TRANSCRIPT OF INTERVIEW WITH JANA WENDT, A CURRENT AFFAIR, 21 MARCH V1990
Period of Service: 11/03/1983 to 20/12/1991
Release Date: 21/03/1990
Release Type: Interview
Transcript ID: 7982
Document: Original Transcript (PDF 258.83 KB)
TRAkNSCRIPT OF INTERVIEW WITH JaNA WENDT, a CURRENT
AFFAIR, 21 MRCH 1990
E 0 E PROOF ONLY
WENDT: Mr Hawke, thank you very much for your time.
PM: Pleasure, Jana.
WENDT: Are we on the brink of a recession?
PM: No. If you use the economists' analysis you have
two quarters of negative growth. Last quarter, the one
before this one just coming up today, 0.9 percent for the
quarter growth, this one, minus 0.2, so we had one
quarter and this quarter is a 0.9 statistical discrepancy
which, when it's rectified could have you in positive
movement. So technically, no, and in terms of the
assessment of the market, no.
WENDT: Would a recession be proof of the failure of your
PM: No. What I'm saying right up till now and which I
continue to say is that we've had a problem of excessive
growth that's why we had to have tight monetary policy
WENDT: OK, but if the recession occurred, if we're in
one now which as the Opposition is saying and as some of
those economists are saying will that be proof of
PM: No economist has said we' re in a recession yet.
What is, is technically you have two quarters of negative
growth, we haven't had that, we've had to slow the
economy down, but what we've had now is a big movement
into more exports and a reduction of imports precisely
what we've got to do to reap what your listeners are
concerned about and that's the external debt.
WENDT: Prime Minister, I want to say what, what I'm
asking you. If we were to strike a recession, would that
be proof of a failure of your policies?
PM: No, if we were to get two quarters of negative
growth and that were sustained it would show, yes, there
is a recession in the technical sense. But what I am
saying is we haven't got there. I don't believe we will
and we've got to slow the economy down anyway. That's
what people want, they want to see our external problem
WENDT: You've just seen a representative of small
business say that around half of Australia's 750,000
small businesses are in real trouble. Do you accept that
that's a result, a direct result, of your policies?
PM: I don't accept that that is accurate. What we've
got is a position where those businesses, over this whole
period of seven years, have shared in this enormous
increase in employment, big increase in profits. They've
been part of that and that, as they've been part of the
growth, and as we've expanded too much as an economy in
the last year, they've had to take their share of the
slowing down. I mean, you can't have it both ways.
WENDT: Yes, but Mr Hawke, it's more serious than that.
You've just seen shop after shop after shop closing down.
That's on an average street in an average suburb in
Australia. PM: Well, the alternative would be this. If you really
wanted to ruin this economy, what we could have done is
to say alright, we'll have easy monetary policy, we'll
just have an even greater binge on consumption. If we'd
allowed that to happen, the economy would have done what
it did at the end of the conservatives' reign. We would
have had the worst recession in 50 years. Now I wasn't
prepared to do that. I've had to take some tough
decisions. WENDT: But are those closures the result of Hawke's
PM: The slowing down of activity is a deliberate
outcome of the fact of a tightened monetary policy. The
alternative was for the whole economy to collapse.
WENDT: But for you, you call it a slowing down of
economic activity and sure that's what it is. For those
people, it's flesh and blood and money and
PM: But what it would have been, it would have been more
than that. It would have been more than that for more
people. If we hadn't had tight monetary policy, then the
economy would have collapsed completely, collapsed
completely. Now what just let me tell you what the,
what the market is saying about what's happened. I mean,
this is the Reuters screen last night, just let me read
this what they're saying is credit market at the end
of the day in anticipation of a further easing in
monetary policy in the next few weeks assuming, this is
what the market said, assuming the Hawke Labor Government
is re-elected at Saturday's federal election, the only
way we're going to get rates down is with the re-election
of the Hawke Government.
WENDT: OK, well you quote to me, I can quote to you. We
approached, as we mentioned in the story, four major
banks. PM: Yes.
WENDT: One economist told us, yes, we are facing a
recession. The other three told us we are in for a hard
landing. PM: Well, that's not the, not the consensus of the
economic profession generally because what they are
saying, the overwhelming majority have said we are in for
a soft landing and the markets are saying, and there it
was that I've quoted from, they are expecting if the
Hawke Government gets re-elected, a lowering of interest
rates. And that's what will happen.
WENDT: Election campaigns are about communicating to the
people who'll be voting for you on Saturday or not voting
for you. Do you think you can make this message plain
that you are giving me to the people who've had to close,
close their businesses?
PM: Well, I hope so, Jana. I mean, it is a reasonably
complex message but the simple fact is, if I can put it
this way to your listeners and not use economic jargon,
we were expanding that rapidly that we were consuming
eight percent increase, we were producing four percent
increase and that gap, we were importing and that was
wiping up our external deficit. We had to slow things
down and these last accounts that are out today show that
we've got it back in to kilter. The increase in
consumption is the same as the increase in production,
but importantly the production now has been channelled
into exports against imports. That's the turnaround.
WENDT: Mr Hawke, it's a happy picture that you paint,
but it contradicts what people are telling us, what I'm
sure you hear in the streets
PM: But Jana, I'm sorry I'm not trying to say I never
have and in my policy speech I made it clear I know
that good Australians have suffered. A lot of them, a
lot of them. Because we've had to slow things down. I'm
not trying to say there are not people out there hurting,
I know that are. But I had to take the tough decision
either we did slow the economy down from its too rapid a
growth, it was just going like that, either I took the
tough which meant there was some pain or, if I hadn't
done that, then we really went in to the sort of
recession which the Liberals gave us just before I came
WENDT: Are you accepting then that you have lost some
people in delivering that message those people who have
had to close the doors of their businesses you've lost
them? PM: Well, I don't know, I guess some of them yes, I
guess some of them. But I also think because I
basically have faith in the Australian people I think
that in the end that people are going to say, on the
24th, OK, Hawkey's made it tough, I understand, a lot of
them are going to say I understand why but they're not
going to like it. But the simple fact is this, and this
is what the market knows that's why they say rates will
come down if Hawke's re-elected that Peacock policy is
a wages explosion and blow the budget surplus, because
he's got seven billion dollars in unfunded promises. If
you have a wages explosion and you blow the budget
surplus then, you do have a repetition of what they
gave Australia in 82/ 83.
WENDT: Mr Hawke, did you back away yesterday from a
suggestion that you'd be able to bring about a two per
cent fall in
PM: No, what I
WENDT: interest rates, did you back away from it
because you knew you couldn't deliver it?
PM: No, what I said at the Press Club today was, I was
asked about it, I said I got into a parenthesis about
John Howard when I'd seen that John Howard has said two
per cent. It would have been wiser on my part if I
hadn't referred to John Howard. I've said consistently,
and I say again now, that when we win we will be able to
go to the Reserve Bank and say all the evidence is of the
slowdown, there should be now a lowering, a further
lowering of prime rates and then that goes into the other
rates, the retail rates. And that's what I've said and,
fortunately, all the industry and the market is saying
that's what will happen provided and they're putting
the proviso on it it will happen if the Hawke
Government is re-elected.
WENDT: Do you think that if people believe that you're
painting an all too rosy picture
PM: No, I'm not trying to do that.
WENDT: Well that is the impression
PM: Well, I mean I've just said..
WENDT: that some people have.
PM: Well, it's a wrong impression. Now look, I have put
it straight to the Australian people. I've said, not
only in this election campaign Jana, I've said it a
number of times and I take this opportunity now of
saying, directly to your viewers that I'm not a masochist
and I'm not a sadist. I don't want to hurt them. I've
been thirty years in public life the whole of my adult
life has been in public life working for Australia and
Australians. I wouldn't want to hurt them, I would never
hurt them deliberately. But I've created, with my
Government, jobs at a rate that have never been created
before five times faster than before and twice as fast
as the rest of the world. That's what we've done we've
got investment at record levels but we went that fast,
that it was creating an external problem. And I've had
to slow things down a bit. And I know, I mean, Jana,
believe me I know, that some people have been hurt in
that process. But the alternative would have been the
collapse of the economy, and while my opponents are
prepared to let that happen, I'm not.
WENDT: Well Mr Hawke, I'm afraid we will have to leave
it there. Thank you for your time tonight.
PM: It's been a pleasure Jana, thank you very much.