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Transcripts from the Prime Ministers of Australia

Transcript 4989


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: 15/03/1979

Release Type: Interview

Transcript ID: 4989

Frank Char-berlain: ( Agence France Presse)
Givar, that some of your tax proposals will undoubtedly
be misrepresented to terrify the swinging voter, and given that
the swinging voter will determine how many seats will give a
m ajiority in tLhe House of Representatives and maybe the Senate,
given that Mr. Fraser and the coalition parties have control of
the media for all practical purposes and that their publicity
is -more effective than Labor's, what hope is there is a
Labor Government in tChe next decade?
Mr. Hayden:
I understand I'm going to be given a Press Club tie when I finish.
If we let-Frank tie the knot it will a hangman's noose I suspect.
Well I am optimistic. In 1980 I expect the Labor Party to be
returned as a National Government. It will be returned not only
because of the mismanagement of the Fraser Government, and not
only because of the broken promises that litter the pathway of
that Government, but because we have constructed alternatives
and more than that, that we are prepared to take the issues,
the challenges, head-on in a constructive but sensible way.
Now I recognize that M4r. Fraser, indeed, has already signalled
his intention to do this, in a rather hefty way some unkind
people would say clumsy but nonetheless he's done it that
he intends to misrepresent our commitment to these various taxes.
I'm happy to take! that debate on. In many ways it reminds me
of the ingredients of the debate on Medibank where we had to
confront vested, powerful, but minority interests in the
community who were doing so well out of that system, who didn't
want change and preferred to have a system that was unsatisfactory
to the people and quite inefficient in the way it provided
service s because t -hey thought that their own comfort and self-interes
wa= s above the self-interest of the nation. Well, in many ways
thre-is a-iiaiy. There are some small, vested, but
pcwerful and wealthy interests in this community who are going
to resent what we are proposing. No doubt they are going to
bankroll the conservative coalition political parties quite
generously. But that's one of the costs that we must take into
calculation. TWe have a commitment to a much greater responsibility
th-an merely currying favour with powerful, wealthy minority
grcu. ps in this community. We have an obligation, and traditionally
a Tabor Party has sought to discharge it, to protect the rights
of people in this community. We regard ourselves as a Party
of social conscience and flows from this that when we make
decisions on various matters, especially economic matters, we
want to be certain that the distribution of any burden or
sacrifice is fair and equitable. That's what this argument is
about. IfL Mr. Fraser wants to align himself with powerful,
wealthy minority groups in this community, and I have no doubt
that he will, I am happy to enter that debate. I welcome thei
early indications that Mr. Fraser is keen to make this one of the
major issues in the next election. We are already tooling up
for the combat. / 2
15 MARCH 1979

David Jensen: ( Australian Associated Press)
You are proposing new taxes and you refer to tax weary
Australians, but your new taxes, I understand, are aimed
at larger companies taking a greater share of the tax burden.
Would you reduce any taxes, or would you relieve any taxes
of -the Fraser Government and have you considered perhaps a
lower tax on money earnt on overtime to induce more work
from. people. If I can slip a very quick one in, would you
also welcome Neville Wran and perhaps Bob Hawke on your
front ' bench?
Mr. Hayden:
Just a minute are they going to get paid overtime rates
or not?
If" there is room to reduce taxes in the next Budget, we would
certainly be proposing that. We've got to make a distinction
here. We've outlined a programme for economic recovery based
on the broad parameters available in the 1978-79 Budget.
I believe it is the first time it has ever been done, and done
in detail in the Federal Parliament. There were markedly
different priorities in the proposals we outlined. They
included, among other things, reductions in indirect taxes
and direct taxes for reasons I won't go over again right now.
At this stage we are reasonably sure of the rough parameters
of the next Budget. Before we make any commitments we will
want to see the detailed outline of that Budget. I would expect
there will be some room to make some adjustments but the main
point I am interested in, in presenting to the Australian public
now, is that they are tax-weary and they have every-right to
feel tax-weary. They have been led up the garden path by
the Prime Minister who assured them that he was the leader
of a low-tax Government; the evidence is that the total tax
bill is highe'r than it has ever been, except perhaps in wartime
and that he is determined to raise more taxes in the next
Budget. Now it's obvious because of the commitments that he
has made that he is going to have to raise these taxes. The
question is, where is he going to get the money from. The
ch. oice is quite obvious. Either he puts more burden on a
tax-weary public or he moves to areas which have had remarkable
im: munity in this country, in one of the few countries in the
wor_ 1Ua certainly about the only industrialised country in
tha world in relation to some of these key proposals. Now,
finally, would I welcome Neville Wran and Bob Hawke on the
fron-. bench I certainly would. I've said that on many
occasions. I gather from what Neville said on the weekend,
however, he is pre-occupied in NSW between now and the next
eleot_+_ ion and looks forward to leading his State Party then.
The decision for Bob Hawke is one that he has to make, but
we would certainly welcome him.
Mungo MacCallum: ( various publications)
You started your speech by saying essentially that Mr. Fraser's
forward promises mean that he will have to find an extra
$ 1,000 million worth of revenue somewhere and you've then
outlined the ways in which you would raise that extra $ 1,000
million worth o~ f revenue. Wouldn't it be simpler to simply
abandon some of Mr. Fraser's former promises without arguing
about the equity of the new taxes you propose, and if you / 3

MLungo MacCallum: ( continued)
are not prepared to abandon them, would you tell us whether
you would in fact reduce the coal export levy, transfer
Government revenue to domestic oil producers, full-stop
valuation, 2 percent real increase in defence expenditure,
elimination of death duties and so on. It seems to me that
you are attempting to raise money by means which you consider
equitable to fulfill Malcolm Fraser's promises, which I
assume you don't.
Mr Hayden:
This week has been a week of rapture and joy for me, except
when the writer of" various publications" rose, because I got
up on Tuesday morning in Melbourne you mentioned me helping
Malcolm Fraser out and read in the newspapers that Kevin Newman
felt he couldn't confidently proceed any further with an
energy policy unless he had my support. I went back to my
office waiting for the phone to ring all day expecting when
I picked it up that the voice on the other end would say
" Bill, it's Mal here, I'm in trouble with the economy". But
then I reflected it's more likely that Leonard Breshnev will
telephone Pope John Paul II to ask for doctrinal correction before
that happens. What I am trying to point out is that a
situation is arising in the next Budget that Mr. Fraser has to
confront as a result of promises he has made. He has one or
two major options open to him. One is that he raises personal
taxes and indirect taxes, and we reject that. The other is that
he moves into these areas that we have spoken about. Now the
next Budget is going to be his Budget, or maybe Andrew Peacock's,
or someone might want to help him out, but someone in the
Liberal Party T expect will be introducing, or in control of
the Parliament, the Government, at the time of the next Budget.
So I am making that point quite strongly. But of course, our
priorities are going to be quite different from them but we
have to understand that some of the things he's proposing
anyway are covered by the things I am recommending. For instance,
the abolition of the excise on the export of coal would in fact
be integrated into the resources rental tax. Similarly, the
petroleum revenue tax would absorb that sort of money, that
$ 110 million, which will be transferred out of revenue in the
next Budget to the domestic petroleum developers of this
cou-ntry. So quite obviously, our whole thrust will be
considerably dif:[ erent from theirs. I don't really have enough
time to outline how completely the philosophical approach and
the sets of priorities as a result of that would be different
from ZMr. Fraser's, but it is implicit in the alternative that
I amn offering that we not only wouldn't do things that he is
proposi~ ng, we would take things in another direction.
Grea Hywood: ( Financial Review)
Besides how much to tax people with jobs, there is a question
-of what to do with people who don't have jobs to be taxed,
and you only covered unemployment very lightly in your speech.
What you did say was your economic programme would generate
abou-t 5 percent non-farm growth resulting in about 130,000
new jobs. Given that a number of people are bound to re-enter
the work force once jobs become available, 130,000 new jobs may
/ 4

Greg Hywood: ( continued)
not have the impact on existing rates of unemployment it
might first seem. That's assuming your Government could reach
a 5 percent non-farm growth rate. I ask you therefore, what
rate of unemployment you regard as a realistic target in
Austr-alia, and further, to what extent would your Government
be prepared to create jobs by subsidisation? This Government
spe.=-s around $ 120 million on employment and training programmes,
how much would your Government spend?
Mr. Hayden:
What you point out is perfectly true. It's been the experience
in a number of developed countries in recent years, which have
gone through recession and then at an appropriate time sought
to stimulate recovery. In this country we have about a quarter
of a million people hidden unemployed. It's very simple to work
out from workforce participation rates which continue to decline
in Australia. There is no doubt thatL as a recovery gets under way
people who've dropped out of the workforce will start registering
and tend to hold up the rate of unemployment. But then one's
got to point to the positive progress which has been made, and
130,000 jobs iJs a significant rate of advance. Now if it were
possible to achieve a greater rate of advance than that, we would
be in the business of doing that, but it is my own belief, that
is a very sober judgement of the situation, that that would be
about the maximum that you could achieve in the first year and
how much you could achieve in the second year would be determined
by a lot of circumstances, many of which would be quite volatile
and not predictable at this stage. I would see a Labor Government
undertaking a sustained programme of economic recovery and
wearing down that unemployment problem. What is the ultimate
level of unemployment iti this country well, again it depends
on. the philosophical inspiration that guides a political party.
If you believe, as the Government does, and as Treasury does,
and as not a few financial writers do I have noticed, that it
can all be left to the market forces, then you are going to
end up with permanent levels of unemployment in this country
aned a situation which would be regarded as more fully employed
in the economic sense, of around about 4 percent 3 1/ 2% to
4% T believe closer to 4 percent. Certainly the Crawford
Committee of Inquiry had made it abundantly clear the responsiblity,
or thne accuracy, of reliability of that sort of analysis
and furthermore the dangers of leaving the whole process of change
and recovery merely to market forces. This brings in another
matter which is the issue of longer term economic management.
This _ Js lost sight of in the hurly burly of debate about the
cycl--cal problems because they are immediate, they are pressing, and
people are worried about them. But underlying the overall malaise
of the economy is this longer term problem. We are committed
to economic planning. We are also committed to manpower planning.
It's like bringing out a bad relation and presenting him to
rather dignified guests I suppose to say, but we are committed
to iianpower planning. There has been some sort of respectable
reticence about quoting this in our society. Surely the
Crawford Committee Report has made it abundantly clear unless
we start some sort of programme of manpower planning, we are going
to be in dreadful trouble in this country trying to handle recovery
in the years ahead, let alone handling the sorts of economic
competitive economic challenges pressing in on us internationally

Mr. Hayden: ( continued)
alreadv. Now, finally, two points other points you mentioned
what level of unemployment do I regard as historically
achievable in the future for full employment I would be wanting
to see us get around 2 percent or even better, over time.
Now, I don't accept that pessimistic conclusion that we've
got t*-o live with something like 4 percent. That's totally
unacceptable to me. There are so many things to be done in
thisz community. I'm quite convinced that is a matter of
Government having the wit and the wisdom, the determination to
create the policies and get out and start them working in
the commununity.
Finally, would we subsidise employment type programmes?
That's been the whole thrust of what we've been saying for
some time now. We proposed expenditure in the public sector,
directly in that area or through it, in support of the private
sector. In those areas where there is a great deal of slack
capacity, which means simply high levels of unemployed people,
resources which aren't being used which can be brought together
and used productively and that will generate demand not
only for the commodities being produced but multiplying out
within the economy.
We are also prepared to subsidise wages for net additions to
the work force of establishments beyond a specificied date.
The subsidy would be the equivalent of unemployment benefits.
Now, our conclusion is that it is better to subsidise people
who would be otherwise unemployed and unproductive, on unemployment
benefits, in that way productively. They are going to be
happier. There will be much less economic dislocation and a
considerable reduction in social distress.
Looking at a range of things, voluntary early retirement is
another thing that we are looking at. You probably know that
Mick. Young is following in the steps of Freddie Daly, about
to become our next most prominent author, he is writing a book
on -this subject which will detail quite extensively the sorts of
prograrmmes that we have in mind.
Lau-arie Wilson: ( Seven National News)
You'vre been at the helm of the Labor Party now for something
over 12 months and yet we still seem to be reading stories,
hearing discussion about how well you can cope with the pressure;
whether or not you are going to be able to bear the burden
o' leadership. I wonder just how much you are concerned, how
muc; n_ you worry, perhaps how much you are annoyed by the persistence
of Znese stories and whether in fact it worries you that they could
becomne politically damaging in terms of the public mentality
towards your capacity to lead the Labor Party. / 6

Mr. Hayden:
No, I've been in Parliament 18 years now and one learns
to live with these outrageous slings and arrows of misfortune
that are directed at me, shafted towards me by insensitive
members of the press. I am tempted to do a Gough Whitlam,
with all of its dangers, and say the one -thing that restores
my confEidence is the full knowledge that God walks with me.
But not only is it dangerous, I know it can't be true because
Mr. Bielke Petersen has a monopoly on that right? Although
as one theologan said to me in Brisbane last year, it's not
that he should happen to think that God walks with him that
worries me, i t is that he is so damn sure that he is ahead
of him all the time that disturbs me. Anyway, am I worried?
No, I'm not. I went through Nedibank with all of those
outrageous gossip tales which were going around, pubbed about,
I was rather flattered that so many people took so much of me.
And as my good friend, Mr. McNichol in the Bulletin, making
some obscure references which look like he is politically
grave digging to try and get something going, I just want to
assure you, inspite of any differences I have with Mr. McNichol,
have enormous respect for him. He is a sort of an aged seer
of the press gallery. He is, in many ways we owe him a lot;
what he has done for journalism, what the cylindrical record
did for the recording industry. In fact, you probably gather
I'm starting to look forward to it.
Paul Lockyer: ( ABC)
With a simmering situation persisting in the Queensland ALP,
just what needs to be done now do you think in that State to
give the State Branch perhaps a cohesive base to pose a threat
in State politics there, and not only that but to give you a
solid base to perhaps win Federally?
Mr. Hayden:
The situation there I think probably got more importance and
attention in the media than it deserved and it seems to have
se+.--led down now. As I pointed out, the best regulated
families have their tiffs from time to time. I wouldn't suggest
for a minute that the Labor Party is above that sort of little
co-ntre temps that occurs. I expect that we will be making a
lot progress 4ni Queensland, Federally and of course in association
h our different State branches. We are working out an
integrated systematic programme of campaigning activity. In the next
ewweeks it will be under way and it will start off at a
fairly heavy pace and it will build up. We intend to win in
1930 and our Branch units are just as keen as we are that that
should be achieved.
Lraurie Oakes
I've got three questions. The first one is, which one is the
sixth commandment; secondly, as an alternative to the introduction
of new taxes have you considered possibly introducing a new
gambling game, presumably administered by a friend of the Labor
Party such as Sir John Kerr; and thirdly, can you tell us what
stage your proposal for a wage-tax trade-off has reached. Have
you gotk down to discussing specifics with Mr. Hawke and the
union movement. / 7

Mr. Hayden:
I'm sure that Mrs. Oakes will be extremely reassured to
know that Laurie doesn't know what the sixth commandment is.
I suppose if Sir John Kerr was in charge of any gambling
game, it would have to be black-jack. The wages-tax
trade-off, well we are in the process of working on that.
Ralph Willis and I have got to do a lot more work. The
Australian Labor Advisory Council, which is a constituent
par-t of our organisation, will be meeting again I think
it is April and Ralph and I will have to produce some
sol2-d material1 there. But we are extremely encouraged by
statements of Bob Hawke. Bob Hawke has said publicly and
repeated at our last ( inaudible) meeting that the situation
he sees in the future is such that while he would want the
union movement to oppose reduction in real wages, because
of the serious unemployment problems we are going to see,
which I referred -to a few seconds ago and you will recall that
Bob was a member of the Crawford Committee of Inquiry, he
would prefer to see additions coming from productivity which
in the normal circumstances would have gone to the wages sector,
being redistributed to help those who would otherwise
be out of work. Now that seems to me to be an extremely
responsible approach from the trade union movement. It is on
that basis we are responding because it slots in very closely
with the sorts of things we have been thinking about.
Stuart Simson: ( National Times)
There are some indications that the economy is growing at
a greater rate than the GDP forecast in the last Budget.
If we are in the throes of some sort of upswing, does this
change the Federal Opposition's economic policy as outlined
after the last Budget, particularly with regard to the level
of Government spending.
Mr. Hayden:
No, I expect that the total level of GDP will be higher
thL-an ' the Government forecast in its Budget. I am most sceptical
as to whether the total level of non-farm GDP will be as high
the Government forecast in the Budget. The increase in
th_' e total GDP comes as a result of good weather, happy
c*-rcumstances for the farm sector, in some areas only. It has
lost sight of the fact that, by many commentators, that there
are still substantial areas of the farm sector which are
deonressed. Now, you've got to look at the different approach
W.* Iich our proposals reflected in the alternative Budget to those
ad. opted by the Government. We are concerned about two things;
ir~ nging down inflation and bringing down unemployment. The
e-iidence is quite clear that in spite of the movements which
have been taking place in the economy, and I would want to see
a lot more solid evidence over a sustained period before I
change my attitude on the thrust of what we are proposing,
but in spite of whatever movements might be showing up predictions
comzzig from within the Public Service and from within other
informative sources, is that unemployment will continue its
inexorable rise and that we will see something like more
than 9 percent of unemployment unemployment among the work force
members in the near future. We are going to see increased
interest rates, that inflation is going to be jammed. The last
/ 8

Mr. Hayden: ( continued)
Budget did nothing for -these problems. What we are saying
is -that Government programmes have to be implemented which
will generate activity and create jobs, and secondly, that
that has to be done in areas which will not aggravate inflation
and thirdly, by a judicious cut in indirect charges of . taxes
at the Government level, instead of the increases the Government
introduced; bring down inflation. Now, our calculations of
the~ inflationary effect of the Government measures was spot on,
just as our calculation of the reduction in inflation by the
scrr-s of changes we are talking about, bringing about a 2.5 percent
reducti1on is a fairly reliable assessment of the benefits of
our programme. It is a different approach entirely to what
the Government is adopting. We just won't accept that more
unemployment must mean more inflation and when you get more
arnd more unemployment and you run into trouble like the,
present situati..-on with inflation starting to jam and perhaps
tilting upwards, the Government presumably considering
resorting to even more unemployment or at least being quite
calm and indifferent at the prospects of unemployment on the
advice of its own Department in this area exceeding 9 percent
in the near future.
Max Hawkins: ( Brisbane Telegraph)
May I ask you on a couple of other matters relating to ALP
affairs in Queensland: although the Queensland ALP Parliamentary
leader in Queensland, Mr. Ed Casey, has voiced strong opposition
you have said very little, if anything, on whether or not you
support Senator Georges and Mr. Uren as Federal Members of your
caucus in -their part icipation in street marches in Queensland.
What is your-attitude to this issue and secondly, how regularly
do you expect to sit on the new Queensl and State Administrative
Coimtmittee of the ALP and if you aren't able to sit, who if anyone
will represent you?
Mr. Hayden: w,: 7 mhkee decision wh ilrepresent me when I can't
sit there. Of course quite obviously the appointment and the
proposal, or the provision of the rule, was based on the
assumption that the Leader's respectively, State and Federal,
W0o U. ld attend as -much as they could. My attitude on the street
marches has been one that I have consistently expressed and
tha--t is that Senator Georges and Mr. Uren are perfectly
en-titl" sed to participate in those demonstrations if that is
their inclination, if they have concluded that that is what
thex' should do according to their conscience, according to
theIr belief of how important thtmteis I have defended
thei.-_-ight to do that. It doesn't mean that I believe that
that is my priority commitment. It is not at all. I believe
as leader of the Labor Party I have other constructive, and
I susoect more effective, ways of trying to bring change about
and I pursue those to various forums which are available.
Trevor Gilmour: ( West Australian)
A necessary prerequisite to implementing any of the economic
priorities you have outlined here today is the process of
winning seats. Western Australia and Queensland in particular
in the past have been weak links in the Labor Party's performances. / 9

Trevor Gilmour:( continued)
You've referred to the Queensland situation, I wonder if
you would like to see some action on the West Australian
front. Could you detail your thoughts on that point please?
Mr. Harden:
Well tne State Branch of the Party in Western Australia
took a poll out in that State a few months ago. It shows us
Federally well ahead of the present Government so I can't
complain. In terms of seats, well, you know that the
re-distribution makes it very tough for us in Western Australia.
We had hoped to probably pick up two seats as things stand
now, but there has to be another re-distribution because of
population growth so really the whole speculation is in the
melting pot until we see how that redistribution comes out.
Bill D'Arcy
I assume the Labor Party is still committed to the creation
of an egalitarian society, you certainly alluded to that during
your speech. Given that the Labor Party is committed to the
restoration of Medibank in its original form, given that the
Labor Party believes in health care for all, why is the Labor
Party allowing a free vote on the Lusher motion, a motion which
has nothing to do with the question of abortion but has everything
to do with making health care the right of the rich?
Mr. Hayden:
That's not quite true. I am assured by the Medibank
practitioners that even if Lusher's motion were to be carried
that there are ample items under the Health Insurance proposals
which would cover abortion-type procedures, but put that to
one side. Why are we allowing a free vote? Well, there a lot
of people who have very strong feelings on this and they are
deeply held. They are religiously based and their attitudes
have to be respected. They would see, and do see, the proposals
as methods which recognise and facilitate abortion-type procedures
and to them it is a rather crunching experience to be told
if that were to happen that they would have to support that sort
of change against their will, against their firmly held, quite
deeply held beliefs. They are in no different position from
peopne like Bill D'Arcy and me who believe that Mr. Lusher's
recommendation ought to be tossed out. If we were to be
confronced by a situation where people oppose, or support the
Lusher view is a better way of putting it, sought to bound us
to saupcrt the Lusher motion. It's the last thing I would want
to d o. The final thing is just a matter of plain politics.
Once a Party starts binding all of the members of that Party
to vote on this matter or matters like this in the Parliament
then it is London to a brick that the people on the other side
of the House are going to be bound too and the chances of people
exercising independent judgement on these matters, and I hope
would hope prevailing against the Lusher amendment, would be
totally destroyed. So whichever way you look at it, the
justification to me is quite overwhelming. / lO

Transcript 4989