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Interview with Shadow Treasurer

MATTHEW ABRAHAM: First up, Shadow Treasurer, Peter Reith, defending his attack on the public service. Shadow Treasurer, Peter Reith, has appeared in the political gun barrel sights in the last two days, of both Treasurer John Dawkins and Industrial Relations Minister, Senator Peter Cook, on this program yesterday. He was accused by Minister Cook of toadying to some basic sentiments with an attack on the public sector. You might recall him revisiting Robert Menzies' colourful suggestion that the trouble with bureaucrats is that they don't eat their young. John Dawkins accused his Shadow of immaturity by questioning the independence of the Reserve Bank before visiting bankers. I get the impression, however - Mr Reith who is with me now, good morning Mr Reith. I get the impression you're not enjoying the .. or you are the enjoying the assault.

PETER REITH: Well, there's certainly a vigorous debate going on and the Coalition's got a lot of sensible things to do and a major reform program, and the Government, quite frankly, is just trying to run up every burrow they can find. And the truth is that none of what they've been saying in the last few days will do anything for the unemployed, won't address this country's debt problems, and certainly won't see the sort of sustained recovery that Australia so desperately needs.

MATTHEW ABRAHAM: What about the unemployed you're going to create by chopping off at the knees public service programs?

PETER REITH: Well, I'm glad you said programs because the run that this little story's had in the last couple of days has been based on a misquote of what I actually said. And you know, it's always a pity to let the facts get in the way of a good story, but the point I was making was, firstly, certainly it was not a personal attack on public servants. That is simply not true. Secondly, the point I was making, and I've made it on a number of occasions, and that is that we have some very dedicated public service officers in Australia. And in fact, quite frankly, on a number of occasions I've gone out of my way to make that point, against that sentiment which certainly does exist in some parts of Australia. The third point I was making is that in the past, we've chopped programs here - we've chopped them a little bit here, we've chopped them a little bit there - but we've never really fundamentally attacked that problem of, you know, bureaucracy simply growing and growing. And if we are to have a more efficient delivery of service by Government, then we need to bring to account the ideas of privatisation and contracting out. But what I said was that in some cases you'll have to chop out, chop off at the knees, programs entirely.

MATTHEW ABRAHAM: Yes, but you're really saying you're chopping off at the knees people, because, I mean, a program is .. to save money by getting rid of a program, you get rid of people. It's like Nissan saying that they've chopped off at the knees their car plant but no-one's lost their job.

PETER REITH: But of course that is not the case though, Matthew, because you can chop out a program which is being delivered by government and make arrangements through contracting out or otherwise for it to be delivered by the private sector. Now, that can mean more jobs for people and, in fact, the abolition of payroll tax, if we're talking about Canberra, for example, will be a tremendous boost for the private sector in Canberra. So, I mean, this spectre of a whole lot of people losing their jobs under the Coalition is simply not the case.

MATTHEW ABRAHAM: Yes, but I've got a transcript which your office has sent me of your remarks and you say that you can do it and you do have to be prepared to just cut out government programs where they are inappropriate for government and just chop them off at the knees, fullstop.

PETER REITH: That's right. And sometimes there are services delivered by government which are inappropriate to government.

MATTHEW ABRAHAM: But the program would then stop, or would then be handed over to the private sector?

PETER REITH: Well, it goes over to .. can go over to the private sector. It depends on the program. You have to assess it case by case. But if you talk about privatisation, for example, you know, you take the whole of the work force of Australian Airlines and you put them into the private sector. And that can mean for them a chance to take off the shackles of government and be in an enterprise which might have access to better capital arrangements, better industrial relations, all of which can add to their efficiency and actually provide people with jobs.

MATTHEW ABRAHAM: But isn't there a myth that if it is private, it is necessarily more efficient than the public sector?

PETER REITH: Well, I think, well, I don't know whether there is a myth but it is true, Matthew, that the mere question of ownership, regardless of anything else, may or may not affect the efficiency of the delivery of a service. That is true, and you need to look at all the other factors, and of course, I mean, that's only a theoretical proposition. One of the benefits, I think, often, of taking something out of the public sector into the private sector, particularly with our industrial relations strategy, is that you'll have a more flexible approach to working time arrangements and all the other things that go with more efficient management.

MATTHEW ABRAHAM: Well, let me just put this to you - another one of your quotes. You're talking about an extensive list of things that are going to be contracted out which really takes activity out of the government sector, ensures efficiency, better service for customers and keeps the price down. Now, I was in Big W the other night and I had to wait for 15 minutes while we went through a Sir Humphrey scenario of the customer in front of me getting a cheque cleared; and that was private industry. It was bizarre.

PETER REITH: Well, look, I'm sure it was no reflection on you that you stand in a queue and make sure that your credit was fine.

MATTHEW ABRAHAM: It wasn't my cheque. I really am trying to tackle, though, this myth of just the expense sometimes of farming things out to the private sector. Don't you have a dual cost there, that the possibility of a price runaway in the private sector and also the cost of paying out the public servants on packages and so on, who were doing that job in the public sector?

PETER REITH: Well, I would say this to you. Look, I don't think we ought to be sort of ideological about these issues. I think it is fair to ask the question on a case-by-case basis whether or not you really are getting value for money, whether or not it can be done in a better way, and basically, that's our approach. And so if there is a myth that exists, it certainly is not a myth by which we'd be operating. I think you'd just have to look at it in a sensible way, and if you can do it in a better way, do it in a better way.

MATTHEW ABRAHAM: Well, Mr Reith, I agree. If you read the fine detail of the Fightback package, you do look at things on a case-by-case basis, and it is quite specific. But do you agree that the image you're painting for possibly political gain is this sort of jingoistic image of bash a public servant? You use very strong language when you're talking about chopping out programs and so on.

PETER REITH: Well, the Menzies' quote got the .. excited the imagination of the press, but if you actually read what I said, I said after I quoted Menzies, I said: `which is very hard on bureaucrats, but there's some truth in the inevitable nature of the growth of bureaucracies'.

MATTHEW ABRAHAM: And your quote got a good laugh from the audience.

PETER REITH: Well, it may well have, and I think that would reflect a view that is somewhere in the community. But, I mean, I have in fact, myself, said that it's a very hard quote, but it does reflect the view that some people have. And that's why you've really got to take a new approach to the whole delivery of government services, and that's why privatisation and contracting out are so very important. And that is the basis of what I said in response to an engineer who got up and asked me a question: `Well, I had to get out of my business because the Government was wasting my money'.

MATTHEW ABRAHAM: All right. Yes, he went on to say that he understood that 44 per cent of people who are employed in the country are public servants. I presume you corrected that. It's 10 per cent, isn't it?

PETER REITH: Well, I did .. it was a very long answer.

MATTHEW ABRAHAM: Okay. Almost what that question suggests, though, is that - and it seems to me some of the rhetoric we have coming out of the Opposition suggests that public servants are sort of second-class citizens.

PETER REITH: No, well, I don't think that is the rhetoric of the Opposition, and it's not been my rhetoric. And it is true that outside of Canberra, I think, you know, often people blame Canberra and they throw everybody into the same melting pot, and they blame bureaucrats, and that can be very unreasonable because, as I say, we do have some very hard working, efficient and good operators in the public service. And it's more an issue about organisation and about obtaining efficiency, and that's exactly what I was saying.

MATTHEW ABRAHAM: All right, Mr Reith, if we can turn now to the Reserve Bank issue. Are you threatening jobs there, as Mr Dawkins suggests, by your attack on the independence of the Reserve Bank?

PETER REITH: No, I'm not, and I must say I was surprised that John Dawkins would go to the length that he has to mount an attack on the Opposition, although I suppose it's a mark of desperation. We have never played the man on the issue of the Reserve Bank. We have always stuck to and restated our central policy which is that the Reserve Bank, its independence ought to be enhanced, and that's part of an anti-inflation strategy. Australia's got a lousy record on inflation in recent years. It's down now because of the recession, but we think that we ought to make some structural reforms so that we can keep inflation low in the future.

MATTHEW ABRAHAM: What about Mr Fraser, though, would you be happy to have him serving as Reserve Bank Governor, under a Coalition Government?

PETER REITH: Matthew, you want to bring me on to the personalities of the issue and that is something that we have steadfastly refused to buy into. Mr Fraser is a statutory appointment and he's there by Act of the Parliament, and that's the end of the matter. It is not an issue in terms of his personality and I'm not going to make it one.

MATTHEW ABRAHAM: All right. We have Tony Cole, head of Treasury, this morning, reportedly pushing for an immediate lifting of sanctions against South Africa. Do you agree with that?

PETER REITH: Well, he's a very good bloke, Mr Cole, isn't he? And he's personally in favour of a consumption tax as well, and obviously we ought to be lifting economic sanctions against South Africa. They are making giant strides towards reform and I think we ought to be encouraging them rather than have Australian Government policy basically dictated by the ANC.

MATTHEW ABRAHAM: You don't mind talking personalities with Mr Cole, but not with Bernie Fraser?

PETER REITH: No, in fact I was agreeing with his policy position and making a point and that is that we do have some good people in the public service and I've always been very happy to say it.

MATTHEW ABRAHAM: Mr Peter Reith, thank you. Shadow Treasurer, Peter Reith.