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Transcript of doorstop interview: "AM" Radio, ABC: 4 August 1993: Timing of the Budget; possible mini-budget in May; managing the economy; interest rates



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Leader of the Opposition

> . * . 1

4 August 1993 REF: TRANSCR\0081:MM:DJ

JOHN HEWSON MP TRANSCRIPT OF INTERVIEW ABC RADIO "AM" PROGRAM

E & Ο E - PROOF COPY ONLY

SUBJECTS: Timing of the Budget; Possible mini-Budget in May; Managing the economy; Interest rates

LEAD IN:

The prospect of a Federal mini-Budget next May to supplement the main Budget in two weeks has been dismissed by John Hewson who says it's a sign that the Government's economic policy is in disarray.

The Sydney Morning Herald is reporting that the Federal Government is considering a plan for a mini-Budget in May, and, that addressing unemployment. Dr Hewson is in Sydney this morning to speak to a business breakfast and before his address he spoke to our finance correspondent, Phillip Lasker.

LASKER:

Dr Hewson, this Budget they say is going to be very tough, but what about the idea of bringing down a Budget in May or June.

HEWSON:

Look, I find it absolutely amazing that the Government cant just bring down one Budget now. It's been in power for ten years. To have a, to have to have some sort of academic exercise to see if you can come up with any more ideas, or new ideas, to do with unemployment is just, just boggles the mind. I mean, they arent going to learn anything new out of that. They know what the problem is. They know how to solve it. The fact is that with the union movement basically having total control over this Government, they're not going to address a lot of the issues. And this is just all posturing, and it's got nothing to do with the sensible government of this country.

COMMONWEALTH

PARLIAMENTARY LIBRARY MICAH

Parliament House, Canberra, A.C.T. 2600 Phone 2774022

REF: TRANSCR\0081 :MM:DJ 2.

LASKER:

But w ont this help bring the Budget period into line with the business financial year and isnt that a positive development?

... i . ' ... ; , HEWSON: Well look I, I d o n t know that argument. There's been a lot of debate for years about the best timing of Budgets. I mean, it's more important to get the Budget right, one that addresses the problems of Australia, not to make it look as if you're doing something else.

LASKER:

Doesn't it make economic sense, though, to make this Budget a tough Budget in order to address our Budget deficit? You should be pleased to see the Government taking seriously the problems with the Budget deficit.

HEWSON:

Well I don't think they are taking them seriously. I think what you're witnessing is a softening-up process, a massaging of expectations. They always go out there creating the expectation it will be tough. They give you fictitious numbers - we're starting at $18 billion, we've got to cut, cut, cut, and so on. Then on Budget night there's a big sigh of relief because things d o nt seem as bad as they led them to be.

But, you know, look, they're not going to address the problems. They're not really seriously going to cut government expenditure and try and trim back the fat of the public sector. They dont believe in that. They believe in government as an end in itself. So this is just window-dressing and posturing. It's not really dealing with the problems. I would be delighted if they did deal with the problems. But they're not doing it.

LASKER:

But if they did deal with the problems, would that create the opportunity for interest rate cuts, perhaps, after the Budget, and wouldn't that be a positive thing?

HEWSON:

Well, it's always a positive to get interest rates down. In fact, as any small business in Australia will tell you, that they're paying nearly twice the level of real interest rates that they'd pay, say, in the United States. But you've got to get them down in a way that's sustainable and defensible by putting the right fiscal policies in place. And this

Government has shown no genuine determination to put our fiscal policy in order. They just play politics with everything.

REF: TRANSCR\0081:MM:DJ 3.

LASKER:

But if they did show a genuine determination, then of course interest rates could come down and that would be a good thing, wouldn't it?

HEWSON:

If they did show a genuine determination I think I'd faint.

LASKER:

And would you support it? Would you support it?

HEWSON:

I always support lower interest rates.

Ends...