TEL No. it y. 04,07,86 12: 41 P. 01
TRANSCRIPT OF PRESS CONFE~ RENCE, -ABC STUDIO,. HOBART
4 JULY 1986
E 0 E PROOF ONLY
JOURNALIST: money market, why do you think that
PM: Well, I suppose you have got to assume that in some caseso
there are people who believe that they will make a killing out
of what they calculate will be the reaction to such rumours.
NOw, I guess this is the price that you have to pay when you
free up the market. I regret it, that those sort of things
happen, but it is the price you have to pay. I Wish that
there were people in-this area who would show the sort
of responsibility which they demand of others, say particularly
unionists. I guess the same sort of people are saying that
the wharfies are damaging Australia by having a couple of
days strike about superannuation. It would be the same sort
of people who are exercising a great degree of irresponsibility
themselves. JOURNALIST: Do you regret having floated the dollar?
PH: No, of course. We would be paying a much worse
price if we hadn't floated the dollar because the fundamentals
are that there are these changes in the terms of trade which
means we are getting less for what we sell. -And so your exchange
rate has to reflect that. Now, under a floating system that
is happening. The movement has been, as I say, exacerbated to
some extent by, I think, tome degrees of irresponsibility that
have been taking place. Fundamentally, there would have had to
have been an adjustment. Now* if you had had a system of a
continuation of a fixed exchange rate with the Government and
the REserve Blank meeting to fix the rate and trying to sustain
the rate against, those pressures, then it would have imposed
an intolerable pressure upon monetary policy and woul1d havemeant
that interest, rates would have been right through the roof:
So it is appropriate to have a deregulated exchange rate. It is
a pity that to some extent there hasn't been a proper reading
of what is happening in this country. There has been some sort
of expectation that you are, going to produce an instant budget.
What they have got to understand is that the Government is going
through the hard slogging process of reviewing expenditures,
looking at revenues, to bring down a budget on budget nightthe
19th of August which will be the one that is right and
necessary for the conduct of economic policy in this country.
We have got the budget right in ' 83, ' 84, ' 85. We will get
it right again in ' 86.
T N04., 0786 19>: 4 P n') 2.
JOURNALIST: And that rumour about Lhe retirement of Paul
Keating yesterday was, in your words, a " complete bloody furphy"?
PM: A complete furphy. And never any basis for it at all. He
is still an outstanding Treasurer and is still working ceaselessly
to do the job which is necessary to get the right policy settings.
As I say, we have got them right. We have shown the capacity . in
the past. to adjust to-changing economic circumstances. And we
will do it again.
JOURNALIST: You said some harsh words this morning about
Australian companies or management, particularly, being hopeless.
would you like to
PM: Let me put that in its general context. Of course, there
are outstanding managements in this country who have done some
marvellous things. The thing that rather annoys me is that
you have spokesmen, so-called spokesmen, from national employer
organisations like the CAI and so on, getting up and saying
Australia can't compete, our cost structure is too high. Now,
I am not saying that every element of our cost structure is
right, but what I am saying is that those people are talking
bloody nonsense. And it is about time they stopped talking
their country down. Let them come along with me and go and
see as I did on Wednesday this company operating in the
highest area of technology, the most competitive in -the world.
And that Australian company with vigorous, imaginative management
and a co-operative workforce is out there beating the pants off
the rest of the world. Fifty per cent of the world's market
Latk. L, * exw, n nry ri hh -ntinl nrnnnrtinn nf the. marhi
in Ameriud diid in Europe ana thc rot of thu wuLl' œ 0r
pacemakers, heart pacemakers. Now, you can't be operaLing in
a more competitive, tougher area, and they are doing it with
the existing Australian cost structure. And they are out
there winning. By 1990 that -company will have half a billion
dollars worth of sales with 90 per cent of them from exports.
Now what I am saying is that we can do it. It doesn't mean that
we should be complacent or that we should accept that every
element of our existing cost structure is perfect, or every
work practice is right, because they are not. But with what
we have got, we can win. And it is about time that some of
these people with their narrow, vested political perceptions,
Lhey should otop knooking Australia, they Ahnild recognise that
we can 4fnd are winning, when wo chow the right management
initiatives and when you get. the co-operation of the workforce.
If one company, two companies, three companies, if you have got
_-one company this one that I am talking about that has got
150 million dollars worth of sales this year with 90 per cent
exports, going out right there into the heart of the rest of
the world, in America, and in Europe, and beating the rest of
the world. Now if one company can do it in that area and have,
as I say, by 1900, they expect to have half a billion dollars
worth of sales, with 90 per cent of it into export, itcan be
done. And if the business leaders have some sense of commitment
and loyalty to their own country they would be recognising what
could be done what is being done, rather than getting up with
their pacn of complaints. / 3
TEL No.
3.
JOURNALIST: You did seem to be rercrring to management
techniques this morning. You said a lot of Australian companies
should be taken over because the managements are bloody hopeless.
That is pretty tough, isn't it?
PM: And it is pr'etty accurate too. This sort of story that
goes around that there is something intrinsically undesirable
about takeover is a nonsense. I won'It name the* company but there
is -a company in Aus3tralia at the moment which should have done
and it is not BHP because I don't want to give some suggestion
that I am getting into tJ~ at fight a company which is subject
to takeover specL-ulation. Now, in my judgement it would be the
best thing for Australia that could possibly happen if it was
taken over. because it has missed opportunities, it hasn't shown
the imagination that -it should have done. It could have done
much more for competing with imports, it could have done much
more to go out and win exports if it had irnqginative management.
Now, igo. babk because I have been there this week to visit this
company, there are ordinary Australians got together a good team
of management, putting a lot of money into research and developmen
which is what you have got to do, taking advantage of government
schemes which they recognise are amongst the most generous in
the world that we have brought in-to stimulate research and
development. And they are saying now on the basis of the
framework that the Government has created that we can go out
and beat the rest of-. the world. And if, by getting new
management in some of our companies you are going to get
better performance then all Australians should have a vested
initerest in it.
JOURNALIST: What do you expect criticism of the money markets
and manufacturers to achieve? It sounds a bit desperate doesn't
it?
PM: Not desperate at all. I am simply rc.. ponding to a situation
where there is some suggestion that as far as internal Australian
economic policy settings are concerned that there is something
wrong, that that is creating an incapacity for Australians to
perform and compete. And it is essential that that myth be disa
Gover not wtllue. chtosnt maou the usnsto improvi ngth
Itoisrnoet true. Tha osnt manou the casn't o improvintg
policy setting because I would be guilty of a very serious
mistake if I just ' sat complacently back and said everything
as far as Government decisions are right, They are not and
we want to continue to improve them. But what I am trying to
say is that the business spokesmen who try and.. impose upon
the workers of this country the blame for what is happening
and saying look it is the existing cost structure, the existing
union attitudes that is the problems, are being miscreant in
their duty -because we have the lowest level of industrial
disputation that we have had in this country for 20 years. We
have the most competitive position that we have since the end
of the 1960s and that is the official competitive index. So
conditions are there and the get up and go companies are
operating remarkably successfully within that environment. And.
the time has come when we have got to recognise that the world
has made a judgement about what they are going to pay for our
traditional exports for our wool and our wheat and our meat
and those sorts of things which constitute such a high propo
of our traditional exports. Now we have got to recognise that, / 4
TEL No. 04,07-86 12: 45 P ni
ILL No. U4, U(, 8b 12: 45 F. U2 4.
PM contt we have got Lo & LreiLhei and diversify the rest
of our economic base and that is what we are doing. And the
message that 1 want Australian management to get i4 that thei*
colleagues in various areas are showing that in those areas
they can take on the rest of the world and beat them. Now, if
they areprepared to show the same sort of imagination there
are hundred I believe, and indeed literally thousands of
Australian companies that can do the same thing. And if these
companies that I have talked about are doing it in the suosL
competitive, toughest, hi-tech area then it can be done in
others. I am not slating Australian management generally, there
are many of them who are very,. very good. But what I am slating
is this complacency, this preparedness to blame others.-the
workers and so on, or government and say it is all too hard.
it is not all too hard. If we are prepared to work and work
together we can take on and beat the rest of the world and that
is what I am talking about.
JOURNALIST: inaudible question
PM: It is not the Government's fault. We have all got to accept
some responsibility for the ' lucky country' syndrome. I have tri
to say before that if you look at the whole of the post-war
period in this country, we have had it lucky. Immediately
after the war the rest of the world, the devastated war-torn
world, wanted our wheat and our wool and those sort of products
and were prepared to pay the-world for them. Then as the prices
came down there, we had our first mineral boom, and so we were
carried on through that. Then we had a second minerals boom.
But all those lucky country syridrome efœ ecLs are over. And
we have got to understand that they are over. We are not going
to have some bonanza suddenly appear out of there. The cargo
cult mentality. It is gone. What we have. got to do is by our
own efforts, diversity, strengthen, our economy. And that is
what we are doing. It is happening. The capauity is ouL there.
If you get the right management, you will get the co-operation
of the workforce. We have got the incentives there, of assistanc
to enterprise to perform. We have got to recognise that that
is the new game, the new ballgame that we are in. And if we
play it hard and play it co-operatively,, we will win.
JOURNALIST: Commonwealth for the local tax increases?
i-M: ML Gray '. is again bein9cOnsistent. Consiotently untruthful.
He said, he has talked about cuts of a 150 million. He is wrong.
He knows he is lying. I just wish he would stop it. The facts
are that in the last 2 years we have given 62 million dollars
extra, beyond and above what was required by the independent
Commonwealth Grants Commission. He has talked about cuttiny
I0 million, we haven't, We have given 62 million beyond whaL
was required. what is happening to Tasmania aL the moment is
that Mr Gray in his last budget, he knew he had an election
coming up, he had a three per cent real increase in expenditures
He went on a vote buying budget. Irresponsibly. Ana now he
is making Tasmanians pay. We have gone beyond 62 million
what was necessary. And I did it deliberately because I didn't
want to hurt the people of Tasmania. I didn't want to say, as
the Grants Commission said, well that is all they should get.
1 have tried to ease the transition burden. They are still
getting Tasmanians are still getting the highest per capita
TEL No. 04.07.86 12: 46 P. 03
PM cont: revenue from the Commzonwealth of any State. And that
is in part because I deliberately was noL going to allow
them to be hurt as a result of the straight implementation of
that independent Commonwealth Granto Commission. But let me
say this, that the one danger that the people of Tasmania.
have in regard to the questions of . relations with Commonwealth
is the incapacity of their Premier* to speak~ truthfully, to deal
truthfully. ends No. 04.07.86 12: 46 P. 03