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Transcripts from the Prime Ministers of Australia

Transcript 7911


Photo of Hawke, Robert

Hawke, Robert

Period of Service: 11/03/1983 to 20/12/1991

More information about Hawke, Robert on The National Archive website.

Release Date: 18/02/1990

Release Type: Interview

Transcript ID: 7911

THOMPSON: Mr Hawke spoke to Warwick Beutler at The Lodge
in Canberra last night just a few days ahead of the
announcement of the new wages-tax-superannuation deal
with the ACTU. It's expected to deliver a substantial
wage rise next financial year. Mr Hawke wouldn't reveal
the details of the wage deal but he did discuss the
principles on which it was based.
PM: You've got to have decisions which produce the best
outcome in aggregate terms. Quite clearly if you are not
able to negotiate an arrangement with the trade union
movement which gives you predictable outcomes and within
reasonable bounds, then the alternative, and certainly
the alternative which is contained in the Opposition's
policy will be a massive wages breakout.
BEUTLER: So it's the price we've got to pay for
industrial harmony is it?
PM: It's not a question of the price you have to pay.
It's a question of making a choice as a society whether
you want the chaos of the alternative prescription, and
we don't have to be theoretical about it. They practised
this at the beginning of the ' 80s wages explosion,
collapse of the economy, worse recession in 50 years,
double digit inflation, double digit employment never
before been achieved. Now that's the alternative you've
got. BEUTLER: Yes but the other alternative, the alternative
under your Government, is to deliver big pay rises when
the country has to pay for that in high inflation, high
interest rates and we price ourselves out of
international markets, don't we?
PM: On the contrary. You conveniently ignore the facts.
Let's take the last point first, pricing ourselves out of
international markets. In the last two years a 14%
increase in real terms in manufactured exports. Totally
inconsistent with the proposition that you're putting.'
If you price yourself out of international markets you
can't have a 14% real increase in manufactured exports.

BEUTLER: But we still have the worst balance of payments
crisis we've ever had in our history.
PM: That is in fact not true. The current account
deficit and your external position as a proportion of GDP
was in fact worse just before we came to office than now.
Now the fact is that what we
BEUTLER: But you wouldn't say it was good now, would
you? PM: No of course not. There's room for improvement.
But you wouldn't say would you either Warwick that you've
priced yourself out of business if in the seven years of
government you've created 1.6 million new jobs, a rate of
employment growth five times as fast as in the previous
seven years and if you've had a rate of employment growth
twice as fast as the rest of the world and if in that 1.6
million new jobs that we've created, 92% of them have
been in the private sector. How about taking account of
that. BEUTLER: Yes, and we've got
PM: Thank you.
BEUTLER: and we've got high interest rates, very high
interest rates.
PM: Not as high we haven't reached the peak that we
did under the conservatives.
BEUTLER: We wouldn't want to would we?
PM: No, we certainly wouldn't want to achieve any of the
things that they did in their period and we haven't. Now
let me make the point that as far as the high level of
interest rates is concerned, I haven't tried to hide the
fact that they've been high. But they've had to be high,
as I've explained to the Australian people, because we
had a situation, put simply, in the last full financial
year you had an eight per cent increase in consumption, a
four per cent increase in production, and that gap of
four per cent was taken up by imports. You can't keep
doing that. So with tight fiscal policy and tight wages
policy you also had to have tight monetary policy. You
see I'm not, as I've said, I'm not a masochist, I'm not a
sadist. I don't want to hurt myself. I'd be out of my
cotton picking mind to hurt myself and I'd be out of my
cotton picking mind to hurt you and your listeners.
Because you have votes and you're going to cast a vote.
The reason why we had to have tight monetary policy was
to ease demand. And to have it goes back to what
you're talking about, our external position. If we
hadn't been prepared to supress demand in the economy you
would've had an infinitely worse external position, which
is what you're talking about.

BEUTLER: You mention interest rates. Interest rates
have begun to fall and housing interest rates can't be
too far behind. But they can't fall far can they?
PM: The extent of their fall is not something that I can
predict. But what is the most important thing for your
listeners I think is not in a sense what I'm saying but
what the banking industry itself is saying. They are
saying quite clearly and universally that interest rates
are going to fall. They are already falling. The cash
rates have fallen. They're down now, cash and bills are
down very significantly. You've got the situation where
they've reduced prime rates and they've indicated they're
going to fall further and that mortgage rates are going
to fall.
BEUTLER: But they can't fall far can they?
PM: They can fall considerably but I can't put a figure
on it and I'm not going to because that would be quite
irresponsible. But what we have done is to take the
tough decisions and take a lot of flak for making the
tough decisions and being prepared to make tough
decisions. The other side have the rhetoric but we had
the responsibility and the courage to take the tough
decisions. And now what the financial community is
saying, and saying unequivocably, is that those policies
have worked, are working, and within that framework that
rates can come down. Now the extent to which rates fall
is, they're not capable of exact prediction. And I'm not
going to say how much. All I can say is that I've done
the tough work with Paul Keating and have copped the
BEUTLER: But give us a ball park figure.
PM: No, I'm not going to give you a ball park figure. I
know you'd like one Warwick. Wouldn't it be good for you
to be able to say I got the Prime Minister to give a ball
park figure. I'm not going to do it.
BEUTLER: How much will wages grow next year?
PM: Well that will be part of the statement that the
Treasurer will be making on Wednesday. He'll give you a
precise figure as to what the projected wages growth
figure will be for ' 90-91.
BEUTLER: Can voters be excused in this election for
believing there's not much of a choice at all, for
believing that you and Mr Peacock are a bit like Bib and
Bub. You don't differ on foreign policy, you don't
differ on defence, you don't differ on the need to help
the family, to help middle Australia.
PM: Just excuse my laughter. Let's take it bit by bit.
' We don't differ on foreign policy.' Well let's just
give you one smidgeon of difference. I'm being

sarcastic. Fundamental. I negotiated, initiated and
brought to fruition the South Pacific Nuclear Free Zone
Treaty to which we are a party. Mr Peacock would abandon
that to allow the stationing of nuclear weapons in
Australia. Do you think that's peripheral? Fundamental.
I suggest
BEUTLER: But the United States doesn't support that
Treaty for example.
PM: The United States is not running my policy. Nor
would they, I think, hope to have their policy run by Mr
Peacock or be running his. The question you asked was
not about a difference between me and the United States.
I think if you roll the tape you'll find, and it will
show that you asked about the difference between Mr
Peacock and me. Correct?
BEUTLER: ( inaudible)
PM: Yes, correct. That was a yes listeners. Yes he
said. And in answer to the questions you put to me I'm
saying on that fundamental question of whether you have
nuclear weapons stationed in Australia or not, Mr Peacock
would abolish our adherence to the Treaty that I
negotiated which prevents that happening.
BEUTLER: That's one minor element. But essentially
PM: Your judgement ' minor', but I doubt Warwick whether
your listeners would regard the question of whether
you're in favour of the stationing of nuclear weapons in
Australia or not as minor. You may regard it as minor.
I don't.
BEUTLER: Alright. The family.
PM: The family. Yes, well, I was coming to the family.
Now let's look at the family. Rhetoric is cheap and
easy. But you know, if you have a concern for the family
you' re not talking about something that lives up in
Mohammed's coffin. They exist here in Australia. You
know what affects the welfare of families? Let me tell
you. Jobs, education and health.
BEUTLER: And interest rates.
PM: We'll come to interest rates. They had higher
interest rates than we've ever reached. So dispose of
that. Now, let's look at what they did in regard to the
three things which are fundamental to the question of the
welfare of families. Jobs last 12 months, another
quarter of a million on the unemployment scrapheap. The
worst record of employment and unemployment of any poswar
government. They brought the worst recession in
years. Threw mum and dad and the kids out of work.
Health we came to office with two million Australians,
you know, members of families. Not somewhere out there

in Mars. Two million members of Australian families
uncovered for hospitals and doctors visits. If they got
crook they had no cover. Now they were very concerned
with families weren't they. Well my concern with
families was translated by bringing in Medicare which
meant that every Australian, every member of every
Australian family covered. Not having to worry about
being unable to pay the bill. Education let's just
think about education and how they talk about their
concern for families. Do you know what their magnificent
achievement was? Seven years in office and they
increased the participation rate by a miserable two
percentage points, from 34% to 36% when they walked out
of office. In other words one in three of Australian
kids staying on in the education system. The basic
building block of education. The basic determinant of
the future welfare of the kids of Australian families. I
said that was pathetic. And against their two percentage
points increase from 34% to 36, I've lifted it from 36 to
62 and next year it will be 65. In other words, not one
out of three but now two out of three kids staying on in
school. So you've got it. Jobs, health, education.
They can have the rhetoric. Give me the facts.
BEUTLER: Yes but you can constantly refer to the
previous seven years of the Fraser government and it's
natural that you should make that comparison. But a lot
of Australians aren't interested in what happened then.
They're interested in what's going to happen in the next
seven years.
PM: Exactly. And it's because they are promising
exactly the same as the policies before that I go back to
the past. Not simply to say there's their seven years
and there's mine. But you look at the issues that we
talked about jobs, the economy. What devastated the
economy in the last years of their office? Very simple.
They had no wages policy. They allowed wages to explode.
The economy collapsed. They are promising a return to
exactly the same thing. So what they produced before
will produce the same or even worse this time. Health
they are now promising a return of the same. To abolish
Medicare. To go back to the situation where people will
be uncovered. In regard to education, the same thing.
You look at their education policies in regard to
universities. They are saying we'll give a certain
number of scholarships and then the rest will be fees.
So the rich will get the places, the poor and the middle
income people miss out. They are returning in other
words to exactly the sort of policies which gave the
disaster of the past.
BEUTLER: Do you accept that 30% of the electorate, as
much as 30% of the electorate is undecided?
PM: I would doubt if it's as high as that. But I see
some polls suggest it. But they will make up their mind.
That suits me fine because I mean, if that figure's

right because what they're already seeing in the
election, what they are already seeing is the total
disarray of the Opposition. They are seeing the absolute
unity of purpose and of policy of my people. And the big
question, the big question is going to be in regard to
all their rhetoric and their promises ' where's the money
coming from?'
BEUTLER: Is your Government tired?
PM: Do I look tired?
BEUTLER: I said is the Government tired?
PM: No, well I'm a large part of the Government. I'm
certainly not the Government exclusively. But I'm not
tired. My Ministers are not tired.
BEUTLER: Why is it necessary for you to spend $ 19
million on advertising in this election?
PM: It won't be $ 19 million on advertising. I think
there was some reference that the total cost of the
campaign might be of that order. But that's not just
advertising. BEUTLER: But a fair amount of it will be advertising.
PM: ( inaudible)
BEUTLER: Why do you need to spend that much?
PM: Well, the Opposition will have unlimited financial
support. I think
BEUTLER: You will too.
PM: I wish you were right my friend, I wish you were
right. Not unlimited I can assure you.
BEUTLER: No, but you'll spend more than they will.
PM: I don't know about that. We've got no reason at
this stage to judge that that'll be true. They've
already started. We haven't. I mean
BEUTLER: But why is it necessary?
PM: Would you suggest we don't need to spend any on
advertising? You're saying it's a tight election and
we've got to explain to the Australian people. I mean I
think if we listen to the rest of, y'now, what's gone on
before this you would concede that probably there's a lot
of the Australian people don't yet fully understand and
appreciate why there's been a need to do some of the
things we've done, what are some of the achievements of
the Goverment in a whole range of areas. I don't blame
them for that. If there's been a problem in a full

comprehension, we have to accept some of the blame for
that. Then if that's true then in the campaign we've got
to make sure that people do understand what the
alternative is. I mean I so deeply believe Warwick that
this election is crucial for the future of this country.
It really is going to determine in my judgement what sort
of Australia we take into the 21st Century. If $ 19
million is the figure that needs to be spent to make sure
that the right decision is made well then so be it.
BEUTLER: Andrew Peacock surprised you in 1984 didn't he?
PM: No he didn't surpise me. No he didn't.
BEUTLER: You didn't think he'd do as well as he did.
PM: Well. Were you privy to the polling? I mean I know
what the leads were of the Government and the Opposition
at that time. And there is some suggestion that it was a
massive gap, that we were streets ahead. We never were
streets ahead?
BEUTLER: What's the polling say this time?
PM: That's for me to know and you to find out if you
can. I don't like your chances.

Transcript 7911