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Opposition Leader defends the Coalition's zero tariff policy and criticises the Government for lowering sugar tariffs without accompanying cost disadvantage reforms

ELLEN FANNING: Well, despite the split among his Coalition partners in the National Party, the Liberal Leader, Dr John Hewson, says he is standing firm on tariffs. The row over tariffs threatens to split the Coalition's previously united policy push which is essential for selling their alternative Fightback package to the electorate. But in Sydney today, Dr Hewson told reporters, including the World Today's David Pembroke, that the Coalition would stand firm on his pledge to phase out tariffs altogether.

JOHN HEWSON: We are not going to change our tariff policy. We are going to maintain maximum pressure on the Government to do what it's supposed to do, which is to get rid of all the cost inefficiencies under which these, whether they are sugar producers or other manufacturers, operate. I mean, the Government is cutting tariffs without eliminating things like payroll tax, sales tax, petrol tax, 20-50 percent cost disadvantages on the waterfront, in transport, in telecommunications. I mean, the Government is the issue here. It's the Government that's failed and it's the Government has got to be called on to eliminate those cost disadvantages.

DAVID PEMBROKE: You will continue to bleed, though. You do have National Party ....

JOHN HEWSON: Hang on. Just make it clear, we are not bleeding. The Parliamentary Party at the federal level is totally one on this issue, apart from a few in Queensland, who have always been a few in Queensland, that have always run their own agenda. And the point that seems to have been missed in a lot of the press of the last few days is that Tim Fischer and his team have come out totally behind our policy. And all you have seen is a lot of media hype in the last few days, trying to beat up a few comments by a few people at State level. And the policy stands 100 percent. The issue is not us, the issue is the Government. After all, it's the Government that's cutting the sugar tariffs and it's the Government that's cut tariffs on the automobile industry and the textile, clothing and footwear industry ....

DAVID PEMBROKE: But you'd do the same thing, wouldn't you?

JOHN HEWSON: Hang on, let me finish ..... which, it's the Government that's cut those tariffs, without putting in place reform. Now, we can demonstrate, as we have done, that those industries will be significantly better off, if you reform, if you cut cost disadvantages, if you abolish payroll tax, you abolish petrol tax, abolish sales tax, cut personal income tax. I mean, those industries will be significantly better off.

DAVID PEMBROKE: If you can't explain it to Mr Borbidge, Mr Murray, Mr McNamara, how are you going to explain it to anybody else?

JOHN HEWSON: Well look, I suspect that Mr Borbidge and others are running State agendas on this issue and I'd put it to them to think about the fact that the only thing that will cost us government in this country, is disunity. Now, the attack isn't on Fightback. The attack isn't on our policies. It is represented as such in some parts of the media. The attack is actually on the Government's decision to lower tariffs without dealing with the cost disadvantages, and whereas the issue in Australia is actually reforming the place, we know the place has got to be changed. It will be fundamental change and it's got to be done in a totally integrated way, along the lines of Fightback. If you just cut tariffs, sure, you will send people broke. If you don't put the whole reform agenda in place, as we have said, then of course, you are creating problems, but the problems can be avoided. We can have an even more internationally competitive sugar industry or automobile industry or textile, clothing and footwear industry.

DAVID PEMBROKE: But they don't believe you. Wal Murray doesn't believe you.

JOHN HEWSON: Wal Murray just will have to face the facts that Fightback can deliver a significant improvement in the outlook and prospects for most of the industries that are the subject of this debate.

JOURNALIST: So are you calling on your National Party colleagues to pull their heads in ....

JOURNALIST: ..... you support the Government's cuts without .....

JOHN HEWSON: Look, don't put words into my mouth. I am not saying anything to my National Party colleagues. What Mr Borbidge does in Queensland to put pressure on Mr Goss, is not my problem.

JOURNALIST: And Mr Murray.

JOHN HEWSON: Hang on. Mr Goss has made a lot of statements in Queensland about how the sugar industry ought to be protected. Okay, Mr Goss can protect the sugar industry if he wants to - that's his decision. We are in Opposition. I mean, it's amazing, we must be the most powerful Opposition in history, as everybody is attacking us. We didn't cut the tariffs, we haven't failed to deliver the reform, the Government has. And so I tell you, that the issue is the Government. It's the Government's failure to implement a proper set of policies.

ELLEN FANNING: Dr John Hewson, who hasn't convinced a Queensland Opposition frontbencher.