Well, ladies and gentlemen, starting with this afternoon and this
evening is the intensive part of my visit to the United States. I'll
be seeing the President tomorrow and I'll be talking to Dr Alan Greenspan
this evening. It's always an interesting experience talking to Dr
Greenspan given his immense responsibilities and enormous success
as undoubtedly the most significant economic administrator and regulator,
not only in the United States, but in the entire world.
The issues that I'll be raising with the President obviously include
the Australian Government's intense disappointment regarding the American
decision regarding lamb imports. However that won't, of course, be
the only issue that I'll raise. The full gamut of the bilateral relationship
will be canvassed. No doubt we'll discuss in some detail the present
situation in Indonesia and East Timor and we'll be putting certain
views regarding not only Australian policy but also United States
policy regarding Indonesia.
I'll be interested to get his assessment of the current situation
in Yugoslavia and in the wake of the cease fire and the apparent pressure
developing on the Milosevic Government, I will renew my entreaties
to him in relation to our two aid workers, Pratt and Wallace. The
Australian Government remains still very concerned about their situation
and we'll seek every opportunity we can, not only with President Clinton,
but also with other world leaders as I did with the Prime Minister
of Japan, Mr Obuchi, a few days ago to intercede on their behalf.
We still don't know what is going to happen. We remain hopeful, we
remain optimistic. The briefing I received from the Australian Ambassador
in Belgrade last weekend when he returned to Australia was positive
although indeterminate as to when he thought it likely that Steve
Pratt and Peter Wallace would be released.
The visit to the United States gives me an opportunity not only to
talk to the President and the Chairman of the Federal Reserve, I'll
also have a chance of talking to the newly installed Treasury Secretary,
Mr Summers, who, of course, along with Robert Rubin and Alan Greenspan
have formed something of an economic troika advising the President
over the past couple of years. Both countries, of course, are enjoying
almost unprecedented sustained levels of economic growth and the experience
of both of us in that regard I am sure will be instructive. The indications
are that the American economic boom ought to continue. There are no
apparent reasons on the horizon, as far as I can see, as to why that
should be interrupted although some people operate on the principal
that nothing goes on forever, but certainly the signs now are extremely
good and they are certainly better in the experience I have had observing
the American economy; they're certainly stronger and they're certainly
better than they have been at any time over the last 25 years.
After being in Washington I'll be going to New York where, of course,
the focus will be very much built around our ambitions to see Australia
and I guess by dint of the accumulation of financial businesses there,
Sydney, become a world financial centre. We have gone a long way towards
making Australia more attractive; not only our economic strength,
our good record of corporate governance, of prudential banking supervision
but also the tax changes that we have made and others that are in
prospect as a result of the recommendations of the Ralph Committee.
So it will be a very intensive period of days but it's time extremely
well spent. This does remain still by any measure the most important
relationship that Australia has, although we have a number of very
important bilateral relationships. But we should remind ourselves
against the background of our understandable anger over lamb that
our exports to the United States in 1998 raised by 34 per cent. And
it is because its economy is so strong it's an extremely good market
for Australia. And one of the reasons why we have been able to avoid
the worse ravages of the Asian economic downturn was that we were
able to divert a lot of the exports that might otherwise have gone
to Asia and indeed some new ones that wouldn't have gone to Asia anyway,
to North America and to Europe. And part of the success that we have
had in avoiding the worst of that downturn is precisely because we
have been able to find new markets and new opportunities in the United
States. But, of course, that doesn't in any way absolve the administration
from the criticism it has received from the decision has taken in
relation to lamb but, of course, that will not be the only issue but
it will be certainly an issue at the top of the agenda when I see
the President tomorrow. Any questions?
JOURNALIST:
Prime Minister, will you be putting on the table our security relationship
in light of the lamb decision as Agricultural Minister Vaile believes
you will?
PRIME MINISTER:
Well, I didn't read his comments to mean that but let me make it perfectly
clear as the head of the Government there's no way that our security
relationship is on the table. They're two quite separate things. And
the thing that dominates my attitude to all of these things is the
Australian national interest as I have said before. The Australian
national interest is well served by the security relationship. It
always has been and it will in the future and there's absolutely no
way that you put one on the table with the other; they are two quite
separate issues. And there is a separate, discrete, clear Australian
national interest involved in a close security relationship with the
United States. It has always been my view. I don't think you will
find at any time in the comments I have made on this issue as Prime
Minister, as Leader of the Opposition, as Treasurer or indeed as anything
else, I have ever suggested that you should put the security relationship
on the line. And I don't believe Mark Vaile said that. Anyway, our
position is abundantly clear from the comment I have made now and
what I made a couple of days ago.
JOURNALIST:
Prime Minister, you announced some assistance for the lamb industry
when objecting to the American decision. In terms of the nine per
cent tariff, is there anything further you can do in terms of helping
with marketing that would be able to offset that nine per cent so
that we can at least obtain market share?
PRIME MINISTER:
Well, we will in the course of our discussions, and I expect to have
a full report on some of the discussions that are taking place between
our Agriculture Department and the industry, we will do whatever we
can, consistent, of course, with World Trade Organisation rules to
assist with marketing. I mean, our point all along has been that these
blokes have won a market share without any kind of government assistance
and what we have sought to do with the levy is to offset the cost
of the tariff that's been imposed on. I mean, if there are other ways
consistent with what I announced last week to help in relation to
marketing we will but obviously there are limitations to that.
JOURNALIST:
Prime Minister, when you've talked about lamb here or in other press
conferences you used very strong language. How strong will your language
be..
PRIME MINISTER:
Well, my language will be appropriately strong. I don't, as you know,
I don't script things. And I'll put my view and I can't tell you precisely
in advance what precise words I use because as you know I don't script
things, I just say what I think at the particular time.
JOURNALIST:
Will you formally ask the President to reverse the decision even though
you know that's a remote..
PRIME MINISTER:
Well, look, I don't think there's any prospect that the Americans
are going to reverse the decision. We will.look, I will make all the
requests that are appropriate, I will enter all of the protests that
are appropriate. I think to be realistic the Americans are not going
to change the decision but they should not be left in any doubt both
as a result of things that I have said publicly. They would now be
in no doubt as to how we feel but clearly tomorrow is an opportunity
for me to convey in a personal forum to the President the concern
that Australians feel and the sense of being let down that they feel
about this particular decision. Now, I don't expect the President
to say to me tomorrow: well John, we are going to change it. I don't
expect that. But that won't stop me asking but I don't expect that
is going to happen. I mean, we have to be realistic about that.
JOURNALIST:
Mr Howard, will you be asking for a commitment from President Clinton
on APEC and on free trade, you know, in light of the lamb decision?
PRIME MINISTER:
Well, I would expect that I will receive from him tomorrow a commitment,
a reaffirmation of his view rather than a bilateral commitment, a
reaffirmation of his view that the APEC process should go on. I would
expect that the American response will be that lamb should be seen
in the context of particular circumstances and that the American commitment
to freer trade remains undiminished. I mean, we obviously have said
some things about that and I think you'll be aware of those. But I
would expect that I will certainly nonetheless emphasize our commitment
to a good APEC outcome. We would like a leaders' declaration coming
out of the APEC meeting about a new trade round and it does remain
the case that although we are bitterly disappointed about what's happened
on lamb it does remain the case that we have had some real success
in a number of other areas in winning market access not only in relation
to agriculture but in a number of other areas but particularly in
relation to agriculture. But there are some, you know, outstanding
caveats on the American, very big caveats, on the American commitment
for free trade. I mean, we still remain very angry about a thing called
the Jones Act which denies market opportunities to burgeoning ship
building industry in Australia. We'd like to see the Americans sign
the OECD understanding that's been negotiated in relation to ship
building.
JOURNALIST:
Prime Minister, in the context of American caveats Mark Vaile also
says that Australia should now pause in its trade liberalisation and
let the rest of the world catch up. Is that your view with the context
of APEC?
PRIME MINISTER:
Well, I think it's certainly the case that Australia has compared
with most other countries Australia has done extremely well. I think
what has to happen is that we need a commitment from all of the APEC
members towards the original Bogor goals and we also need a commitment
from the APEC leaders towards a successful World Trade Organisation
outcome. I think that is what he has in mind, it's certainly what
the Government has in mind.
JOURNALIST:
But is there anything in it for us to go any further and, in fact,
to do something like winding back a little bit..
PRIME MINISTER:
Well, my view has always been that you look at the national interest
rather than who's fair or more open in their trading practices than
the next person. You look at the national interests. Now, what I believe
should be said is that we have gained a lot from a more open trading
system. And the reality is that Australia is a more prosperous country
now than it was 10 or 15 years ago. And the people who turn around,
and people who say that more open trade has hurt Australia are ignoring
the fact that we have in fact as a result of the efforts of the Cairns
Group we have won market access. I mean, we do have 30 per cent of
the import market for beef into Japan. Now, that's something that
we didn't have 10 years ago and that didn't come about other than
as a result of our pushing through the Cairns Group and through other
avenues to secure greater market access. So I think you have got to
keep this thing in perspective. The only reason that I argue for a
more open trading system is that I happen to think it's in Australia's
national interests. I am not doing it either for my political health
nor am I doing it for some kind of ideological commitment. I just
happen to think that when you are a nation of 18.5 million people
you still have a very strong and efficient agricultural industry.
You clearly need access to world markets for your manufacturers and
your service outputs. It's clearly in our interests to have a more
open trading system.
JOURNALIST:
Have you told Mark Vaile that?
PRIME MINISTER:
Mark Vaile is very well aware of that and I don't think anything he
has said is inconsistent with it.
JOURNALIST:
Prime Minister, do you agree with him that Australia has got far enough,
at least for now?
PRIME MINISTER:
I believe that Australia has done very well. But it's not really the
point as to who has gone far enough. It's a question of what is in
our interests and it is in our interests to export more to the rest
of the world. And that's my total guide on this - what is the national
interest; not whether we have gone further than somebody else. I always
argue that we should do something out of the national interest. Now,
in relation to something like the motor vehicle industry I thought
the national interest was served by us having a further reduction
in assistance and then having a pause for five years. And that's why
we did it. And clearly in relation to agriculture it is in our national
interest to continue to argue for a more open system.
JOURNALIST:
Prime Minister, on Kakadu where there is going to be a decision on
that made tomorrow, previously in these kinds of matters the Italian
Government has tended to decide with the environmentalists. This time
they are quite enthusiastically in favour of the Australian Government
and they have also offered $300,000 to set up a World Heritage Austral-Asian
unit within Australia.
PRIME MINISTER:
They have?
JOURNALIST:
Yes. What have you done to make them so enthusiastic?
PRIME MINISTER:
Well, I haven't done anything.
JOURNALIST:
What's the Australian Government done?
PRIME MINISTER:
I am not aware that the Australian Government has done anything other
than to argue very persuasively and very eloquently a very strong
case.
JOURNALIST:
And what's your reading of the likely outcome?
PRIME MINISTER:
I don't know. I am always very cautious about sort of, you know, the
early returns.
JOURNALIST:
Prime Minister, in terms of Pratt and Wallace what will you be asking
specifically the US President to do?
PRIME MINISTER:
Well, I'll be reminding him, as I did when I spoke to him on the phone
a few weeks ago, that we would naturally want to see these men released.
I'll be asking him to and his administration to use whatever opportunities
arise to plead the case for their release. I think one of the strongest
arguments of course is that until this matter is resolved the future
level of aid activity from organisations like CARE in Yugoslavia is
going to be under a cloud.
JOURNALIST:
The United Sates has been fairly preoccupied with Yugoslavia. Do you
think they should be paying more attention now, or putting more attention
on Timor? What sorts of things will you be discussing about that?
PRIME MINISTER:
Well, I'll be giving our assessment and our assessment of the state
of play in Indonesia and Timor is always of interest to the United
States because we have special knowledge and a special understanding
of the area that probably no other country has. The question of whether
they should devote more or less, well that's a matter for them. I
haven't come here to sort of give lectures publicly or privately to
the United States administration about the weighting of their foreign
policy focus. I think quite plainly they're perfectly capable as the
only true world power of walking and chewing gum at the same time
and they have a great capacity to do that. We are naturally very committed
to a good outcome in East Timor. We've played a significantly role
in getting a commitment from the Indonesian Government. We remain
very much of the view that the Indonesia Government deserves a great
deal of credit for two things. Firstly for the steps it's taken to
embrace democracy in Indonesia as a whole which is quite a historical
development and also the commitment to hold an open ballot. Now we
had worries about many of the activities in East Timor and they remain,
and Indonesia will suffer in the eyes of the world and the esteem
Indonesia has gained will be diminished if it's thought that an open
ballot is not allowed in East Timor. And I hope that every country
that expresses a view to Indonesia will convey that in the views that
it expresses.
JOURNALIST:
Prime Minister, just two aspects, one arising out of that and one
not. One is that you said at the beginning in your opening remarks
that you wanted to discuss the certain aspects of US policy vis a
vis East Timor and Indonesia [inaudible]. And secondly, looking further
down the week to the business tax question, will you be able to tell
[inaudible] American audiences that the centrepiece of reform will
be a 30 per cent rate which some of your colleagues believe is the
key to marketing this tax change internationally..
PRIME MINISTER:
Well Jim, I won't be able, nor will I even attempt to announce the
outcome of the Government's response to the Ralph recommendation,
we haven't got those recommendations yet, we won't have them until
the end of the month. I will be indicating areas of reform that I
think are needed to make Australia more attractive to the rest of
the world. I can't be as specific as to say what we're going to do
about rates, I don't know, I haven't got the report, I've got to hear
all the arguments. There are all sorts of options and combinations.
Clearly the debate about a 30 per cent rate and plus or minus things
like accelerated deprecation that's clearly going to be an essential
element of our consideration. But until I've got it all in and everybody
knows what Ralph is going to recommend, it's premature of me to say
well we're going to do this and this, but it's not premature of me
to indicate that there are a number of things that need to be done
in order to make Australia a more attractive country in which to invest
and therefore probably to give an indication that all things being
equal we'll try and do some of those things.
Now you're first question was, well perhaps it was just an infelicity
of language I really meant that I wanted to talk about Indonesia and
East Timor. I wanted to get American views on it; I want to express
our views I wasn't meaning that there was some particular aspect of
American policy that I wanted to focus on.
JOURNALIST:
How concerned are you that the political atmosphere here, particularly
the rising tide of protectionism and the way that that might play
out in the coming election campaign, could prevent the US playing
the leadership role they should on trade?
PRIME MINISTER:
Well I think all of our societies have a constant debate. We had quite
a debate about protectionism broadly defined in the last federal election
in Australia. I thought One Nation was very much about the rising
tide of protectionism. I expressed a view frequently that One Nation
was more a function of economic alienation and dislocation particularly
in regional Australia then it was of racism and that's true of all
our societies. I don't think America in that sense is any different.
But of course being the strongest power in the world and being the
power who's views on how far you go down a particular path, carry
more wait than anybody else's; it does matter a lot. I mean the reality
is that if you can sign up America and Japan within the forum of APEC
to a particular outcome, a particular point of view, you get that
outcome. If you can't sign both of them up it's very hard to get the
outcome I mean that is the reality of it and we all know that. That
is why their view carries America's view in particular, carries more
weight. And they just, in the end they've got more votes than anybody
else and therefore they're going to have a very significant influence
on the outcome.
JOURNALIST:
Prime Minister, can I just ask..
PRIME MINISTER:
This is the last one otherwise Mr O'Leary will be angry with me.
JOURNALIST:
When you say that there's a number of things that you'll be suggesting
need to be done to position Sydney as the financial global.global
financial centre. What sort of things will you be discussing?
PRIME MINISTER:
Well, I think there are a number of enormous advantages we already
have.
JOURNALIST:
Apart from those though.
PRIME MINISTER:
Well, clearly some of the changes already announced in taxation will
help the abolition of stamp duty on share transactions on stock exchange
will help enormously. The abolition of Financial Institutions Duty
will help. If there are further changes to the business tax system
that make it more of a neutral choice between an investment in Australia
and the United States, that will be something that enhances the attractiveness
of Sydney.
JOURNALIST:
That's the bit I am interested in.
PRIME MINISTER:
Well, come along on Wednesday.
JOURNALIST:
Prime Minister, you have got a situation here where the United States
is now moving to the next range of tax reform and we are, in a sense,
catching up with, in some way or other, with the Reagan tax changes,
they're moving on to the next phase. To be competitive in achieving
that neutrality as far as that's concerned, we are going to have to
take a big jump aren't we and rates are very important there.
PRIME MINISTER:
Oh yes, they are, they are important. But anyway, we'll just see what
comes out of it.
JOURNALIST:
I mean, Americans are going to be less concerned in terms of investment
and things like accelerated depreciation aren't they?
PRIME MINISTER:
Well, it's.there are.you are not talking about.we are not deluding
ourselves that we can rival New York. We are not quite in that league,
we are not arguing that. But what we are arguing is that certainly
in our own region and more generally in the world because of the advantages
that we already have, and they include not only a strong economy but
they include a very highly respected corporate governance system,
a very well-regulated banking system, one of the best regulated in
the world, an enviable lifestyle, a growing cost advantage compared
with many of the cities of Asia and so if you add to that some enhancements
in the taxation area, it is becoming, and the fortuitous time zone
placement of the eastern seaboard of Australia, you have got quite
a series of very, vtralia, you have got quite
a series of very, very attractive characteristics. Now, I can't for
reasons I explained earlier get into the minutiae of tax changes in
the business area. I don't yet know what they are going to be because
I haven't got Ralph and until I have got Ralph I am not going to say,
well, I am going to do this and I am going to do that. But it is obvious
that there are some things that if addressed would make Australia
and Sydney in particular more attractive.
[ends]