1AtST ALIA
PRIME MINISTER
E 0 E PROOF ONLY
TRANSCRIP~ T OF PM'S PRESS CONFERENCE, CANOWINDRA 31 MAY 1986
JOURNALIST: Mr Hawke, do you think you've won them over today?
PM: It wasn't a question of trying to win them over. I gave
Peter and his colleagues a promise that I would come and visit
them. They asked me to. It was a generous invitation and I'm
fulfilling that undertaking. I wasn't coming here to win votes,
I wasn't coming here to lose them either. I hope that out of
this visit Peter, and the people here, can accept that firstly,
we understand their problems and are serious about trying to
do what we can about them. They may not agree with everything
we're doing, but the first step is that we understand and that
they understand what we're about.
JOURNALIST: D~ oes the rural community have to accept sacrifices
like the rest of us at the moment?
PM: Not like the rest. There may be, in the approaches that
we have to adopt to adjust to this dramatic fall in the terms
of trade, there may be some little further element as far as
the rural coimrunity is concerned. I wouldn't think it is
appropriate that they should be asked to bear as much as anyone
else because they have had an enormous fall in their income as
a result of the terms of trade. When we talk about the terms
of trade decl. ine you are talking about the decline of the income
of farmers.
JOURNALIST: Mr Hawke, what were some of the concerns that Mr Ryan
put to you at the meeting this morning?
PM: The indebtedness situation and therefore, the burden of
their payments. They acknowledge that there has been a move
down in the interest rates, but within that situation they
stressed again what appears to be the somewhat differential
treatment of farmers. They don't get the full benefit, of the
decline in rates apparently, and that's something that John
Kerin and I are going to be talking about and seeing whether
there's anything more that can be done in that area. That is
a major burden of their complaint. One can understand it.
One of the sorts of figures that struck me most forceably was
one of the gentlemen, there today, said that his calculation,
I think it was over the last three years, he'd produced for
Australia I think about $ 3 million worth of
RYAN: Two years it was.
PM: I'm sorry, it was two years he'd produced about $ 3 million
of income in wheat exports and was broke. He'd gone broke
in the process. Now that's pretty telling sort of stuff because
Australia as a whole benefits from that export income which his
efforts have generated and you can understand them feeling crook
because if Australia as a whole benefits from those long hours
of labour, and yet he's going backwards. Now you can understand
that. JOURNALIST: Will there that particular issue in
your economic statement?
PM: What on the issue of differential interest burdens?
JOURNALIST: And indebtedness?
PM: I don't think that's necessarily appropriate for that
statement. John and I will be analysing what we've heard
today and there's one or two particular issues where I think
we may be able to do something in initiating possible changes.
Though that's more particularly for rural sector, the general
statement I will be making will be much broader than that.
JOURNALIST: Prime Minister you've offered nothing new today,
nothing specifically new....
PM: Well you don't know what I've offered.
JOURNALIST: Well you certainly haven't made that public.
PM: No, well I'm saying that you would have to ask Peter and
the others. What I've said is in certain specific areas where
they have raised the problem that this differential treatment
in regard to interest rates. I think there that's something
that we can address our attention to. See if there is some
improvement that can be affected.
JOURNALIST: What are those areas?
PM: Well what I'm saying there is that what they are putting is
that farmers seem to be differentiated against, that is what
they are suggesting, by the banks and they make the observation
that the security of their property is very substantial. There's
no reason why there should be significant differentiation. Now
that seems on its face to be a sound argument. I've undertaken,
together with John Kerin, I'll look at that.
JOURNALIST: Do you think farmers are as badly off as they say
they are?
PM: You can't generalise. When you're talking about 175,000
farmers altogether, around Australia, some relatively aren't
suffering very much. There are others who are going to be
suffering very badly. I think that if you want to generalise
you'vye got to say that farmers are very much worse off now
than they were a few years ago because of this massive
deterioration in the terms of trade. The drop in the price of
wheat over the last two or three years has been 12 per cent.
There's been very significant declines in their prices and they're
still faced with increased costs. So they must be worse off.
Now the extent for each farmer will depend on the degree of
equity he has in his land. Tf he has got a 100 per cent equity
and hasn't got a debt burden well he's going to be, obviously,
in a much different situation to the person who's got very
littl. e ecuity. Also, a lot of them made a move into crop
production in 80/ 81, when the prices were up, and acquired
significant indebtness to get the machinery. It's a heavily
capitalised section of agriculture, wheat and similar crops.
Those who went in heavily then and acquired the machinery
then, they've got particular burdens. So you can't generalise
for all because that will disguise the fact that some are
very much worse off than others. Having said that, clearly,
for Australia as a whole, there has been a massive drop in
rural income.
JOURNALIST: Do you think that the policies you announce today
could return farming to of the 50' s and the
PM: No of course not and the good sense of the people with whom
I'm speaking know that that's not possible. We're not looking
at that.
JOURNALIST: Mr Ryan you were the man that invited the Prime
Minister down here. Was it worth while?
RYAN: Yes I think that any opportunity to have dialogue with
the Prime Minister of this country and the minister for Primary
Industry has got to be worthwhile. What we were trying to achieve
by this visit today was to get down and talk at grassroots level
at the problems and pain that some people are feeling in
agriculture. I think that we've been able to get that message
across. JOURNALIST: What constructive things came out of it though?
There's been a lot of talking in the past, is there anything
new today?
RYAN: No. I don't believe that there is a lot new at this stage.
We have certainly stressed to the Prime minister that people are
hurting and people are not only hurting, but they're worried and
they're frightened. They're frightened because they don't really
know where their next turn is going to be made and we've tried to
stress that point to the Prime Minister, and given that situation
we've offered a couple of proposals that we believe that they
could look at as a means of alleviating this fear.
JOURNALIST: Does this mean we're unlikely to see you in Canberra
again with your rebel farmers protesting in front of Parliament
House? RYAN: I don't think so. I believe that if need be farmers are
prepared, still, to go to Canberra to make their point. And the
way that we've been doing, I think, has been extremely worthwhile.
I might also point out that we have graduated not only from tryinci
to attract attention to the problem,, but we're also lobbying
the politicians and the Government to try and make sure that
everyone in the Parliament and the Government are informed
on what agriculture is all about: and what are the specific
problems in agriculture.
PM: I'd just like to add to that. As I said to you publicly
and privately, they have o-.' ened up lines of communication. At
no stage did we feel annoyance or aggravation at the fact that
they were exercising a democrat right of protest. I've certainly
appreciated the opportunity out of it of meeting Peter and his
colleagues and I've undertaken that they can meet with our
rural industry committee and out of that there comes a more
formalised process of continuing consultation and that will be
good. I think we both agree with that.
RYAN: We're certainly going to continue with whatever has to
be done. People have put a lot of faith in what we've done and
we've got to make sure they have some hope.
JOURNALIST: You mentioned that area of differential rates. You
mentioned also that there was one other area, can you be specific?
PM: Well I had raised with me specifically the question of the
impact of the fringe benefits tax for employees. I just want to
look at that and get some information about the degree of impact
and Peter knows I've not promised anything on that. I just want
to inform myself on the dimension of it. They are making the
point that if they've got no income they're not paying any tax
otherwise, and yet get hit with this tax. They regard that as
an anomaly and a problem. I certainly want to have a look at
that. They have certainly placed some stress on that.
JOURNALIST: But you are convinced, is there some hope that...
PM: I'm saying as much as I've said there.
JOURNALIST: The European Community has increased its subsidies
on cheese to Australia and the US has encroached further on our
grain markets. Are we making any real impact with those two
main agricultural super powers?
PM: Yes we are making some impact. Clearly, take the United
States first of all, I believe that as a result of my visit to
Washington and discussions with President Reagan we've got
avenues there for ensuring that our case will be put and heard
in the actual implementation of the export enhancement program.
Having said that I'm not being complacent about it because if
you look at some of the recent developments, particularly in
the Middle East with grain sales, there's some cause of concern
there. We have got the avenues open. Mr Kerin will be going
overseas again next month and will be continuing to press our
case in these areas. As far as the Europeans are concerned,
yes we've advanced there. We've got the reaffirmation of the
Agreement as far as an all extension of European
subsidies into our Asian beef markets. I believe that there
is a growing realisation in Europe of the economic absurdity
of $ 70 billion of subsidisation. They know that it's perverting
thei~ r own economies. The fact that at the Tokyo Summit a third
of the time of the economic discussion was spent upon international
trade and agricultural products is some indication of the impact
we've had. We pressed with President Reagan, we've pressed
with Mrs Thatcher and the European Community and Mr Craxi, all
the people who were going to be there, that they just had to
address this issue. And I think that the fact that they had
this historically long time on. these products was some reflection
of our pressures in this regard.
JOURNALIST: One of the industries that is suffering in the west
at the moment is the cotton industry. Did you discuss that
with President Reagan on your last visit?
PM: I've answered that one in Parliament and pointed out that the
provisions of the US Farm Legislation in regard to cotton and rice
were in place before I went to the United States and before these
recent rounds of discussions had been going on. They weren't
able to give us any firm undertakings in that regard. I would
point out that it's not only Australia's concern in the area of
cotton and rice, but Thailand, which is an important strategic
consideration in the United States, they were very much concerned
about the impact upon their rice production. I think the United
States is going to have to look reasonably closely at this. I
think in that area there probably is not the longer term
problem. They say that is going to work out over the next
12 months. There's not the same degree of longer term concern
there as we're entitled to have in regard to the cereal products.
ends