PRIME MINISTER
TRANSCRIPT OF JOINT NEWS CONFERENCE WITH JOHN KERIN,
MINISTER FOR PRIMARY INDUSTRIES AND ENERGY, PARLIAMENT
HOUSE, 10 APRIL 1989
E 0 E PROOF ONLY
PM: Well, I want to just make a few general observations by
way of introduction to the important announcement that my
colleague, John Kerin, has got to make in regard to the
deregulation of the wheat industry.
The basic point I'd make is that, of course, from the very
beginning of our time in Government in 1983, this Government
has embarked not only on rescuing the Australian economy and
of pursuing appropriate macroeconomic policies, but putting
in place consistent microeconomic reform which is calculated
to make the Australian economy increasingly efficient and
competitive.
my press release sets out those decisions that we've taken
and which are quite well known. I point out in the
statement that during the last election campaign, on 6 July
1987 in Ballarat, I set out there twelve areas of
microeconomic reform which would characterise the third
period of the Hawke Government.
In the attachment I indicate the way in which a slight
majority of those areas have been addressed and those that
are left will be dealt with in the next two months in a
series of statements to be made from here through to the end
of May. That will, by that stage, mean that we have totally
covered all those areas which I promised that we would do in
July of 1987.
So this period of Government generally from ' 83 and in
particular from 1987, has seen a greater period and
intensity of microeconomic reform than at any other period
in Australian history.
I invite anyone who is interested in this area to make the
comparison between the performance of this Government in the
area of microeconomic reform and the previous seven years of
conservatives. As in virtually every area of relevance to
the welfare of this Australian economy, they were barren and
inept.
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( PM cont): Our period in Government stands in marked
contrast to that. I say that by way of introduction to the
important decision that John Kerin is going to announce.
The background of that of course is that we recognise the
great importance of the wheat industry, it provides the best
part of $ 2 billion of exports to this country. It was
almost $ 2 billion in 1987/ 88 and while it's shown its basic
efficiency, there are further things that can be done, we
believe, to increase that efficiency and the profitability
therefore of the industry to the producers in it.
We established the Royal Commission in cooperation with the
States, the Royal Commission into Grain Storage, Handling
and Transport. We've taken the action that we can in that
area, but there are limits to what we can do.
We have, as a Cabinet, made decisions that more now needs to
be done. John Kerin will go into the details of that.
KERIN: Thank you very much Prime Minister. It's very
difficult to know where to start, but the last IAC Reports
have said that on balance it would be very sensible to
deregulate the domestic wheat market.
The reason they've been saying that is mainly to get
efficiency gains right across the cropping sector.
The Balderstone Committee also examined this whole question
of domestic market deregulation and said that cost savings
could be achieved in this manner. We put in place the Royal
Commission into Grain Transport, Handling and Storage and
they said that there's potential gain to cost savings off
farm of $ 10 per tonne.
If you look at that for wheat and barley alone, that's about
$ 170 million for the industry off farms. It varies for
about $ 6 per tonne in South Australia to $ 13 per tonne in
Queensland.
Now in the negotiations with the Grains Council who have
been vehemently opposed to any deregulation, mainly because
they've been taking the National Party view or more
accurately the National Party's been taking their view,
which is really a status quo view they have pointed out
that we also need to make sure that we get these changes in
the transport and handling and they're in the arms of the
States.
We did what we could at the Commonwealth level. We removed
the road provision in South Australia, but more importantly
we gave the Wheat Board additional powers by saying that
they no longer need to deal with only one grain handler in
each State.
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( Kerin cont): Through that they've been able to get some
savings for the wheat industry in this year.
Now what we are announcing today following Cabinet
consideration, is that we will be giving the Wheat Board a
transport override power.
We've been advised that Constitutionally we can do that with
the export power and we believe that that will give the
Wheat Board even more power to negotiate with the States
where those States aren't passing on savings, where those
States are simply extracting a rent from the grains
industry.
Now there will be a lot of opposition to this from quite a
few people, mainly I guess from the National Party, from the
Grains Council, from the States in some instances. But the
simple proposition is for this country, if you are going to
impose an additional $ 170 million or $ 200 million worth of
cost on yourself, that is less production, it is less
exports and it is less additional need for the facilities.
The situation the way it's all just grown up like topsy,
does mean that we have storage in this country today for
about 43 million tonnes of grains and the biggest wheat crop
ever was about 22 million tonnes.
Now, putting this into political terms, John Howard now has
no reason to weezel out of what he said last week in the
press release with Bruce Lloyd from the National Party. He
laid down four conditions and of course there had been a lot
of discussion about the word reasonable progress.
Today's announcement shows how far we're going to go. Mr
Sinclair of course, even a couple of weeks ago, trying to
find impossible conditions to put upon us pointed out that
we really need to get deregulation of the world's wheat
markets, if not the world itself, before the National Party
would agree to it.
Well, I'd also point out with the breakthrough in Geneva
over the weekend, we can even go quite a way in
agricultural trade reform, but we haven't quite fixed up the
world yet. But it was really a churlish attitude to say
that you've got to do everything at once rather in seriatum
and I think what the Prime Minister points out is, where we
have the opportunity, where we can take action, where we can
really effect real change, we will do it.
I repeat, Mr Howard has no choice now but to go along with
the Government's legislation. If he doesn't he will be
weezelling out of it and have absolutely no credibility in
terms of microeconomic reform or sensible non idealogical
deregulation.
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JOURNALIST: Can you deliver though in terms of the rail
union KERIN: It's not a question of delivering with the rail
unions. If the Board has the power to negotiate with the
State Rail Authorities, it is my view that the wheat will
travel by rail. The question of jobs being at risk because
of this doesn't come up.
JOURNALIST: Would you anticipate there will be a
Constitutional challenge to this move?
KERIN: Given the stupidity of the National Party in
Queensland, I would think so.
PM: I think the basis of the Constitutional power is very
clear though. Clearly within Section 51.1 of the
Constitution, the Commonwealth has power to legislate in
regard to trade and commerce with other countries and among
the States. Very clear, unequivocal power and while, in
their desperation, some may seek to make a Constitutional
challenge, we believe and are advised that we have very
sound Constitutional basis for the decison we've taken.
JOURNALIST: Have you had any talks with the Victorian
Government about this?
KERIN: No, the focus is centred on Victoria rather than
Queensland mainly because of the Grain Council's views in
that State. They don't choose to select out Queensland
where the most expensive system is in place. But the short
answer is
JOURNALIST: any discussion with the Victorian
Government about this matter?
0 KERIN: The Prime Minister wrote to the Victorian Government
after the McColl Grains Commission, Royal Commission on
Grains and we are still waiting for a response. We have
indicated quite clearly that we are going to try to put in
place the recommendation of McColl and so far really only
the NSW government has responded.
JOURNALIST: The statement says you're going to override
restrictive state regulations but for some curious reason it
doesn't say what they are. Is it a secret or are you
prepared to tell us?
KERIN: The restrictive regulations are manifold in the
whole freight transport and handling system. They involve
many practices by the States but the main one of course is
the extraction of rent from the grains industry. 1
JOURNALIST: Mr Kerin poor position, does that mean that
you are also proceeding with the 95% underwriting
KERIN: The reality of that is that that is a figure plucked
out of the air because there was a 95% net underwriting at
one stage. I'm informed in terms of discussions by the
Opposition they're not going to die in a ditch over 95 or
JOURNALIST: So you've had discussions with the opposition?
KERIN: No, but I know what goes on.
JOURNALIST: How do you know what goes on?
PM: You're not the o nly one that has contacts.
KERIN: My people talk to their people.
JOURNALIST: Would the Commonwealth be prepared to negotiate
at the Premiers' Conference to offset any losses to the
States through
PM: There needn't be any.
JOURNALIST:-KERIN: There need not be any losses. we are trying to get
more efficiencies. If you get more efficiencies and you get
greater product, you will get greater turnover and you will
probably get a more efficient use of the system.
JOURNALIST: Would you like to do something similar with
coal, which is also the subject of..
KERIN: I'd like to but I'm not so sure this path would
work. I'd have to get more legal advice on that but
basically I think we can quarantine this because we're using
the Wheat Board. But this could flow on into some of those
areas. JOURNALIST: Is overriding a state legislation the trump
card you've been holding until the Coalition position came
out or only just come in?
KERIN: I guess it's truthful to say a bit of both. We're
aware generally of the powers, we're used to being lectured
by the States about what Constitutional powers are. We
decided to investigate this fully during our discussion on
the whole question of wheat deregulation when the debate
intensified so much to see what additional options were
available to us.
JOURNALIST: Prime Minister, your statement foreshadows
announcements of coastal shipping waterfront and the
waterfront. The ACTU
PM: Only the waterfront once, not twice.
JOURNALIST: I'm sorry, I repeated myself.
PM: Once is going to be hard enough I can assure you.
JOURNALIST: Exactly. Mr Kelty seems to have set himself
against it.
PM: Why do you misrepresent Mr Kelty setting himself
against waterfront reform? You've got not one piece of
evidence to support that proposition.
JOURNALIST: Well I have camera tape
PM: No, what you can report I'll tell you now, I haven't
seen your tape but I'll tell you what's on it and that is
that Mr Kelty did not embrace all the recommendations that
were brought down by the IAC. That is not the same
proposition that he set himself against reform on the
waterfront and the opposite is true because I've had
detailed conversations with Mr Kelty and I know that he
supports reform. So please get it right.
JOURNALIST: Mr Hawke, is the big hangup the question of the
coverage of the WWF is that where Mr Kelty sees real
difficulties PM: That's one of the areas because quite clearly you've
got a situation where the waterfront, Waterside Workers
Federation is a body which has had its membership
drastically reduced in the last generation, basically as you
know as a result of the fundamental move towards
containerisation. They are now relatively a very small
union and they are naturally enough going to be concerned
about any suggestions which regard to outlying ports or
in other aspects of the report would involve a significant
further reduction in their membership. That's
understandable. The important point to understand is that
the core elements of. the IAC report in regard to reform
don't turn on those issues. So I believe that it is going
to be possible to achieve through negotiation some
significant reforms in a way which will not meet the
understandable opposition of the Waterside Workers
Federation in regard to issues which from their point of
view are quite understandable, which I repeat are not
central to the thrust of reform.
JOURNALIST: Do you think there can be effective reform on
the waterfront as long as the labour system continues?
PM: Let me put it this way, that one of the central
elements of the IAC report is the concept of single
employment. I believe that there is a basis for getting
towards that position. I don't think that is necessarily
something which is
JOURNALIST: Why are you flagging these reforms in this
statement today? Is it good political timing to go with the
tax cuts, or what's the reason for putting this out today?
PM: To give I think there are a number of reasons
Heather. There's been a fair amount of extraordinarily
loose and ill-based talk about this Government having lost
its impetus, never one basis of foundation for that loose
sort of talk. So we thought, one reason, it's not a bad
idea therefore to get out clearly the range of very
significant action which has been consistently going on
under this Government during our third term that's point
one. Point two, I have made the point recently that the
April Statement that Paul was bringing down is not of itself
one which is going to contain significant micro-economic
reform proposals and I have said that there would be however
a series of decisions in this area around this time. So
what I've decided is that I would take this opportunity of
setting down the sort of timetable and program for those
further areas of reform which will complete the Ballarat
process, if I can put it that way. Thirdly, I wanted to
have the opportunity of putting this very significant reform
that John Kerin is announcing into the wider program of
reform. It is important in its own right obviously for the
reasons that I and the Minister have outlined. But it's
properly to be seen as part of a total program of
micro-economic reform.
KERIN: To quote John Howard, the timing has suited me.
JOURNALIST: Mr Hawke, in your statement you note that you
needed to make change, a precondition of that change
responsive financial sector freeing up the banks. Well they
certainly are freed up. One of them, Citibank, is talking
about home loan rates going to 18% now. Is that kind of
talk helpful?
PM: I've got nothing to add to the rather concise answer
that the Treasurer gave on that matter in the House today.
JOURNALIST: Mr Kerin, in your statement you speak of
exempting the AWB and other grain trading corporations etc.
What are the other corporations that you have in mind?
KERIN: In terms of the route we're going down this could
apply to the State Barley Board and virtually other
corporations. JOURNALIST: Mr Hawke do you concede there has been a large
rise in housing affordabilty and do you concede the
possibility that interest rates could reach 18% under this
term of your Government?
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PM: I'm not conceding that possibility. I've said that I
don't speculate about immediate short term possible
movements in interest rates because the very fact the Prime
Minister or the Treasurer speculate about possible short
term movements can of itself be a factor in what happens to
those movements. So both Paul and myself don't do that.
That's different from what I said at the beginning of the
year, when I talked about, when I was asked what would
be the situation at the end of the year, I was quite
prepared to make that statement but I'm not going to
speculate about short term movements.
JOURNALIST: And you still believe that will be the case,
that by the end of the year the rates will come down
PM: I have no reason to change the observation I made in
January. JOURNALIST: Mr Hawke speaking about the will
Wednesday's statement see the Government child poverty?
PM: Well I think it really is fair to wait until then. I
mean I'm not going to pre-empt the statements that will be
made then. But I think you'll find not only in that area
but in other areas of social welfare that it will be a very
well received statement.
JOURNALIST: Do you still stand by your comment Mr Hawke
that the top marginal tax rate won't be reduced unless
PM: I'm not going to be making announcements that will be
properly made by the Treasurer on Wednesday night. I mean
you don't really expect me to
JOURNALIST: announcement, you actually said previously
PM: Anything I said on that would be a pre-emption of what
the Treasurer will announce. He'll make the announcements
for and on behalf of the Government on Wednesday evening.
JOURNALIST: Would you agree that someone seems to have
pre-empted it?
PM: Well let me put it this way Laurie. We haven't yet
reached the " Oakesian" deluge of our conservative
predecessors. But there does seem to have been some sort of
hints about what may be coming out. I will not add to those
but I simply add I'm pleased that we haven't seen the
proportions of deluge that were associated with your coup.
JOURNALIST: blaming the unions for that?
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PM: I'm not blaming anyone. I mean it would be a little
bit unfair wouldn't it because I mean even when unions
haven't been associated with discussions, when it's just
been a matter of Ministers and Departments, they haven't
been leak-proof in the past.
JOURNALIST: Does this mean Mr Hawke that the tax
pledges are now back in the melting pot? For example what
does this mean that all your
PM: It means it's nothing more complex, sophisticated,
esoteric or difficult to understand than this; that the
announcements will be made on Wednesday night by the
Treasurer and not on Monday by me.
JOURNALIST: Mr Hawke in your list of microeconomic reforms
you've got reference to the change in defence industries.
Could you give us a bit of an idea what that means?
PM: I'm sorry?
JOURNALIST: In your list of microeconomic reform statements
in May, amongst them you've got defence industries. I
just wondered if you could be
PM: That further announcements will be made? waiting
for the Ministers to make those.
JOURNALIST: But if you can just give us some idea of what
this microeconomic reform in that area will mean?
PM: Well it will be to do with the increasing commercial
nature of the operations of industries in that area. But
all I've done there is to indicate the areas where
announcments are going to be made. I mean that's not an
invitation from me to you to be asking what those
announcements will be.
JOURNALIST: Mr Hawke one of the things you were saying
continue to encourage the elimination of outdated work
practices. We've had the in the second tier agreement.
Now none of these things show up in the statistics
having substantially boosted productivity. Do you think
that we've got any reason to believe that the award
restructuring will be any different?
PM: It's not fair of you Milton to say that those
initiatives have petered out. The initiative that I began
in Melbourne some three years ago moved logically into the
second tier and now it's been tuned into the processes of
award restructuring. I don't think you need to rely on my
assessment, Paul Keating's assessment or Bill Kelty's
assessment, I mean you turn to the employers themselves. I
suggest that the enthusiasm of the Metal Trades' Employers
where the initial detailed negotiations have taken place
confirms our belief and assertions the implications of this
PM ( cont): restructuring process. The Metal Trades'
Employers who talked to Mr Evans on behalf of the trades
industry association, they are excited and understandably
excited about the implications of the restructuring process,
and so they should be because I mean I don't know why people
as they are have any sceptisism about this. It seems to me
to be beyond argument that if you take the metal trades,
which is the major award in the manufacturing sector, if you
are going to take that award 350 classifications wipe
that out and get down to 8 classifications which is going to
create a career structure and a remuneration basis related
to that career structure so that the classifications are
relevant to the modern processes of production and give you
a firm and sensible and relevant basis for training and
retraining programs, you have to have a degree of sceptisism
which is even beyond what we tend to find around this place
at times, to argue that that's not going to have significant
impact in industry, it will. That's why, let me say, the
employers concerned have entered into this process with
enthusiasm as well as the trade unions. It's the most
revolutionary thing that's happened in industrial relations
in this country in this century. Because it's not just a
question of what's happened in the past where if the
employers have had the power they've been able to impose it
and cut wages or where the unions have had power they've
imposed there's or have had wage increases which are beyond
the economic capacity of the country. Uniquely now what
you've got is a joint commitment of employers and unions to
tackle a whole process of wage fixation and industrial
classification in terms of what's going to meet the
interests of the industry unique.
JOURNALIST: Mr Hawke are you concerend that very large pay
increases for lower paid workers may impact on their
employment? PM: If it were handled rationally yes that could occur.
But I think you'll find that the processes of phasing which
we spelt out in more detail are such that they will be
able to be accommodated in a way which you're not going to
have adverse employment effects. I mean in the end I mean
the unions concerned in these areas are not going to act
against their own interests. I mean if you are looking at
this concept of supplementary payments and say we're going
to whack it all in in one go, then I think you would run
that risk. I think you avoid it by the process of phasing
over a considerable period of time.
KERIN: The fruit pickers award in Queensland is $ 231 a
week. It would be a terrible thing to do anything about
that, wouldn't it?
JOURNALIST: Prime Minister do you have any information on
why the Belconnen branch of the Labor Party is suddenly
being mentioned in connection with the Winchester case?