PRIME MINISTER
E 0 E PROOF ONLY
TRANSCRIPT OF INTERVIEW ON THE SUNDAY PROGRAM 15 JUNE 1986
OAKES: Prime Minister, welcome to Sunday.
PM: Thank you very much indeed.
OAKES: Sir, your Address to the Nation seemed to have been
panned by everybody business, unions, most commentators. Was it
a flop?
PM: No it wasn't a flop Laurie, I am not simply saying that
through pride of authorship. What I was about there was to alert
the Australian people that we have to, for the time being, accept
a reduction of standards. It was by definition not a Budget
speech or a Premiers' Conference speech. I was indicating the
hard things that had to be done. We delivered the first
instalment on Friday. The other instalments will be coming.
OAKES: Just putting economics aside for a moment, an issue seems
to be can Bob Hawke lead?
PM: The answer is obvious. He is, he can and he will.
RAMSAY: Prime Minister, the perception of a lot of commentators
and a lot of politicians have is that it is Paul Keating who is
doing the leading and Bob Hawke is doing the following. Do you
resent that sort of interpretation?
PM: No, I don't any more than I resent your completely lopsided
interpretation in the press today because we know that some
people have a total incapacity for objectivity Alan. You learn
to live with those things.
OAKES: Well Prime Minister, in Peking you seemed to think there
was a need to put Paul Keating in his place. Why did you do that?
PM: Well, of course, that is not right. What I made clear and
Paul quite clearly understands is that I thought the idea of a
summit that was being built up, not by Paul and I read the
transcript of the interview with him, but the concept of a summit
was being built up as though at a summit some great decisions
were going to be able to be taken. That had to be dissipated. I
dissipated that but not Paul because I think it is quite clear, I
don't think anyone that's gone through this week would have had
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any doubt about it, the Hawke/ Keating axis is as strong as it
ever was.
OAKES: But you gave that briefing in Peking that Mr Keating
blamed your minders for didn't you?
PM: Yes and I told Paul about that and I invited him to read the
transcript. He is perfectly happy about that.
OAKES: You don't think he was humiliated?
PM: No, I didn't intent to and he didn't feel it.
RAMSAY: You don't think you are being disloyal to your
Treasurer? PM: No, I don't.
RAMSAY: That is the first background briefing that you have
given and in the past you have in fact refused to give background.
briefings, Why, on this occasion, did you break your own rule?
PM: I don't have inflexible rules. If I think something needs to
be done I will do it. And I told the Treasurer what I was doing
and why I was doing it and the result has made it all worthwhile.
OAKES: Prime Minister, I think the question most people would
want to ask you is exactly how much economic trouble are we in. A
visitor from overseas reading the newspaper, listening to our
politicians would almost certainly think we were on the verge of
banana republicanism. Are we?
PM: No, tcertainly not. But what has been happening to this
country for a long time is that we have had a gradual move
against us in our terms of trade. Depending on your starting
point it could be said to be half a per cent or one per cent per
annum. What's happened in the most recent period say since
December of 1984, you have had about a 14 per cent move against
us in our terms of trade. In the last nine months a nine per cent
move against you in your terms of trade. Now that is very
dramatic. It has meant in the last 12 months a three per cent cut
in our national economic capacity. So what I am trying to alert
the people of Australia to Laurie, is that we have got to adjust
to that. You can't, if you have had a three per cent cut in your
national capacity because of the fall in world prices, then you
can't go on living at that previous standard. So that means the
sorts of things I am talking about a further cut in the sort of
wage expectations that there were there before, certainly the
cuts in the State Governments that we have now imposed upon them.
Those sorts of things have to-be -done-to make us, if you like,
leaner and better equipped. Now that is the immediate sort of
thing. The other part of what I was trying to say to the people
in the Address was that it is also a longer term problem. We
can't keep relying, in our export base, so much on agricultural
products and mineral products which will always be subject to
these adverse price fluctuations. We have got to have a wider
manufacturing base and I was trying to tell the people of
Australia we can do it. I wonder could I just briefly Laurie,
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read a couple of paragraphs from a letter I had here which gives
an indication of the sort of thing I was trying to say. This is a
letter from a company in Victoria to me on 6th June this month.
It said thanks for the Government support certain incentives
were given. We are now in a position to build $ 70 million
pharmaceutical plant in 1986 increase in the number of jobs.
They said we have created new technology which has been sold
worldwide for millions of dollars and this technology is now a
market leader overseas. They said we anticipate exporting a $ 100
million worth of products manufactured in Australia. Now what I
was trying to say is there is a small company that has done this.
OAKES: Why aren't more companies doing that?
PM: Well, I think there is a mixture of reasons and some of the
things we can do something about. And so we have added to the
incentives that this companies refers to here. We have added to
those in the statement on Wednesday night. But ultimately then
when Government has created the framework Laurie, it is matter of
Australian businessmen, entrepreneurs realising that what this
company has done, others can do. I mean you have been around the
world and you get a pride I know when you see that Australians
can take on the Americans, the Europeans, the Japanese in the
most sophisticated areas and we can beat them. It is just a
question Laurie, of people being prepared to get up and go. We
will provide them with the framework, the trade union movement
has got to provide the co-operation, we have got to get rid of
work practices that are standing in the way of the highest levels
of productivity. But Australians can do it and we have got to do
it because if we just keep relying on wool, wheat, iron ore and
coal and then when those prices go down that simply means that
you are going to be, as a nation, reduced in standards. I mean if
I could just give you an examp~ le. Just take in wheat, about three
years ago if you were importing let's say a medium size car you
needed to sell 33 tons of wheat. Today it is 46 tons and so on.
You can just multiply it. Well you can't keep being in that
position.
RAMSAY: Prime Minister, one of the positive aspects of your
speech Address to the Nation
PM: Oh there was one.
RAMSAY: Yes, I will concede this. It was your bash-at the wage
and salary earners in our community, your call for further
discounting of wages in the next national wage case. John MacBean
and Simon Crean said that is not on. Are you prepared to risk the
Accord on this matter?
PM: I don't want to-see the-Accord go Alan. But I think one
thing which you will appreciate Alan, if you are going to get the
sort of environment within which the trade union movement can
make announcements and decisions is that they are waiting on the
outcome of this case. Now if the decision comes down and they get
the 2.3 per cent which involves a 2 per cent discount and
productivity staged in, as I would say, over a couple of years,
then I think in that environment the position you have is that
the Commission will say to unions if you are going to get these
things you have to sign on the line, give your commitment to-no
further claims outside the Commission's guidelines. I think that
the trade unions will accept that and that will take us through
then to the next case. As I have said quite unequivocally in that
case, as we read the economy now, there will need to be further
discounting. So what has been done by my statement more than has
ever been done before is a clear statement by government of what
needs to happen in the wages area.
RAMSAY: Then why is Simon Crean and John MacBean being so strong
in their opposition to it now? Your confident that they are going
to accept the Arbitration Commission's decisions.
PM: well they have constituencies Alan, they can't just simply
say yes, we accept what Mr Hawke says. I guess they have got to,
as I say, they have firstly got to wait until the decision comes
down so they know what sort of wages system framework they will
be working within and then I think in that framework the trade
union movement will see that it is not just a question of
exercising restraint by men and women in employment. Those men
and women in employment are parents, they have got kids and what
we are about is trying to make sure that we have an economic
environment in which we can retain the jobs for the people that
are there and create more jobs for their kids. So they have got a
responsibility not just to think immediately of themselves and
saying I want to keep the standard that I had before even though
national economic capacity has gone down. We have got together to
make the decisions, hard decisions which are going to give their
kids the greatest opportunity of getting gainful employment in
the future.
RAM'SAY: So you don't think that the Accord will be at risk
whatever the decision will be?
PM: Alan, I don't want to mislead on this. I think that we are
in a difficult period with the Accord. I think it will survive.
OAKES: Prime Minister, if the unions won't go along with you
though, will you go it alone before the Arbitration Commission,
argue for discounting even if the unions refuse?
PM: Well, you know I am not great one for hypothetical questions
but I think that my speech made it quite clear. You'll remember
the actual wording of it Laurie. I said the Government believes
now that on the current economic circumstances, our examination
of it, that a further discounting will be required. I said we
will, under the processes of the Accord, we will convey that
position to the ACTU. The Accord makes it quite clear that the
Government has the right in the light of the economic
circumstances to take a position which it believes-is necessary
in those economic circumstances. Let me in fairness if I may to
the trade unions, I mean all that has been talked about now is
the statements by some of their leaders which suggest that they
mightn't be co-operative. Let's remember that under the plan that
I am proposing the only national wage increase for 1986 will be
2.3 per cent. And in the last year the earnings in this country
only went up by six per cent which was virtually the same as the
per cent of our major trading partners. There has been
restraint and the restraint of the trade unions should be
recognised but it is not enough for the future. There has got to
be a bit more.
OAKES: You have said that all sections of the Australian
community will have to make sacrifices and take a cut in living
standards. What about Members of Parliament?
PM: Latrie-il vil-e. getting a report from the
Remuneration Tribunal in the relatively near future. I think you
will see by the way I deal with that that I am applying the
standards generally.
OAKES: So there will be a cut in MPs' salaries?
PM: It is not right for me to make the statement until I receive
the report from the Tribunal. But let me say this that I don't
think we can be asking the public generally to be exercising
and then it not being exercised itself. Let me say this as far
as remuneration of. Parliamentarians is concerned they have had
more restraint imposed upon their salaries than workers generally
over the recent period. And so at some stage in the future
there will h& vt~ o be an adjustment to meet that, but I don't
think the time is now.
RAMSAY: Would that attitude also apply to judges and senior
public servants who have been lining up before the Remuneration
Tribunal for rather large increases?
PM: Let me get the report of the Tribunal, Alan, but I am making
it quite clear that the restraint I am talking about should be
exercised across the board.
OAKES: I know you hate hypothetical questions
PM: Have a go Laurie.
OAKES: but wouldn't you expect Members of Parliament to
squeal pretty loudly if you cut their recommended pay rise?
PM: I don't think anyone would like, whether Members of
Parliament or not, Laurie, but the Australian community has to
face up to this simple fact. I can't wave the magic wand and
wave away that 3 per cent cut in our national economic capacity.
It has been imposed upon us from outside. And we have to live
with it. If we don't live with and adjust to it, then the
economy will adjust in another way. And that means by a falling
exchange rate, rising interest rates, lowered activity, lowered
employment levels. Now it will adjust that way, or it will
adjust in the reasonable and constructive way that I am talking
about. And I think everyone will come, and I think quite
quickly, to the understanding that the way I am prosposing is the
best way to do it.
RAMSAY: Prime Minister, you can compel wage and salary earners
through the Arbitration Commission, you can compel federal public
servants and politicians, but you can't compel executive salaries
to be restrained.
A-7.
PH: That is right, Alan.
RAMSAY: Surely -toqgoodne85" would you like some more power in7
tact in that area?
PM: It is no good saying would you like more power. The process
of getting more power would be so long and drawn out that the
immediate would be passed by the time you got there. What you
have got to try and do is to use, as I say, the exhortatory
processes, urge them to comply. Let me say in the first
period after the. Summit, the major period after that, they did
comply as the Advisory Council on Prices and Incomes indicated.
it is just in the more recent period that they haven't. Now they
have given me the undertaking that they will comply in the
future. I am going to be asking the States to watch them, as we
will. if they don't, I think the community may well then be in
the frame of mind where they would say, if you won't do it
voluntarily then: -there may be a case. for getting powers to
government. OAKES: Prime Minister, the Opposition Leader has challenged you
to a televised debate on economic policy, will you be in that?
PM: Of course I won't. You know, because you are around in this
Gallery, the opposition, including the Leader of the opposition,
have had the chance for months to ask economic questions, to have
economic debate. They have been a total abject failure which is
the unanimous view of everyone of you in the Gallery. It is not
just a Government view. They have been absolutely derelict in
the responsibilities and their duty. And we are not going along
with some gimmick along these lines of a debate. We will get on
and make the decisions. They couldn't make the right decisions
in government. They brought us to worst economic crisis for
years. And the only thing, as I have said before, which matches
their incompetence in government is their totally unprincipled
irrelevance in opposition. The people don't take them seriously.
More than half his own people don't take Mr Howard seriously.
Don't let him expect me to take him seriously.
RAMSAY: Prime Minister, you like to take your case to
television. You took it outside the Parliament in making your
Address to the Nation last week. why not take on John Howard on
national television?
PM: It is an irrelevance with an irrelevancy.
RAMSAY: Why is it an irrelevant?
PM: Because he has nothing-to do with the formulation of either
policy nor, more importantly, has he exercised to this point, the
responsibility of drawing up alternative policies. You have seen
them in the government, in the Parliament. You have seen them
there, not dealing with matters of principle or issues of
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economic policy -they have been with all the scuttlebutt
irrelevancies around the place. We are not going to reduce the
importance of relevant government decision making to an
irrelevancy with a man who is not going to be Opposition Leader,
I think, for very much longer at any rate.
, OAKES: Prime minister, the situation in South Africa is
deteriorating rapidly. You have said Australia will push for
tougher sanctions when the Commonwealth leaders meet in August.
How are you going to swing Margaret Thatcher around?
PM: There are a number of factors that are relevant, Laurie. I
think first of all the fact that Lord Barber, her representative
on the Eminent Persons Group, signed the report, is relevant.
Secondly, I know from the discussions I have had with others,
including a long talk with Brian Mulroney during this week, what
the view of my senior colleagues are. And thirdly, I would hope,
Laurie, most importantly, this point Britain has a very
considerable investment in South Africa. Now I think
self-interest should start to come through in this. It is quite
clear that the leadership of the front-line states, the ANC, they
don't want to see the economic infrastructure of South Africa
destroyed. They want a transition to a democratic multi-racial
state where people have the right to vote irrespective of race or
colour. They don't want to see a repetition,. Laurie, of what has
happened in other African states where political freedom has
become associated with economic disintegration. So what Mrs
Thatcher and the British should understand is that the best
chance of retaining their capacity to be involved in a developing
South Africa is not to stand in the way of change but to be
associated with it. Now if Mrs Thatcher can come to understand
that then I think she should come to see that sanctions are going
to be necessary to get the South African regime to talk. I
repeat, and it was my initiative, I don't like the concept of
sanctions for sanctions' sake, it is only a means to an end to
get dialogue and discussion and decision.
RAMSAY: Is she risking a break-up of the Commonwealth by holding
out against sanctions, do you think?
PM: She would be, Alan, she would be because there is no doubt
that every other member of the Commonwealth believes that if we
have failed in trying to get dialogue through the Eminent Persons
Group process, then sanctions, unfortunately, will be necessary.
So everyone else has that view. And I notice that Mrs Thatcher
is reported in the papers this morning as saying well if she is
right and she is the -only one out then that doesn't matter.
Well, we have * all heard about everyone's out of step but my
Johnny, there is no doubt what the facts are here.
OAKES: The Malaysian Prime Minister, Dr Mahathir, is on his way
to Australia for a private visit, but we are told that he wants
to talk to you about ways to put pressure on Mrs Thatcher. Will
you go along with that?
4. 4
PM: I wouldn't discuss publicly what I would say with Dr
Nahathir, but what I would hope, Laurie, it is not just a
question of putting pressure. The best way of getting positive
and constructive outcomes is for a person to be persuaded, if you
like intellectually, of the correctness of a course of action.
And that is why I go back to the question of the self-interest of
the British. It would be much better if Mrs Thatcher and the
British themselves could see that their own self-interests are
much better served this way. If the alternative is followed, of
the bloodshed and confrontation which is the only other
alternative to discussion and dialogue, then there will be a
destruction of the British investment and the capacity for
Britain ever to be involved there. Now, that is neither in their
interests nor in my belief is it in the interests of the blacks
of South Africa.
RAMSAY: Prime Minister, just on one point about these sanctions.
Your Government still allows South African Airways to fly into
this country. Why, if you are fair dinkum?
PM: Alan, you do display a bit of a lack of knowledge of the
processes of Nassau. We had stages of action that were agreed in
Nassau. And that function that you referred to is in the second
trenche. I can assure you that if we can't get the dialogue that
I am talking about, that will be one of the several additional
things that we will be doing.
OAKES: Prime minister, we are just about out of time, but a
final question. There has been a lot of speculation in the last
few weeks that because the economy is going downhill you might
call a early election. Are you prepared to repeat your
comfitment that this Parliament will go its full 3 three years?
PM: Yes, I am. And let me get the context right. The
Australian economy is not going downhill. Let's get that quite
straight. What has happened is that the external world is paying
us much less for the things that we produce. And that has
produced the loss of 3 per cent in our national economic
capacity. It is quite clear that if Australians continue to
work, but work even harder together than we can overcome this
problem. That is the right context. And within that context, we
will go our full term.
ends