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* SUBJ EC. 7 i~ 77
TiHE~ JOHN LAWS SHOW, RADIO 2UY, SYDNEY
20th October 3081
INTERVIEW WITH THE PRIME MIINISTtR OF AUSTRALIA,
TBE RT. HON. MALCOLM FRASER, CHI, 14P.
Five or six years ago 1. believed that overseas countries
would -get. their own economies right. much quicker. I
believed that they'd get InIlation down, I believ'ed their
economics would start growing and that. world trade would
start growing and that that therefore wvould assist,
Australia because we are very much ' an export country.
I suppose ubout three or four years ago I came to the
view thbat major world economies weren't going to get
fixed quickly and that. whatevere wve did we would have
t~ o do on our own account and that's really been the basis
of policy ever since.
LAWS: Mr. HIayde-n Is not the sort. of fellow Who would make th~ at.
kind of statem-ent without some sort of foundation. I
don't really think that Bill ) ayden'is an alarmist. as
such. I don't know whether you agree or not but one
would think that he had some basis for making t-hat.
statement.. What might that basis. b) e?
PM4
CLAWS: TIM: 1 don't reall1y think he's got. abasisfor It beca ' use I f
you really look at what he has said over the Years,
you know, he has predicted changes In the value of the
dollar, he hats predicted difficult circumstances In t-be
economy, he has predicted, If my recollection is,
correct,* 12 or 13 or 14 percent rates of Inflation, and
thbose predict-ions have Invariably proved to be very wrong.
Don't you think that a statement that. we are facing t-be
worst credit squeeze in 20 years Is rather an alarmiststatement?
Yes It is and I think it'sntboroughly Irresponsible
statement and you know, I doubt if, 1-his might be a harsh
thing to say, but I doubt if he really believes, it
himself.
LAWS: Yes. I don't. know that it is harsh. I think if I made
the sane sort of statement on radio I'd probably have
another trip to the Tribunal. It seems extraordinary..
* that he can make that. sort of statement if there's no':.
foundation for it.
PM: WellI I don'I-think there is any foundation for it at all
because one ol' the things that we've tried to do over
the last five or six years is t~ o manage the economy and
to manage the banking system In ways which h[ ave avoided
w~ hat in the' old days you'd call a credit. squeeze.
And we" Ve been able to succeed in that. I ca n' see
why we shouldn't succeed in the future in precisely the
same way.
YAM: 1j2C)
Page 2
LAWS: Ok. President Reagan, as you say, admits that Americia
is in a recession he calls it. Is that going to have
an effect on us?
PM: When the American economy is Tn difficulty it has an
effect on the whole world and they buy less from overseas,
they buy less from Japan. Commodity prices therefore
tend to fall and this is precisely what's happened over
recent months. It's not only-the Unile-d Stales' economy,
the British economy, the French economy, the Italians,
the German economy which was known, for a number of
years, as the economic miracle.
LAWS: That's right. We looked to it for guidance.
PM: They've taken a very severe battering.
LAWS: Yes they have.
PM: And, you know, when this happens amongst the major
western economies around the-.. orld i.' s bound to affect
commodity prices and, you know, this in a sense is the
main thing affecting our own Balance of Payments.
PM: Yes. I'm asking you to loQk.._ B bit into the future
which is probably not possible, but a calculated guess,
what's the situation going to be like, in your mind,
six months irom now?
LAWS: Well I suppose in -office you learn not to make the same
mistake twice and predicting too definitely what might
be the circumstance has proved to be embarrassing in
past years so I don" t want to put an albatross around
my own neck by being too precise. I think the world
economy is going to stay difficult and that means some
difficulty through, you know, commodity prices but
also believe that Australia is very well and strongly
placed to deal with whatever c-rcumstin-ces might arise.
We are better placed. We do have a sounder economy than
most industrial countries overseas and therefore whatever.
happens in other places, we ought to be able to get through
better and I believe we will;
LAWS: OK. Could I ask you to go this Jar. Do you think it
will be worse or better in six months?
PM: This economy has been growing. The Budget estimates are
that. this economy will grow through this year. I haven't
seen any evidence that. would suggest, you know, that
those Budget estimates, and -they are-not cynical estimates,
they are put down by Treasury on the basis of their
projections.
LAWS: Yes.
PM: I haven't seen any evidence that suggests that. those
estimates of growth in this economy are off track.
Page 3
o the situation sbouldn't worsen,
PM: -I don't believe so.
LAWS: ON~. AThut.' s going to happen over this sales tax question
In the Senate? what.' s the Constitutional posit-ion
ithe legislation-continues to be blocked by the Senate?
Ithat happens then?
SLAWS: A second rejection, on all the ) egal advice that I've
been given from the Attorney-General and quotitig
autlhorities going back for forty years, does constitute
a rejef,-tIon. Now I. wIll be Interesting t~ o see if, In
spite of the letters thbey've signed, the Demiocrats will
In fact. reject thc measures. It. wIll also be Interesting
to see, in spite of everything the Labor Party hoa said
about blocking Supply and Money B1116, whether they are
prepared t~ o participate in ft rejection because that is
totailly against their pbilosophy in terms of the. use
of the powers ol thbe Senate.
' 1Jat's right.
We've always said$ on our part, that if the situation was
serious enough that. those Senate powers are there and
could be uised but the Labor Party As not. trying t~ o say
t. hat.-there's t-hat kind of serious situation. They are
just tmking a totally expedient and in view ol' their
past attitudes, as I would believe totally hypocritical
" ttitudes, if they, you know, tAke an action which does
constitute a rejection of the measures.
LAWS: Ok. Now I-or the people who don't understand it
Const-itutionally, aDd. I'n -one of them, would that. then
Aprov'Ide grounds for a double dissolution?
N0. M For a double dissolution yould'have to have a
rejection ' twice _ spread out over a -three month preiod but
1 -think a lot -of * wat er has flowed tinder the bridge over the next
Ye ; ew ee) s and. whi). e ere. determied to. get , the mneasures:
hruhad eieewe wil get th. e measureas thrig
1don', t' tb Ink; w6' wt talk o f double, -dis solutioxis'gol ng'
oround thbe place because.
LAWS: Well you-, vouldn't want . one anyway,. -would you?
PM: : I ' m quite sure . hat the people' fit. ime Want uB to
eton with the business. of governing.. That's
pcslywat -we Intend to do.
LAWS: It'd just be a nuisance wouldn't it. : It wouid just waste
more * time and w~ ore money.-
PM: *. It would be 6 diversion and It would be unnecessary aad..
we are going to get , on with the business of VovernIng.-
Page 4
* LAXS: Aire You ever going to consider backing off on sales
tax on items like building materials apt) I footwear if
you do find yourselves In a corner?
PM: Look, I believe we'll get. the. se mensures throiugh the
8~ nteI reailly do.
LAW~ S: You're that confident?
I ' M: Yes.
LAWS: M~ any people are saying that those particular ones, and
I remember mentioned them t~ o you the day Filter the
B~ udget, the building material on, I thought that. Was a
bit tough for young people At's tough enough trying t~ o
buy a house now anyway without that additional sales
-tax on those materials. B~ ut that.' s the only one I
questioned actually.
0AW1: Well I can understand your reasons for that but
again, we wanted to take an-Initial step or a modest
step might be'a better way of putting it, t~ o broaden
-the Indirect tax base and to put uis In an enhnced
position for income tax reductions at, a later point. and
also I think It.' s worth noting that while the additional
tax is collec * ted and this year a very few bundred
additional million dollars,* the real Increase In average
. eurnings'last year* put 2.7 billion dollars Into tbe
pockets of Australian families and thbat was after
tax and I think t. hat does put it.. into., you know, a little
bit of perspective. There waS.' a very big Increase In
-real earnings last year for, wost. Australian families and
. the additional sales tax Is-a very . small part of t~ hat.
I do recogDise the ' difficulty of people'starting'Out and
trying to meet home. interest, repayments but the real way
to solve'that problem Is to'try'and collect policiesthat
will ' r'e duce pressure oninhterest'rIates find get
-t~ o the source of the difficulty.
The new arms dealb '$ 2,000 million, thatt's the biggest.
In Australia's history. Obviously you feel it's&
necessary. Wby--is it necessary?
PH: Australia-has got -to have It's own Independent defence
capacity. and . by the' standards of many countrI es we spend.
* a mhodest. amount on Def once.*: It Is a little less thban 3.
percent of , eyerything we produce although present. projections
WA l1 bulId it. up to that. and i t' n A * mal I f orce, smallI
in numbers, and that.' s one o f the reasons why you need
mjo dern, highly sophist-icated and harder hitting equipment-
7whether it. s$ for the Airforce, thbe Army or the Navy and-*.
.1 suppose In F slense you uke up for. l ack of numbers
j itR sure. that your own people:# re very well1'
eqlpedindeedi -We ' N" e taksen ak-very long while tormak6
w'tbi9-decisioniakd -fle eilbIBdga atiat~"..
-~ jater today ' About it. and hink that ~ our own..: Airfofte
andp r~ efoencnee lhav realy~ o through. the whole
process -with ebnormous care'.'--It is'a~ vastl) y. eXpensive
decision but -thrt-i1s. spread,-obverpa -considerable period.
P'age
It's a sum that has been allowed for in forward Detence
* planning for a number of years, ItIs j~ ot, you Unow,
In addition to, the current basis and whatever, It's
allowed In the program and I'm very glad that. we have In
fact got to a position to be able t~ o make a decision.
LAW~ S:. Are you.* getting any grizzles from the Opposition about It?
TIM: Aircraft sn'lesmen I suppose are very, you know, thbey press
their views very, v'ery strongly indeed but what we need
to ( 10 in these circumstances is to rely on thbe expertise
iind the advice In our owl) defence establishments and thbe
airlorce because they really have built up a very great
capacity aniJcIt's worth noting that in buying new
Eircraft the purchases of the Australian aircraft. has
quite a relevance t~ o other purchases In different places
around the world. They'know the expertise of the Royal
Australian Airforce and there are other places where they
watch that and say, you know, what's the decisions those
D ~~ hatevAer ustralian-pse oaprlee msaayk infrgo. m tShoe wlhoastienvge r cttehderI grizzles Pthrein kand
W we just need t~ o stick, well I ' m sure we just need to
stick withi our own advice on these particular matters.
LAWS: Yes, well your own advice obviously says you should be
buying themn IcDonel -Doug) as F38.
PH: Well that'Is what Jim Killen Is going to be saying. You
know.-be's going to be saying one. way or the other
l1ater on in the day although newspapers ' this morning all
seem to have their * particular view but. you'll have to wait
' till1 Jim Killen speaks to see whether tbe newspapers have
jumped. the rIght way or the wrong way.*
-AS; Y'eIts. w ould appear that General Dynamics aren'
g oing to take It lyi~ ng on. I was reading thbe paper
c-rgrlier t * is ' morning,,, In the. Aust-ralian t-hey have a large
* advertisement giving us a number of good reasons why w
o boul-d buy the P16 as' opposed to the
wi: Whoever, let. me put It that. way because I'mn not going
t~ o pre-emnpt tbe Defence Minister, Whoever is the loser
in this contest will be very well advised to take it.
with good grace. They really would. Because once a
obvernmet. has made a -decision for an aircraft
c.:, orporation and a multi-national company to try and whip
-: up pressure against that. decision is-not behavIng In a
-particularly decent way. It's not behaving In a way that
would win any respect whatsoever-and I ' ye got to say
that 1. don't appre: iate and have not responded to . the
last minute press~ ure. of' whi ch some ' members of major
corporations have sought to put. on me.
LAWS: Yes wvell they've certilanly put the pressure on, haven't
they?
Page 6
PM-: Ifell they've sought to and I haven't responded to It
and. I don't, Intend to0 In any sense. But _ you know,' that
Wind of pressure is something that Governments should
% yellh. ave In mind when they are making purchases in the
future b) ecause It's for Government. to make the decision
bnd if the corporation happens to lose out well then so
be It. They've lost that one and they should accept it.
LAWS: Yes but you know the nature of the Am~ erican saletsman
ks well as J do. They are hotshots when it comes to
selling find they really stop at. nothing ( 10 they?
1114 Well I-think that's probably true but maybe. they'll ' think
twice i1f they only learn thbat that In getting their
corpora-tion a very. you know, once t. e aeIeiini
whichever. way R decision goes, if. the losing contender
then tries to continue to pressure . and-all the rest the
only result of that will be to damage. the name and the
reputation of that corporation In this country, with
t-he-Government., wvith-, the Airforce and w* ith the Australian
J) ubl Ac.
LAIWS: Did you have a look at the editorial in the hustralian
this morning by any chance our davzling sti
perlormance. I would think you'd be aware of the figures.-
Thbe Australian * shipping Industry' has lost somne $ 600
mil Ion through strikes In the past three months.
P) 4, The'. Astralian shpigindustry,, and the strikes involved
inl it$ for a variety' of reasons, the records an appalling
one,-
LAUS: Yes It really is, : We ' re responsible for 53.45 percent
of t-he tot'a'l st rikes onthe world waterfronts and'our
closest challenger I$ Sween' That.' comes In with 312.
percent and, Britain Is copping such criticism these days,,':
isa in third place with 8 percent and we're leading wt
5345. I t'snot good Is .1t?
:-elIf the figure'i right, well whatever thbe figures right,
our record on the waterfrolnt Is not good but, you know,
th'ere has been ft variety of. reasons; There was'a marine
engineers di spute, they have been condtinuing Problems
wlt h coal loaders in Nlew South Wales.-and one. of the.
tregedies is that. while otit overall:. trike xecord " As
about the same.* as the United States alhubIthink
we make much more. of a fuss of it. tan they do, a large
Part of It is in sensitive.. areas which are evident and-..
obvious to our trading partners. In the resource'Andusti-ies,.
on the waterfront. In shipping, and thieref ore*, -you, know,
overall our. position Is the same as m6any other. countries
and it. isa more ' obvIous and -that.' s not -good. Itsbad' 7
for Australia'~ s reputat-ion and, you k~ now, therels one
vecry simple message that f wi sh we could g'et tbrought
. trade union. leaders and, it they could only sbow some
concern fur people. who are out, of. work and show-greater
concern for Itustrlala's trading reputation find whether
-it's in terms of . demanding Increased. wages or Improved...-.
conditions or -just.* sheer' di sruption'. if they could haive in
mind that every time they undertake that kind of activity
Page 7
t hey are making it. harder to reduce the number of people..
w-% ho are, In fact,* out of work.
LAWS: Do you think tbey% really care?
PU11: I think a n~ umber of them don't care..
LAWS: I'm Quite sure they don't..
PM: A lot o1 them wouldn't care ifthey'thougbt. about It,
But then translating'theory. into action is quite ftnother
matter,
LO1S: I mean even tbose who are totally In sympathy with the
labour movement must really shrug thbeir shoulders when
they bear figures like that, I mean we must really
wonerwhether the Australian maritime unions care
whether thbeir f ellow countrymen prosper or whether they
don't prosper.
9P*..,. some union leadership Just doesn'* t care at all. They
cttotally selfishly and their own Immcediate interests
Is fill that they ' cin see but again the " union is made
up of a generality of Australia ' ns and Australian * families
and if they' and their families or wives If wives were
allowed toc have a vote on strikes
LAWS: The situation would be very different. wouldn't
yPM: I thinkc the situation would be vastly different.
LAWS., Yes It sure would. lell thbank you very much for your time,
It's been good to talk to you. We've covered a bit. of
-ground there., Ie won't talk about the leadership. It
seems to have died down,
IM:."~ lthnkt~ ees ojav fied down butan yay. ev-en if i
LA8 OR, Well Int lb f area We111 talk to you
very soon. . Thank6 . very mu. h . fo r your., time, Prime Minister,
To: PH IME 14JdIUBTER' 8 PRIESS OFIFCE
' ROM: FID118 OFFICE,' 8D~ 1Y