PRESS OFFICE TRANSCRIPT
19 JULY 1978
INTERVIEW BTV 6 BALLARAT
QUESTION: You've come to Ballarat within four weeks of the
Budget bing brought down. How do you begin to draft a
Budget with a $ 3,000 million deficit to cover from last
year? PRIMrE MINISTER: Well, you have to look at all your expenditures,
all the programs of Government. You've got to look at
obligations, payments to the States, you make sure that you
are responsible as you can be in whatever expenditures you
have to undertake and you've got to make decisions overall
which are responsible and in the best interests of Australia.
We are quite determined in what we have been doing over recent
weeks to make sure that taxpayer's dollars are well spent.
We are well aware that whatever Government's spend they've
got to take from people and we are also quite determined
that in its final result, the Budget will be seen as being
responsible, one that will continue to get inflation down,
interest rates continuing to move down in a steady and
sustained manner and that is going to, by that means, help
Australia. QUESTION: You've already hinted that some indirect taxes
will rise. What are some of these indirect taxes?
PRIME MINISTER: I don't think I did hint that indirect
taxes would rise. I was asked once on another program about
an inquiry Mr. Howard had initiated into broader-based
indirect taxes. Now that inquiry will take several months,
the Government will have to examine it, and Mr. Howard said
at the time that the purpose of that inquiry was not to raise
more money, but to put the Government in the better position
to make sure that the money it did raise from people was
equitably shared. I think it was against that context that
I'd made remarks about indirect taxes.
QUESTION: You've also described the Budget as being austere
and tough it doesn't sound as if it is going to be one to
gain your Government much popularity.
PRIME MINISTER: It will be an austere budget and I think
everyone understands that it will have to be. But I have
sufficient faith in all the people of Australia to believe
that they respect a responsible budget and I do not believe
that they any longer respect politicians who merely promise
to spend more of other people's money because when politicians
make promises to spend and spend up big, they are not promising
anyth~ ing of their own. They are promising something which they
first have to take from people like you and people watching
this program and indeed all the taxpayers of Australia and
I believe that the overwhelmingly majority of Australians know
that that kind of policy gets this country into a great deal
of trouble and they don't want it any more.
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QUESTION: Sir, you are not going to give much away about the
Budget, so can we turn to...
PRIME MINISTER: On August 15, Mr. Howard will give it all
away he'll let it be know then.
QUESTION: Fair enough. Returning to employment. Now you saw
some of Ballarat's unemployed here today and figures released
this morning show that our unemployment rate is 9 percent of
the work force. What is your answer to these people say these
people that demonstrated this morning?
PRIME MINISTER: -There are a number of things that I would like
to say about that. First, I understand that tho ' se who demonstrated
this morning were not unemployed. They had shut down their
factory for the day so they could come and demonstrate against me.
I also understand that they've got work bans on the factory so
that they won't work more than 35 hours a week and as a consequence
the factory is having to turn away orders because orders that have
to be filled within a certain time can't be filled under these
bans. Now that is a classic example of union activity, which I
wouldn't have thought the majority of the blokes support which...
QUESTION: I think these people were under retrenchment notices.
PRIME MINISTER: Well, some might have been, but the bans are
sti-1lon the factory for the reasons that I have mentioned.
Whether they are under retrenchment notices or not, I don't know,
but that kind of action and the kind of action by the Builders
Labourers in Melbourne, which has led to the cessation of work on
a major building I think about $ 150 million worth has led to
a great deal of employment just not being created. In Melbourne
many major projects have just been abandoned and hundreds of
jobs lost because of the tactics of a number of union leaders.
Now that is obviously not the only problem but I make those points
to indicate that in getting back to a proper employment base,
everyone in this country has got a role; Governments have got
a role, trade unions have got a role, and employers. Now, for
our part, we've got to go on getting inflation down. We've got
to make sure there is stability in this country. We've got to
get access to the maximum extent in markets overseas. Employers
have got to show inventiveness, initiative, and they've got to
work well with their own people, their employees. But we need to
understand that our interests in this area are interests as
Australian which we share; they are not competing interests. The
sort of action which seeks to drive up wages too high, the tourist
industry in many areas has been destroyed by penalty rates now
these are things that are only going to be solved if the trade
unions, and the people in the industry, can get together and work
out a way which allows an industry to operate profitably.
QUESTION: There appears to be a vicious circle at the moment;
employers are reluctant to take on more staff because of high
costs. ./ 3
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PRIME MINISTER: I think that's true. You see in one two-year
period wage rates, hourly wage rates, went up by over 50% and
that was much higher than our competitors, much higher than
people overseas. Inflation in Australia at the same time went
up much more than that of many other countries. Now we've
got inflation down, it has in fact fallen in this country
faster than in any other OECD country over the last couple of
years and we will keep on getting it down and I think we will
have it below the average of a number of our major trading
partners I think really our inflation rate is below the
United States now and that will start to make Australian industry
more competitive again. But these particular attempts are in
part frustrated when unions go on wage claims outside the
indexation process and they are also frustrated if the
Arbitration Commission awards wage increases which are
unreasonably high.
QUESTION: Now, we've already discussed the National Budget,
local Governments too are working on their documents and many
Municipal Councils are claiming that the ten percent increase
in the General Purposes Grant is less adequate than the 1.52%
of the share of income tax. Can you explain this?
PRIME MINISTER: Well, I think I can, yes. All Governments
of Australia had got into a state of going on spending more
year after year after year. Now the taxpayers of Australia,
in the case of local government, ratepayers obviously can't
afford to go on having their rates put up, especially in rural
communities where many people were going through difficult
times; drought, disastrously low beef prices, and other difficulties,
and you know the idea that governments at any level whether
it is Federal or Local or State can and should spend a larger
share of Australia's resources year after year, is a view that
I am quite certain the overwhelming majority of Australians reject
and that applies to local government as much as it does to the
Federal Government. We've sought to supplement the funds to local
governments so they can make their own decisions.-We enormously
increased grants to local government in the first year of about
million to $ 8Qmillion to $ 140 million, that went to over
$ 160 million last year and that will go to over $ 180 million
this year. It is a 10% increase it is much more than enough
to cope with inflation that is running at maybe 7% in that sort
of order and therefore gives them greater real resources coming
from the Commonwealth. Now, against that background, I believe
there is no justification for local governments saying that the
sum is inadequate and I hope also that their ratepayers and
if I can speak as a ratepayer at a moment will be putting their
view to the local government that rates also ought to be held
and not increased. We do have a commitment to move from 1.52%
of income tax collections to 2% but against the budgetary
circumstances that we knew we were facing, we said we couldn't
do it this year and that still means that the significant increase
which I mentioned, does flow to local government. / 4
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QUESTION: One councillor in your own electorate said he
believes they have been sold a pup because you haven't increased
the share of income tax.
PRIME MINISTER:-We said we would do it over the life of the
Parliament and we will, but at the same time there are
substantial increases from a bit over $ 160 million to around
about $ 180 million and if that's a pup, it's a very expensive
PUP. QUESTION: Can I ask you now for some comments on one or
two rural matters. First, the issue of the export of live
merino rams. Now the Graziers Association has asked your
Government to back its decision to lift this ban despite union
interference. Do you expect union interference?
PRIME MINISTER: I would hope that there won't be and that common
sense will prevail. I'm sure the rams will be exported.
QUESTION: On the matter of sheep and wool, can you update
growers on what's happening to the submission made in 1974
by the Wool Corporation on their marketing plan?
PRIME MINISTER: The marketing plan was put forward, there were
discussions with the industry that involved quite substantial
changes from the present marketing, a further change towards, if
you like centralised control and a year or so ago the Minister
negotiated with the industry, the Marketing Corporation, to
undertake an experiment to demonstrate whether they could by
these means, handle wool more cheaply than is done through the
sources presently used. But until we see the results of that
the Government would be reluctant to take further steps. We
need to understand in the wool industry, that we have a marketing
operation that is working extraordinarily well. It has put
a floor in the industry, that floor price has been steadily
increased. It was increased two or three weeks ago for the opening
of this season and at the same time the Corporation has been
getting rid of surplus stocks. There is stability in the price,
the price going to growers is a good price. The price of sheep
is good and the system I was one of the early advocates for
change and back as early as 1960 or ' 61 was advocating substantial
changes to the system of marketing. But what we've got now
is quite different from the free and open unregulated auction
system of older days and its working very well to the advantage
of growers and therefore when we take further changes, we want
to be cautious and make sure they are going to be successful
and that they don't in any sense jeopardise the gains and
the advances that have been made and again I believe that
would be a view that would be shared by a majority of
woo lgrowers.
QUESTION: A matter closer to your own heart, being a beef breeder,
the U. S. A. recently expressed interest in a $ 90 million order
of Australian beef. Are there any other orders of this magnitude
in the pipeline?
PRIME MINISTER: Well, this is a particularly large order.
I believe that the beef industry has turned through the
bottom. Now I had hoped this would have arisen earlier,
a year ago it didn't but the United States had had
very severe drought over about half of America and in our
terms about 25 states would have been declared drought areas.
As a result, their own cattle numnbers have come down about
million over the last two to three years; they have been
selling enormous numbers of additional surplus stock breeders
for their manufacturing meat which was competing directly
with our Northern Queensland/ Australian beef. Now, their
droughts have broken, they are facing better seasons, as we
are, they are going to want to build up their stock numbers
again and over a period of years; and that means that there has
been a substantial shortage of meat on the American market
and that's the basic reason why they are importing more from
us. While that additional quotas, imports, were to come into
this United States by Christmas of this year, I don't believe
we are in a short-term situation. They are going to need
more meat, not just from now to Christmas, but I believe for
years ahead and against the backgrou~ nd that our own beef
numbers are down about 4 million, I really do believe that
the beef industry has turned the corner; prices are now
much better, I have no reason to believe that those better
prices won't be sustained. At the same time, of course, we
are going for increased access to markets in Japan and in
Europe, and in Japan we are having some success, and we are
getting access into other markets also. So, for the beef
industry I think the future is bright and I think this is
already reflected in the great farming and pastoral communities
of Australia because there is an optimism in the air in rural
Australia with forecasts of up to 40% increase in rural
incomes this coming year now we haven't had forecasts of
that kind for seven or eight years and that's not only good
news for farmers and graziers, it's also good news for country
towns that feel it very much when farmers themselves are in
difficulty. 000---