PRESS CCNFERENCE GIVIEN BY THE PRIME MINISTER9
THE RT. HON. R. G. i4ENZIES, AT CANBERRA, ON
THURSDAY, 8TH FEBRUARY. 1962, AT 3 P. M.
QUESTION: Sir, Mr. Calwell appears to have made a take-over
bid, and he gives the impression he doesn't think much
of you. Will you reply to him?
PRIME MINISTER: ; Well as far as my memory can carry me, he's made
a take-over bid every day sinc. the election. It's
been very interesting. This time he seems to have
excelled himself because yesterday he announced to the
Press that there was nothing new about my statement,
it was the same old policy. But today, no doubt having
taken counsel with his principal advisers, he has
decided the opposite. Uell, I must leave it to him to
find it out for himself. I am deeply concerned about
what we are doing ourselves.
QUESTION: Who do you think would be his principal advisers?
PRIME MINISTER: Oh, I should think the Sydney Morning Herald. That
seems a reasonable guess together with its juvenile
child.
QUESTION: Would you care to comment on his claim that your
statement adol Labour's Election Policy, and even
takes it farther, Sir?
PRIME MTNTST. R: I don't think it does. I thought my statement was
very plain. I pointed out the results that had been
achieved by our policy, and then went on to say I
thought categorically that the results that I
indicated had happened, or had been achieved, in the
trade balances, in the consumer price index and in the
Loan Market, were good. Then I went on to say we
acknowledged the promise of recovery which appeared
late last year had not been realised sufficiently in
practical results, and that it must now be promoted
with greater speed. I referred to the problems; and I
referred to what we were going to do; Our proposals will
stand or fall on their own merits.
QUESTION: Sir, on that basis of price stability do you
regard your present short-term programme of making
available something like œ 70m. in the cash stream in the
next four months as being inflationary, or likely to be
inflationary?
PRIME MINISTER: It depends entirely on what the results are. If,
in fact, not in a hurry it won't happen tomorrow
morning or something of that kind but if, over the
next few months there is a material iiqrovement in the
employment position then that won't be inflationary:
that will represent the taking up of what, at present,
are unused resources. And that is what we are hoping
because that would help to produce, or to
re-introduce, a state of normality not a state of
infation, but a state of reasonable normality, And as
we thought that ought to be encouraged to continue, and
the wday to help it continue was to relate your shortterm
measures to a restoration of confidence in the
community, we are hoping that there will be a
sufficient restoration of continuity to carry the
cormmuunity along without a constant repetition of
injections. Here is a particular injection for a
particular purpose.
mr*
QUESTION: Does this mean, as some have suggested, that the
Government is more interested in economic growth than
in stability?
PRIME MINISTER: v'ell, I don't think that it ought to be put in that
fashion. We are essentially interested in economic
growth. Perhaps the great mistake we made in the last
election was to allow ourselves to be represented as
being not interested in econo. ic growth. I made it
quite clear in the Policy Speech that we were but then
an atmosphere developed in which we appeared to be in
favour of some kind of stagnation, not of growth. We
were, and are, emphatically in favour of growth, Ve
don't think that growth is irreconcilable with as I
said in my statement a reasonable degree of stability.
We may have li,: tle fluctuations here or there.
QUESTION: Even though that growth emphasis may mean some
risk in balance of payments, you are still prepared to
take it?
PRIME MINISTER: Well, in the present state of affairs you must
accept some risks if you are going to make a sufficient
impact on the current state of the economy to get rid
of these matters that I referred to in my statonent: a
higher rate of unemployment than anybody could
contemplate as acceptable a rate clearly requiring
special measures to get it down. All these things
involve, I suppose, some risks but we are not
incompetent to deal with the risks. We have indicated
that what we want to do is to get rid of this
unemployment and to stimulate confidence in the
community. If, in fact? at some time in the future
and I am not expecting it very soon there were
pressures developing on the economy, then we have
indicated that we intend to deal with those by
specific measures as far as possible, and not by
general ones. I think that is the drift of what I
said the other day.
QU: STION: Have you an estimate of the total cost of your
programme, Sir?
PRIME MINISTER: Oh, well... you mean in the current financial year?
, Jell let's see. There is, in a direct sense,
for the States, because you remember that we don't
find the money on semi and local government they have
an authority to borrow but coming from us œ 10n. nonrepayable
Grant, œ 5n. advance on Housing. iJell, that's
On the Income Tax concessions I've heard various
estimates running betwTeen œ 25m. and œ 30, m. In the short
run, in the next four months, these other items are not
easily calculated, but I wouldn't think were very
massive in that period. For example, nobody can tell
yet how much will be involved in investment allowances:
it depends entirely on what happens in the manufacturing
field. You can't expect that to happen over-night,
The improvements, particularly the family improvements
and the unemployment benefits, well I don't know, but
again that's not, I would assume, a massive figure
over the next four months.
QUESTION: Sir, it would come down to something like about
to œ 6am?
PRIME MINISTER: I wouldn't think more, but I haven't worked it out
with precision. But those figures would represent, I
would think, the top limits.
QUESTION: PRIME MINISTER: Can you be any more specific, Sir, about the
at this stage? Can Queensl. r. d expect special
treatment? Well, there are two propositions we are putting
up. Let's take them in order.
First, œ 5m. on Housing. JeIll, we'll have to
discuss that with the State Pr3miers. I thought it
proper to indicate the total amount, but I don't think
it would be very agreeable to be saying in advance " and
this is how it's going to be distributed". You know
they might perhaps think it's not worthwhile coming.
But we'll have to discuss with them the housing thing,
very largely on the basis of -1hat the needs are in the
various State-, no doubt at least that will be an
important factzr.
As for the œ 1Om. 1 which is a straight-out grant by
the Commonwealth, and quite a substantial one that
being a voluntary grant by us under Section 9 we,
technically, can determine its allocation. Buz we
don't as a rule try to do that we may have to in the
long run. In the past when we have done anything of
this kind we have discussed it with the States, but we
will ourselves indicate what we think are the broad
principles. And as this is to be a grant for
employment-providing activities, then it is quite
obvious that one of the factors, one of the principal
factors, to be taken into account is the relative r7e
of unemployment in the various States. At this time
Queensland, I am informed, has the highest rate of
unemployment. Therefore it is not to be assumed that
we will just distribute this money on a population
basis. This is designed to relieve unemployment, to
enable work to be put in hand swiftly for the relief of
unemployment, and therefore the unemployment position
in each State is a very important factor. VWe have had
a few cases of this kind before in past years. I
remember one I've forgotten what it was about but
one in which we found some extra money. On that
occasion half of it was distributed, according to the
existing formula, and the other half arbitrarily
allocated by the Commonwealth. But I don't prophesy
that. All I want to make quite clear is that the
position of the States with the most serious unemployment
problems will certainly not be overlooked in the
distribution of this sum.
QUESTION: Do you intend, Sir, to try to get that money spent
quickly on small works to take up unemployment in
semi-skilled.....?
PRIME MINISTER: Well, speed is the essence. You see this is a
grant for this financial year, not for the next 18
months or something of that kind; this is a grant for
the remainder of this financial year. The whole idea,
to use the co: mmon phrase, is to give the system a
" shot in the arm" because the employment position has
not turned out to be as satisfactory as we had hoped.
There it is. And it must be improved. And it is very
important, under those circumstances, to make a quick
attack on it. That is why we are concentrating, into
these few months, the amount of money that I have
indicated. Therefore it follows that we are not
looking to the States to say, " Well, this will enable
us to begin planning some long-term operation". We want
jobs in which they can be putting people on the job in
the next week or two. I know there are such jobs in
Queensland because I have been up there; and I have
no doubt there are in other States.
QUESTION: Will you impose any conditions, Sir, as to the
class of works to be undertaken, or will that be left
to the States?
PRIME MINISTER: Well we haven't discussed this yet, and I don't
like to take up the attitude that we are imposing
something on the States. But it is quite clear that if
the principal object of the exercise is to provide
employment, particularly in places where there are
pockets of unemployment and to do it quickly, then
naturally I would expect everybody to give priority to
works with the highest labour content.
QUESTION: Mr. Calwell has also said, Sir, that he is goinj
to force you to an Election as soon as possible.
PRIME MINISTER: Well I nc-ver doubted it.
QUESTION: Would you care to estimate how soonø..?
PRIME MINISTER. No I haven't a clue, I haven't a clue. But he
would be a very poor Opposition Leader if he didn't
have the ambition to put us out as soon as he could, T
take that for granted. I think it is an admirable . Ji
QUESTION: He has also predicted, Sir, that you won't fight
another " ection?
PRIME MINISTER: Has he? Oh, well.... he must think Parliament
going to last a long time.
QUESTION: Sir, coming back to your statement the other
night on the Banking ouestion, you rather suggest that
you are thinking in terms of a more competitive bank. nq
system, perhaps something like the pre-war system. Is
that the kind of thing you have in mind?
PRIME MINISTER: Don't broaden this out too much. We saw the
Trading Banks and they had... I said " Wiell now here's
your opportunity to tell us about your problems,
direct, you iknow, where you think the system isn't
working effectively". And broadly speaking there were
two problems that wee under discussion. One was the
interest rate structure. That is not, at present, the
subject of deternination bocause further discussions
are going on in that field, and I don't prophesy what
the result of it will be. But it is not to be assumed
that that matter is disposed of. That remains a matter
of active consideration.
The other one was how far the Trading Banks cald
go into longer term lending. This is of lively
interest, particularly in the country, and, as you
know, arguments have gone on as to whether the Banks
provide finance in country areas to the extent that
they should, or the extent that they can. One of the
reasons why the Develop! ent Bank was established was to
fill in what was thought to be a gap in that field.
Now the Banks themselves are quite interested in this
problem of longer-term lending. And we welcor. D that of
course. But it is early days for them to arrive at a
conclusion. They indicated to us that they were having
discussions about it, and they have confirmed that
since, as I said, in talks with the Treasurer. But I
can't prophesy what the result of this will be. And of
course if it turned out that the Banks found
themselves able to go into longer-term lending in that
way it would be of material advantage to rural
development, and perhaps, to that extent would reduce
the drain on the funds of the Development Bank. Ido krw
that they are interested in that aspect of the matter.
But all that being on the knees of the Gods we are
satisfied that the Development Bank must be able to go
on with its job, and that is why we are providing a
further œ 5m. capital which we will do in the autumn
session. I mean this is not a forecast of the future.
It will be one of the financial measures.
There is one other aspect, you know, of my
announcement the other night I think I ought to refer
to in corxmon justice-to the peuple concerned. I -oted
that in his first lucubration on this matter the
Leader of the Opposition persuaded himself that what
had been done had been done over the bitter hostility
of the Treasury, and the Treasury officials, T Li, I
want to say, is arrant nonsense. ' e had a very
strenuous fortright of consultations which I found
tremendcusly v-. uable. We had the meeting of a small
group of Ministers, first without, and then with
officials, and then we agreed upon recommeniations and
we put them to the Cabinet on Fiiday of last week. And
they were agreed to, after some hours of discussion.
I want to say that the proposals that we evolerc,
and which I subsequently announced, were, so far as
can judge. and I'm not in a bad position to judge
proposals which represented the complete agreement of
all the departments concerned. Certainly, there was no
indication that there was opposition by t he Troasury,
This little bit of underground propaganda that goe: s
to try and create some state of war between the
Department of Trade and the Treasury is just nonsenc.-'. e.,
utter nonsense. I thought they all behaved very wel. l
And, of course, naturally, as the proposals that were
announced were entirely agreeable to me who wrote t
down I felt they were all very intelligent by produclJ..
unanimity on then.
QUESTION: Is the investment allowance intended to be a
permanent reasure Sir?
PRTIM MfINTSTR'i: I think you can treat it in that way. In a sense
it may be experimental, but it is not being put on for
some limited period of time. Though, I suppose, from
the point of view of future years something may depend
upon how it works, whether it produces the effect. Of
course, at some time in the future, if it turns out to
be successful, as I think it will be, then the rate is
capable of variation according to the circumstances.
But I want to say that I think Mr. Holt is going to say
something, isn't he, in a supplementary way about the
Investment Allowances, because there are some nice
technical questions that they are working on which
prevent us, at the moment, from putting a specific date
down. We certainly...
QUESTION: I don't think this is a technical question, Sir,
but after a long period of prosperity in which firms
have had an opportunity to build up reserves why has it
become necessary to give them a virtual subsidy to
nodernise their plants?
PRIME MINISTER: The great advantage of modernising the plant, from
the point of view of manufacturing, is this: they are
not the masters of the wage structure, they are not the
nasters, overall, of the economic policy, yet they have
to work within those limits, and it is terribly
important that their efficiency be so increased that
they can move more and more into the export field.
6.
The greatest thing to increase the efficiency of highly
mechanised industry like manufacturing is to enable
them to keep abreast of the latest developments and have
the most modern plant. Under the existing scales of
depreciation it is not easy for them to follow that
line because they depreciate, yes, but they depreciate
over a term of years 100% of the particular plant.
They might want, very much before that time is over,
to replace it by something so -much better that if tvey
don't have it their competitors in the world will uat
them out of business. Therefore this is a direct
encouragement to raodernise plant, and thereby to . eep
down unit costs and increase their capacity to
from Australia and their capacity to compete J"-ide.
Australia with goods that come in. We examined this,
it's been und,.. consideration one way or another for
some time, but this time we examined this with
particularity. ; Je saw what was being done in other
countries and we came to the conclusion that what
amounts, in substance, to a subsidy to re-equipment, a
subsidy to modernisation, would be a very, very good
contribution to the efficiency of the industry.
QUESTION: Jouldn't this also tend to encourage investmen;.-;
from overseas in Australian industry?
PRIME MINISTER: Oh, well it very well might, it very well migh!:,
I wouldn't distinguish between the two things.
QUESTION: Your statement the other night, Sir, divided yu'r
proposals into two groups, one of which was descri 1..
as short-term, or interim. Is it to be inferred fr,.
that that those proposals may come under review fa
soon, or may they continue?
PRIME MINISTER. Some of them expend themselves in their own
performance, don't they, like the payments to the
States, you see. But the question of income tax, well
I'll say nothing about that at this stage because this
is a matter that we have to consider when we are
approaching our overall annual provisions.
QUESTION: dould that apply to sales tax on cars Sir?
PRIME MINISTER: Do you mean will it come on now and go off on
June 30th, or something like that, eh? Or go up?
QUESTION: Should we buy a car now?
PRIME MINISTER: Look, I don't think I actually distinguished
sharply between short-term and long-term. I thought I
used a different expression, and I did it deliberately,
to indicate that some of these are designed to produce
quick results, and some of then are designed as a sort
of follow-up, to encourage confidence and restore the
general tone of industry. Apart from those that expend
themselves in their own performance, like the grants to
the States, the others... don't roead any inference into
it at all. They are of quick operation, true, or we
hope so.
QUESTION: You mean we should think in terms of purpose
rather than character?
PRIME MINISTER: That's right. I can't give you the slightest idea
as to what will happen in the long run on these matters.
We don't put an ear-mark on them and say, " Ucll those
are things that are going to be done and are going to
stop on Juno 30th", or something like that.
QUESTION: Mr, Menzies is there anything you can say on the
Indonesian situation, and ' Jez. New Guinea? Do you think
the situation is easier at all now?
PRIME MINISTER: Well, I wish I knew. In one cable you get a little
optimism about having negotiations; and in the next one
there's no optimism. It depends largely from what side
of the fence the message comes. All I can say is that
we are still hoping that there will be negotiations -; d
not war, because the institution of hostilities 1'.
matter of this kind, in this part of the world, is not
very agreeable to 99 people out of 100, though, I
gather, fondly hoped for by the 100th.
QUESTION: Mr. Menzins, there is a Space Club project o.:
way which Britan and France have sponsored and tli:
Australian Govurnment has been asked by France and
Britain to ratify a treaty. Do you know what stage ti: is
has reached?
PRIME MINISTER: I don't, I don't. But Mr. Fairhall may knov, t lake
a chance of asking him. I know in a genera] ; ay ; c.' at
stage they are at, but as to the particular stage-;
the moment, I don't. it hasn't come back to us
final decision.
QJESTION: Going back to Indonesia, Sir, if the Dutch
Government asks for permission to land on AustraliJa:-.
territory, flying these re-inforcements or replacei: 3to. rc
PRIME MINISTER: I never answer hypothetical questions.
QUESTION! Have you had such a request, Sir?
PRIME MINISTER: Not that I'm aware of, no. But those are matters
you deal with when they arise, if you've got any sense.
QUESTION: Have you had any indication, yet, of the date of
the Prime Ministers' Conference, Sir?
PRIME MINISTER: I don't even know whether there will be one. I've
had no hint of one yet.
QUESTION: Mr. Menzies will you move as quickly as possible
after the State Elections in South Australia and Now
South Wales to get this conference going on the
Chowilla Dam?
PRIME MINISTER: That's a matter I'm going to have a talk to Sir
Thomas Playford about when he's over here next week.
Personally, I would like to do something. Even if it's
only a preliminary discussion on the matter, I would
like to get it under way. But I will be talking to the
Premier of South Australia about it. He's got an
election coming on hasn't he? Everybody seems to have
an election.
QUESTION: Mr. Calwell referred to the " Menzios myth", Sir...
PRIME MINISTER: Did he? But he referred also to the myth of the
boom. Don't you remember? Jell, I'm like the boom in
1960, I'm a myth. 3ut I've been a " myth" for some time.