I. J PRIME MINISTER
TRANSCRIPT OF NEWS CONFERENCE, PARLIAMENT HOUSE, 6 SEPTEMBER 1990
E 0 E PROOF ONLY
PM: Cabinet tonight has made a number of major threshold decisions
on micro economic reform. Going to telecommunications f irst, the
Cabinet agreed to the introduction of effective competition as
fundamental to any policy change that'll be finally decided. The
Government will regulate effectively to ensure that such competition
delivers the lowest possible prices to consumers and the highest
possible quality of services and the early introduction of new
technologies and community service obligations, particularly to rural
and regional areas and to pensioners, will be guaranteed. Telecom
itself will be retained in full public ownership and in the
implementation of these changes, every attempt will be made to ensure
the maximum participation of Australian industry.
In regard to the airlines, it was agreed the Commonwealth would sell
equity in both Australian Airlines and Qantas and that the extent of
that divestment would be decided by Cabinet before the 24th of
September. We will ensure in this way that the airline's capital
needs are adequately met and obviously in that way, consequently take
pressure off the Budget. As I say, the Cabinet will finalise its
position on these issues before the 24th September, although you will
see that we have, as I say, made major threshold decisions now in
this regard. It was recognised that out of the processes of asset
sale or licence sales, there will be potential for the Government to
tackle high priority national infrastructure projects.
Now, may I just make a couple of general comments about those
decisions and the background to them. I know that it's been a matter
of considerable comment by you all as to the extent of the processes
in which we've been engaged, including the less than perfectly kept
state secret that there are some divisions of opinion and emphasis
amongst Ministers on this subject. I want to make the point that
it's not in any sense surprising that there should be this extensive
debate and these differences because what we're dealing with are
issues which have been of fundamental philosophical importance to the
Labor movement for a very long period of time. The suggestion that
there could be serious change in the Party's position on these issues
has aroused, naturally enough, very considerable discussion, debate,
concern and fairly deeply held differences of opinion in the Party.
The important thing is that the debate has been conducted in a
serious way and there is no doubt that very many people in the Party
have moved from what had previously been quite deeply entrenched
positions and as far as the Government is concerned we've welcomed
those discussions.
We have believed it's appropriate for us at this point to give these
indications of principle as to where we stand. We will take account
of the discussions that will go on in the next week or so, but before
the conference is held, there will be a final indication of the
details of the Government's view in these matters.
JOURNALIST: Prime Minister, what do you mean by effective
competition?
PM: Well, it's a statement that, of principle, there must be
ef fective competition. It is the case that still there would be
differences of opinion as to what constitutes effective competition.
For instance, and I'm not going to debate the issues and I don't
think you're inviting me to, but for instance, some would say that
without network competition you won't have effective competition.
Others say that there are ways of getting effective competition
without going to that point. Now that's still an issue which i's
going to involve some discussion within the Party, so we're not
trying to dodge the issue, we're saying as a principle there must be
effective competition and by the time the Cabinet comes to make its
final decision we'll spell out what we believe is involved in
effective competition.
JOURNALIST: You've talked about equity in Australian Airlines and
Qantas PM: Yes.
JOURNALIST: Do you have a figure on that at this point?
PM: Well, the Cabinet hasn't. I think it would be fair to say that
overwhelmingly Cabinet has a view as to what is appropriate in regard
to Australian and in regard to Qantas, but we're not going to
finalise that position until we've had the opportunity of some
further discussion within the Party, but I can say that there's a
fairly clear view and it wouldn't necessarily be the same for each
airline. JOURNALIST: 49 percent for example?
PM: Well, I think it's at least 49 percent.
JOURNALIST: Prime Minister, if Cabinet takes detailed decisions on
these matters before September 24 and the special Party conference
on that date
PM: It sounds like a hypothetical coming up.
JOURNALIST: Bit of a hypothetical, but should the special Party
conference decide differently, can those Cabinet decisions be
reversed? PM: I would believe that the view that Cabinet comes to would,
because of its merit, be accepted by the Party conference. I
understand and say to my Government colleagues that we have an
obligation to listen to what the Party is saying. It's a bit of a
reciprocal. I mean, they have an obligatio/ n also, I think, to listen
to what the Government is saying and thinking and I am optimistic
that we'll get a mutuality in the process that will mean that the
merit of the decision that's come to by the Government will be
accepted by the Party.
JOURNALIST: Mr Hawke, you said that these were threshold decisions,
but in relation to telecommunications didn't you announce at the
Press Club virtually those same principles yourself as very firm
principles that you were already committed to?
PM: Yes, although that's true to some extent, but I think it's, it
should be noted that we are indicating in the decision that there
will be a sale of some assets involved in the Government position in
Telecom and that, to this point, has not been a position which is
consistent with the Party policy as it stands.
JOURNALIST: But the competition decision really was taken quite a
while ago wasn't it, by you at least?
PM: Well, that's true, but it's also equally true that since I made
my statement to the Press Club that there are significant sections
of the Party who've said they don't agree with that. They've said
there shouldn't be any competition, it should be left as it is and
what the Cabinet has confirmed in its decision tonight is that there
shall be effective competition.
JOURNALIST: decision is in relation to the future of Telecom and
OTC. Are they coming together in a merger?
PM: Well, that hasn't been so decided.
JOURNALIST: Why has there been a delay in decision making?
I understood
PM: Well, that could I just finish in answer to Paul that the
Cabinet will, I think, come to a specific decision on that next week.
In other words, we won't be waiting right up until the eve of the
conference to make that decision.
JOURNALIST: Why couldn't you make it tonight, Mr Hawke?
PM: Because there were good reasons in our consideration not to,
which were not unrelated to the view that there was still room for
some further discussion in that area.
JOURNALIST: ( inaudible)
PM: Beg your pardon?
JOURNALIST: Is one of those reasons the discussions that Minister
Beazley had with the ACTU the other day?
PM: That was one of the elements, one of the elements.
JOURNALIST: So there'll be further talks with the ACTU?
PM: The further talks that will take place, I think, could well
include further discussions with some elements of the ACTU.
JOURNALIST: Foreign ownership, Mr Hawke
PM: Sorry.
JOURNALIST: Foreign ownership.
PM: Yes.
JOURNALIST: Was it discussed in any of the telecommunications or
airlines PM: It didn't, it had some passing discussion in regard to
telecommunications. It was part of the discussion there, but in
regard to the airlines, we didn't go to that in detail. It was
really the very broad discussion that we had there. Although, let
me say this, that in regard to the airlines we talked about that and
it was quite clear that there will be limitations upon the level of
capacity of foreign ownership of Australian airlines.
JOURNALIST: On telecommunications, Prime Minister.
PM: Yes.
JOURNALIST: On telecommunications we haven't got any more detail
tonight than we've had in a long time. Doesn't this make the
Government look paralysed?
PM: Well, I have no doubt that if that's what you think that's what
you'll write. It will be incorrect. We're not paralysed. It was
the point of making the comments I did in my opening remarks. We are
not dealing with some peripheral issue in the affairs of the Labor
Party here. We are dealing with something which, by anyone's
standard who knows anything about the Labor movement, goes to deeply
held issues on which there are very, very profound feelings. We
could have been cavalier about it if you like, and said, alright
we'll just say this is the decision of the Government and say there's
been enough discussion in the Party, that's it. It's been sensible,
in our judgement, to recognise that there's room for further
discussion although what we felt we needed to do was to, as a
Cabinet, indicate certain basic positions of principle. I think will
be of some assistance in helping the process of discussion that will
continue to go on up to and including the conference. Now, if you
don't think that's intelligent, that it's a more intelligent way, a
Ramboish way of saying to the Party, well you've had your turn,
you'ye had enough time to discuss it, here's what we're going to ram
down your throat and that that would not look a position of
paralysis, well you write that if that's your interpretation. But
permit me to say it would be a very inadequate analysis.
S
JOURNALIST: You started walking down this path three
years ago. It's a long time.
PM: Yes, it is a long time. It will mean that when we do
make the decision culminating in the conference that
there will be a fundamental change in the position of the
Australian Labor Party. If I've been responsible for
initiating that, as I believe I have been, if it's taken
three years, so be it. I would simply point out that in
a period of seven and a half years in Government we have,
as I've said before and you've heard me say, undertaken
more micro-economic reform in that period than has ever
been undertaken in any comparable period. Now we're
setting ourselves to go further down that path which
stands in the starkest of contrast to the absolute
paralysis, if I can use that word, of the conservatives
in power who never changed anything.
JOURNALIST: With all proceeds Mr Hawke, will all the
proceeds of the assets be used on infrastructure or
will some be used to pay off our debt? And what
mechanism do you have in mind for bringing that about?
PM: I've made my position quite clear that I don't
believe that it is responsible to say that you can just
get a lump of money from the sale of assets and apply
them to some particular area of expenditure. I believe
that what you are certainly able to do with
responsibility is to use the savings in respect of public
debt interest in this area. It is very likely that out
of the decisions that will be made by the Party there
would be considerable amounts of money which would fit
into that category.
JOURNALIST: Mr Hawke, Mr Beazley has been going around
the Party, presumably with your acting consent, in the
last few weeks promoting that option. Does he still have
your support in that option?
PM: I think you will have seen reference to the fact
that I've expressed views as to possible alternatives to
the model that the Minister has put. I happen to believe
that his proposal would bring in significant competition
and profound changes into the system. I think there are
arguments as to whether an alternative may also have
advantages, some different advantages. But if the
decision in the end is the Beazley model it's my view
that it will involve very very significant and I think
irreversible changes for the Australian economy.
JOURNALIST: Can you indicate whether your own position
is still support for Mr Beazley?
PM: I have no reason to change what I've said and that
is that I think there is room for argument that an
alternative proposal could bring other advantages. But I
recognise that this is an area in which that is clearly
capable of argument. Certainly I know that Mr Beazley
profoundly believes and will so argue that his model is
the best. Now there is still some further discussion to
be had on that but I want to make it quite clear that if
out of those discussions it is in fact the model that's
been proposed by Mr Beazley that is the one that is
adopted, I firmly believe that that would involve very
significant improvements for Australia in that it would
mean real competition introduced into the
telecommunications industry.
JOURNALIST: Do you think it would have been in
retrospect better to have had this Cabinet discussion
started the process rather than when Mr Beazley had gone
this far with the Party?
PM: Well you could perhaps argue that. But I don't have
a strong feeling about that. It was inevitable, if you
go back to what I said at the beginning of this
conference, you had to know that you were dealing with
S issues of very very deep concern in which there were
going to be profound differences of opinion. It would
have been an exercise in self-delusion if you would have
thought that simply by adopting some particular technique
of discussion at the beginning you were going to sweep
that under the table. There is no way, whatever your
technique that you adopted, that you were going to be
able to avoid first of all a conference. Because you
couldn't have changes without a conference. If you think
that you're going to have a special conference of the
Labor Party and wave some magic wand and in the period
between making the decision have the special conference
and the time of that special conference you weren't going
to have profound discussions within the Party, I mean
you're deluding yourself. You know nothing about the
Party. JOURNALIST: You said that you wanted to keep Telecom,
Cabinet wanted to keep Telecom in full public ownership.
S Are there any aspects of Telecom, assets of Telecom which
could be sold off, and if so, how? And what has Cabinet
decided on who should own Aussat and OTC?
PM: I would think that you could say that there is I
think within the Party generally the question of Aussat
is not really an issue about it being disposed of. There
is still some debate in certain sections of the Party in
regard to OTC.
JOURNALIST: Prime Minister, could I clarify the position
of the airlines? I'm not sure what you meant. Has
Cabinet made a decision about the proportion of
privatisation and
PM: No. The exact words Laurie. Cabinet agrees that
the Commonwealth should sell ordinary voting shares in
Australian Airlines Limited and Qantas Airways Limited.
The extent of this devestment to be determined before the
24th of September.
JOURNALIST: Mr Hawke, do you expect Mr Keating to push
on with his option, and should he?
PM: Well I think that within the decision that's been
made it will be open for anyone, Paul or any others who
may have a different version or a different emphasis, to
do that. When the Cabinet makes its decision next week
on form then all Cabinet Ministers will be bound by it.
JOURNALIST: You talked about competition. Does that in
your view mean competition on the basic network?
PM: That's the view I have.
JOURNALIST: Can you clarify the process for the Party
resolution as far as the National Executive is
concerned and will the final resolution still give
Cabinet some flexibility?
PM: I believe from the discussions I've had today that
you won't have a firm detailed decision from the National
Executive tomorrow. Rather you'd have a form of decision
I would think and expect that it was broad enough to say
that there would need to be changes in the Party platform
to achieve certain broad positions and then leaving the
detail of that still to be the subject of the sort of
discussion for instance that we'll be having in the
Cabinet and other sections of the Party will be having
before the conference.
JOURNALIST: Mr Hawke, Martin Ferguson today made some
statements basically embracing the Beazley option. How
important will that be in your view in terms of the
internal factional debate in the ALP?
PM: It will have different importance for different
factions and for different parts of different factions.
JOURNALIST: ( inaudible)
PM: I think the answer to your question is that
different parts of the Left would attach different
emphasis to the views of Martin Ferguson. I don't think
that's a particularly clever answer. I think it's just
the correct answer.
JOURNALIST: How soon will people get cheaper airfares or
cheaper phone calls out of this
PM: I think the question of the level of airfares will
be in part a function of the decision that's already
taken which is going to with effect with the end of
the two airline system. In fact you're already starting
the see the effect of that. So the disentanglement of
causes in reductions in airfares will be a bit difficult
to take.
JOURNALIST: ( inaudible)
PM: I would think quite quickly. I mean you would have
to obviously work out a tender process and we would
clearly be wanting to do that as quickly as possible. I
would think it would be, I would hope certainly it would
be within this financial year.
JOURNALIST: Does that apply telecommunications?
PM: No, that was in respect of I thought your question
was in regard to airlines there.
JOURNALIST: Well what about telecommunications?
PM: It's conceivable that it might take somewhat longer
in regard to Telecom. But I would need to be advised on
that. JOURNALIST: When you said competition means competition
in the basic network, is that your view?
PM: I answered that question there. I was asked
specifically the question then, just a moment ago, did I
think that it meant that. My answer to that was yes. If
you'd noted my earliest answer, I said that for some
people in the Party it means network competition. Others
believe that you can have effective competition with
something less than that. I've answered what I think.
JOURNALIST: So what I wanted clarified was the Cabinet
decision in favour of competition refers to also those
people who believe you don't need network competition.
PM: Yes I've already said that in my earlier answer.
JOURNALIST: Prime Minister, on the proceeds you've said
that Cabinet will make detailed decisions before the
24th. Will it go to Caucus before the 24th as well?
PM: I would think not. I would think not. But I
haven't specifically addressed myself to that. I don't
know that there's any expectation that that would be the
case. But I wouldn't think so.
JOURNALIST: concern Mr Hawke is the privatisation of
OTC one of the issues still before the Cabinet?
PM: Yes, that is something which is in a sense still on
the table. That will be determined next week.
JOURNALIST: Do you think the Party might be prepared to
go that far?
PM: Some parts of the Party would.
JOURNALIST: How concerned are you at the divisions and
how confident are you that consensus can be reached by
the 24th?
PM: I meant what I said earlier Michael that I'm not in
any sense surprised at the divisions that have
transpired. It would have been an exercise in ignorance
for anyone to expect that you could go to the issue of
the possible privatisation of Government-owned airlines
or the introduction of competition into Telecom without
having significant debate and division within the Party.
Just impossible. That was what was going to happen. The
fact is we've been prepared to face up to that, have
fairly prolonged processes which are inevitable. Once
the conference was set that was going to happen in the
period up until the conference. But as I've said before,
the important point is this, that at the end of that
process the political debate, the real political debate
will be set. And it will be the debate between the
Australian Labor Party which believes, in the area of
Telecom, in retaining a fully-fledged Telecom facility
within full public ownership. That will be the position
of the Australian Labor Party. Against that you will
have the conservatives of this country who would dispose
of the totality of the telecommunication industry to the
private sector. That will be the debate. It will be a
clear debate and it will be a debate that we will win.
JOURNALIST: PM, you said that the process looked
inelegant, I think were your words, once before
PM: Sure, sure.
JOURNALIST: Do you agree that it's looking even
distinctly messy at the moment?
PM: No. I mean I'm sure that that's the way you want to
9 write it. But I just go back, I mean you seem to want me
to say it five times. I must sound good in saying it so
I'll say it the fifth time. It was inevitable. You
cannot go to an issue, a sacred issue in the Labor Party
like the ownership, the public ownership of its assets
and the airline industry and the question of uncompeted
against Telecom, you can't go to those issues if you know
anything about the facts of political life and expect
that there will be other than pretty vigorous debate and
argumentation. Anyone who thought that you weren't going
to have that simply doesn't know their politics and
doesn't know their Labor Party. I just come back to the
point I made in which and which I hope I walk out
now, that having gone through what you might want to
describe as our mess or our trauma or our exhilarating
experience, whichever way you want to look at it and
however you want to describe it, what the realities will
be at the end, we will have made up our mind and it will
be in this telecommunications area unequivocally in
favour or a fully publicly-owned telecommunication
facility operating across the spectrum internationally
and domestically. And against that the conservatives who
want to throw it all over to the private sector. I
repeat, that will be the debate and it's the one we will
win. ends