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GST, Keating's economic statement, structural reform, conservation foundation, Paul Keating



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Leader of the Opposition

13 February 1992 REF: TRANSCR\NM\S0053

TRANSCRIPT OF DR JOHN HEWSON HP INTERVIEW WITH PATTL LYNEHAM 7.30 REPORT, ABC TELEVISION

E & 0 E - PROOF COPY ONLY

SUBJECTS; GST, Keating's Economic Statement, Structural Reform, Conservation Foundation, Paul Keating

Lyneham:

Dr Hewson, welcome again to the programme.

Hewson:

Good evening Paul.

Lyneham:

Your consumption tax campaign seems to have lost some of its momentum over the Christmas/New Year period, and now everyone's waiting for Paul Keating's statement on the 26th. How will you try to regain the initiative?

Well, it has perhaps lost maximum momentum, in the sense that it's not conspicuously on television every night. But the effort level has been maintained by us. We've been engaged in a lot of public meetings. We have a task force which is '

driving all my colleagues to do their part in contacting various community groups. We will have a major letterbox drop and mailout to households beginning very soon - over the next month or so. And of course, right through the year we have a

series of public meetings and launches of more detail of some parts of the package.

So we have an agenda that runs right through to the next election.

Do you ever face the danger though, that if Paul Keating's statement is well received, it could provide him with a new platform from which to attack your consumption tax?

Hewson:

L y n e h a m :

Parliament House. Canberra. A.C.T. 2600 Phone 2774022 COMMONWEALTH PARLIAMENTARY LIBRARY MICAH

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Hewson:

We're not worried about the attack, but we look forward to the debate. And I hope that Paul Keating puts down a genuine alternative - not a populist alternative - that is designed to deal with our problems, and that we can have a full-blown debate between then and the next election.

Lyneham:

And of course, he's also got the August Budget, which will help him to put a bit more pressure on you as well.

Hewson:

Well, we've looked at the possibility of Paul Keating having three statements - the February 26 statement, which I think will be largely an industry statement; then the Budget, of course, which I think will probably include the wage/tax

elements, some assistance to pensioners, increases in family allowances - making it possible for him to go perhaps as early as September to a Federal Election, but leaving open the possibility of another March, April or May statement next year, and a June, or maybe even July election. I'm not sure of the final dates.

So he's got a number of options through there to make changes to his position.

Lyneham;

And in terms of immediate solutions to this recession, you don't want more government spending to stimulate the economy. You oppose any further national wage cases, and you tax bread and milk. I mean, isn't Labor going to find it fairly easy to portray you as "Dr Gloom"?

Hewson:

No, I think people have learnt Paul, from the experience of the 1980s. There's no quick fix. Increasing government spending without paying for it is only going to lead to higher inflation, higher interest rates. Any benefits will be short term. Any increase in jobs will be short term. It'll all be clawed back.

Lyneham:

But don't the unemployed want jobs now, Dr Hewson? Want jobs now?

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Hewson:

They do. But there's no alternative but to make major change now - not to tinker at the edges, and not to try and spend your way out of it. Because we've seen it. We've seen it over and over again in Australia. To spend, without paying

for it, isn't the answer.

Lyneham:

But the message of "vote for me and I'll give you a good bit more pain" - I mean, it's not all that sexy and attractive, is it?

Hewson:

Well, that's not our message. What we're going to do is completely rebuild the Australian economy. I don't deny the fact...

Lyneham:

Which takes a lot of time.

Hewson:

Some things can be done reasonably quickly. One of our key elements this year is to put in place, or to draft the

legislation that will be necessary for us to make the changes we want to make, so that in the early days of government, we can put that legislative package through the Parliament.

We will move very quickly. In some cases I think you can bring about change quite quickly. But, let's face it. We have a major structural problem. It's a deep-seated problem. It's the worst in 60 years. We are going to have to spend time to come out of it properly. But let's come out of it properly. Let's not pretend that we can make things look better for a while.

Because I fear all Paul Keating is doing - he's going to stimulate the economy, push the problem beyond the next election, and hope that he can get away without people seeing inflationary consequences, interest rate consequences and so on.

Lyneham:

Remember telling me last year how, as a young man, you once thought of becoming a bible translator in New Guinea?

Hewson:

Yes.

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Lyneham:

I wonder if we're seeing that same sort of fire and brimstone evangelism - a new approach now to public policy. I mean, you know what's right for us, and we're going to take this bitter medicine whether we like it or not.

Hewson:

Oh no. Come on Paul. Obviously we. have to have a degree of missionary zeal in selling and explaining our position. But it's not just us telling people what has to be done - I mean, it's the perceived view that Australia has deep-seated

structural problems, and the solutions are clear. It's labour reform. It's tax reform. It's structural reform across the board. It's a significant change in attitudes and policies. Now, that's not just us...

Lyneham:

But you've never been just a sort of average bloke with a point of view, have you? You've always taken this very hard- edged position - totally convinced you're 100% right. The missionary with a message.

Hewson:

No, not at all. I believe, obviously, in what we're saying. And I do believe that we can make the changes that are

required, and I do believe in Australia. I believe in average Australians. I'm not putting my faith in me. I'm putting my faith in them, and I know average Australians can see the problem, and average Australians will respond positively to

the problem. And I know that together we can turn this place around.

That's really what we're seeking - is an acceptance by people that we need to make major change; that we all have to be part of it; that we all have to change not only the policies - that's the small bit - it's the attitudes and the values that we've let slip. We've got a great country, great potential,

so let's go for it.

Lyneham:

Talking of faith, what's John Hewson's God like? Is this an Old Testament, stern God, or a New Testament, compassionate, loving God?

Hewson:

Both.

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Lyneham:

Both at once?

Hewson:

Both at once.

Lyneham:

Depending on whether you're in the Conservation Foundation or not?

Hewson:

Well, I'm not sure what Phillip Toyne's view is these days, after he leaked those letters. I guess he was trying to serve some particular agenda. It's a debate that's been going on between us and them for some time, and he's tried to paint it

that I'm not interested in the environment - that I don't care, if you want to use the caring word - about the

environment.

But I do, and I've spent an enormous amount of time on

environmental issues. But I don't have to talk to Phillip Toyne to get the environmental policies right, or to strike an appropriate balance between development.

Lyneham:

But even if Toyne and Garrett are, as you claim, politically partisan and don't agree with you, what's wrong with having a yarn to them occasionally? I mean, do you only talk to those who are converted to the Hewson gospel?

Hewson:

No. That's misrepresenting it too. It's the fact that they've been so blatantly dishonest in the way they've represented green issues, and they have done a deal in the past with the Labor Government, to deliver preferences to the Labor Government. It is pointless talking to people that have

their own personal or party political agendas.

There are good people in the Conservation Foundation. There are a lot of good people who work in the environment. There are a lot of people I can talk to, and I can get a better view of say, what's happening out in Shark Bay, or what's wrong with the Derwent in Tasmania, or the Great Barrier Reef, or whatever, by going out and speaking to the people in that

community; the environmentalists in those communities; the local council and other townspeople about the problem - as much as I can sit and listen to Phillip Toyne talk about his political agenda.

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Lyneham:

What are we then to make of the comments by John Valder, a former Liberal Federal President, that it's this sort of thing about the environment that runs the Opposition the risk of being labelled an extremist party?

Hewson:

Well, we're not extremist. There's no doubt you can't sustain the position...

Lyneham:

He's worried about that image though.

Hewson:

Well, look. John Valder has spoken out many times on many issues. I don't think people see us as extremist. They see us as consistent. They see us as committed. Look, I'm about striking an appropriate balance between development and the environment. 1 am not ashamed of the fact that I believe that the pendulum swung far too fast in favour of the environment, at the total expense of development, and we've got to get a better balance.

We can do that. The projects that Phillip Toyne had stopped, like Wesley Vale and Coronation Hill, were able to go ahead on environmental grounds. The fact that they didn't meant we lost real jobs in this country. How can you defend that position in the midst of the worst recession in 60 years?

Lyneham:

Are you looking forward to going toe to toe with Paul Keating this year?

Hewson:

Yes. Very much.

Lyneham:

Do you think he'll be a tougher opponent than Bob Hawke?

Hewson:

Paul, I've always believed that Bob Hawke was the tougher opponent, and I've said that consistently, and for a number of reasons. Bob had a relationship with the Australian people which was such that they tended to forgive him. They accepted

him in the form he came. They accepted him as genuine and they forgave him.

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In the case of Paul Keating, I don't think they will ever forgive him and we will be constantly, as part of the process, reminding them of the type of person Paul Keating was - who said we had to have this recession; who deliberately inflicted this pain on people; who fought Bob Hawke - fought Bob Hawke and undermined Bob Hawke just to get his job - and I think people now are genuinely surprised that having served for so

long, undermined for so long, that when he got there, he had no idea what he wanted to do.

So I'd be delighted to debate him, but I will keep it on the issues. I will focus on the issues, because the people want a clear-cut choice at the next election,

Lyneham:

If it was deliberate - this recession - rather than a mistake in picking the curves and the corners, that must make him one of the greatest political masochists of all time, mustn't it?

Hewson:

I think he's one of the greatest political manipulators of all time. I think he will run an argument - he'll run an issue. He will say and do anything. He will deal with the devil if it's necessary, in order to win the next election...

Lyneham;

All that missionary stuff again, you see?

Hewson:

...in order to win the next election or to maintain his

survival. That's the type of person he is. The warnings were there back two or three years ago, about the consequences of high interest rates. We said it. If you do it the way you're doing it, you're going to drive this country through the

floor. He was told. He denied it and he lied about it, and when it happened, he said "well, it was the one you had to have".

That was a deliberate policy to try and slow the economy down enough in order to get past that election. This time he's just trying to heat it up enough to get past the next

election, and then leave people to live with the

consequences - be they much higher interest rates, much higher inflation and a balance of payments crisis, higher

unemployment. That's what he's going to do.

Lyneham:

Dr Hewson, thanks for your time.