6 DECEMBER, 1978
PRIME MINISTER'S INTERVIEW WITH HOWARD TYNER OF THE CHICAGO TRIBUNE
QUESTION: Mr Fraser, the firsy thing I wanted to ask you
about is concerning Vietnamese' refugees. Australia is one of
the few countries, and including the United States, that has
been accepting some of these people. There is a United Nations
Conference coming up, but given the historical ineffectiveness
of such actions, what do you think is going to alleviate the
situation? Where does the solution lie?
PRIME MINISTER: I don't see any short-term solution to the
" problem. The refugee question obviously arises in part at
least because of the internal policies of Vietnam.
Unless there are some change in those policies, I think the refugee
situation is likely to continue maybe at very high levels
for a long while. I think that there ought to be a greater
international effort. That is the view that Australia will be
putting at this conference in Geneva. It is sometime in this
area very hard to get countries that aren't either geographically
close, or they believe other particular obligations, to take
much notice of what is occurring. Adequate international effort
is to always easy to achieve.
QUESTTION:. Australia is geographically close, and although it
has ta en some of these people, do you think Australia is going to
come under greater pressure to take some more?
PRIME MINISTER: I think that is quite likely.
QUESTION: How many do you think Australia would be willing to take?
Could you put any figure on it?
PRIME MINISTER: I don't think I want to put a figure on it,
in relation to future events, the present and past record speaks
for itself I think in relation to our own population we
are taking as many, or not more, refugees from south-east Asia
and Vietnam than many other countries. We would believe that
the main burden of the problem should not rest on Malaysia, Singapore,
Indonesia or Australia it is not just a south-east Asian
problem, it is an international problem. The United Nations
recognises that, but as you pointed out in your first question,
there is sometimes the difference between recognition and action.
I hope that at this conference the United States and Australia
at least will be very much united in wanting to get greater and----
more effective international action. I don't think at this
point we should assume that that is not going to occur.
QUESTION: Some people have been ma king a distinction between the
type of refugee that is coming out, expressing a criticism in fact
that some of them were able to pay gold. I think at times that a
lot of people have a stereo-type version of what a refugee should.
be he has to be poor, in rags. Do you think that this distinction
should be made between the middle-class ethnic Chinese and the
others? / 2
PRIM~' E MINISTER: No, I don't really think it should. If you go
Back to the days after the World War there were refugees from
Eastern Europe of many different kinds and many different
characteristics, and many different backgrounds many of them
very highly educated, and highly articulate, and probably if
they had any possessions leaving, or losing most, in the process
of becoming refugees. Many, many tens of thousands of such people
came to Australia, and they came here for one reason only it
was a free country and one in which they thought they would be
able to live out their lives, and bring up their children in
freedom, a place where they could make their own and be recognised
for what they could contribute. It has worked out that way.
I think it makes no more sense to exclude people coining out of
Vietnam now that it would do to exclude those people who are
very genuine refugees from the last World War. Refugees can come
in many different shapes and characteristics.
RUSIN And the treatment that they receive at this end should
be he same for all of them?
PRIME MINISTER: I think basically, yes. I think you could put
this in parathenses, but the situation can be to some extent differentan
exodus movement is being promoted by the government of the country.
QUESTIN: But if the government feels that it can't live with
thesepople that isn't very good.
PRIME MINISTER: I think it become much more complicated if a
government is directly promoting an exodus.
QUESTION: It does become more complicated, but still the people who
are being sent out perhaps have, or feel that they don't have a
future in that country.
PRIME MINISTER: I have got no doubt that the policies are designed
ach~ ieve just that, and that it also means that the government
has decided that removal is a better policy than either assimilation
or integration.
QUESTION: Do you think it is wise, or possible, for western governments
to try to convince the Vietnamese not to do this do you think it
is really possible?
PRIME MINISTER: I think it might be very difficult, but again you
ha-ve got a new element in the refugee movement governments are
going to start saying, well, here's an unwanted minority, we are
just going to push them out into the world and somebody can look
after them the world might suddenly decide its time that
accepted as a more general principle. It might well find it's got
a world with a problem on its hands, the size and proportions out of
any comprehension as a general comment, not just related to Vietnam.
QUESTION: If we could switch over to another subject Australia has
been lobbying very hard against proposals to change the US beef
import quotas. Europe, the farmer and the graziers, as well as
the politicians there is an understanding. Suppose you were an
American farmer, someone who reads the Chicago Tribune, considering
the present state of the livestock industry in the States do you
think you would have any sympathy for the Australian position? / 3
PRIME MINISTER: In terms of trade, I think when people have got
ftr wnimmeiate interests involved, they probably have
sympathy for those interests. I was speaking with some people
at lunch in Washington last June -there were a couple of Senators
present who were not unaware of the problems of the cattle
industry in the United States and it was my very clear impression
that the prices then prevailing were regarded as reasonable,
and if they continued that wasn't a great problem.
You have asked a particular question and really it is a
general one. Producers in any country whether they are
manufacturers or farmers can feel uncomfortable if they get
some competition. That is their reason, that is their argument
to say that that competition should cease, or that governments
should act arbitrarily to prevent that. I don't believe for
one minute that Australian beef exports to the United States
has really damaged United States farmers, has damaged the United
States cattle industry. Imports are too small a part of the
total market in the first place, and secondly the sort of
beef we send to the United States doesn't really compete with
American beef it is in many ways complementary to it, providing
a need that the United States can't fill.. Thirdly, the problems
in the beef industry in the United States over recent years
have been attributed to drought as much as any thing else where
the excess slaughtering may be up to 20 million, because your
beef numbers are down about 20 million. When those kinds of
problems occur I think it is quite wrong to take it out on
another country, even on I am not unaware that we have
a massive trade deficit with the United States, and we have that
trade deficit, in part, because of arbitrary restrictions of the
United States market I doubt if there are quantitative
restrictions that affect any United States exports to Australia.
I have been watching with great interests the arguments that
the United States has drawn in relation to the trade relationship
with Japan, because of the United States deficit position with Japan.
In relation to our size, our deficit with the United States is
just as great, if not greater, and having regard to the arbitrary
restrictions that are sometimes placed on our exports to
the United States not just in beef, but in other things
I think the United States has given us some very good arguments
to use against the United States in relation to the imbalance
of trade between the United States and Australia.
The United States knows all the arguments, they have just got to
read their own arguments about Japan, and they will know the
point of view that we can put.
QUSIN Increasingly I think Australia is seen as a European
island in an Asian sea. Relations with Britain which were once
very strong have changed dramatically, and now a peculiar
relationship with Japan, the United States ties are still close
but American presence in Asia isn't what it was.
Where does this lead Australia? Is there a place for Australian
leadership, or do you reckon there will be a turning inward,
a sort of isolationism?
PRIME MINISTER: In Australia?
QUESTION: Yes.
PRIME MINISTER: No, I don't think we react that way. IIn faatct',
over the last two to three years there has been much more
active foreign policy any dramatic headlines in relation
to our own neighbours and in relation to a number of other
countries around the world. You mentioned the relationship
with Japan you said it was peculiar. I don't know that I would
use that adjective. It is a relationship very much measured
in mutual self-interest of both Japan and Australia.
In many ways some of these are complementary. Both countries
have taken very deliberate and active steps to try and extend
the relationship between an economic-trade relationship, so
there will be a better understanding between our two peoples.
I think that is necessary because of the very great difference
in our cultures and historic backgrounds.
QUESSTION: But isn't it true that while Japan has been willing
to take primary products from Australia, they have not invested
in Australia as extensively as perhaps say the United States?
PRIME MINISTER: Or not as extensively as the United Kingdomthe
United States hasn't invested as extensively as Britain.
We would like the broaden the sources of investment funds in
Australia, but you have got to remember that we went through a
period of mild aberration where investment from other countries
wasn't really encouraged. The last couple of years has been in a
period of slack trade, not much market growth and there is now,
I believe, a good deal of renewed interest in investment in
Australia, and I hope both from Europe and from Japan.
I was going to go on to mention that in relation to ASEAN
countries a number of quite specific measures have been undertaken
to improve communications and consultation between ASEAN and
Australia. They sometimes have one or two things to say about
access into our markets, the plain fact remains that their
exports have grown at somewhere between 30-40%~ a year, for the
last seven or eight years that is a fairly rapid rate of growth
and we have done a good deal to assist them into our markets.
They have problems because the ASEAN countries are competing
very often against each other they all want to export the same
sort of things. They are also competing against countries like
Taiwan, Hong Kong, South Korea, that might have been more active
earlier, and in the sort of goods that they do export to us, the
non-ASEAN countries tend to export by far the greater part.
The relationship is developing, and I think developing very well.
In the Commonwealth, and also through the United Nations and
other forums Australia has been taking a fairly active view in
the Multi-lateral Trade Negotiations, and also in the North-South
dialogue we have extended our field of relationships and because
we are a commodity exporters and understand the problem of
commodity trade we have taken, up to the moment anyway, a
noticeably different view from that of the other B-Group countries
in the dialogue of argument with the developing world.
I think over the last year the B-Group countries have shifted
their position quite substantially. We believe that the developing
world has certainly got a point and there needs to be a response
to it. In these ways I think we are far from drawing into our
own shell Australia has been taking a reasonably active role.
The meeting that Manley is calling in Jamaica at not a very
happy time for me, because I have to leave here on Christmas Day
between some developed countries and developing three or four
years ago Australia would never have been asked to that sort of meetin
I think this is an example of changed attitudes, a change
of acceptance.
QUESTION: Your Government has had considerable success in
cutting the inflation rate unemployment. Could you explain
briefly how, what are you schemes of reducing the inflation rate?
PRIME MINISTER: Yes, but there was an assumption in your
question which a lot of people make and I have rejected
we haven't overcome inflation at the price of high unemployment
high unemployment camne into this country when inflation got
high because our industries couldn't compete and they couldn't
sell -lost shares on the domestic market and many industries
withdrew from export markets. So, under these circumstances
unemployment was bound to grow. When the basic relativities
in the economy go wrong as they did, industries aren't able
to compete. In a country with democratic institutions such as
Australia it takes some time to get the relativities right.
We have got an Office of Youth Affairs in this country and
somebody from that Office the other day said that it is very simpleif
you have got a commodity and you can't sell it all, you
generally try to reduce the price of that commodity so you
can sell it all. What is happening in the labour market is
that even though you can't sell all the labour you have got,
people try to sell it at a higher price, and that makes it very
difficult to get back to a full employment situation.
The point I am making here is that overcoming inflation is not
at the expense of high unemployment the high unemployment
was with us, and the damage hadn't really worked its way through
fully by the time we started to overcome inflation. and fal1l
back on inflation. There were still the damaging effects
of the earlier inflation to work their way through the economy.
Overcoming inflation there is no simple and quick description
you have got to get all the arms of economic policy working
to fight inflation, and that means there has got to be restraint
in government expenditure that means cutting expenditure and
that is difficult. It doesn't necessarily mean just cutting the
rate of growth of expenditure it can mean in many areas
cutting expenditure in real terms; it means having a monetary
policy which is fairly tight, control over the growth of the
money supply, and I think that is more important than many
envisage if there is a too rapid growth in the money supply
that can flow through at a later point as inflationary pressures.
I think they are probably the main two elements of policy
obviou~ ly related to it is policy on interest rates, policy on
exchange rates. One of the manifestations of how all this
works out is the size of the deficit, which has probably too
much prominence in the public debate because I suppose pointing
to the deficit is a short-term way of demonstrating how other
policies are working or not working but restrain expenditure;
keep control over the money supply; have appropriate settings
for interest rates ( inaudible). / 6
-6
QUESTION: Do you think the United States should pursue a
similar policy on this?
PRIME MINISTER: It's not for me to tell the United States
hiow to overcome inflation. I think the prescriptions for
overcoming inflation are well known. Let me say that I am.
delighted to see the policies that the President announced,
the changes that were introduced. One of the things which is
not always understood is that the value of the United States
dollar is enormously important to a lot of countries. Maybe
percent of our major export trade is written in U. S. dollars.
The stability in the dollar is therefJore important to us.
Up to 30 percent of our GDP is dependent on trade. In the
United States I think it is 4 percent or 5 percent, maybe
6 percent, but certainly much much less than ours. Many
countries look to the value of the United States dollar
and they look to the strength of the United States economy
and recognize that as a very important element in the total
financial system which can affect smaller economies very
greatly. QUESTION: The Australian is loosely tied to the American
dollar, is it?
PRIME MINISTER : There is a basket of goods and then we
have a management committee and a Reserve Bank and Treasury
and my Department. I think we stick to the basket of goods
which is a trade-weighted basket, but because of the
( inaudible) of some of the currency fluctuations we have had
to modify them on a ( inaudible) basis over the last 18 months.
I think by and large the management of the exchange rate in
Australia has gone well ( inaudible). It is very difficult
when you get one trading partner, Japan, appreciating
enormously. Another major trading partner, the United States,
depreciating enormously. I really believe that in the trading
world one of the things that would help promote, promote
markets therefore create jobs is to get to a much greater degree
of stability in the world trading system, a much greater
stability in currencies than we have seen over recent years.
QUESTION: Perhaps in future Australia's dollar will be tied
more closely to the Yen than to the U. S. Dollar.
PRIME MINISTER: There are no suggestions that the present
management system that we have for the Australian dollar
will be altered. It's flexible. It gives us room to move,
to move if we have to. It needs to be closely watched because
of the very great movements of other currencies, which you
can't always predict. I think therefore we have established
this system quite deliberately so you don't get stuck in a
position and then you get embarrased because you have a
fixed position with an automatic relationship either to the
United States dollar or to the Yen or to any other currency.
Because of the size of the movements you have an arrangement
which gives you an automatic relationship you can well find
your own currency moving in a way which might not be the
best for your own economy. / 7
-7
QUESTION: The dismissal of Mr. Whitlam seems to me to carry
a very deep effect on a lot of things in Australia.
I first came here in 1972. I found, coming back several
times, a tremendous amount of cynicism that I didn't
think was here when I first came. Do you think that
Australia is going to get over this. Do you think it is a
temporary thing or is it a maturing of Australian outlooks?
PRIME MINISTER: I think there is too much cynicism but
I think, and I agree, that those events are related to it.
I think it is starting to fade. You are probably coming at
a time when there is some contemporary re-assessment because
of John Kerr's portrait, because of the statements that have
been made by other people in relation to it. In one sense
the event might be hard to understand in the United States
because you have a different system of Government where
people are elected for fixed terms. But in our system, or
in the British system, the cause of the crisis was a very
simple one. Here we have through some centuries of tradition,
the simple intention that if the Government can't get a
supply of money through Parliament in which to carry on the
processes of Government, to be able to pay Public Servants.
and to pay your defence forces and carry out all the various
other functions of Government, then that Government resigns.
It can suggest somebody else form a Government in the Parliament
or it can recommend an election. The most likely course is
to recommend an election. Mr. Whitlam took a very strange
course. Even though he couldn't get supply through Parliament
he said he was going to stay in Government regardless, but he
couldn't pay anyone. If that sort of thing occurred in
Britain ultimately Her majesty would have to act. It did
occur in Australia and ultimately the Governor-General
had to act. He had no option. It was caused by a Prime Minister
who couldn't understand he couldn't stay in power if he
ceased to have Parliamentary support.
QUESTION: The result of this has been what I see as a very
distinct polarisation..
PRIME MINISTER I think it has been and I think it is
unfortunate. It is continued I think by the repeated and
continued attempts at self-justification by taking that
original action. ( Inaudible). They even went to the extent
of trying to get the banks to finance the affairs of
Government. In the bank's ( inaudible) books, there is no
legislative or constitutional ( inaudible) to say now come
and pay the Government's bills'. This was all happening
in the last f ew weeks. But that is an aberration not part
of Australia and I hope the people of the United States knew,
and understand, that it is an aberration not to be repeated.
QUESTION: It's very complicated I think though. American
people, as you said ' before, have different systems but still
understand what happened.
PRIME MINISTER No, I think that's probably right. In Canada
there would be better understanding because they've got the
same system. In one sense the practical impact would be the
same as if you had a President in power and the Congress
refused to give him any money for' any activities of Government.
8
QUESTION: That happens from time to time.
PRIME MINISTER: Yes, but Presidents seem to get their money
through ultimately, or people seem to go on getting paid
while there is a dispute about budget bills. But if you
had a situation in which Congress had no money whatsoever
for any programs, for your payments of salaries, you've got
to have some way of breaking that sort of deadlock. In our
system a way of breaking it is the thoroughly democratic
procedure of allowing people to have a vote.
QUESTION: Mr. Whitlam could have called an election then?
PRIME MINISTER: He could have. He wasn't prepared to.
He was prepared to call a Senate election but a Senate election
wouldn't have affected it because you would have had half
the Senate only being elected. They wouldn't have taken their
seats for another six months and that could not have resolved
the problem. The only way to resolve the problem was to have
a total election,.. which he was determined not to have.
( end of tape) 000---