PRIME MINISTER
TRANSCRIPT OF UNEDITED INTERVIEW WITH JIM WALEY, A
CURRENT AFFAIR, 8 DECEMBER 1989
9 0 E PROOF ONLY
WALEY: Prime Minister, thanks for your time and
congratulations on your 60th tomorrow.
PM: Thank you very much Jim.
WALEY: You're not getting Boft in your old age, are you?
PM: No, I've never felt better, Jim.
WALEY: Well everyone's remarking today about your
turnaround on the pilots. Why the change?
PM: It's not a turnaround Jim. There has to be the
distinction made between the issue on which I was
fighting and that was the protection of our wages system
where I could not accept or tolerate this 30 percent
claim outside the system where the AFAP had declared war
on, on the system, on the, their employers, on the
Arbitration Commission, on the Government, on the trade
union movement
WALEY: Also a recognition that you noticed that you'd
overstepped the mark, perhaps, on your rhetoric and that
perhaps PM: Well, I think, you know, looking back, not only in
this issue, I mean, I'm now 60 years old. I look back
and a lot of things in my life that, I guess if you could
have a second go at your phraseology, you may have done
it differently and I accept that some people may have
better understood my position if I'd, if I'd explained in
more detail and perhaps, somewhat differently that what
my concern was the issue. But the point I'm making, the
distinction has to be made between that issue where I was
about protecting the interests of Australia, of all
Australians, and my attitude towards the union. Given my
background, Jim, I could never be party to any attempt to
smash a union.
WALEY: But there is an election just round the corner.
Was there also a recognition that perhaps now was the
time to lift your game?
PM: No, no.
WALEY: That you weren't performing quite as
PM: No.
WALEY: well as you may have.
PM: No, on this point, Jim, the issue has very nearly
been resolved. We are at the latter stages of it. In
other words, the airlines, as is now understood commonly,
had substantially rebuilt the airline capacity and in
that situation you now move to another stage. I had
supported the airlines in taking their case because there
had to be, Jim, in my judgement an independent judicial
establishment of the facts. That is what was the issue?
Who was responsible? And the judge has done that very,
very specifically and unequivocally
WALEY: But the bottom line is that with your union
background, you much prefer to be a conciliator rather
than a hardliner.
PM% Absolutely and as I said yesterday, Jim, to the
Press Club, nothing really has grieved me more in my
Prime Ministership than that because of the attitude of
the AFAP to this point, that role was not available to
me. In other words, they were saying we're outside the
system. We're not within the system within which the
conciliation process can take place. Now I have been sad
about that. Now what I am saying is that the judge of
the Supreme Court, having estab lished that it was the
pilots, to use his language, who were spoiling for the
fight and that there was no conspiracy between the
Government and airlines. That, importantly, has been
established by an independent judicial authority. I am
not about the business of damages against the trade union
and that's why I said, unequivocally, that I am saying to
the airlines, both the. private airline, Ansett, and the
Government owned airline, Australian, that they should
not press now that the point has been established, they
should not press for damages because what all Australians
need now, the fight, as it were, having been fought, the
principle having been established and what we wvant is the
complete re-establishment of the great Australian airline
industry. A much more efficient one now it will be.
What we need is decent relations, harmony. That sort of
position is not going to be established by the extraction
of damages from a. union. I don't agree with the
principle, in general, and in these circumstances in
particular WALEY: Have the airlines indicated that they're willing
to drop their damages claim?
Pm: I believe that that will be the case. They have to
appear before His Honour in January and I guess it will
be for them a matter of Judgement as to how or when they
indicate their position. That may be complicated by the
responsibilities they have of appearing before His
Hlonour, but I would believe, Jim, that they would respond
positively to what I've said.
WALEY: Well, let's hope so. Leaving aside the rights
and wrongs, very briefly, what sort of damage has been
done by this pilots dispute to Australia?
PM: Well, it's a balance that you have to take into
account. There's no doubt that some damage has been done
in this period, but what you have to understand is that
we will go into 1990 with a much more streamlined and
efficient and more productive airline industry as far as
the pilot employment is concerned. There will be a
significantly lesser number of productivity of the
industry will be very much higher. So in the longer term
we will come out of it, tragically through this sort of
process which I would have much rather seen avoided, but
we will come out with a significantly enhanced, more
efficient, more productive airline industry.
WALEY: But on the other side of the equation, the
tourist industry is on its knees. Now how long will it
take to revive tourism?
PM: Tourism will be able, as we go into 1990, to go back
to its full growth path.
WALEY: It might take a bit longer to gain the confidence
overseas though.
PM: No, I don't think so. if you look at the evidence
of the number of the people that have come to Australia
In this period, it is basically in line with the
projections that were made before the dispute commenced.
WALEY: So back to normal by mid 1990, the end of 1990?
PM: No, certainly by mid 1990. There is no reason at
all, in terms of internal airline capacity, why that
can't be happening in the beginning of 1990.
WALEY: The big message from your speech yesterday to the
National Press Club was, of course, about the economy.
That we have to endure the pain, it was worthwhile during
this period of restructuring yet you still held out the
promise of lower interest rates. When will that happen
and how long will they stay down?
PM: Could I go to the first part of your question, then
to interest rates, Jim? The essence of my message, and
I'll try and make it as brief as I can
WALEY: Please, yes.
PM: it is rather complex, but I'm saying there is no
single measure of how we, as an Australian commrunity
together, are progressing along the path of
reconstructing the Australian economy. You can't simply
use the measure of lower real wages because, as part of
the lower real wages, what has happened are two things.
As you'Ive got lower real wages, there'Is been a move to
profits, from profits, increased profits, into the
highest investment we've ever had in our country. That
investment is doing two things. It's sustaining record
employment growth, but it is also, importantly, reequipping
and restructuring the Australian economy so
that it will be more efficient in the future. Access
Economics, has that' s the body used by the Oppositionhas
said there are some $ 90 billion of projects either
under construction, committed or under serious
consideration and when they all come on stream that will
generate an additional $ 10 billion of foreign earnings
for us.
WALEY: That's long term. What about the short term?
PM: Well some, no, no, some that, Jim, of that that's
under construction, that will be coming on stream
earnings in 1990. Some of it. So it's immediate, medium
end longer term. So that's one thing that's happening as
a result of the lowering of real wages. We are, as a
community, now setting in place those benefits for the
future. The second thing, of course, is that as our part
of the bargain of the trade unions accepting lower real
wages, we've massively increased the social wage.
Without boring you, or your viewers, Jim, with all the
details of those things, just by way of example and I
think it's terribly important as far as Australian
families are concerned we have poured massively
increased resources into education, both into the system
and also to families, we've more than doubled the
secondary education allowance to lower and middle income
families. The result? When the Liberals walked out of
office only 36 percent of our kids staying on in the
education system, it only increased that retention rate
by two percentage points from 34 to 36 in their seven
years WALEY: Prime Minister
PM: We've lifted that to 61 percent. Now that's part of
the social wage
WALEY: That is accepted, but I mean the immediate hurt
is on interest rates, now
PM: Well, I'm coming to interest rates. I mean, I had
to answer your question in two parts.
WALEY: OK.
PM: I was giving the message that if you make the
judgement about hurt and part of the hurt has been the
reduction in real wages, then you've got to see what has
happened in terms of benefits. Interest rates. That is
the result of the fact that our economy is growing so
rapidly. I mean, we are having such a high level of
economic activity, that we are sucking in a level of
imports, such a high level of imports, that our exports
won'It pay for. So we have to somewhat dampen down the
level of activity and to do that in addition to tight
fiscal policy and tight wages policy we have to have
tight monetary policy. And what I am saying is that the
signs are now emerging quite clearly that those interest
rates are having the effect. There is a gradual slowing
down. That's why I say to you, and to your viewers, Jim,
that together all of us who've exercised that restraint,
Government has cut its expenditures, the restraint has
been exercised by the community, interest rates have
played their part. I believe that as we go into the
1990s that evidence will become stronger and the
conditions will be there for a lowering of Interest
rates. WALEY: Before the end of the financial year?
PM: I believe so.
WALEY: And will they stay down?
PM: I believe so in terms of the Australian conditions.
In other words, an Australian economy is influenced by
two things. It's influenced by what we do ourselves, not
just Government, but the community. My judgement is in
terms of what the Government is doing and how the
community is responding, yes, that we can do that. Now
if you had a situation externally where you had a total
collapse of our terms of trade, for instance, I don't
believe that's going to happen, but to be honest with
you, fully honest with you in answer to your question,
will they stay down. Provided the international economy
continues to operate on steady levels of output growth
as the predictions are internationally that it will and,
therefore, we will not have a collapse in our terms of
trade then I don't believe there are external reasons
why that move down our interest rate structure can not be
sustained. WALEY: Maybe that was one of the provisos that Andrew
Peacock was thinking about this morning when he predicted
that yes, indeed, interest rates will come down early
next year but they will not be sustainable.
PM: yes, well, of course, I don't want to say this in a
harsh, personal sense, but it is the universal judgemnent,
the universal judgement of his colleagues, of the
commientators here in Canberra and of all analysts and
business people who've met with Peacock, that he simply
doesn't know, he simply doesn't know anything about
economics. WALEY: Could there be an element of truth though in what
he said?
PM: No. Not on this issue. I mean, when you have a man
who says in regard to the central issue of what happens
to the Australian economy, that is, wages outcome, that
is the central issue which will determine the whole of
the economic outcome. When asked specifically at his
Press conference, what will be those outcomes? He throws
up his hands in hopelessness and says whole to know.
WALEY: OK. Let's move on to the economy. You mentioned
a moment ago that
PM: I thought we'd been on it, mate.
WALEY: Well yes but the slowing of the economy.
PM: Yes sure, sure.
WALEY: Obviously there's a lag in official rates when
they are Issued. One of the dangers of tight monetary
policy if in fact it is biting is the fact that it
will take effect quite suddenly and dramatically. Are
you taking steps to ease the brake, so to speak, at the
right time so that the country doesn't dip into
recession? PM: Absolutely.
WALEY: In what way?
PM: Well that's the centrally important It is the
important question. I congratulate you for asking it. I
mean the fine art of economic management now, Jim, is to
watch all the indicators as to what's happening in the
economy. They really fall into two categories. There
are the official statistics. For instance, the recently
issued national accounts figures together with official
statistics on housing and so on in investment. But
secondly and very, importantly, there is the anecdotal
evidence. What we are constantly doing, Jim, is getting
feed in for instance, from BHP, what's happening to steel
sales, what's happening to steel imports, those imports
which they bring in for their own purposes. And for
instance, they indicate to us that the signs there are of
a slow down. We are also in constant contact with the
retailing industry. So you combine
WXLEY: Are they telling you though, that there is a slow
down? pM: Both of them are telling us that the evidence of a
slow down is there.
WALEY: Dramatically 6o?
PM: Sufficiently so. Now what you have to do, Jim, that
is Government and the Reserve Bank, what we have to do is
to watch those indicators and be extremely responsible
about it. The worst thing I could do, Jim, to your
viewers would be in terms of trying to get some immediate
electoral acclaim, is to say whack interest rates down
now. We've got to be certain that the impact is there,
that the economy is slowing down sufficiently for us to
ease rates off.
WALEY: I guess what I'm asking you is there going to be
a recession?
PM: No. I know that's the point of the question. No
and the fine art of economic management to have the
easing off at the point where you can be confident that
the slowing down of the economic activity has occurred
enough so that the easing off will mean that in the
jargon of the economists, to get the soft landing, that
is you ease it off at the point where if the economy is
not dipping down like that. It's come from here, gone
down a little bit, and getting to a plateau level which
will still be economic growth to sustain employment
growth. WALEY: Prime Minister, can we take a break at this
stage? PM: Sure.
WALEY: Do you think at a time when many within Cabinet
are calling for perhaps softer measures, that the
Treasurer will hold out and be too fanatical, too hard
line? PM: Jim, the premise of your question is not soundly
based. The Cabinet supports the responsible approach.
It's not correct to describe it as a hard approach, it is
the responsible approach.
WALEY: With the incidence of high interests rates fairly
hard?
PM: Yes, but it's responsible, I mean, as I've said and I
don't want to keep repeating this phrase, but it's
important. I am neither sadist nor am I masochist. In
other words the last thing I want them to do, I haven't
been in Australian public life for thirty years to want
to hurt Australians, the opposite is true. Now I am not a
masochist, I don't went to hurt myself. But what we have
to do Is to get that position where the great advance
that we, as Australians, have made together towards
restructuring the Australian economy, which is
acknowledged it is happening. We mustn't prejudice that
by just allowing a splurge of activity now which would
destroy everything, because if you allowed activity just
to splurge at this rate we couldn't sustain that level of
imports and then the exchange rate would collapse,
interest rates would go through the roof and we're into
recession. So you can describe it as hard but it is
necessarily hard if you want to use that, because in
terms of benefits, enduring benefits for Australians, we
mustn't allow the economy to collapse in that way. As a
result of this policy we will be able to have the easing
easing off of rates next year and in that situation
weo will have retained all the benefits of growth and of
restructuring. WALEY: So no disagreement between you or Paul Keating on
policy? FM: Or within the Cabinet, Jim.
WALEY: How are you getting on with the Treasurer these
days? PM: I would think it's true to say that our relations
have never been better.
WALEY: Categorically?
PM: Ye8.
WALEY: OK. You turn 60 tomorrow, seven years almost of
Labor Power. Do you agree that there's a perception out
there, perhaps, that after so long, you turning 60, that
Labor's looking a little bit tired, a little bit jaded?
PM: No, on the contrary. I mean, if you look at the
level of activity and the importance of decisions that
have been taken, I would think it's probably true to say,
Jim, there hasn't been a period in our office when we
have been making more important decisions more regularly.
I mean, without being exhaustive just let me refer to
some of them internally and externally. Externally first,
we just had here in November an historic meeting as the
result of the initiative I took at the beginning of this
year. For the first time the countries of the Asian
Pacific Region have met here in Canberra as a result of
my initiative in January in Seoul and they have met and
acknowledged and paid tribute to my Government for the
initiative, and as a basis of that we now have the
momentum towards this Asian Pacific Economic Co-operation
which is going to be enormously important for the region
and tremendously important for Australia.
WALEY: So you feel that there's a confident young image
about the present Government, do you?
PM: Well, it certainly should be an image of confidence
because it goes back to the questions you have been
putting. I mean, it would have been, if we weren't
confident, if we were weak we would have wobbled around
and said no we'll cut interest rates back immediately.
WALEY: Let me put it another way. The National Executive
has been meeting today, and as I understand it changing
the rules for some of the candidates. Does this mean that
there's a recognition there, you need brighter, younger
blood? PM: No, no. This goes back to an issue which has been
before the Federal Executive going back for two or three
years. It's a question of preselection rules in New
South Wales. There's a general recognition that there
could be room for improvement in the preselection
processes. But that goes back some time and let me say
this, that the existing preselection processes not only
in New South Wales, but in other States produced a
situation that when I became Prime Minister in 1983 there
was an enormous range of talent that was there, so much
so that the Shadow Treasurer, Dr llewson, said just a
couple of years ago, that the Hawks Cabinet is the most
talented Cabinet since the war. He was right then and it
remains true today.
WALEY: OK. You say you'll retire If you lose the
election. PM: Now let me say that was entirely hypothetical, Jim,
and I said I don't believe that will happen, and I don't
say that in a cocky way. I realise that we've got to work
hard to be re-elected. We will work hard to retain the
confidence of the Australian people. The question, then
what Mr Hawks despite that you would lose. I said, well
I think in those circumstances I would retire.
a WALEY: But you'd stay on for another three years, at
least, if you won?
PM: Yes.
WALEY: you feel you only have a contribution to make if
you win?
PM: No. But I would think, that's why I said I think I
would retire, I mean, obviously I'd be guided by my
Party, Jim. I mean, if they said to me, in those
circumstances, and pressed enormously, we want you to
stay, well, I would have to give that consideration. But
I just make the point that this year, at the end of this
year, where we are now, I have been in public life for
thirty years, ten years as the Research Officer and
Advocate for the ACTU, ten years as President of the
ACT), ten years in the Parliament, and seven of those
years as Prime Minister. Now that's a long time in
public life and I am eternally grateful to the Australian
people for having given me the proud honour and privilege
of being the Prime Minister of the greatest country on
earth. I've been there a long time, I had no definition
of 8 life before Parliament, there is a life after
Parliament. If the view of my Party, and, in a sense, the
people, was that they wanted to stay there in Opposition
I would have to give that serious consideration because
without, I hope, sounding mawkish the thing that
dominates me is my love of this country.
WALEY: ( inaudible)
PM: I guess, I mean, I would be a remarkable individual
if I hadn't and I would be a singularly unintelligent
person if I hadn't. I mean, as Prime Minister you have a
unique opportunity to learn even more about your country
and also, Jim, to learn about the international context
within which we operate.
WALEY: Still retain a sense of humility?
PM: I am a mixture of pretty supreme confidence in my
capacities. I say that directly. I do have a supreme
confidence in my capacities. A mixture of that and also,
I don't know whether I would describe it as humility, but
it has been said and I think it is correct that I am one
of the best listeners in public life. I do listen, I
mean, I have this. love of people, I mix with people, I
listen to them as well as talking to them and call that
humility or what, I don't know, but I believe that you
can always learn in life, and certainly as Prime Minister
you can always learn, Jim, from listening, absorbing
things. So it's a mixture of, as I say, supreme
confidence in my capacities, but also a knowledge that I
can perform better the more I listen.
11.
WALEY: What does a 60 year old Prime Minister Bob Hawke
do on his birthday, go to the races?
PM: No, he won't be going to the races. He'll be swamped
in the morning, joyfully, by his grandchildren which, of
course, is one of the great joys of my life. I mean I
can't describe the pleasure I get from my family.
WALEY: Big family reunion?
PM: Yes. They'll all, except my two little grandsons, who
are up in the North West of Western Australia, but my son
will be there, my two daughters and four of my
grandchildren, they'll be all over me in the morning and
then later on in the morning I'll try to pick a few
winners and place a few bets.
WALEY: So it's a family day?
PM: Oh very much so. I'll watch a bit of cricket I
suppose tomorrow afternoon and then tomorrow night we're
having a party.
WALEY: What about Clem, your father?
PM: Remarkable, he's now nearly 93. 1 see him as often
an I can. I've seen him two or three times in the last
few weeks.
WALEY: You're very close to him aren't you?
PM: I love him.
WALEY: What will you say to him tomorrow.
PM: Be well and thanks for everything you have done for
me. WALEY: What's he done for you?
PM: Well, he's passed on to me the fundamental beliefs I
have and that Is that we are in this world, not just to
advance our own interests, but we owe an obligation to
our fellow human beings and I think you have heard me
quote before the thing that he said to me that has always
stuck in my mind, he said, Bob, he said, if there is a
belief in the fatherhood of God, then that, inevitably,
has the corollary of a belief in the brotherhood of man.
That's, I suppose, if I had to say what I owe most to my
father it is the implanting in me of that belief.
WALEY: It's been another Red Letter Day this week and
that was your son Stephen receiving a Human Rights Award
from no less than Mrs Hlawke. He's a very independent man
isn't he?
r ends 12.
PM: He's a remarkable young man. He has a brilliant mind,
a brilliant intellect. When he was doing his HSC in
Melbourne he left the school he was at, Melbourne
Grammar, he didn't like that, left there in that HSC
year, went uprooted himself went to another school,
was hit with glandular fever, was knocked out a couple of
months or so before the exam and got brilliant results,
you know 100 in mathematics and these sorts of things. I
mean, it's just not the pride of a parent, he's got 8
brilliant mind, could have been anything, could have done
anything, but he's devoted his life to the most
underprivileged group in the country, the Aboriginal
people, devoted his whole life to that. He could have
been anything if he had been concerned with Just his own
advancement, could have been anything, and yes, I am very
proud of him.
WALEY: Prime Minister, I guess when we all turn 60 we are
entitled to shed a few tears. Congratulations and thanks
for your time.
PM: Particularly when you talk about my Dad. -He's been
a truly remarkable man. I don't think I've ever met
anyone of whom I could say that I don't know that they've
ever done anything crook in their life. He's been, to
me, something very special.
WALEY: Indeed. Thank you, Sir.
PM: Thanks.