PRIME MINISTER' S PRESS COINFERENCE, CANBERRA,
July 1975
I should make it clear that I do not intend to respond
to any questions or speculation about the Budget to be brought
down on 19 August.* I-have take n that attitude in 1973 1974
that is normal practice. Nevertheless, it will help you if I
say something about the Government's general approach to the
Budget in the context of our present economic situation.
The forthcoming Budget will be the result of fuller
preparation and consultation than any Budget before it. This
process of consultation and preparation has-been going on for
months. It is a process that involves, not just the Cabinet
and our officials, but many outside groups and interests. The
Economic Committee of the Parliamentary party met yes terday to
discuss the broad terms of our economic policy, with " ir. H~ en,
the Treasurer. The Government's consultations with outside
groups are more extensive this year than they have ever been,
They will conclude with a meeting with A. C. T. U. representatives
tomorrow morning. In addition, the Government itself has set
up new procedures to develop its budgetary strategy. We
established earlier this year you remember, the Expenditures
Review Committee of Cabinet, backed by a committee of officials
who have been wotrking for the last two months.
I want to emphasise that I regard this as a major
innovation in budgeting procedures and one with which I am
very satisfied. The committee of officials is chaired by an
officer of my department and includes officials from the
Treasury and the Departments of Social Security, Labour and
Immigkration ana" Urban and Regional Development. The Cabinet
committee, which is under my chairmanship, has proved very
useful in scrut~ ising the proposals of individual ministers
and looking at hr. ad economic policy. The officials' committee
has produced two vdery full reports on the whol& range of
iGovernment exze-ditures. Ministers will be considering these
reports and debaJ-ting the Budget in general all next week.
As kzn ow, the Government since coming to office has
made many innovatLions and introduced many social policies and
programs that were long overdue. We saw that a lot of things
had to be done, and our task was made more urgent, and more
costly, by the-fact that nearly all these areas had been
neglected for so long by our predecessors. That is why
Government expenditures rose so rapidly in the past two years.
In addition, It was necessary to push expenditures ahead at a
time when unemployment was high and the economy was in recession.
But we also recognised that it would be necessary to review
Government expenditures as the economy recovere
That is what we are doing. In April tifis year I wrote
to all ministers telling them to prepare for c ~ tbacks in
expenditure and draw up their own programs fok cutbacks.
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We instructed the officials' committee to examine
thoroughly all on-going programs and new proposals and to
identify the options open to us for reducing expenditures
in the Budget. They have done so in the two reports I have
mentioned. The basic fact is that the industrial western nations
are now starting to climb out of the deepest recession experienced
since the second world war. This recession has not been confined
to Australia; it is not a local affair. Every major country
in the industrialised world has been going through a recession
over the last 12 to 18 months and in most of them the severity
of the recession has been much greater than it has been in
Australia. For instance, in the United States, by far the biggest
economy in the world, industrial production during the recession
has declined by about 14 percent compared with 8 percent in
Australia and gross domestic product is running nearly 8
percent below its level in the last quarter of 1973 in the
United States, compared with a fall of 3 percent in Australia.
Unemployment in the United States has passed the 8 percent
mark. In Australia it is 4.5 percent.
In Japan the decline in production was of the order
of 20 percent. Real gross domestic product fell by about
1 percent. Zn the European Economic Community there appears
to have been a ein in production of about 6 percent over
the last year. : eai gross domestic product of these countries
increased by on-y 1.3 percent in 1974 following a 5.6 percent
growth in 1972. C_-auunity-wide unemployment has risen from
2.7 million to 4.2 million over the past 12 months.
Not only is the recession not confined to Australia:
there are grounds far arguing that it had world-wide origins.
0-r experience has zeen part of the total experience of the
ilu. strialised wor-i-There are, however, grounds for optimism.
T-e latest indicatfins are that the recession is ending in the
United States, Ja= an and Western Eurpoe. And there are
indications tha. it is ending in Australia.
PRIME MINISTER: Are there any questions?
QUESTION: I refer to your letter that you mentioned you
sent to Mr Berinson and other Ministers about their staff.
Why have you zecided to ask Ministers to give you such
detailed infor.. ation about their personal staff, and isn't
this task already undertaken by the Australian Security
Intelligence Organisation?
PRIME MINISTER: The Australian Security Intelligence
Organisation doesn't concern itself with aspects other than
security. Itdoesn't concern itself, for instance, with
any business activities, or personal connections of that
character,, which Ministers' secretaries may undertake.
Quite clearly it is necessary to insure that Ministers'
staffs do not do anything which Ministers themselves
are not allowed to do, or not expected to do. I gave
Sevidence on this matter before Mr Riordan's committee
concerning the pecuniary interests of members of the
Parliament. I said that people whom the ministers
appointed should have to make the same declarations,
their interests should be registered, in the same way
O as I advocated, and as the Labor party advocates in its
platform, should be the case with ministers. Now it's
quite clear that ministers'staffs ought to be under the
same, they should operate under the same standards, as
ministers themselves, and I propose to ensure that from now
on this is t-he case.
QUESTION: Who do you expect will be enforcing these
standards? Will it be yourself, Sir? To what use will
this information be put? Will it come to you and will you
O then vet Ministeri-al staffs? The second question, quite
different. Do y: ui hope that in the near future to be
making an announcement about the new Governor of the Reserve
B ank? MINISTER: The second one: yes. The first one, I
have to be informed by ministers of the persons that they
propose to appoint to their staffs. As I say, I need to know
the previous enoio-ment history, the academic attain ments,
and the famil -v noersonal connections of any proposed
appointments. I, in my view, the appointements are not
suitable, then of course, the persons concerned will not
be appointed. I would imagine, however, that discussion
with the minister concerned will see that appropriate
people are appointed.
QUESTION: Have you been happy in the past with the A. S. I. O.
checks on ministerial staff, particularly since December
1972, and is it true that since December 1972 full checks
have only been carried out by A. S. I. O. on two ministerial
staffs? PRIME MINISTER: No, I believe that there have been A. S. I. O.
checks on the staffs of all ministers who would have any
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in
connection with matters/ which A. S. I. O. was concerned.
Not only them, but on most ministers. This question
arose several times early in 1973 and answers were given
in those cases. I have no reason to believe that A. S. I. O.
checks were . r adequate. The matters of dissatisfaction
which have clearly emerged would not come within the
sphere of A. S. I. O.
QUESTION: You've prevented witnesses, public service witnesses
under your control, from testifying before the Senate.
You've offered no alternative inquiry into the loans
affair. In the normal procedures of the Parliament you
haven't offered the documents that the -Opposition has
required. And I ask, what are you hiding, how long
can it be hidden, and in particular, is there any truth at
all in the letter that was written by Professor Colin
Howard to the Age, who . was at the time, as is still,
an adviser to the Attorney-General, that the Government's
design was to avoid, was to arrange a method by which it could
get around the Senate's rejection of Supply?
PRIME MINISTER: The Government is hiding nothing. I didn't
read through Professor Colin Howard's letter to the Age,
I don't know if he is . i. adviser to the present Attorn,-y-General.
Nevertheless, I stated in the Parliament last Wednesd. Ay
that there was no bypassing of Loan Council procedures.
I was asked a question about this late in March, I think,
late in May, and I gave an answer. And the answer was correct,
and it hasn't zeen challenged. The matter arose at the
last meeting of the I n Council and nobody demurred at the Loan...
QUESTION: I'm referring to the rejection of Supply, Prime
Minister, not the Loan Council. Professor Howard's
suggestion...
S PRIME MINISTER: Oh, well look, if you don't mind, I think
it was two colur:-sthe letter, so I didn't really read it
through. I thougah you said Loan Council. I didn't read
Professor Howard's letter, and I don't think it's satisfactory
for you to ask -e to comment on your summary of it. The
Government is : zncealing nothing, the Government has
responded to v-erything that the Opposition has asked in the
proper way. Than is, by questions to ministers or motions
concerning ministers. It is the normal procedure for the
Crown to plead privilege in the matters which are in the
Senate summons. The Senate summons concerned the, a meeting
of the Executive Council and matters prior and subsequent
to that meeting. Quite obviously they are privileged. Any
Government would claim privilege for them. You might as well
say that if a witness was called from a newspaper, if an
editor of a newspaper was called-and no Crown. privilege could
be pleaded in respect of a journalist or a newspaper editorthe
journalist or the editor would certainly plead privileges
as to the sources of his information. Are you then to say
that you're hiding something?
QUESTION: Well, you would be hiding something, Prime Minister...
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PRIME MINISTER: But the fact is that privilege has
always been claimed, and properly claimed for proceedings
of the Executive Council. That's what the Senate summons
mentioned. That, and that alone. They called public
servants alone. You don't politicise the public
service in this jay. Privilege is something which is
claimed by many people in the Courts or, in the exceptional
circumstances of them being summonedbefore a Parliament.
A journalist pleads privilege as often as not when he's
called as a witness. A doctor pleads privilege similarly;
a lawyer pleads privilege. It is the normal thing, and
it is the proper way in which these things are conducted.
It's been recognised for centuries.
QUESTION: Today Senator Withers, in the Senate, gave notice
that the Senate would affirm its right to summon
the people before it. ( Unclear). This runs in the face of the
Idirections the ministers have given to the permanent heads...
PRIME MINISTER: With respect, it does not.
QUESTION: Well, my answer is, Prime Minister...
PRIME MINISTER: Well, I thought you were wanting an answer
from me...
QUESTION: Well t do you propose to do if the Senate
summons, brings. a permanent head before it, asks a question,
doesn't get an aannds wtehre n decides that he's in breach
of Senate privilege?
PRIM MINISTER: be the day when the Senate presumes
to iorison a pub-Servant for obeying instructions.
QU: STCN: Would v-ol: care to explain the difference between
public servants givinz evidence to Estimates Committees
in the Senate, a5 niic servants giving evidence to the
Senate as a con--ee of the whole?
PRIME MINISTER: No public servant has ever been asked by a
Senate com-mittee to give evidence concerning, say, a meeting
of the Executive Council or the proceedings prior or
subsequent to a meeting of the Executive Council. The Senate
has accepted, furthermore, that public servants do not discuss 1
at Senate committee meetings matters of policy, the advice
given to ministers, and so on. Or the discussions between
ministers or the discussions between departments on advice
to ministers. The Senate committees have accepted this
principle. It's all set out in the book of the Senate Clerk
on these matters. / 4
4.
QUESTION: Has the traditional approach been for public
servants to claim Crown privilege on matters of Government
policy, and not on matters of fact?> Have you now received'
new advice th,-public servants are able to claim Crown
privilege on z=.-tters of fact,. as distinct from Government
policy? PRI14E MINIST.-: R: No public servant has ever been summoned
before the Senate before. The only person who's ever
appeared to give evidence before the Senate before was
the Governor of the Reserve Bank. It may be, I don't
assert it to be the case, it may be, that people like the
Auditor-General or the Governor of the Reserve Bank,
might he able to give evidence. The Auditor-General.
of course, is obliged to advise the Parliament. The
Solicitor-General may possibly be asked to advise, as long
as it doesn't cut across opinions which he's given
to the Governmnent. As long as it's not upon subjects;
the evidence sought from him doesn't touch upon advice7
which he has given to the Government. But public
servants have never previously been summoned before the
Senate, and nor have they been, say, in Britain. The
nearest parallel to this was in 1951 when a Senate
committee requested the Chiefs of the Armed Forces
to appear before it, and the Acting Prime Minister at the
time, Mr Fadden, as he still was, conveyed to the Chairman
of the SenatI--e committee which made the request that they
would not be attending.
QUESTION: M~ r Thomas. fron, tho Age, Sir, if the Government
is concealing nothing about the loans
OPRIME MINISTER: Mr'doubting'Thomas
QUESTION: Could you explain which New York and London based
companies the Government intended to buy back with part of its
$ 4,000 million borrowings. And how did the Government intend
to breach the gap between the 8.35 cost of the borrowings and
the dividend yield of major resources companies here of about
3 or 4 per cent?
PRIME MINISTER: This was all discussed last Wednesday No
I know I didn't and I don't propose to now.
QUESTION: In the likely event that the Senate decides that
the Senate will decide what is privilege-"-. hat evidence
is privileged and not the Government.-Wnat is your reaction to
that? If the Senate tomorrow says that this evidence of
Fred Wheeler/ is, in fact, not t-rue?
PRIME MINISTER: Well I expect that the Senate will accept the
advice of Senator Greenwood when he was Attorney-General and
Mr Ellicott ; hen he was Solicitor-General. That is they will
treat the cerwiicates of the Ministers as conclusive.
QUESTION: And i Eney don't?
P?: 2z MINISTER: seli in that case if the Public Servants obey
S their instructions, they would technically be in contempt of the
Senate maybe. T dn't believe the Senate would so resolve and
if it didit's not likely to send them to Goulburn Gaol.
QUESTION: Can't you take it to the High Court Sir. In that event
would the Government try and get a ruling from the High Court on
that matter?
PRIME MINISTER: Well, wait until they get to gaol. There may
be dungeons below the Senate Chamber, I don't know. The Senate
Attendants wouldhave their time cut uutguarding thenm,. keeping them
chained up.
QUESTION: A question in relation to ministerial staff / 6
PRIME MINISTER; This is the third from the Financial Review;
we have had 2 from the Age, 3 from the Financial Review. Are
there any other newspapers?
REID: ( interjection: he's not a newspaper).
PRIME MINISTER: Any other media?
REID: Reid, A. C. P.
PRIME MINISTER: This is not the medium; this is the message.
Mr Reid.
REID: In your speech in the House you revealed the oral advice
given by the then Attorney-General on the loans matter to the
Executive Council. Why not then reveal the advice of the
Solicitor-General in the same circumstances as asked for by
Mr Ellicott and other Members of the Opposition.
PRIME MINIST: R: I quoted already the letter which Mr Byers the
Solicitor-General, that is the second Law Officer of the Australian
Crown, wrote to the President of the Senate this afternoon. He
pointed out quoting Attorney-General Greenwood and
Solicitor-General Ellicott, his predecessor, that the privilege
of the ' Crown extends to opinions -of the Law Officers. The principle
applies whether thev be written or oral and Mr Byers, the
Solicitor-General, said " as one of its law officers I may not
consistently with my constitutional duty intentionally act in
opposition to its claim". I didn't quote the opinion of the
then Attorney-General, I said we acted on his advice, his oral
advice. QUESTION: In relation to staff appointments were you told last
year in the presence of Sir John Bunting and several other people
that a certain person who was later appointed to a Ministers staff
had offered bribes in an attempt to obtain Cabinet Documents
from another person connected with another Minister's staff and
-was the same advice given to both Dr Cairns and the former
Attorney-General, Lionel Murphy. / 7
PRIME MINISTER?.: I have never heard of any of this. Sir John
Bunting never mentioned any such matter to me.
QUESTION: I didn't suggest he did. He was present
when it was suggested to you.
PRIME MINISTER: I don't remember any such occasion. I don't
remember anybody saying such a thing to me. If you care to tell
me afterwards about it, I'll -pursue it.
QUESTION: I'll do that.
QUESTION: Prime Minister in your speech last week you said the
Attorney-General advised orally that the $ 4 billion loan could
probably be legal within the terms of the financial agreement.
Can you tell me have you received any written advice on this
subject. If so who from? And have you got any advice that
the borrowing was definitely within the terms of the financial
agreement and not just probably within the terms of it?
PRIME MINISTER: There was no written advice sought or received.
The matter was also discussed with Mr Byers and the Secretary of
the Attorney-General' s Department by me.
0 = SSUION: Can v.: u tell us what advice you got from Mr Byers and
. e Secretary O: fh Department as well as what you got from the
2ttorney-General?
PRIME MINIS__: i sought the advice from the three persons
and I acted in accordance with the advice.
QUESTION: Have you decided that Miss Morosi is not to be employed
on any Ministerialstaffs and have you and have you issued the
appropriate instructions? a
PRIME MINISTER: I believe I was asked this at another Press
Conference about a fortnight ago. I gather that your question is
based on one of the Sydney afternoon papers. It could have been
either of them I must confess. Their sense of responsibility
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saying that had issued an instruction in respect of Miss Morosi.
I have never m-entioned that the suitability of Miss Morosi's
employment t-D any of my Ministers.
QUESTION: You were quoted in some papers this morning as telling
Caucus that the Auditor-General is somehow involved in
some aspect of the Cairns business and the loans business. Can
you tell us the involvement of the Auditor-General, what he is
investigating, why
PRIME MINISTER: I didn't see any report in the newspapers to this
effect. I don't, what I said in Caucus yesterday was not very fully
reported. For very good reason I didn't tell any of you.
I didn't give a briefing and I didn't give a conference or an
interview to any of you or in any of the Media on the Caucus
proceedings. I don't, I'm not intending to.
QUESTION: can I -clear something' up.: was the
Government intending to dodge a refusal of supply by hocking
what is called now our national heritage
PRIME MINISTER: I saw some suggestion of this. This bright
idea was never discussed. Nor, of course, having been made
in one of the Fairfax papers, was it checked with any of the
persons that . i-t be concerned.