PRIME MINISTER'S PRESS CONFERENCE
PARLIAMENT HOUSE, CANBERRA
TUESDAY, 19 MARCH 1974
PRIME MINISTER: I haven't any announcements to make to you. You had
quite a number given to you by my colleagues after the Cabinet meeting
yesterday. There are some others to be announced but they require
notification to Premiers and meetings of the Executive Council so I
can't do those yet. Are there any questions?
QUESTION: I quote from a very penetrating article in today's " Age"
which I believe is part of your Bible. It concerns President Nyerere' s..
and it says that Nyerere holds some political prisoners and I want
to ask you whether you will now give an undertaking on behalf of
the press people of the world that you will raise the question of
political prisoners with President Nyerere?
PRIME MINISTER: I raise, with any Head of Government or State,
matters which affect the relations between Australia and his country.
obviously, this is one of the things which affect relations. I
understand that whenever I go to any country where there are, or are
thought to be, political prisoners that I will be asked questions
about it. As you know I do not go into details about discussions I
have with Heads of State or Heads of Government. No Head of State
or Head of Government does so. I would say this, however, that
Tanzania is one of the most admirable states in the continent of
Africa in the way it is governed. I notice there is a question on
notice and there was also a question without notice from a man whose
consistent scrutiny or even ill-will towards Tanzania are known to
you all. Now the fact is that President Nyerere is the senior member
of the Commonwealth after President Makarios. He was the senior
member of the Commonwealth present at the last Commonwealth Heads of
Government Meeting in Ottawa, last August. In Tanzania there is more
freedom than there is in practically any country in Africa, north,
south, east or west.
QUESTION: Last week after his talks with you, Mr Tonkin was very
confident about the outcome of the Alwest project. Can you say what
reasons he may have had for feeling confident at that stage and what
may have happened in between to change the Government's decision?
PRIME MINISTER: The Government had made no decision on the matter
until yesterday. You will remember that about a month ago we decided
that we would call for reports from the Interdepartmental Committee
on Foreign Takeovers, from the Minister for the Environment and
Conservation and the Minister for Urban and Regional Development on
the Alwest project. It was quite clear in view of the strong report
from the Interdepartmental Committee on Foreign Takeovers that the
Government couldn't, I don't believe any Government could have waived
the variable deposit requirement. The variable deposit requirement has
never been waived yet. This was far from being the most meritorious
application, and there were other features in the environmental field
which gave great misgivings. The Alcoa project is possibly damaging
to Perth's water supply. One could not, without very great
safeguards, be party to permitting an expansion of such projects. You
know the requirement that we made there. We say that the agreement
between the Western Australian Government and the joint venture it
should be amended to provide the detailed environmental investigations / 2
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to be carried out under the supervision of the Department of the
Environment and Conservation at the joint venturers expense and the
cost of any steps necessary to arrest and/ or correct significant
environmental degradation revealed by continuing investigations be met
by the joint venturers. There is a generally accepted principle now
that the polluter pays. If there is no pollution then no payments are
required. Nevertheless, we know that close to Canberra here the evil
that can flow and the expense to the taxpayers that can arise from
failure by Governments to supervise mining operations. Captains Flat
was mined by a company which left a very great number of slag heaps
there; they are now poisoning Canberra's water supply but the Company
that did it has gone into liquidation. That means the Australian
taxpayer will now have to pay to clean up the mess left by the
company which did its work, made its profits, and then disappeared.
Now Alcoa's operations in Western Australia are causing misgivings
about Western Australia's water supply. Water is the most precious
resource that Western Australia has. I don't believe that the Australian
Government, without whose permission no export can take place from
Australia, can lend itself light-heartedly or without proper
consideration to a further degradation or possible degradation of the
environment. The report of the Department of the Environment and
Conservation has been tabled in the library. There are not enough
copies to distribute to you yet but I guess the West Australian could
get one.
QUESTION: He was so confident after his talks with you that
PRIME MINISTER: I surely don't have to repeat to you that the
Government has considered this twice. The first time was to set these
inquiries in train. The second time was when those inquiries came
in, and the two reports which it is proper to release have been
released.
QUESTION: Would you also consider releasing the IDC report on
foreign takeovers and tabling it in the Library.
PRIME MINISTER: No.
QUESTION: Why not?
PRIME MINISTER: I would have thought that more than any newspaper
yours would realise why. The reason is that companies seeking
exemption from the variable deposit requirement give confidential
information to the Interdepartmental Committee on Foreign Takeovers.
The information which they give is of very great interest to their
competitors. Quite obviously, therefore, one wouldn't without their
positive approval release that information. This is not the first
time that two of the joint venturers, BHP and Reynolds have sought a
lease over bauxite deposits. They combined in making application for
Gove; another combination won, but nobody has suggested, certainly
nobody from any financial paper has hitherto suggested that the
information given in those circumstances should be released.
QUESTION: Could not an abridged edition of the Interdepartmental
Committee report be produced to eliminate the confidential information.
If not, what can the Government do to inform investors, both
overseas and Australian, what its general policies are on matters of
this sort? / 3
PRIME MINISTER: This can be seen from the decision by the Government.
The Government's decision incorporates the recommendation of the
Interdepartmental Committee on Foreign Takeovers. These were the
words of the Government decision, in effect, which has been conveyed
to the West Australian Government and also to BHP on behalf of the
joint venturers. " The Australian Government agrees that the project
should go ahead providing that the parties, other possible
participants, and the Western Australian Government are able to agree
upon arrangements which esr".... and then I will just now read the
requirements which concern ownership and management. I have already
given you one about the environmental aspects. The ones about foreign
ownership are these: " That the mining operation remains at all times
at least 51 per cent Australian-owned and managed by an Australian
shareholder". And, then, in respect to the refinery aspects the
refinery operations: " That Reynolds invite the Australian Development
Corporation to organise further Australian participation in the
alumina refinery on the basis that any Australian participants in
the refinery would be admitted to the venture on terms and conditions
no less favourable than those applying to prospective overseas
participants and on the basis that Australian participation would be
given preference over foreign participation in the event that known
bauxite reserves prove to be insufficient to support the expansion
of capacity that would be required to accommodate both Australian and
foreign requests for participation." And secondly " that if BHP waives
its ten year option over the refinery or if BHP fails to exercise the
option within 10 years of the date of commencement of the operation
of the refinery, Reynolds transfer the option to the AIDC or to an
interest or group nominated by the AIDC and that the option so
transferred remain current until the expiration of 12 years after the
date of the commencement of the operation of the refinery." Now those
are the recommendations of the Interdepartmental Committee on Foreign
Takeovers and the Government accepted those strong recommendations word
for word. But we can't obviously give the commercial data upon which
the recommendation was made.
QUESTION: Will the next taxation concessions on housing interest
apply to the gross or net incomes of those eligible and could you
estimate the cost to the Government of this concession?
PRIME MINISTER: The proposal flows from the following sentences in
my policy speech, and then I will give the particular answer which
you want, that particular section. " We propose that a limited tax
deductibility be available for interest payments. This tax concession
will be concentrated amongst the groups which bear the greatest
burden. All taxpayers whose actual income is $ 4000 or below will be
entitled to deduct 100 per cent of their interest rate payments.
The-percentage of total interest payments which is deductible will
be reduced by 1 per cent for every $ 100 of income in excess of $ 4000."
Now you ask what will be the income. It will be the actual net income.
QUESTION: Cost to the Government?
PRIME MINISTER: Ask the Treasurer that. I think it's here but it
will take a bit of time to look it up.
QUESTION: Will you support any diplomatic moves made by the new
United Kingdom Government that may be opposed to the build up of
the American base at Diego Garcia. 4
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PRIME MINISTER: Yes. It is in the context, as Senator Willesee
said when you and I were in Burma, that we don't believe that it helps
the littoral States of the Indian Ocean for there to be great
power rivalry. We would hope that there would be an agreement
between the United States and the Soviet Union to restrict their
build-up.
QUESTION: Have you made any representation to the United States
on this matter, Sir?
PRIME MINISTER: No. I have discussed it with their representatives
here. I haven't raised the subject but it has come up in conversation
QUESTION: Did you put this point of view to the new British
Government? PRIME MINISTER: No.
QUESTION: Did Cabinet receive a report on the Superphosphate Bounty
from the joint Caucus committee and, if so, was any action taken
on this?
PRIME MINISTER: You know what I haven't got the text of it
here, but you would know the resolution that was passed by the joint
Caucus committees on this subject. The only change which has been
recommended by the Cabinet is that the facilities.... I think the
original resolution was that any industry which thought itself
disadvantaged by the expiry of the Phosphate Fertilizers Bounty Act
at the end of this calendar year could ask that the Industries
Assistance Commission consider forms of assistance appropriate to its
needs, and that the facilities of the Bureau of Agricultural Economics
and other departments be made available to any such industry to
help it prepare its case to the Industries Assistance Commission.
The Cabinet believes that that should be the facilities of the BAE
or through it of relevant departments should be made available to
any industry to help it prepare its case. We believe that it is
appropriate for the BAE, an economic body, to be the appropriate body
for members of the public to approach rather than departments which
have to advise ministers.
QUESTION: This will in fact rule out the Superphosphate Bounty as
such though?
PRIME MINISTER: I hope so.
QUESTION: Two questions on the housing interest deductibility scheme
two points on that. Many houses, of course, are owned jointly
by married couples both of whom are working. In that case how will
the interest be deducted, will it be deducted from say just the
main breadwinners net income or will it be split. And the second
point, will it apply just to the first house people own or to the
house in which they are living at the time?
PRIME MINISTER: It will apply to the aggregated actual incomes of
a couple. It will apply to whatever residence is their principal
residence or a loan to extend the accommodation at their principal
residence.
QUESTION: Is actual net income is that different from net taxable
income?. PRIME MINISTER: Yes.
QUESTION: Quite apart from the merits of whether or not the
Superphosphate Bounty should be retained, how do you reconcile your
attitude towards it with what appears to be a contradiction in the
party platform which says the provision of fertilizer subsidies or
words to that effect.
PRIME MINISTER:. The provision in the party policy is in general
terms. It does not purport to say in what years or in what amounts
there will be bounties or subsidies. It might be appropriate to
point out that no Government has done more in a rational sense
to assist the primary industries. This year's Budget spends
million more on primary industries than last year's Budget. The changes
in expenditure are in two fields in particular. First of all we
believe that money should be spent on promoting markets where it is
possible to sell goods. Our predecessors did it the other way around.
They sai6, if you produce anything we will try and find a market
for it. We say, we try to ascertain the markets which are available
and then let the public know, the producers in particular know, where
those markets are, what size they are. And my Government, through
Dr Patterson and Dr Cairns, has found more markets ones we never had
before or bigger entry to ones we already had than any other Government
before. We have done more trade agreements in our fifteen months
in office than our predecessors did in the last fifteen years.
Secondly, where welfare criteria are involved, i. e. where the taxpayers
are being asked to subsidise people because otherwise they are
suffering hardship we are concentrating the assistance on those who
need the assistance most. We are helping people to get proper sized
farms or if they can't get a proper sized farm or if they don't believe
there is a future for them in the industry, we are helping them to get
out of the industry. Our predecessors, by contrast, followed the
practice of giving a subsidy or a bounty per unit of production.
Therefore, the bigger the producer was the more subsidy he got, so
that it meant that people who needed it least or not at all got most.
Those who needed it most, got least or sometimes nothing. Now we
are bringing about a rational allocation of resources and our attitude
towards tariffs, for instance, in the secondary industry has been a
very enlightened one and the primary industries who were always
complaining about the featherbedding which Country Party leaders used
to give to secondary industry are now finding that they have a
Government which heeds their pleas where those pleas are rational.
We have done more in the rational way a responsible way for
producers, primary and secondary, than any Government in Australia's
history. QUESTION: Are you concerned that companies like AMP may be influenced
by the abolition of the bounty to decrease the amount of investment
they make in primary production? / 6
PRIME MINISTER: My heart bleeds for the A. M. P. and its sufferings at
the end-of the Superphosphate Bounty. I agree with what Sir John
McEwen said when the Superphosphate Bounty was cancelled previously.
You will remember that the Labor Party introduced the Superphosphate
Bounty in 1941, just before the Pacific War. And during the wartime
there was price control, there was a loss of overseas markets and
there were also, in the middle forties, some very bad climatic conditions
and the industries needed assistance, but in the three postwar years
incomes in primary industry rose by an average of 38 per cent a year.
That was the case in 1949/ 50, 1948/ 49, 1947/ 48, and relying on this
the new Liberal/ Country Party Government with Sir John McEwen, as
he now ias minister for Commerce and Agriclture, brought in a bill
to cancel the Superphosphate Bounty. He brought it in in November
1950; he made it retrospective to the end of June 1950 and he pointed
out that there was no purpose now in continuing the bounty for the
two purposes for which it had been introduced. One, to educate people
into the advantages of fertilizers. The other was to help them in
lean times. He pointed out that everybody knew the advantages of
fertilizers and things had never been so prosperous. Now relying on
the same arguments, strengthened as they have been, we are allowing
the Phosphate Fertilizers Bounty Act to expire at the end of this
calendar year because in the last three financial years the average
income of primary producers has risen not by 38 per cent as it had
when Sir John McEwen cancelled it previously, but by 48 per cent. And
if we were to extend it for another three years, we would be committing
the taxpayer to find $ 200 million. Now our taxes can be spent for
better purpose than that. Our Government has found markets which our
predecessors lost or never acknowledged and we are helping people
in the primary sector who need it most.
QUESTION: In Opposition, Prime Minister, we were familiar with your
criticisms of inequities in taxation deductions. We heard you point
out that your driver paid, in fact, twice as much for health
insurance as you did.
PRIME MINISTER: The disparity is even greater now because my income
has gone up more than his has since we came into Government.
QUESTION: Now that you are in Government, what are you going to do
about this in such matters as child endownment that have been
brought to your attention by Professor Ronald Henderson's report.
PRIME MINISTER: The Government hasn't considered Professor Henderson's
first report.
QUESTION: Will the Indian Ocean play an important part in your talks
with the President?
PRIME MINISTER: I would expect so, I don't think necessarily a
predominant part. As you will realise, President Nyerere and I saw
quite a lot of each other during the 10 days we were in Ottawa at the
Commonwealth Heads of Government Meeting and he was very happy to
visit us. One of the first Foreign Ministers to visit Australia
after the change of Government was the Foreign Minister of Tanzania,
Mr Malecela. He is coming with the President on this occasion.
Of course, the Indian Ocean will be one of the things which we will
be discussing. I think I can say without any qualification whatever
that every littoral State in the Indian Ocean hopes that there will be
no escalation or great power rivalry in the Indian Ocean. The Indian
Ocean has been mercifully free of it. We don't want to launch it now.