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Transcript of radio interview with Dr John Hewson, MP, Leader of the Opposition and Rod Henshaw, ABC Radio 4QG Friday, 24 May 1991, Brisbane



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Leader of the Opposition

TRANSCRIPT OF RADIO INTERVIEW WITH DR JOHN HEWSON, MP, LEADER OF THE OPPOSITION AND ROD HENSHAW, ABC RADIO 4QG . FRIDAY, 24 MA,Y 1991, BRISBANE

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SUBJECTS: Voluntary voting; $A exchange rate

Henshaw:

The Federal Opposition Is looking at Introductory voluntary voting. Opposition Leader John Hewson has asked spokesman of electoral affairs, Senator Warwick Parer to consider the issue in detail and come back with a recommendation. In the

meantime the idea hasn't received too much support. The Prime Minister described the exercise as cynical and advantageous to the conservative parties. That view was endorsed by Democrats leader, Senator Janet Powell, who said voluntary voting was

clearly a matter of self Interest for the Liberals. So how does Dr Hewson respond to some of those views. Dr Hewson is In Brisbane, he's on the line with us now. Good morning, Dr.

Hewson:

Good morning Rod Henshaw, how are you.

Henshaw:

Well thanks. Is it a case of self interest.

Hewson:

No, look its been a point of view that has been strongly held by a lot of people in our Party in the Parliamentary Party and in the organisation for quite some time. Its an Idea that is notionally attractive and its worth coming to a final position on it. I think you can actually argue the case both ways. There are people who believe that it would be advantageous to us and there are others in our Party who believe it won't be,

so one of the reasons for Warwick Parer's paper Is just to pull all these arguments and views and ovidonce together and we'll have a look at it. . . . /2

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2.

I guess it also, I mean, we're just tossing it around at this stage, naturally enough, but I guess it also comes down to asking just how effective.the compulsory aspect of it is. I mean a lot of people won't vote because they just don't feel

like being compulsorily made to, and in other words they stay away from the polling booths in droves and take their chances.

Henshaw:

Hewson:

That's right. I mean a number of people have opted to pay the fine in recent years rather than vote and we've had on

occasions, of course, very high informal votes, which is just quite often a way of people expressing a view that they don't particularly want to pick either party or they don't

particularly want to vote, so, you know, and its not clear, of course, if you make it voluntary that you'll necessarily get a significantly lower turnout. Its very hard to make

international comparisons, but I guess if you look at New Zealand is the best example to pick - I think their voter turnout was in the high eighty per cent on the last occasion.

Henshaw:

Well, how about the view that people who are more likely to vote voluntarily are those of a conservative nature. It doesn't say, its rather a sad indictment, statements coming from the Labor Party which might seem to suggest that maybe their voting popularity is at an all-time low.

Hewson:

Well, the Labor Party believes in compulsion in everything, I mean, compulsory levies and compulsory policy implementation, and it is a fairly sad comment if they think their supporters won't come out unless they're forced to come out. I actually

disagree, I think the Australian electorate is quite sophisticated and you will certainly get a better quality of vote if people are left free to choose whether they want to vote and then who they want to vote for. The evidence I've

seen is the electorate is very concerned right now and they would take every opportunity to express their views and if they had a voluntary voting situation I'm sure they'd turn out and give you a quality vote.

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I guess also, and once again, tossing it around, the principle of democracy. Isn't better that we're all required to vote, you'll get those hardheads .who'll say well look we had to fight for the vote, therefore in- fighting for it we should, we

should be rewarded by having the vote and therefore it should be compulsory.

Henshaw:

Hewson:

I don't see that if follows really. I think most western democracies don't have compulsory voting. I think our democratic system is such that is should offer people choice and that's one of the arguments for voluntary voting, of

course - people have the choice whether or not to vote, they have the choice then who they want in government.

Henshaw:

Dr Hewson, could I Just turn our attention to the value of the dollar. You're critical of the Government calling for it to be lowered. Why is that so.

Hewson:

Well, Just to be clear, I think the dollar has been raised to levels that are uncompetitive simply because of their high interest rate policy and my view is if you want to get the dollar down you change your interest rate and the only way

they can do that really is to change policies across the board. What I am nervous about with this Jawboning approach, that is trying to talk it down, is that you either get one of two outcomes. Either the dollar goes down briefly and they

shoots back up as it has on several occasions before when they've tried .it, or the authorities and the Government actually precipitate a significant loss of confidence in our currency, they focus on our weaknesses, the international community look at it, and they pull out of the currency in droves and of course then the currency tends to fall quite significantly.

What I'm nervous about is I think that the Reserve Bank and the Government have sort of made a choice that rather than ease monetary policy and rekindle inflation, they will try and force the currency down by talking it down. But of course if

its successful and the currency does fall that rekindles inflation anyway, and you have an exchange rate crisis to boot. So I think its a very shortsighted and ill-conceived approach. There is no alternative but to put in place the right policies that will give you a competitive exchange rate.

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But you seem to be a lone voice on this one. I mean,

economists and farmers, exporters, they all seem to advocate a lowering of the exchange rate.

Henshaw:

Hewson:

Well, a lower currency, you know, their argument Is, of course, that our currency has been to their significant disadvantage, and it has. But you've got to ask yourself why is it where It Is and the answer is Its been pulled up there by these very high real interest rates. They way to get the currency down and the way to put it back at a level that is closer to our long-run competitive level Is to change policy, not to talk it down. Talking it down carries with it the sort Of risks I described and If you precipitate an exchange rate

crisis to get it down you undo what you're trying to avoid. You actually rekindle inflationary pressures rather than keep them under control.

Henshaw:

But doesn't the whole think come down to two things.

Productivity and the need to increase exports, to make them more competitive.

Hewson:

That's really what T'm saying, in order to boost our national productivity and our export capacity you really need to put in place these other policies. And in doing that the exchange rate will move to be more in line with its long-run

competitive level. Just forcing it.down doesn't necessarily bring you the improvement in competitiveness you want. If it rekindles inflation, if it rekindles wage pressures domestically, and if inflation goes back up, for example as it did in the period 85-86, then you lose. You go backwards rather than forwards. Sure, you've got yourself a lower currency but you've also got yourself a higher lot of domestic costs which price you out of international markets.

So the only way to deal with it is to lower the domestic cost disadvantages that people suffer, that's transport costs, waterfront charges, telephone and telecommunications costs, airfares, labour market, costs and so on. Now that's where the policy focus ought to be, and in doing that you will become more competitive and you will start to trade your way out of

it and you will see the exchange rate move to a more

competitive level and stay there.

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5.

Henshaw:

Right, we'll have to leave it there. John Hewson, many thanks indeed for your time this morning. I appreciate it. The Opposition Leader, Dr John Hewson, who's in Brisbane at the moment for a Federal Executive Liberal Party meeting.