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Transcripts from the Prime Ministers of Australia

Transcript 8192


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: 09/11/1990

Release Type: Interview

Transcript ID: 8192

CARLTONs With-the opinion polls down for the Government,. the
economy in pain, the Prime Minister has been telling his
Ministers and his Party to get out and communicate, to start
selling the Government's massage to get it across to Australians
and I quo.., perhaps, as part of that process, Mr. Hawke joins-us
today on the line from Canberra. Good morning.
HAWKEs Good morning, Mike.
CARLTONs Thanks f or your time. When are you going to use the
word and concede that the country's in recession.
HAWKEi Well that's a pretty sick sort of question after I've
answered it about three or four times in the Parliament. I've
said simply this Mike, that all I have been saying is that as far
as the economics profession is concerned, the technical
identification of recession is when you have two successive
quarters of negative economic growth. That' s what the economic
profession says. That hasn't arisen yet, but I've said and I may
to your listeniers, that doesn't mean that I, in any sense, am
trying to. avoid the fact that as far as very, very many
Australians are concerned, they are being hurt. That is, that
when you slow down the level of activity as we had to do, that
means, by defiLnition, that some businesses and individuals are
going to be hurt and a lot of them very severely, so there's no
point in having fun about the economist's technical definition of
recession. I don't nail my particular flag to that mast. I'm
simply saying that's what the economist's definition is, but it
doesn't mean people aren't already being hurt, they are.
CARLTON: Yeah, but the view from Sydney..... we believe up here,
everyone will say that Canberra is out of touch, that it is a
recession, people are using the word.
HAWKE: People are entitled to use the word. I mean, the man and
the woman in the street is not a professional economist, nor
should they ben expected to be bound by the economist's technical
jargon and technical definition. I have no problem at all if
people say, " We're in recession" and if that's how they feel

and that's how they're being affected, they are -entitled to use
the word. The professional economists haven't got a monopoly of
the word and what, I'm saying to your listeners is this, that the
position with which the Government had to deal, Mike, was one in
which in the previous year, we, as a community, had increased our
expenditure, all of us, by 8% and we'd only increased our production
by 4% and you couldn't allow that to go on because that's
the way to bankruptcy and so you had to Blow the level of
activity down. Wie've done that by tight fiscal policy and tight
monetary policy and tight. wages policy. Now, when you do that,
a. you had to do it, then obviously some people are going to be
hurt, but the point is this, that if we hadn't done that in a
controlled way, out of which, next year we will come into a path
of sustainable economic growth, then the rest of the world would
have imposed a solution on us that would have been infinitely
worse than what we've got.
CA. RLTONs Alright, but rightly or wrongly, there seems to be a
credibility gap. While you talk about a downturn or pain or a
slowdown and so -on, they're talking recession here. Could that
be why your opinion poll rating's down, the credibility gap?
HAWKE: I think -the simple fact is that when you make decisions
as we've had to d~ o as I've just explained to you as we'v, had
to do that, it would have been irresponsible not to do it and
when people get hurt, they don't give you ticks of approval and I
can understand, : r don't have a feeling of disillusionment or of
anger at the fact: that people are marking us down at the moment.
You'd expect that, when they are suffering hurt. You can't expect
people to understand all the ramifications that if we hadn't done
this, then it would have been very, very much worse. I'm not
expecting them to embrace all that understanding and I accept
they are marking us down at the moment. The other side of the
coin, Mike, of course, is, as I've said and in politics, it's not
only the judgment; about yourself, they look at the other side and
there is a sense of community relief almost that the Libs have
. gHot oridw Poeafa cotchkra-t adnodu t, rtahge reeo uwsa s htuhridsy sgeunsrdey o fo fp eHnto-wuapr d, r elPieeafcso. c Tkh, at
particular stupid saga's finished and there's someone else there
and the present Leader of the Opposition is not doing or saying
anything or when he doe say something, it's quickly exposed to
be ridiculous anti then he says " Oh, well I didn't really mean it,
it was just an idea to start debate", but he's had a bit of a
positive run because he's come after the end of the stupid hurdy
gurdy. CAR~ LTON: Alright. There seem to be, though, some doubters in
your own Party don't there? I mean, Bob Carr, for example says
" This is the worse recession since World War 2.1."
HAWKE: Yeah and Bob Carr is wrong and is manifestly wrong.
Take what the Weiitpac bank said I haven't got a publication in

front of me but Just a few weeks ago they just made it quite
clear that this is not as bad as 1982. You've Just got to look
at the figures. In 1982/ 83 you had five successive quarters of
falling employment five successive quarters. You had bank
rates peaking at about 221, far above what they did here and you
had a wages explosion of 17t. You've got wages under control
here, so whether you look at the level of wages, whether you look
at the level 0f investments, the level of employment, what is
happening now has not reached the depth of 1982/ 83. But that
doesn't make me complacent and say " Oh well, it's not as bad as
the Libs brought about in 82/ 83". The only cause that we have
and the basic cause that we have f or optimism as a community is
that the fundamen~ tals are different now. Then, they didn't have
a wages policy, you had a wages explosion, now, we've got a wages
policy. Then, you didn't have any programme for restructuring
the Australian economy, now, we have. We've got the greatest
programme of reform that the country's ever seen and this economy
Sis going to emerge basically stronger when we, as a community,
Whave gone through the necessary pain that we must do to
accommodate to -the fact that we couldn't keep spending 8% more
and producing 4% more.
CARLTON: Right. There seem to be some doubt as to, in your own
Cabinet, John Dawkins, for example, said the other day: " We have
a third world economy, we should be putting financial muscle
behind our export as a change in policy."
HAKM Well, I don't agree with Dawkins that we've got a third
world economy but where John Dawkins is right is that we do in
Australia have very special problems that some third world
economies have, but we've got strength that they don't and
characteristics that they don't, but the problem that we have is
that this is a -very exposed economy because we rely so much f or
our export incoue upon fluctuating commodity prices, that is, for
wheat, wool and so on and what we dig up out of the ground as
well, Mike, and we have no control over those prices. Then large
economies which have a very, very large manufacturing base, in a
Ssense, can determine their own export income to a very large
extent. We can't and in that sense, we're exposed, but, of
course, we have very fundamental strength that put us, you know,
way above other economies and the fact, Mike, is-that in the last
seven and a half years, we, in this country, never forget it.
we, in this country, have had a rate of employment growth twice
as f ast as the rest of the world and you can'It get that unless
you've got sound economic policy and the basic structure being
developed in the right way.
CARLTON: Alright. John Dawkins though, seemed to say-. " We've
had enough of thfe level playing field though, it's about time we
tilted things our way."

HAWKE: Yeah, I understand the argument and the fact, of course,
this Government hasn't had some ideological obsession about
playing fields and levels. We have maid this, however. We, that
is Australia, has been in the forefront out there in the Uraguay
round and, without getting technical about it, that's the whole
international discussion that's going on under the GATT to try
and bring about a freer international trading system and that's
particularly important for Australia because we have the world's
most efficient producers of agriculture products. our farmers
are the best, but they are being virtually raped on the
international markets by the practices, the restrictive
practices, of the Europeans in particular, and the Americans
reacting against. the Europeans and they have these export
subsidies and producer subsidies which are ruining our farmers.
Now it's very difficult for us to be out there in that GATT round
at the moment, which is coming to an end now, arguing for
countries to rip down these export subsidies, so that our farmers
can get a fair go and at the same time, be internally embracing a
9 dif ferent approach. That doesn'It mean, Mike, however, that
within our approach to government, we don't intervene. For
instance, when we~ came to office in ' 83, you know that the steel
industry was on the verge of closing down. We said ' not on your
nellie's we introduced the steel plan and now we have a steel
industry, which is not only producing for Australia, but is
producing massively for exports. We did the same in the
shipbuilding industry, so we're not averse to constructive intervention,
but essentially what Australia needs is a manufacturing
sector which is exposed to competition because history shows that
basically, in a manufacturing sector, the only enterprises that
are going to be really efficient are those which come from
sectors which are exposed to the winds of competition.
CARLTON: OK. When do you think.. I mean, you'Ave conceded
yourself, Australians have made sacrifices, they've exercised
restraint for years now. When do you think the pain will stop
and that we'll see some reward for this restraint?
9 HAWKE: Well, let's just get the picture straight, when you
painted a picture Of pain. Australians ( interruption)
twice as fast as the rest of the world and if you want to
relate to the previous ( inaudible) before we came into office,
( inaudible) have been increasing in this country five times
faster than they did in the period of office of the conservatives
before we came in. Now that's not a picture of pain.
CARLTONz But sulrely you Can see that people are feeling pain
now? HAWK!: of course they are, but I'm saying don't give it as an
unrelieved picture. I mean, I will come to the question of the
difficulties but. acknowledge surely, it's not a picture of pain

when you've got employment growth twice as fast as the rest of
the world. Surely, it's not a picture of pain
when we came to office, as a result of the conservatives, only
one in three of our kids, one out of every three, were staying on
in school. Now, as a result of our deliberate policies, we have
changed the social face of Australia, It's now two in three of
our kids are staying on and more of them being able to go on to
have their talents trained in the technical education system, in
our university system. The face of Australia has changed in that
respect. Education used to be the privileged opportunity of the
well-to-do, now iLt's been made available right across the face of
Australia CARLTON; Alright, conceding all that though
HAWKEt 6. the picture of pain. Now, coming to the problem
of the present time, what we've had to do in this period vwe've
9lived in a period of massive swings, massive swings in our terms
of trade, which relates back to what I was saying about what
happens to the -prices you get paid on the international market
and we've had swings back there in ' 85, ' 86 when we lost eleven
billion dollars of national income because of the change in our
couaodity pricei and we had to adjust. We had to adjust there,,
we had to ask for very real restraint
CARLTONt Yeah, but granting all that and accepting all that,
when are we going to . you know, when are we going to move
upwards? When airs we going to see some sunshine?
HAWKEs We have been moving upwards. Look, how can you say the
country hasn't been moving upwards when in fact, you've averaged
over this period, since we've been in office, growth, economic
growth of between 3 and 4 per cent that's what's happened in
that period, when employment has increased by 1.6 million new
jobs. That's growth, that's improvement, that's creating
__ opportunities for people to be employed, to have an income, to
ylook after their kids, that didn't exist before. There has been
growth, but there's had to be restraint as well, particularly in
this most recent period. Now, I'm saying that as we go into ' 91
by the middlet of ' 91 this current downturn -would have been
reversed and we will have resumed the path of growth in the
framework of an economy which we have continued to make stronger.
There has been a situation where the Australian economy now is
more competitive, infinitely more competitive than it was before.
Remember this, that in this last year, our exports of
manufactured goods have increased by nearly 10%. That hasn't
happened by accident, it's happened because we're more
competitive and. it's happened because our great Australian workforce,
the men and women of your prograimme, the men and women to
whom you are constantly talking, have been prepared to accept
restraint. Many of them could have, in fact, obtained much

higher money wagea increases than they... .,,. restraint
and in that process, it's meant two things. It's meant that
they've created employment opportunities for many more of their fellow
Australians and secondly, it means they are now working in an
economy which can now sell its goods competitively on international
CA1RLTONs Prime Minister, I'll have to leave it there, I'm out
of time, but thanks very much for your time this morning.
HKWKE:, Thank you very much, Mike.

Transcript 8192