IN'] ERVIEW WITH ' THE PRIIMIE MIISTIER AND SIR GiARLES ( flURI PER'IH, 21 OCTOBER 1978
PRDbE MIS15TER: . very useful discussion. We have been assessing where
we see Australia and Western Australia moving as we get into the
1980' s. The meeting that will held the Loan Council in only
a few days time now about infra-structure financing proposals is
going to be a very historic meeting between the Premiers and the
Commonwealth because it is going to make it possible for the States
to borrow overseas in a way which will assist major resource projects and
enable development to take place which might otherwise be held up.
That is going to mean a good deal for activity it will help to
make Australia more competitive, I believe it will make Australia more
attractive as a centre for major resource development in a world which
tends to become increasingly competitive. Australia has got an edgethis
will give us a better edge.
In this State the Premier has got a number of projects which are
moving forward to the stage where the real activity is going to takd
place and in other States also a number of proposals have been
put to us which could lead to a good deal more activity and help build
up the resources and infra-structure and the basic strength of Australia.
The initiative for this originally came from Sir Charles, and it is
a matter on which there has been a great deal of work undertaken
between the Commonwealth and the States and I believe it should lead
to more activity of a very real kind. The Commonwealth welcomes it
in particular because it will give projects access to overseas funds
in a way which doesn't fall on our Budget and doesn't make our
deficit financing problems worse might otherwise be the case, and
therefore the proposals are particularly welcome from that point of
view. We discussed a number of matters, but the other thing that I would
like to draw to attention again is that with inflation falling in
Australia we are getting to a situation where Australian industries
are becoming, and will continue, to become increasingly co mpetitive.
They are going to get a larger share of the domestic-market, and
now for the first time, for a long while, Australian industries are
moving out into the export field in a very imaginative way.
In this State, fishing vessels designed and built entirely in
Western Australia are being exported to a number of countries overseas.
This sort of thing is happening right around Australia, and again
I believe augurs well for the future development of Australian industry,
and getting back to something which concerns all of us to
establishing more jobs so that Australians who want to work are
not going to be in the difficulty which we know quite well a number
are at the moment.
QUESTION: Mr Premier, with regard to the Infra-structure financing
what projects in particular are likely to benefit from that?
PREMIER: The most important one of course, from the national and
the State point of view is the pipeline from the north to : รต outh
it is a major undertaking by anybody's standards it is quite a
dramatic thing to have a pipeline of 1000 miles built in any
generation and whilst we don't need to have the money inmmediately
we have to know very clearly that we will be able to borrow at the
right time in the overseas market. This together, with the other
projects such as the griding of the power scheme in the Pilbarra
and the assistance with backup for the Aiwest project are* thetype
of things that will be resolved on the 1 November. I felt it was
a good time to have a talk to the Prime Minister while he was
here to make sure that the particular needs, the particular reasons
that the State has in the scheme would be understood by him personally
because we have found that his personal knowledge and intervention
carries a fair bit of weight.
QUESTION: Mr Prime Minister, you have mentioned the fishing boat
export industry here. Is it possible that the Federal Government
consider using West Australian built boats for coastal surveillance
and minor Defence functions as has been argued by one of our
boat builders?
PRIME MINISTER: I know they have. The patrol boats that are
being developed in Australia at the moment are being built by
an Australian firm they are not being imported. So here it is
a question of one Australian constructor as opposed to another.
That particular Defence contract did go to a north Queensland
boat builder in Cairns, but let me only say that for future
Defence contracts, as that is the area that this falls in, that
we will be examining any tender in Western Australia very closely.
They cannot be commitments to one State in relation to that, you
have got to look at all tenders on a fair basis. We certainly
do intend to spend as much as the Defence equipment vote
in Australian industry as possible indeed that is the policy in the
total area of Government spending on capital equipment. Ina
number of instance we give quite a substantial preference to
Australian industry as against the imported product. I think that
is the way it ought to be but it used not to be that way.
We introduce d that policy when we came into office.
QUESTION: It could be some years before industry recovers enough
to alleviate the unemployment problem. Is it possible that the
Government will introduce some interim spending measures of its
own as a stop-gap measure?
PRIME MINISTER: This point needs to be very clearly understood.
We are doing a great deal to help the unemployed at the moment.
110,000 Australians, many of them young Australians, are in
various training programmes, specifically helped by the Commonwealth
Government, a number of them working in cooperation with States
and with State resources. These programmes are monitored, they
are examined, they are extended, they will be improved and that
process goes on indeed, Tony Street has a major review of the
programmes underway at the moment in a routine way and we will be
looking at that in a few weeks time. These programmes are there,
a very large number are being helped 110,000 right at this
moment, and many tens of thousands have gone through the programmes
and are in permanent work as a result. We ask ourselves, can these
programmes be imroved, can they be extended. Ifthey can be improved,
they certainly will be. / 3
On the other side of the coin, you said will be have special
spending programmes designed to create jobs we want to avoid the
problems that a number of European countries have fallen into to,
where they have subsidised jobs in particular industries and
then capital, and labour and management have got locked into
industries which are not competitive, which have required ever more
subsidies to stay alive. Ou r programmes are quite different
from that, I think they help just as many people, maybe more
people, and I don't believe the sorts of employment creating
schemes that Europe has pursued really end up with more people
having jobs. We have found, from Australia's own experience, that
Government spending runs away, if you have got more people on a
Government payroll it can end up by more people being out of work
because of the greater Government expenditure adds to inflation, and
that disheartens private industry and they employ less.
The preminent example of this was in 1973-74, when Government
expenditure when up by 46%~ in one year. Obviously with many
more on the Goverment payroll, but the total numbers unemployed
in that one year rose by 200, 000.
PREMIER: I think Mr Prime Minister, if I might mention another
matter which is relevant to this employment thing on the positive
side that we did discuss the programme that is being developed
in connection with Yalliri, because people get the idea that all
the uranium is in the Northern Territory in point of fact, of course,
of the known uranium in the world is at Yalliri. This is only
beginning, and I wanted to make sure that the Prime Minister
understood the programme we are following, which is unchanged.
We want to get on with a pilot plant, starting in January, and
get that built, get it into work, and then still working on the
programme, of being able to export yellow-cake from Yalliri by
mid-1984. This is another side of the programme which is important
to the rest of the world, because if there is any hesitancy about
the Ranger uranium, we want the world to know that there are other
sources of uranium in Australia and they will be developed.
PRIME MINISTER: The Commonwealth certainly supports that.
Of course, the infra-structure proposals themselves will lead to
more activity, and real activity, related to real productive
enterprises. They are the sorts of jobs we need in Australia for
Australians. QUESTION: The Government has been criticised for its failure to
spend to create work, and its popularity has slumped as a result.
That is what I was trying to get at earlier, Mr Prime Minister.
interim government expenditure in industry, not in the long-term
not to lock industry into it.
PRIME MINISTER: The training programmes do much of this, and
the sums provided for the training programmes have increased by
tens and tens of millions of dollars in this year's Budget. Much of
this does help industry. But it is aquestion of where the
training programmes are. If industry is prepared to provide positions,
they get support under the programmes. Therefore, that is a very real
and that sort of assistance will continue. What we seek to avoid,
is specific subsidies to specific industries, whether it is a
permanent subsidy for the labour or whatever, which locks people in in
an unreal way. But again, let me get back for a moment to the total 91 4
position. You can look at a particular industry in that one
question, but when you look at the Commonwealth's total Budget
you sometimes have to take a different view. We have a deficit
and we have to fund that deficit either by your borrowing prog'rammeif
the Government wants to borrow more, it tends to put up the
rate of interest. If it puts up the rate of interest that is
bad for industry, it is bad for home builders, we want the rate of
interest to go down.
We don't want the Government's borrowing requirements to be too
large. If you don't want to raise it by borrowing, you have got
to raise it by increased taxes perhaps. People don't like paying
increased taxes and there are many people who argue that taxes
are too high. Your third way of funding it is just by printing
money and that, of course, is highly inflationary.
There are unfortunate consequences from whichever way you seek to,
fund a larger deficit there are unfortunate consequences from
it, and we want to avoid those consequences because we believe they
would be bad for the Australian economy, bad for activity in private
industry, and especially small businesses, amongst the home building
industry, which is stifled sometimes by high interest rates.
Therefore the policy of getting inflation down, of getting interest
rates down is a very real one and a very important one and it is.
one that we intend to pursue. We don't want policies to be
introduced that will cut across getting interest rates down and
getting inflation down.
QUESTION: Are you saying that the Government's unpopularity will
have an adverse effect on business and on public confidence in the
Government?
PRIME MINISTER: I think the business world understand the basis of
our policies and they know that we are providing the sound economic
base and the stability in the economic climate which will . enable
them to plan for the future. I don't really believe, because every
one knew that we had a difficult job at the time of the last
Budget, but I think, by and large, when people stop to think
there are many Australians who have given the Government credit, for
having the courage to introduce what they know is a responsible
Budget. I know people don't like particular items in the Budget
but at the same time I am quite certain that an overwhelming majority
of Australians wanted a Government that was prepared to introduce the
right Budget for getting Australia right, as opposed to a Budget
that would have some immediate impact on the opinion polls.
There is only one poll that I am really interested in and that is the
one poll that I am really interested in and that is the one that
will be conducted on the date of the next Federal election.
QUESTION: exports, you agree that they will go ahead in
1984, even if Ranger hasn't gone-previous to that?
PRIME MINISTER: I don' t want to say much about that because there are
discussion taking place and it might be a little bit premature.
But it is our intention that uranium mining will proceed we made.
that decision and that applies obviously to Commonwealth areas,
but we also want the developments to go ahead in Western Australia,
if there is anything that we can do, therefore, to support Sir Charles
in the development of Yalliri, we would want to do.
QUESTION: that particular priority Sir, it is just whichever
is ready first?
PRIME MINISTER: We believe that Ranger should go first and I suspect
that it still will. If it doesn't Sir Charles goes first.
PREMIER: The market is going to need the lot. 1985 is a crucial
year, when everything that your Ranger can produce, everything that
we can produce, and some other places can produce will have a
market. PRIME MINISTER: It is worth noting that a very socialist government
in Sweden has just been reelected, a socialist government reelected, they
threw out their opposition, and the main point in the election was
the development of nuclear power. The socialist government wassaying
nuclear power has got to be developed further Sweden has got to
be preminently dependent upon nuclear power because nothing else
is available. On that, they won the election.
I think there was a vote also on the development of nuclear power as
a separate referendum issue and Sweden voted 2-1 in favour of the
further development of nuclear power, which is an interesting
side-light on the attitude that some members of the Labor Party
take in Australia.
PREMIER: If they went to Europe today they would find that the
unionmovement is right behind nuclear energy, because they have
got the simply slogan no energy, no jobs.
PRIME MINISTER: The British Labor Government is desperately wanting
to sign contracts with us.
QUESTION: Sir Charles, one other point on the talks this morning.
Can you give a time-scale for the introduction for any of-these
other State projects you mentioned.
PREMIER: Wagerup was announced this week. We will have the
answers on Aiwest within a very short time now. The pipeline
thing is locked into the timetable so the gas comes ashore in 1985,
so you have got to come back from that point. That is where the
whole of the sales and negotiation, the whole of the infra-structure
are all regulated by the deadline date to bring the gas ashore and
exporting it as LNG. You work back from that date. If it takes
you three years for the pipeline to be constructured on land, which
will be much quicker than the one in the sea of course and the
platforms in the sea, then naturally this dictates the time when you
want the money. Noone borrows the money and this is what I can't
seem to get across to some people in Australia noone borrows the
money before they want to use it,.. because you are paying interest
on it from the date you start to draw. We have got to know that
when the time comes we can have this money. I emphasise it is
not a question of wanting to draw it immdiately, it is a question
of drawing it to fit in with the construction timetable.
I would be the last one to borrow it a day before I have to.
QUESTION: Can we take it then that the North-West Shelfi is going
ahead? / 6
PREMIER: I have got no doubts in my mind. Everything is
running on time. The $ 55m final evaluation programme with
design and finance and marketing negotiations is right on time,, and
I have no qualms about it at all.
QUESTION: Have you had any indication from the companies that they
will proceed?
PREMIER: When I went away abroad in May and June it was to talk
to all the top people in the consortium we keep in touch all the
time. The timetable is right on time, and put it this way, there
is not the slightest suggestion ever been made to me, nor canlI
see it on the horizon, which is adverse to the project.
QUESTION: The companies are still reluctant to say
PREMIER: They are very wisely reluctant to say. They have until
the end of September. I am hoping that they will make the
announcement on the 29 September 1979 it happens to be two things:
it is the 150th anniversary, and it is my birthday.
I am not suggesting that is why we fixed the date 30 September
for the final announcement, but it would be alovely conincidence.
QUESTION: On the overseas borrowings. will: the Commonwealth retain
the right of veto despite the fact that all States might agree...
PRIME MINISTER: I think if all States were agreeing on a project
it would be unusual for the Commonwealth not to support it.
It was recognised that the present voting procedures were introduced
on a trial basis and also, against the background that the Commonwealth
does retain ultimate responsibility for monetary control and
overall financial management.
PREMIER: We-accepted this on the basis that first of all-we are
breaking the 50 years of history, and secondly on the trial basis
so you have got to go step by step and we accepted it as being
a sensible way to break the ice.
QUESTION: You are quite happy now with the guidelines?
PREMIER; Some aspects of it we will never be happy with, but we
did accept the fact, as a matter of good sense, after 50 years
you couldn't expect to throw the doors wide open and we agreed
that provided there was a genuine undertaking for a review after a
trial period we were satisfied to go along with it, and that
makes good sense to me.
PRIME MINISTER: I think the proof of it will be in performance.
QUESTION: Apparently in 1929 there was a referendum where the
Commonwealth had to come a bail out the States because of overseas
borrowings. PREMIER: In 1927 the Loan Council was set up and that is an historic
date and that is why I say 50 years.
ENDS