. M. s PRESS OFFICE CANB TEL: 61-062-732923 19,10,90 11: 45 No. 003 P. ui
PRIME MINISTER j
TRANSCRIPT OF DOORSTOP, WILLOUGHBY LEISURE CENTRE#
WILLOUGHBY, 19 OCTOBER 1990
2 9 OE PROOF ONLY
JOURNALIST: Mr Hawke are we in a recession?
PM;, Well, technically, no and I'm not trying to avoid your
question. The economists' definition of a receasion is when
you have two quarters in succession of negatve growth.
We're not in that position but I don't avoid the fact that
there are economic problems for a lot of people. But as
I've explained in the Parliament as I think is understood by
the people. We have not deliberately tried to create a
hardship for Australia but there's a simple statistio which
must be understood it's not complex economio jargon. in
the last year we increated, as a notion, we increased our
expenditure by 8 per cent. We only increased our production
by four per oent. We made up for that four per O* nt gap by
just borrowing from overseas people from their savings to
finance our extra consumption. Now you can't go on doing
that. So we had to slow down the level of Australia's
activity so we could cope because if we hadn't done it
ourselves the rest of the world would have done it for us in
a very vioious way. Now I think people know Bob Hawke over
all these yeare. He's not one who trie to hurt. He trie
to help. We had to do that because if we hadn't done that
the world would have done much worse things. So we've
slowed things down and now we're reaching a point where our
Imports are tolling and our production Is greater then our
consumption. Now
JOURNALIST; Prime Minister
PM: Now just a minute. NOw that's what had to be achieved. We've done that and I think therefore as we go into 91 we will see the recovery take place in a sustainable way.
JOURNALIST: Prime Minister last night the Australtan dollar fell through US77 cents, Will this Impaot on fuel prices and therefore the CPI?
PM: It's Impossible to predict because what's happened to
international oil prices is quite remarkable. Let me just give you a couple of figures which will show what I mean.
Before the Gulf crisis the price of oil was US$ 20 a barrel.
it moved gradually up and then it jumped to over 840 a barrel between a week and two weeks ago. Now it's down to about 36 and we can't make any decisions at a point where
it's moving So unpredictably and when we're not sure what's going to happen in the Gulf. What we all hope in that the
crisis will soon end. In those circumstances, you know, we
will get back to normality in petrol pricing. It just would
be irresponsible to make a decision at this point on that
issue.
JOURNALIST: How strong will the recovery be, Mr Hawke?
PM: What we've got to do for some time, as a nation, is to make sure that our increase in production is above our
increase in consumption. But I think we're capable of doing
that. We haven't had the collapse in the employment market
that oharacterisad the 82-83 period. I want to see that we
can continue the reoord employment growth. Not necessarily
S at the same rate. In this period of office we've created
1.6 million new jobs. Ninety per cent of them in the
private sector. That's been e rate of job creation more
than twice as fast as the rest of the world. That's been
great for Australia and I want to see us retaining
employment growth as we go into 91 and through 92. 1 think
we'll do that but we mustn't as a nation think again that we
can just go on consuming, through private consumption and
investment, we can't consume more than we produce. That's a
discipline as a nation that we have to keep upon ourselves.
JOURNALIST: inaudible.
PMt Just a minute. One at a time. I'll get to yours.
JOURNALIST What are your expectations though in terms of growth and employment growth in the next six months?
P14: We think that the GDP for 91 will be positive. As to
Just precisely what the level of growth will be you just
can't now, in these volatile oircumstencea, put a precise
figure upon it because since we framed the budget you've got
the Gulf crisis-. That does introduce uncertainties. We
believe that growth will be positive for the year and
employment growth with It will be positive. We have saoid
that there might be some increase in unemployment but that
employment will remain positive. You had a question here.
JOURNALIST: The recovery, Prime Minister, are you saying it will happen in the new year or at the beginning of the next financial year'?
P14: I'm saying that it will happen as we go into 91. It will happen during 91 in my judgment.
JOURNALIST: Well that appoers to be at odds with what you maid to the Business Council last night
PM: I know what I said. I mean I was the one who said it. You'll see that it's not at odds.
JOURNALIST: Ig the Deputy Governor of the Reserve Bank wrong when he says parts of the economy are in a deep recession?
PM: No. Of course he's not. I mean the economy is made up of parts and if you look at the rural sector there are parts of the rural sector which are In very deep problems. mean you take the wool industry and the wheat sector. They are
in very deep problems. Sacause In those circumstances, overwhelmingly, because of the collapse of international prices. No-one can deny it. We've asserted it. We've met with representatives of the National Farmers Federation and
the Grains Council. We tecognise, for instance, that those sectors are in v ary deep problems.
JOURNALIST: 1f we're not trusting though the two terms of negative growth as a definition for recession, I mean, how should we be defining it then?
PM I didn't * e8y you don't aooept that. Where did you get that question from?
JOURNALIST: Why ore you and the Treasurer reluctant to use the word recession?
PM: It's not a question of reluctance. I mean, I've got up in the Parliamenr] t and said I don't resist the definition. The definition which is accepted by the economists. I mean I don't run the economics profession. That In the technical definition of two successive terms of negative growth. That hasn't ooourred. Z don't hide behind that technical definition to say that no we haven't got problems. We have and I've said that in the Parliament. But the point I'm making, and which has got to be understood, is if we hadn't taken the action deliberately that we have with tight fiscal policy, tight wages polioy and tight monetary policy to slow the eoonomy down, as we now have, then the rest of the world would have imposed a much worse solution upon us.
ends