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PRESS OFFICE TRANSCRIPT TUESDAY, DECEMBER 4 1979
PRESS CONFERENCE, 4 TREASURY PLACE, MELBOURNE
Prime Minister:
The cabinet meetinq this morning and this afternoon has
concentrated on making decisions that will be necessary for the
Premiers' Conference and the Loan Council meeting which is being
held on Friday. I believe it is going to be a very important
Premiers' Conference and an important Loan Council 1reeting.
We have made a number of decisions concerning the basic national
development of Australia concering the investment by Australian
governments, State and Commonwealth and the infrastructure that is
necessary to support the much more major and very often much more
costly investment and development by private enterprise concerns
of many different kinds.
We have made a number of decisions which build upon a historic Loan
Council meeting held in Melbourne about this time last year
when $ 1,700 million worth of national development projects
were supported by the Commonwealth and the States working together in what
was a breakthrough conference. It was a histoxic conference.
Before coming to the nature of today's decision, I think it important
to emphasise that these decisions are made necessary by the
position Australia finds herself in at the beginning of the 1980s.
They are made necessary to enable us to capitalise and grasp the
opportunities that are open to us in the 1980s. They are necessary
so that we can prepare the-way to what I believe can be an exciting
and fulfilling decade for Australia.
We would not be making these decisions if Australia was not in an
international position to attract very significant development,
investment funds from overseas so that the great resource projects
can go ahead, so that the great power projects can go ahead now in
an energy short world so that we can capitalise on the favoured
position in which Australia finds herself and by developing
coal-based electricity to achieve greater resource development
in this country than might otherwise have been the case.
That is already happening, notably in aluminium with $ 4 billion
worth of investment and development in that area. Now, if these
great projects are going to proceed, if. you need the power,.. the roads,
the ports, the infrastructure which is necessary to support a much
higher rate of investment and developmefit, and therefore, this is
very much a question of responding to the challenge of the
and looking to the future with confidence and a very great deal
of optimism.
If I can just remind you for a moment, the projects that were supported
last year totalleda bit over $ 1.7 billion and In the coal area,
$ 164 million was in coal loaders. $ 640 million was other resource
development. The Dampier Perth gas line, the Redcliffe projectboth
those are waiting on final decisions still, but the North West
Shelf project is looking morbandmore favourable as each day passes
and the Worslev Alumina project which was finally approved only a
few days ago. $ 869 million of that original program has gone on
power generation -the Loy Yang, hydro electric power in Tasmania, / 2
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the Eraring power station in New South Wales, power generation
in Queensland and in the generation of power supply generation.
And there are one or two more minor projects.
But you will see from that initial program that the major part
of the approvals were in the support of basic national development,
national investment, in areas which are designed to support the
investmebt and activities of private concerns, the development
of the wealth and the growth of the economic base of Australia.
The decisions that we have made for this forecoming Premiers'
Conference and dependent upon the attitudes of the States, of
course, were designed very much to build upon that. But since
the last Premiers' Conference and Loan Council, the importance
of the world energy position has been re-emphasised the shortage
situation in oil suppl~ ies and the possibility with political
instability that that could worse has led us to want to get
a particular attention to energy based projects and ones which
fit into the general pattern of our energy policies, encouraging
the basic conservation of oil, encouraging the use of other forms
of energy.
Some of the projects that are supported, that we are prepared to
support, will be are again dependent upon what the States do on
Friday, have been very much influenced by the energy policy
we now have in place.
The Commonwealth will be proposing three matters for approval
under the basic development program on its own account. This is
a new venture. All the earlier proposals were State based proposals.
Now on this occasion, we will be proposing the rebuilding on the
standard guage on the Adelaide Crystal Brook railway at a cost of
something like $ 60 million. That is a commercial and it will able
to go ahead as quickly as the rail construction can be accommodated,
and it was necessary because the existing construction team runs
out of work at probably about October next year on the present line
up to Alice Springs. Now, that next phase in the project will complete
that particular link.
But, we are also prepared to support what I believe is a much more
exciting project, one which ought to capture the imagination of
a very large of Australians, and that is the electrification of
the Melbourne-Sydney railway link. Now, this is very much motivated
at this time because of energy needs, energy requirements, saving
in oil and the use of alternative forms of energy. What we will bE!
proposing for Friday is an important study involving New South Wales,
Victoria and the Commonwealth so that the Premiers' Conference and
Loan Council in June can make firm and final decisions about the
phasing, the costs and the rate of progress of construction.
In other words, from our point of view, and subject to the agreement
only of the States, it is a decision to go ahead but we need that
examination, and out of that might well come a special authority for
the construction phase of a kind which was present which the
Snowy Mountains Authority and authorities were established by
three governments.
That is a venture which the. Commcnrwealth will be proposing and
we hope very much will have the support of other States. There is
a smaller project which is important for rural areas to achieve a
greater rate of progress in the modernisation of telephone links / 3
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in coufttry areas for Telecom. Then, coming to the States, a
very large part of the program again will be for electricity
power generation. The program is upwards of $ 1,000 million,
including the Commonwealth that is excluding the Sydney Melbourne
rail link, that is separate. The tentative figure from the
Department of Transport for that project would be $ 300 million
but it is not included in firm approvals at this stage, ald will
be a matter for later final decision.
But upwards of $ 1,000 million including the other projects for
approval on Friday, electricity generation, a further $ 490 million
on top of the power generation projects approved last year.
Oil powered conversion in a couple of States again is very much
related to our energy objectives, and then rail electrification
in at l~ east two States are again related to efficiency and
energy objectives. Then there are a number of other more minor
projects.
Now, all in all, if these proposals do receive the final approval
of the Loan Council and Premiers on Friday, the meeting last year
and the meeting this year will have resulted in a number of
historic decisions by State and Commonwealth governments which
will enable this nation to move forward into the ' 80s, with
great confidence, with great optimism, supporting in a very
major way, the great national and international investment and
development that has; taken place in Australian resources and
in Australian energy projects.
There are two other points where we propose an eximation with
the Premiers and I have asked the P': emiers or Mr Anthony did
on my behalf asked the Premiers to examine the ratr-. of
electricity generation based on coal because there have been
one or two instances, or certainly one instance in New South Wales,
where a major indust~ rial project could not be sited in New South Wales
because power generation is not kept up with the increased demand.
Now, that is not said as a point of criticism aluminium smelters
are vast consumers of power and new projects have been approved
in New South Wales but there is one project that was running hanging
because power generation would not be adequate under present
arrangements for all the possibilities that were around.
I think it is very important that Australia's industrial
development not be held back because of lack of power, a lack
of coal based electricity. So the Premiers have all been asked
to examine the programs of electrification development
production of electricity to see whether additional projects
should be brought on stream.
Now, that letter would not have had an impact on this particulhar
Premiers' Conference. Some of the Premiers have responded to that
particular approach that the matters would be for final decision at
a later meeting.
And the other matter where we want to make sure that we don't miss
on major export and developmental opportunities by lack of infrastructure
in Australia is in the export of steaming coal. We are inviting the
Premiers to identify the ways, the port facilities, the infrastructure
that is necessary to make sure that we can match the increasing
international for steaming coal over the decades to the end of this
century. So, those two initiatives also, I would imagine, are likely / 4
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to result in further co-operation between the States and the
Commonwealth in the development of these resource projects.
Question: Prime Minister, I am sorry to interrupt you before you had finished,
but what I was going to ask was, do these decisions, is part of
the thinking behind these decisions to create jobs, and in that
sense, does that represent any change in the Commonwealth's
thinking about spending Commonwealth money to create greater
employment? Question: No, it doesn't indicate any change of policy in relation to that.
Quite obviously, greater investment, more development creates more
jobs. We have always argued that jobs have got to be based in
real growth, real development, and that the government can't
fudge that issue, ie make-work schemes that don't really make
work which could result in some cases in less people'being
employed overall than without the programs. I believe that that
certainly happened in a number of countries in Europe. So, we
want real investment, real growth, real development, real exports
which will add to the number of jobs and opportunities available
to Australians. So, these policies are very much motivated to
get the private sector of the economy, working and moving as it
is to have governments work in partnerthip with that, to consolidate
it, to strengthen the move as I believe is happenind at the moment.
The ldtest figure of private investment and development projects
around Australia, firmly approved and committed or in the final
feasibility stage was, I think, about $ 16 billion. That shows the
extent of domestic and international interest in investment and
development in Australia. But quite obviously, if that is going to
be matched, governments have a role to play on their side of the
major national development projects in seeing that the basic
infrastructure is available, that we don't miss out on investment
because power is not available or roads are not available or
ports are not available or a coal loader is not in place. Therefore,
it is very much a part of our total approach to preparing Australia
for the 1898s, and very much a part of complimenting the other
broad policies of the government get inflation down, keep it
lower than our major trading partners to make it Au~ stralia
competitive so we can sell, so we can have a stable economy
and attract more investment, and against that stable background,
export the fact that we do have major resources, major reserves
of energy and especially coal in this country which can be brought
together, as is happening in the case of aluminium in particular in
a very spectaculor way, which can be brought together to achieve
greater processing and greater activity within this country.
So, it is all very much related to the growth and development
of the Australian economy, to achieving more jobs in the Australian
economy but, it doesn't indicate a change in approach anymore than
the infrastructure programs of a year ago indicated a change of
approach. It is an emphasis on an approach which is dependent upon
the private sector moving forward and the decisions we have made,
so long as they are supported on Friday and I have no reason
to believe that the States will vote aqainst their own proposals,
the decisions we made will certainly re-emphasise the basic
thrust of our policies.
Question Mr. Fraser, is the Commonwealth willing to go ahead with
all the projects ( inaudible)
Prime Minister
I said we stand ready to support upwards of $ 1,000 million,
which would cover them all. But there are one or two projects
which might well be better financed in other ways, and we will
be raising questions about those. You will note that I have not
spoken about specific projects that had been proposed by
the States, and I don't think it is proper for me to do so.
I have spoken in general terms about electricity generation and
other in broad categories but I haven't itemised.
Question ( Inaudible).
Prime minister
Basically, we are prepared to support them but we do have some
reservations in monetary projects that we think could be perhaps
better financed in other ways. We will be raising those issues
on Friday.
Question Do you have a State figure there? You gave us the figure plus
( inaudible).
Prime Minister
The State figure is about $ 800 million over eight years. The
Commonwealth figures-well, the Telecom and Adelaide Crystal Brook
will be a bit under $ 100 million.
Question Each? Prime Minister
No. The-two. Melbourne, Sydney rail electrification, on a very
tentative figure by the Department of Transport $ 300 million, But
that is not for approval in the firm final stage at this Premiers'
Conference. We want to establish an agreement with the two States
concerned to enable us all to be in a position to make final
decisions in June.
Question Just a couple of points of clarification. Firstly, ( inaudible)
Prime Minister
I said upwards of 1,000.
Question ( Inaudible) 6
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Prime Minister
I said upwards of.
Question ( Inaudible)
Prime Minister
I think you are being too specific. Upwards of 1,000 doesn't
mean 1,000, it means upwards of. It means exactly what it says.
Question On the ( inaudible) Melbourne. The Commonwealth has decided that
that electrification will go ahead ( inaudible).
Prime Minister
We have decided thait it should go ahead. We need State agreement
and appropriate arrangements in relation to it, yes.
Question PM, didn't, on the Sydney Melbourne electrification, was that
not vigorously ( inaud) by the States ( inaudible).
Prime Minister
There were some studies that I think Mr. Whitlamr might have looked
at at some point, but the energy situation, the oil supply situation
I think puts it into a much different focus than that in previous
times. The rail electrification projects and there is more than
one in the thing, it is not just Commonwealth involvement in
that area are very much based in energy policies and conservation
of fuel oils. Not only, but significantly, the conservation
reason and as the price of fuel oil rises a very obvious economic
justification for electrification.
Question ( Inaudible)
Prime Minister
The State projects are over a period of about 8 years.
Question And the electrification?
Prime Minister
That would be subject to decision in June. I would hope that
it could proceed as rapidlyas construction could efficiently
and economically be organised. I think once governments have made
up their minds to undertake that kind of project it ought to be
done as expeditiously as economic construction allows. We / 7
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Prime Minister ( continued)
very much found with the construction of railways in South Australia,
on the line up to Alice Springs, that they have operated so
efficiently one is electrification, one is laying new track.-
But they have been doing it so efficiently that we have had to
provide additional funds as a result of them doing it quicker.
If we had stayed within the original limitations it would have
been done less quickly and less efficiently and at greater cost
overall. That is just one example of where construction is best
done really as quickly as the team involved can consummate it.
Question Have you any estimate as to when it will be finished ( inaudible).
Prime minister
No, I haven't. I would prefer that to wait until we have had the
papers put before us as a result of the examination over the
next six months.
Question Have you talked to Mr. Wran and M~ r. Hamer yet.
Prime Minister
Not yet, no.
Question Are you concerned that the State Premiers might see this as
something of a sleight of hand. They have already made it clear
that they don't think they are going to be happy with the
allocation of funds if not this year from general revenue taxation
( inaudible), if not this year then certainly next and before
February... ( inaudible) comes into effect. Aren't you really saying,
well, perhaps you are niot going to be happy with the funds you
are getting from this source, but you can get more by borrowing.
It is not money they get for free, so to speak, it is money they
are going to have to pay back.
Prime Minister
You wouldn't be able to use taxpayers funds in these sorts of
projects anyway.
Question I'm not saying that.
Prime Minister
No, but the two things; you suggested that you could use one
instead of the other. I think that you will find that you are a
bit in error, because the 39%, 40% formula is likely to lead to
very substantial increases in funds to the States next year anyway.
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Question I certainly don't think
Prime Minister
You know quite well that every Premier approaches a Premiers'
Conference in a somewhat dismal state of mind. Now that is
traditional, and I believe and hope that thisowill be an exciting
Premiers' Conference and which can be regarded as one in which
the States and the Commonwealth working together to build for the
1980s in a very realistic way. Now, the infrastructure proposals
supported a year ago were accepted in that vein. I can see no
reason to believe why the whole Premiers' Conference shouldn't
be accepted in that vein.
Question If I could get back to the point about things improving in the
future. If that is the case, why is it suddenly going to change.
Over the last, what, 4 years you have had to revert to the
Whitlam formula.
Prime Minister
Income tax collections are up very significantly this year, as
you kniow, and that will mean that out of the normal incentive
basis the States will get a very significant increase next year.
Now that is already in the books and nothing can change that.
So, that increase is there. I think that will tend to make the
States a little happier for next year.
Question If-I could put that a little differently: you are offering the
States something like $ 1,000 million in loan funds, then you
indicate you
Prime Minister
Except for the areas where there are Commonwealth initiatives.
They have sought these projects.
Question Yes, but ( inaudible) of $ 1,000 million.
Prime Minister
Upwards of. / 9
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Question Can you indicate to us what modifications with tax sharing
arrangements you will be proposing.
Prime Minister
Oh no. No.
Question Can you tell us how many jobs you expect those decisions to create?
Prime Minister
Mr. Viner will be doing some work on that and making a statement
about it. But that would be after Friday.
Question ( Inaudible) on the question of the re-shuffle?
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