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Election '96: debate on election policy issues; racist comments during the campaign

MAXINE MCKEW: With Labor launching its election campaign and the Coalition bringing forward key policy releases, the race for government is on in earnest. While the leaders have dominated media coverage, Kim Beazley and Tim Fischer are crucial figures in the current election campaign and any future Parliament. Tonight, Lateline talks to the men who would be Deputy Prime Minister - Kim Beazley versus Tim Fischer, that's our story tonight.

Well, it's not Orange and it is certainly not a town hall but I'm pleased to say that both Kim Beazley and Tim Fischer have agreed to join us tonight on Lateline for a second major debate in the election campaign. After the next election, one of them will be Deputy Prime Minister. Kim Beazley was elected to the Parliament in 1980. He has been Minister for Defence, Communications and Education. He is currently the Minister for Finance and the Deputy Prime Minister.

Tim Fischer is the Member for Farrer. He was elected Leader of the National Party in 1990 and has held the Shadow portfolios for Energy and Resources and Veterans' Affairs. He is currently the Shadow Minister for Trade. Gentlemen, thank you both for coming on.

Mr Fischer, I suppose, if we talk first about the issue that's been running all day today. We have seen, I suppose, some rather creative explanations from Bob Katter about what he really meant when he referred to 'the slanty-eyed idealogues and femi-Nazis'. But would you have to concede that the damage has been done?

TIM FISCHER: I am glad you've raised this first up, Maxine, because when I first heard this utterance at 6.06 am I was very angry. It is an unacceptable terminology for him to have used. I took immediate action with regard to that under the proceedings of the National Party, in fact cited the matter to the Queensland State President, David Russell QC. That has now been brought forward a response and also an apology - as well it might in the circumstances. Mr Katter is not a racist, but it is unacceptable to use that terminology and I, as Leader of the National Party in six years have worked hard to in fact ensure that there is no racist element in the National Party, and more so that that was the particularly disappointing part, was that a lot of good work that I've done as an individual, as a leader of a party, and as a Member of Parliament in building contacts with Asia visiting Aung San Suu Kyi last year - the only MP to do so - and making other contacts can be besmirched by this type of conduct.

MAXINE MCKEW: Well, precisely. You have put in all of this sort of work but surely the sentiments behind these comments can only be seen as racist and misogynist.

TIM FISCHER: It is totally unacceptable. The matter has been dealt with very decisively, and it is an interesting point to make that Mr Katter himself is of Lebanese descent. The situation is that I do not believe he is a racist. The National Party will not endorse racists as their candidates.

MAXINE MCKEW: How have you dealt with the matter?

TIM FISCHER: In fact, for the first time in six years, I have cited both a member and a candidate publicly to the State President, that being the procedure in relation to the National Party. That State President, David Russell QC has taken very clear-cut action on the matter.

MAXINE MCKEW: What action?

TIM FISCHER: In fact, he has now issued a two-page statement making very clear that the Queensland Nationals judge it as unacceptable as well, and that any repeat performance will bring forward very decisive action by David Russell, whose jurisdiction it is, and he has condemned and censured them in the middle of a campaign as I have disowned those comments.

MAXINE MCKEW: I would have thought though, Mr Fischer, that sounds like a bit of a slap on the wrist.

TIM FISCHER: Hardly. Here we are at the half-way mark of a Federal election campaign. Kennedy is a very marginal seat, Leichhardt is a very marginal seat. I have gone a very public path because I was very angry when those comments first went to air earlier this morning. It is an unacceptable comment to make in Australia.

MAXINE MCKEW: If it's unacceptable, then isn't it unacceptable to have Bob Katter running for public office?

TIM FISCHER: Well, he apologised and he's not a racist. He apologised and the difference is, for example with Graeme Campbell - he has never yet got around to extending a full apology.

MAXINE MCKEW: Kim Beazley, are you counting your blessings that, say, someone like Graeme Campbell didn't wait until mid-campaign to make the sort of comments that he made recently?

KIM BEAZLEY: Maxine, this is a failure of leadership. I mean, this is savaging this pair with a wet sheep, or whatever - all those analogies that you like to draw from our experience in politics. It's a failure of leadership that casts doubt on the genuineness of the commitment of the Coalition leadership to inclusiveness. And they've tried to say that we're not like we were in the 1980s - please forget the comments that we might have made during the course of the 1980s - we are now all into inclusiveness. This is a product of repeated statements.

Mr Burgess started the process in this particular incident and was allegedly disciplined, repeated the views that he held earlier and said that he didn't resile from them - nothing happened about that. Mr Katter was then questioned on it and Mr Katter came out with this extreme language, and then there is some action and the action is, you know, hold out your wrist and let us give it a bit of a slap. I mean, that's the process and it's not just occurring there of course, there's an equivalent version of it in this way and related to the Aboriginal community going on in New South Wales.

MAXINE MCKEW: What are you referring to there?

KIM BEAZLEY: Mr Cobb's correspondence now with Mr Refshauge alleging that what Mr....

MAXINE MCKEW: This is Michael Cobb, the Member for Parkes.

KIM BEAZLEY: ... Mr Refshauge has some intention to, and puts it in the most disturbing way he can, shift Aboriginals out of Redfern into Mr Cobb's constituency. That's a piece of correspondence from him to Mr Refshauge.

MAXINE MCKEW: Is that right, Mr Fischer?

TIM FISCHER: It is wrong. Totally wrong. Michael Cobb has denied that -categorically. Peter Cochran has also denied the reference that it made to him. This has been decisive action by me from the moment that I first heard those remarks.

KIM BEAZLEY: Mr Refshauge has produced a letter from Mr Cobb. He can't walk away from that, Tim.

TIM FISCHER: Mr Cobb has made very clear, he has not entered in any way, shape or form down a racist path and I accept what he has said on that regard. Andrew Refshauge is making maximum mischief in a circumstance which I think this campaign could well do without.

KIM BEAZLEY: Mr Fischer is accepting and not acting. It doesn't matter whether it's that particular incident, whether it's Mr Burgess, then Mr Burgess repeating himself and being let completely off the hook. Then Mr Katter having seen Mr Burgess let off the hook, giving us a view of his real feelings....

TIM FISCHER: I acted decisively.

KIM BEAZLEY: But the point about that, Tim, is were you elected to office, this would be your backbench. These would be the people who would be coming into the Parliament, hostile to environmentalists, hostile to workers, hostile to Aboriginals, hostile to the non-English speaking background community, all adding up to the potpourri of the policy formulation in your parties. And what would result from that of course, is not the inclusive Australia that you talk about, but a highly divided one.

TIM FISCHER: How dare you suggest it would be racism with any member of the National Party or any member of the Coalition. That is a total unfair statement - it is wrong....

KIM BEAZLEY: It is very difficult to see those words in any other context, and they're there.

TIM FISCHER: and apologies have been given, absolute apologies have been given....

KIM BEAZLEY: To whom, about what?

TIM FISCHER: ... It has been totally unacceptable that the remark was made. I acted very, very quickly in relation to that and the action has brought a very unusual statement for from the State President, who has direct jurisdiction....

KIM BEAZLEY: ... and the apology is effectively, 'sorry Tim, I've made life difficult for you. Sorry about that.'

TIM FISCHER: It is an apology to everyone offended. It is a public apology and I am not a racist and I do not accept that the National Party is in any way tangled with racism....

MAXINE MCKEW: Mr Fischer, have you talked to John Howard on this topic today?

TIM FISCHER: I acted in my own right as Leader of the National Party....

MAXINE MCKEW: I realise that. But I'm just wondering, have you and John Howard discussed this matter? Because it would seem to me that John Howard must be thinking, 'Is this going to be 1987 all over again for me - the Queensland National Party?'

TIM FISCHER: Each day of the campaign there is contact between the various leaders on the Coalition side at various levels. I acted on this before talking to anybody because I was that angry. It was unacceptable terminology - I took very public definitive action. There will be no racism in the National Party, and we'll build the proper links with Asia - links which Prime Minister Keating, I might recall, upset with his skulduggery and his very clumsy way he handled the Malaysian incident a couple of years back with his comments of recalcitrant....

KIM BEAZLEY: What skulduggery?

MAXINE MCKEW: I'm sorry. I would like to move on. Gentlemen, we're not going to resolve this one. I would like to move on.

KIM BEAZLEY: This sort of thing just whirls off the top of Tim's head. What particular skulduggery by the Prime Minister?

TIM FISCHER: Recalcitrant.

KIM BEAZLEY: Skulduggery by the Prime Minister - the Prime Minister has taken initiatives in this region which is giving this country a chance, -which is opening up markets to us - 75 per cent of our goods go to those areas. We are people who have, as a result of that expertise, set up a set of trading arrangements and security arrangements in the region which is allowing us, a very small nation, to advance our interests. It's not skulduggery. That's competence and leadership and that's the problem here. It's the contrast between trying to keep your nasties in the barrel and competence in leadership.

TIM FISCHER: On the matter of trade, you have been totally inadequate with the country-to-country bilateral trade access issues - and I can nominate quite a few: -Singapore, United States and elsewhere. And on the matter of recalcitrant, it took him a whole two weeks during a period of very critical negotiations for some very big contracts and tenders that were outstanding in Malaysia. It did us a lot of damage and a lot of continuing damage because of his arrogance at every stage.

MAXINE MCKEW: Okay gentlemen, I'll come back to the issue of trade.

KIM BEAZLEY: The proof of the pudding is in the eating....

MAXINE MCKEW: No. I'm sorry, Mr Beazley, I'm sorry. I'll come back to some of these issues.

KIM BEAZLEY: ... the achievements are massive.

MAXINE MCKEW: I would like to get down to some other nitty-gritties now. First of all, Tim Fischer, you have said 13 years of hard labour. How bad is it?

TIM FISCHER: It is savage in so many rural provincial centres. It has been a crunching at the educational opportunities of many school children, partly due drought, but also recession, plus the general malaise which has hit small business. This man, a couple of Sundays ago, said on Channel Nine that in fact small business was - and I quote exactly - 'highly profitable'. It builds on the arrogant remark of Mr Keating last May - 'this is as good as it gets'.

MAXINE MCKEW: Well, hang on, small business as Mr Keating said today, has created over 500,000 jobs in the last three years. So they must be doing okay.

TIM FISCHER: Well, I'll take you back to the unemployment figures that have jumped from 8.1 to 8.6 per cent. I take you back to the situation where the long-term unemployment has sharply moved up yet again. I take you back to the real situation at the coalface where small business person after small business person is terrified to contemplate putting on another employee because they walk straight into the horrific nature of Labor's unfair dismissal law which has done so much to upset the balance. Yes, you have to have a fair safety net - a fair mechanism - but Labor's unfair dismissal law is adding to the unemployment problem in this country.

MAXINE MCKEW: So you're suggesting that problems are of a dramatic dimension.

TIM FISCHER: Absolutely.

MAXINE MCKEW: Okay. In that case, why is it that you are only presenting a program of minimal change? It would seem to me that if, as you say, the programs are as enormous as you paint them - at the moment you have not outlined a coherent program which will alter unemployment, foreign debt, improve national savings.

TIM FISCHER: It's a fair question and there are more policy developments to come - policy announcements next Sunday with John Howard's launch, and some pretty exciting stuff. But just let's address that in the context of small business. The best engine room to bring about a real recovery in this economy - further boost our exports and help soak up some of the horrific levels of youth unemployment - Bundaberg 49 per cent - is in fact to provide the framework which will see small business light up and get humming again. We will reduce the provisional tax uplift factor from 8 to 6 per cent - $185 million real commitment because provisional tax penalties are horrific. Small businesses have to cop it sweet. We're going to reduce that burden by that much.

MAXINE MCKEW: How many jobs will you create in the next three years?

TIM FISCHER: We will be abolishing Labor's unfair dismissal law. We will be altering and simplifying fringe benefits tax and capital gains tax and by a series of other steps - some yet to be announced - you will find that small business will have a new dawn, a new beginning and will, in fact, I think soak up a good deal of the unemployment.

MAXINE MCKEW: Just on your first point. Getting rid of unfair dismissal. You're absolutely right, business don't want a bar of it. But could I put it to you that that perhaps will only have a marginal impact on employment.

TIM FISCHER: I think it will change the culture. I think it will change the underconfidence with so many small business operators, medium business operators, big business operators and even local government bodies, to quote the Mayor of Deniliquin this morning, who back before an unfair dismissal action now in extraordinary circumstances. It's about time the out-of-touch, arrogant government realised the horrific of the unfair dismissal law, even horrific on workers who have their problems with it as well.

MAXINE MCKEW: Kim Beazley, has that been one of the great failures of the last three years? I mean, you've been hearing exactly what business has been saying on this unfair dismissal. They hate it.

KIM BEAZLEY: Seven hundred thousand jobs....

MAXINE MCKEW: Yes and 800,000 people who still want jobs and part-timers who want full-time jobs.

KIM BEAZLEY: Seven hundred thousand jobs .. Perhaps I might be able to respond to the ten minutes you have just let Tim have unfettered. But 700,000 jobs over the last three years - we were mocked for saying that we would do 500,000 - the vast bulk of those jobs in small business. The small business survey's now showing an intention to employ additional people - a substantial increase in their employment on all the known facts at the moment. Unfair dismissal laws amended after the Business Council that raised their complaints with us and put through the Parliament, which people tend to forget about, and....

MAXINE MCKEW: That was abolished.

KIM BEAZLEY: And then this bogus position put, and it's an absolutely bogus position, but of a piece with the attack on the lives of the ordinary Australians: a subliminal attack. You do not solve the youth unemployment problem in this country by making Mum and Dad and the youth easier to sack. You do not do that. I mean, hands up everybody who wants to be easier to sack. And that is the proposition of the Opposition. How do we fix a small business problem? Well, we make you easier to sack. Easier to sack in the face of the fact, a) that the Government has already amended the law in a way that was negotiated through and discussed through with business; two, has created 700,000 jobs, 200,000 more than anticipated with all the surveys showing small business with a substantial intention to improve their position. This has got nothing to do .. this in the end has got nothing to do with small business, -nothing to do with youth unemployment, and everything to do with the industrial relations agenda of the Opposition, the real industrial relations agenda of the Opposition, which is to intimidate workers and, at the end of the day, you live a life of decency and comfort or a life of misery and penury, dependent upon your wage and whether or not you have got access to a job.

Make yourself easy to dismiss and then of course you have got a threat from that angle. Put yourself in a position where you cannot effectively collectively bargain and you don't get the level of wage that sustains it. You get a lot of things for the family, but the best thing you can do for the family is to provide a decent, secure and capable-of-being-increased wage.

MAXINE MCKEW: I would have thought that the best thing you can do for the family is to make sure that they have jobs. Now, Labor's....

KIM BEAZLEY: Absolutely.

MAXINE MCKEW: ... record .. okay. Eight hundred thousand people who would still like to be working.

KIM BEAZLEY: ... is terrific.

MAXINE MCKEW: I agree. Okay, you've exceeded your target - terrific - but we still have 8.6 per cent unemployed.

KIM BEAZLEY: And we're committing ourselves to bringing that down, and the basis on which we have had a rate of job growth something like three times that of our opponents when there were in office, and about twice the average of the industrialised world, is that we have put in place industrial processes which have guaranteed an unprecedented level of industrial peace. We have had the unions sign up to inflation targets which have given the Reserve Bank comfort to keep interest rates at levels which are sustainable. If he hadn't had that comfort he would not have been in a position to do that, as he has made clear evident on a number of occasions.

MAXINE MCKEW: Well, you set a goal....

KIM BEAZLEY: Now that .. that is part of the fairness of society and the growth of society. What you cannot do - and the reason why the Liberals do embrace us and try to create the minimum possible divisions, as you alluded to, in what their intentions are and what we are doing, is that they know we are ticking up successes. So they would like to say, 'Well, we can incorporate those successes. We'll have the words, but we won't have the music. We have a different music.'

MAXINE MCKEW: So you accept there is no ideological divide now in this election, do you?

KIM BEAZLEY: There is a stack of ideological divide, but the ideological divide goes to their real intentions and their attitudes as opposed to what they're saying about us now. What they're saying about us now is, 'That's fine, we only want to make a little bit of adjustment.' Why do they say that? Because the public knows that they get a decent go. That's why they say that. What their intentions are, of course, is the same agenda that Tim used to have when he cut the birthday cake for Fightback - the last election - and said what a terrific thing all this is, but it's all up there now subliminally rather than in lights where Dr Hewson used to leave it.

MAXINE MCKEW: Mr Fischer, why not set a jobs target when, as you say - I mean, Labor set a jobs target in 1993 and they have exceeded it.

TIM FISCHER: We are realistic in our approach to turning this economy around. It will be a very big task, given the legacy of Labor, the Aussie Bankcard, net foreign debt - $23 billion when Keating first got the keys to the Treasury, $180 billion today. Household savings racking down five, four, three, down as low as 2.6 before turning up slightly. Inflation -remember Keating's statement? 'I'm not going to just bend the rod of inflation, I'm going to break it.'

MAXINE MCKEW: All right.

TIM FISCHER: And in fact, inflation now, despite these 17 quarters of limited economic growth, bouncing up l.9 to 5.1.

MAXINE MCKEW: But I come back to the proposition I put before - this minimal change approach. There is one area of major policy difference that you have enunciated and that is the part privatisation of Telstra. Now, that may or may not be a good idea for all sorts of reasons. However, is that the sort of thing that is going to create jobs?

TIM FISCHER: There is a raft of differences between....

MAXINE MCKEW: No, but just on Telstra. As I say, that is the one major difference. If you talk to focus groups they say, 'Ah, they'll sell Telstra', right?

TIM FISCHER: If you listen to Mel Ward....

MAXINE MCKEW: How does that create jobs?

TIM FISCHER: It is. Because it is going to put Telstra on a similar footing to its competitors.

MAXINE MCKEW: If you listen .. hang on, Frank Blount.

TIM FISCHER: It is going to make it more efficient and effective and, in that process, give it a chance to compete better in Asia. It has just pulled out of the Philippines under its current public ownership sector. It spent millions trying to carve out a niche there. This is a classic example of the way both sides of politics want Australian big organisations to head. And what happened? They ran up the white flag last week. Why? Partly because of the ownership hiatus circumstance when we know that Labor would privatise Telstra if given the chance.

MAXINE MCKEW: Telstra is looking at cutting something like 20,000 out of its workforce, and that is to do with technology.

TIM FISCHER: Technology changes. That is what is a bonus for country people.

MAXINE MCKEW: That's right. They're closing down exchanges all round the place.

TIM FISCHER: It's a bonus for country people in lifting the digital network roll-out and giving us a decent computer modem connection to isolated homesteads, small business operators, right across Australia. We'll do that, we'll mandate the community service obligation. We will provide a benchmarking of performance, all of which - if I may remind Minister Beazley, he acknowledged on the floor of the House - is the correct way to go with community service obligations under this regime.

MAXINE MCKEW: All right, now do people in the bush accept that?

TIM FISCHER: People in the bush do accept that there are many bonuses in getting a modern digital telephone network across Australia under the one....

MAXINE MCKEW: What - they're all saying this when you go out to Richmond and Page and Eden-Monaro? You know, 'Oh, that's terrific, we'll have that digital service'.

TIM FISCHER: In fact, last night at Echuca they did. And the NFF, as a farmer organisation, and the Cattleman's Union, as a slightly different farmer organisation, has very clearly endorsed the one-third sale. We're being honest. We say one third. The black hole in their budget is so big that they don't say anything, but they'll come back if given a chance.

MAXINE MCKEW: All right, Mr Beazley, can you put your hand on your heart and say you will not sell Telstra?

KIM BEAZLEY: Absolutely. And let me just say....

MAXINE MCKEW: Like you said you wouldn't sell Qantas and you wouldn't sell....

KIM BEAZLEY: No, but let me just go through with this. I mean, the point that .. the wonderful picture that Tim presents is not possible to be delivered under anything other than a publicly-owned Telstra. That's the simple fact of the matter, and the bush knows it. The bush understands that completely. Now, the fact of the matter is Tim referred to a pulling out of a particular project in Asia. He could have also referred to the enormous success - the opening recently of a line between Hong Kong and Indo-China, effectively put in place by Telstra, bringing along with it the Australian electronics industry. Now, when we came into office, our electronics industry export was about $50 million a year. It is now a billion and it is headed, by the end of this century, to $1.5 billion. But what does it rely on? It relies on Telstra buying its product from the Australian electronics industry. Our electronics industry, which is taking the leading role in our export business, is virtually dependent for its bread and butter - if not its icing, the exports icing, very important - but it is dependent for its bread and butter on what Telstra purchases.

If you put a couple of foreign telcos into that ownership structure, you put an - even in a minority shareholding status - you apply the rules that would then apply to the management of Telstra which would then follow, about putting duress on shareholders, taking actions as directors to decrease the value of a shareholding, and all this is going to be lost. They'll say marginally cost our operations, off .. marginally cost our purchasers off what we've got coming out of ATT or France Telecom or British Telecom, depending who it is....

MAXINE MCKEW: Mr Beazley....

KIM BEAZLEY: ... and they'll be in trouble. Now, in the bush, you're not going to be able to put pressure on them to do those things. The character of telecommunications is changing all the time. The quality of service is changing all the time. The technology of service. You cannot mandate it. That's all there is to it. So the bush misses out when it was in fact the bush's greatest opportunity. The greatest opportunity for decentralisation is modern communications. But if the modern communications does not get out there at affordable cost, that is dead.

TIM FISCHER: You've just contradicted yourself.

MAXINE MCKEW: Mr Beazley, can I just come in? Mr Beazley, yesterday, even Jennie George said that Labor voters are cynical about Labor's pledge not to sell Telstra. And why wouldn't they be, one would have to say?

KIM BEAZLEY: Yes, but the .... the difference is. The difference is this, that we do not disbelieve in public ownership per se. We don't have an ideological commitment to privatisation, which is what our opponents have.

MAXINE MCKEW: But this is - hang on. This is a convenient belief, is it not, in the benefits of public ownership?

KIM BEAZLEY: No, no. Maxine, you would have heard me go through all the debates in the Labor Party in the late '80s and early '90s on this matter as we were reviewing the structure of the public sector, and what we decide to maintain in it and what we wouldn't. The fact of the matter is....

MAXINE MCKEW: Yes, but this has been a very flexible thing.

KIM BEAZLEY: The fact of the matter is that, with Qantas, it needed a global relationship with a major company if it was going to succeed as a global airline....

TIM FISCHER: Telstra doesn't need that?

KIM BEAZLEY: And as far as the Commonwealth Bank was concerned, it no longer performs a reserve bank-type functions. It needs capital injections. You can't justify taxpayers providing capital injections to a bank which only a percentage of it, a minority percentage....

MAXINE MCKEW: All right. Can I just give you a very good commercial argument as to why Telstra should be a free private agent, and that is including....

KIM BEAZLEY: Why, are you in this debate are you?

MAXINE MCKEW: No, no. Well, I'm putting the argument that's in the marketplace....

KIM BEAZLEY: Sure.

MAXINE MCKEW: ... and that is that they could do better business in Asia because they will not have to explain their activities to a Senate Estimates Committee. They have a free hand.

KIM BEAZLEY: Their reporting requirements, as a partly privatised operation, would be infinitely greater than the reporting requirements that they have now. The pressure that would come on them to take decisions which may not seem commercially viable, but nevertheless establish a presence in a market, would be, if the directors took it over the protests of the private shareholders, would be seen as placing them under duress. They could not do it. And if you've got a couple of foreign telcos in there in the ownership structure putting up their hands, when they're in fact competitors with Telecom overseas saying, 'Hang on, you're not going to devalue our shareholding here. We will take the opportunity to get in there and do that thing ourselves.'

See, Telecom is our one big chance. It is a really big company - it is even a big company by international standards - and it is an effective competitor. It beats them. It beats them out there. But you haul them back - you say 'Your only business here is to make a profit for the shareholders; you will not act in that sort of forward-thinking fashion if you might lose money on it; you will not roll out those community service obligations; you will not roll out those new technologies to the bush, all of which affect the value of our shares - you will just exploit it here.' That's the problem.

MAXINE MCKEW: I want to know - I want to move on. As you know, the Prime Minister would happily have sold OTC off a couple of years ago if his preferred option had got up over yours.

KIM BEAZLEY: Yes, but the big banana is Telecom. I mean, OTC was a minuscule company....

MAXINE MCKEW: Well, OTC, if had been sold off, it could have been a matching big banana couldn't it?

KIM BEAZLEY: ... a minuscule company effectively operating off Telecom's infrastructure. That's all OTC was.

MAXINE MCKEW: Okay. All right. I'd like to move on to the question of national savings because the Prime Minister brought this up at his launch today. Mr Beazley, as you know, the Prime Minister said that we have increased national savings, but could I put it to you that our national .. if our national savings were a whole lot healthier, we wouldn't be paying the two and a half percentage points real interest rates premium that we are paying.

KIM BEAZLEY: Look, the question of the levels of interest rates has more to do with inflation than it has to do with the issues that you raise....

TIM FISCHER: And that is a problem.

KIM BEAZLEY: But national savings is important. There is no question about that.

MAXINE MCKEW: If it's important, why aren't you running a healthier surplus after years of growth?

KIM BEAZLEY: We don't want to be dependent upon overseas capital absolutely, or nor do we want to reject it. I mean, the Commonwealth Government itself is not in debt, and therefore the Australian people in - to any great extent, in terms of our foreign indebtedness position; it's about 5 per cent of that total debt - the bulk of it is private debt. And what is its private debt doing? It's private debt constructing great projects around this country, employing Australians, giving this country a chance to develop. But it is not enough. What we need is a better pool of private savings. You are absolutely right. There is only one thing on the table which produces that in this election, and that is the Government's superannuation policies. The payments by employers into the funds for their employees, going up to 9 per cent, and then the co-payment by the Commonwealth to a voluntary contribution by employees - 3 per cent, on 3 per cent. That resolves the....

MAXINE MCKEW: But aren't we seeing a transfer of savings? I mean, there's a Reserve Bank research report that has showed three quarters of the savings that are going into super are coming from somewhere else.

KIM BEAZLEY: No, it's not a transfer of savings, not a net transfer of savings. It is not that, and that's the point. All these other schemes - the sort of tax benefit schemes and all the rest of it do, as the OECD reports indicate, simply transfer savings. The fact of the matter is, the reason why this works - and it's not necessarily a very pleasant or easy thing to say - the reason why this works is there is compulsion about it. We're not good savers, Australians, and the element of compulsion that effectively comes into superannuation by the very heavy co-payment attraction, if you like, of a voluntary savings effort, combined with the effective direction via legislation of the business component of it, is a compulsory pool. Now those countries which we admire around us - all who are most effective - all have some form of compulsory saving, and that's what we're doing.

MAXINE MCKEW: Okay. I would just like to move on. Mr Fischer, you made reference to the fact before that Labor is facing a black hole in its Budget. If that is the case, in two and a half weeks' time - if you're in office - you're facing the same black hole.

TIM FISCHER: Let them open the books so we can all make that assessment and let them do that in the next 48 hours. It would not be an unreasonable thing in all the circumstances. Instead of....

MAXINE MCKEW: You have made this assertion. That's on the basis of what?

TIM FISCHER: Well, when you see a government after 13 hard years - 13 years hard labour - produce....

MAXINE MCKEW: No, no, we're talking about the state of the books now. What are you expecting in two and a half weeks' time?

TIM FISCHER: When you see a government produce an extraordinary magical tax grab figure to partially respond to their funding document crisis, then you have to be very suspicious. And what I'm alluding to is the fact that, on any reasonable independent analysis, this Budget is not in surplus. They are sitting on the secret forward estimates. They will not release them because they're terrified of them. We're entitled to know what they are.

MAXINE MCKEW: Mr Fischer, you're the second major Coalition figure that, in the last couple of weeks, has referred to a big black hole. Now, Jeff Kennett talked about something in the range of a $9-15 billion deficit. You just said a black hole. What knowledge is it that is around that you're anticipating and, if that is the case, what are you prepared to do about it?

TIM FISCHER: It's Labor's track record, and what we are....

MAXINE MCKEW: No, no, no. But you'll be in government in two weeks - you certainly expect to be in government in two and a half weeks' time....

TIM FISCHER: And we'll get to look at the books and we'll establish exactly what the real circumstance is. I don't put any figure on it because I've not been allowed to look at the books, Peter Costello has not been allowed to look at the books. What have they got to hide?

MAXINE MCKEW: What does it mean then for the about $5 billion dollars of election promises you have already racked up?

TIM FISCHER: We have a very cautious and modest set of election promises....

MAXINE MCKEW: Well, it won't look modest if it is a black hole.

TIM FISCHER: They have been costed very carefully and you will get full documentation on that, and that is part of the campaigning in the 1990s at the Federal level. I just wish the States had the same discipline apply.

MAXINE MCKEW: Mr Beazley, are you facing a black hole?

KIM BEAZLEY: The only reason we're having this discussion about alleged black holes is because of the hole in the heart of their Budget figuring. If they cannot sell Telstra, they cannot deliver on the environment, they can't deliver on roads, they can't deliver on health, they can't deliver on anything. They know that. So they've raised this bogus issue. John Howard, twice as Treasurer, had an opportunity, not only to provide forward estimates at election time, but to actually provide forward estimates at a Budget, and chose not to do so. We provide forward estimates Budget and we provide a half-yearly review.

MAXINE MCKEW: Why not open the books?

KIM BEAZLEY: No other government has ever done that.

MAXINE MCKEW: Can I just say, this time last year, you were preparing a May Budget. You had the figures. Now, I know the Budget was pushed out this year.

KIM BEAZLEY: No, no. The fact of the matter is that, when the Treasury sits down to go through all the growth estimates - the estimates related to wages, to employment, to growth and GDP, altogether, which forms the underpinning of the judgements that they make on the out years - they take the quarters leading up to the Budget and then make their judgements. Now, we've got confidence in the positions that we've announced. Those positions haven't been a product of bodgied up figures. Those positions have been a product of advice from the Treasury which we have had the honesty to make public, and we have done it, which you never had. And you can't disconnect....

TIM FISCHER: Why not open forward estimates?

TIM FISCHER: You cannot disconnect yourself from this, Tim, because your leader was in the position in two elections to do precisely what you're suggesting, and in about five budgets to do what we do, and has not chosen to do it. And the only reason why he is batting his gums about it now is that he has suddenly discovered, to his horror, that basically everything he says is not credible unless he does something which he has now discovered, to his horror, is extraordinarily unpopular, and that is sell Telstra, to sell what is really genuinely - as opposed to what is often alleged to be - what is really genuinely the family jewels, and it is very embarrassing for him.

MAXINE MCKEW: Okay, Mr Beazley, are you confident, as Finance Minister, you are not facing similar bodgie figures on the basis of what is going to flow to you from clamping down on the 100 wealthy persons in this country who are seemingly not paying much tax? Now, $800 million a year for four years - how much of that are you going to collect?

KIM BEAZLEY: Well, the effect .. let me say this for starters.

MAXINE MCKEW: Given the odd High Court challenge and everything else that may come your way.

KIM BEAZLEY: The point that Paul Keating was making on this matter was that we had a set of reports that had come in on this, that had come from the Taxation Commission - good sound advice from him - we ought to make that position available.

TIM FISCHER: ... in 1984.

KIM BEAZLEY: So let's put that to one side. He also has not claimed it for our expenditure activities. As he has pointed out, we are in the unusual position....

MAXINE MCKEW: Sorry, what do you mean he has not claimed it?

KIM BEAZLEY: He has not claimed it to spend it. He has simply claimed it to add to the surplus. That's what he's claimed it for.

MAXINE MCKEW: And you're confident that surplus is still there?

KIM BEAZLEY: And I am confident that, when we produce Budget figures, they are good figures and I am confident for those figures for the future.

MAXINE MCKEW: So you're not necessarily relying on this, is that right?

KIM BEAZLEY: And I will rely, of course, as any Finance Minister would, as we get every - it's not some mysterious or unusual process - on any additional estimates that are provided by the Treasury, after they've had the chance to look at the year in progress and project forward, at the proper time. The proper time to do that is before the Budget.

TIM FISCHER: You have two weeks. Why don't you release that information? The public are entitled to know before they....

MAXINE MCKEW: Just a quick final comment.

KIM BEAZLEY: You have not been releasing policy for 12 blinking months, and now find yourself with a problem with Telstra.

TIM FISCHER: There is plenty of policy....

KIM BEAZLEY: Stop trying to put the problem on to us....

TIM FISCHER: There is plenty of policy out there.

MAXINE MCKEW: Okay. All right. Gentlemen, on that note, we're out of time. Look, I'd like to thank you both very much for making yourselves available. Thank you.