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John Brown has become chairman of a new tourism lobby group

PRU GOWARD: Well, he used to be Mr Tourism, brave enough for the piddliest Koala and light-hearted enough to be dubbed 'The Minister for Good Times'; hard-headed too. And John Brown, perhaps before many others, saw the enormous potential of the local travel and hotel industries. But then John Brown's now found himself on the back benches, out of the public eye. But not any more. John Brown is back doing now what he's always done best, promoting Australian tourism. This time heading a new tourism task force, an industry group set up to lobby government for funding. Well, if I might say so, Mr Brown, it does seem slightly odd that a Federal Government back bencher is head of an industry group set up to lobby your Government for funding. Is there a conflict of interest?

JOHN BROWN: Not really, Pru. It took this group about six weeks to enlist me to become chairman of this particular lobby, because I saw that as being a difficulty. And, of course, you're not just lobbying the Federal Government, you're lobbying the State governments as well because they also all have a tourism budget. But I must say that when I was Minister here for five years, even in the three years in Opposition when I was putting the policy together that eventually became Australia's tourism boom blueprint, I was never lobbied by anybody. I mean there are groups within the industry that look after particular segments but in those days, ATIA, which is now the umbrella group, was almost moribund. And, I must say, greatly to the credit of Frank Moore and his very strong personality, they're not moribund any more. The feeling of the group that enlisted me was that there was no lobby group within the industry that was as influential as it should be. And when you look at the scope of the tourism industry, you're looking at what is now the biggest industry in Australia: 700,000 people employed - mind you that's 450,000 more than were employed in 1983. The turnover's gone from $7 billion to $27 billion in five years, and international visitors went from 800,000 to 2.3 million.

It earned, last year, $6.5 billion worth of overseas currency, which made it the biggest earner we had. So it's a massive industry. And it was the feeling of this group that a lot of the big players were not represented because they weren't considered part of the traditional mainstream of tourism. Now, I'm talking about the banks, the finance companies, the credit companies, the developers, who, of course, are the big contributors of finance to this industry, and they weren't covered by any umbrella group. So this group put itself together, talked me into being the chairman, and, here I am, rightly or wrongly, here I am a back bencher, lobbying this Government for funds.

PRU GOWARD: And how are you going to guard against conflict of interest or is that really up to the Minister you lobby?

JOHN BROWN: Well, I don't find it a conflict of interest, I might say, and I don't think the Government does either because you might note that when a question was asked in the Parliament before this group was announced, the Prime Minister gave it a ringing welcome.

PRU GOWARD: He's very fond of you, though, isn't he? You might not have....

JOHN BROWN: Oh, we're very good friends. And I must say that I could never have achieved the budget I got for tourism - I mean, it went from $8 million to $40 million in five years - if he hadn't been a great believer. And, of course, in the first couple of years when you weren't getting the results - because it takes a while to build up - he stuck with me and he showed great faith. And....

PRU GOWARD: You were really the only businessman in Cabinet, weren't you? I mean, if he didn't believe in you, he didn't believe in the way business did things.

JOHN BROWN: Well, Bob has a good business mind. I mean, he's always been...even as the chairman of the ACTU, he was close to business, and, of course, he had to be because I mean the days of us and them in the Australian political, the Australian business life, are long since gone. I mean, that's the reason we've had so little industrial conflict in the traditional unions over the last five or six years. And Bob was able to bridge that gulf between representing the workers and understanding the problems of industry. Now, I, of course, was in the lucky position of having been a trade union member for 25 years, but the leader of an employees group, employers group, rather, before I went into the Parliament.

PRU GOWARD: So you've done it all?

JOHN BROWN: Well, I can see the problems from both sides.

PRU GOWARD: And I guess, Clyde Holding knows you quite well? And when he sees you coming he'll know what it's about and he'd be very foolish if he....

JOHN BROWN: Look, Clyde and I are great friends and I think that he's delighted that this influential group has been put together. Look, the secret of tourism's success in Australia was simply, before 1983 we had no money. The Tourist Commission had no money, it could not promote. So I got the money. With the advantage of a Hogan tape, I got the budget from $8 million to $20 million. We let Hogan loose on an unsuspecting world. I must say that in those days....

PRU GOWARD: It never recovered!

JOHN BROWN: Well, we really didn't have much to sell. I mean, Australia was an unknown quantity. The best kept secret in the world. We had this wonderful product here and nobody knew about it. But, I must say that the infrastructure was very lacking. I mean, you look at Sydney in 1983, compared with Sydney in 1989. You didn't have the Regent, the Intercontinental, the New Ramada, the new, about to be opened, Nikko, 15 other hotels to be opened. And even, a greater example, Surfers Paradise. In 1983 it was a mass of rusty foundations, people going broke selling units off the plan. You've now got Jupiters, Sanctuary Cove, the Mirage Resort, the Gold Coast International.

PRU GOWARD: But how much did the very low dollar have to do with boosting our tourist market?

JOHN BROWN: Well, the very low dollar wasn't around in 1983-84; it was 85-86 when the very low dollar came about. No doubt it was an advantage. But being able to get out there and sell this product gave us growth rates of 23 per cent, where the OECD averages about three. We were doing seven times as successfully as anyone else. Now, what happened was in 1988 the industry and the Government became complacent; it said, 'Oh well, it's going terrifically now, we don't need to spend so much money'. Well, of course, that was an absolute abrogration of all the rules of promotion and advertising - consistency is the thing. As soon as we stopped promoting and advertising, down went the numbers. And we had trouble in the tourism industry well before the pilots' dispute.


JOHN BROWN: So, we've got to build it up again. But now we can start with an infrastructure that's the envy of the world. I mean, there was no tourism industry in the Kakadu National Park in 83.

The Barrier Reef has been absolutely rebuilt - every island has been rebuilt and refurbished. You didn't have the south west of Western Australia operating as it is. You certainly did not have any tourism resource in the wilderness areas of Tasmania. Sydney, Melbourne, and most of the other cities, including the Gold Coast, have rebuilt. Cairns has regenerated; it was a sleepy old town, now it's a beautiful tourist resort. So, we've got a product to sell now, Pru. And I think Clyde was delighted that he had a group like this with the influence of this particular group. And if you see the advisory group, you see not only the who's who of tourism - almost a who's who of business in Australia. And including people with media push. We haven't got a Pru Goward on the list; we probably should.

PRU GOWARD: It's okay.

JOHN BROWN: We've got John Laws; we've got Ken Cowley from the Murdoch News Print and, because of the connections of Channel 7 and Channel 9 with tourism, we've got them as well, to push the Government to realise that the public would want public expenditure in tourism.

PRU GOWARD: So this is a much more powerful group than Frank Moore's group?

JOHN BROWN: Well, it's much more broad-spread across the influential groups.

PRU GOWARD: Because it's got the developers?

JOHN BROWN: It's got the developers, it's got the banks, it's got the...see, companies, like American Express and Visa. Developers like the Hassen Group in Sydney are in that group.

PRU GOWARD: And what's your job, really? Just to keep lobbying the Government to make sure that that spending on tourist promotion is kept up?

JOHN BROWN: Yes. You see, I got the budget from $8 million to $40. Then it went to $30 and then it's gone back up to $38. Now, in my view, it should have gone from $40 to $50 to $60, because as the market gets bigger you should be promoting more widely. Now, I think that was a mistake to reduce it. Now, the Government a fortnight ago, introduced a rescue package. Now, as I've said, I've always said that the industry was in trouble before the air strike and the figures that were out yesterday proved that. So I don't think this is necessarily a package to revive the industry....

PRU GOWARD: And do you get a retainer for this, or is this completely voluntary for you?

JOHN BROWN: I can't tell you. But let me tell you that I think that whatever I'm being paid is pennies compared with....

PRU GOWARD: Is pennies, compared with what you're doing.

JOHN BROWN: And they obviously think that.

PRU GOWARD: Now, you've named some very big businesses on this group and you are still, even from the way you are talking now, you still think like a businessman. When you talk to these people and you move around in business circles, do you sense that the drawing away that we've now seen from the Business Council of Australia, Sir Arvi Parbo's group, a drawing away from the Labor Government? Are you getting a bit nervous? Is that a widespread feeling now in the business world?

JOHN BROWN: I think that they're drawing away because high interest rates are obviously hurting. But even the Business Council of Australia can't give you an alternate policy to high interest rates to solve our overseas debt. And the Business Council of Australia, of course, embraces the people who generated the bulk of that private debt, so they're in a fairly awkward position. But even if they're drawing away from the Labor Government, I don't think they are embracing the Opposition. I mean, they're taking a fairly neutral view. But I think this Government has been particularly advantageous to industry. And if I can just take a few statistics: 1983, personal tax at the top level was 62, it's now 49; company tax was 48, it's now 39; there's an imputation of tax on dividends, which has been an enormous boost to industry, not so much that dividends are now tax free but that companies can retain capital within their base structure.

PRU GOWARD: That was something you supported in Cabinet, and I wonder without people like you there whether there isn't that same nose for business in Cabinet?

JOHN BROWN: I think I was a very useful additive to....

PRU GOWARD: You can be immodest.

JOHN BROWN: I was a useful additive to the points that Keating was pursuing. In fact, I can remember telling the story in Cabinet the day that we debated that. In 1953, when I first started in business as a youngster, having earned about the equivalent of about #20 a

week, my two partners and I found that the first year we made a profit, or the equivalent of, about $100,000. I thought, God, how long's this been on? Well then you paid the 46 per cent company tax and you were left with $54,000, divided at three ways with 18; you paid your 60 per cent tax on the bulk of that and you finished with about $8,000, and then provisional tax took the bulk of that. So you finished with basically nothing. So I've always railed, when in my pre-Parliament days as the chairman of an employers group, against this second tax. And you see, now, take for example, in 1989 if someone made $1,000,000 they pay their 39 cents company tax, they're left with 61. You get 20 each tax free. Now that's a beaut for the shareholders but, even better for the company because previously, when you distribute your dividends you pay the personal tax. If you didn't distribute them, you left them in the company, you're paying a penalty tax under division 7 of 75 cents in the dollar. Well now, if you had the $60,000-odd you kept it in your company to increase your capital base, your opportunities to grow and expand, that's an enormous advantage. See, I'll tell you what happen: if you walk into, say, James Hardie, for example - the ABC's been giving James Hardie a bad time of recent days - but walk into their company office and you might see 100 company names on a list. Anybody in the olden days who developed a new building technique and wanted to develop it, with a small company, had difficulty getting the finance. They certainly couldn't aggregate it because of the Tax Department's view. They had difficulty getting finance from the banks. What happened is that people in those days would be taken over by people like James Hardie or they would go to a public company. So we had this peculiar position in Australia, with a small financial market you've got a number of extremely powerful companies, like BHP, for instance; it's a huge company by anybody's standards around the world.

PRU GOWARD: Because the only way to grow here is take over?

JOHN BROWN: That's right.


JOHN BROWN: And you see we didn't have that aggregation of middle level companies. And a lot of interesting entrepreneurs finished as middle executives in big companies.

PRU GOWARD: Now, we are running out of time, Mr Brown. And your stories are very useful, very useful parables. But just finally, what would you do to get Arvi Parbo back on side? He's pretty steamed up. I mean, he's got a few...there's a few...he's a bit sore about a few things, I think.

JOHN BROWN: Yes, he's pretty steamed up. He's steamed up about interest rates; he's steamed up about what he sees as inconsistency in Government decisions.

PRU GOWARD: And that personal attack on him didn't help and there's consumption tax that we didn't get in 1985.

JOHN BROWN: Well, I've got to say, Pru, that the Business Council of Australia were one of the greatest opponents of a consumption tax in 85. The Business Council of Australia, you'd got EPAC, you'd got the trade unions, you'd got the social security groups all saying, 'No'. Keating was there, the lone voice, saying, 'Yes' and, of course, the rug was pulled from under him. All of those characters now want to embrace it, and, quite obviously, we should have had it then. I think I was Keating's lone supporter in Cabinet at that stage.

PRU GOWARD: You were in the cart. What would you do to get him back onside? He's too important too leave out in the cold.

JOHN BROWN: Well, he's a great Australian and he's made an enormous contribution to the community and to the business area of Australia. I think Arvi will come back onside as interest rates retreat.

PRU GOWARD: You wouldn't take him to the races or ask him over for lunch at the Lodge?

JOHN BROWN: Oh, I think Arvi's - I don't know if he's been to the races, I think he's probably been to lunch at the Lodge. And I think he's a got a great regard, in a personal sense, for the Prime Minister. I think that what the business community wants most - it's certainly what I wanted when I was a businessman, and I fought for with all sorts of governments, was consistency. And I think there've been a few inconsistent decisions of late, made for the best possible reasons - Coronation Hill being one. I think it was probably a mistake in the first place to give that conservation zone within Kakadu State 3, but then somebody thought they were going to get a mine; they've pursued it with vigour since, complying with every guideline, and then suddenly the decision, which is probably correct, not to allow the mine to go ahead was made. It probably should have been made six or seven years ago, or five or six years ago. Then people would know where they are. The thing that business communities want most is consistency so that they know what the ground rules are, they can plan on that, and then they can make decisions that are prudent.

PRU GOWARD: Mr Brown, I think I understand why the Prime Minister wants you back in Cabinet. Thank you for being with us this morning, and very best wishes and good luck with your new lobby group.

JOHN BROWN: Thanks, Pru.