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Transcript of Ian McLachlan MP ABC A.M

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For some time the Opposition Leader John Hewson has been criticising Australia's car makers for their hostility to the coalition's proposal to phase down tariffs to negligible levels by the turn of the century. In recent days Mitsubishi has joined Ford and Toyota in attacking Dr Hewson's plan. Mitsubishi says it won't proceed with investing $500 million if a future Coalition government ... on its policy proposal. On Friday on A.M. Ivan Deveson, the former head of Nissan .... as it

examines the Opposition's tariff policy

Ivan Deveson - The important thing is that we're going to zero or near zero regardless. If you ask the question ... if you don't achieve microeconomic reform, will you still go to zero or near zero, you don't get a straight answer, and that leaves business very unsure.

.. Industry Minister Ian McLachlan on the way in which the tariff cut message is being sold. Mr McLachlan joins us ...

Journ - Mr McLachlan, you heard Ivan Deveson there, why can't business get a straight answer on this.

IMcL - Well they can get a straight answer and the straight answer is that the micro reform will get done. It hasn't been done by Governments in the past, it's not being done by this Government and will be done by us. And what is more some of those same car companies that we're talking about actually give us credit in the cost of a car for some $250 or more per car for our industrial relations changes over the present Government. That's a benefit to the car companies. So when you make

those changes that's when you can start to make the microreform. So they're giving us some benefit at the start before we even get into government.

Joum - So is Mr Deveson wrong?

IMcL - Well I've heard Mr Deveson, Mr Deveson comes from the car industry. The debate about the car industry is always the same prior to elections, I mean prior to every election the car industry ....

Journ - So they're just a bunch of wingers.

IMcL - I didn't say that and I don't believe that. They are putting their industry lobby, as they have done at almost every election since the end of the war.

Journ - Mr McLachlan why does the Coalition have so many in industry off-side at the moment.


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IMcL - Well I think that the car industry is seen as a big employer, it is a big employer, although the car manufacturers are less than 1 per cent of Australia's employment. They managed to mount a big effort. But the fact of the matter in many of these debates, the truth gets lost, and the tru th is this: that they have all signed up to a 15 per cent tariff by the year 2000, they've signed up to that under the Labor Party; and secondly what we are saying is that they can go to 5 but we will give them back the $1,000 differential that they have identified per car in taxes foregone by the government and other benefits. Now th at is the argument, and the perception is that we are being tough, But the reality is of course we're only doing that for one reason, and that is to save Australians money and to make cars cheaper for Australians both in business and privately.

Joum - Well how do you quell those in the Opposition who are concerned about this policy, Steele Hall for instance?

IMcL - Well it's funny, Mr Hall always seems to be quoted on this subject, but the fact of the matter is that I think that's probably been his position for a long, long time. And the party policy is quite different.

Journ - But he's not the only one.

IMcL - Well we're quite solid on this matter. There is no doubt. Look, the Labor Party itself is going to 5 per cent on every other industry except textiles, clothing and footwear and automotive, and they're doing it by 1996. We don't hear a single word about that.

Joum - You say that you're quite solid on this, but that's the leadership, the Coalition leadership. There are many within the Coalition who are not solid, the Queenslanders for instance over sugar. How many people have expressed major concerns to you, people like Steele Hall?

IMcL - We had debates about this whole thing time and time again but it's simply the difficulty of selling a program which Australians aren't used to. Australians have been used to for years paying too much for many of their products. Now the Labor Government said let's get rid of that, and it was supported by this party, and they have chosen to differentiate on the subject of cars. And the problem is that most Australians think that protection will help them. Our backbenchers say to me

it is difficult to show people that protection is a misnomer, which it is.

Journ - You'd agree there's problems with selling this package?

IMcL - I mean there's always been problems, the debate has been going on since 1840.

Joum - OK, well there's an election probably six months down the track.



IMcL - OK, for the last nine months, since Fightback! came out, we have said to the Australian population, we want to tell you the truth. The truth is that cars today cost you $4,000 more than they otherwise would if it weren't for these tariffs, we want to slowly bring these costs down, we want to get the age of the Australian private car park, as it's called, down from 17 years, which it is at the present time,

and to do that unfortunately you have to remove tariffs slowly, but gently, to the year 2000. And that's what we're going to do. In other words, our job is to tell Australians the truth and to make life cheaper for them and for their businesses.

Joum - But the Opposition is continuing to push for zero tariffs when the rest of the world, as we've seen over the last week, is erecting them. We're going in the opposite direction.

IMcL - What are you talking about the wheat industry?

Journ - Yes.

IMcL - Well the wheat industry is a very vexed problem and I am the first to criticise, and have been criticising the Americans, for 15 to 20 years over that policy. It's a very bad policy. And what is more, it will disrupt the world wheat market

from one end of Europe to the other end of the Americas. And it's a very bad policy and it's being done because they have an election and they are running for the votes.

Joum - But if the rest of the world follows one policy, we follow the others, what does that do to our balance of payments?

IMcL - No, it's not a policy, it's an expediency for an election, and that's what Keating has done, and what he will do next week is he will make some more moves, or in the next couple of weeks, he will make some more expedient moves which will walk away from all of the things that he has ever said about protection, in other words he will buckle on protection in the face of an election which he knows he can't win.

Joum - One final question, and it's on that. The election is so close. How has the Government managed to snatch the agenda on this? Two months ago it was both the Government and the Opposition in the firing line, now it's just the Opposition. Why is that?

IMcL - I think that Mr Keating has tried to pick up a lack of understanding in the Australian public that protection helps them, and we will keep on telling them that protection has cost them a lot of money, and that if we want to be internationally competitive and get this country on the road, then we slowly but surely have to

change those arrangements as he has said many, many times.