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John Howard At The National Press Club: 1998 Election

This is the text and audio of Prime Minister John Howard’s appearance at the National Press Club.

Howard’s Address took place two days before the election.

  • Listen to Howard at the NPC (64m)

Transcript of John Howard’s Address to the National Press Club.

HOWARD: Thank you very much Mr Randall. My Parliamentary colleagues, ladies and gentlemen. As we come to the end of this election campaign, it is only natural that we should seek to put it into context and in doing that today, I want to invite you to examine the two quite different attitudes that the two major contestants in this election campaign bring to the nature and the character of Australian society.

My campaign has been based on an essentially robust and optimistic view about the future of our country, about the capacity of Australians to discriminate between those things that we ought to hang onto and preserve because they continue to work, but equally to discard and reject those things that are no longer working and are no longer beneficial to the Australian community.

I have long believed that one of the required arts of good statecraft is to be sufficiently capable of hanging on to what is worth preserving and at the same time vigorously getting rid of that which is no longer worth preserving. That has been my fundamental approach. On the other hand I believe that the Labor Party has taken an essentially pessimistic inward-looking negative view, even a frightened view, of the character of Australian society.

The Labor Party’s pitch in this campaign has been an essentially negative one, it has been an appeal to fear, it has been an appeal to a narrow focus on one aspect of the economic debate. I also think the election campaign has displayed very clearly the views of the two political parties about other characteristics of the Australian community. There are many characteristics and many values that run like mighty rivers through the Australian community. One of them is the great Australian tradition of a fair go. We do pride ourselves on being a community that worries about the underdog. We do pride ourselves on being a community that cares for the needy and believes in our great vernacular that everyone should have a fair go.

But there’s another great river that I think runs through our community which I believe the Labor Party in this campaign has all but totally ignored and that is a companion to a fair go and that is the Australian tradition of having a go. Because one of the great Australian characteristics and one that I certainly imbibed as a young person and one that has guided my behaviour though life is the belief that, yes, you look after the needy, yes, you have a social security safety net, yes, you have an open, tolerant society but you also have a society where people are encouraged to have a go. You have a society where people are given an incentive to improve themselves.

Australians are great believers in starting with little and building something and handing it onto their children. Australians are great believers in starting off life against the odds, overcoming those odds and moving on to a situation that they might never have dreamt of. And I think when you run through the Labor Party’s policies for this election campaign you find a total insensitivity to that great Australian tradition of having a go. You find no incentive for middle Australia in the Labor Party’s taxation package, you find no incentive for middle Australia in so many of their policies.

So I think if you are looking at this campaign against the background of the great traditions of the Australian nation, any emphasis on having a go from our political opponents is all but absent. In a sense, my whole campaign has been built on the principle of having a go. In a personal sense, it’s a commitment by me whatever may be the ultimate political cost of doing something that I believe is absolutely essential in the national interest and that is reforming Australia’s taxation system. I cannot believe that anybody on any side of politics who has been through the experience of the last 15 or 20 years can other but believe in their deepest, most reflective and personally candid moments that we can seriously go on indefinitely with the existing taxation system. The reality is that it is failing us and failing us badly. But more about that in a moment.

When I announced the election campaign, and it seems years ago, I said that economic competence would be the major issue and that has remained my theme throughout the election campaign and let there be no doubt about it. To those of you in this room or out there listening, wherever you are who haven’t decided how you are going to vote on Saturday there is one overriding question you have to ask yourself – do you really believe that the Australian Labor Party can never better manage the Australian economy in these difficult international times? Do you really believe that after two-and-a-half years only a Government that inherited a deficit of $10.5 billion and a year ahead of time turned that into a surplus, a Government that has delivered the lowest the lowest housing interest rates in 30 years to the tune of $320 a month more in the pocket for middle Australia paying an average mortgage? Do you really believe a Government that has peeled almost one-third off the $95 billion of Government debt that we inherited two-and-a-half years ago, do you really believe that that Government deserves only after two-and-a-half years to be expelled and to be replaced by – essentially absent one person the former Prime Minister Mr Keating – by the same people who ran this country for 13 years, left us with that high debt and left us with that high deficit? Do you really believe that they are going to be better able to run the Australian economy against that background in these increasingly difficult economic circumstances?

That is the issue of this election crystallised into a compelling question. And that is the fundamental question that you have to ask, there are other issues and no doubt they’ll be canvassed later in my remarks and more particularly during question time.

But in the end, elections are about choices. In the end if they are about choices that fundamentally is the major question that has to be asked. But, of course, it’s given added weight and given added urgency if we add to a reflection on what has happened over the last two-and-a-half years against the background of what my Government inherited. If we add to that reflection the competing attitudes of the Coalition and the Labor Party about Australia’s future.

Australia’s future is, in my view, fundamentally very positive. I have spoken often of that unique intersection that I believe Australia occupies historically, geographically and culturally in this part of the world. But we cannot be certain that the full benefits of that positive future will be realised unless we are willing to do further things to make our country stronger and safer. And that, of course, brings us inevitably and unavoidably to the issue of taxation reform. Our taxation plan, which is now well known in the Australian community, has three fundamentally powerful arguments in its favour.

The first and most important is, that it will strengthen the economic infrastructure of this country. It will reduce business costs by $10.5 billion. It will, more than any other single policy decision of any government, demolish what Geoffrey Blainey so evocatively called the tyranny of distance, its reductions in the cost of fuel at $3.5 billion a year will be an enormous boost to the bush to people living in country Australia. At a time when more than ever we must export to prosper it will take $4.5 billion a year off the cost of our exports. It is, in every sense of the word, a tax plan that first and foremost is a plan that strengthens the Australian economy. And if you reduce the costs of running Australian businesses, if you say to all men and women in business that all the taxes that you pay on the things that you buy to run your businesses will be rebated to you, and that is how you get the $10.5 billion, it is a matter of ordinary logic that those businesses are going to be more competitive, win more orders and therefore employ more people. If you are saying to the exporters of Australia, yes, in a time of trading difficulty, particularly against the background of what is occurring in the Asia-Pacific region, we’re going to reduce your export costs by $4.5 billion, you’re also providing them with a major incentive.

So that is the argument based on strengthening the national economic infrastructure. It’s a compelling argument, it’s an unavoidable argument and can I say that it’s an argument that has not even been seriously confronted let alone put down during the course of this election campaign. Indeed at no stage have our opponents tried to seriously deconstruct the fundamental economic argument in favour of our taxation plan. They have intermittently spent their time running a fear campaign and making false allegations about the price impact of the plan but there has been no serious attempt to economically deconstruct the fundamentals because deep down, I think even they accept the fact, although not for the purposes of this election campaign that fundamental taxation reform of the type we have outlined is absolutely unavoidable.

The second great argument in favour of our tax plan is that it will provide massive incentive to middle Australia. The $13 billion of reductions in personal income tax cuts, in income tax, will mean that 81 per cent, 81 per cent of all Australian wage and salary earners, that is everybody earning less than $50,000 a year, and that’s 81 per cent of Australian wage and salary earners will be on a top marginal income tax rate of only 30 cents in the dollar. Now that’s what I call encouraging middle Australia to have a go. And that is what is so completely absent from the Labor Party’s alternative tax credit system which imposes very high marginal rates of tax on household incomes which are in the range $40,000 to $60,000.

And if you are able to say to every employee in this country who might be earning $30,000 and there are hundreds of thousands, indeed millions, of our fellow Australians who are in that situation, if you’re able to say to them you can work another $10,000 or $15,000 a year worth of overtime and not go into a higher taxation bracket, the impact of that on incentive is enormous. They’ll feel like having a go if they live under that kind of taxation regime.

And the third great virtue of our taxation plan is that it will guarantee an end to one of the more ignoble features of Australian politic life. And that is the annual barney between the Commonwealth and the States over how much money the States get, who’s to blame and, and who’s responsible for any failures in government services. I have frequently renamed the goods and services tax, the government services tax. Because by dedicating all of the revenue from the goods and services tax to the States, what we are doing is guaranteeing that years into the future the states will have the wherewithal to provide the police services, the education services and the hospitals that the citizens of our States are entitled to have. And one of the great ironies of this whole campaign has been that people have attacked the GST because it’s meant to have a negative impact on the delivery of government services. In fact the GST will guarantee the delivery of government services years into the future because under our plan, the States will, after then years cumulatively, be $25 billion better off than what they are under existing arrangements.

Now, ladies and gentlemen, I’ve spent a few moments recapitulating the essential elements of our taxation plan, not because it is the only economic issue in this election, but because it does represent a generational, an historic opportunity to turn away from the taxation system that we all know is no longer serving the interests of this nation. And the decision that the Australian people will make on Saturday will determine for a generation whether or not we have sensible taxation reform.

If the Labor Party wins on Saturday they will of course, in my view in time, increase existing indirect taxes. They will in time introduce selected services tax and they’ve all but admitted that at various stages in this campaign. And over time you will essentially have a rerun of what you had in 1993 after the re-election of the Keating Government. But because of their rhetoric during this election campaign, and because of the stance that has been taken, they will be constrained in office from sensible taxation reform. And you will, in fact, end up with the worst of all worlds, if the Labor Party wins on taxation. You’ll have increased indirect taxes. You’ll have changes in that area but it, it will be done in such an ad hoc and clumsy way that it will add further band-aids to an already failing and antiquated system.

So this is one of those generational elections. This is one of those moments when a nation has to decide whether it has sufficient optimism and sufficient commitment about the desirability of reform. And a sufficient commitment to a forward looking view of Australia in the world of the 21st century. Or whether we simply run away from that, we turn inward and pretend, McAuber-like, that something else will turn up in order to solve the problem of our failing taxation system.

Well, ladies and gentlemen, something else won’t turn up. It’s almost 25 years since I entered Federal Parliament. And a year after I entered Federal Parliament, the first of many reports on the Australian taxation system called the Asprey Report was given to the Whitlam Government, and it recommended essentially, not in every detail, what we are now proposing. And year after year, at various stages, through the mouths of politicians on both sides of politics, there was espoused the cause of taxation reform. And anybody, and many of you have been here at many of the luncheons over the years, wondered why it was, if you look back over the last 20 years that at various stages you had Paul Keating at this platform, you had Bob Hawke at this platform, you had John Hewson at this platform, you had Kim Beazley at this platform, you’ve had John Howard at this platform, all of them from different political parties. All of them over a good spread of years, but all of them saying one, the same thing at various stages and that is we have to change the present taxation system. Has it ever occurred to you why that would be so and why here I am in the closing stages of this 1998 election campaign, in front of you, some the same faces over the years, saying the same thing? It must mean something. It must mean, you know, there is just a fragment of a possibility that we might need to change our taxation system, there is just a fragment of a possibility. And there may almost be a fragment of a possibility that we will be failing the national interest if we don’t vote in favour of taxation reform on the 3rd of October.

I don’t ask the Australian people to vote for something that will leave them worse off. Our tax plan will leave them better off. Our tax plan will give to middle Australia a top marginal tax rate of 30 per cent. Our tax plan will give to everybody who takes out a private health insurance policy a tax rebate of 30 per cent. Our tax plan will guarantee the delivery of so many of those government services. Now I don’t for a moment ask people to support something that will leave them worse off because it won’t. But above and beyond the impact on the individual and on particular groups, I do in the words that I used my policy launch ask the people of Australia on the 3rd of October to call it for Australia because this above everything else is a generational change that will strengthen the Australian economy.

This plan will leave Australia a better country. It will leave Australia a stronger country. It will leave Australia with a capacity to compete more effectively in the outside world. If the downturn in Asia and the Pacific tells us anything it is that the rest of the world economies are unpredictable. If it tells us anything that the world economy of the late 1990s and the early 20th century is a world economy were you cannot afford to carry the baggage of a 1930s taxation system. To ask the exporters of Australia to go overseas and win orders in the increasingly difficult international environment with a 1930s taxation system is like asking a boxer to fight for the championship with one hand tied behind his back.

So, my friends, it does represent an historic generational opportunity to make a decision in favour of something that will strengthen the Australian economy. I don’t argue for a strong economy. I don’t argue for taxation reform in a vacuum. I have long believed that a strong economy and a better society are permanently linked. You can’t have a better society without a strong economy and a strong economy without a better society is simply not worth having. The two are totally and forever linked. Economic policy whether it be taxation or anything else, economic policy ultimately is meant to serve the overall good of society and we’ve had much debate over the years about the balance that we ought to have between the role of the Government and the role of the market within our society.

I do not believe in unrestrained markets. I understand the limitation of markets but I also understand the limitation of governments. I believe that the balance between those two is important to the kind of society that we want to create.

When I stood before this gathering in 1996 seeking the Prime Minister-ship of Australia I committed myself to a number of fundamental goals. I committed myself to supporting the Australian family. We have done that in many ways not least the burden that we have lifted from their shoulders through reduced interest rates. I committed myself to helping small business and we have delivered on that commitment in so many ways including our industrial relations reforms and also of course they have derived the benefits of lower interest rates. We committed ourselves to a private health insurance rebate which we are greatly adding to in terms of our taxation plan. We committed ourselves to strong economic growth. We committed ourselves to an assault on unemployment and we committed ourselves to be in government a group of men and women who govern for the mainstream of the Australian community, without paying undue regard to noisy interest groups.

I believe when you examine the ledger, when you look back over that two-and-a-half year period it is fair of me to claim that we have honoured the thrust of the commitments that we made in 1996. I don’t pretend that every last one of them has been, I know that, but of course when I stood before you in 1996 I was operating on the basis that the budget I would inherit if I became Prime Minister was in surplus, when in reality it was in deficit to the tune of $10.5 billion and I can say very defiantly to you today that that can’t happen again and it can’t happen again because one of the things we said we would also, also said we would do, in 1996 was to introduce to Charter of Budget Honesty and that is what we have done. And that means that never again will we have a situation where people operate in the dark about the true economic and fiscal position of the Government’s budget.

Ladies and gentlemen, the last two-and-a-half years, like any period of Government, and like any experience of a Prime Minister, have had their good moments, their even great moments and their more difficult moments. Like any other Prime Minister I have made my mistakes. Like any other Prime Minister I have learnt things. Like any other Prime Minister I have tried in my period of office to get closer, indeed even as close as I can to the Australian people.

I brought to my job some fundamental values. I brought to my job the values that I learnt from my parents. The values that I had imbibed through life and those values are based on some very simple propositions about human nature. They’re based on the belief that every individual is worthy, those values are based on the belief that we should create a society which treats people equally. I have often said that one of the genuinely successful and brilliant parts of Australian society has been the way in which we have been able to take the good things of our inheritance, cultural speaking, but to reject the bad things. We have imbibed much of the great Liberal tradition of our British and other European heritage, but thankfully we have rejected the class distinction that went with that in the countries that gave birth to those traditions. And I’ve often spoken of the fact that I believe that in the present moment in our history, Australia occupies a unique intersection in terms of history, geography and culture.

We are a projection of western civilisation in this part of the world. We carry with that projection some very great European traditions of which we should all be proud. We have very strong links with North America, links that have been reinforced in war and reinforced through our shared opposition to authoritarianism and our shared commitment to liberal democracy. But here we are in the Asian-Pacific region, with a vibrant component of our own population of Asian decent making a marvellous contribution to our modern society. And those three assets come together uniquely in Australia. There is no nation on earth that enjoys such a conjunction of assets. We can go into the Asia-Pacific region with the benefit of our European background and our American links without carrying the baggage that our British or American counterparts might do.

We can use our Asian understanding and bring about change as we did in relation to the International Monetary Fund’s treatment of Indonesia. And that was a very good contemporary example of how you can use that unique intersection to our great advantage.

So ladies and gentlemen, as I said at the beginning of my speech, my approach throughout the whole of this campaign has been based on a fundamentally optimistic view that I have about the innate decency of the Australian people. A fundamentally optimistic view I have about the place of Australia in the world. Our society is not without blemish. Our history is not without blemish, and in particular our treatment of the indigenous people is something that readily comes to mind when I speak of the blemishes in our history. But the balance sheet of the Australian achievement is a fundamentally positive one. It is something of which all of us as Australian’s can be immensely proud.

The fabric of Australian life can withstand robust debate. The fabric of Australian life is fundamentally tolerant, it is fundamentally decent. And the fabric of Australian life can embrace necessary change. Australians are clever enough, and astute enough, to hang on to what continues to work, but to throw out something that no longer works.

And as we stand on the cusp of the 21st century the sense of enthusiasm, even exhilaration, I have for the use to which we can put that very special place that unique intersection that we occupy, and the geography and the history and the culture of our world is something that challenges me. It is something that inspires me. It is something that does more than sustain me and it is something that I feel very deeply and it is something that underpins my faith in what I have done and my belief that the interests of the Australian people will be served by the return of my Government on the 3rd of October.

QUESTIONS AND ANSWERS

MALCOLM FARR: I’m intrigued by some remarks that you’ve said, you’ve used two or three times recently about how you’ve never been more at peace within yourself politically. I think at one stage you even said you’ve made peace within yourself politically, which sounds an awful lot like Zen Methodism or something.

HOWARD: No no, Wesley Methodism.

FARR: Can you explain that, the change that apparently you’ve undergone and is there a sense of political destiny in any of your thinking?

HOWARD: Well, Malcolm, what I mean by that is that I utterly believe in what I’m saying and doing. I mean, at various stages in your political life you have varying degrees of commitment to things that you are supporting. And this happens to all of us. You are part of a team, you support things sometimes that you didn’t originally believe in but you do it as part of a team. But if ever I have gone into an election campaign believing from the moment I got up in the morning to the moment I went to bed, and in all my being, that I what I am doing is right for Australia, it is this election campaign. Now, I know it is risky. I know it is against the conventional wisdom, but whatever the result is I will have no regrets. Whatever the result is, I will believe that I called it right for the long-term interests of this country. I mean, how else can we ever get something that we all know has got to happen. I mean, there’s not really a serious commentator in this country who disputes the need for tax reform. Everybody knows we’ve got to fix this system. We can’t go on forever with it. Are we going to struggle on forever with an indirect tax system that was built at a time when services occupied that much of the economy and it is now 65%, we’ve got to do something. Now, how else can we do it except in an election campaign? Could I have gone into this election campaign and fudged it and said oh well I’ll have a trilogy or whatever or a variation of that you can think of and I’ll have a meeting. I mean, imagine what a meeting on taxation would be like? Everybody would have their own point of view and in the end they’d turn around and say, well, John you fix it, you’re the government, you’re the Prime Minister. I mean, the job of a Prime Minister in a situation like that, I believe, is simply to lay it out, campaign for it, and try and persuade the Australian people to accept it.

Now, when I say I am at peace with myself, what I mean is I passionately believe that this is right for my country. That is what I mean. And I ask the Australian people to respond to that, and if they respond to it positively, I think it will be tremendous, and I think we’ll have a stronger country. I’m not saying it will solve every economic problem. I don’t pretend that for a moment, but it will certainly make our economy a lot stronger and I think we will have made a very intelligent decision. Now, if they say no, well, as I said on theSunday program, as far as I am concerned, it is good night nurse to me. But I think that the Australian people will reflect upon the value to their country of doing something that I think deep down increasing numbers of people believe is necessary. And as I said in my speech, it is funny isn’t it, all these people kept coming back here and saying at various stages that tax reform is necessary, so there must just be a possibility that that proposition is right.

MICK MILLETT: Michael Millett, Sydney Morning Herald, Prime Minister. This flows from your last answer. Senate obstructionism, both past and future, has been a major issue in this campaign. To the extent I think during the last term there has been a number of plans discussed at senior ranks of the Liberal Party, Andrew Robb was one of them, about trying to reform the Senate. Given the likelihood of a hostile Senate resisting two of the major planks of your platform this time, will those plans have to be re-enacted? How long can we let the current dead-lock persist?

HOWARD: Michael, I don’t have any plans to change the voting system for the Senate. I have a plan to win both houses on Saturday. That’s what I want to do. Don’t ask me to hypothesise about alternatives. If we win the House of Representatives on Saturday, but don’t win control of the Senate, I will say to every last Senator, who is not a Liberal or National Party Senator, that the Australian people have spoken, very very clearly, very emphatically, on something that has occupied the centrality of an election campaign in a way that no other issue I can recall, since 1949, has occupied the centrality of an election campaign. I mean, there will be nothing like it in terms of an identifiable mandate and I will confront all of the members of the Senate with that political reality.

LOUISE YAXLEY: Mr Howard, Louise Yaxley, ABC Radio. Can you explain to us how it is there that such a significant amount of the benefits of your tax package go to the top 20% of income earners?

HOWARD: Well, Louise, the basis of your question is not quite, with respect, accurate, in that the proportion of total tax paid by the top 20% will actually go up under our plan. And the other thing that you seem to have forgotten is that people on high incomes pay more tax. And unless you completely get rid of the progressive taxation system, if you have a tax cut, the dollar gain that they have is always higher than people on middle incomes. Because that is the way a progressive taxation system works. If you are on $100,000 a year, you are paying a lot more tax than somebody on $50,000 and somebody on $50,000 is paying more than somebody on $30,000. And if you cut the rates, then clearly in dollar terms the person on $100,000 is going to get a bit more. But bear in mind that we have not cut the top rate. The top rate, although the threshold is being pushed out to $75,000, the top rate has remained at 47%. So, I don’t think if you look at the mathematics, I don’t think it can be argued that the balance is being skewed further in favour of the well off. What’s happened quite understandably is that in dollar terms, because you are paying more tax. The dollar gain is better but many of the proportionate gains for high income earners are less and of course at a certain income level it flattens our completely. And I might also add that the health insurance rebate, because it’s a rebate, the dollar value of that remains absolutely constant and therefore in proportionate terms it’s less of a gain for people on high incomes.

FRAN KELLY: Prime Minister, Fran Kelly, Radio National. Prime Minister, Centrelink said today that workers stood down as a result of the gas explosion in Victoria will be able to claim benefits but they will be subjected to the same eligibility as everyone else and will have to prove hardship. Isn’t it a given that any factory worker stood down as a result of this will be suffering hardship and should they be eligible for immediate assistance rather than having to use their holiday pay and their savings and the long service leave.

HOWARD: Well, I haven’t seen, sorry Fran … I’ll let you finish. I haven’t seen that statement made by Centrelink but the statement that was made last week by Senator Newman was on the basis that there was a discretion under the Social Security Act to waive the waiting period and this was the sort of situation where that should be waived and people were encouraged to approach Centrelink and to take advantage of that opportunity. Now, you asked me isn’t something a given. I think all I can say in a situation like this is the existing law will be applied in a very generous, no holes barred, open-hearted fashion. But people have to continue to meet the eligibility criteria.

VIVIENNE STANTON: Prime Minister, Vivienne Stanton, from Bloomberg News. Given that the outlook for global growth is that it’s going to slow, what are you going to do aside from tax reform to speed up growth in Australia?

HOWARD: Well, one of the things we are going to do if we’re returned is we’re not going to take the industrial relations system back to the 1950s or 60s and if you want a recipe for interfering with Australia’s economic growth, you’ll reverse the industrial relations reform that my Government has made. Australian’s economic growth performance over the last couple of years has continued to confound many of the critics and many of those who’ve made predictions and I quite deliberately anticipate a question on the IMF report that was released this morning. The Treasury and the Government shares this view, and the Treasury’s view, intention is specifically directed to this, says that the projections do not adequately take into account the strong domestic fundamentals in Australia. They imply that we’ll have average quarterly growth in this country of only 0.25 per cent. And all partial and forward-looking indicators are inconsistent with the economy in Australia slowing as dramatically as that. Our economy has held up very well in the face of the Asian economic downturn. We have performed over the last few months on the trade front better than many expected. Our growth performance in the last quarter exceeded most expectations. There’s a lot of evidence around that we have very successfully diversified our exports, and you ask me what do we do to speed up growth. I think we continue to run budget surpluses. We continue to run a low inflationary, low interest rate economy. And whilst I don’t get into the are of speculating about interest rates, I merely draw your attention to what has been achieved on that front, and you also continue to tackle those other areas of micro-economic reform including, of course, reform of the taxation system, that are so necessary.

I mean, 20 years ago if you looked at the Australian economy, you saw the need for four or five fundamental changes. You saw the need to deregulate the financial sector. You saw the need to lower tariff barriers. You saw the need to deregulate the industrial relations system and, of course, you saw the need to change the taxation system. Now, with a bipartisan approach we deregulated the financial system. Tariffs were lowered without the then Coalition Opposition running a campaign of political opportunism against the then Labor Party’s decision to lower tariffs. Industrial relations has been significantly deregulated but the Labor Party promises that if it’s returned on Saturday to turn the clock back not to Keating and Hawke. Mr Beazley on industrial relations really wants to go back to really the pre-Keating / Hawke period in industrial relations, and then that of course leaves you with taxation reform of which I’ve said something during my speech.

BARRIE CASSIDY: Barrie Cassidy, 7.30 Report, Prime Minister. Whatever might be revealed down the track, the methodology that Treasury employed, to calculate the price impact of a GST, do you still maintain that the spending patterns of the rich and the spending patterns of the poor are basically the same.

HOWARD: No, what I maintain, Barrie, is that the method we have used to calculate the price effect of the GST is according to the Treasury the most accurate method of what happens. The most accurate way of measuring what happens. The method we are using is the same method that the Labor Party used for 13 years to index the old age pension. I mean, if the Labor Party is saying that the CPI adjustment that we’ve used in the tax plan is not enough for people on the pension, why is it that they used that method for 13 years to adjust the pension? Are they saying that they had for 13 years gutted the pensioners of Australia by not increasing the pension by a greater amount. I mean, I saw this absolutely desperately absurd comment from Kim Beazley this morning that there’s some secret analysis that shows the cost impact is five times what we’re admitting. There is no secret analysis that says that. And that is just a desperate, sort of election-eve scare which has no substance and in any event is utterly disproved by their own behaviour in Government. I mean, if indeed some other methodology was fairer and better and more accurate why is it that successive governments have not employed it?

PETER O’CONNOR: Peter O’Connor, Bridge News, Prime Minister. Prime Minister, when you first came into office, you moved very quickly to set an objective of getting the budget back into surplus in your first term, an objective which you achieved. Now the Treasurer also very quickly set that underlying target ban for inflation of 2 to 3 per cent. Something that was also achieved, again, overachieved even. You’ve also set a target of reducing government debt as a proportion of GDP from 20 per cent down to 10 per cent.

HOWARD: No, I think that’s, I’m sorry.

O’CONNOR: Well I, I’m fairly, well definitely the Treasurer has set that target and the, Mr Reith also set a target of reducing workers’ awards entitlements down to a maximum of 20. Again that’s a target you have achieved. Given you willingness to set targets over a range of policy areas such as fiscal, economic and labour market areas, why are you so loathe to set a target for the socially critical area of employment? And given your success in setting those targets as well?

HOWARD: Mr O’Connor, that, yes certainly.

O’CONNOR: I’m not talking about Mr Beazley’s targets because, I just mean targets generally.

HOWARD: No, I know that. I’m not suggesting for a moment you are. But you just wanted to make sure that I was under no misapprehension. Well, you’ve, you’ve mis-described a couple of things. I think actually we spoke rather proudly of that debt reduction as a potential achievement rather than as a target. And I think also, when you said that we set ourselves a target of reducing award entitlements we have never set ourselves a target of reducing the monetary entitlements of people, never. In the industrial relations area, the most misquoted thing in the industrial relations debate over the last two-and-a-half years were the remarks that I made in January of 1996 when I said that no person who went into an AWA would be worse off than the entitlements they got under the award. And that was sort of quickly bundled up and converted into a guarantee that no single Australian’s wage would ever vary during the time that I was Prime Minister. What we’ve simply said is that in monetary terms you’re not going to be worse off, and in fact we’ve really stuck to that and I don’t think people have been able to put a hole in that. I don’t think the nation is served by setting targets that are plainly on your track record to date unachievable. And that is what, and I will talk about Mr Beazley’s target, that is what he has done in relation to unemployment.

I can’t and won’t set a target on unemployment because I think that essentially misses the point. People want to be told how you get there. I mean I’d love to have unemployment down to 5 per cent in a couple of years time, I’d love to have it back to what it was when I left school in 1956. But I know enough about the way the Australian economy works, I know enough about the structure of the workforce, I know enough about the world environment in which we are operating, to realise that to sort of just set those targets out there without some backing to them is just, it’s just going to increase the level of cynicism in the Australian community about the deliverability of political commitments.

My commitment to the Australian people is to make all of the policy changes that will deliver a faster growing, more competitive Australian economy which will by its natural momentum generate more jobs. I also have a commitment to maintain as free as possible an industrial relations system consistent with the Australian tribute to the fair-go in that we do have a protective safety net for workers in this country. We are different from the Americans in that respect and I think we should remain different. I believe in a social security safety net and I believe in preserving a proper balance, but equally, if you go back to a rigid awards system and you slow the rate of further deregulation in the industrial relations area I think we’d be making a very big mistake. So that’s the commitment I make and I think that is the only realistic commitment to set yourself a target of 5 per cent when you haven’t described how you’re going to get there. You haven’t even acknowledged how many jobs need to be created in order to get there is, I think, inviting cynicism.

PAUL BONGIORNO: Paul Bongiorno, Network 10, Prime Minister. Just picking up on Barrie Cassidy’s question. If there is no secret document, why won’t the government release the 12 documents identified by the Sydney Morning Herald of the Treasury using the Household Expenditure Survey of the ABS. And is it not a fact that in 1985 the draft White Paper used this HES Survey in a points compensation package, that’s the Keating Consumption Tax Package, and indeed in 1991 Fightback! the Hewson consumption tax package also used the HES Survey for its compensation package?

HOWARD: And it’s also a fact that in 1991 the Treasury advised and the then Labor Government, Prime Minister Keating and, well soon to be Deputy Prime Minister Beazley, that that was a completely flawed methodology, it was inferior to the methodology being used to adjust the pension which is the methodology that we’ve employed in this taxation package and Mr Keating and Mr Beazley enthusiastically embraced that rejection of the HES approach. So what Mr Beazley by championing in at this last moment the HES approach, he is explicitly repudiating the stance that he took in 1991 on the advice of the same person who chaired the taskforce that advised the present Government on the composition of the tax plan.

MICHAEL HARVEY: Michael Harvey from the Herald Sun Prime Minister. Jeff Kennett reckons that Victorians are all a pack of whinging softies because they don’t like cold showers. Do you agree with that and given that this now being talked about as a national crisis, a national disaster today – the Victorian gas shutdown – are you concerned that such an unsympathetic attitude might in fact foster sentiment against governments at all levels and cause a problem for you on Saturday?

HOWARD: Well I don’t, my reading of what he said does not square with what you’ve said. I think that is an inaccurate extrapolation of what he said. I’ve seen a lot of remarks from Mr Kennett and they’ve measured and sensibile, and sympathetic. From my point of view let me simply say to my fellow Australians in Victoria, I’ve indicated to Mr Kennett, on several occasions, that the Federal Government stands ready to help in any way asked. This is a difficult situation, it ought to be separate and apart from the election campaign, I’ve not sought to intrude the Federal election campaign into the issue. I note that so far Mr Beazley has not sought to do that either. I don’t think the Australian public wants their personal discomfort in Victoria mixed up with this election campaign and I certainly don’t intend to do it. We will help in any way we can. Australians work together well in times of adversity and difficulty and I’ve no doubt they’ll continue to do that and I hope that supplies of gas can be restored as speedily as possible.

JOHN MAIR: John Mair from Reuters, Prime Minister. Mr Beazley this morning has said that he would be prepared after Saturday to form a government with the support of an independent, apart from One Nation, if that was the case and I was wondering…

HOWARD: Now that’s a very, very interesting change.

JOHN MAIR: I was wondering is that something you’re prepared to do if necessary to rule with the support of an independent, not necessarily One Nation? And also are you surprised that given the size of your majority that we’re in a situation where we’re talking about perhaps the Opposition winning, or even minority governments, or hung parliaments at this stage?

HOWARD: Well nothing ever surprises me in politics – the answer to your last question. In answer to your first question is that I’m not going to speculate about the result. I don’t know what the result is going to be. I said at the beginning of the campaign it would be tough and tight and that remains the position. I don’t take anything for granted. We may have a majority of 44 seats, but in these days of detribalised politics, fewer people rusted on to party allegiances, you can have significant movements during election campaigns. I’m not going to speculate other than to repeat what I said before, I will make no deals with One Nation – none at all – and I will govern in Coalition with only one Party and that’s the National Party of Australia.

GEOFF BREUSCH: Prime Minister to continue on from Michael Harvey’s question, the Victorian Trades Hall has called that the situation there be described as a disaster and is asking for $50 million in Federal funding, is that something you’ll be willing to consider independently or do you still need the phone call from Jeff Kennett?

HOWARD: Well, it’s not a question – it’s a question not of any phone call. It’s a question of sensibly working through with the person and the government who is responsible for handling the matter. I mean it’s, I don’t want to be critical of the brothers and sisters in the Trades’ Hall, I really don’t, but I do, I am sort of constrained to think that perhaps it’s fairly easy to say that. I mean as far as I’m concerned I want to help, if Mr Kennett asks for help, we’ll provide that help and I’m quite sure that if there is any need for that assistance to be asked for then he will ask for it and we’re ready to do so.

Look I am very genuine in saying to you I think we ought to keep politics out of this. I mean I really do. I think this is quite a serious issue and it’s quite a challenge to the maturity of the Australian political system. That includes me, it includes Kim Beazley, but also includes you. It includes everybody. I mean we have a situation here where a lot of my fellow Australians are facing personal difficulty, not through the political fault of anybody. I mean even the most fervent Labor supporter couldn’t blame Kennett for what happened. I mean they might try but it wouldn’t be fair and you’ll notice that I think I displayed a certain amount of restraint in the remarks that I passed about that water problem in New South Wales, even though it occurred under the stewardship of the administration of a Labor Government. These things can happen to any government and it is a challenge to our maturity, particularly on the eve on an election campaign that we don’t trivialise it, we do our job, we help, we don’t try and score political points out of it and I think, if I may say so, that obligation of maturity extends to the media as well.

LOUISE MAHER: Louise Maher from Radio 2UE and affiliated stations, Mr Howard. How would you sum up the impact of Pauline Hanson and One Nation on Australian society? Do you think her star has finally waned and do you believe One Nation’s promise that it will issue double-sided how-to-vote cards on Saturday?

HOWARD: Well, look, as far as their how-to-vote material is concerned I just don’t know, I have no idea, I have had no communication. I am not aware of any communication so I have no way of knowing what One Nation is going to do with its preferences beyond what has been said by its spokesman. Can I say that I don’t know what vote One Nation is going to get on Saturday. The polls suggest it will be lower than what it was in Queensland. I don’t, once again, know whether the polls on that are accurate or not. You asked me to sum up the impact of One Nation on Australian society. Can I say that I think it’s demonstrated the fundamental strengths, the tolerant characteristics and the fundamental decency of Australian society. One Nation was something that represents a phenomenon that is not peculiar to Australia. It is very easy for anybody to play on the sense of insecurity and the sense of fear that people feel at a time of economic change and social change and economic reform. I think what has happened over the past couple of months is that people have begun to realise what I have always seen to be the case and that is that One Nation offers no solutions at all to Australia’s problems. I thought one of the most perceptive articles on One Nation was a small profile in The Australian yesterday of a young researcher for, I think, the cattleman’s union based in Rockhampton, this young woman was described as having some of the best networks in rural provisional Queensland and she made the point that she didn’t think One Nation was making a lot of headway with rural people because it didn’t really have any answers. And that whilst there may have been a transient, peripheral attraction, after a while there were no answers. So, I thought that was a very interesting article. Whether it proves to be right or wrong, I don’t know, I’ll perhaps know at about half past seven on Saturday evening. I hope she was right because I don’t think One Nation does offer any solutions.

I have said before, and I have got into trouble from saying this so that won’t intimidate me from saying it again, that the 23 per cent of Queenslanders who voted for One Nation were not all racist. They certainly weren’t. They voted for One Nation for a mixture of reasons and many of them included just a, sort of, a disorganised sense of protest and bewilderment about the change that was overcoming them. And I remember when I went to Wondai after the One Nation success in the Queensland election and addressed a very large gathering and I have never forgotten this man who I met. He said: John, I am exactly the same age as you are. And he said: I have got a rural property. He said: I can’t sell it, and he said: it was handed down to me, so I am not making any money, I owe the bank about $100,000. He said: I can’t get a job, I am 58, and he said: I have got a grown family but I have still got a couple of teenage kids, he said: what do I do? Now, that is the dilemma that is faced. And, I mean, I said to him, in all honesty – I forget what his name was – I said: I don’t have an immediate answer to that, but I said: I feel for you and I understand it. And he said: look, I am just an ordinary Australian, and he said: if somebody comes along and says I have got some simple solution, you can’t blame me for coming along to listen. Now, this is a human dilemma that a lot of people face. And I think what you saw was One Nation exploiting that. And you saw One Nation talking to people in the pig industry and saying: well, look, the answer to your problems is to block all of the imports. And for a while that looked pretty sensible and then they suddenly realised that if you blocked those imports then their mates who are trying to export sugar and beef would have their exports blocked. And I think, in fact, and I’ll probably get into trouble for saying this but I will nonetheless say it. I think, in fact, the experience of the past few months will probably strengthen the quality of some of the debate on some of these issues because, in a sense, you have had a dry run, that’s probably a bad adjective, but you have had, sort of, a dry run of, sort of, the simplistic alternative and people are starting to see that it doesn’t work. I mean, it doesn’t work to block off imports, it doesn’t work to pretend that you can, sort of, maintain the exact precise size of an existing industry and that in a globalised economy there isn’t going to be a constant change in the composition of industry.

There’s no doubt that the greatest criticism I have of One Nation is the way in which it has described people according to their race. That is wrong and that is repugnant to the values of Australian society and all Australians irrespective of their ethnic background are entitled to decent treatment and respect and I have said frequently before as a fourth generation Australian on one or two sides that as far as I am concerned anybody who has embraced this country as their own, whatever their ethnic background, has as much right as I do to call Australia home. And that really is the greatest criticism I have. You ask me whether any final analysis was has been the impact. I think you have to make your own judgement on that. I am not as pessimistic as others. I am really not and I think the reaction of Australians over a period of time has demonstrated their fundamental tolerance. And the thing that has annoyed me most about this debate is the readiness of some people to typecast the whole thing as an illustration of the inherent intolerance and racism of the Australian community. I don’t believe that and I get very, very angry when people describe Australians as racist or intolerant.

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