E&OE..........
Thank you very much Mr Chairman. I intend to make a very short introductory
statement to allow the maximum amount of time for questions.
As you all know the relationship between Australia and Japan is very
close. Japan has been for a long time and remains Australia's best
customer and therefore as Prime Minister I pay a great deal of attention
to the relationship both at a personal level between myself and the
senior people in the Japanese Government and also at a broader national
level between our two societies.
The Australian economy is enjoying a period of very strong growth
at present. The growth rate is between four and five per cent a year.
We have just received some unemployment figures which have taken our
unemployment level to the lowest in 10 years. It is now down to 7.2
per cent which historically is a very low figure in our country over
the last decade. We have the lowest interest rates and the lowest
level of inflation for the past 30 years and in three years my Government
has eliminated a budget deficit of over $10 billion Australian and
we now have a budget surplus of a half per cent of GDP.
The Government has just taken through the Parliament a major reform
of our taxation system which involves the introduction of a broadly
based goods and services tax as well as major reductions in personal
income tax. That reform is to be followed very shortly by proposals
to reform our business taxation system. All of which together will
contribute to making the Australian economy more competitive internationally.
In my discussions with Mr Obuchi and other senior figures in the Japanese
Government I have emphasised the strengths of the bilateral relationship.
I've pointed out that we have the lowest level of industrial disputes
in Australia in almost 90 years. That we continue to be a very reliable
supplier, not only of raw materials but also of other products we
continue to be a country that welcomes large numbers of Japanese tourists
and we of course are a nation which is now experiencing an extraordinary
growth in teaching of the Japanese language amongst young Australians
and therefore a greater understanding of the culture of this country
by tens of thousands of young Australians.
I'm encouraged by the signs of greater growth in the Japanese economy.
I do not believe the Japanese Government has received as much credit
as it deserves for the reforms it had been undertaken in the financial
sector and elsewhere. In my discussions with Mr Obuchi I have naturally
underlined the leadership role Japan has, not only in the region but
in the world as its second largest and strongest economy, and that
it is not only important for Japan but it is also important for the
region and the world that the Japanese economy grow more strongly
and that some of the sluggishness of recent years be put behind it.
We continue in Australia to press for more liberalisation of world
markets, particularly in agriculture. We would like to see more open
access for agriculture in this country. It is our largest market for
food. I said to Mr Obuchi that both of us should work together at
the upcoming APEC meeting to encourage a leaders declaration calling
for a comprehensive world trade round which I believe is important
to the process of further liberalisation.
The final point I'd make in my opening remarks is that we spent some
time in our discussions talking about the situation in Indonesia.
I indicated to the Prime Minister of Japan that I felt that Indonesia
had undertaken a remarkable and historic move towards greater democracy,
that the elections had been conducted with comparatively little blood
shed and the indications were that the ballot had been essentially
transparent and open and that it was a very considerable achievement
that a nation of 211 million people after an authoritarian system
being in place for 40 years was able to embrace a more democratic
approach and that the Indonesian Government deserved more credit for
what it had done. We both agreed on how important it was to Indonesia's
international representation that a clean, open and transparent ballot
take place in East Timor to determine the future status of that part
of Indonesia, whether it be as an independent country or as an integrated
territory, enjoying autonomy within the Republic of Indonesia. Any
questions?
JOURNALIST:
Two questions if I may. Despite the sluggish state of economy in both
Japan and within the other parts of Asia, the Australian economy has
been enjoying very robust growth under your leadership, and also under
your leadership you now have for two consecutive years a fiscal surplus.
Can you give us a pointer as to how this was possible? I suppose it
was due to the excellent policies followed by yourself Prime Minister
Howard. But what is the clue.
The second question. I wonder is it possible for you to consider elimination
of the withholding tax altogether within Australia. It is considered
that the withholding tax system Australia is not very favourable because
it taxes for example on top of the interest rate 10 percentage points
on the interest rather when any foreign party were to make investment
into Australia. So if for example the Japan Export Import Bank were
to consider investment into Australia there would be taxation on the
interest rate. So this withholding tax has been undermining, if you
will, every potential investment by the Japanese into Australia. Of
course I would imagine this is due to the very rigid stance and policy
followed by your ministry of finance and in any given countries around
the world, bureaucrats are known to have very, shall we say, rigid
stance. But may I invite you Prime Minister to study this matter and
consider altogether the elimination of the withholding tax.
PRIME MINISTER:
In relation to the first question, the reason why Australia has been
able to stare down the Asian economic downturn is really I think due
to the fact that over the last 10 to 15 years governments of different
political persuasions in Australia have embraced very significant
reforms and we have now begun to get the real benefit of those reforms.
I think there are five major changes, I call them the five pillars
of the modernisation of the Australian economy. The deregulation of
the financial system which was begun under the former Coalition government
in 1982-83 continued with the support of the Coalition in Opposition
by the Labor party. That included the floating of the Australian dollar
and the clever management of our exchange rate over the last 18 months
has been one of the reasons why the Australian economy has done so
well.
The tariff reforms, the reductions in tariffs that were undertaken
by the former government, once again with Coalition support, I think
they were very valuable indeed. The present government's tackling
of the budget deficit has been of major value and without it I don't
believe there would have been the international confidence in Australia
nor the domestic confidence and the contribution getting rid of that
deficit made to reducing our interest rates.
Also under the present government there has been of course the major
reform of the Australian industrial relations system. We now have
the lowest number of industrial disputes in 90 years and I think in
a sense as far as reform is concerned, industrial relations over the
last couple of years has been, to use an Australian expression, the
bolter. I think what it has done is to produce a greater boost to
productivity than many people imagined. The reforms went much further
than some of the critics two or three years ago suggested. And finally,
of course although the tax reforms haven't come into place I do think
that the fact that we were able to embrace tax reform and get it through
has given a great deal of heart to people who believe in the long-term
cause of reform.
So the answer to your question is that it's the fruit of a series
of measures taken and I'm very happy to acknowledge the contribution
of the former government in a couple of areas in relation to financial
deregulation and tariff reform. Without that we wouldn't have been
as good. But I will make the point that in Opposition we supported
the former government in relation to both of those things, so you've
seen the benefits of 10 or 15 years of intelligent reform.
Withholding tax I should tell you that we will be getting the major
recommendations of our business tax review committee at the end of
this month. So I won't try and speculate as to what it might recommend
but it has been a very comprehensive review.
The other thing, can I emphasise, is in relation to the first question
that the skilful management of a flexible exchange rate meant that
we were able to divert exports away from weakening markets towards
other markets when the Asian downturn hit and that has been a very
major reason why we have done so well.
JOURNALIST:
Michael Millett, Sydney Morning Herald and Melbourne Age.
Japan is coming under increasing pressure both internally and externally
to adopt some of the structural economic reforms that you have just
been referring to. In your talks with senior Japanese business leaders
over the past few days do you detect a willingness and capacity of
Japanese industry to undertake what are often painful reforms such
as labour market restructuring?
PRIME MINISTER:
Michael, yes to a greater extent than I have found in the past, yes.
JOURNALIST:
Head of the International Division within the [inaudible]. I am also
a member of the planning committee here at this National Press Club.
I'd like to ask a question about how you foresee the future of APEC.
APEC was a forum created under the leadership of Prime Minister Hawke
back in 1989 and in 1994 it set objectives for further liberalisation
at Bogor. However, some say that APEC has been losing momentum as
a result of various factors inclusive of the downturn in the Asian
economies and also the financial turmoil in the Asian economies. Some
even say that the role of APEC has now been concluded. I am wondering
if you could share with us how you foresee the future of APEC and
its role thank you.
PRIME MINISTER:
A fair amount will depend on how the next meeting goes. The last meeting
we really marked time. What happens at the next meeting will be quite
important. I am still optimistic but we have had a decision from the
American administration overnight on lamb exports from Australia and
New Zealand which does not bode particularly well for the cause of
more open trade. But we will continue to argue very strongly the important
role of APEC but clearly the next meeting will be quite important.
Could I just add that APEC is still the best medium, longer-term hope
for the region. It's still offers a lot more hope by way of higher
living standards and growth particularly for some of the poorer countries
of the region than any other understanding.
JOURNALIST:
Nigel Blunden from the Macquarie Radio Network, Mr Howard. In your
talks with Prime Minister Obuchi and the other government officials
how do you believe your message on free trade has been received?
PRIME MINISTER:
It's very clearly understood. I'll know whether it's been received
when I know the outcome of some of the gatherings over the next few
months particularly the APEC gathering. It's outcomes that really
matter in relation to things such as trade liberalisation rather than
rhetoric. Now, there's a general commitment to further trade liberalisation,
there's a very strong commitment to a comprehensive WTO round. I think
all of us have to wait and see what the final outcome is.
JOURNALIST:
Thank you very much. I am from the Mainichi Shimbun newspaper a question
about East Timor. Australia has made a substantial commitment to the
situation in East Timor however if we compare interest of the Japanese
commitment if we compare the past Japanese commitments to countries
such as Cambodia it seems that the current Japanese commitment to
East Timor seems to be less robust. Prime Minister, what is your view
on the Japanese commitment to East Timor?
PRIME MINISTER:
Could I answer that in the context of Japan's very generous contribution
to helping the region through recent economic difficulties. Japan
has been very generous and along with Australia the only other country
to contribute to each of the three rescue packages. It is to be expected
that because of the proximity of East Timor to Australia and the history
between our two.or the territory and our country, that Australia would
make a big contribution. That's to be expected. So I don't think it's
strictly fair to contrast Japan's contribution with Australia's given
that there is a clear and evident proximity in the case of Australia.
We would naturally make the point that if there is a continuing burden
in relation to East Timor it can't be born by Australia alone. And
we do need help from other countries and thus far that help has been
forthcoming although Australia is making a very big contribution.
JOURNALIST:
Hello, this is Bruce Elsworth with Bridge Financial News and I have
questions about your statement that it said, "skilful foreign
exchange management has helped to redirect exports to other markets"
and I am wondering if this means that you think a continued weak Australian
dollar will be necessary to maintain exports? And also a question
about unemployment rate - if you have any future goals for further
reductions in the unemployment rate? Thank you.
PRIME MINISTER:
I never talk about the level of the Australian dollar only its skilful
management. I express no view about future levels. As far as unemployment
goals are concerned our only goal is to drive unemployment down as
low as possible. We don't have a particular numerical target we just
want to get it as low as possible. We are pleased it has come down
but we still have a long way to go.
JOURNALIST:
Two questions if I may. A question about agriculture. You talked about
seeking greater access for agricultural products. I wonder if you
could be more specific as to what you will be pursuing, for example,
are you going to be seeking further reductions in the tariff rate
or will you be seeking greater allocation within the minimum access
vis a vis Australian products? Do you have any specific, shall we
say, proposals or suggestions that you have brought with you on this
visit? And secondly, did you have any concrete discussions with the
members of the Japanese Government during your visit about expanding
access?
PRIME MINISTER:
Well, we take the view that in an area like this there's no hard and
fast and better way of achieving access. It varies according to product,
it varies according to circumstance. There has been an improvement.
We acknowledge that but it is still a market that in many areas, as
we found was rice, is not easy to break and we still have a long distance
to go. And the general desirability of greater access, of course,
is swept up in the world trade round. If you have a successful world
trade outcome you have greater access because markets that are currently
closed are open or further liberalised as a result of the world trade
outcome. It's not something that you can do entirely on a bilateral
basis. It's better to be done within a multilateral framework.
JOURNALIST:
Prime Minister, Fran Kelly from the Australian Broadcasting Corporation.
The World Heritage Bureau is meeting in Paris on Kakadu and the question
of whether to list Kakadu as world heritage in danger. The decision
won't be made until Monday but I understand there are some signals
coming already. Can you give us any update on how the Australian Government
thinks it's going?
PRIME MINISTER:
Well, I have a natural caution - born of political experience - about
interpreting early returns, Fran. I don't know what is going to come
out of it. We do not believe that it should be listed as endangered
and we have put a very strong case - very strong case. But you will
also know that the Australian Government is resolute in the belief
that proper environmental concerns have already been taken into account.
We do not believe that there should be any departure from decisions
already taken and there will not be any departure because we believe
within the domestic sovereignty of Australia all care has been taken
and all proper procedures have been followed.
JOURNALIST:
Associated Press Television News. We have a question regarding PNG
and Taiwan. So [inaudible] raising around so it could [inaudible]
the prosperity in regional economy, regional prosperity. So Mr Skate
has stepped down. So how is Australia viewing the situation and also
is there any possibility at all for Australia to consider to take
some sort of measurement of PNG in Taiwan? PNG's policy towards Taiwan.
PRIME MINISTER:
What was the.what was the last bit about Australia?
JOURNALIST:
Is there any possibility for Australia to consider to take some sort
of measurement..
PRIME MINISTER:
Some measures?
JOURNALIST:
Some sort of steps towards PNG's policy towards Taiwan?
PRIME MINISTER:
Well, I am not going to comment on the domestic politics of Papua
New Guinea. Mr Skate has stood down and it's up to the political processes
of his country to chose a successor. I merely say that Australian
governments for some years now have adhered very strongly to a one
China policy and I repeat that position today. We recognise the people's
Republic of China and that remains the position. That does not prevent
us having productive commercial associations with Taiwan. We'll continue
to do that in accordance with well understood modalities but we don't
intend in any way as far as Australia is concerned to divert from
the one China policy.
JOURNALIST:
Asahi Shimbun Newspaper. Many view that the Asian currency or financial
turmoil has subsided at least for the time being and that the Asian
economies are on their way to recovery. In the last two years Australian
Government, as well as the Central Bank, has made substantial contribution
toward the stabilisation of this situation in the Asian economies.
Now having said that, some predict the possibility of the resurgence
of financial turmoil in Asia down the road and there has been much
discussion about introduction of preventive mechanisms so within the
Asian economies vis--vis the resurgence of financial turmoil in the
future. Two years ago Japan with an understanding had proposed the
possible establishment of the so-called Asian Monetary Fund as a way
to prevent financial turmoil in the Asian economies. I wonder how
the Australian Government would react to such a fund and such preventative
mechanisms? Would Australia be supportive and do you think that Australia
might even take a very active role by making financial contribution
to such fund? Thank you.
PRIME MINISTER:
We are in favour of some reforms to the international financial system.
We're not particularly attracted to the regionalisation of the international
financial architecture. That has been our position for some time.
We don't support the possible emergence of an Asian IMF. We don't
think that makes sense and I would have thought from a long term point
of view given Japan's status as a world financial power it necessarily
makes long term sense for this country either.
JOURNALIST:
I'm afraid time is fast running out so if I may use or abuse the prerogative
of the moderator I would like to ask the final question if I may.
Here in Japan we now have a discussion over the possible designation
of the song Kimi Gayo as the national song. Kimi Gayo has
unofficially been treated as the national song for Japan for many,
many years and now we're talking about the possible official designation
of the song Kimi Gayo as the national song. However, there are parties
or camps that are strongly opposed to the official designation of
this song as the national song or national anthem rather. When I was
covering Australia some 23 to 24 years ago I recall this similar type
of discussion that ensued in your society as to whether or not to
designate God Save the Queen or Advance Australia as Australian national
anthem. I wonder if you could share with us Prime Minister what the
most difficult part was you believe in designating Advance Australia
as the Australian national anthem. Also if you have any views as to
the designation of Kimi Gayo as the national anthem I would
appreciate it and we would certainly appreciate any advice that an
Australian Prime Minister can make on this point. Thank you.
PRIME MINISTER:
Well I will take the second part of the question first and say I don't
offer a view as to what Japan's national anthem should be. On the
designation of Advance Australia Fair that in fact was made the national
anthem of Australia by a proclamation of the Hawke Government in 1984
following a plebiscite in which it received more support from the
Australian people that any of the alternatives. But in the interests
of full disclosure I should tell you that in that plebiscite I personally
voted for an alternative and that was Waltzing Matilda. But I should
quickly add that Advance Australia Fair has become very widely accepted,
very enthusiastically sung and I don't mean by that personal confession
to in any way reopen debate. But I do like Waltzing Matilda.
JOURNALIST: