PRIME MINISTER ON RADIO 4BC ( HAYDN SARGENT SHOW) 12/ 6/ 86
H. S. Mr Hawke seems to have copped flak from both sides
of the fence from the unions and from the employers.
Good morning Mr Prime Minister
PM: Good morning Haydn, how are you?
HS: You've copped flaK from both sides of the fence this
morning after last night's speech. The unions weren't
happy, the employers weren't happy. Were you
expecting that sort of reaction?
PM I think in politics in the broad senseadd that
includes Industrial politics, people have
constituencies and I've got to take account of those.
was a little bit surprised by sections of the business
community who in discussions with me indicated a view
about the productivity/ superannuation case In line with
the government and then they make public statemennts
to the contrary. They have their constituencies to
look after. As far as the ACTU is concerned and I
think this is the important point Haydn, they are in
a vacuum at the moment. They've got a case which they've
argued and there's no decision yet. I believe that if
the Commission comes down, arid obviously they are an
independent body and I can't say what they will do, but
I believe that if they come down with a decision which
grants the 2.3, which itself involved a 2 percent
discountt if they come down with that decislon and an
indication that superannuation will be available spread
over a longer period, it means there is a wages situation,
wages systemthere within which the trade union movement
can make clear decisions. I think it will work out on
that 3ide.
HS I was talking to Brett Davis today from the Chamber
of Commerce, he's a senior economist and you probably
know him, and he said the Chamber of Commerce felt that
wage increases Should be based on productivity. Do
you support that idea?
PM: Productivity Is obviously relevent and has to be taken
into account.-But If you have a situation where you only
took account of productivity and no movement in prices,
you would have a continually declining situation as far
as the capacity of people to purchase goods and services.
So you've got to balance the two. But there is a case
that there has to be a reduction In-real standards in
the foreseeable future. The world has cut our national
income by by .3percent. We can'tVw~ ive that fact away,)
we have to accommodate to t.
HS A lot of people feel that the wage earner or Australia
is being asked to carry the can, but that the
manufacturers and the retailers and the wholesalers are
not prepared to enter into some sort of even voluntary
agveements to peg prices.
PM Yes, and that's a fair feeling. Just let me make two or
three comments about that, Haydn. The fact is that wage
and salary earners constitute the great majority of Lhe
nation's income and expenditure so there has to be
restraint In that area. The point Is that under our
constitutional and institutional position In this
country there are mechanisms Including the Arbitration
Commission, for dealing with wages freeze. Under the
same constitution there are no mechanisms fur-exceriling
the same sort of restraint In regard to the Usille~ S
sector, So we've got to rely, baslcally~ asd
substantially, on the decency if you like and the good
sense of the business community, and that is why in thte
area or the three things that they can do aind should do
we have . There are three areas in which the
busln2: Is commun. I. Ty h . i a rP. 5POn!:: 1 hilitY firstly In
regard to to their own salaries, the executives and
directors and so on, they've * oL to exercise the same
restraint and have a real reduction In their standards
by not allowing their remuneration to go at a raster
rate than wages and salaries and I believe we'll
get that restraint. They-certainly have a moral
responsibility to exercise it.
Secondly, in the area of p rices, they should embrace
the voluntary guidelines of the Prices Surveillance
Authority, they should keep price increases to a
minimum and we're going to do our best to see that they
do. Thirdly, in the positive environment that has been
created with profitability back to the levels of the
late 60s and early 70Os, they have responsibility to
invest in this country and we are providing them with
the best sort of environment to do that. They should
be positive in each of those three areas.
HS I notice this morning that The Australian published a
poll that suggested 64 percent of Australians felt we
are In deep financial trouble. I wonder sometimes though
whether the constant talk about our 6eep financial trouble
and the constant media attention to it, doesti't end up
becoming a very negative factor and people thun start
to think negatively and behave negatively instead of
rallying and fighting the common enemy. We just all
tend to sort of flop around and say we're beaten.
PM: That's a fair point and it's precisely that sort, or
consideration that was my major concern last night. I
wanted to tell the Australian community ordinary men
and women of this country, workers and businessmen that'
we do not have cause for dtspair. T reminded them of wha,
we did together at tho boginning of 1983, that. wam th,
worse economic crisis this country had had for 50 years.
Now by realising that by working together we'd do better,*
we then moved into a position of economic growth far and2
away beyond the average of overseas, we got the highmest
rate of employment growth in this country's history and
we brought inflation down to it was down by 5 percent
there at the end of 1984 before we got hit b y this
depreciation. 5o we have demonstrated to o,, e another
that we can face a crisis. Now we don't want to d4spair.
Ue've got to recognise, howeverthe reality that there.
has been this 3 percent cut in our national economic
capacity and we're getting less for what we sell overseas
than what we did before. So we've got to adjust to
that. But if together we work hardert if business
invests and we diversify our export base, we can lick
this. We're Australians and Australia can set a place
in regard to fundamentals solution is in our
hands and if we recognise that fact we can come out on
top.
H-IS You said Australia had a severe crisis in 1983 is
this crisis as big or bigger?
PM What we've got now the challenge is only daunting if
we can control what the world pays us for
our products let's go to a few of the prices so
people can understand what has happened to these prices,
in the last year take aluminium the prices we get have
fallen 13 percent, 4 percent for coal, 10 percent for
wheat, 5 percent wool, beef and veal, 13 percent for
sugar now these are very very substantial declines in
what we get for what we sell. We can't control those
overseas prices. So what we've got to try and do is
diversify our export base, try and increase in absolute
and terms what we do in the manufacturing and
services areas, so we're not so adversely impacted upon
by these movements in prices for rural and mineral
products. I used the example in one discussion I had
last night of Canada they have produced a situation where
they have increased the proportion or manufactured
services relative to agricultural and mineral products.
They were relatively fortunate in living next door to
the United States and having that great big market there
into which it could sell, but we've got to try and do the
same sort of thing. And, my point of rerferring to
Deek and to Sutherland and to Ben Lexcen arid Bertrand
was to say the sort of thing which made those people gree
tht determination the dediScation the Wpardedness to
use the Lbest aidvice and technology the prepairedrieszi
to forego immediate satisfaction for the longer rewards,
those sort o1f principles can be used in our manufacturing
and services sector? and we can do great thing4.
I'll just -quote to you from a letter I had just a rew
days ago from a company in Victoria ' thanks to the
government's support we are now 1In a position
to build a $ 70 million plant late in 1986 due to
government support, 25U jobs will be created immediately
the plant is completed and will Increase to a total or
500 jobs within four year s. 0 And they talk about
developing a whole new range of products for here and
overseas and thank us for what we've done. Now here's
a company which said I all right, here's help and
assistance the government is providing, let's use ourown
imagination and drive and this Is what we can do'.
I've had other letters like this and It seems to me
that's an indication of the sort of thing we've got
to do.
HS Mr Prime Minister you and I both know that the amount of
money spent on former Prime Ministers Is piddling
compared with the National Budget, You and I also
know that the amount of' money spent on wages to
parliakmentarians is petty compared to the National Budget
But out in the marketplace out in the village where
people are, there is enormous resentment about the
amount of' money spent on former Prime Ministers and there
is enormous resentment about comments like the one made
by Mick Young that politicians should get a better dtal.
And when the Prime Minister is talking to the nation of
wage earners about restraint, I think people look with a
degree or resentment at those two areas and they're
waiting for the rank and file parliamentarian to set
the example.
PM Let me say two things about parliamentarians. I say
without any possibility of' contradiction that if you
look at what's happened to parliamentarians salaries
over recent years. they have relatively to wage and
salary earners done worse. They haven't had the sorts
of adjustments that generally havc occurred. But
having said that let me Say the second thing that
the Remuneration Tribunal which deals witn these things?
will be making report to me I believe before very long
and to the government. I obviously have to receive
that report but I indicate that as far as parliamentarians
are concerned they are going to have to exercise the
same sort ot" restraint that I'm talking about. I think
further down the track there's got to be a looking at
this because the quality the electors will get in the
PArliament is going to be related to the remuneratlon.
If you allow that remuneration to go down too far
relative to other obstensibly comparable positions in
the community, that will ultimately reflect in alesser
quality of people who will make themselves available.
But having said that I believe in these current
circumstances when we are asking for restraint from the
rest of the community, parliamentarians from myself down
are going to have to exercise similar restraints.
HS Prime Minister I guess it's a matter of time isn't it?
We seem to be a rairly fragmented socny at the moment
the unions wanting the employers to carry the bag and
the employers wanting to carry the unions arid the work
force to do the sacrificing. It seems to me we've got
a common enemy and all three the politicians, the
employers and the employees must get together and then
we've got a chance.
PM You're absolutely right. I repeat we did that in 1983
and we got out of the worst economic crisis as I sai for
years and we should as a nation be proud of what we did
there is no reason why we can't do it again I have tota'
confidence that we will.