PRESS OFFICE TRANSCRIPTTUSA, 1JLY98
INTERVIEW WITH PETER HARVEY, NATIONAL NINE NETWORK ECONOMY
Question
Prime Minister a lot of people are understandably very concerned.
about interest rates, so much so that the New South Wales
Premier has today,: and I understand the Victorian Premier is
going to bring in, some sort of guarantee scheme to protect
people, they say, from losing their homes. How concerned are
you about the problem that this sort of reaction in political
terms represents?
Prime Minister
We of course, acted to help people who are buying or who want
to buy their homes several months ago. We brought in an
approach that. was going to subsidise the interest payments
first home buyers, one that was going to make a much more
easily attainable subsidy to help pay for part of the deposit.
In addition to that, we offered to the states, quite
significant sums in co-operation with the states to help
families in Ea crisis situation. I mean, the very circumstances
that Mr Wran is talking about has probably been funded in
part with our.. funds, because we said we were going to work
with the states, circumstances where people who are in
emergency difficulties over mortgage repayments will be
given help arnd protection.
Question So this is something that doesn't apply just to New South Wales?
Prime Minister
No, we are providing funds. We said we would go dollar for
dollar with the states over a three year program and we are
obviously concerned at high interest rates and especially if
a family gets damaged in other ways. If somebody loses a job
well that famaily can be in very great difficulty and
Government's need to have arrangements that can provide help.
So if Mr Wran made an announcement yesterday, we were three
or four months ahead of him, but the detailed adminstration
of that kind of personal crisis relief needs to be undertaken
by the states, because they have the machinery, the framework
for that. But we have said that we would provide significant
sums, and we are.
Question But you are obviously keeping a watch on whether it is being done,
are people being protected? Are the states doing what they should? ./ 2
TUESDAY, 13 JULY 1982
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Prime Minister
I will need t~ o speak to our own Minister about that because
he had not completed the discussions with all the states in
the last report that I had from him, but because this matter
has come up t-his morning, I will make sure that if the matters
are not concluded with all the states, that they will be
pressed forward as a matter of urgency, because I know they
are important.
Question To protect the family homes, no matter where in Australia?
Prime Minister
No matter where.
Question And this will be a continuing interest from Canberra?
Prime Minister
Yes it will.
Question Prime Minister, overall with the state of Australia today, it
is a big question, but broadly, how do you see it?
Prime Minister
We have some problems ahead of us. Now part of that is home
grown, to the extent of wage increases last year and when you
take the hours decisions into account, probably we gave
ourselves a 15% or 20% wage increase. Now when other countries
are settling for 5% or 6% wage increases and when other
countries very often as a result of very real recession,
have been getting their inflation rates down below ours.
obviously their industries are being made more competitive
and ours are being made less comeptitive. There Will be more
imports coming into the country and unfortuntely, they have
been replacing Australian made goods.
The hours decision and the wages decision of last year have
done a great amount of damage indeed, and now we have to work
that through the system and we have to be restrained in our
approach to these matters over the period ahead of us.
It has all been compounded by world recession of a very real
kind. If we have problems in Australia, then visit the United
States, Canada, Britain or France or other countries in Europe
and the problems, the difficulties of unemployment are measurably
very much greater than in Australia. There are not many people
here who know that over the last recorded quarter industrial
production in most of these countries has been falling and
world trade shrank last year for the first time in 20 years. ./ 3
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( Prime Minister cont.)
That all gets reflected in much lower commodity prices
for our exports, for mining exports, the exports from
primary industries and our manufactureres are now in a
more competitive world. Now the task of the Government as
I see it is to do everything that we possibly can to guide
Australia through a difficult period and to make sure that
when there is a world upturn, Australian industries are
going to be well placed to take advantage of expanding
trade opportunities. But we cannot afford any more loss
of competitiveness, we have to make sure that that sort of
thing does not happen. We are looking at the Industry
Assistance Commission reports and obviously against the
Budget discussions going on over the next couple of weeks
against this total background. There is a very significant
responsibility on Government to come up with the right
answer. Question You are talking in fairly tough terms, does that mean
that measures, such as incomes tax reductions will now have
to be postponted?
Prime MinistE~ r
Well, I do not want to talk about any particular facet or
part of the Budget or what might be in the Budget. But
obviously the situation we are in today is different from
that of 12 months ago on the lead up to that Budget because
then Australi a was growing strongly in economic terms, we
had expectations that that growth would continue. Now
a continuing world recession, the massive downturn in
commodity prices which is putting miners in great difficulty
and there caii be no guarantee that all projects are going
to go ahead. There has been talk in the papers in recent
days about the problems of Alcoa at Portland and I hope very
much that Mr Cain's negotiations with the company can lead
to a continuation of the project. We know the company
isin a cash difficulty and we know the market for aluminium
is very thin, and that is a project that is based entirely
on export orders. -If they cannot get those-export orders
there is obviously a real problem.
So these things are now hitting Australia hard. We have
been told over the last two years there will be an
American upturn in six months. Well we are still being
told there will be an American upturn in six months and
sometime those forecasters are going to have to be right,
but I will believe it when I actually see it, * and we are
not going to see a shift in commodity prices till that
happens. Now the longer this continues the more it
affects Australia because we are a significant trading
nation and a large part of our national income a large
part of the weaUU-being of every Australian family is
dependent on our capadity to sell overseas, and to sell at
a reasonable price. We cannot pretend we'are an island unto
ourselves, we cannot shut out the world outside. 4
Question The reality is that that translates the things like
the possibi]. ity of taxation reduction.
Prime Minister
Well it translates to all sorts of possibilities, unfortunately,
but I am not commenting on any particular item because
we are just beginning the Budget discussions and I don't
want to start speculation about what may or may not be.
Question
Obviously it is something you would like to work for?
Prime Minis-ter
Obviously, nobody likes paying taxes, you don't, I don't
nobody else does. But at the same time, if there are
things that Governments must do, they have to be paid for.
Whether it is education, health, roads or whatever and we
have been, certainly by comparison with other countries
very restrained in our own expenditure over the last six
or seven years. Some people come out and say: " knock a
billion, knock two billion dollars off expenditure,
knock it off welfare or whatever", but then when you chcllenge
them with a harder question: " where in particular would you
reduce expenditure", they say: " that is your job". Well of
course it is but we are not in the business of cutting
expenditures and haven't been in a way that damages the
lives of individual Australians.
Question Mr Hayden and Mr Hawke are both saying the only way for
an Australian Government to behave at the moment is to
generate jobs, to generate business, to spend. They are
saying that only the Labor Party with its links with the
trade union movements, with its links with the labour force,
can get this country out of what they say, is an economic
recession. How do you respond to that, it is a fairly
powerful argument at this time with unemployment at a
record high?
Prime Mini: ster
I don't think that is correct, and I don't believe the track
record of Labor in Government gives any credibility to that c3ai.
I don't know that'it really is a powerful argument because
the Labor Party's approach to economic problems has always
been to spend and to spend up big. They proved that when
they were in Government and Government expenditure went up
by 46% in one year alone which people tend to forget, and
it was that: Labor Government that really began Australia's
economic prbblems. It is worth noting perhaps that there
was Mr Whitlam as Prime Minister and Mr Hayden as Treasurer
and Mr Hawke! as President of the ACTU and as President of the
Labor Party, the three of them together made the biggest
mess of Government in Australia that this country has ever
seen. So I don't think that does much for the credibility
of either Mr Hayden or Mr Hawke. In addition to that, we
have seen the problems that Labor caused in Tasmania
but people probably don't pay ' a great deal of attention
to that, but: the deficit that they were left there would be
equivalent to a New South Wales deficit of $ 400 or $ 500 million,.
We have seen the massive economic nonsense
that Mr Wran has gone on with through five or six years of
total mismanagement in New South Wales and wherever Labor
has had a chance to run a Government is has messed up the
economy which that Government was responsible. Now,
if Mr Hayden is going to come along and say: " all you need
is a Labor cGovernment, which is going to spend a great deal
of money", t: hat is not going to be the answer to Australia's
problems. We need careful management, we need careful
analysis of the difficulties that industry, that people face
and we need a Government that is responsive to those
concerns. Question Will an election campaign, be it early or late, be fought al * ong these
lines, that the'Labor Party be it Hayden or Hawke promising that
they can do better than you with 7 years of difficulties.
Would it worry you fighting an election campaign on those
grounds Prime MinistLer
Whenever it comes, no it wouldn't, because I don't believe
for one moment that people would take a gamble with the
Australian Labor Party in terms of the management of this
country's affairs. The Wran example in New South Wales, the
tinsel, the public relations machine has fallen apart and
the damage that he and his mismanagement, his lack of concern
has done to the state and to the people of New South Wales
is massive indeed. * He has had to put on new taxes and
charges totalling $ 350 million and that is on top of against this
base grant last year of a 17% increase in funds from the
Commonwealth this year and the untied tax reimbursement
grants. Now if a Labor Premier cannot run on a 17% increase
in those untied funds, then obviously there is something
very wrong indeed with Mr Wran's adminstration. I don't
believe Australians would take a risk again. I know
that there earlier had been suggestions that Mr Hayden
was a responsible economic manager, but he was a minister
of a Government that resulted in greater increases in
health costs in Australia than ever before in Australia's
history. Ile was Minister of a Government that increased
expenditurEt by 46% in one year, that led to massive problems.
Now neither Mr HaydennorMr Whitlam had told the people of
Australia that that was what they were going to do before
they got into Government. They kept that all a great
secret. and it is all very well to pretend to be reasonabl" -responsib~ le
when you are in opposition, but it is the test of what you do
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when you arE! in Government that counts and when you put
that test on the Australian Labor Party whether it is
in the Commonwealth or whether it is in the States, they
have failed abysmally.
Question Now you appear quite certain about the result of an election?
Prime Minister
Yes. Question No matter when it comes?'
Prime Minis-ter
No matter.
Question Do you rule out an early election?
Prime Minister
I can say no more than I always have. Unless there are
very good reasons I believe the Parliament should run its
full term. I still say that. There is no doubt that over
the last two or three weeks at the Labor Party conference
Mr Wran sought to terrify the conference members with the
prospects of an early election because that was the only way
he could belt them into some elements of responsibility.
Question Is he wrong, is Wran wrong?
Prime Minister
Well, I think it is rather a poor thing that that is the kind
of weapon he has to use to try and get even a half respontible
answer out of AL~ P conference delegates.
Question But isn't it an option that you keep up your sleeve?
Prime Minister
If the circumstances required it, if the Senate misbehaves.
I am not going to say under no circumstances. * We don't have
a majority in the Senate and I don't know what the Senate
is going to do. So * to -that extent I don't know whether
I would be forced into a position when I would have to call
an election or not. ./ 7
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Question But it wouldn't worry you even with the Labor Party campaigning
on their economic promises?
Prime Minister
No, because once people start to focus their minds on the
problems, on the sorts of policies that the Labor Party
would put in place. Let's just take a couple of examples.
They want to put on a resource tax. Now our resource
industry is right down on its knees, world prices are falling.
This is often the nature of what happens in that industry
and if they are going to get an additional tax put upon
them then quite plainly there are goi~ ng to be many more
people out cf a job. The press reported the conference
decision on uranium as one which would allow the industry
to continue, but if you read the policy, the resolutions
carefully, t. he commitment to getting rid of the industry
is as firm and as absolute as ever, and Mr Hayden has
reaffirmed that since the conference. They are just saying
instead of putting a knife through the industry thev
are going to phase it out, but they don't even say existing
contracts can be allowed to contine. The phase-out could
be in three months or six months, it could be in three weeks
and still comply with the conference resolution. The
concept of the social wage, the union movement won't buy
that. It has already been condemned by the AMSWU and the
Labor Party seems to be getting closer and closer to that
particular union and to the letadership of that particular
union. Obviously, a Labor Government would be significantly
influenced by the affairs and policies of the Amalgamated
Metal Workers' Union if they were ever in office.. That again
is not something that the people of Australia would want.
People are not going to buy this. There are real problems
ahead and it-would be quite the wrong time to have a. Government:
that'didn't have stable, sensible policies. It would be
quite the wrong time to have a Labor Government that would
clearly be , subject to the dictates of unions like the AMSWU.