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Transcript: radio interview with John Stanley radio 2ue



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Leader of the Opposition

18 July 1995

TRANSCRIPT OF THE LEADER OF THE OPPOSITION THE HON. JOHN HOWARD MP RADIO INTERVIEW WITH JOHN STANLEY RADIO 2UE

TOPICS: A Competitive Australia speech; industrial relations reform; tariffs; GST

E & OE..................................................................................................................

PRESENTER:

John Howard, good afternoon.

HOWARD:

Hello John.

PRESENTER:

The first thing you've said today is you're going to maintain that commitment to a low tariff regime, so does that mean essentially the present plans to reduce tariff levels in Australia or reduce protection, they will be kept in place?

HOWARD:

Yes, they will be kept in place but with the important addition that we will accelerate the process o f reducing business costs so that companies are not in the invidious position o f having lost their protection but still suffering very high business costs. Now, I'm in favour o f lower tariffs, very strongly in favour o f lower tariffs, but I think the low tariffs should be matched by equally low business costs, and that's been the missing element under the present

Government's approach. Their tariff approach has been broadly okay but because they haven't freed the labour market and reduced other business costs, they've left companies in the invidious position o f having lost their protection, but without enjoying lower business costs

and therefore their competitive position has not been improved. In some cases it has been dangerously eroded, so I am going to do both sides o f the equation and not just one.

Parliament House, Canberra, A.C.T. 2600 Phone 2774022

COMMONWEALTH PARLIAMENTARY LIBRARY

PRESENTER:

Well, the business costs element, that would include government charges, both state and federal. It would also o f course include the sort o f costs that are entailed in employing people. Does that mean possibly paying people less?

HOWARD:

N o it doesn't mean that. What it means essentially is the cost o f doing business, such as, if you were an exporter, our ports are only 40% as efficient as comparable ports overseas. The handling times in all of the major ports in Australia are treble what they are in comparable ports. It means changing our industrial relations system so that many o f the costs associated with employment, as distinct from the salary levels, are reduced. In fact, wage levels in Australia are not really the problem. I'm not arguing for lower wages. I'm arguing for a freer industrial relations system that will reduce many o f the incidental costs o f employing people.

It will allow firms to run their plants at greater capacity. One o f the great problems with productivity in Australia is that we have a lot o f idle capacity and if they could run them more frequently, then the return from that investment would be greater. Now I know a lot o f this

sounds a bit sort o f economic and unexciting and undramatic but it's making significant gains in reducing the costs o f doing business that are really going to make this country a lot more competitive than it is at present.

PRESENTER:

Can I just tiy and put it in practical terms?

HOWARD:

Sure.

PRESENTER:

I f there's a factory or a manufacturer who's got idle capacity, wants to be able to run that capacity for longer or extend the use o f that particular machinery or whatever, what's preventing them now?

HOWARD:

Well, one o f the things that's preventing them now is that if he runs another shift, he runs immediately into mandatory penalty rates.

PRESENTER:

So essentially what we are talking about is..

HOWARD:

Is really a lot more flexibility in the labour market. It's not talking about taking away penalty rates from people who have got them at the present time but if somebody wants to run an additional shift, the cost o f running that additional shift shouldn't be so much that that person is not prepared to do it. Now that really is just commonsense and it's providing that greater flexibility. This is very important in industries which are really 24 hour a day industries. It's very important, for example, in the recreation industry but it's also important in a lot o f

manufacturing industry. Now there has been some improvement o f the margin, and if you talk to unions, a lot o f them will say, you know, we're in favour o f this as well, but the fact is that we do have a lot o f idle capacity and it is one way o f reducing the cost o f producing something. It is one way of, getting a better return on existing investment is one way o f making this country a lot more competitive. Another way is to make certain that it doesn't

cost so much to ship goods out o f this country or to ship them into this country. I mean, we really cannot have a situation where, say, the port o f Melbourne is only 40% as efficient as the port o f Antwerp, which is the most efficient port in the world. Our handling times and our handling costs and charges are way below what they are in New Zealand. I know we don't like some o f these uncomfortable New Zealand comparisons, but New Zealand has now got a

sustainable growth rate o f 6%.

The key to getting this country moving again is to be able to grow far more rapidly than we are but not, as you say, as soon as we start growing, our foreign debt blows out and our current account falls to pieces and we have to bang it all on the head with lower interest rates so that we don't have yet another current account crisis.

PRESENTER:

I know we're getting into an economic discussion here but I mean, how do we do that so that we can grow say, at 4 or 5% or even more? I mean, the question is, why can't we grow at 4%?

HOWARD:

One o f the reasons is that we are still not competitive enough and one o f the reasons that we're not competitive is that we have all o f these constraints. I mean, if you're an exporter and the basic price o f your product is competitive but the price of that is added to by exorbitant handling charges through a w harf and delays and so forth, the end price is therefore affected. You're going to lose the sale, and this happens time and time again in this country, and they're the sort o f things that have to be changed and eliminated, and until they're changed and

eliminated, we're going to keep falling behind. I mean, we were the twelfth largest trading nation in the world in the early 1970s. We're now the 21st. Our export ratio is about 20% o f our total annual wealth. New Zealand's is 30%, and when you think that New Zealand has precious little in the way o f raw materials and natural resources, it's a very unfavourable comparison.

PRESENTER:

Yes, so when you talk about reforming the ports, more flexibility in the industrial relations system, aren't you still opening yourself up to the Government providing the detail for you. I

know Peter Cook has already said, what it means, it's lower wages. It means you'll have to sign a contract before you can get a job.

HOWARD:

Well it certainly doesn’t mean lower wages. I mean, the Government will say that anyway. Can I just say one thing to the Government. If it wants to learn anything from the Queensland election, it ought to understand this one thing. There is no political dividend in telling absolutely blatant lies about your opponent's policies. One o f the things that discredited

Wayne Goss in the last election, in the Queensland election, was to say that the Coalition intended to privatise hospitals in Queensland. Everybody knew that was untrue. It is equally untrue for the Government, the Labor Government nationally, to say that our industrial relations policy means that we're going to cut wages. We're not going to cut wages. There will be guaranteed, minimum conditions if people go into workplace agreements. Nobody will be forced out o f an award, nobody, unless they agree to go out o f the award, and you won't go out o f an award unless you're going to be better off and you're going to get a benefit.. So this business about cutting wages is the typical Labor scare campaign, and I am not going to

sort o f be deterred from putting forward decent policy by a campaign o f vilification and lies.

PRESENTER:

And yet what you are doing o f course is putting forward far less policy than has been put forward in the past. You're saying that you're going to release it at the beginning o f the election campaign. Will there be as much detail when we finally get is as for instance, John Hewson outlined so far in advance of the last poll?

HOWARD:

No, no, there won't be and the very reason is that I'm not proposing such a radical change to the tax system. I mean, there is not going to be a GST and the reason that John Hewson had such a detailed plan was that he was proposing a very radical change to the tax system with the introduction o f a broad based consumption tax called a goods and services tax, and out o f that he was going to fund the abolition o f other taxes and other major changes. N ow I am not

doing that and I will make it absolutely clear, there will be no GST. There won't be a GST. We're not going to the next election with a GST and we won't be introducing one. Well, it stands to reason therefore that the degree o f change in that area which I am offering is a lot less so therefore there is less detail to provide. It's not as if I've got a whole lot o f detail in my

drawer which I am keeping out o f view and I am going to sneak up on the Australian people after the election. I'm not doing that. There will be no radical change to the taxation system o f the type proposed by the Coalition in the last election. People rejected it.

PRESENTER:

Would you agree though that at the federal level, given the issues that are concerned, there is an imperative on an opposition leader to provide more detail than for instance the Coalition did in Queensland where essentially, you are taking over the running o f basic government services. In a sense, at the national level you are setting the direction for the whole nation. You do have to provide more detail than they did, don't you?

HOWARD:

Yes but we will already have done that. I mean, I spelt out today again our very broad, perhaps broad is the wrong word, but I spelt out in some detail our approach to an area like industrial relations. I spelt out in detail our approach to how we put a greater emphasis on productivity and ways and means o f doing it. I did provide in today's speech quite a lot o f detail. There seems to be an unwillingness on the part o f some people to accept that unless you have in a statement or a speech proposals about tax cuts or expenditure cuts, that you are not providing any policy detail. This will not be a campaign overwhelmingly about tax or

expenditure cuts because we are not into a big change to the taxation system. I mean, that is just not going to happen because at the last election the Australian people rejected that, so I think it's very important that we sort o f get into context that this is not going to be a big, radical change election. There will be significant change proposed but compared with last

time, there will not be big radical changes and therefore it's not so much that we're holding anything back. It's just that we're not going to make the same radical taxation changes that were proposed last time.

PRESENTER:

I notice also you say today you won't be telling the Reserve Bank what to do. Would Bemie Fraser be acceptable to you as the Governor o f the Reserve Bank?

HOWARD:

I don't want to comment about individuals who may or may not hold positions. Under a future Coalition Government, as I understand it in any event, M r Fraser's term runs out in the middle o f next year and I understand he's indicated that he wouldn't seek reappointment, but I don't have any intention o f sort o f saying who will or will not hold positions under a

government that I lead after the next election.

PRESENTER:

Yes, and the comment o f five minutes o f economic sunshine that he was so critical of, you're saying today that you're going to be providing more than five minutes o f it?

HOWARD:

Well we're certainly providing more than five minutes o f economic sunshine. I hope that we can provide durable growth. I mean we heard a lot o f spelling in the last election. I mean I will be offering G-R-O-W-T-H growth, not the other word that was offered in the last election. I think we can provide more than five minutes o f economic sunshine. That remark encapsulated what a lot o f people felt and still feel. They resent the fact, particularly in small

business, when they're told this is as good as it ever gets. They resent the fact that they had years o f high interest rates. They had a very deep recession. Many o f them went bankrupt, and then for an apparently short period o f time things get better, and then the interest rates start going up again. Now that's the feeling that people have and the reason the interest rates

started going up again was that this damn current account problem re-emerged and we had to slam on the brakes, belt it on the head, and that happens time and time again, and until you cure that problem by fixing the sort o f things I've talked about, dull though they may sound,

they're not exciting, until you fix those things, you're going to continue to have that sort o f stop - go situation.

PRESENTER:

Okay, John Howard, thank you for your time this afternoon.

ends