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PRESS CONFERENCE GIVEN BY THlE PRIME MINISTER,
MR WILLIAM McMAIION, AT PARLIAMENT HJOUSE,
CANBERRA, ACT. 21 OCTOBER 1971
Q. Have you seen anyone down here today from the
Treasury, Prime Minister?
PM: Yes.
Q. What line of discussions have you had, may I ask?
PM4: I wanted to find out what their version of the consumer
index was.
Q. What is it?
PM: They explained tL-he figures Lo me, particular the sharp
increase that occurred in New South Wales as the result of
the increase in fares and the increases that had occurred
over the whole of Australia because of the impact of
increases in health charges. The greater part of these
were due to wage increases. They also went through the
various other elements of the September Index ith me.
But I.. have.. given you my impression of what their thinking was.
It then became clear that if you had removed the special
influence of New South Wales special influences relating
to New South Wales that the rate of increase would not
appear to be anywhere near as sharp -or as sharp if you
could put it a little more accurate -as the raw figures
-would indicate.
Q. Did they make any predictions about what the December
quarter would bring in view of increases in State Bu& c ets
Pm: I raise. this question myself and I obtained verification
of my own views that the December quarter while being
speculative at this moment could at least be expected to be
quite substantial because of the impact of the Commonwealth
Budget figures were not felt in the September quarter, as the
collection of the data occurred in the middle of August and
the Budget didn't come down until a little later, and that
the effc-ct of Budget changes in the Victorian Budget would
not be written in until the December index figures became
available.
Q. Does this mean that a substantial increase in the
December quarter won't prompt the Government to tak,-e any
action on the economy?
PM: I will not make any statement there, but again it
must be obvious that in the December quarter, most of the
impact also will be substantially due, or as put last night,
directly or indirectly due to the impact of wage increases,
and not as the result of an increase in demand. Nowi what would
happen then in the March quatter March and June quarterswill
largely depend on the National Wage Case, if the decision
is out by that time. vOUia re
Q. Sir, Mr Lynch has made it clear Nk%, xis/ oing to do
something about the Arbitration Act tightening it up.
Do you think what you do there will have an effect on
the cost of living? Will you be able to pull it into line
through action on wages?
. P. M: You are taking it over a very broad cnnvas.
As yet, we haven't made our decision, so the question is
hypothetical, and one to which you couldn't give an answer
that is sufficiently exact. But it is as I said, in my
view and in the view of the officials and those participated
in the drafting of the Budget, the forecasts that we made then
are turning out to be correct with this one exception that
demand is not quite as strong as w~ e would like it to be.
B ut the economy is a healthy one, our overceas balances are
strong, our overseas trade is going along~ well, and personal
savings are particularly high. What is-needed is a little
more confidence. If this confidence was there, then I am
sure the economy could be brought quid-y to a pretty healthy
state.
Q. Any idea how you are going to instil that confidence,
Prime Minister?
PM: Talkabout it. There is a wonder: ful phrase that was
once used by Roosevelt: " The only thing we have to fear is
fear itself". And I think that applies pretty well to
Australia's position today.
Q. You are not planning any other definite measures to
increase consumer spending, for example?
PM: Naturally, and I have said this before, we are
watching the economy vary carefully. We have plenty of scope
for revision and we could act quickly should we feel the time
was right to do so. I can give this assurance that I, in
particular, the Treasury officials and the Reserve Bank are
watching the figures very closely, and I have had at least
two very thoroughgoing discussions with them during the course
of the last four weeks.
Q. Do the present employment figures, in the light of this
Index rise, present you with any trouble, or do you pL-opose
to take any amelioratory steps at this stage?
PM: Not immediately. But I have said to you that I have
had thoroughgoing discussi ons with all the officials recently
and in particular, we will have a national income and
expenditure forecast presented to the Government quite soon.
Those are the figures that will be important to us in consideringj
what we should do.
Q. You have asked for this specifically, Prime Minister,
have you?
PM: I did some weeks ago.
Q. How far ahead does this project? Is it a projection
on the rest of the financial year? I-
PM I don't know how long a projection it will be, but it
is a projection.
Q. When do you think you % vill get it? After this trip or
before?
PM: Q. PM: Q. PM: Not before, no, I don't think so. I think I would be
extremely lucky, although I have been asking them to hurry up
with it. But these have got to be done with a great deal of
thoroughness and care, and I think you might get a surprise
a pleasant surprise when we see the next employment figures.
Have they indicated to you that there are already
indications that things might not be following the same pattern
we saw in September?
Don't let me get too speculative, but I do my homework.
an I know all the people in the employment offices, and I
never hesitate to contact them personally.
' What would give you a pleasant surprise a small drop
or a small rise, or what?
The figures that I would be looking at would be see to
whether the October figures accorded with the pattern of the
October figures for previous years..
The pattern being an improvement in tlesituation in
October usually? It is usually avery small increase in registrants
look I couldn't explain them accurately to you because I haven't
got them in front of me, but they are usually somewhat neutral
figures. And I will be interested to see what does happen.
We won't have the figures after all until the second wveek in
November.
Q. PM:
Q. Is that time, therefore the second week in Novemberwhen
you have to sit down and decide whether the Go-rnment
PM:
Q. That will be an important week for us, yes.
Does that mean the Government will get the income and
expenditure That I couldn't tell you. As I have said,
extremely difficult analysis to make, and one that
done with a great degree of thoroughness and care.
been asking them to hurry up with the analysis for
prepared to. make them ( 3to too rushed a job. I want
analysis I can get. it is an
has to be
W hilst I have
me, I am not
the best
Q. You will still be away then, won't you?
PM: Look I have said to you.. no, that isn't correct.
Let me correct you, because I said I didn't know when it was
coming forward.
Q. No, I just meant that second week
Interjection : The employment figures will be out in that second week.
PM: Oh, the employment figures. Yes, they would come out
in the second week. It would only be within a day or two of
my cominq back.
Q. PM:
Q. PM: Prime Minister, just what degree of concern do you
feel about the state of the economy?
I have said to you already that the economy is in a
healthy state.
You are not concerned?
Of course I am concerned. Any politician whoever loses
a capacity toib concerned would be a strange one. Of course
PM:
I look at the figures with care but I know that the greatest
problem of all that we have to solve is of inflation.
And we are doing the best we can to.-try and solve. Many
people are now conccding for the first time that what we
have said is correct. For example, if you look at today's
papers, there is a-very good... . and if you would like to
look, for example, at an article by Professor K. J. Hancock
in the " Financial Review" of 19 October, he says in this
context: " Given that the Government takes the view that
some deflationary counter to inflation is desirable
it is hard to see the logic of those who assert tha-' the
Government's Budgetary policy is misconceived."
I think you ought all know these. And the statement of the
National Bank today believes that " the economic slow-down
of the past year has been caused by the conservatism of
individuals in the personal sector as a whole." These
are very important statements because now it is becoming
understood by so many. The cause is there. The cause
is a very real one and we have tried to the best of our
ability to ensure that we bring inflation, particularly
wage inflation, under control under relative controland
I believe we are on the way to succeeding.
Q. You said one of the things you are going to do about
the economy is to talk. Have you considered going on
national television or radio and trying to undo the message
that was given to people in January and February?
PM: No, I don't think I have. But I don't want to push
this too far. I have I suggested to the ABC
I might go on, but they had a programme filled up and then
I was going away. I couldn't finalise the arrangements
with them. But I have made arrangements... I1 thought I
would be having a press conference on Wednesday before I
went, and I would do exactly the same then as I am doing
now, saying a little more confidence is what we need to
get demand back because the potential for demand is
pretty high and personal savings and disposable income
will permit some increase in demand. But again, if you
start to look at the figure. Look at Waltons' figures
today for retail sales. They were surprisingly high. So
production figures are pretty good. You know, the figures
are not As clear-cut yet, for anyone to be able Ito be precise,
I don't care who hie is.
Q. Prime Minister, you mentioned Professor Hancock's speech
the other night to the Economics Society. Although it is
quite correct what you did quote, the main burden of hispaper
was there was a strong chance the Arbitration Commission would
no longer have the small degree of control it at present has
over the wages policy, because the MTIA would perhaps go outside
the Arbitration system. Are you concerned with this possibility
which seiems to flow from the decision in the Carpenters' case,
that we may have the MTIA having sweetheart agreements outside
the Arbitration Commission in addition to the National Wage
Case and setting a case in which the Government cannot even
make representations as it can do now with the Arbitration
Commission.
PM: Yes I am disturbed by it and I will be seeing Mr Cilarkson
tomorrow. He hasn't indicated to me he wants to see me about it
but I presume it would be in connection with the Nati-nal
Employers policy decisions as to what they intended to do
with Arbitraition. I think i't would be a retrograde step if
they were to have negotiations with the Metal Trades Industries
outside the Commission and later on went to the Commission
itself and tried to get a national wage increase. It could
be extremely dangerous and would introduce a policy that
wouldn't be in the best interests of this country and certainly
wouldn't be in the best interests of the working man.
Q. * Have you considered the idea of using corporation powers
to enlarge the powers of the Arbitration Commission in your
Hkkadxiniiwx present review of the Arbitration Commission?
PM: I don't think you can. In fact the Arbitration power
is a separate placitum of the Constitution, and gives the
power to legislate for the peace, order and good gover.:-Aent
of the country, and we can only legislate with regard to
Arbitration. We cannot affect the Arbitration decision 1~'
itself. We must leave them free to make up their minds what
they think is right.
Q. i thought the corpofation power, and of course it is
the subject of wide discussion outside the corporation
power might give the Government greater control over an
institution such as the Arbitration Commission operating
as an incomes board, being able to set maximum rates as well
as minimum.
PM: I don't think so. It has never been suggested to me
and on the plain meaning of the words, I doubt whether that
interpretation is.-right. 4" U g~
good
Q. To change the subject You have had a/ view of the
fasters. What do you think of Paul Ponoermo's actions-.
he was taken to hospital today?
PM: I have been very worried about him-i. Very worried.
I did, as I mentioned in the House, ask the Speaker if
he would make arrangements to ensure that whatever facilities
were available to them were made available, partic. ilarly if
they wanted to have a wash, if they wanted somewhere they
could change, that they would be able to do so. I also made
enquiries yesterday to see that he was watched carefully
to ensure that he didn't come to any harm. And I checked
again this morning to ensure that lie was watched. I was
later on informed that some of ) Js friends had arranged for
the ambulance to take him to hospital. But I have been
worried about him, very worried.
Q. You had him watched in the medical sense?
PM: In the medical sense, yes. I thought if~ he we're not
eating that he could damage to himself, and I didn't want that
to happen.
Q. What about this question of increasing aid to
million, have you thoughtc-out that?
PM: Yes, it is only recently that we made the decision
about the increase of $ 11 million, and both the Minister for
Foreign Affairs and I have answered questions about it in
the House. I have also discussed it again with Mr Bowen
this morning.
Q. Can we expect further announcements?
PM: I can't make any other statement about it.
Q. Did you discuss the possibility of increase?
PM: I won't go any further.
Q. Was this in the light of the increase in the British...
PM: No, it was in the light of the United Nations'
initiative
Q. The Brits say they acted because the United Nations
asked them for more money. Have we had a specific request
from the United Nations?
PM: I don't know because I wanted to talk to Mr Bowen
about it today. He is ill in bed and I was not able to find
out what the exact position was.
Q. Sir, will you be talkingzbout the refugees on this
trip? Is it one of the things....,
PM. No. V
Q. Can you tell us, generally, the reasons for the
trip?
PM: PTMh: e reasons were, I thought, made pretty plain in
PM: Sir? So far I intend to visit only the United States and
Britain. I mnust... I1 think then I will come straight 1 iome.
That will get me home then on the Wednesday before the House
meets, and I think that is about as late a s I want to return
to Australia. What date is that?
Somewhere about the 16th or 17th. I could look it
up for you, but I think you can get it just as easily as I can.
Prime Minister, did you get any indication when
you received an invitation from President Nixon that this
was in response to your letter to him which you mentioned in
the House. You agreed in the House that you had writLen to
the President following....
No, I didn't. I didn't get any impression that it
was as a result of that. I did not. I got an impression
the statemcnt that I issued. I received a personal invitatioi
from President Nixon to come to Washington on 2 November.
Sometime before, I had received an invitation from Mr Heath,
and I informed him that OThen a suitable opportunity arose
I would come. As I was going to Washington I immediately
informed him, and he asked me if I would come to London
and we have arranged meetings there.
Is the suggestion well founded that President Nixon
has some announcements to make that will affect us and wants
to tell you about them? Have you got any reason to believe
that that is so?
I think it would be imprudent for me to be making
any kind of a statement that could create false impressions
and I have no intention of doing so. But there has been
a speculation on a wide range of subjects and I am sure most
of them will be covered in the discus~ ios.
Can you say what other countries you will be visiting
PM: PM:
Q. PM:
that this was a very suitable time for me to come because.
it would be immediately before the decision-making processes
on a wide range of matters would be initiated, and that it
was a very favourable timc to be there. I would have liked
to have gone a little later, particularly during one of the
weeks that the House was up but it was felt on analysing the
information we had that the 2nd was the best date I could be
there.
Q. Sir, can you tell us when in fact pu got the
invitation?
PM: Last Thursday.
Q. You. really didn't waste any time accepting it.
PM: No. Well I gave you the explanation a few seconds
ago that I would have liked to have gone a little later and
I pointed this out, but it was also pointed out to me that
in our interests, our Austral. ian interests, it would be wise
to be there at the earliest possible date.
Q. Can you indicate some of these wide range ot matters
PM: No, I don't want-to. But the Press speculated, and
frankly, the Press speculation on this occasion has been
wide ranging and has touched most subjects that I think are
of importance.
Q. Sir, will you have any point of view to put to
the President on China which seems to be the big issue>
I think your visit will be before he goes to Cihina.
PM: Yes, but I am not going to be now forecasti, g
or stating explicitly what I will be saying. The details
of what I intend to say is something that has qot to be
reserved for discussion with him, and then subsequently
T am pretty certain a joint press statement will be made.
* The Press that come, I can assure you, will be kept well
informed.
12.
Q. I assume before you leave Australia will make
a decision regarding its currency level?
PM: No
Q. I assume you will be discussing it in those talks
both in Washington and London.
PM: The answer to your first question is: I don't
think we will be making a decision as to the long-term
parity of the Australian currency with other currencies.
The second one, of course, I will be discussing both the
import surcharge of the United States and the question of
currency realignments together with the other problems
associated with it such as greater freedom of trade
multilateral trade and I take it that, incidentally, although
it won't affect us, thexpxkñ uiaxx will be the question ofa'
greater sharing of the defence burden.
Q. Have you spoken to the President on so-called
" hot line"? Have you spoken to him personally yet about the
trip or is it a written arrangement?
PM" Well, he wrote to me personally. Then there were
discussions on at leatt two occasions bxnt eHe Australian
Ambassador to Washington and the White House staff.
Q. If you are going to get back mid= November and
Cbbinet will be considering changes to the Arbitration
I presume.
Act, presumably, which Mr Lynch is/ go ng o present to
Cabinet, you are going to be rather pressed to get this
into Parliament before the House rises for Christmas.
PM: Yes, but we has not been, as it were, waiting for
all the papers to be pre-sented one Cabinet meeting.
We have had several Cabinet meetings about the Arbitration
system, and I think most of us are in a position, whrre if
we have to make decisions on a single paper we will be able to
do it fairly quickly.
13.
Q. The intention is to have a policy statement mor'e
or less first, rather than detdUled legislation before
the HoUse rose?
PM: I doubt whether we could have detailed legislation.
It would be a policy, statement.
Q. Sir, have you got any comment on the Fr Anthony's
suggestion there could be a Federal election early next
year?
* PM: No.
Q. It-is not true or you have no comment?
SPM: I have no comment.
Q. I think you said early this year there would be
no more legislation introduced into the House three weeks
before the house rises on December 10. Will that in fact
occur?
PM: Yes that decision will stand with these exceptions.
That in the case of tariff reports and in the case of
essential Treasury Bills, they would be introduced. But these
are usually passed without very much discussion. They are
bills of a formal kind that can't be avoided.
Q. If I could ask one more question. You told
Parliament the other day you would look at the figures
presented by Mr Howson on the Television and Film School.
Have you done so yet?
PM: Yes. I have had a thorough look at them
Q. Can you tell us the result of it? / 14 -M a
14.
PM: No, I can't. I think it would my response if I
said anything to say it in the House.
Q. You said you saw a Treasury official today. Can
you tell us who you saw? Did you see Sir Richard?
PM: I saw Mr Garrett, first of allpwho, as you know,,
is an old friend of mine, and we started to discuss the
C index figures. He thought it was better if I saw Mr
Rye, and I t'Aen had a talk to him. He is one of the whiz kids.
Q. Prime Minister, thank you very much. We hope we
will be able to see you again soon. F-