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Transcripts from the Prime Ministers of Australia

Transcript 8193


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: 8193

9 NOVEMBER 19190
JONES: Prime Minister, good morning and welcome.
PM: Good morning and thank you Alan.
JONES: Prime Minister, I think your father and mine, both
resting now : Ln peace, would say this is damn boring stuff
isn't it?
PM: You've hit the nail on the head. The actual jargon is
boring but the impact of it is going to be tremendously
important for every one of your listeners.
JONES: Yes indeed. Can we just take these perhaps bit by
bit. Telecommunications, what are you suggesting that that
duopoly you've now freed it up so that that someone will be
competing AUSTEL will compete with Telecom but that will
only go until when?
PM: Until 1997. See what you've got to understand
listeners have got to understand is that to get
competition into the telecommunications industry is a very
expensive business. To undertake the massive investment
that's required to set up in competition to an already
established entity like Telecom/ OTC is and will be. You've
got to give them a time, a period, in which they can have
the opportunity of getting some return on their investment.
So that we're limiting that situation of the two. That is
the merged OTC/ Telecom being the one publicly owned entity
and then a private competitor based upon the sale of AUSSAT.
We'll have that going through to 1997 so that they'll have
the opportunity of establishing it. Then at the end of 97
that will come to an end and if anyone else wants to seek to
come in in that condition they'll. be able to. Although it
may well be the case that you'll have such effective tough
competition and with other people operating in the mobile
phone areas that, and the cordless telephone that it may
be that no other major competitor will want to come in.
Because you'll have, under this system that we're
introducing, Alan, it will be the most competitive situation
you've got anywhere in the world.
JONES: just take it from the point of view of our
listeners. I mean, what we see, I suppose, is that it's a

fairly limited market and that because of our enormous
geography only one aspect of that market surely is
lucrative. That is the seaboard market. I don't see anyone
bursting themselves to service Birdsville or Cunnamulla or
Brewarrina. Now how are any number of competitors going to
make a quid in that market?
PM: Well the experience shows that with the enormous
changes in technology that are occurring in this industry.
There's more rapid change in technology here than in any
other industry in the world. But what was previously
unthought of or incomprehensible becomes, with new
technology, possible. In regard to STD, for instance, which
goes to all the sort of areas that you're talking about, as
a result of the competition that we are introducing it's
estimated that there'll be reductions of up to 40% in STD
charges. Now by definition
JONES: Did I read just on that point did I read in your
speech that you said there'd be price caps. Is this right
that there would be ceilings on what could be charged for
local, trunk and international calls, is that right?
PM: Yes, because what we've already got is what we call a
CPI minus X factor. In other words, what we now say to
Telecom that they are limited in price movements to the
Consumer Price Index minus a factor of X. You set that
factor of X, you know, let's say that is CPI minus 4% on
the assumptioins about what productivity improvements
there'll be. The same concept is going to apply into the
future. JONES: OK. I tell you what you've got on top of it. By
gee it's not all that easy. Just one final thing on
telecommunications. In the speech I noticed an interesting
statistic. You say that the Asia Pacific region have half
the world's population but only 17%
9PM: Of the..
JONES: Now does that mean that that's a potential export
market for us?
PM: Yes. To round out that see what I'm saying is that
there are 500 million phones in the world. 500 million
phones in the world but that Asia Pacific region, with half
of the world's population, only has. 17% of that 500 million
phones. Now with the rising. standard of living, as you
know, that's occurring in that region there's going to be a
massive increase in demand for the number of phones which
are going to double, you know, by the end of the century,
it's estimated. Now we are ideally placed, Alan, here in
Australia to get a big share of that action. The decisions
that we've taken now are going to make Australia very, very
much more competitive to get in and get a slice of that

JONES: OK. That's fairly obvious. Well done. Just one
thing I didn't understand. You've just said this "' we will
not place in the hands of future Treasurers or Ministers for
Finance responsibility for delivering service in areas where
competition does not eventuate, nor do we expect a new
philanthropic owner for Telecom could be found who would
provide them." Does that mean that
PM: No what
JONES: does that mean where it's not
PM: No, no, no.
JONES: the service.
PM: That is -a bit elliptical. But what I'm saying there is
that under the present situation we have what are called
community sex-vice obligations. Under that, for instance, if
you look at remote and rural Australia, which you were
properly concerned with earlier, if you had a system of
charging for installation and service for those remote areas
on the basis of simply what it cost.
PM: Then those people would have to pay more. But under
the system weI've got now we say there is a community service
obligation to see that they are benefited by some, as it
were, cross-subsidies that the more profitable areas of the
network are used to subsidise those remote areas. That's
what you call-
JONES: 1: he telecommunications owner or the Government?
PM: Well that's done through the actually through
Telecom. Now that's the very precise point of what we're
saying. What's been argued by the conservatives, by our
opponents, is, oh well don't worry about that, if there's
something to be done in looking after that we wouldn't
require that of the operators we might do something in the
budget about that. Well you know what they are like. Like
hell they would. They'd just leave those people to suffer.
What that section of my speech is saying is, that we're not
going, like -the conservatives would be, to leave it to the
possible discretion of future Treasurers or Ministers of
Finance or so-on to say, oh we might find something in a
budget to help those people. We will build it into the new
system we've got under the regulations that those who are
providing the services are going to have to continue to help
those people in Australia who, by virtue of their location
and no other reason, are up for significantly higher costs.
JONES: OK. Good. That is Aviation. We won't say
much about that because there's two things I wanted to ask
you about that. You have said new services, lower prices
and so-on. Deregulation November 1. You would know that
Ansett and Australian have just put their fares up

I'm inundated with callers here who say they can't get a
slice of any of these cheaper fares at all. When are the
people you're talking to now then going to see these lower
prices? PM: Well I understand that there are lower prices for some
services actually operating. I mean, I know
JONES: You've really created a controversy. I can tell
you. PM: Well all I know I know of people who've actually got
the benefit and have used them. People on my staff, for
instance, have had the benefit of them. Now I think what
you're going to find, Alan, is that as the new competitor
actually enters, that there is no doubt that there will be
significant price reductions available over a range of
services in this country. I mean, it's
JONES: Does this mean, though, that Ansett and Australian
are currently working at too generous a profit level; or are
they too inefficient; or are they too overstaffed? Where
can those costs be cut?
PM: Well there's always improvement in productivity coming
from new ways of doing things. Let me say in respect of the
current operators that as you very well know and you were
very sympathetic through all that dispute and I appreciate
that very much but you know that they suffered very
significant losses last year during the period of the
pilots' dispu~ te. I mean, it cost them an enormous amount of
money. Both of them. There is some sense in which they'll
be wanting to the extent possible to recoup some of those
very substantial losses that they incurred then.
JONES: Why dio you have different rules for foreign
ownership? 1: must say I get a bit, I get a bit tarty about
all that. I notice that domestic Australian Airlines you're
going to permit foreign ownership of 15 to 25% for an
individual, 40% of it's an aggregate and Australian Airlines
or when you'r. e selling Qantas foreign investment of
PM: Yes. The reason for that differentiation is this, that
the 35% is the figure which is regarded within the
international aviation industry and the agreements that are
reached in the international aviation industry for single
designated riLghts for national carriers. That if there's
any more than 35% ownership in the national airline then
it's not regarded as a, as the national airline which gets
the benefits of designation under the international system
of designating rights of entry between countries. If in
other words, if Qantas was more than 35% owned it wouldn't
be an Australian airline
JONES: I am just wondering how for example Channel Ten
couldn't get 35% foreign ownership?

PM: Well let me make the point As far as the
international operators are concerned if we had more than
foreign ownership there in regard to Qantas, we simply
wouldn't get -the benefits that are associated with the
designation of rights of one country to fly into another
because it wouldn't be regarded as an Australian airline and
that determines the
JONES: Right. Well I just wonder why Channel Ten can't
have 35% foreign ownership?
PM: Well Channel Ten's not flying internationally.
JONES: But as a media outlet as opposed to an aviation
outlet, well as a media business as opposed to an aviation
business. PM: Well the principle there and you haven't got the same
clear cut sort of question involved there, Alan. It's a
question of saying do we in Australia want an important part
of our lifestyle, that is television, to be capable of being
dominated by international interests. I concede readily to
you, Alan, that I can't be dogmatic and say there is a
precise percentage which means you avoid that problem. But
the concept is one I think you would agree with. We don't
want, or at least I don't as an Australian
JONES: I'm just wondering what the dip in 35% to get them
out of strife, 20% won't.
PM: Well the; strife, let me remind you, has been not of the
Government's creation
JONES: Owner induced, owner induced.
PM: Owner irLduced because people paid prices which were not
relevant to the earning capacity of the asset they were
acquiring. Now if people have made those sorts of mistakes
and have crea~ ted difficulties, I don't think we should
jeopardise our Australianism and our desire to protect
Australian cultural identities because people have made
commercial mistakes.
JONES: Talki~ ng about commercial mistakes, would you be
offended if we took a commercial break and we'll come back
to you?
PM: You need it,. mate.
JONES: The National Road Freight Corporation, I don't think
there's any debate on that, up and running for uniformity in
national rail, a national road organisation. But could I
just ask one question which does worry me? I hear everyone
talking about it and this is it. Road user charges, there
seems to be a movement abroad that the truckie, for example,
has got to pay for the damage he does to the roads when in
fact many people who don't drive cars, are not involved in
transport in any way benefit from the fact that the truckie

belts through the night in awful conditions to get the
Sydney Morning Herald to Tamworth by 9 o'clock or the fresh
fruit to Moree by 9 o'clock and people who benefit most
probably never go on the roads again. Are we saying the
truckie must pay even though those who benefit don't?
PM: No, it's not that. The basic problem we've got is
this, that St~ ates which are seeking to get a greater
contribution from those who actually impose the heaviest
damage, the heavy trucks, and this is particularly in NSW.
NSW has sought to have a system whereby the registration has
a relevance t: o the impact of the vehicle. But because we
have the Federation you have other States who say, oh no,
we'll have lower registration fees and this is
JONES: I'm -Just asking a question
PM: But wail: a minute. Let me make the point
JONES: I want to look at the point about who should pay for
the roads
PM: But what I'm saying is you mean you'll be virtually
getting nothiLng like an equitable contribution from the
heavy users if you continue the system we've got. To be
precise, you have NSW having a registration fee which seeks
to get a reasonable contribution from them, not the totality
of it, but a reasonable contribution. So what happens? SA
says no and they come register with us. We've got a very,
very, very low fee. And that means that the concept of
getting any sort of reasonable return from the heavy road
users is frustrated. So what we're going to do is have a
national system whereby you will, on a basis which is
equitably worked out mean that those who use it most and
cause the most damage will make a fairer contribution. It
doesn't mean that the taxpaying community as a whole won't
be making its contribution. We spend billions of dollars on
roads. JONES: Right. Just time always beats us but there are some
things, if you don't mind if I just deviate from the speech
for a couple of questions.
PM: Sure, sure.
JONES: One iLs all my listeners and half Australia last
night saw these pictures of great tips being dug and oranges
being. thrown into them,. if.. it wasn't last night it was where
sheep are being, you know, thrown into them. I mean how
long can we sustain this business about bringing imports in
from Brazil while the local citrus industry is being
destroyed and isn't there a better way of getting rid of
20,000,000 sheep or 50,000,000 we don't want than shooting
them and burying them in pits?
PM: Sure. Well let me answer the basic problem which I
know must seem to your listeners and television viewers as
very strange. Let's understand this point. For the last

few years we have been going flat out as an Australian
Government in. the GATT Round to try and get the countries
particularly of Europe and the United States which is
operating in reaction to Europe, to cut out their export
subsidies and. their production subsidies which simply mean
that those co'untries are producing massive mountains of
agricultural produce which the taxpayers subsidise at an
enormous expense running into something like $ 200B a year
between the Europeans and the North Americans. So we're
arguing, we're up there arguing you've got to cut these out
so that the world's most efficient producers which are the
Australian farmers, are going to get a fair price out there
and a fair gco in the international markets. Now in that
situation how can we, if we're arguing that, which is
obviously in the world's interests and in Australia's
interests say oh, but as far as we're concerned we'll put
barriers out to people bringing in their
JONES: Fair enough. That's an answer.
PM: So we can't do that. Now in regard to the second part
of your question, I'm appalled, of course, like you when you
see a situation of it not being, the products just being
destroyed andt if the community we're able to organise some
way as I see that some charitable organisations have to
cooperate wit~ h farmers and so on to get this produce and use
it for those who are desperately in need, well you know
that's very worthwhile. You've got to, of course, recognise
that if that were done to, you know, an unlimited extent
then the position of the producers would even be worse
because the prices they are able to get would reduce
further. JONES: Just one final thing. Everywhere, I know you said
in you speech everyone says we should do more and we should
do more particularly on what's called fiscal policy, in
other words cutting back expenditure. But we saw yesterday
I believe that they were after you in the question that
was asked by the Member for Wannon in relation to stamps
because a rumour went around that you had been using your
office as a Post Office for the Labor Party at the last
election and that's apparently why they asked the question-
PM: And it blew up in their face, didn't it.
JONES: It bl. ew up in their face. And so you've got on the
National Party side this disgraceful waste. Yesterday we
did a story here about the Tax Office in Brisbane buying
themselves into a block, the most extravagant block of
accommodation available up there, where they could've saved
$ 1B going somewhere else, $ lM going somewhere else. I mean
that's waste and extravagant. When are the public, you
know, going to feel as though there is a bit of frugality at
work? PM: Well I think you know, Alan, that as far as the Federal
Government is concerned we've now had four successive years
where we've produced a surplus and that surplus has come by

cutting very vigorously into our outlays. We've had
successive years now of real reductions in Commonwealth
outlays. Now when you have budgets the size of ours I
suppose even in aggregate I've been successively reducing
those outlays
JONES: inaudible
PM: Something that's never been done before. I guess in
the size of the outlays we've got you'll always be able to
find some example where something could've been done better.
I'm not aware of the particular instance that you refer to
JONES: make you aware of it.
PM: I'll have
JONES: I'll be in touch with your office.
JONES: Just one final thing before you go. A caller rang
this morning, or at least we're running a campaign here this
morning to try and raise $ 90,000 for a leukemia cancer
victim who couldn't get the treatment in Australia but
because they couldn't, have now got to fork out the bill for
treatment in America. Is that fair, $ 90,000 to keep a bloke
alive? PM: Well I'd like, Alan, to write to you on this. It's
something which is not capable of
PM: Of detail
JONES: I'll refer that one to your office.
PM: And I'll. certainly send you a detailed response on it
because there are considerations here which I think you'll
appreciate. JONES: OK, thank you for your time.
PM: Thank you, mate.

Transcript 8193