*~ PRESS OFFICE TRANSCRIPT TUESDAY, 29 JANUARY. 1980
QUESTIONS AND ANSWERS FOLLOWING ADDRESS TO BUSINESSMEN'S
LUNCHEON LOS ANGELES
Question I would appear, Mr. Prime Minister, that one of the driving
:: forces in the United States' economy towards inflation might be
the defence spending. What share of your Budget is going into
defence spending, and do you think that is going to be moving?
Prime Minister-
I believe that defence spending will increase in Australia.
Traditionally, we have kept pretty small forces. A great deal
of defence expenditure f inds its way to the United States, because
of much of the sophisticated equipment that we purchase comes
from your country. But, the proportion of GDP that we spend on
defence would be significantly less than the United States.
We have already called for a review by our own defence people
of their strategic assessment, and for a review of their defence
programmes. I hope both those reviews will be ready to be put
in my hands when I get back to Australia in about two weeks.
Question Prime Minister, what is the reaction of the people of Australia
to your announcement that you would join with the United States
in the boycott of the Olympics in MoscQw?
Prime Minister-
I believe general support. Your Olympic Committee has gone
further than ours. Ours has committed itself to putting the
Government's views to the International Olympic Committee.
They have kept their final options open at this stage. But
the Government's view is almost identical to that of the
United States Government. Having stated that position, I would
hope that it will be seen that an effective boycott of the
Olympic Games in Moscow might well be the strongest weapon any
of us have in demonstrating to the Soviet Union the depth of
our concern and the depth of our opposition to what they have
done in Afhganistan, because there is not the slightest doubt
that the Soviets want the Olympic Games in Moscow to be a great
public relations operation for their own people athletes from
all the countries of the world going to Moscow virtually paying
homage to the Soviet Union by their presence, competing, and as
the Soviets would want, being defeated in the Soviet Union; to
have a great domestic success. Now, a number of things, trade
sanctions and all the rest, can be hidden their effects can
be hidden from the Soviet people. If there are a large number
of countries that do not go to the Olympic Games, the effects
of that cannot be hidden from the Soviet people. There would be
a wondering why, a questioning. Our people, who have watched and
examined, advisers on Soviet affairs, believe that an effective
boycott of the Olympic Games would bring home the view of / 2
Q/ A FOLLOWING BUSINESSMEN'S LUNCHEON
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Prime Minister ( continued)
independent states and nations about Afghanistan, bring
that view home to the Soviet people, more strongly and more
forcefully than almost any other non-warlike act that it would
be possible to take.
-Question
Prime Minister, recent decades have seen a tremendous build-up
of the trading partnership with Japan. Do you foresee a similar
development with Mainland China in decades to come?
Prime Minister
Yes. I * think it might be slower. Are you talking about between
Australia and Japan?
. Question
Yes. Prime Minister
We, obviously, will be seeking every opportunity to trade
with China, but there is a very the Japanese and Australia
economies, they are complementary. We both have something that
the other needs, so a rapid growth in trade and relationships
between Japan and Australia was prompted and promoted by the
economic relationship which grew very r~ aturally. I think there
will be great opportunities to trade with China, and I hope
trade both ways. But at the moment, for example, it is much more
one way. There are some things that we sell to China, very little
at the moment that they produce that we need. In some things they
produce they want to compete with a number of others, and are
pretty effective in the business. I believe the opportunities
are there. The practical effect of increased trade will be seen
in coming years. But I doubt if it would be as great as the
growth with Japan.
Question Prime Minister, is there any possibility of the Federal
Government building a studio, for the production and the
benefit of the various States, in the production of feature
films in Australia, and incorporating into that studio operation
the amount of money that is presently spent on the school, the
motion picture school, that is presently operating there?
Prime Minister
I have not heard that suggestion put forward. The film industry
seems to be moving ahead quite rapidly in Australia. There have
been not only some domestic successes, but international successes
over recent years. For a long while that did not happen in
Australian production. We have also done one or two things to
give the Government Broadcasting Corporation a greater stimulus
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Prime Minister ( continued)
to get out and produce and to sell by allowing them to keep
the profits of what they produce and sell. Before the Treasury
used to grab it back. So I hope that they will be doing a bit
more. But I had not heard of the suggestion that we should
the Government should build a studio. I think government
should only be a thing that private enterprise or other people
cannot do.
Question I don't private enterprise can do it.
Prime Minister
No. But I make the point the film industry has been highly
successful at the moment, with the facilities and arrangements
that do exist.
Question Prime Minister, ( inaudible) the economy in which the Australian
Government welcomes investment and are there any problems in
connection with the repatriation of profits ( inaudible)..
Prime Minister-
No, and we expect people to make profits. You do not invest
unless you do. In Australia, profits i's an honourable term.
We like people to make prof its. The major overseas investment
has been in the resource industries or manufacturing. But
there are a number of construction firms, or service-based
industries that have also got significant overseas investment.
There is one area -that can become sensitive, and that is
in the investment of land, f arming land, and I think you would
understand that. There are some rules which determine the basis
of foreign investment. In the major resource projects we try and
get 50 per cent Australian partnership in an operation. But if
an overseas corporation wants to do something and cannot get an
Australian partner and can demonstrate that quite clearly, they
will still get approval to go ahead. It is a pretty flexible
policy and one that is quite deliberately designed to encourage
overseas investment in Australia. If you make profits, well,
subject to paying our normal taxes which are the same as any
other corporation has to pay. Well, they are yours to determine
what you do with.
Question Prime Minister, would it be proper to ask about the impact of
Prime Minister Thatcher's Government on the relations with
Australia, with all the changes that are being wrought?
Prime Minister
I think Prime Minister Thatcher has a tremendous task ahead
of her, which I think she is tackling boldly and with a good
Q/ A BUSINESSMEN'S LUNCHEON
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Prime Minister ( continued)
deal of vigour. It is going to be a long haul, because there
are many things that had to be put right, but I know this is
understood in the United Kingdom. As far as I am concerned,
all praise to Margaret Thatcher for what she is doing. I think
a lot of Australians would see it that way also.
Question Prime Minister, the other day I read a speech by your Deputy
Prime Minister, I think it was given in San Francisco recently,
in which he commented at some length upon the concern about
growing protectionism in the United States. I wonder is this
something that is especially noted in Australia, and would
you comment on the general subject of protectionism as you
see it.
Prime Minister
In general terms, protection is an evil, but we have to face
that we live in a world where all countries, to a greater * or
lesser extent, practice protectionism. There have been times
in the past where some United States actions have damaged
Australian industries by quantitive restrictions. This is
largely in the primary industry field, although restrictions
have been placed in the past on lead and zinc. I think going
back to the Eisenhower regime there were limits for bans.
When my colleague Doug Anthony was talking about that sort of
thing, he would also I suppose * be having in mind the trade
balance, which is two to one in the United States' favour.
We do not look for people to have a balanced trade balance because
that is just not possible. We have a favourable
balance with Japan for example. The quantitive restrictions
on major bulk commodities and whatever have sometimes inhibited
expansion of trade between Australia and the United States.
I think we made good progress in the MTN so far as the
bilateral relationship was concerned. Access for meat and for
wool and for some other commodities was significantly improved.
I think we made real progress in that area. Our people have,
for a long while, wondered about the rationale of a tariff on
raw wool. The United States was the only country in the world
that had it, and all we could see happening from that was the
wool industry in the United States being damaged, as well as our
own. Under the new arrangementsc, that is going to be very
significantly reduced. Significant progress has been made.
We also of course, have got elements of protection and we are
accused also of sometimes being too protectionist in Australia.
I do not think we are when you take into account the fact that
Australia uses tariffs, sometimes quantitive restrictions but
not very often. We have particular access for the goods from
developing countries. Exports from the ASEAN group have been
growing into our market by over 30 per cent . a year for nearly
years. We import large quantities of textile, apparel and
footwear from developing countriJes. Some manufactured goods
from developing countries. When you look at the sort of
protective devices that Australia pursues and then look at the
protective devices in Europe, well, we are very much novices
Q/ A BUSINESSMEN'S LUNCHEON
Prime Minister ( continued)
and learners in the game. I do not know that we want to
become as expert as the Europeans. We would hope that they
might diminish some of their elements of protection. They
spend $ 25 billion a year in wage subsidy and export subsidy.
They are all protective devices, just as much as a tariff.
They have levies and quantitive restrictions and quotas and
labelling devices, and health regulations and all sort of things.
That does inhibit the opportunity for trade. Indeed, much of
our trade with Europe well, it has fallen very greatly over
the last ten years with Britain going into the Common Market
as a result of these devices. If it was not for a standard
trade with Japan and Korea and Taiwan and Hong Kong and South East
Asia, Australia would have been in very real difficulty. But
we have made up for it with a trade offensive in other areas.
Protection is bad. I think we have all got to work at lowering
it. We have also got to face the reality of the domestic
economy sometime which, in a protected world, make some elements
of protection inevitable. No one country I think can afford
a sudden inflow of no protection. A country our size could not.
You can make judgement for the United States.
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