TRANSCRIPT OF MIKE WILLESEE 11 JUNE 1986
E 0 E PROOF ONLY
WILLESEE: Does this mean you have now taken a more direct
responsibility for the economy?
PM: In one sense, but I want to say that I am deeply indebted to
the assistance I have received from Paul Keating, who has been
shoulder to shoulder with me in the preparation of this material.
And I also thank my colleagues on the ministerial committee who
have been involved with me. But it is the case Mike that as
Prime Minister and particularly in a time of crisis I have to be
up front, out there leading. That is what I am doing.
WILLESEE: You realise the purpose of the question of course,
coming right after your clash with the Treasurer. Is his status
as Treasurer diminished in any way by this?
PM: I believe not. Let me say, and I can say it with absolute
sincerity, the personal relations between Paul Keating and myself
are as close as they have ever been and my confidence in his
capacity is undiminished.
WILLESEE: Did he collaborate and did he endorse the address?
PM: Entirely. I could not have had a greater degree of close
collaboration and if I may say so in the best sense of the word,
comradeship, in the preparation of this because Paul knew that it
was going to be the Prime Minister up front in economic matters.
I could not have received more assistance from him.
WILLESEE: Prime minister, would you agree that this is more like
a pep-talk from the national coach rather than a set of
government decisions?
PM: On the contrary, while it's not lacking in a pep-talk,
certainly that has got to be there. It is replete with specific
hard decisions, not only in the statement I have made to the
nation, but in the examination also of the fuller statement that
has been released tonight. And may I say, as far as the economic
future of the country is concerned, some very hard decisions in
the area of wages policy, in the area of government expenditure
not only my government, but my indication of the hard line that
will be taken with the Premiers. We are about creating, within
the area of our responsibility and opportunity, the appropriate
economic environment to enable Australian industry to rise to
this challenge.
WILLESEE: Well, you have talked about tough decisions. You said
in your statement that you would rather risk electoral defeat
than take soft options. But my guess is, with respect, that a
lot of people will be asking where are the hard options the
specific decisions.
PM: Let's nominate them.
WILLESEE: I have got them chronologically, if you would like me
to take you through them? Your call for wage restrictions. Now
is that a tough decision by government, or a request.
PM: Let me say that under our institutional arrangements, the
Arbitration Commission sets wages not the government. But what I
have flagged very clearly is this that the decision coming out
of the current case should be the only national wage case this
year. There shouldn't be another one before the 1st January
1987, Mike. And I have said that as we read the economic
situation we will be going into that next case and arguing for a
further discount.
WILLESEE: Has the ACTU indicated it will comply with your
request?
PM: No, it has not. And that is in the nature of the Accord
that there is the right to the parties to the Accord to take into
account the economic circumstances. It is my responsibility on
behalf of the people of Australia as a whole to analyse the
economic situation and to say what we think is necessary. And we
will be putting that to the Arbitration Commission. Under the
Accord, there will be discussions with the ACTU but we will be
putting that position to the Commission.
WILLESEE: Restraint on executive salaries of course is a
request.
PM: Yes,' we have no constitutional or institutional capacities
to do more than make that request. Let me say this that under
the Advisory Council on Prices and Incomes, which was set up
following the 1983 summit, that we wrote to the major
organisations and the heads of major companies around Australia
asking that such restraint should be exercised. And Mr Willis
has said, both to me privately and he has said publicly that for
a long period the business community responded positively in this
regard. Unfortunately, in the later period there has been on the
evidence a breakout in that area. I will be writing again to the
business organisations and to individual businesses asking that
they exercise the same restraint. And I want to make it clear,
it is the case that wage and salary earners, by definition,
constitute the largest sector of the national income and
therefore there has to be restraint in that area. -But it is
going to be much easier to expect such restraint from the
ordinary workers of this country, who I believe, will respond if
in fact they see that those who are not by law subject to the
same institutional and constitutional restraints, voluntarily
exercise that restraint. I hope and expect that that will be
done.
WILLESEE: Price increases to be kept to a minimum, that is also
a request?
PM: We have no constitutional power to control prices. we have
set up the Prices Surveillance Authority. I have made it clear
in my statement that I expect the business community of Australia
to exercise great responsibility and restraint in this area. And
it is in their own interests, as well as the interests of the
Australian economy, that they should I have made it clear
that whatever assistance the Prices Surveillance Authority
requests from the Government to increase their efficacy will be
forthcoming from the Government.
WILLESEE: Do you mean a bigger budget?
PM: For them?
WILLESEE: Yes.
PM: I don't know that they will be asking for more resources but
if they were to make an increase for more resources, and in a
context where we could see that that would produce more
efficiency in the exercise of surveillance over prices then we
would consider that sympathetically.
WILLESEE: But isn't that a bit vague?
PM: No, it is not vague. It is not vague beyond what the
constitutional limitations upon us are. I don't believe in, and
nor may I say is the trade union movement, asking for price
control because we believe that that would be counter-productive.
But we do want the business community to embrace the voluntary
guidelines in regard to the operation of the Prices Surveillance
Authority as have been outlined. I believe they should do that.
And I think the Australian community is going to become very,
very much more conscious of the pricing decisions of business
because the ordinary Australian who understands, I believe,
without knowing all the economic theory of it, but I think they
understand that we do face a challenge. I believe that they will
be prepared to co-operate. But they will expect the business
community to co-operate. And I hope that the Australian
community will themselves exercise surveillance over prices. * And
part of the thing that we can do with the Prices Surveillance
Authority, I think, is to ensure that the mechanisms of the
Authority are improved to enable the communication, the better
communication, between the Authority and the public. And we have
now specifically designated a Minister, Mr Hurford, who is the
Minister assisting Paul Keating, to accept specific
responsibility in this area of prices.
WILLESEE: You say there will be tough decisions in the budget
this year. And you say you have identified savings of $ 1
billion, but you don't say that you will save it.
PM: I wasn't playing with words because we haven't completed the
budget process. I can assure as the chairman of the Expenditure
Review Committee that we have spent countless hours already going
through the Government's own programs. And when I say we have
identified, I am not saying well we have ticked them off and it
is not going to happen. That is where we have got so far, there
is more to be done. And the appropriate place basically for the
revelation of the Government's approach in the budget area and
the savings that it will have effected, of course, is in the
budget. There was no cleverness, Mike, intended by using the
word identified.
WILLESEE: But it is not hard decision?
PM: Yes, it is.
WILLESEE: To identify?
PM: I am saying that it was not appropriate to tick off what
those items are at this stage because the budget process isn't
completed. I can assure you and the people of Australia, Mike,
that those savings will be made.
WILLESEE: Do you undertake to reduce the deficit this year?
PM: One thing that you have got to understand is that if the
wages outcome that we are seeking eventuates, that of itself,
will have the effect of significantly increasing the budget
deficit because you see, if we reduce the wages outcome below
what would have been anticipated before, that significantly
reduces the Government collections under PAYE.
WILLESEE: That is right, but that is you requesting again. You
are seeking the co-operation for the national good to do that.
But are you going to take a tough decision you keep talking
about tough decisions and say we will reduce the deficit.
PM: We are aiming to reduce to deficit. But I am simply saying
that if you get an additional billion dollars on your deficit as
a result of the beneficial result of reducing the wages outcome,
th'af-is an element which will make that task harder. That is all
I am saying. We will operate within the Trilogy to further
reduce the deficit as a proportion of the GDP. Since we have
come into office we have halved the deficit as a proportion of
GDP. We will continue to do that Mike.
WILLESEE: You talked about the opportunity for those on the dole
to undertake community work. Now are you talking about something
voluntary or compulsory?
PM: The framework that we've got in mind is that we believe, and
I certainly know talking with young people, that they want to do
something for the dole. I mean they would much prefer to have a
job. They want to do something for the community. So what we'll
be doing in consultation and co-operation with the relevant
organisations in the community is to try and build up a bank of
community work that can be done by the people who are in receipt
of unemployment benefits. The question of compulsion is not
relevant, I think, in a sense that because of the judgment that I
make about the young people on unemployment benefits there will
be more people wanting to do this than there will be jobs
available. WILLESEE: So you're not planning something compulsory?
PM: It's not compulsory in the sense that you will have the
relationship between more jobs to be done and people to do them.
If as time goes on you've got a situation where you developed a
large number of community jobs and you were to get a position
where people were saying no we're not going to do them then
the Government would have to look at that position.
WILLESEE: That's not taking a tough decision saying you'll have
to have a look at it. What do you intend?
PM: Look Mike, it is taking a very firm decision that what we're
going to do is create a situation where the community is not just
paying out very large sums of money for unemployment benefit and
there is no nexus between society and~ the unemployed other than
this quite sterile thing of handing over a dole cheque. when you
talk about compulsion it involves the assumption that the people
on the unemployment. benefit, particularly the young, don't want
to do something for the community, they do. I know that they do.
our problem, in my judgment will be, as a community, finding
enough community jobs to satisfy the demand that there will be
from the unemployed. Now if we reach the situation where we are
able, as a community, to create that many jobs, these would be
the number of people who are wanting to do them, and people were
saying no we're not going to do it, then I think the community,
in that circumstance, would want the Government to look at that
next step you're talking about. But what the community rightly
wants is not just to be in a situation where they're handing out
money and that's the end of their relationship with the
unemployed. And that's what we're going to do.
WILLESEE: Are you threatening compulsion?
PM: The very thing this Government is about is not threats.
That's not the way you run a co-operative society, a society
that's going to address itself to problems. If I thought that
what we face was a great number of unemployed, who simply don't
want to do any work and of course there are some of those but
overwhelmingly the unemployed in this community want to have a
relationship with the community which is not simply a taking of
money. They want to do something. The community wants them to
do something. As a Government we're going to satisfy that nexus.
WILLESEE: So isn't this more a social matter than a cost saving
matter? PM: No I don't think it's just a social matter, although
primarily I want to satisfy what the community wantsand what the
unemployed want. That is a productive relationship between the
community and the unemployed. There will be economic
implications to it in this way. I think to the extent that we
can get the unemployed doing something in the community, other
than just taking the unemployment benefit, that that-will give
them an experience, that will be of assistance to them. That is
an economic advantage. It may be that as people see that this
practice is going to develop of doing some community work, it may
for some of them say I'd rather go, I'd rather try harder to go
out and get a job in the market. If that is of significant
dimensions it will have an economic impact. But what we've
really got to do is, as far as we can as a society, to have a
positive productive relationship between the society and those
who at this stage can't get a job. That's what the community
wants. It's what the unemployed wants. And that's what we're
going try and bring about.
WILLESEE: So you're not saying at this stage whether it will
cost money or save money?
PM: I don't think at this stage that you can make that final
judgment for this reason, it's quite obvious that in creating
these community sort of jobs that we're talking about there will
be some cost element. Basically it will be supervision, not
capital sums involved.. So there'll be some money for
supervision. I think the community will be saying, in net terms
even if there were to be some cost they would much rather have a
situation in which the unemployed are doing some things for the
community. What I'm saying, particularly from the point of view
of the unemployed, and I had a great deal of experience during
that Priority One period, that the kids themselves are saying
Mr Hawke, we don't just want to get the dole, isn't there some
things that we can do. If there's not a job, of course we'd like
to get a job, but if there's not a job we'd like to be doing some
things and that's admirable and I think the attitude of the
community is right.
WILLESE Prime Minister just briefly to wind up. Rip-offs in
the welfare system are estimated variously between $ 100 million
and $ 1 billion. will you be making concerted efforts towards
fixing that problem?
7
PM: Yes. And as Brian Howe, the Minister has said in the
Parliament and elsewhere, this Government has done more than any
other to tighten up the administration of the social security
sector and Brian is currently working in this area, as well in
the work test area, to try and ensure that as far as possible the
resources of this community shall only go to those who are in
need. ends