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Transcripts of Peter Reith MP, Deputy Leader of the Opposition and Shadow Treasurer



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Deputy Leader of the Opposition

E&OE

TRANSCRIPT OF PETER KEITH HP, DEPUTY LEADER OF THE OPPOSITION AND SHADOW TREASURER, MELBOURNE, 1 OCTOBER 1991

PKR: Today's balance of payments figure makes Australia's accounting ledger look a bit tidier but they hold out no prospect for jobs in the immediate term future.

The real figure, I think, today to focus on is that

imports have dropped by 12 per cent. We're spending less and that's basically recession induced. So the figures themselves are welcome as one month's set of figures but, within the broader context, Australia's recession rolls on and these figures are just

confirmation of the depths of the worst recession for sixty years.

J : Surely you were taken by surprise?

PKR: Yes, the figures are certainly better than market

expectations and we certainly were not expecting that, you know, massive drop in the imports - 12 per cent. A fair bit of that, of course, was in the investment area and it's no surprise that demand for investment

goods is down. The budget itself projected that

investment would fall this year by 10.5 per cent but private forecasts are suggesting drops of up to 18 per cent. Of course, without investment it's very hard to see any sustained recovery in Australia and the jobs that would follow from that higher investment and turn around in economic activity.

J: Economists would call it an outrageous (inaudible)

number.

Parliament House, Canberra, A.C.T. 2600 COMMONWEALTH

PA R LIA M EN TA R Y l i b r a r y M IC A H

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PKRi

J:

PKRi

J:

PKR:

J:

PKRi

Ji

PKRi

Ji

Well, it's certainly much better than expected. I wouldn't call it outrageous. What's outrageous is that this Government has deliberately brought on a recession to address our current account deficit problems. They ought to, of course, have been

undertaking the major structural reforms that would give Australia a much better capacity to achieve

higher income for Australia. You look at rural

exports, for example. The expectations for rural exports in the next 12 months are not rosy. In fact, the official forecasts are for a fall back in

commodity prices. That reduces our capacity to earn our way in the world and that is a cloud on the

horizon for Australia in terms of the current account deficit.

(inaudible)?

Well, the Government's policy was to bring on a

recession to fix the current account deficit. We do, of course, have a massive indebtedness to the rest of the world and a very big interest bill to pay to the

rest of the world - which is dragging down Australian living standards. So today's turnaround, yes - a

result of the recession. And, yes - the Government deliberately brought on a recession. And if they

think that's good policy, that's a good reason for people to vote them out at the next election.

(inaudible)?

Oh look, a trend in lower deficits is obviously

welcome. You need to look at the underlying causes of that trend and in this month's figures, just looking at the one month alone, the trend has seen a big drop off in imports and a marginal performance on exports. Exports are up one per cent.

But how best would you actually describe the figure, itself?

Well, the figure itself is welcome against a backdrop of a policy induced recession.

Would you say it's is a good figure or is it...?

Well, any lower figure is good in itself. But you

need to assess Australia's economic circumstances on a wider base than simply one set of figures and I am

sure Mr Kerin will be saying exactly the same thing in Canberra today.

(inaudible)?

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PKR:

J;

PKR:

Well look, nearly one million Australians who are unemployed won't be clapping a Government which has brought on a recession and which has seen literally thousands of Australians sent bankrupt, thousands of businesses sent to the wall. Now, that's not my idea of good news and I think that has to be said. I mean, yes, we want a much better performance on the current

account deficit and the Government's response to the current account has been to bring on a recession. That's how we got here. That was their deliberate

policy. They set out to give us the worst recession in sixty years with all the scorched earth policy

consequences of that. Now, that is not good policy and what this country desperately needs is a

comprehensive economic policy that will give us the same growth and a turnaround in the current account deficit. So we need to fix up the labour market. We

ought to stop taxing exports. We ought to have a

change to the tax system biased towards families. We ought to stop taxing investment. We ought to make

those big policy changes that will give this country a brighter future than the one it has today.

Mr Reith, just on another matter. (inaudible)

regarding the Prime Minister's phone call to

Mrs Kirner on the weekend?

Well, its very revealing. I'm glad you asked the

question. It reveals that the leadership issue is uppermost in Mr Hawke's mind. He is prepared to

sacrifice the entitlements of the Victorian taxpayer to his own leadership ambitions. It shows you that the factional tension both within the factions and between the factions are very considerable and it's

just nonsense for senior Labor figures to be

attempting to downplay the ongoing leadership

struggle. It's alive and well and I think it is

outrageous for a Prime Minister to attack the

Victorian Premier, require of her to discipline her Ministers, all in furtherance of his own interests. He ought to be more worried about the jobs of nearly one million Australians than he is in his own job, which

is obviously his obsession.

J: (inaudible)?

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PKR;

J:

PKR;

J:

PKR:

(inaudible) and on the imports side. The real focus of this month is on the import side. As for the

future, well ABARE forecasts of the last week have been for a pretty subdued performance on our rural exports. Something like, I think, seventy percent of Australia's exports are both agriculturally based and mining based and the prospects on those two are not as

strong as we'd like. So I don't have a forecast

specifically for the next two or three months but

private forecasts at the time of the budget had a

figure slightly higher than the Government's

$14 billion. A lot of it will be determined on

economic activity on the domestic scene.

(inaudible)?

Well, there are a number of resource projects which this Government has denied and has rejected for purely political reasons. Wesley Vale would be in that

category. Coronation Hill. The third runway at

Sydney airport is another project which should have been fast tracked years ago. It's nearly ten years now since the Labor Party stopped that project

proceeding and they're still talking about it. So there is a debate, obviously, within the Government between those who want to see more development and jobs and those who are sticking to a strong pro

conservation/environmental line.

What's the Liberal Party line?

Well, I think we've got to have the jobs. And I

think, yes, you've got to take environmental issues into consideration but, if you take the Sydney airport as an example, I don't see why it needs to be, you

know, nearly three years since the Government made its decision on that and yet we still have no firm project going. That's absolutely absurd. Everybody knows it's absurd and I think that gives the lie to the

Government's, you know, claims about fast tracking. There's a project they could fast track tomorrow. Why don't they?

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