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Shadow Minister comments on the economy and leadership in the Liberal Party

PRU GOWARD: Joining me, now, is the Opposition's Treasury spokesman, Alexander Downer. Well, Mr Downer, thank you for joining Radio National. You must be pleased.

ALEXANDER DOWNER: Yes, I am pleased that there is a cyclical upturn in the economy. After all, think about it - if the economy was still in the worst recession that it has been in for sixty years, then it would be little short of a catastrophe, so obviously, I welcome the improvement in the economic statistics. And this has happened because we've had very good economic news coming out of countries like the United States and the United Kingdom.

PRU GOWARD: Oh, yes, but we are leading the growth rates.

ALEXANDER DOWNER: Well, according to some. I mean, in the Asia-Pacific region, as a matter of fact, we would have just about the lowest rate of growth, and when it suits the Prime Minister, he talks about the Asia-Pacific region, and when it suits him he compares us with Denmark, Poland and Holland. I mean, come, come. I think we are in the Asia-Pacific region.

But there's no doubt, also, that the changes of State government - in particular, in Victoria, but also in Western Australia and I think we're beginning to see this in South Australia - have had a very important psychological effect on confidence, and when you go to Melbourne, it's almost palpable, the change in environment brought about by the demise of the Kirner government and Jeff Kennett and Alan Stockdale's work.

PRU GOWARD: Would you agree with the Treasurer that he does have to get the deficit down, now, particularly with signs that the economy is generating its own steam and you don't have to have government spending? And that perhaps means that you're wrong in suggesting that those tax increases be taken off?

ALEXANDER DOWNER: On the contrary. That precisely confirms what I said at the time of the last Budget, and what I said at the time of the last Budget is that instead of going on a spending spree which the Labor Government has done - as Labor Governments usually do - they should have restrained themselves at the time of the Budget, not increased Commonwealth outlays in the way that they did ....

PRU GOWARD: So where do you think the spending cuts should be now?

ALEXANDER DOWNER: ... and avoided - let me just finish - and avoided the increases in tax that occurred. They simply should not have increased spending at the time of the last Budget. Now, they're in a difficult situation where their budget deficit is still vast, absolutely vast, and yesterday they increased petrol taxes and on 1 August, they're going to increase petrol taxes again. When it comes to reducing government spending, they might just start with the administrative costs of the Commonwealth Government which, for each of the last five years, have increased by, on average, 3.5 per cent in real terms.

PRU GOWARD: All right. Now, Mr Downer, if we can just look at your own party's problems for the moment. Bronwyn Bishop - does she have the numbers to defeat John Hewson?

ALEXANDER DOWNER: Well, I don't want to buy too much into all of this, but it would be disingenuous, I suppose, to say nothing about it, and the fact is that, obviously, as everybody in Canberra knows, she doesn't have the numbers to defeat John Hewson. Look, the simple fact is ....

PRU GOWARD: Shouldn't he just pull on a challenge, get rid of her and get on with it?

ALEXANDER DOWNER: Look, the simple fact is that, you know, I get on very well with Bronwyn and I think very highly of her as a politician and I don't think anybody could deny the success she has in building popular support, but she has never been a member of the House of Representatives and members of the parliamentary party are simply not about to elect somebody as their leader to lead them in the House of Representatives who has never been a member of that forum. I mean, they're simply not about to do that.

PRU GOWARD: Now, how do you resolve it?

ALEXANDER DOWNER: Now, everybody in Canberra simply knows that. Well, I think we need a period of tranquillity in the Liberal Party and I do think people in the party need to focus much more heavily on the Labor Party and the immense damage that that Labor Party has done to this country.

PRU GOWARD: Yes, but it's not going to happen, Mr Downer, unless this is resolved. How should it be resolved?

ALEXANDER DOWNER: Well, what can one say except what I have said. The simple fact is that although Bronwyn Bishop is an undoubted talent, is an effective operator ....

PRU GOWARD: But she twice refused, didn't she, twice refused yesterday?

ALEXANDER DOWNER: Yes, but look, the simple fact is ....

PRU GOWARD: Is she going to keep going?

ALEXANDER DOWNER: ... the simple fact is to become the leader of a political party, you must get the support of the majority of the members. Now, that is a statement of the obvious, and it is clear to everybody in Canberra - everybody who knows the parliamentary party - that Bronwyn has nothing like the numbers to become a leader, nothing like ....

PRU GOWARD: But that doesn't alter the fact that she wants the leadership, and she appears to be determined to continue the way she's going with the instability that it's creating. How do you stop it? How do you resolve it?

ALEXANDER DOWNER: Well, I think the party itself - only the party itself can do what I'm doing and that is simply reinforce the point that there isn't about to be a change in leadership and the media's reaction to the opinion polls has become - if I may say so, with the greatest of respect - little short of hysterical. I mean, she is more popular than John Hewson but this isn't an American presidential primary. To be the leader of a political party you must display skills in the House, on the floor of the House and with your colleagues which she, to be fair to her, has never had the opportunity to test.

PRU GOWARD: Alexander Downer, thank you very much for joining us, this morning. The Shadow Treasurer, Alexander Downer.