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Transcript of radio interview with Clive Robertson: Radio 2GB: 5 May 1994: White Paper



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Leader of the Opposition

5 May 1994 REF: TRANSCR\WH\AP\149

TRANSCRIPT OF RADIO INTERVIEW JOHN HEWSON MP CLIVE ROBERTSON RADIO 2GB

E & Ο E - PROOF COPY ONLY

SUBJECTS: White Paper

Robertson:

I'll bet you're sort of interviewed out over this aren't you.

Hewson:

Well we have talked a bit about it but I think you'll hear quite a lot more about it in the weeks and months ahead.

Robertson:

The consensus in the editorials isnt terribly favourable. I notice that Terry McCrann says that in fact this is not doing anything to actually help small business, to actually give people real jobs. How do you feel about that?

Hewson:

Well I think he's dead right. If it was simply a matter of throwing money at the problem then we would have solved it. They have spent something like $12 billion on labour market programs since they've been in Government and we have this horrific unemployment and long term unemployment problem now. I fear that what we will get

is just better trained people, and people who've had some employment experience, but no guarantee of a job.

Robertson:

I notice that Mr Keating is saying the markets are wrong. But the markets are the markets aren't they? I mean if that's their perception, that's the reality isnt it?

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REF: TRANSCR\WH\AP\149 2.

Hewson:

It's a fairly ambitious claim to say the markets are wrong, because they are worried obviously about how $6.5 billion can be found. It's a lot of money and we've already got a very large budget deficit and I think that the price we might pay for this is an increase in interest rates which will start to choke off the recovery.

Robertson:

So is there anything good in this? I talk to you now if I can, if we can separate ourselves, not as Leader of the Opposition but as the economist, the man who worked as an economist for so long. Can you see anything that's not a bad idea?

Hewson:

Well they've moved some things obviously in the right direction. We've argued for some time there ought to be a training wage, and they've picked that idea up, and we're very pleased to see that.

Secondly the Commonwealth Employment Service has needed a thorough going review. It hasn't worked well, and they've started to address that problem as well.

The idea of a parenting allowance I think is a good thing. There's been an anomaly in the social security system for people usually women who choose to stay at home for part of the time to raise children.

I think the decision to suspend - I would have preferred dump - the Training Guarantee levy, is a good thing. That was an unnecessary cost on business. So there are some steps in the right direction and I don't deny Clive that you've got to spend some money to deal with the particular problem of the long term unemployed

but not at the expense hopefully of other unemployed, and more importantly, let's do something as Terry McCrann said for small business. If you can get small business going, then you can solve the unemployment problem.

There are already 800 000 small businesses. If each one of those just employed one person, you'd knock over the bulk of the unemployment problem.

Robertson:

I'm glad you said that because I don't understand all these things doctor, that's why you are there, and Mr Keating's there, and I was discussing it this morning...

Hewson:

You're too modest Clive!

REF: TRANSCR\WH\AP\149 3.

Robertson: ...........................

...I was discussing it with my colleague. I was saying, I really feel you know that it's small business. I know people in small business who cant afford to employ more people, who arent encouraged. And so I'm glad we agree on that. It makes us right doesnt it?

Hewson:

Well the problem is that in recent years the additional cost of employing people has gone up dramatically with things like the Training Guarantee levies, Payroll tax, Superannuation Guarantee levy, a whole lot of other changes to the Industrial Relations system. They are all anti-small business.

The fact is we've got to get small business going if we are ever going to turn the unemployment situation around and that's where the White Paper really does fail because it does nothing to ease the burden on small business.

It does nothing to encourage them to invest. It does nothing to keep big business back here in Australia, rather then investing overseas and taking the jobs with them.

Now that's really the big issue, is where are the jobs going to come from. I don't think anyone denies that people who have been long term unemployed are going to need to be trained and re-trained for today's workforce.

But if you arent simultaneously giving them jobs that they can look forward to keeping in the longer term, you are not doing them all that much of a benefit. They are a bit better off obviously for having had the training and an employer will take them on when they're being subsidised to take them on.

But he'll stop keeping them on once the subsidy ends. This is the problem you've got. Throwing money at it isn't going to solve it.

Robertson:

That's pretty cruel on the person who is employed of course. Now tell me if it is so obvious to you and to some of the commentators and even a simple person like me that it is small businesses where the future is going to lie. Why does the Government ignore that? Can you explain that to me?

Hewson:

Well I really don't know. I think that they have made so many commitments to the Union movement that it prevents them from doing some of the things in terms of industrial relations they really need to do, from the point of view of small business.

REF: TRANSCR\WH\AP\149 4.

And that's probably true when you look at the waterfront -and at the -transportation system. It's the powerful unions in there that have been delaying the reform.

I think it is probably because of their political base - the Trade Union movement, the ACTU -that they cant move, and that's the price we're paying. It's quite ironic if you think about it. A Labor Government having produced a million unemployed and unable to create jobs to put them back into work.

Robertson:

Yes and they do n t seem too optimistic either on this paper. Now finally, when you get into Government, say this thing is now in force. If you then reject a lot of it, haven't you as a Government, the new Government, wasted all this money by changing the direction of it? Do you see my point? You've got a sort of responsibility to carry on with this to justify the whole thing.

Hewson:

Well not really, I think it depends. You seek a mandate at the election to make certain changes. Now I'm not saying... a lot of it would obviously be in place and hard to turn around.

We'd had some pretty disturbing evidence thought that the Department of Employment Education and Training and the Commonwealth Employment Service haven't been able to do the job in the past. There's been evidence of fraud and massive mismanagement.

I think you can save a lot of money in the administration of the programs and still make sure that where training is needed or other assistance is needed is actually provided.

I think a lot of money has been wasted and nobody would deny that given the evidence that's emerged in recent days. So in that sense you can sort of improve the processes that you inherit as well as I think doing things we've talked about, and that is putting in place policies that will really help small business and start to solve the problem in a genuine sense.

Robertson:

I have one last quick question for you doctor. How is he going to be able to get the money?

Hewson:

I do n t think it is very easy for them to get this money at all. I think what you'll see is that they will say that growth is going to be a lot stronger then it's been and that's

REF: TRANSCR\WH\AP\149 5.

going to be a bit of a fudge. Because I don't think growth will be sustained. If we don't get business investment, which we haven't had - we're at a forty year low. If we don't get business investment, we're not going to get the growth, and I fear the bottom line of this will be increased interest rates, and probably increased taxes, which will delay the recovery and probably make the unemployment situation worse and not better.

Robertson:

All right, thank you Dr Hewson.