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Transcript of doorstop interview: Caroma Industries, Coburg North: 9 April1992: Unemployment; Wills; polls; GST; One Nation



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Leader of the Opposition TRANSCRIPT OF DOORSTOP INTERVIEW CAROKA INDUSTRIES COBURG NORTH, MELBOURNE

THURSDAY, 9 APRIL 1992

B fc OB PROOF COPY ONLY

SUBJECTS * unemployment, wills, Polls, GST, One Nation

JRNLSTl

Dr Hewson, the Government is saying that the figures really do indicate that the worst of the unemployment crisis is over.

They must be looking at different figures. I think they confirm the fact that Victoria, in particular, is an

employment wasteland and we see that full time job losses are still continuing, the unemployment rate in victoria is 11.6% and if you look at the Newstart and Jobsearch recipients over

the last 12 months, they are up 60% in the northern region which includes Wills. So I think it is a direct, if you like, argument against what the Government is saying. The

employment situation hasn't stabilised.

JRNLSTi

But the national figure is encouraging, surely?

HEWSON:

The national figure of 10.5% is where it was. We are yet to see, I think, the full impact of this recession on employment and unemployment.

Do you think it will still the reach the 11.5% that you have been predicting?

Well, we've been referring to the leaked DEBT document which said that the number could come in at about eleven and a quarter and that's still a possibility.

HEWSON:

JRNLSTt

HEWSON:

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

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JRHLST*

Kim Beazley is telling people to take heart in the latest DEBT leading indicators and the One Nation package. Has he got any argument based on the figures that came out yesterday from the Department?

HKWSON*

I don't believe that there's any positive sign yet for employment. In fact, the question marks in the last few days in relation to the international economy should cause us all to stop and take a long hard look at whether, in fact, our export markets aren't now going to shrink significantly particularly as the Japanese economy slows down. As far as One Nation goes, well there's no evidence that it's going to

stimulate jobs - indeed, it could cost jobs - and if they proceed with the compulsory superannuation legislation, that will directly cost jobs.

JKNLST*

These figures today have to help your campaign on Saturday, don't they?

HKWSON*

I think they confirm what we've been saying and they provide us with an opportunity to actually bring the focus of the campaign which has gone up every burrow in the district in the last 4 weeks, bringing the focus back to unemployment. I

think as far as the people of Wills are concerned, their focus has been consistently on the lack of jobs and the lack of opportunities for their kids and, yes, in a sense the release of this data today, will refocus media and their attention on that number.

JRNLSTs

The Statistician says the trend estimate has steadied after falling steadily during 1991, surely that's good news?

HKWSON*

The trend estimate of what, of employment or unemployment?

JRHLST*

Unemployment.

HKWSON*

Well we take the view consistently that you look at a run of data. It's true that it seems to be steadying but it's always too early. We don't know the timing of the flowthrough for example of the school leavers. In previous years, it's been

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February, March, April, maybe May where the big impact has occurred and we're only half way through that process. One is hopeful, of course, that it is steadying nationally but there isn't any evidence yet to convince us of that. In fact, if you look at the emerging gap between Victoria and NSW, I think

that makes a very strong point. Full time employment is still falling in victoria, I think it's back to about the 1985 level and had a loss of about 180,000 full time jobs in Victoria in the last 7 years and that is a very significant factor and it shows that while other States, for example, NSW have improved a bit, Victoria continues to decline and there's a half percentage point jump in the Victorian unemployment rate in

these numbers.

JRNLST:

Dr Hewson, you said the campaign has gone down all sorts of burrows in the last few weeks, do you think this is partly your fault that you couldn't stop it heading down those burrows ...

HEWSON:

.. No I don't think so ...

JRNLST:

.., and is this a bit of a worry for the national campaign for you?

HEWSON:

No, I don't believe so. I think in the national campaign the focus would be on a head-to-head contest between Paul Keating and myself. In recent days that hasn't been so much of the focus, it's been a focus on just about, any extraneous issue

that's come along. I'm not denying that there's been pretty consistent coverage of the Wills by-election on a daily basis, but there’s been a lot of other attention on things like flags and the monarchy and so on which are diversions from the main

game. ·

JRNLST:

What's your polling showing?

HEWSON:

Well as far as we can see, we have been consistently behind in the polls since the beginning and that's been confirmed by the Morgan Poll that was available not long after the campaign was started and we're still behind. You can't really, to be

honest, read a lot from the polls because you get very high rejection rates and you will have an election where there will be potentially a very large number of informal votes. But all that's made us do is try harder.

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JRNLSTs

Do you think the Liberal Party polling is parallel to Morgan Polls?

HKWSON:

I wouldn't say that our polling is as reliable, let's say, as Morgan. The bit that I've heard of that we've done has

broadly confirmed what Morgan has been saying.

JRMLSTi

Dr Hewson, the wholesale sales tax on the products of this factory are at 10% I understand, how is your GST good news for them - they're going to be dearer by 5%?

HEWSONI

It's not clear that the calculation follows because of the nature and the difference between the GST system and the wholesale sales tax but this type of company which has proved itself as t\ very successful performer, a very high quality

product, a lot of excellence awards have been won, design awards have been won, they are a very effective import replacement company. They stand to gain a lot from the whole package, not just the changes under the GST per se but, of course, the abolition of payroll tax and drops in

transportation costs and better labour market relations and so on, they all flow through to a significant improvement in the bottom line. I think what you see here is a high quality Australian made product, it's an effective competitor with

imports. It has some export markets, some export potential and I think they would be big winners under our package.

JRNLST*

Dr Hewson, Mr Keating said this morning that you are becoming mournful about the rejection of the GST in the Wills

electorate, .and so you've swapped your outlook to labour market reforms?

HEWSON*

Mr Keating apparently grabbed on to a story that appeared in one of the newspapers written by a fellow who hasn't spent much time with me over the last 6 months or so. I must have put the same argument about the importance of the industrial

relations component of our package, namely, that it is the most important element, almost every time I spoke and since we released "FightbackI " from the very day. It is important, it's fundamental in itself and it's fundamental to a lot of

other areas of reform like the waterfront, like

transportation, like power, like telecommunications. They are in a substantial part, labour market problems as well as problems associated with a lack of competition or too much

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government regulation or government ownership as distinct from private ownership or whatever the factor might be in each of those areas, In simple terms, we've always said that the industrial relations policy is the centrepiece of our package,

it'e important to recognise that the tax package backs it up as I said in yesterday's speech. You give people under the industrial relations policy an opportunity to earn more, and the employer to get a more competitive wage outcome more directly linked to performance and the tax system gives them

an opportunity to keep more and an incentive to work harder, an incentive to save and incentive to invest. The key point about the whole package is that no one part of the package, in itself, is an answer to our problems. Each element of the package is important - some more important than others - but

really it is the package as a whole that's of fundamental importance and that's the position that I've consistently put. Just to be absolutely clear, there is absolutely no way that we will back off or change any aspect of our goods and

services tax policy or our tariff policy as a result of what happens on Saturday.

JRNLSTt

Dr Hewson, do you think the significance of this by-election has been overstated at all?

HEWSON*

Well there's been a moderate amount of attention. I see around me a lot of people who have got out of Canberra and spent a fair bit of time down here and I think that's probably been a good thing for them and it's certainly been a good thing for

us. I have always said consistently what I thought about this by-election. We were behind when we started, we had to work hard to win, it's a very hard seat for us to win. It became harder when the Independent, Mr Cleary, appeared, but all

that's convinced us to do is to up the ante, if you like, put in a greater effort, make a bigger effort in door knocking and letterbox dropping and direct mail, make a bigger effort in terms of personal appearances on my part and on the part of my colleagues. We have put a lot of manpower into this seat and we've given it every chance. As I say consistently, I haven't

given up, it's always been tough, but let's see what happens on Saturday. We will fight to the last second to try and win this seat and, in that sense, we don't mind the focus. It's provided us with an opportunity to get some of our ideas up

and some of the focus back on some of the issues we think are important, as hard as that might have been on any one day.

JRNLSTl

Dr Hewson, in the export markets of Asia, this particular company faces tariffs of 50% in countries like the

Philippines, Thailand. What would you do as Prime Minister to try and bring a level playing field so companies like this can actually trade fairly in Asia?

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HKWSONi

Well, we'd do two principal things and you've used the tern "level playing field". We only apply a level playing field to our own domestic industries. We are trying to provide a level playing field within Australia, we're doing that by trying to match the best in the world by becoming internationally cost

competitive and the focus of the whole package, be it the abolition of taxes like payroll tax and sales tax and petrol excise, or be it the elimination of the cost disadvantages across transport and telecommunications, waterfront and so on

or be It the reform of industrial relations or whatever. They are all designed to eliminate those cost disadvantages and to make our industry as competitive as we can. The second point is, however, that we tilt the playing field and try to tilt

the playing field in favour of our industry. And that doesn't mean that we use tariffs to do that but the abolition of payroll t.ax may put our companies in a competitive,

advantageous position compared to somebody in another country where employment is taxed or the abolition of sales tax on their inputs or the abolition of excise on petrol. We'll give them some advantage - accelerated depreciation, R & D

allowances·, all the things , that are part of the package that may not apply in some of those countries. Thirdly, I guess what we'd do is would argue the case on a multilateral, a bilateral and a regional basis for trade liberalisation. We

strongly support the attempts of the Government and others in relation to the GATT. I put a specific proposal yesterday which I have many times about using APEC as a forum to bring about genuine trade liberalisation in the Asia-Pacific region which would Include some of the countries that are in question

in the points you raised and, of course, on a bilateral basis, the Government can do a lot more to try and open up markets. I think we haven't touched the potential that is there for bilateral approaches - country-by-country approaches by our Government - to open up trading opportunities.

JRNLSTi

Companies'like Caroma say that it's impossible for them given the labour cost differentials between Asian countries and our own to have zero tariffs when they are trying to get into markets where there is a 50% tariff war?

HEWSONi

Labour costs are part of the problem but they are not all the problem Sure, we can, under our package, bring you more internationally competitive labour costs that gets a much better balance between productivity and wages so that unit

labour costs are internationally competitive. But this company probably carries some advantages in terms ot the state of the art technology which may not apply in some of these other areas or in design which may not apply in some of these

other areas. And certainly to the extent that we abolish other taxes and reduce other costs, we can make them

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increasingly internationally competitive. so I hear these arguments all the time but I don't think that it makes a lot of sense to say, well we better give up, we better match that tariff protection because all that does is lock the

inefficiency that's in our system into our system forever and to build on it and not guarantee them any more effective capacity, probably less so, to compete internationally than what they now have. So my view is that we have to get

internationally competitive ourselves, as a top priority, you can only do that by lowering costs and matching the best in the world, becoming genuinely internationally competitive, while at the same time, taking some of the other steps in

relation to our international transactions on a bilateral, multilateral or regional basis in order to open up some of those markets. I have no doubt that our package would, in cost terms, significantly benefit a company like this.

Thank you.