PRIME MINISTER
TRANSCRIPT OF NEWS CONFERENCE, SIR CHARLES GAIRDNER
HOSPITAL, NEDLANDS, PERTH 1 MARCH 1990
E OE PROOF ONLY
JOURNALIST: exploited one of our sporting heroes,
Allan Border, for your own political gain.
PM: No, that is
( CAMERMAN mikes down please. Ask the question
again) PM: Down a bit? Now, are you people complaining about
the microphones? Now, why, this is a free and democratic
They can put their microphones where they like. Now I
insist on their right to put their microphones where they
like. JOURNALIST: quite right that Allan Border and
the Order of Australia has been used for political
purposes? PM: This is an absolute nonsense, the determination of
who gets the Australia award is with the council of the
Order of Australia. They make the decision as they did
in this case and it was announced by the Governor-
0 Gteenaemr arle. t urWnei nhga, d tah eproes itwieoren wthiecrkee r-yotua peh adw eltchoem eAsu stfrora litahnem
everywhere, the Australian community was overjoyed about
their success, there was going to be a reception for them
in Melbourne. The judgement was made that it would be
appropriate if it were acceptable to the council for the
announcement about the Order to Allan Border to be able
to be done then. So the decision was made by the council
and I would regard it as very surprising if the people of
Australia would think it inappropriate that the captain
of that Ashes winning team should not be given that
Order. JOURNALIST: But the fact that it was you yourself who
nominated Allan Border and that the nomination came
before the statutory time limit of five years from his
previous honour?
PM: The decision as I said is made by the council. You
refer to the nomination, but I can make no decision. The
decision can only be made by the council and it was. I
must say I am amused by this confected indignation that
here was Australia wanting to welcome, as it did with
ticker-tape receptions and the dinner in Melbourne, this
victorious Australian team and its captain and that an
award to him is somehow or another, properly made I might
say by the council, now being regarded as inappropriate.
That surprises me.
JOURNALIST: Do you think the office of Governor-General
has been a bit sensitive on this one?
PM: The office of the Governor-General? I don't know
what's happened in the office of the Governor-General.
JOURNALIST: Should we go back to the days of the imperial
honours when there was no political involvement?
PM: Well, I think Australians appreciate what Labor has
done and that is to get away from the imperial system,
have Australian honours. And I would think Australians
generally would say that if anyone was entitled last year
to get an honour, it was Allan Border, and that the
Australia Council having made that decision it was
appropriate that he should get it at the time he did.
JOURNALIST: Mr Hawke, the size of the balance of
payments? PM: I'm glad we are getting our priorities, with Allan
Border now the balance of payments. Yes?
JOURNALIST: $ 1.9 billion, is larger than, I think,
obviously you'd hoped for. How worrying is it? good
news of last month
PM: I don't think it is worrying. It's within the range
of expectations. It's got, of course, that over $ 300
million of Qantas aeroplanes in it. That would bring it
down to just over one and a half billion. The trends of
imports are down which is the way we want it, the trends
of imports are down. It's very interesting to note that
if you look at manufactured exports in the last three
months compared with the same three months period twelve
months ago, manufactured exports up 50 per cent. And
it's also interesting to note, Peter, that there's been a
significant downward revision of earlier figures which
gives us a reasonable chance of bringing in the figure
for 1989/ 90 at the figure we projected at Budget time.
JOURNALIST: Sir, aren't imports up on a seasonally
adjusted basis?
PM: The I'm talking about the, that's one month. I'm
talking about the trend in the period. And the trend as
has been indicated and accepted by the market is down.
JOURNALIST: Mr Hawke, do you think the current account
deficit can be brought back to about two and a half per
cent of GDP in three years?
PM: I think it's conceivable and achievable that at the
end of our next term we will be able to get the external
position into a sustainable level.
JOURNALIST: Mr Hawke, does it mean that interest rates
may have to stay higher than you had previously expected?
PM: No, the figures are consistent with the processes
initiated at the beginning of this year. And I don't
think there is any reason to believe otherwise. The
figures are consistent with the slowing down of activity
and it was that slowing down of activity which was the
necessary underpinning of what was happening in the
easing of monetary policy.
JOURNALIST: the decision of the High Court today
disallowing the stamp allowance, or at least, finding it
invalid in law, an embarrassment for the Government?
PM: No, not an embarrassment. But let me just give the
background and then the immediate comment. The
background, of course, was that we thought it appropriate
that members of Parliament should have the opportunity of
communicating regularly with their constituents and this
was on the basis of allowing them to communicate with
each constituent at least once a year. If you look at the
situation overseas in the United States, other countries,
they have a much larger allowance which is, as I say, on
the basis of allowing a representative in the Parliament
to communicate with his constituent, his or her
constituent. And that was the basis of the decision.
Now, let me say that the decision that we took was made
on the best advice available to us from the Attorney-
General. That's the basis upon which you must make a
decision and we made it on that basis. And I would, I
would believe that it was an appropriate decision, it was
certainly one taken in good faith. Whether people have
used amounts in excess of the $ 9000 in question, then I
don't think there would be a large number that would have
done that. If they have I guess they have probably been
on both sides of politics and that situation would have
to be looked at.
JOURNALIST: They won't pay the money back then, Prime
Minister? PM: We are examining the decision. I mean I won't give
you an off the cuff legal decision on what the
implications of that are. Obviously, the decision will
be examined and the right thing will be done, whatever
the right thing is.
JOURNALIST: If necessary, would the Government pay the
money for them?
PM: Well, I repeat, we will look at the decision. I just
don't know what the implications are for instance of
beyond that mid-November point in regard to which the
High Court made its decision. I don't know the
implications of any expenditures after that period.
JOURNALIST: Mr Hawke, the Liberals appear to feel they
are onto a winner with the capital gains tax issue. They
have got an ad going to air tonight with Mr Howard in it,
selling their proposal. Do you think this is a problem
for the Government?
PM: No, I'm very very confident that the capital gains
issue will be a massive vote-loser for the Opposition.
One question is very interesting too, on this, I'll come
to the Howard ad in a moment. One question is very
interesting on this. In 1987 Dr Hewson indicated he was
in favour of a capital gains tax. He said he thought all
forms of income should be taxed at approximately the same
rate. He was in favour in 1987 of capital gains. It
would be very interesting to get an explanation from Dr
Hewson as to why he has changed his position. Now, you
talk about Mr Howard being the one who is going to do the
ads. We note from the media today that the Liberal's
advertising is not going to feature Mr Peacock, they are
going to feature other people. Well, that's fascinating,
but perhaps understandable. I wonder whether when they
get Mr Howard in they might sort of do an advertisement
from him on the quality of the leadership of the Liberal
Party. But, fascinating to read today in the paper that
Mr Howard was asked if he believed Mr Peacock deserved to
be Prime Minister and look at this ringing endorsement
that Mr Howard gave when he was asked whether Mr Peacock
deserved to be Prime Minister and I quote Mr Howard on
that subject: " I want the Liberal Party to win. I
believe we deserve to win. He's the leader and in those
circumstances, yes." What a fascinating thorough-going,
ringing endorsement by Mr Howard of Mr Peacock's
leadership. JOURNALIST: Are you disappointed with the outcome of the
Cambodian peace talks?
PM: Well, one, it would have been too much to expect that
the matter was going to be resolved there. But, I think
what you've seen now is a very, very widespread
endorsement of the Australian plan. It's the basis now
for a resolution of the future but of course, you've got
to get the position where the Khmer Rouge in particular
is going to be amenable to this approach. But everyone, I
mean, the ASEAN countries, and the other countries
outside the region who are involved, the U. S. and France
have been unanimous in praising Australia for our
imagination and our initiative. And I only hope that
work will continue to go on now on the basis of the
Australian plan which can lead to a resolution of that.
JOURNALIST: Do you think the Chinese stance is a problem?
PM: Well, it is very hard to know exactly at this point
where they are. There is some intelligence which would
suggest that they have been trying to exercise a
restraining influence upon the Khmer Rouge and we hope
that that's the case. But this is something of which you
certainly don't despair and I think all Australians
irrespective of their party affiliations should be proud
of the initiative that Australia has taken. It is the
basis and accepted as the basis for the resolution of
this tragedy.
JOURNALIST: The Opposition is saying millions of
Australians are affected by the capital gains tax through
their superannuation.
PM: Well, yes, some of them are saying it and some
aren't. I mean, Mr Peacock of course gave a whole lot of
figures which were inaccurate. I am just trying to find a
reference to Dr Hewson, here we have it. This was on this
point. Asked about the impact of the capital gains tax on
super funds, Dr Hewson replied " I don't know how big an
effect, we haven't got a year's tax data yet, there are
no data, there is no data on which we can rest our case."
I mean out of Dr Hewson's own mouth, they have no data on
which to rest their allegations, and their allegations
are obviously untrue. If you look at today's press you
have a representative of the superannuation industry
saying that the tax is virtually totally offset by the
processes we have allowed to them in regard to dividend
imputation. JOURNALIST: There was a $ 7 billion increase in foreign
debt in the latest figures released today. Are you
worried about that all?
PM: Well no-one is complacent Niki about foreign debt,
no-one is complacent about it. But we believe that the
fundamental policies are in place now. Let me make these
points. The first of course is as far as the
Commonwealth is concerned, we owe no debt. We are net
international creditors. And remember how that's
happened. The other mob put us into debt as a
Commonwealth Government by their incapacity to run the
business of the government of Australia. We've done it
better, we've turned that deficit into surplus and as a
result we owe no debt. Now the second point to make is
that the debt has been predominantly, almost two thirds,
the private sector. As I've said before, that private
sector debt has to be looked at in terms of the other
side of the coin, that that represents in many instances
investment which is going to constitute a significant
future inflow of foreign income. The third point to make
is that we've got the basic policies in place to turn
around the inflow of imports. The trend is downwards.
We will see in the future I believe a continuation of
that reduction in imports and a growth in our export
capacity. So those are the fundamentals. If you had a
situation where the Government had not taken action to
deal with these issues, yes you would be concerned. But
we're aware of the issue and we've taken the action.
JOURNALIST: Mr Hawke, you've criticised Mr Peacock over
doorstops. Is it just a coincidence that the day when we
have the balance of payment and the debt figures you're
having a doorstop and not a press conference?
PM: It certainly is a coincidence. I mean have you got
any further questions you'd like to ask on the balance of
payments? I mean has there been any attempt here to have
other than a full press conference? I'm not quite sure
that the difference between me standing behind a podium
and standing here in these very congenial surroundings is
limiting your capacity to ask me questions.
JOURNALIST: Well on the balance of payments Mr Hawke you
were saying earlier you thought that considerable
progress would be made over your next term if you're reelected.
Can you quantify that in any way? Can you give
any target as to what your goal would be?
PM: You've got to I'm not going to put a precise
figure on it now. But you've got to be in a position
where you've stabilised the debt so that you've shown by
what's happening to the level of imports and by your
export capacity that your level of debt is capable of
being serviced without imposing a growing impost upon the
economy. That sort of figure I believe can be, that sort
of position can be I believe achieved by the end of our
next term in government.
JOURNALIST: Do you accept that given that three year
timetable we would at some stage have to go into trade
surplus over the next three years?
PM: I would want to look at the exact figures that would
be involved in that project That is possible.
JOURNALIST: The three year target's a lot more
optimistic than the Government's own EPAC forecast.
PM: They've thought by roughly the middle of the decade.
I think I draw a lot of comfort from the very
significant improvement in our area of manufactured
exports. And I think that that study of the Bureau of
Industry Economics yesterday repays a fair bit of study
because they are saying there, the Bureau of Industry
Economics, is saying that what we have seen in the last
seven years is a very significant restructuring of
Australian industry. I mean this is an independent body
saying that what's happened, the price we've paid if you
like, with restraint, has been something that's
worthwhile. In other words you're seeing an Australian
economy which is now very very competitive. The
proportion of our commodities in our total exports is
declining. I think that gives us very good reason to be
confident that if we keep along this path we're going to
be able to very considerably extend the range of our
manufactured exports and also very importantly the range
of our exports of services which have grown enormously in
this period. I think the figure that I recall is that
where manufactured exports have grown in the last four
years by 54% the figure for the growth in export services
is 69.4%. It's a very very significant increase.
JOURNALIST: So you're saying the outlook has in fact
improved since EPAC last did its forecast?
PM: No, I'm saying that the outlook has improved under
this period of government. I would hope that by the end
of our next term of government that we'd all be saying
that the position is very very much stronger than it was.
It may take another year to reach that point of
0 osnt atailsl titchael obsjteacbtiliivtey . e vidBeuntc et, h e isi mtphoartt anast apno inetc onIo mthyi nwke,
are moving substantially in the right direction. The
trend of imports is down. Most importantly the economy
is being restructured to remove that overwhelming
reliance on commodity exports. I mean that's what leaves
you so open to very big fluctuations in commodity prices.
In our period of government you've seen it. I mean
you've had that loss of $ 11 billion of national income
there in ' 85-86 which had its own set of difficulties.
Then you know what happened in this most recent period
where we had the turnaround improvement in the terms of
trade, the surge of export income coming from the
improvement in commodity prices which imposed those
massive increased demand pressures on us. So what we've
got to be working towards and I believe what the Bureau
of Industry Economics statement of yesterday indicates is
happening, is that the structure is changing. We are not
so reliant upon primary commodities. And we will be able
0 tcoh ancgoenst intuhaet toa red o tatkhiantg asp laac er. e sulIt moefa n thwee afruennd'atm enntowal
getting a greater proportion of manufactured exports,
we' re not now getting a massive increase in the exports
of services through chance. It's happening through a
whole range of basic decisions that this Government has
implemented. JOURNALIST: Do you think that the unexpected rise in the
debt figures today will give an added political edge to
the debt summit starting this evening in Melbourne?
PM: I really hadn't thought much about the debt summit.
JOURNALIST: criticised the changes that you
announced yesterday. Do you still believe that you can
sell them to exporters and what do you think of the way
the press conference ended yesterday?
PM: The situation is obviously one, where you change a
scheme as we have in regard to the Export Market
8
Development Grant Scheme which lifts some thresholds,
some people who operated within lower thresholds in the
past are going to be disappointed. That's so obvious it
hardly needs any elaboration. But I firmly believe that
the net increase in expenditure by the governments
involved in taking the two schemes together, what we're
doing in regard to the Export Market Development Scheme
and with our new scheme, that net increase is better
targeted, it's conceptually more sensible
JOURNALIST: What is the net increase Mr Hawke?
PM: I haven't got the figures in front of me. You know,
you've got them.
JOURNALIST: Well we don't actually. There were about
four different figures given yesterday.
PM: I am very good at figures. I haven't got those with
me but the fact is there's a net increase I think of
about $ 16 million in the first year. It's that sort of
figure in the first year. Over the years in question it
involves a net increase in outlays. But you'll always,
in that situation where some people have been able to use
an existing scheme, with lower thresholds and make claims
for some sort of expenditures, if they can't do that now
they're going to be upset. But I think the new scheme
which is I think well conceived and well targeted,
together with a continuation of the Export Market
Development Grant Scheme will be in net terms an
improvement for Australia. As to the second part of your
question I've obviously got no comment. I hadn't
forgotten it Niki.
JOURNALIST: Mr Hawke, in 22 pages of documents, 22 pages
in relation to that announcement yesterday, why was it
not clearly said that there was a cut in that scheme?
PM: The proposition that was put that there was a cut
overall in the press conference wasn't right. The
minister was mistaken about there being a net cut. There
wasn't. JOURNALIST: But why didn't the documents say there was
going to be a cut in the existing scheme?
PM: In the Export Market Development Grant Scheme? I
don't know. I don't draw up every word of these
documents. But it was spelt out if you look at the
document it was spelt out that there was an increase in
the threshold and so on. I don't think that there's any
problem about the general position that we're putting,
and that is that importantly we had a new scheme coming
in which was going to be targeted in a more effective
way. I don't feel any problem about that.
JOURNALIST: Don't you think you ought to relaunch it