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Transcript of doorstop interview: Parliament House, Canberra: 31 August 1993: Government backdown on budget

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Leader of the Opposition

31 August 1993 REF: TRANSCR\WH\DT\038



SUBJECTS: Government backdown on Budget.


I just called this doorstop to make some comments on the supposed, the so called deal that was done last night, between the Democrats and the Government, a complete, a significant change to the basic direction of the Budget. And the key point is that I think the Budget of betrayal has now become a Budget of humiliation. I cant think of a time in the history of Australia where the humiliation has been greater than

it is at the present time for both the Prime Minister and his Treasurer over this Budget. Now we took a stand two days after the Budget saying we'd vote against four major tax increases and on the back of that this whole process of caucus revolt and Democrat negotiation has been fostered and we find a situation now where the

Democrats have been quite happy to sign off on very significant tax increases. They say they've gained a bit in terms of half a billion dollars of fairness. They've actually signed off on billions of dollars of unfairness. There are tax increases that are going ahead that shouldn't go ahead because the Government has absolutely no mandate to increase tax. And in the circumstances of the debacle of the last what is it, nearly ten or seven, ten days is it since the Budget. The Treasurers position is totally

untenable, he's made a mockery of the whole fiscal policy process, he's had his own people on his backbench saying he should go and I think in the circumstances there is absolutely no alternative but John Dawkins should step down.


Why didn't you ask him to step down yesterday? COMMONWEALTH PARLIAMENTARY LIBRARY MICAH

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



Well we wanted to see in fact whether the speculation that was around was actually going to result in a deal or if it wasn't, and what we've seen is that despite his assurances for the period since the Budget that he wasnt going to negotiate and so on, he then immediately buckles under to pressure last night and starts to negotiate in a way that doesn't make any sense. The Budget is still very unfair, it might be marginally fairer for some people but there are an awful lot of people that are still left out in the cold and are treated very badly but the key point is that they have no mandate, absolutely no mandate to increase tax.


You must have known a deal was coming?


...inaudible... the Senate has control of the fate of the Budget and in asking Mr Dawkins to resign because he hasn't got the numbers in the Senate is culpable politics?


No not at all. I mean he's made a mockery of the whole process, I mean we are now the laughing stock, not only of the financial markets here, but internationally, I mean the Government has just dragged the standing of this country and the credibility of fiscal policy to an all time low and he's responsible for that. Look it's not a question

of the Senate, I mean the issue is that he knew what commitments he'd made at the time of the last election, he knew what the people of Australia expected and what we've been doing is voicing on behalf of the people of Australia their concerns and their anger at the fact that they were cheated and lied to and that the Budget was a

massive Budget of betrayal.


Yes but the people of Australia reject your option which was billions of dollars worth of spending cuts - their was no mandate for that either.


We think they were frightened about the GST and we've listened to them and removed that from our package, but the only mandate that the Government got out of the election campaign was not to increase tax.



You've talked of standing and credibility, where are the Democrats now?


Well the Democrats have shown a capacity to negotiate which disturbed me, I mean I'd hoped that they would come in behind us and support us in opposing all four of those taxes. It appears and we welcome that they will support us in opposing the wine tax but they're prepared to actually sign off basically in support of the other taxes and although there's a bit of sop of a few hundred million dollars of benefits that they've negotiated, the fact is they are signing off in favour of billions of dollars of

unfairness and they're signing off in favour of billions of dollars of tax increases which the people of Australia do not want. So they'll have to live with the consequences of that decision.


Are you saying it's all right for you to amend your policies by listening to the electorate but it's not all right for the Government?


Hang on, we're not in Government. I mean and the issue was fought on tax and the issue, the mandate that came out of the election was no increase in tax. The Government said basically, 'Hewson will increase tax, and we wont. We can give you your tax cuts without tax increases.' That was the essence of the election campaign.

It started back as early as the One Nation document and dozens and dozens of times the people of Australia were reassured that they could have the One Nation tax cuts, they were put in law L-A-W, they would be delivered, there was no question, and that would happen without tax increases. And that's what people of Australia understand, that's why they are so angry. I mean I have never seen a reaction to a Budget like this, and it's principally because the Government has basically cheated on its own so-

called true-believers' as well as more generally the people of Australia, because it made very firm commitments during that election campaign and it sustained those commitments after the election campaign, but it has not delivered. And that's why the angers there and that's why the people of Australia w ont settle for a marginal change in this Budget. They want those tax increases blocked and they want the Government

to go back and do it again.

Jmlst: ■

Are you concerned that the people of Australia may look at this as the Democrats having done something for them and you having done nothing for them?



No the Democrats have had a fair bit of attention in the last few days but I'm the guy that took the stand in the Budget reply speech that said we'd oppose the taxes that gave the Democrats an opportunity to play a part. I mean after all I moved thirty six votes, I think they got about seven. And they've been negotiating but I think it is wrong, I mean these are not issues that are negotiable. This is a matter of principle.

Honesty and integrity in Government, fundamental commitments like not to raise tax are fundamental and they are not negotiable.


But Dr Hewson at the end of the day these fundamental changes which have occurred there have been forced by two groups. By the back bench of the Government and by the Democrats. Why should we not characterise you as a sideline player?


Well the fact is that they wouldn't have made that play if I hadn't of taken that stand. I mean I took the hard line stand and said no tax increases which gave them, and that was welcomed by the community, and it was the strength of that community reaction to the stand we took on top of their disgust and anger over the Budget that brought the pressure on the caucus to act, it brought the pressure or the opportunity for the

Democrats and the Independents to act. So in those circumstances I mean I dont think that would have happened if we hadn't of made the stand. If we just lie doggo and let it go by this Budget would go through because it would have had our support.

But it wasn't going to get our support when there was no mandate for tax increases.


Do you think the Government's performance up to now is justifying calls for a new election?


I know there's a lot of talk about that around the place. I mean every time I walk through an airport or somewhere somebody says to me, 'get 'em to the polls, get 'em to the polls', and they feel cheated. Now the election is of course in the Governments hands. I'm happy to go to an election any time they would like, particularly in view of the recent polls but I do n t think that's what it's about. I think people really want us to

stand up for what they feel as a result of the last election they were entitled to. That was tax cuts with no tax increases, and no new taxes.

Now we're voicing that anger and we're voicing that concern and we're going to sustain that pressure on the Government, and the Government will never get out from under the significant kick to their credibility that's come with this Budget. They've been


exposed as liars before, during and after the election and the people have seen how a so called compassionate Government, a Government that claims to believe in social justice and so on, doesnt care a damn about people.

I mean this Budget is still massively regressive even with the changes. Massive tax increases that aren't compensated for. They do impact on the poorest and the lowest income people in Australia much more then they impact on anyone else and in those circumstances, yes people will stay angry.


But isn't the instability demonstrated by this argy-bargy over the Budget, a negative for Australia, isn't it something that we should be trying to avoid?


Well yes but the Government has a responsibility to make it a positive for Australia. They have the responsibility to bring down a Budget that matches the election commitments they made firstly and secondly that deals with our economic problems. I know there's been a lot of hoo-ha about some elements of the budget but d o n t lose

sight of the fact that this Budget does nothing for unemployment. It makes debt worse, it makes the balance of payments worse, it doesnt deal with our basic economic problems, there's no significant reform or steps further in the right direction.

It's a Budget that in economic terms is a total failure and in terms of the election commitments they made, they reneged on them. An open and shut case, they had a mandate not to increase tax, they promised tax cuts without tax increases and they failed and we'll continue to hold them accountable for that and so will the people of Australia. And if the Democrats and the Independents want to do a deal at the

margin, that makes them feel better, they should recognise what the Australian people will recognise. They are signing off on very significant tax increases along with the Government.


Are you expecting this to be the last revision, or you've another one coming?


Well you know the way they've been, you could count on more I reckon and we still have a long way to go in terms of the Senate processes anyway. We tabled some opinions yesterday that suggest that the legislation itself in relation to the tax changes, the deficit reduction bill, as it's called is probably unconstitutional, now that will put a

significant question mark over the Government until that's resolved and the Government would be foolish to push ahead with that type of legislation in the expectation they can get it through with the Democrats support only to find that




somebody challenges it in the High Court and the whole Budget goes out the door so there's a long way to go yet in terms of the processes.

There are other decisions in the Budget that are attracting a lot of public attention now. The FBT decision, for example on hotel accommodation travel costs, the travel industry's mounting a massive campaign. They're talking about job losses as high as ten thousand, I mean we'd want to see that looked at by a Senate committee. I think there's a long way to go yet, and there's still a lot of anger on the backbench and you

know the way the Government goes they only play political games, they're not interested in the economics or the policy of it and they do as much as they can to get by and pull on a bit of support. Another issue rises tomorrow, another bit of pressure but they'll go again. I mean you should read the Prime Minister's adviser, John Edwards is it, who described the process very well I think in a recent article. I mean this is one great big political game to them. They do not give a damn about the

people of Australia.