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PRIME MINISTER1
TRANSCRIPT OF THE PRIME MINISTER TiE 1I0N PJ. KEATIG, MP
JOINT PRESS CONFERENCE WITH SENATOR THE HON PETER COOK,
MINISTER FOR INDUSTRIAL RELATIONS, CANBERRA, 2 DECEMBER 1992
E& OE PROOF COPY
PM: All right we might make a start. Over the last couple of months, the last eight
weeks or so the Comnmonwealth Government has become increasingly concerned
about the threat to recovery in Victoria, which is about thirty per cent of the
national economy, which has been occasioned by the industrial relations policies
of the Kennett Government which is, of course, running on the agenda of the
Hewson lead Opposition in Canberra. This is not just a threat to the recovery, but
indeed to social cohesion in Victoria and which has put at risk the operation of the
flexible structure of enterprise bargaining which the Commonwealth Government
has put in place and where just now in the space of six months we've seen over 550
enterprise agreements negotiated for higher remuneration and better productivity
without rancour and which is the key to Australia's productivity advance.
The Government has always taken the view that successful economics have a
value system of co-operation and one where reform and competition takes place
within that co-opcrativc framework. This has been abandoned by the Liberal
party in Victoria and by the Federal Opposition. Instead they prefer the old master
and servant relationship and are now relying upon and will rely upon the master
and servant provisions of the common law. One should havo thought that in the
lattcr part of the twentieth century Premier Kennett and his Liberal party
colicagucs would have understood that the mature relationship which exists in
industrial Australia today could no longer return to the master and servant
rclationship. The simple point is that social and industrial unrest puts recovery at risk so the
Commonwealth decided to legislate in a way which we think should end wide
spread industrial action in Victoria which has been in some respects crippling to
the Victorian economy and of course, may be in the future. But it does protect
people and will protect pcople from being forced onto individual contracts. The
Commonwealth lcgislation is to provide for coverage under federal awards
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administered by the Australian industrial Relations Commission for groups of
employees, organisers and unions in Victoria who wish to make sucb a
transformation. And undcr the Commonwealth's foreign affairs power, the
Commonwealth will legislate to give the Commission power to set minimum
wages, equal pay and termination of employment in the state of Victoria for
groups who don't enjoy particular federal award coverage and this legislation
under that head of power will come from the 1I LO conventions which have already
been ratified and ones that will be ratified in the future.
So the end result is I think, there will be a choice for Victorian employees they
can as groups seek registration under federal awards, but the legislation will apply
only where no industrial and arbitral structure exists and of course as Victorian
tends in its legislation to see the cessation of the operation of all awards in Murch
of this year, that condition will obtain in Victoria. T7hat is there will be no arbitral
structure and therefore access to the federal award will take place under this
legislation. The end result should be as I said, in wide spread industrial
disputation this is a remedy for that, people do have recourse, not just to individual
common law master and servant contracts. This is not to say that in relation to the
Kennett government's changes in respect to hospitals or schools one won't see it
localised in sporadic industrial disputation around redundancy and these other
issues. But in terms of widespread industrial disputation this gives the employees
and the public of Victoria protections which the Kennett governent wishes to
take from them. Now Ill invite my collcague the inister for Industrial Relations,
Petcr Cook to add some remarks to mine.
PC: Thanks Paul. I think the Prime Minister has actually explained it quite clearly.
The point is that we believe and stand by fair and independently determined
awards as governing and protecting basic and minimum employment conditions.
Awards arrived at by free arbitratio -n where necessary. By contrast our political
opponents and the Kennett government support individual employment contracts
and the choice which Mr Howard and Mr H-cwson have often talked about the
choice is now clear. People can opt for awards, guaranteed proper minimums
independently determined or they can opt for Mr Kennett's individual employment
contract and I don't think there's much doubt what people will choose, they'll
choose the protection of the tried and true, almost century long system we have in
this country.
In addition wc will be as the Prime Minister has said, legislating minimum
protections in minimum wage,,, equal pay and protections against unfair dismissals
or victimisat ion at the point of termination of employment and provisions that will
allow redundancy. The external affairs power will be the head of power we use,
ILO conventions will be the mecans of establishing the treaty relationship.
1: Without the co-operation of the Victorian employers, I mean it is all very well for
the unions to say well) yes we'd like the federal award, we'll have that. What
happens if the employers resist particularly if it's a State government?
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PC: A lot of employers don't want the Kennett style industrial relations, they don't
want to break the harmony that has been created under us. As you know Victoria's
industrial disputation is off the bottom of the ABS graph and employers want to
continue that co-operative relationship we have generated. So a number of
employers will want to co-operate with unions and workers to shift state awards to
federal jurisdiction. But if there is a dispute, that is a paper dispute, an argument
and an employer wishes to remain within the Kennett system, then the matter is
heard by the federal Industrial Relations Commission and because there will be in
Victoria no independent access to arbitration that will be one of the guidelines we
will encode in our legislation which will enable the federal commission to make a
decision in those circumstances to facilitate the transfer of the state award and turn
it from a state award to a federal award.
J: Does this also apply to Victorian state public servants?
PC: Victorian state public servants are subject to an appeal that has gonc to the High
Court, that was taken and argued in June and you will recall at that time there was
a negotiation on about awards for the state public service. The NSW government
and the Kennett opposition opposed that and the federal court upheld that, it's on
appeal at the High Court; we arc waiting a decision on that. would expect the
decision will be that the award could stand and if I'm right about that expectation
then state public servants under the first thing that we are doing here will be able
to transfer their state award to the federal area. Under the second thing we are
doing here, the minimum payments provision, they'll be able to do that anyway as
soon as we get that legislation through.
[-lHow can it be that you can widen the determination of minimum wages for the
Commission in a way that doesn't affect the power of other state tribunals other
than Victoria?
PC: The distinguishing feature about Victoria is that in the past, like every other state,
they had an arbitration systemn to which if there was a dispute a party could go and
have the othcr party called before the Commission and have the dispute settled.
What Kennett has done is remove that right. You can't get to the Commission in
Victoria unless both parties agree. So if the party that is exploiting the other party
doesn't agrec to call on the umpire you can't get before the judge. That means
there is an cnd in Victoria of compulsory arbitration. Now where that has occurred
by the actions of the state government then the federal Commission will facilitate
upon application by unions or employers, the transfer of the state award to the
federal jurisdiction.
J: Priruc Minister, when will this legislation of yours be introduccd in the House?
PM: As soon as we are able to get it in. As soon as we are able to bring it in.
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J: You have to anticipate the High Court challenges to the use of external affar
powers?
PM;. We are not necessarily anticipating it, but we are confident about our position on
the matter. There has been other principal acts of the Commonwealth held to be
valid by the High Court under the foreign affairs head of power and we think given
the fact that the ILO conventions are conventions entered into by employers,
employees and governments for minima, mostly in countries that don't have
jurisdictions as we have, that seeking to have them apply in this country would be
very much, not only doing in the letter and spirit which the Parliament has ratified,
but in doing it, doing it in accordance with an international convention.
pC: Can I[ just say this, what does it tell you about a government if it be the Kennett
government that you have in mind or if it is John Howard, if its he that you have
in mind, what does it tell you about them and their proposal? They want to block
access to Australian workers to independently determine fair minimum wages,
equal pay, prevention of victimisation at the point of termination, or redundancy.
1: You say you are considering legislation for other standards including annual leave
and matcrnity/ parental and hours of work, would that be legislation based in the
Commonwealth's external affairs power?
PC: Yes, there are HLO conventions upon which we can base legislation for annual
leave, parental lcave, hours of work, those conventions are there. The priorities
however are to guarantee protection of minimum wages, equal pay and a
prevention against victimisation at the point of termination of employment and to
guarantcc reasonable redundancy rights in the event of being terminated.
1: To what extent arc you actually creating a precedent for the Opposition by a use of
the external affairs power if it wants to usc some of the Commonwealth's powers
like this for its own legislation if it wins office?
PC: John Howard said he won't use the external affairs power.
PM: He made that explicit today in a press statement.
J: you are sort of changing the deal if. you like before he comes into office.
PC: B3ut lct's get it clear the field that wc arc changing to. As the Prime Minister said a
momcnt ago the ILO is the labour agency for the United Nations and like the
World Health Organisation makes standard international proclamations on health
standards, the ILO makes them on labour standards and when they adopt them,
they adopt them in a plenary in which thcy arc voted for by workers, governments
and employcrs and they have to be carried to be then presented to govrnmcnts
and those standards havc been adopted in the case of minimum wages and in the
case of equal pay by all Australian's states and the Commonwealth. In a case of
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termination as the Prime Minister said, we will now adopt that convention. These
are international minimum labour standards and is someone going to tell us that
these don't apply to Australia when the world expects them to apply to countries
all over the globe.
J: When this goes into the High Court it will means months maybe years of
uncertainty and it certainily will mean that you'll go to a federal election not
knowing the validity or legality of this legislation doesn't it?
PM: But there will still be access to it. There will still be access even were there to be a
challenge, just because the legislation may be challenged doesn't mn to say it
won't be operative until a judgement is made.
1: Will you be separating federal award changes from the ILO base changes or will
you be wrapping it up in one legislative package?
PC: No, we will be able to move on the changes to the Federal Act immediately on
facilitating thc transfer of State awards to Commonwealth jurisdiction and we'll do
that by using an omnibus bill that is now in the Senate on industrial relations by
adding in a few clauses and I would expect that would go through immediately
and be able to dealt with in the House when it comes back. As far as the other
changes arc concerned we'll need to develop new bills for that and as the Prime
Minister has said we'll do that as soon as we can.
J: Do you have assurances from the ACTUJ that this will mean the end of industrial
disputation?
PM. It's not a matter of assurances and it is not the ACTU that is in a position to
provide them, it Is that the core of the problem is that the arbitral tribunal process
Is to be suspended, all intentions, purposes in Victoria and awards cancelled as of
the 31 March 1993. That is the basis of this widespread industrial disputation,
these measures give thc people affected by those changes an alternative, and one I
think can reasonably assume, therefore, that the widespread disputation or
demonstrations mounted as an appeal to the Kennett Government, in respect to the
legislation, those people will reasonably regard this as of sufficient quality as a
remedy to deal with their perceived injustice.
J: In other words you are giving the trade union movement the capacity to back-off a
damaging industrial campaign which would also hurt your Govcrnmcnt by giving
them breathing space and an alternative?
PM: No. What wc are doing is giving the employees of Victoria the right not to be
pushed into common law, master and servant contracts, 600,000 individual
contracts. The Liberal Party says they arc intcrcsted in choice, well now
organisations of employees have got a choice.
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1: Are you saying it is important that the unions now don't continue that campaign of
industrial action?
PM:. That is a matter for them. Our problem with all of this is the disruption which it is
causing to Victoria and to confidence in Victoria. As I say in the press statement I
think we are starting to see that in the classified job advertisements which have
fallen in the Age Newspaper, DEETs indicators of skilled job vacancies released
yesterday show rises for all other States, but no movement in Victoria. Victoria is
a large part of the national economy, it has been recovering, we want it to
continue.
PC: Can I just support that by saying this to give you an example of what we mean
nurses In Victoria today are taking industrial action in protest of the fact that
because they are shift workers and lose weekend penalty rates, their salary is
reduced by 25 per cent. What is the response of the Victorian Health Minister?
On public radio today she said that they will be offering, I think, 2,500
redundancies among health workers.. There can't be any guarantee that the
Victorian Government which appears to be off the rails won't go further off the
rails and provoke, in various sectors of public enmploymcnt, particular industrial
disputes.
J: Mr Kcating, have you or Senator Cook had talks about this with Mr Kelty and Mr
Halfpenny, and what has been the response?
PM: Senator Cook and I have had talks with the ACTU about some of the principles. I
have not spoken to Mr Halfpenny about it, I don't think Senator Cook has.
J; What has been their response to that?
PM: Well I think they would regard this as an appropriate legislative remedy by the
Commonwealth to this provocation in Victoria and giving cffcct to a set of
conventions which the Commonwealth has ratified and which now an appropriate
national circumstances can bc used, in terms of their reflection in legislation. The
ACTU has been a party to the disputation in Victoria and the cause is the central
cause, the fact that 600,000 Victorians are going to bc pushed onto common law
contracts. So, you take the contract or you take the sack.
J: is it hypocritical to be now relying on ILO minimum standards whcn the ILO has
found that your own union rationalisation program breaches freedom of
association?
PC: No it's not. But I am glad you raised that point, we will enter it on Friday in a
discussion with the employers and the u nions about repealing our minimum size of
unions decision. So, we conform with the ILO.
J: it's a bit late now isn't it, it's already had an cffect?
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PC: No, no it is not a bit late now. When we introduced that it was a reasonable thing
against all of the jurisprudence of ILO previous decisions to do. But they have
found that way now and we have said, we are good corporate citizenis, we will
abide by [ LO decisions and that will be something that I will talk to the employers
about on Friday with the unions. But the point that I think I should also make is
the significance of the ILO and its conventions and decisions. That's an
application the employers made which indicates the employers accept the
sovereignty and authority of the ILO. Therefore, when we encode in Australian
law ItO conventions which have been adopted tripartitely at international
conventions we would expect that they to would be consistent and accept those
stanidards.
1: Can you guarantee to have the safety net legislation passed before an election is
called?
PM: We are going to pass it as quickly as we can pass it.
J: Will that be before the election?
PM: Well as quickly as we can pass it. It is as simple as that. Don't ask me tricky
questions about the election timing please. But we will introduce some of it in the
Senate and pass the balance in the House, or where we need to legislate dirctly we
will introduce it properly in the first place in the House of Representatives. There
Is no cause why it shouldn't be passed by Christmas.
J: Is there a risk that business and international investors might see this as a signal
that the Federal Government doesn't believe that there is a case for speeding the
pace of reform in the labour market?
PM: We don't regard this as reform. We don't regard Kennett's obscurantism reform.
We regard it as a trip down the time tunncl to the 19th century, to the master and
servant structure which is a disruptive, confrontationist, non-coopcrative structure.
So, if you go arnd ask the markets, ask the markets what they think of the
cooperative cnvironment of Japan, of the cooperative environment of many
successful countries. This is the antithesis of cooperation, this is not
rnicroeconomic reform, this is not labour market flexibility without rancour, where
there is an inducement to higher productivity and higher remuneration. I noticed a
day or so ago, the statistician produced the profit results, company profits before
tax, they are rising again back near the peak, back up to the peak, towards the peak
of 1988-89, which was way above the ' 60s historical golden mean. Where they
are now must be near the ' 60s average. So what is Mr Kennett saying? That
wages are too low, and this is before there is any volume on the bottom line, as the
recovery strengthens and we start to see volume, when overheads have already
been covered, the profitability will go straight to the bottom line and that profit
share will jump inordinately. What are thcy saying? What is the Liberal Party
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saying? That wages are too low, that the profit share above the ' 60s golden mean
is not enough, because that's all they are about, they are about depressing wages.
As we have said often in the Parliament, Senator Cook and myself, the industrial
agreements the Governments introduced gives all the flexibility in the world,
except flexibility downwards, the one thing that John Howard, John Hewson and
Jeff Kennctt want is lower remuneration for Australian workers. That means a
profit share higher than that which we have experienced or are experiencing. Is
this reasonable? Answer, no.
J: Mr Keating, the statement says that the legislation isn't designed to create new
national standards, but to what extent does this greater power for the arbitration for
the Industrial Relations Commission, even if it is only for those people not subject
to a State jurisdiction, still going to create a national standard or a national floor
under rninium wages?
PM: There is a national floor now, there is a floor now in minimum rates, but these are
having less to do with pay rates. Pay rates are being negotiated under industrial
agreements where the productivity is being shared between the employer and the
employee. What this provides is the extension of the Federal power of the
arbitration commission to make awards, in respect of minima, for those
organisations which seek that coverage and for other employees who seek to have
a minima established. This provides that coverage. But again, we are talking
about minimas which are below, mostly, the actual paid rates of the country. But
again it all gets back. What do these people want, a profit share which is at such
levels beyond any historic experience? If you ask the Kennett Government what
do they want, I don't think they know. What is the point of this, to push the profit
share to such levels that we have never seen? Australia is a very competitive
country as compared with other countries in respect of wage rates. The share of
national income going to wages in this country is very competitive with
comparable countries. What do they want?
J: The Government has all but wrapped up its wage deal with the public sector now,
when will we see the completed negotiations, and can you hope to have that
wrapped up by Christmas as well?
PM: What we do in the next phase of our industrial transition is something the
Government is still thinking about and I couldn't give you any timetabling about
when.
J: You would like to have that finished before the election?
PM: It depends what we would be seeking to finalise.
J: Should you presumably be thinking about as the Treasurer indicated yesterday,
about how you would stop a second round effect on inflation from depreciation. Is
that one of the factors that you will be looking at, and would it mean that you
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would be looking for some sort of wage deal stretching over, say, a two year
period?
PM: Welt I thought you were all telling me yesterday the column is faltering. How arm
people going to collct high price increases in a so-called faltering economy? Or
don't you really believe that?
1. The Treasurer also suggested that the economy is about to take off. So based on
what he is saying, presumably you will be wanting to look at locking in low
inflation?
PM: Productivity at the moment, I think the national accounts was running in the
market sector at about 3 per cent in the year to September, 3 per cent. So, there is
a huge productivity surgc in there which is going to go a long way in maintaining
inflation. And the fact that the economy is growing, but modestly, means that the
tear-away notion of price taking from higher import prices is think remote.
J But you arc also saying minimum wages are a very important part of your
platform, Mr Keating, that you want to protect low paid workers. So, it is fairly
important, isn't it, that you find some mechanism for protecting those low paid
workers but also locking in inflation, if you have any economic adjustment?
PM: Laura ( Tingle), we do have an inflation rate of .7 per cent.
J: Mr Fraser and Mr Dawkins have both indicated that it is likely to rise because of
depreciation.
pm: well there will be some impact from the dollar, but look at the enormous ramrod
effect the depreciation is going to have for growth and activity in the economy,
PC: See, trimmed labour productivity in the market sector over the last 12 months was
3.6 per cent, that is not bad in terms of productivity performance in the OECD
group.
J: Senator Cook, you said soon after the election of Kennett that there was already an
adequate process for workers wanting to switch to federal coverage. Why is that
process now inadequate?
PC: I don't think it was inadequate, but I don't see any reason why it shouldn't be made
more adequate. If I can explain that, the avenue existed but the principles incoded
in the act didn't take account of someone doing what Jeff Kennett did, so we arc
just making the act take account of that and provide the avenue more easily and
swinging that door that exists more widely open. But we are going beyond that to,
we are putting in this provision for minimum wages which will have I think quite
an important effect across the economy and will also have an effect on freeing up
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the tabour nmarket further because it will enable small groups or individuals to
approach the Federal Commission to fix minimum rates in their particular case.
J: Mr Keating In your talks with the unions in August you put a $ 10 plus $ 10 wage
proposal, I think it was, where is that now up to and when will that be finalised?
PM: Well Senator Cook basically has carriage of its progress, do you want to reply
Peter?
PC: well at the moment we are still in the process of settling that down and making a
final decision with the ACTU as to what we do. But the important element of it is
that we wanted to allow breathing space to get as many workplace agreements up
as possible.
I: it Is supposed to come in about March.
PC: While we are putting in our efforts to get work place agreements up it means we
will turn our attention soon to protecting minimum standards, this is one of the
things that will help us do that. But the important and strategic priority is to push
as many workplace agreements through as possible to get that productivity
through.
J: Do you think the implementation of that will be delayed somewhat from the
August talks?
PC-It's clearly delayed now, it will be delayed a little longer too, I think, but the
prospcct of..
J: But the implementation was supposed to be next year, wasn't it?
PC: The proposal was for an increase in March, 1993.
J: Will that be delayed?
PC: It depends on how soon wc decide to move, but at this stage it looks like the
March date might be pushcd back a little.
J: How much?
PC: It's hard to say.
J: Thrcc months, six months?
PC: No, no, you can't put a time on it like that. Once our workplacc agreemlent for the
Australian Public Scrvice is registered, if it is on Friday, and I expect it will be, we
will get a very clear idea about thc growth and spread of workplace or enterprise
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bargaining in the economy. The impetus we've built up from that and the
generation of productivity improvement we've got will provide us with a platforma
to make a decision about that application.
h: Can you clarify an answer to an earlier question. What's to stop workers in another
State taking advantage of this legislation? Should they be unhappy with their deal
with the State Government?
PC: The trigger, in terms of transferring State awards to the Commonwealth, is the
absence of a proper arbitration system in a State. As far as the minimum wages,
equal pay, and termination of employment provisions are concerned, where a State
jurisdiction operates to determine those in our legislation, we will respect the rol4
of that State jurisdiction. Where a State jurisdiction doesn't operate to determine
those, they'll have access to our Federal system.
J: Have you consulted Victorian employers about this legislation in advance, as well
as the ACTU, and if so what was their reaction?
PC: rm going to talk to the industrial parties, employers and unions, in the national
consultative forum of thc NLCC on Friday. I will talk to the Victorian
Government as well. I make the point they never did us the courtesy of talking to
us. And a lot of their laws have federal implications. One of those enduring
implications is, for example, under Victorian State law people covered by federal
awards could still be deemed to be criminals if they took part in industrial action.
No-one talked to us about that. There are a myriad of other implications, but
because they're crass and ignorant and don't consult, there's no reason why it
shouldn't be proper. We will consult appropriately.
J: Mr Keating, you said at the time of the One Nation statement that any Government
that couldn't run the economy at 4 per cent should give the game away.
PM: No, no, just understand what I said. I said any economy that can't travel at 4 per
cent without spilling into Imports should give the game away.
J: So we've got the constraint now of imports and wc can't travel it?
PM: No, no, what I said was, and I've made the paint in thc Parliament plenty of times,
not that we ought to be growing you're not that simple that you think that means
that we should be growing at 4 per cent all the time. Surcly not. What do think
we're going to bounce from recession to 4 per cent growth overnight? What I was
saying simply was this that to the Liberals' eternal shame, after 30 ycars of
government, the most the Australian economy could grow before the demand
spilled into imports was 4 per cent. That is, they had no fat in the infrastructure to
handle 5 or 6 per cent growth rates like a lot of the countries to our North have in
this part of the world. Once we got to 4, there was no more capacity left and we
spilled into imports. What I said was, if we can't run the Australian economy at 4,
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that is if we regarded the growth limit as being under 4, then you should throw in
thc towel. And let me repeat it, because we ought to be able to run this economy
at 4 per cent at least, and will need to bring unemployment down in a sustained
marked way in the long ternm.
3: current pace of recovery?
pm: I thought yesterday's reporting was pretty strange. T7he Sydney Morning Herald
had " New Figures Kill Hopes of Recovery" and then they had a graph on page 2
which had an obvious recovery. There's the peak of 1989, 4 per cent, there's the
recssion, and there's the climb out of 2 per cent. The economy is growing as we
think, in terms at as I read to you in the House last week if you were there the
Economist has got us in their forecast, which is a world-wide one, for the year to,
2 per cent for Australia and higher than all of the other countries surveyed,
Belgium, Canada, France, Germany, Holland, Italy, Japan, Spain, Sweden,
Switzerland, the UK and the USA.
1: So you are satisfied with the 2 per cent growth rate?
PM: I think no, I think the recovery has not been fast enough. But we are recovering. I
don't think there's any basis for these sort of headlines " Killing Recovery", or
" Faltering".
1: Aren't you running with a B~ alance of Payments constrained at 2, Mr Keating?
PM: I don't think you can deduce that at this point of the cycle, no. Look, if the import
growth represents a trend, there's a lot more going on ou t there than the National
Accounts say. It could be, and it may well be, that businesses are simply
optimistically holding stocks for Christmas, and that we're not seeing basically a
trend. If we're seeing a trend there, they're either going into stocks or they're going
Into thc economy. If they're going into thc economy, we're doing better than
obviously.
J: Business investment figures yesterday wcrc down again, you've got business
surveys showing a lack of confidencc, you've even got a leading businessman this
morning saying that the economy is in crisis.
PM: Who was that?
The Manager of Woolworths on AM.
PM: He's decided to sign up with the Liberal Party. He's signed up with the Liberal
Party, he's in favour of the GST, he's speaking at their meetings. Look, lct mc just
1: Put him on your list?
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PM: No, no, I don't have lists, but I can read. Look, we are reaching a point after a long
deleveraging of business in this country after the high debt cycle of the ' 80s, the
profit share is recovering. I don't know whether many of you saw it September
Quarter the profit share is recovering, we're reaching a point soon where that
balance between debt and equity is reaching the point where businesses will start
looking around for investment opportunities. This had to happen. It has taken in
the Wcstcrn world about 18 months longer than everybody thought for this
delevcraging to happen. But it's not well and truly on the way. The profit share is
recovering. And of course, any volume is going to see, as I said once you've got
your overheads covered all volume is basically cop for the bottom line.
J: You don't think there's a
PM: No, I do not. We've got housing up 12 per cent for the year, 5 per cent for the
quarter. I noticed some people said that there was a reliance on public sector
demand, well I've got some of you saying the One Nation spending is not coming
through fast enough, and when it comes through you say you're relying on public
sector demand. The game is deteriorating, the analysis game, if that's the basis of
your analysis. Two weeks ago the big trouble was that One Nation spending
wasn't all being spent, this week the problem is that there is too much public
expenditure in the growth numbers. Can just say, for all you sleuths out there,
that stock building was in at .5 for non-farm stocks and 1 can tell you this, I
don't have any superstitions about stocks, they're mostly goods that are put on
shelves, and they're goods made by people, and so you can count them in to
private sector demand. And then someone said private sector final demand fell by
1 think we are entitled to say that stocks are part of the private economy. If you
put thc stocks back into private demand, well of course private demand rose in the
quarter along with public demand, which has given us .5 per cent for the quarter,
2.1 per cent for the year, faster I think than most if not all OECD economies, and
across the year, not the quarter, private demand was up 1.1 per cent.
J: But how can you count stocks in that way unless they walk past the cash register?
PM: If you don't think stocks are part of the private economy, old son, where do they
belong?
J: If you're not satisfied with the current pace of recovery, and there's no indication
the economy accelerating, what do ) you intend to do about it?
PM: Thec September quarter, like all National Accounts, still represent a bit of recent
history, and it was for July, August and September. It would be a brave person
who said that the economy is not growing as quick or more quickly in the last
quarter.
J: So do the Budget forecasts on growth stand?
TEL: 2. Dec. 92 18: 39 No. 021 P. 14/ 17
14
PM: I think we need time to see, but this quarter I'm told is right on the button with the
quartrly through-the-year structure of the Treasury's forecast.
1: Mr K~ eating, regardlcss of where stocks sit in the economy, the basis strategy of
your government is to try to see as much activity in the net exports sector of the
economy as possiblc. Now, yesterdays National Accounts certainly showed that's
not happening, partly through a slowdown in the world, and partly because
imports are rising. That still creates a basic dilemma between your goals of
boosting employment and not running up a Balance of Payments constraint. How
long are you prepared to see that dilemma continue and to put pressure on the
current account?
PM: I think the dilemma, as you put it Laura ( T7ingle), is resolving itself through the
ramrod effect of the exchange rate. The markets have seen this. It's already made
a 13 per cent adjustment down in the exchange rate. We will see that push activity
through the economy in the next 12 months. Why have we got such a result in net
exports? Answer commodity prices are down, rural volumes are down. And
what have the exchange markets done? They've adjusted the rate accordingly. So
the conundrum you're addrcssing, the markets have already addressed. it's sitting
therc now.
3: Mr Keating, what do you think of Mr Fraser's suggestion for a growth strategy
statement?
PM: I think Mr Fraser is at pains to advise the community what he sees are the
prospects for growth in the Australian economy and the very great opportunities
Australia has. You notice in his recent address, he was largely endorsing the
structurc of governmecnt policy. He was not urging that there be a new structure. I
think what he is after is some mechanism or method to tell the community that
great structural progress has been madc, and that Australia is adjusting, and that
some of the gloom that is dispelled by people knowing that the fundamental
adjustment in the economy is still taking place. I think that's the point of the thing.
J: Do you agree with it?
PM: Yes I do, and I think the Treasurer responded to that yesterday.
J: Mr Keating, on spending and on jobs, Senator Tate admitted this week that the
local capital works funding that went to New South Walcs was not being used to
create new jobs but only keep those jobs that already existed. Is that the case in
other States, and if so doesn't that run slightly contrary to what the Government
said is
PM: While it may in somec cases be correct, upon examninat ion think Senator Tate
would ind that it's not correct. I was in Bundabcrg recently, the very day I was
TEL: 2. Dec. 92 18: 39 No. 021 P. 15/ 1-
there 21 people were put onto one of these programs in that city at that time who
were not employees of the Bundaberg City Council. So this is happening all over
the place. There is additionality, as they say, to all of these things.
J: Senator Cook, given that you would legislate to give effect to the ILO convention,
and if it's not thrown out by the High Court, does that mean constraint on a future
Liberal Government in just wiping out the legislation, or doe it put constraints on
( inaudible) if you do that?
PC; I don't think it will be thrown out by the High Court, let's get that very clear. But
if we legislate minimum standards and an incoming Governiment wants to remove
minimum standards, and if they've got a Parliamentary majority, they can. But
how would you look out there in the community trying to knock off minimum
standards? So if they want to do that, they'll reveal the colour of their morality in
these sort of issues.
J: How do you see the IRC actually implementing this, through a national test case?
PC: No, the way in which wc would propose to legislate is to enable the IRC to do
what it does now, in fact, to declare minimum rates of awards, so that their
minimum standards would be an appropriate standard for the industry sector.
J: Mr Keating, a lot has been made of your comment on Lateline the other night
when you said the micro reform agenda was largely completed.
FM: I was speaking about the Commonwealth own purpose authorities, not the
Commonwealth induced national Look, let mc just make this point. In a
country like Australia, the micro economic reform will never be completed, it's
impossible to complete it because it implies that everything is at optimums in
the labour market, in the product market. Of course it is not and can never be in
any country. So there will always be a desire to make any country more
competitive and more efficient. But in terms of the Commonwealth's own
authorities and its things, in such things as airlines are largely completed;
telecommunications, a competitor, a sunset clause, full competition in 5 years from
now; in tariffs. Wherever you go around the Commonwealth's realm, the big
agenda of thc middle ' 80s is largely behind us, but much of the Commonwealth's
agenda now will be about making State authorities in the public sector more
competitive. But of course, the big agenda will always be making the private
product marlcts more competitive through enterprise agreements, et cetera. That
was the point I was making, that people were saying to us in the ' 80s, you've got to
do thc ports and wharves, you've got to do the airline system, you've got to do the
telecommunications. They are largely done, that's the point I'm making.
V: You're still saying there's a lot still to do?
TEL: 2. Dec. 92 18: 39 No. 021 P. lb/ 1?
a' L~,** DOW4
16
PM:. I think in the public sector, broadly categorised, yes. And particularly in State
authorities for which the Commonwealth does not have authority. That is, where
we've got to do things cooperatively with thc States, we have a national agenda
there. But that's not our own purpose thing. Where we've been in the box seat on
our own things, wc'vc done them.
1: Will you be pushing the States on Monday when YOU See them to speed up micro
reform?
PM: in some respects we'll be talking about micro issues. The agenda for this meeting
some of it will be in areas like electricity where again we are on the verge of a very
dramatic change, thc separation of power generation from distribution. And again,
an area where the Commonwealth's own Interest are the generating units of the
Snowy Mountains hydro-electric scheme, but where the Commonwealth has a
national interest in the operation of the Electricity Commissions of the various
States. So that's the point I was making.
1: Mr Keating, in Mr Hawke's New Federalism there was an aim of cooperation with
the Premiers to eventually get rid of industrial tribunals in the States. Is this still
an aim that your Government would like to work towards?
PM: Would you like to say something about that, Peter?
PC: Yes, we've been pursuing that, and we're doing it cooperatively with the States.
We've done a number of things to help reach that goal. We've appointed, where
States nominated them, all their Commissioners to our bench and they've
appointed our Commissioners to their benches; we opened a common facility in
Adelaide the other day where that there's' one court with both parties using it.
We're moving in that direction. I think there is, as an ideal outcome, a good idea
that we have one industrial relations system in Australia instead of seven. Or, in
the case of Victoria, you'd have to say six and a bit. But we're working towards
that, and I think it would be a desirable outcome to get there.
J: When do you intend to talk to the Victorian Government and about what?
PC: Pretty soon.
Have you spoken to other State Governments?
PC We'll conduct proper consultations with the States and we'll get on our bike and do
it immecdiately.
J: But you've already decided what you're doing.
J: What's thc point?
TEL: 2. Dec. 92 18: 59 NO . UZI
17
PC: There is a lot of point. In the case of many of these State Governments they'll
want to see our legislation to make sure that what we say is the principal, where
there is a genuine Commission. This legislation won't intrude, theyll want to see
that, they're not affected by that, so we'll show them that and go through the
legislation. That's the standard way of proceeding.
J: If they disagree with the legislation you will just go ahead anyway.
PC: As the Prime Minister said, we've got an obligation to the Australian community
to push the recovery through even better, and Victoria is a blight on that landscape,
and if they want to continue to be a blight I don't think that's consistent with our
national focus at all.
J: Senator Cook, if there is a large number of workers who are already outside the
award, wouldn't you expect a flood of dissatisfied workers to the IRC?
PC: There's not a large number of workers outside the award system. The award
system covers about 82 per cent of Australian workers, and of the remaining 18 per
cent most of those are managerial or professional. So there's not a large group
outside the award system, but there arc some outside the award system. And the
significant thing about the changes that we're proposing to legislate minimum
wages, whether some of those people are in a union or not they can approach the
federal Commission and have a fair minimum determined for them.
ends