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Budget 91: Industry Minister comments on Treasurer's handling of Budget and leadership issue

PETER THOMPSON: Key Federal Ministers have been working hard to counter criticisms of both economic policy and the Budget, this week. Labor Caucus Members are angry at the move to impose a $3.50 fee for visits to the doctor, and the New South Wales Government is threatening to impose the fee in the outpatients and casualty sections of its hospitals. The Treasurer, John Kerin, has been criticised for not selling the positive aspects of the Budget, and at times, the Prime Minister and the Treasurer have appeared to be taking different public positions on the likelihood of another interest rate cut. We've been joined now in our Canberra studio by one of the Government's most senior economic Ministers, the Industry Minister, Senator John Button. To talk to him, again, here's John Shovelan.

JOHN SHOVELAN: Senator Button, do you agree that there's been some confusing signals, this week, from the Government and possibly, in particular, from Mr Kerin and Mr Hawke that's marred the selling of the Budget?

JOHN BUTTON: I don't think the confusing signals are the things which have marred the selling of the Budget. I think events in Russia have marred the selling of the Budget more than anything else. Mr Kerin has said a couple of minor inconsistent things. Look, he's been two months as Treasurer; he's had a very difficult period as Treasurer; difficult times. Now, I think he's handled it very well, and in this goldfish bowl, which is Parliament House, any minor discrepancy in things he says is sort of picked up and pounced on. Now, I don't think, I think what he's done is hold the line very firmly on a number of issues as we've just heard on interest rates, and I think once we get out of this goldfish bowl and he can get on with the job of selling the Budget, then it will be all right.

JOHN SHOVELAN: He seems a bit uncomfortable with the idea that whatever he says will be flashed across the screens of dealers, and that will affect the money markets.

JOHN BUTTON: Well, I would not be surprised if he feels uncomfortable with that. Anybody would feel uncomfortable with that at this present time who had any decency about them - and that's what he's got. I think Kerin will handle this well. I think he's stuck to his guns through the Budget process and I think he'll continue to do so.

JOHN SHOVELAN: Well, is it appropriate for a Labor Treasurer, at a time when we have got 800,000 people out of work, not to countenance a cut in interest rates at this point? Is that just the Treasury line; has John Kerin become captive of the Treasury line?

JOHN BUTTON: Look, there are certain, sort of, false dawns, I think, suggested by some commentators - namely, that if there was a cut in interest rates tomorrow, that would do something for the unemployed, for example. That's not true, and Kerin knows that. It takes 12 months, probably, for an interest rate cut to work its way through the system, and the recovery, the slower recovery than we hoped for, which we believe is now beginning to take place, is very much dependent on interest rate cuts that were made nine, 10, 11 or 12 months ago.

JOHN BUTTON: Well, as Minister for Industry, you're quite comfortable to tell your constituency you don't think there should be an interest rate cut?

JOHN BUTTON: Well, as Minister for Industry, I'm not particularly comfortable about economic circumstances, generally, in this country. I am comfortable about some aspects of industry which are discussed in the Budget, namely the very good export performance and the predicted improvement in export performance in the next year, which will be a very important aspect of the recovery. I'm comfortable about those things. I'm not comfortable about the unemployed and I'm not comfortable about the burdens which have been imposed on a number of businesses over the last year or so.

JOHN SHOVELAN: The Opposition says that you could have balanced the Budget, that the $4.7 billion deficit was unnecessary.

JOHN BUTTON: Yes, the Opposition has been saying that. I really think they've got a problem in trying to work out whether they're compassionate or tough. You know, at one time they're saying they are very concerned about the unemployed; on another occasion they're saying that there should be no Budget deficit. Now, that would mean the absence of a Budget deficit, more people on the dole queues - thousands and thousands more people on the dole queues. I don't think they've got their act worked out. I thought it was a very synthetic performance by Dr Hewson in the House the other day and it's consistent with what has been said by his Liberal spokesman in the Senate.

JOHN SHOVELAN: The Budget and the reception of the Budget is crucial to the leadership issue within the Government. If we have another week like we've had over the past week, that would make Paul Keating's chance at the job in the near future look a lot better, wouldn't it?

JOHN BUTTON: Well, look, I don't think the Budget is relevant to the leadership issue, except in the minds of a number of journalists around Canberra who want to keep the leadership issue up front. Let me say, when Paul Keating challenged last, he said, after that: `I had one shot in the logger, and I fired it'. Now, I interpret that as meaning that unless there is a vacancy in the position of Prime Minister, he will not be a candidate for a job, for that job. Now, I don't think .. what I think is important is not so much the Budget, but ongoing economic management, and one of the important things in this Budget is that it's not seen as the be-all and the end-all.

JOHN SHOVELAN: We must leave it there, Senator Button. Thanks very much for your time.

PETER THOMPSON: Senator John Button, in Canberra, with John Shovelan.