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Transcript of press conference by Dr John Hewson, MP University College of Southern Queensland Toowoomba, Wednesday 22 May 1991

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Leader of the Opposition

22 May 1991




Ghandi assassination; work for the dole; military scholarship; productivity;' broad based goods and service tax; rural crisis; bl-election and economic recovery.


Dr Hewson, any response to the Ghandi assassination?

Well, I was shocked and appalled like I'm sure most people were. He was an inspiring leader whose career is nipped unexpectedly short and we all send our sympathy to his family.


The work for the dole scheme you outlined yesterday - what is the main idea of that?

I didn't actually outline a scheme yesterday, the press have been having a bit of fun with this idea. I said we were reviewing a number of proposals in relation to work for the dole schemes and there are now quite a few around that have been put forward by various groups to get some sort of community service or work in

return for part, or all, of the dole. I've always been in the position, personally, of remaining to be convinced that these can be cost effective schemes but that doesn't stop us from having a look at them and seeing whether any of them are worth persuing and that is the point at this time. There is no particular

urgency about it but we feel we have got a responsibility to look at issues like that.



Parliament House, Canberra, A.C.T. 2600 Phone 77 4022


What about the military suggestion where people have a years scholarship in the military?


Well I haven't looked at that proposal so there is no point in making a premature comment. I'm looking forward to seeing the detail of Senator Ray's statement next week before we make any definitive statements. There has been a fair bit of press

speculation as to what will be in that statement but at this stage it is counterproductive to comment until we know exactly what he's got in mind.


You said today that productivity has gone down under the Hawke Government. What could you offer to change that?


You need to really embark on the structural policies that I identified. We are about boosting national production and to do that we have got to eliminate the cost disadvantages we suffer on the waterfront; in the labour market because of labour market practices and management practices; in land transport because of the role and influence of government; and in the tax system. If you eliminate those cost disadvantages we can match best

international practice and be able to compete with anyone elsewhere in the world. That is really what we are about.

That's major structural change and it should be made as a matter of urgency. . . . . . . ,,, - ■ · .


When you talk tax are you meaning bringing in a consumption tax?

HEWSON: : ’ " ’ "v

Well, we call it a broad based goods and services tax. It is an essential part of a tax policy that we've foreshadowed which will restore incentive, Incentive to work and incentive to save, which are two major problems in our economy at the present time.


Do you see it as a way out of the recession?


No, it's not a panacea in any sense. It is an element of a

structural policy that has to be put in place. We've got to move the tax system away from, in fact, encouraging expenditure and debt, if you like, towards encouraging increased effort,


productivity and saving. Consumption tax "Is part of the shift but it's not the only part. You need to abolish the wholesale sales tax system. You need to cut personal tax rates. You need to abolish the capital gains tax and simply tax short-term speculative gains so that people will put their money Into small business and have a chance of keeping it beyond that speculative period. So there is a lot of change that has got to be made

directed towards restoring incentive to work and to save.


You have spoken to local business leaders today. What seems to be the main problems in this area that you have heard of?


The particular Impact of the recession, firstly, and secondly, the co-incidence of that, If you like, with the rural crisis which Is a double-whammy for people in Toowoomba, not only directly but, of course, indirectly. You have only got to look

at the number of shops that have closed; or businesses that are in trouble; or auction lists and so on to see the magnitude of the impact on the community as we have driven through It. They are very concerned that the Government isn't doing anything. They (the government) are not providing any leadership, Is unlikely to deal with the problem before the next election and

there la very real pain and hardship. We've talked to people right through from Lifeline and people who are In that sense In direct contact with the problem, right through to grower

organisations and industry groups and representatives, local business people who have been faced with the choice of laying people off or trying to maintain some degree of profitability of their members through the worst recession in sixty years.


The farmers say that they are hurting now. You are saying

restructure and change our attitudes. What assistance can you give them now?


I don't think it is a question of just giving them assistance. Clearly there are schemes and we have proposals for hardship assistance and rural adjustment assistance and so on which is in place and which the Government has increased and we've supported. But in a lot of cases farmers and others come to us and say: look we've got a problem please give us some assistance to help us

live with the problem. Whereas our approach is really why don't we try and solve your problem, a lot of their problems really relate to things like the exchange rate; interest rates; cost disadvantages on the waterfront, in transport, in tax. Now they are all problems that governments call solve and governments can



solve them pretty quickly If they want to get off their tails. We would put the emphasis on solving the problem first, while always, of course, keeping a keen eye on genuine cases of

hardship which may need some particular assistance. In a lot of cases the change can be made quite quickly.

We've got one industry now, the wool industry, where change is underway. We're going to a new marketing system for wool. I think it will be overwhelmingly in the best interest not only of the growers but also of Australia as a whole. The major export

market in wool will be facilitated. Now, the industry is able to handle that without any additional assistance under the sorts of numbers we've seen, provided they make some changes; they have a flock reduction scheme; they use some of their promotion

reserves; and they sell off some of the assets of the wool

corporation they can keep the levy on growers down to a level of about 5-10%,' which is manageable in these very difficult circumstances. Now, if they don't adjust and indeed the

Government's proposal is calling for a much higher levy which I think can be avoided. So, first cab of the rank is to try and

solve the problem and deal with the structural issues but, secondly, if there is any need, over and above that, for

specialised assistance, that is the context in which you should look at it.


We've just had a bi-election here in town. Do you believe the swing away from Labor has a fair amount to do with the Federal issues rather than State?


I tend to think that State elections and bi-elections are

dominated by State Issues, although there has been evidence of some contagion spreading into Queensland. Certainly WA Inc has spread to Victoria, it has spread to South Australia.

Dissatisfaction with the Labor Party, generally, in the worst recession in sixty years has now spread, it does seem that it was a factor in the bi-election results as a substantial swing against Labor in this state and some of the gloss has gone from Mr Goss.


You are part of a reasonably successful Coalition partnership on the federal scale, would you suggest that the Queensland

Nationals and Liberals have to get together if they are ever to gain government again here?



I stay out of state policy and Party organisational questions. I can say one thing though that united we stand, divided we fall. We've learnt that lesson. Disunity is death in politics and anything that can be done to facilitate a closer co-ordination

and co-operation between the two parties is in the best interest of the two parties. But, of course, we recognise that where at the federal level we can compete, and that is in Labor held

seats, we've got the best chance of maximising the non-ALP vote if both of us run a candidate and compete with each other.

That'll certainly be our approach at the Federal election where healthy competition within a very effective Coalition is a good thing.


Do you believe rural industries will have a bit to do with an economy led recovery? "


I don't think there is likely to be any recovery until the latter part of 1992 and it will depend very much on the business

community deciding to re-invest, which at this stage there is absolutely no sign that they will. The rural sector, I think, we are yet to see the impact of the rural sectors crisis flowing through to the rest of the economy. I think that will flow over

the next 12 to 18 months so Mr Keating might be hoping on a quick recovery in the latter part of this year, but I don't think so. I think the rural sector and the world economy will keep our economy flat for quite some time and I put it to Mr Keating and Mr Hawke that perhaps the only way a lot of Australians are going to get their jobs back is when Bob Hawke and Paul Keating lose theirs. .

Thank you.