E 0 E PROOF ONLY
TRANSCRIPT OF INTERVIEW WITH JOHN HEWITT, 2MMM 12 JUNE 1986.
JOURNALIST: How are you this morning after waking up and
receiving quite a lot of criticism from all sides of the fence,
it seems?
PM: I'm durable, John. Obviously I would be less than honest is
I said I wouldn't have liked a more fulsome reaction. I must say
that this morning I've been on a lot of radio programs around
Australia, as has Paul Keating, I must say the reaction has been
very, very much better on the sound media. It has been much more
positive.
JOURNALIST: Mr Hawke, it has been said that you were prepared,
and I noted in the newspapers, to gamble with the unions on wage
discounting. Do you see it as being, or having been a gamble,
particularly with the union reaction, the ACTU reaction to wage
discounting. PM: No I'm not engaged in gambling John. I don't mind a small
punt on the weekend, but I don't gamble with the Australian
economy. The fact is that the world, by its reduced prices for
our exports, has cut our national income by 3 per cent. I can't
wave that fact away. It is a fact and we've got to take account
of it. We can't just keep on trying to maintain existing
standards by borrowing more overseas. That will quickly reduce
this economy to nothing. So what we've got to do is adjust our
standards, work harder so that we can lift our growth further and
improve our standards in that way. The necessary part of that
reducing of standards at this stage must come to some extent
through the wages and salaries area. So it is not a gamble, it
is something that has got to happen.
JOURNALIST: of course there hasn't been any wage rise this year
and at this stage the unions have appeared to be wanting to do as
much as they can, but do you think perhaps employers are being
too greedy in their criticism this morning?
PM:-Well they are certainly, the spokesmen who are being quoted,
being less than fair and less than accurate in their reading.
Let me make these points, you're right in saying there has been
restraint by the trade union movement. Let me give you a couple
of statistics. under my Government the average rate of earnings
increase in the Australian community has been 6 per cent per
annum. Under our predecessors 11 per cent. In this period of
strong economic growth in the last three years if we hadn't had
the centralised wage system and if people had been out there
using their muscle and trying to get more they could have got it,
and everyone knows that, and the business community knows it.
There has been restraint and it should be recognised. I
certainly recognise it. Unfortunately, as I say, the rest of the
world is paying us less. Our national income is down and there
has to be further adjustment. It gives me no pleasure to say to
wage and salary earners in this country that there has got to be
a further adjustment for the time being, but it would give me
less pleasure if that wasn't done because I know that the
alternative would be a massive decline in our exchange rate,
rising interest rates and growing unemployment. That is the
alternative. That is the way the economy would adjust if we
don't do it sensibly and constructively and co-operatively in the
way we are. Now you rightly go, John, to the responsibility of
the business community. We don't have the same mechanisms as we
do in the Arbitration Commission for wages and salaries to get
the business community to do the right thing. They have to
exercise their responsibility on three fronts. They are firstly,
in regard to their own remuneration, directors and executives
have to exercise exactly the same restraint in real terms as we
expect of wage and salary earners, Secondly, they have to
exercise restraint in their pricing policy. Price increases must
be kept to a minimum. Thirdly, they have got to exercise
responsibility in investment. Their profitability has been
returned under the policies of this Government to the levels of
the late 60s and early 70s, better than anything under the
previous government. They've got the capacity and the
opportunity to invest and invest in an environment where there
will be an appropriate wages outcome. They've got to do that.
JOURNALIST: Mr Hawke, I noted in the speech last night that you
called on Australians to tighten the belt and, in not as many
words, said basically the honeymoon is over and the world
situation means that we've all got to tone it down a little bit.
we experience in getting to our audience that a lot of the
listeners don't understand a number of economic terms, how big a
problem, firstly, is that for you in putting across your message
that people maybe don't have as good a grasp as you would like of
the world situation? And secondly, is there a general feeling in
Australia that we should have it easy?
PM: Well let me go to both those points. Your first one is a
very, very good point John, if I may say so. I understand that
where we talk about a drop in our terms of trade that may be a
bit difficult to understand that is why I tried to say last
night, in simple terms, the world is paying us less for what we
sell them and that has reduced our national capacity by 3 per
cent. Let me just give you an indication of what that has meant.
These massive drops in the prices for our major exports, if I
could put it this way and I think this is in pretty simple terms,
three years ago if we were talking about importing a medium sized
car to do that we had to export 240 tons of iron ore, to import a
medium sized car. Today as a result of the reduced prices we
would have to export 309 tons of iron ore, or 28 per cent more
iron ore we'd have to expect to get that product. If you take
alumina, three years ago we'd have to export 30 tons of alumina,
now we have to export 49 tons or 64 per cent more. We'd have to
export 25 per cent more wool. We'd have to export 40 per cent
more wheat to get the car. Now that is a pretty simple and
straight forward way of explaining it I think. Now that is why
we've got to try and diversify our export base so that we've got
more exports, absolutely and relatively in the areas of
manufacture and services, which won't be so subject to the
dramatic price reductions as has occurred in our rural and
mineral products. In regard to the second question, do you think
Australians are complacent and take it too easy? Well I think
that the right answer is that in that whole period since the war
there has been a sense in which we have been the lucky country.
There has for a long period been a gradual decline in the terms
of trade and the relative prices for our exports compared to what
we pay for imports, but so often something has turned up which
has got us out of the problem. Straight after the war the world
was devastated and they wanted all our food products and our wool
and so on, paid massive prices. we had the Korean War, the same
sort of thing. we had the first mineral boom, then the second
mineral boom. But a country can't keep on thinking that luck is
going to come to its aid. It is not. So therefore together we
have to address this problem and together try and make sure that
we work harder and that business is more imaginative in expanding
its base. I wonder if just on that last point, so that your
listeners can understand that this is not just theoretical words
from a Prime Minister, just let me briefly read to you a letter
which I received just a few days ago, 6th June, from a company in
Victoria. Just two or three bits from it " Dear Prime Minister,
thanks to the Government's support in investing through our
export and research and development grants, we are now in a
position to build a $ 70 million plant late in 1986. Due to this
support 250 new jobs will be created immediately and when the
plant is completed this will increase a total of 500 jobs within
four years". He says this " we have created now a new
technology which is being sold worldwide for millions of dollars
and this technology is now a market leader overseas"''. Now that
is one relatively small company in Victoria. My point to the
nation last night, in referring to the achievements of people
like Deek and Joan Sutherland and Ben Lexcen and Bertrand, was to
say the sort of things that brought them to the top can be done
in manufacturing industry and service industry. And we can beat
the rest of the world in those areas. And this letter which I
just quoted from to you is a clear and classic example of what I
mean. JOURNALIST: Mr Hawke, I agree with you and I think obviously
there is a need for us to be able to compete with overseas
markets and countries and simply to get people here buying
Australian made hi-tech equipment, rather than imported gear, but
is the Government going to get behind that in any big way as far
as research, development that sort of thing?
PM: We have already and we're going to do it more. The taxation
concession of 150 per cent for new technology developments is
amongst the most generous in the world. we're going to give
further incentives, particularly to firms in the technology area.
We're going to provide them with assistance in export drive,
export education. These things are going to be done, are already
being done as you can see from this letter. We're going to do
even more in that area. The point I want to make is that if
business will respond in the way that this particular company has
and we multiply that hundreds of times, as I believe we can, then
we are well on the way to meeting the fundamental problem we've
got. while we've got, as it is now, the best part of 40 per cent
of our exports being rural products, another substantial
proportion of them being mineral products, then we're always
going to be at the mercy of a world which will cut those prices.
Therefore, while we've got to support our rural industries and
our mineral industries, we've got to get a bigger, stronger
Australian manufacturing and services base because I know, not
just from this letter but from my experience within Australia and
overseas, I get just as much pride and I want the rest of
Australia to get just as much pride when they see an Australian
company tackling the rest of the world and beating them. We can
do it. And that is the sort of thing we've got to do.
JOURNALIST: We've got to support them as well.
PM: John you couldn't be more correct. And one way in which
ordinary Australians can do it is to buy Australian more than
they do. Another program I did earlier this morning John, I said
you look at it, Australia has got a population of 16 million
people. Now if for every man, woman and child in one year we
spent $ 100, each of us, on buying Australian rather than where we
bought overseas products, that's $ 1.6 billion that we turn
around, that we're not paying out overseas, that we're paying
here to support further Australian industry. That's putting it
very low. It wouldn't take very much for each one of us to
substitute our purchasing to the tune of $ 100 per person per
year. Now that would have a very big effect. if you double that
and say $ 200 you're talking about over $ 3 billion. And you're
starting in that way to have quite a significant impact on this
basic problem we've got.
JOURNALIST: Exactly. Mr Hawke, just finally, I've had a cable
dropped in front of me that Mr Howard has challenged you to a
television debate on the economy. Now I realise it may be
something you'd want to think more about, but would you be
prepared to do that?
PM: Of course I'm not going on with these gimmicks. Let me make
this point. A very simple one. Mr Howard and his opposition
have had every opportunity in the Parliament to raise and debate
economic matters. It is the unanimous judgment of the gallery
and everyone who has watched this Parliament that they have
failed dismally to address themselves to these issues. If they
can't do it over the course of the weeks and months that are
available to them in this Parliament, then we're not going to
provide this opportunity to engage in such a gimmick. I'll go
about the business of doing what we've done, -of running this
economy. We had to rescue this economy from the disastrous
mismanagement of John Howard. He handed over to me and to Paul
Keating an economy in its worst state of crisis for 50 years
the worst. The highest levels of unemployment and inflation
together 50 years. In the last 12 months before I came to
office another quarter of a million out of work. Now for this
man, who in Government was the worst failure in the history of
this country, who has been an even worse and more unprincipled
failure in Opposition, to talk now about him having some right to
be regarded seriously in this area is a joke.
JOURNALIST: Mr Hawke I certainly hope that what you are doing
does work and I think perhaps at this time criticism is not going
to help the situation, so I hope the Government overcomes that
and every single Australian can get the place working again. And
thank you very much for talking to us.
PM: John, I wonder if you could just allow me one minute?
JOURNALIST: Certainly.
PM: Firstly, I want to thank you and say of the sound media, the
radios generally today, how very positive and responsive they
have been. You are a very good indication of that and I thank
you for it. The second thing, I'd just like to make one point
because I know that you have a very large proportion of the
younger age group amongst your listening audience. If I could
just address myself very briefly to this question of what I'm
saying about wanting to get the opportunity for the unemployed,
particularly the younger unemployed, to get involved in some area
of community work.
JOURNALIST: Certainly I in fact had that in front of me and I
put a bit of paper in front of it. Certainly, go right ahead.
PM: John, the point here is that this is not something of the
Government trying to impose something that I believe the
community and young themselves don't want. During my work on
Priority One in which your station was so helpful, may I say, I
had the opportunity, which I think no other Prime Minister has
created for himself, of getting around the country and listening
to and talking to the young people, including the young
unemployed. And one thing that came through more overwhelming
than anything else was this: that if there are not jobs
available, and of course that's what they want, but if there are
not they wanted the opportunity of doing something in the
community. They didn't want to be isolated from the community
and have the only relationship with the community is when they
picked up the dole cheque. They want to be able to do something.
So what I'm about is to try in co-operation with voluntary
organisations and the State governments and local governments and
trade unions, I'm about trying to create a bank, if you like, of
community work which will be available so that young people can
for a couple of days a week do something for and within the
community. That's what they want. It is what the community
wants. We're not trying to impose something that neither the
community nor they want. I believe that there will be a better
relationship between the Australian society and its young
unemployed in particular if there is a greater association
between them than just the sterile relationship of the dole
cheque. That's what we're about and I think that is good for the
young people themselves and it's good for the community. It
doesn't mean, in any sense, that we're cutting down on our
attempts to create more jobs for them. We've well surpassed my
promise of half a million new jobs in the first three years.
6
We're going to go on trying to create more jobs. We're going to
try and create more education places. We're going to create more
traineeships. We're going to create more training programs in
other areas. But we've got to be honest and recognise that even
while we create more jobs, while we create more traineeship
opportunities there are still going to be a number of young
people particularly, and I don't exclude the elder people
entirely either, but there are going to be still a substantial
number of people who are not going to be able to be picked up in
those areas. So it is there that I want to give them some
greater sense of hope and purpose and association with our
society. That's what it is about.
JOURNALIST: Prime Minister, thank you very much.
ends