PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 4656


Photo of Fraser, Malcolm

Fraser, Malcolm

Period of Service: 11/11/1975 to 11/03/1983

More information about Fraser, Malcolm on The National Archive website.

Release Date: 21/03/1978

Release Type: Interview

Transcript ID: 4656

QUESTION: Prime Minister, what is your assessment of the current
drought situation?
PRIME MINISTER: I am not too sure to what extent rain over the
last 24 hours has altered the situation, but before that in some
parts of Australia its certainly very very serious indeed. When
I was in Riverina a few days ago it was very plain that the drought
there was worse than anything that had happened since the 1944-45
drought. There are properties that have had no stock on them
for many months or even over a year. People have left their
properties and on some there are no sheep left, others have sheep
away on agistment. It's grim and one of the problems that
makes it hard is that the costs of owning the property now are
much greater than they used to be and the reserves the producers
once had just no longer exist.
QUESTION: Is the current Commonwealth State Agreement on Drought
Aid satisfactory in this situation?
PRIME MINISTER: I think it's satisfactory as far as it goes
and I have in recent times announced some extensions of the
sorts of measures that the Commonwealth is prepared to help
finance in relation to the carriage of water or the cost of
installing bores or rehabilitation grants for local government
in matters of this kind, but I have also asked for certain other
matters arising out of the meeting that I had at Deniliquin to
be examined by Commonwealth officials. One proposal for example
is th~ at if a person is unable to carry on on his property then
it should be purchased and leased to a neighbour as opposed to
being sold to a. neighbour. The rationale behind that proposal
was that the neighbour wouldn't have the financial resources to
buy It, wouldn't want to undertake the financial commitment to
borrcaw so that he could buy because so many producers are already
in debt and they don't want to increase an interest ( inaudible)
Basicmally our philosophyis that land should be freehold. In the
partitcular circumstances that have arisen that proposal might well
have imerit and its one that I've asked be put to examination.
QUESTrION: If anybody took opportunity of this move, there would
be some very large landholdings, wouldn't there?
PRIME MINISTER: I suppose that could be determined to some
extemt by what was happening in particular localities. No, I
don't think necessarily very large. I think you could find that
sort ~ of thing would be more happening amongst smaller properties,
or snmaller medium-sized properties. I don't think it will be
happomning in the larger properties.
QUEUI'ION: Have you thought, indeed, of making money more
availLable to these producers who are threatening to walk off.
PRIME MINISTER: Household support is something which is being
examined. Arrangements were introduced about a year ago but we
./ 2

know from the number of recipients that it is basically not
working and so the Minister is revising the provisions, revising
the criteria and I hope that something more productive will
come out of that. Apart from matters of that kind, if a
particular person has go too much liability, too much too great
an interest bill, making more money available which is going to
be a loan, which is going to have to be re-paid, isn't going to
be a solution. Therefore, you are either talking about household
support or change of provisions perhaps for farm build-up where
that is appropriate. If loans are appropriate for a particular
person I certainly believe in a drought situation they ought to
be available, and I think by and large they are. But the lack
of profitability has been so much part of the rural scene over
recent times coupled with rising costs and bad seasons. Many
people borrowed as much money as they wanted to and that it
itself is an inhibiting factor and it restricts the approaches
reduces the approaches that the Government might be able
to pursue.
QUESTION: Can I go onto another subject beef exports?
Prime Minister, despite the fact that we have now record amounts
of beef, there are no new markets in the offing at the present
time. Do you view this situation with any alarm at all?
PRIME MINISTER: I think in the development of markets it is
a question of improving access, increasing access, largely to
existing markets. I don't want to be held to ransom over the
figures, but I think we export to a very well I know we do
to a very large number of countries and the principal markets-
United States and Japan we're hoping that as season circumstances
alter in the United States and their own killing rate drops as
I believe it must that there then will be an increased demand
for imported beef. Now while Japan has its own internal problems
in relation to the import of beef, we have achieved better
access steadily over the last two years. Quotas have been
increased.. We still have the problem of negotiating quotas
every six months. I think Japan understands our point of view
in relation to that which was the beef trades and long-term trade
and we ought not to have to argue every six months. On the other
hand we need to recognize they also have a domestic problem
which makes a sudden move difficult and while we will continue
to press for what we believe is proper and appropriate we have
been getting better access and approved tonnages into the
Japanese market and that is important to us. The real reason
I think that while we have moved record tonnages and the producers
don't do well out of it is that in terms of total overall suppl'
in Australia there has just been too much on the market compared
to the markets available to our exporters and that's when exporters
have been able to pick and choose there hasn't been much
competition in the markets and while many exporters might have been
doing reasonably well over the last period, as we all know, most
beef producers would have been doing very badly indeed. our
beef numbers are being reduced in Australia so as we are successful
in expanding markets further overseas and as our own beef numbers
fall as a change comes in the beef situation in the United States
I think we might see a quite different supply-demand situation
which certainly ought to find itself reflected in prices for
Australian beef. / 3

QUESTION: Of course one of the factors that hinders the
further expansion of Australian beef to other markets is of
course you have got to compete with other countries who subsidize
or indeed give credit sales to their own product on the market.
Would you entertain here in Australia putting credit sales on
beef for our markets?
PRIME MINISTER: I think its a matter that wants to be closely
examined because as I understand it with trade to the United
States overwhelmingly that's not on a credit sale basis. Now
if you are going to get greater sales into Eastern Europe or
the Soviet Union through credit sales you wouldn't want that to
be spreading to your whole trade in beef. While it's a matter
that I think we ought to look at, I think we ought to look at.
it carefully and not just jump to the conclusion saying yes it's
a good thing to do. I know its a matter that some of the
industries put to us and the Minister and departments are examining
the proposal at the moment.
QUESTION: It's virtually playing the same game that the EEC is
playing with us on the Third World market. They are subsidising,
why can't we?
PRIME MINISTER: Credit sales aren't really subsidising. It's
just giving you time to pay and I didn't I think answer the other
part of your earlier question which was getting back to the
question of subsidization. Europe does get rid of its surplus
products, not only in beef and many other primary products by
a process of subsidy. They just ask themselves quite blatantly
what do our producers need as an adequate subsidy to take this
market from whether it might be Australia or New Zealand or
somebody else and that's the subsidy they get. The plain answer
is that a country of 14 million people like Australia can't get
into a competitive subsidy situation with the whole of Europe
over 200 million people. We just haven't got the resources. So
in that area what we have go to try and do is to when Europe
is dumping surplus agricultural products which is what it is
they ought to do it in accordance with certain rules that do not
disrupt the traditional markets of other countries such as
Australia. QUESTION: But don't we have rules. We have GATT. Can't we call
the agreement GATT and say you're subsidising?
PRIME MINISTER: We could call up GATT if it was trade in
industrialized products but I have been trying to make the point
in recent times that international trade negotiations have
resulted in a very unequal situation in trade in all the years
since the last world war, because they have had GATT, they have
made rules, they have applied those rules to what's meant to
be fair behaviour to industrial products but then it screwed
commodities, it screwed agriculture. That's like saying well
everybody's got to behave properly the manufacturers in relation
to the protection of agricultural trade in agriculture you can
do anything you like and therefore GATT doesn't apply overwhelmingly
in this area. I believe that GATT has up to this point helped
Europe, helped North America, helped Japan but it has hindered
fair trade in commodities, it has hindered fair and equal trade
in agricultural exports and this is one of the matters that the
Minister for Special Trade Representations and indeed the who: le
/ 4

thrust of the Government's trade policy was designed to try
and rectify at least in part.
QUESTION: You would like to see an international formal
agreement taking into agricultural commodities?
PRIME MINISTER: I would certainly like to see fair rules for
trade in commodities. I would certainly like to see fair rul~ es
for subsidization of those commodities into other country's
markets. This basically gets down to whether or not the European
community can be persuaded that she ought to change her stance.
I don't think that we can be overwhelmingly optimistic at
Europe's reaction although I think there is a growing recognition
in relation to Australia they do need to make some movement.
The fact that Europe is staying out of the International Sugar
Agreement doesn't all do well for Europe's preparedness to
participate in world commodity arrangements for example.
QUESTION: So you are not really optimistic about there being
a massive change in the EEC attitude?
PRIME MINISTER: Not a massive change. We have tried to make--
however we dislike we don't challenge the Common Agriculture
Policy as such. We don't challenge their right to protect
European farmers. We would be very foolish if we did. of course
they're going to protect their farmers, but what we do want are
changes at the margin changes at the margin of their policy which
will allow the possibility of some access of some trade where now
there is often no possibility of trade and at the same time changes
in the rules to their policy as they call restitution. I don't
know how they came to use that name but that's subsidizing service
commodities into export markets and if you could have rules which
would apply when they used that policy so they didn't destroy the
traditional markets of other countries such as Australia and
New Zealand changes at the margin is what we have been after
all along and it'Is on that basis I believe Australia is being
completely and absolutely reasonable. We are not challenging
their right to protect their farmers. We believe at the same
time they ought to give us some capacity to trade with them.
QUESTION: Prime Minister, on the domestic scene you mentioned
the return to the producer the beef producer do you place
much faith in the PJT being able to highlight some of the
anomolies? PRIM4E MINISTER: I think they might well highlight significant
anoimolies between meatworks. I think it will be very interesting
to have this knowledge. If we want the information it will be
quite wrong for me to pre-empt what might come out but depending
upon what it is we might want to discuss it with the states
and see what should be done but we ought to have an investigation
and see what the facts are.
QUESTION: Changing over to tariffs versus bounty and last week
theire was a significant announcement from the minister for Business
and Consumer Affairs, that is, on removing the tariffs or
lowering the tariffs on small trucks or medium sized trucks I
thiink it was and introducing a bounty. Primary producers
organisation saw that as being a change of direction in your
Government and indeed a recognition that indeed tariffs do not

help unemployment. Is that so, and will you be applying it
more so on a wider field?
PRIME MINISTER: I don't think its a change in recognition
a change in direction of policy. We've always indicated in some
areas bounties operate better than tariffs. There have been
bounties on tractor manufacture in Australia for many many many
years and I think it depends upon cost analysis in each case
as to what might operate better, a tariff or a bounty. But what
I do say in plain terms is that we've got to treat the Australian
economy as one economy and that attempts to divide it into
manufacturers or employees from manufacturing industry and then
into rural industries in the other is very misguided indeed because
for many of our primary products the domestic market is the
best market. Without tariffs there would have been no manufacturing
industry. Without tariffs there wouldn't have been any domestic
market for our primary industries and when we are talking about
competition I don't really think that Australian dairy farmers
want to see uninhibited imports from New Zealand lamb and New
Zealand butter. I don't believe our potato growers and onion
growers and other producers want to see uninhibited imports from
other countries. If you get to the situation in which the world
price for wheat was lower than the Australian price, would we
want to allow the uninhibited imports of wheat when the world
price was below the Australian sugar price. With all these
things the primary industries are in fact put into a position
where they can have a pretty fair certainty of having most of
the Australian market and they need to understand that there is
an element of protection involved in GATT and I think most of
them do.
QUESTION: But with respect sir, whilst they wouldn't like to see
the competition with their own productthey would certainly like
to see some dimunition of their cost inputs and of course this
move by your Government in the fact of the IAC recommendation was
very much welcomed.
PRIME MINISTER: I think that's a good thing. We're not in favour
of high tariffs just for the sake of having higher tariffs but
we do believe the circumstance in which Australia is if we are
going to have manufacturing industry we do need to protect that
industry. I'm only making a point that when people are sometimes
calling for free trade they need to understand that there is an
element of protection in relation to the number of Australian
primary industries which doesn't always come to the fore, but
which is certainly very real and of very great importance.
The manufacturing industry is as diverse as tobacco, sugar,( inaudible)
dairy, wheat and that needs to be recognized.
QUESTION: One last subject if I may sir, and that is union
control of our exports. Your views on it?
PRIME MINISTER: We don't recognize any union bans in relation
to exports and we have no intention of allowing the trade union
to control Australia's exports.
QUESTION: They have in the past.
PRIME MINISTER: They have limited exports in some areas. A number
of bans have in recent times been lifted and I think that
exporters themselves have a responsibility to make sure that there

is reasonable discussion where there is a proper course to
be undertaken but you can't have a situation in which exports
are determined and governed by trade union movement.
QUESTION: How would you stop it?
PRIME MINISTER: I think you will find that bans in relation
to Indonesia have already been lifted and Chile, I think they have
been lifted, and part of that I think is a result of the general
attitude that we are taking to trade union affairs in terms of
consultation and also in terms of having laws which are much
more appropriately related to the needs of Australia in 1978
than they were two or three years ago. The laws have been
changed to give us more flexible opportunities. But at the
same time I think and this might be one of the most important
elements the Government has demonstrated that when it makes
up its mind about a particular issue that it is in fact
determined and is not going to allow the government of the
country to be taken out of the Government's hands.

Transcript 4656