death of Manning Clark, Disclosure legislation


Dr Hewson, do you expect the leadership issue within the Labor Party to be settled on Tuesday.


Well, I hope It is. What we've got now is policy paralysis of the worst sort. They're not governing the country, they're fighting amongst themselves. You've got a very dangerous person in Paul Keating. He's not only created the worst

recession In sixty years but now he's destabilising the

Government. I think the Prime Minister has a responsibility to either pull him into line or make him put up or shut up.


But why do you want them to sort it out. Surely its better

for you if they're disorganised.


I'm a concerned Australian like most people. I'd like to see some of these problems solved and the recession is just

getting worse, they've done nothing about it, they've got no recovery plan and they haven't focussed on it. In 18 months or 14 months, I should say, since- the .last election campaign there 'a been no sense of direction, no leadership, no

capacity to deal with the problems as they come.

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Parliam ent House, C anberra, A.C.T. 2600 Phone 2 77 4 02 2 COMMONWEALTH PARLIAMENTARY LIBRARY MICAH

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The country just c an’t wait another eighteen months or two years of drift. People are being driven off their farms,

bankruptcies are at record levels, unemployment looks like sticking above ten percent/ _They have a responsibility to govern the country, not to fight amongst themselves.

Jrnlst: .

So what sort of impact is this leadership battle having on the economy.


It's making it much worse. You are hearing evidence, for

example, from groups like the Business Council that they're not going to invest in the next eighteen months. They're just going to wait and if you have an investment strike, you won't get any recovery and the number of job losses will continue to

go up. Nearly all of the Business Council people, I think two thirds of them in their last survey said that they were

cutting back on their investment plans that they were going to lay off more people in the next six months. Now, it's pretty , worrying stuff. They're the biggest companies, the biggest employers in Australia and they're making those sort of

comments based on their concern that the Government doesn't know where its going, its not putting any policies in place, its not dealing with the problems at all. They're just

letting it drift. And that's why the leadership issue has to be settled.

Jrnlst: , .......

But you're also a politician.. Isn't this a big benefit to you in terms of destabilisation.


Look, I've tried right through my time as Leader to just focus on issues and to try and get the Government to do the right

thing. We've gone out there and taken some politically

difficult and unpopular decisions like support for a

broadbased goods and services tax, or advocating zero

protection, hoping that they will come in behind us and

Implement some of those policies and start to turn things

around. Now, I'm very genuine about that and, look, I know a bit about the extent to which leadership squabbles in the past have destabilised the Liberal Party.f We've learnt all about that. We've learnt that disunity in politics is death.

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Now in Government it's very important that they solve this problem, and it is a question of leadership. If Bob Hawke is the leader he says he i s - ' h e ^says he's the best leader the

ALP'e every had - he ought to demonstrate that fact and solve the problem by calling it to a head one way or another early

next week so that he can get on and govern the country.


Mr Hawke once said a couple of years ago that he had a mole in

the Liberal Party. Do you have any spies in the Labor Party

who have given you any indication of what will happen at that meeting.


No, not at all. I mean, I just hear conflicting stories all

the time in the press. Graham Richardson out there this

morning saying he doesn't think its on. Last week, I think he was on the other side. You never know which side he's on, but all I'd say is that they should actually settle it. And they ought to all be concerned to ensure that the Prime Minister

does settle it one way or the other next week so that we can,

as I say, get back to some very real Issues. There's a lot of

very important pieces of legislation to come into the

Parliament and its a tragedy that we don't get the time to

debate those and to get the Government to move in the correct direction - telecommunications is a good example.


You pointed out that the election is still a fair way off, but in your opinion is Hawke already a lame duck leader.


Well, he's got to demonstrate his leadership capacity and the only way he can do that really is settle this problem. We all know, you all know, how destabilising Paul Keating has been over the last, what, several years. He's had about three

years of trying to destabilise Bob Hawke. He's the guy that's thrown this country into the deepest recession in sixty years. He's now stopping the government in effect from governing by this incessant focus that he's created on the leadership

rather than on policies and, so Bob Hawke just simply has to act now. He has to bring it to a' head and put it behind them

and get on and govern the country.

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Look, he'll have our support to take the tough decisions that have to be taken. People just can't be expected to wait

another twelve or eighteen months for a change of government to get any relief from this recession. Its just crazy.


Do you support the Victorian Opposition Leader's threat to the superannuation of Labor politicians in that State.


Another thing I've done since I've become leader is not get involved in State politics and State issues. I don't give

them advice as to what they should do. In Jeff Kennett's case he's got to call it the way he sees it and I expect of course

that they don't give me advice about what I should do.


But some would see it, surely, as a pure case of blackmail.


Well, its for Jeff to call it in the circumstances of the time and for the people of Victoria to judge. Its a State issue,

its not a Federal issue. :


Why don't you use this opportunity to give him your full and frank support then, if you think its a good idea.


Look, its not a question of me giving him support one way or

the other. Its a question of him calling it at a State level, like Nick Greiner calls it at a State level. I don't get

involved in giving them advice as to what they should do in

relation to State parliamentary tactics or State policies or whatever. And as I say, I wouldn't expect that they'd do it

to me either.


Well, what would you do if you were in Jeff Kennett's


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I'm not In his position.


But hypothetically speaking, would you go to that extent.


There's no point in talking about hypothetical alternatives. We've got real issues in this country like unemployment,

personal bankruptcies at record levels. I'll focus on those 'cause that's really what my job is about. Its not about

advising Jeff Kennett what to do. We know that Victoria is in a freefall. We know that the people of Victoria want an

election and Jeff Kennett is dealing with that situation as best he can as Opposition leader in that State. Its not for

me to give him advice, its unhelpful one way or the other.


Should the Liberals block Supply in Victoria.


No, I've refrained from commenting on all those options.


Is it something you'd carry over into the Federal sphere,

would you do it in Canberra.


Its not for roe to say what we would or wouldn't do in similar circumstances. My approach right now is to force the

Government to do its Job. That is to govern. That's why I

want the leadership issue settled. That's why I want Bob

Hawke to make a major economic statement. That's why I want him to use the forthcoming Premiers' Conferences to make

structural change. I mean, the country can't wait another eighteen months.

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So what you're doing is distancing yourself from Mr Kennett.


No, not at all. I'm just playing the role that I see I should

play and I've consistently played it right throughout my

period as leader. But I Just don't give them advice and I

don't expect them to give me advice. And you shouldn't

conclude that I do or don't support him. It's not for me to



Well, you're the Federal leader, does Jeff Kennett have your full support.


Well, Jeff Kennett is the Opposition leader, he has the

support of his colleagues in Victoria and he's calling it on the basis of Victorian issues and Victorian circumstances. And its not for me, he doesn't need my support.


But does he have it.


But he doesn't need It. I mean, I think Jeff Kennett's a

great leader. I think he's doing what he can in the

circumstance to make a point, to force the Kirner Government to an election. That's Jeff Kennett's strategy and he's

calling it the way he sees it.


The major banks have now got home loan rates to 13 percent,

12.95 in some cases. Should the April '86 ceiling of 13.5 be scrapped now.

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Well, Its not for me to say that either. But as far as I'm

concerned all interest rate-restrictions should have been abolished over time. Some are more difficult than others. Some are implicit in contractual arrangements. As far as I'm concerned though, the real issue is getting housing interest

rates down and keeping them down. And that will require again a change of policy in order to do it.


But you're the alternate Treasurer. Should the thirteen and a half ceiling go or not.


Ho, I'm not the alternate Treasurer.

Jrnlst: .

I beg your pardon. You are quite right on that. I beg your

pardon, but as far as the economics is concerned, should it go or not.


Well as I've said I've been a strong advocate right through the years of the abolition of all Interest rate controls and restrictions. The circumstances of particular ones like that have to be looked at in terms of the nature of the

relationships that have been established. In my view I've always fought for eliminating quantitative restrictions on bank lending, on interest rates, on financial transactions.


What's you view of Mr Hawke and senior Government Ministers deliberately talking down the dollar.


Well, Jawboning doesn't work in the sense that the only way ydu'll get the currency down to-be closer to its long-run

competitive level is to change policies that will bring

interest rates down, real interest rates down, and thereby the currency will follow suite. ,../8

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Should the Australian dollar be lower.


If you just try and talk it down, one of two things happens.

It only works for a limited period and then it goes back up,

and we've seen that happen many times. Or it creates a crisis of confidence in the currency and then it falls much further than they were trying to talk it down. And that currency

could overshoot as a result of this sort of very destabilising behaviour by Bernie Fraser and by Bob Hawke and others who are trying to talk it down. And its self-defeating. And the

reason that the Bank is presumably, and the Government has decided to talk the currency down, is that they don't want to ease monetary policy.

Now, by creating the circumstances in which there's a loss of confidence and the currency actually falls quite dramatically, that then stimulates inflation, undoes all the good they were trying to avoid by not having to ease monetary policy. So,

you know, the risk they're running is that we'll end up with a higher inflation rate and therefore higher interest rates than would otherwise be the case.

There's only one way to get the currency down to a level

that's closer to its long-run competitive level and that's to deal with the real interest rate problem. And the Governor himself actually said that in New York the other day.


Well, how much lower should the dollar be, in your opinion.


Well the dollar on any day is where it ought to be. I mean

the market puts the dollar where it is on the basis of the

settings of policy and market expectations and assessments. Now they've had a very clearcut direction from the Government for a long time that real interest rates are not only high but they're going to stay high so all short-term investors around

the world find the Australian dollar an attractive currency and they keep bidding it up and if the Government tries to

talk it down it might only work temporarily.

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It’ll go back up unless, of course, they frighten those

foreigners and convince them that they really haven't got any policies to control Inflation or to turn our country around, then the foreigners leave, take their money and the dollar plummets and, you know, we're Into the worst of all

circumstances where you have domestic Inflationary effects, you have significant effects on our debt levels and the

problems get bigger rather than smaller. It is a very short­ sighted, ill-conceived approach to dealing with a fundamental structural problem, that Is, the level of real interest rates.


Dr Hewson, could we get your reaction please to Manning

Clark's death.


Manning Clark, I guess the thing that sticks in my mind about • Manning Clark was his passion for Australia and his passion for drawing to the attention of Australians features of their history or their society that he thought were important and he

' played, of course, a very important role in that respect. He was undoubtedly very controversial and there were a lot of things that he would have said over the years that, I suppose, most of us wouldn't have agreed with. But you can't question

his passion and his commitment to making us aware of some of the features of our history and our current society that he thought were very important. So, in that sense, it will be a great loss.


Dr Hewson, what about the disclosure of political donations. What's the Liberal Party's stand on that.


Well, we support the concept of disclosure provided its fair and equitable. We are now scrutinising the Government's

legislation on disclosure to determine the extent to which we think it is fair and equitable. We've taken the view, the

initial response was one of great disappointment that they put the advertising ban and the disclosure legislation together in one bill. They're two quite unrelated issues and I've written to the Prime Minister and asked him to split the bill into two

so that we can objectively assess each on its merits.

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We'd certainly oppose the ad ban, we want to support

disclosure and we want to support disclosure that Is fair and equitable. Now, Its silly for Jiim to leave them in the same bill. He's obviously got some real problems with this ad ban and the advice of Burdikin and so in those circumstances I

think there's a sense of urgency now about him splitting the bill. We get the impression that they are going to try and

guillotine this legislation through the Parliament. That would be inane.

He really ought to allow complete debate of what is very, very important legislation and something that's going to attack the right of free speech or to be subject to maximum amount of

public debate and scrutiny. And, of course, the issue of

disclosure which is very important should have a full hearing and we should be given every opportunity to make it fair and equitable. But I doubt his bona fides. I don't think he's

got any genuine interest at all in disclosure or in the ad ban per se.

He's just trying to take short-term political advantage vis-a­ vis us, ram through a piece of lousy legislation and hopefully make our life difficult coming into the next election where, as I say, they are two very important issues, if he was a

genuine leader and he was genuinely concerned, he'd split the bills and allow us to debate both those issues separately.

He won't get our support on the ad ban but he would get our

support on disclosure as long as its fair and equitable.

We are now working every second of the day to determine the

precise nature of the legislation that's been drafted and whether there isn't a better set of legislative procedures or amendments that will achieve fair and equitable disclosure.


Do you have the full support of the organisational wing of

your Party.


You've seen some evidence of the frustration of the

organisational wing of the Party that have been supportive of non-disclosure for a very long period of time. I think

probably over forty years they supported non-disclosure.


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There's obviously been some fairly frank discussions about that Issue, but we believe that we are doing the right thing, that the electorate not only demands propriety these days but they demand that you appear te' be behaving properly as well and they should, and In those circumstances we are working to make the best piece of disclosure legislation we can and

hopefully, as I say, the, Government will at least be genuine enough to let us have a go to do that. Disclosure is very

Important, the electorate Is demanding it and in those

circumstances we want to make sure that the legislation is fair and equitable and we don't want them to have any

advantage under the legislation. They shouldn't obviously want us to have any advantage so lets make sure its fair and