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Prime Minister discusses the Government's environment statement and the reaction by green lobby groups; Telecom timed local calls; Opposition policies; opinion polls; election date; ALP policies; world economy; retail sales

PETER THOMPSON: Three days before Christmas the Prime Minister is urging Australians to keep spending, saying that consumer demand is the best way to create an economic recovery. At the same time, he's renewed his attack on the Opposition's revised Fightback and criticised the media for not being critical enough about the Coalition's policy changes. Mr Keating has been busy with some policy initiatives of his own, promising to spend more than $150 million on the environment over the next three years. The plans include a clean-up of the Murray-Darling River System, research into alternative energy and vehicle emissions, plans to nominate new areas for world heritage, and efforts to rid Kakadu National Park of invasive weeds. Doug Weller spoke to the Prime Minister after he delivered his environment statement, and began by asking him about reaction from green lobby groups.

PAUL KEATING: Well, I don't think you can please all the environment groups. I think you'll find a better response from the ACF than you will .. I don't think you can ever please the Wilderness Society. I mean, there are very important things here. You see, in terms of the Wilderness Society, if it's not trees, they're not interested, and the Murray-Darling River System and salinity and water quality is a matter not of great interest to them, but it is to the broader environment groups, I think. And it is to a large part of the expenditure it's actually going to be on the Murray-Darling System which starts, you know, in the north of the country and sort of on which the city of Adelaide depends for water quality, and many places along the way. We're going to try and deal with that with those algae blooms. And as far as Queensland is concerned, we're putting for full and open assessment of the environmental economic values of Commonwealth lands in the Shoal Water Bay area which is one of the last great untouched areas, virgin areas, of the Australian east coast. So, I should imagine any Queensland-based organisation should find that encouraging, and other things like dealing with feral animals, dealing with mimosa pigra in Kakadu. It's another building block statement by the Government on a long record of environmental concerns, starting with the Gordon below Franklin back in 1983.

DOUG WELLER: If we can move to your comments on Telecom, you're claiming that a Coalition Government would allow timed local calls when it sold Telecom, but the Coalition is saying that that's nonsense, that there is no plan at all to move away from the current structure. Why did you make that statement?

PAUL KEATING: Look, if Dr Hewson doesn't get you in the supermarket, he'll get you every time you pick up the phone. He has his package based on a $20 billion sale program for Telecom. Now, you understand what a sale program means, it means capitalising in income stream - taking the income stream and selling it and taking a capital sum for it. Does anybody really think that if Telecom is sold to private companies, to private business, that it won't behave commercially, that it's still going to be into untimed calls? I mean, what will happen is with the technology available today, there'll be calls timed by the second and this will not just affect people in suburban Australia who have come to be able to make a call regardless of time, not looking at the clock all the time, but it will most particularly hurt those remote areas of Australia where the prices of long-distance calls will skyrocket. And this will come about simply because you can't get 20 billion for Telecom without it being a commercial .. either knocking out its competitor, Optus, or lifting its profits one way or another, and the only way a commercial interest would lift them of course, would be to do what a lot of telecommunication companies round the world do, and that is charge for calls as people use them.

DOUG WELLER: But the Coalition says it's not on, it's nonsense - to use their words.

PAUL KEATING: But a week ago they said stimulatory policy wasn't on. A week ago Dr Hewson said my One Nation package was all wrong. A week ago he said stimulatory policies didn't work. He's flip-flopped overnight. He's .. a week ago, he was saying food had to be taxed, now he's saying it shouldn't be taxed. I mean, the fact is he's now built a package .. he's been attacking the Government for, he says, a lack of fiscal restraint, and then he goes into another five or six billion addition to spending, all based upon this trumped up magic pudding of Telecom which, of course, could only be realised if Telecom was a truly commercial operation charging for the services it provides, and of course that would have to be with timed calls.

DOUG WELLER: To the polls, Prime Minister, the Newspoll in today's Australian newspaper has you and the ALP still in front but with Dr Hewson improving his position, the Coalition improving its position. Isn't it possible the ALP may have peaked too early?

PAUL KEATING: I don't think so, but, I mean, I think it ill-behoves the Herald Sun in Melbourne, the Telegraph in Sydney, the Advertiser in Adelaide, to run those shonky polls from 'Quantum' with those results which were taken one day after the statement, which showed a big shift to the Liberal Party. I mean, I was sure it wasn't true, and I think the more reliable Newspoll, which is taken bi-weekly, gives us a better indication. And I think that poll is going to indicate to the Liberal Party that their lack of principle, their lack of commitment, telling us for a year that they spent a year in preparation of Fightback, that it was perfect, that every 'i' was dotted and every 't' was crossed, that the Government's policy prescription is wrong, and then changing it, flipping it overnight because they got a few opinion polls they didn't like, I think these polls are telling the Liberal Party cynicism is not paying off for them.

DOUG WELLER: But there's improvement there for the Coalition out of the Newspoll.

PAUL KEATING: Well, they've had two weeks of virtually uncritical press. But, I mean, they're still five points behind the Government.

DOUG WELLER: No concern in the ALP that you, that the Government may have peaked to early?

PAUL KEATING: The longer we've gone with Dr Hewson, the more we've been able to establish the weakness of his policies. I mean, we've got a fellow now who's running on policies he doesn't believe. He was telling me in the Parliament, just a couple of weeks ago, stimulatory policies don't work - policies he doesn't believe with money he doesn't have. But the nasties underlying his policy, like the Jeff Kennett industrial relation policy, still exists, the zero tariffs still exist and, of course .. and I noticed yesterday he was talking about cheaper education and cheaper petrol. I mean, how can we have cheaper education with $23,000 a year cost to be borne by people for, say, an Arts degree, every year of an Arts degree? How can we have cheaper health when Dr Hewson told us on Friday he's going to levy a $420 million a year co-payment and dismantle Medicare.

DOUG WELLER: Okay....

PAUL KEATING: The fact is, Doug, this man has got policies he doesn't believe. They were foisted on him by the Federal Director of the Liberal Party and some of his front bench, and he's making the best of it. He made the best of a hard job at the Press Club last week. He was nearly .. he was so embarrassed he was trying to slide behind the lectern, giving vent to policies he doesn't have any confidence in, and, of course, with funding that he doesn't have.

DOUG WELLER: Here's the predictable election date question: are we looking at sooner - in other words, February-March - rather than later?

PAUL KEATING: Well, we'll look at it .. most of the parliaments that I've served in have had an average of about 26 or 27 months. This Government is .. this Parliament is three years old in March. So any time between now and March is full time as far as I'm concerned. When the Government thinks the time suits it, we'll have an election and, in the meantime, we'll let the public of Australia get through the Christmas and New Year period in peace without being deluged by us with messages, having to make their mind up about the next government of Australia, and at their leisure they can then look at the policies of the political parties and make a decision.

DOUG WELLER: So, you'd be fairly comfortable with a March election, would you?

PAUL KEATING: Well, there's no point in me .. testing me for dates - that's not going to do you any good and, I mean, I'm not scolding you for it, good on you, but I mean, you know, this'll be a matter for .. I mean, there's all sorts of questions brought to bear here about, you know, when holidays finish and when time is most convenient and also .. also I mean, there's very interesting things happen in the last day or so .. last week or so. What the media have said to the Government is that if a political leader says one thing for a year solid and then changes his mind, that's clever - not that it lacks integrity, not that we are not entitled to be duped, not that we can't build a political system on such chicanery, but that it's clever. And then when he proposes five or six billion of additional spending, they say not that it's financially responsible, but it's clever too. The ground has shifted in Australian politics with the media making new rules over the last week. These are things the Government will have to take on board.

DOUG WELLER: As we know, the Labor Party will be fairly busy over the new year, formulating policy, preparing pre-election initiatives - any idea at this stage where the main focus will be there?

PAUL KEATING: No, that's something for us to think about. We've already been thinking about our next term, how we should continue the structural change of Australia, how we can make the place a more productive, more interesting place to live and, as I said yesterday, a cleaner and nicer place to live in the natural and the built environment.

DOUG WELLER: Is the environment statement the start of it?

PAUL KEATING: Well, the environment statement was announced much earlier in the year that we would have it and there are certain things the Commonwealth can do, there are certain things that are not really in its realm. One of them is the river systems which are trans-State, that run nationally, and the Murray-Darling is one area where the Commonwealth can play a role. And in some of these big problems which cross State boundaries, like, for instance, feral animals and some of the difficult noxious weeds and the like, those things the Commonwealth can play role in.

DOUG WELLER: To the economy: unemployment seems to be easing in the United States, growth there improving, but the Japanese economy remains flat. Is Australia going to be held back by Japan?

PAUL KEATING: Well, the Japanese economy is in a recession, Doug. It went into a recession two weeks ago. The United States is growing at 1.7 per cent this year. We're growing at 2.1. We are the fastest growing OECD economy. But as you know, we're living through a productivity surge. Businesses are determined to get more output from fewer people, and it's only when the recovery really comes on much stronger, when they can't draw more productive capacity from the given work force, that they'll have to start re-hiring. And when that happens - I think it will happen rather suddenly - and we'll start to see a shift in employment as that strength .. as the economy strengthens. But there's no doubt the weaker international settings is one of the principle reasons why we're not growing faster right now.

DOUG WELLER: John Dawkins told Australians a few months ago to get out there and spend. It's the week before Christmas. Is that your message to Australians?

PAUL KEATING: I think so. And from what I hear, retail sales anecdotally have been running quite well. I mean, in Sydney, I've been told, just in a few of the big retail stores, that they've been trading very well. I hope that's true because it's demand .. our problem in Australia is not, as Dr Hewson thinks, that wages are too high and need to be cut - that's not our problem. Our problem is there's not enough demand out there, and the more demand there is, the better. So as domestic demand picks up, so too will the economy. So the best thing that Australians could do would be to spend over the Christmas period, get the productive chain moving again, and we can then, as well as that, because we're getting more than our share of international goods now picking up our exports, the two together will see Australia come into a recovery phase, stronger recovery phase.

DOUG WELLER: Are you expecting that the pre-Christmas buying spree will give the economy the boost it needs?

PAUL KEATING: Well, it'll help. And of course in those national accounts that came out about two weeks ago, two-thirds of the growth was from public demand, as I think at this stage of the cycle it should be. So, it's vindicated the One Nation stand - that was the time to spend, at the time to lift public spending and public demand while private spending and private demand was low. Now this is what the Japanese Government has done, introduce a huge fiscal stimulatory package. Governor Clinton is intent upon doing it in the United States. The OECD has been urging member states to do the same. The only person out of step with all that was our dear friend, Dr Hewson, who said that stimulatory policies were wrong. He's now changing his tune because his pollsters are in his ear. But we made certain in our position in One Nation that that stimulus should come through, and I think because it is coming through, the economy is now growing faster than most comparable countries.

PETER THOMPSON: Paul Keating with Doug Weller.