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JOURNALIST:
Joining me now from Canberra is the Australian Prime Minister, John
Howard. We'll find out more about the outlook for the economy
from his point of view. Now, Prime Minister Howard, very good numbers
coming out from Australia lately on the economy, do you think though
that with a global economy still on the slowdown Australia can keep
up the pace?
PRIME MINISTER:
Well, so far we have done a lot better than many predicted and a lot
of us thought. We have had much stronger growth than many expected
and the outlook as we have come into 1999 remains very strong. You
ask me where we are going to be in six, nine or 12 months time. I
think we will still be performing very strongly. Just how strongly
I think it's impossible to say but all of the indicators are
very, very positive and we are very pleased that we are now getting
the benefits of a lot of reform measures the Government undertook.
We got our budget in order, we are now in surplus after inheriting
a deficit of $10.5 billion. We have got very low interest rates historically,
low inflation. We have undertaken, of course, a massive tax reform
programme and if we can get that through a hostile Upper House in
Australia and if the will of the people on that issue can be validated
by Parliament's action then I think that will underwrite and
even stronger economy years into the future.
JOURNALIST:
We'll take a closer look at those tax reforms in just a moment
Prime Minister Howard but let's go a little more specific into
your outlook for the economy, at least for this year. What are you
looking at in terms of growth?
PRIME MINISTER:
Well, the official forecast is for the coming....for 1999/2000
is two-and-three quarters and it's three-and-a-half (sic) for
the current year. We have recorded five per cent for the year to the
September quarter which is very much stronger than we expected. Now,
those outcomes can move around but all of the indications over the
last few months are very positive indeed.
JOURNALIST:
People though are saying that the consumption could slow down this
year, partly because of the whole tax picture. Do you think that's
going to happen?
PRIME MINISTER:
Well, nobody can seriously argue that because of the tax changes consumption
will slow down this year because the major changes don't come
until the 1st of July in the year 2000. But the general
outlook for business investment, all the consumer confidence surveys,
inflation at 1.6 per cent, interest rates at 30 year lows. When you
add all of those together you have got a very buoyant picture but
we don't take anything for granted. We certainly have outperformed
most other countries but we don't take anything for granted.
We still need to keep on pressing forward with further reforms. One
of the things we do want to achieve, of course, is to make Australia
much more attractive as a financial centre for the region. And one
of the great benefits of the tax reform package is that it will make,
when it's implemented, it will make financial transactions in
Australia attract a much lower rate of tax. And it will therefore
make our security markets and investment in Australia as a financial
centre a lot more attractive.
JOURNALIST:
A lot more attractive than say the traditional Asian financial centres
such as Singapore and Hong Kong?
PRIME MINISTER:
Well, I am not into the business of talking any other centre down
but I am into the business of talking up places in Australia like
Sydney - and talking up the lifestyle, the fact that we have a very
stable legal system. We have one of the best supervised and most effectively
prudentially regulated banking systems in the world. We have a very
stable political system. We, of course, have a marvellous lifestyle.
We have low inflation, low interest rates and if we can get our tax
reform package through we are going to have a very benign climate
for the trading of securities and financial instruments in Australia.
So, you add all of that together and it's a pretty attractive
package. Now, I don't talk anybody else down, I merely talk my
own country up.
JOURNALIST:
Well, while Australia is also trying to attract foreign companies
basing themselves in Australia, a lot of Australian companies are
doing very well. Newscorp just today reporting big profits. Qantas
actually bucking the trend of other regional airlines and also showing
that it can be flexible. What is it about Australian companies do
you think that has let them ride this financial crisis around the
world and actually do very well?
PRIME MINISTER:
Well, we have delivered a very strong domestic economy, we have delivered
a budget surplus and that has underwritten the whole, sort of, aura
of strength you find in the Australian economy now. We have, of course,
operated a flexible exchange rate and that has meant that in some
of the markets we have lost because of the Asian downturn, we have
recovered in other parts of the world. The Australian trading profile
now is very multilateral. The Asian-Pacific region is very important
to us and it is still, in terms of countries like Japan and Korea,
a very important destination for our export but so is Europe and so
is North America. And the free-flowing operation of a flexible exchange
rate has really worked very strongly in Australia's favour.
JOURNALIST:
As has the relatively lower Australian dollar compared to the American
dollar?
PRIME MINISTER:
Well, I never get into too much specific comment on exchange relativities.
I merely say that a flexible exchange rate system, which of course
embraces our relationship with all other currencies, means that you
can adjust far more easily and adjust with far less pain than if you
have a rigid or more interventionist exchange rate system.
JOURNALIST:
Prime Minister Howard, you have been mentioning the budget surplus
quite often. What does this mean then in terms of a tax reform, that
your Government then has more leeway and doesn't have to worry
so much about revenue?
PRIME MINISTER:
Well, that's partly the case but the great value of getting the
budget into surplus is that it has helped bring down interest rates
and it has helped create a climate of economic confidence in Australia.
Because if we had not got our budget in order the rest of the world
would have looked a lot more negatively towards us. And they look
at us and they see a very strong budget position and they see a Government
that is determined to take the measures to deliver that and that really
has helped boost international as well as domestic confidence in Australia.
But the lower interest rates have helped enormously.
JOURNALIST:
A good point Prime Minister, Australia at the moment is enjoying the
spotlight as a place of good economic performance, stability at a
time when many countries around the world are looking quite shaky.
Do you think it can show itself to be a model in the future for the
rest of the world?
PRIME MINISTER:
Well, you never want to make extravagant claims in these situations,
I mean, we are not running around saying that what we are doing is
necessarily a model because every country has to run its own show
according to its own demands and its own requirements. But certainly
I find the Australian economy stronger, the people of Australia more
confident about the strength of the Australian economy and business
people in Australia more resilient and optimistic than probably at
any time over the last 20 or 30 years. Now, that is a measure of the
underlying confidence. There are patches of Australia which are still
doing it very hard. Many of our farmers are still being unfairly treated
by the perverted world markets which still shut a lot of agriculture
out and we don't intend to drop our cudgels on their behalf.
We have very efficient farmers, the most efficient in the world in
many respects but they still face very heavy layers of protection
in parts of Europe and in parts of Asia and we would like to see those
barriers broken down. But overall, people are very optimistic and
very positive about Australia's future. They feel that we have
reached a new layer of economic stability that we haven't had
for a long time.
JOURNALIST:
Many many things to talk about Prime Minister Howard. Please do stay
with us while we go into a commercial break and you viewers too we
have many more things to discuss with the Australian Prime Minister
John Howard who joins us from Canberra.
[Commercial break]
Welcome back to the programme, another top story this afternoon, Indonesia's
president BJ Habibie says today that he wants the issue of East Timor
to be resolved by January 1st in the Year 2000. Habibie
told the Indonesian Chamber of Commerce and Industry in Jakarta that
: "as a friend we will let the East Timorese decide by themselves".
Jakarta is offering autonomy to the disputed former Portugese colony
which was invaded in 1975, and Habibie said last month that if the
East Timorese reject autonomy, the Indonesian Government will discuss
offering it independence. But today was the first time that he mentioned
a specific time frame for any such move.
Well, let's talk about how Australia feels about the developments
in East Timor as well as other issues. We are talking to the Australian
Prime Minister John Howard who joins us from Canberra.
Thank you for staying with us on Trading Day Prime Minister
Howard. East Timor, Australia has been very active on that issue for
several years and yet just recently Australia said it would back movements
for more autonomy but not independence. Now, Jakarta itself is talking
about giving independence. Has Australia, sort of, found itself cut
short on this issue?
PRIME MINISTER:
No. We have not opposed independence. What we have said is that we
would prefer autonomy within Indonesia. But at no stage have we said
that we would be against independence if that is what ultimately the
people of East Timor want. But what must be understood here is that
an independent East Timor not being part of Indonesia would be more
vulnerable, more susceptible to economic pressures, a lot more lonely
and a lot more in need of outside help than an East Timor that was
part of Indonesia. Now, Indonesia has significant economic difficulties
of her own and obviously there's a stretch capacity there to
help but clearly if East Timor of its own volition, and that's
important of course, remains part of Indonesia then it's going
to be, I think, in a slightly less vulnerable position. But at the
end of the day our position is that if the East Timorese people want
to be completely independent, that is their right. And in fact I wrote
to the Indonesian President before Christmas indicating a shift in
Australian policy along the lines that I have explained and that obviously
was one of the developments that was taken into account by the Indonesian
Government.
But we acknowledge at the end that the wishes of the Indonesian people
(sic) ...the East Timorese people were able to determine the matter,
but we would encourage both the East Timorese and the Indonesians
to examine very hard, think very hard as to whether some basis of
a continuing association through autonomy within the Indonesian State
might not be chosen in preference to full independence.
JOURNALIST:
You have been in close contact with Jakarta on that but are you giving
that same counsel directly to the leaders of the pro-independence
movement in East Timor?
PRIME MINISTER:
Oh, they are very conscious of our position and the Australian Foreign
Minister, Mr Downer, will have the opportunity over the next few weeks
when he goes to the region, to Indonesia and so forth, to talk to
figures as it were in both camps and to put our point of view. They
are very conscious of what our point of view is and we think it's
important that they examine autonomy. But if in the end independence
is the way people want to go then we would want the transition to
independence to be arranged in a very orderly fashion because suddenly
being left alone when you are fundamentally quite weak economically
and you have got inadequate infrastructure is going to be very, very
difficult. And I think people should think ahead and keep those sorts
of things in mind. And, of course, this is of great importance to
Australia because we have an historical association with East Timor
stretching back to World War II and of course it is very close to
the Australian mainland and we feel a sense of deep responsibility
and that is why we are urging the course of action I have outlined
on both the Indonesians and the East Timorese.
JOURNALIST:
There is talk though that in your camp there's actually quite
a division on how to approach this issue. How do you reply to that
Prime Minister Howard?
PRIME MINISTER:
What, inside our Government?
JOURNALIST:
Inside your Government.
PRIME MINISTER:
No, no division inside the Government. There's the obvious sparring
between the Government and the Opposition. The division on this issue,
and I don't want to get domestic politics onto your programme,
but there's been quite a division inside the Opposition Party
with their current spokesman on foreign affairs attacking the former
Foreign Minister. But as far as the Government itself is concerned
there is no division within our ranks on the issue, none at all.
JOURNALIST:
Let's move to the general issue of Asia, well not issue, but
Asia in general Australia's relations with it. How much of a
role do you see Australia playing in the recovery of Asia?
PRIME MINISTER:
Well, very significant. Remember that Australia was the only country
apart from Japan to participate in the three IMF rescue packages for
Indonesia, Korea and Thailand. And over the last 18 months due in
no small measure to our economic strength we have been able to be
a very good friend, what I call a regional mate, of the Asian-Pacific
region and to help it a great deal. Now, within our own capacity we
will continue to play a very positive role. We are deeply and abidingly
part of the Asian-Pacific region and whilst we have very important
links with other parts of the world we have very deep links with the
Asian-Pacific region. And I think Australia is increasingly seen as
a partner in the region for the rough as well as the smooth, for the
long-term as well as the short-term and because we are able to help
countries in their difficulties we are seen as a more durable participant
in the Asian-Pacific scene.
JOURNALIST:
One of the rough patches you yourself brought up Prime Minister Howard
that of agricultural products, you brought up how Australian farmers
are being hurt by protectionism in Asia. Can you elaborate on that.....
PRIME MINISTER:
Well, not only Asia....
JOURNALIST:
Yes, not just Asia but also other markets. What would you like particular
Asian countries to do, open up in what areas?
PRIME MINISTER:
Well, we would like the same sort of attitude taken towards agricultural
exports as is increasingly taken towards exports of manufactured goods
and services. Now, there's a great resistance to that in a number
of countries and Japan is one of course where there is still very
strong....there is still a very strong resistance to a number of
agricultural exports in Australia. The way to handle it is to get
a new World Trade Organisation around a new, if you like, Uruguay
type round going as soon as possible. And I am very heartened by the
support that the Americans have recently given to that through President
Clinton's state of the union message and we as a relatively small
country that has a very efficient agricultural sector, our best hope
is freer trade in that area. I use the expression freer rather than
free because you will never get, I suppose, completely free trade
but you will get freer trade.
JOURNALIST:
So much to talk about including Australia's hosting of the Olympics
in the year 2000. Do stay with us we are talking to the Australian
Prime Minister John Howard from Canberra.
[Commercial break]
We are talking to the Australian Prime Minister John Howard who joins
us from Canberra. Prime Minister Howard, the issue of Australia possibly
becoming a republic up for referendum soon, how do you see Australia
going into the new millennium?
PRIME MINISTER:
Well, I think whatever happens in the outcome of that referendum Australia
will go into the new millennium as a united, stable very optimistic,
very tolerant country. I don't know what will happen in the referendum,
I personally am not in favour of a republic because the present system
of Government works exceptionally well and I never believe in changing
something that works exceptionally well. But there is a free vote
for the Government members and we'll see what happens.
JOURNALIST:
Onto another thing that's happening in Australia soon the Olympics
in the year 2000, Australia preparing for that. How do you think it's
been affected by this scandal surrounding the IOC?
PRIME MINISTER:
Well, I think everybody would have preferred that we hadn't have
had those events surrounding the IOC and I am strongly in favour of
a thorough investigation of any complaints, I am strongly in favour
of the whole thing being transparent but it will be a great event.
Sydney will do it in its stride, Sydney will be absolutely lustrous
and welcoming and a great centre of hospitality and I think it will
be a fabulous event and Australians will love it.
JOURNALIST:
Unfortunately we are out of time.
[ends]