PRESS OFFICE TRANSCRIPT
RURAL WRITERS INTERVIEW
23 August 197b
QUESTION:........ are you in a position to tell us what attitude
the Government will take to a strong line by the union if another
situation blows up like last night's.
PRIME MINISTER:
I don't want to elaborate in detail, but let me oniy say that
the Government knows quite well that the sheep export trade
is important to the growers concerned, important forAustralia,
and it is the Government's intention that the trade will
continue. The Government will not, and cannot, accept a
situation in which a particular group of people can determine
the nature or the direction of Australia's exports.
QUESTION: Prime Minister will that include opening up new ports
PRIME MINISTER:
I think it's much better not to go into too much detail about
it. At the moment the trade is going ahead, and the statement
of attitude that I have expressed is the Governments position.
It is a very firm position.
QUESTION: Going ahead until September 1, Sir, what happens after that?
The moratorium finishes.
PRIME MINISTER:
I think we need to see what happens.
QUESTION: Would you allow a reversion to the previous situation prior
to the last conference where they imposed a ratio of carcass
to livesheep?
PRIME MINISTER:
I have said that the trade has got to go ahead, and it would
be much better I think if we could just take it as that at
the moment because you go into the details ' if this', ' if that',
and I think it's much better to see what does occur.
QUESTION:
Tney have categorically said that they regard the situation
as being clearly resolved by this meeting in Sydney, that
no restrictions or bans will apply and they feel totally tree
to do whatever they want.
PRIME MINISTER:
Who is this.
ANSWER: The growers. They regard that meeting which Mr Street convened,
the result of that meeting as giving them a totally clean bill
to do whatever they want to do.
QUESTION: The AMIEU of course has said totally the Opposite.
PRIME MINISTER:
Yes, I know.
QUESTION: Your answer, Sir, indicates that the Government will take the
strongest possible line.
PkcIMh; MINISTER:
The uovernment will be supporting the trade, yes.
QUESTION:
Were you aware ot reported and alleged differences within the
AM4IEU*? PRIME MINISTk; R:
I nave heard there are differences, yes.
QUESTION: Prime Minister, do you think that there is any way that the
ACTU can, if you like, get moderation in this dispute, get
the union to come to the party?
PRIM4E MINISTER:
I think it was the joint activities of Mr Hawke and Mr Street
on the last occasion which did a great deal to resolve the
issue, even if only tor a period. One of the problems ot
this area is you are in the realm of " it" If something
happens, if somebody does something, and it's -not a very
good practEice in politics to respond on that basis because
the conversation can so soon move to an area which can appear / 3
to be nothing but provocative, and future events might unfold
that that was unnecessary. I have stated the Government's
attitude, and I really think that for the moment that ought
to be adequate.
QUESTION: You are hopeful that discussions in other words will still
solve this problem.
PRIME MINISTER:
Obviously I would sooner discussions solved the problem, any
problem. It's much better to have that. Whatever anyone
says the Government doesn't want confrontation. That doesn't
mean to say the Government doesn't have a determined view.
QUESTION: The union says that a lot of the problem is caused by the
transitory nature of their employment they need adequate
compensation. We know-about the shearers, they have
compensation in their a-ward, and there is compensation in
the award for AMIEU people, but what is your reaction
to this claim that they do need compensation.
PRIME MINISTER:
I think that awards have taken that sort of thing into account
and traditionally have in Australia. At the same time we need
to understand that in a number of meatworks., not all, the
seasonal nature of the business is much less than it used to
be. There are some meatworks that used to go from, at the peak,
employment of say 850 down to not much more than maintenance
100 or 150, but now are able to maintain their peak, or something
close to their peak all the year round. A lot work in
Australia is seasonal, and awards have traditionally taken
that sort of thing into account. There is nothing unusual in
that.
QUiESTiON: Prime Minister, will you do the same thing an d make these,
pursue the ram embargo with the same sort of
PRIME MINISTER:
I don't see any problems in the rams going out.
QUESTION: You don't?
PRIME MINISTER:
No. / 4
QUE~ STION:
how will they go out?
PRIME MINISTER:
Again you are in the same position hypothesis.
QUESTION: ' he Russians said they would have bought a hundred ramns in
Melbourne if they had been confident they could have got them
out. PI~ k; MINISTER:
if they had asked me I would have said they would get out.
QUESTION: So the Russians should come to you should they Prime Minister?
PRIME MINISTER:
I'm not really saying that. It the Russians had gone to
Ian Sinclair I am sure Ian Sinclair would have said the rams
will get out, you can bid in complete freedom.
QUESTION: Turn a blind eye to the ( remainder inaudible)
PRIME MINISTER:
Again, why do you want to pursue the " if"?
QUESTION:
We have questioned Ian Sinclair on a number of occasions about
what the Government might do, and he has responded in roughly
the same way as you have: ' Let's wait and see what happens'.
PRIME MINISTER:
But look, the " if" doesn't help, it really doesn't in an
industrial relations sense. i know because I think somewhere
a wrong answer was given.
QUESTION: would
Some good western District rams/ have gone out.
PRIME MINISTER:
Well there were a lot of NSW rams there too.
QUESTION: Ana some Nareen stuff?
PRIME MINISTER:
They won all the unhoused. But it really doesn't help to
pursue the " if" situation. It really doesn't.
QUESTION: But surely farmers need.
PRI14E MINISTER:
They need to know that the ramns will go out.
QUESTION: They will go out?
PRIME MINISTER:
I said I have absolute confidence that they will go out.
And I'd say that to anyone who wanted to come and buy.
QUESTION: If I could come back also to something....
PRIME MINISTER:
I was very surprised that the Russians hadn't bid. But I
made some inquiries why and I think they got a wrong answer
somewhere. QUESTION: Another thing I'd also like to bring on, with absolute
interest to primary producers is the P. I. B. When will
interest rates be structured, and is there any indication
at all what the interest rates will be?
PRIME MINISTER:
I can't add to what has already been published about this.
QUESTION: What has been published?
PRIME MINISTER:
I'll check the tigures.
QUESTION: Surely there would be a requirement if the Government has
made In1' s available through the Budget, surely it would
be reasonable to presume that
PRIME MINISTER:
The fact that I& D's are available will enable the bank to
ameliorate its rate of interest to some extent.
QUESTION: Are they being told to do so?
PRIME MINISTER:
It will enable them to do it.
QUESTION: I understand the Government took legal advice on the use of
IED's. surely if you are going to make this available
it is to a certain extent controversial. Wouldn't you say
to the bank it must be used to give concession?
PRIME MINISTER:
Well it's my understanding that it's going to be. There is
one argument here, a point of view, that I would like to put.
Somebody has said lED is five percent, why can't it be much
lower than the estimates appear to be? One of the things
that needs to be understood of course with lED's is that
there are very considerable tax advantages in IED's to
farmers, and I don't want to lose sight of that now that
they will be starting to get on to a better income basis
the advantages of tax averaging conditions that we've
introduced, and the advantages of lED's for farmers will
really come to the fore. In periods of slack income it's
a bit like saying that Christmas is around the corner when
it never comes. Those who are getting out of a drought
situation and beef producers are going to, through
averaging and IEDs, obviously carry of past losses,
through a combination of these three things they are given
a real opportunity to rebuild their reserves.
QUESTION: Can I ask you this. When Cabinet met in Perth,
did it decide that the interest rates of the PIB would be
11 percent?
PRIME MINISTER:
I don't think I can say any more about it than I have...
QUESTION: There is $ 8U million in the PIB account alone. I am told that
if the Bank lends out 5O million in a year, sorry, borrows
million in a year, and lends out $ 25 million, the contribution
from the Federal Government $ 250,000 I think would be equal
to dropping the interest rate one percent. Could you give some
indication of this $ 80 million, ( inaudible)
how much the Federal Government will be instructed to go into
the PIB?
-7
PRIME MINISTER:
I don't think that's been finally determined.
QUESTION: It could make a tremendous, a huge difference to what, how
the Bank...
PRIME MINISTER:
The main thing with the Bank, really it is, is to have the
long-term finance available which we know quite well the
traditional banks have not been particularly interested in and it's
the period, the length of the term of the loan which has
the greatest impact on the repayments which is the most important
thing-whether or not the farmer can carry it. In addition to
that, and this is confirmed by the success of the Commonwealth
Loan, there's not the slightest doubt that interest rates are
going to go on going down and I would hope that if we are
in a position in which that movement downward in interest rates
will, in a reasonable time, f low through into the rates which are
of great importance to much of the productive sector of the
community and to bank overdraft rates. I'm not putting any time
on that but Government rates have moved down, a lot of finance
rates have moved down, housing rates have started to move down..
The one area that hasn't moved down are -the bank deposit and
overdraft rates.
QUESTION: So you are suggesting...
PRIME MINISTER_
What I'm suggesting is that with our economic policies,. with
percent inflation, there is a light on the hill. That
will be achieved unless something quite unforeseen happens.
Overall, there is going to be a movement downward in interest
rates. QUESTION: Eventually the interest rates of the Primary industry Bank
will move down...
PRIME MINISTER:
Well, they've got to move down with those whatever they are
now, if general rates move down they'll have to move down too,
of course they will.
QUESTION:
Will they be a concessional ratio all the time, to the ruling
rate though? / 8
PRIME MINISTER:
The use ot TED's is designed to enable them to shade their
interest rates below that which they would otherwise be.
QUESTION: Would you need legislation to use IED's?
PRIME MINISTER:
I'd have to check that. Ian Sinclair and tne Treasurer have
been handling the details of this.
QUESTION: Prime Minister, back in 1975 when you became Leader of the
Opposition, you were talking in Portland and Warrnambool, and
you said then about the Primary Industry Bank, " We would
propose that funds be available for the purchase of land for
up to 30-35 years. The funds will also be made available
for the purchase of producers equipment so that people don't
have to buy their tractors and their combines on hire purchase
terms." Do you still see the P'rimary Inaustry Bank making
loans available to Primary producers over a 30-35 year period?
PRIME MINISTER:
They will certainly be making them available for extended
periods. QUESTION: Can you put a figure on it for us?
PRIME MINISTER:
No. The bank will have to make its own judgements about that,
but there will be nothing in its charter to prevent it.
QUESTION: You're hopeful that they will be able to lend over a period
of 30-35 years, depending
PRIME MINISTER:
I would hope they can lend up to that period, yes.
QUESTION: Prime Minister can I say something in relation to the Budget?
Would you agree that the new tax levels on fuel will discriminate
heavily against the Primary Industry sector? 9
PRIME MINISTER:
No, they won't discriminate heavily against them, because
fuel is a significant cost to a number of industries. It is
a significant cost obviously in relation to Primary industries.
It was a policy move that we felt it necessary to take. The
directions I have had from the Primary Industry area are it
received the Budget very well indeed, because they know
inflation is going to come down and that means interest rates
are going to come down. Farmers I think above all know that
getting these two things right means much much more to them
than outweighs any detriment that comes from the fuel tax
for example.
QUESTION:
Well what are the costs likely to be in terms of international
competitiveness? PRIME MINISTER:
I haven't the slightest, although they will be improved
because inflation will be coming down and interest rates
will be coming down. Inflation will be under that of many
of our major trading partners, and our position, instead of
getting worse as it has with high inflation, is going to
improve, there is no doubt. Quite apart from that there
are better markets at the moment.
QUESTION: Prime Minister, on this subject of markets overseas markets
and overseas trade have you had any Japanese reaction at all
to the increase in tariff ( remainder interrupted).
PRIME MINISTER:
I haven't had any. There's not an increase in tariffs. I have
been given very firm assurances that they intend to be a stable
market in the future, and I accept and believe those assurances.
QUESTION: Could you get the same assurances from the MTN discussions?
PRIME MINISTER:
We can get them from the Japanese, but the MTN's a lot of
people, and in relation to a number of MTN countries we
haven't got those assurances at all, as you know. I don't
regard it as an extra tariff, I regard it as the community
getting some of the monopoly profit from import quotas.
QUESTION: They have to pay though.
PRIME MINISTER:
No. I think it will come out of the monopoly profit that now
accrues to the holder of an import licence.
QUESTION: What is the ASEAN reaction to the 12 l% increase in customs?
PRIME MINISTER:
I haven't seen one. It's a monopoly profit, and ASEAN know
quite well that their exports to us have been increasing at
30%-40% a year for a long long while. They have got a better
access into this market than they have into any other
developed country market in the world. I'm not saying they
shouldn't have, but they have. On a per capita basis,
especially for sensitive goods.
QUESTION: They are paying for the right, actually.
PRIME MINISTER:
No they won't be paying for it, it will be the importer
here that will be paying, not them. It will be the
importer here. It is important really to get this all
around the right way. But we need to recognise that 86% of
ASEAN exports to us come in I think either duty free
or under preference arrangements, about 3.6% comes in
under quota, so it's only the bit that comes in under
quota that is in any way affected. It's a very small
part of the total trade with them.
QUESTION: Prime Minister, in the event that the EEC doesn't come up
with anything particularly good in the way of agricultural
trade concessions, is the Government prepared to consider
retaliation moves?
PRIME MINISTER:
There is work being done now, and there will be a submission
coming forward from the Government which we'll take within
the next few weeks on the totality of our trading relationships
with the European community. Let me only say everything we
have said about that subject we've said in great seriousness
and we mean it.
QUESTION: In other words we are ready to get tough with the EEC.
How tough can we be? .11
11.
PRIME MINISTER:
Oh, they need a lot of things from us, and sometimes we
have alternative sources of supply for what we need.
QUESTION: The obvious question, resources diplomacy?
PRIME MINISTER:
Oh I don't think it's resources diplomacy, I think its
a question of taking the totality of one's trading
relationship into account.
QUESTION: ( inaudible)
PRIME MINISTER:
We can't offer any more. We have gone as far as anyone
has gone, and that doesn't stand unless we get reciprocal
benefits for Australia.
QUESTION:
Mr Ushiba was not very confident when we questioned him a
couple of weeks ago that Japan could meet the Australian
( inaudible)
PRIME MINISTER:
I think we'll get an improved situation with Japan on meat.
That's one of significant concern to us as you know, and I
do believe that Japan is making every effort not only to be
but to be seen to be very responsible member of the
international trading community.
QUESTION: That's from pressures from Washington isn't it. You brought
up meat how concerned are we about the
legislation?
PRIME MINISTER:
I'd be very concerned about that.
QUESTION: Are you concerned at this stage with what you know now, are
you? / 12
12.
PRIME MINISTER:
No. I would be very concerned if it was introduced.
QUESTION: At the Ways and Means Committee last week, the second
congressional committee approved it, although watered down.
It looks like the administration, for varying political
reasons, is going to also approve it. It may not affect
us for up to five or six years, but what are we doing in
the mean time?
PRIME MINISTER:
What do you mean ' what are we doing in the mean time'?
QUESTION:
What can we do to counter the ( inaudible)
PRIME MINISTER:
Press our case with the United States as hard as we can.
QUESTION: Are you getting signs from the administration that they are
really for it?
PRIME MINISTER:
No, I haven't.
QUESTION: Any signs at all from them?
PRIME MINISTER:
What I have been told was that they were opposed to it.
QUESTION: And do you think that that will stick? It's an election year,
and of course
PRIME MINISTER:
Well everything I've been told would leave me to believe that
would not be accepted.
QUESTION: It has been watered down I understand and will be accepted. / 13
13.
PRIME MINISTER:
That's not consistent with what I've been told. You've pointed
out that it is election year. On everything* I've been told
I've got every right to be confident, but I note your remarks
about an election year. On the other hand you've got to
understand also that for a number of months the United States
has had a monthly inflation rate of around about That
goes on and on and becomes 10% or 12% over a year. They are
getting increasingly concerned about inflation and food prices
have an obvious impact on that. My belief is that the United
States economy and consumer is going to need more meat, and
Mr Strauss said this in the plainest terms. This isn't just
something up to Christmas. Their cattle numbers were 20 million
down. QUESTION: I thought President Carter told an assembly of U. S.. cattlemen
in Columbia, Missouri', that he would not allow unrestricted
imports of these products.
PRIME MINISTER:
It has never been suggested that imports would be unrestricted.
They have been restricted for many many years. It's a question
of what the word ' restriction' means, isn't it.
QUESTION: Prime Minister, on the question-of import tariffs, you have
told us here in the past you consider the import tariff
argument overdone as far as farm costs are concerned. There
has been a lot of activity on tariffs in the meantime. Has
your attitude to this question changed in any fundamental way?
PRIME MINISTER:
No. QUESTION: Prime Minister, is the Government still-looking for some form
of special unemployment benefits for rural producers other than
what goes at the present moment. Understandably there are
problems with legality at present...
PRIME MINISTER:
I don't know that there are problems with the legality, I think
there are problems with the way the present arrangements have
been working, and it's not giving great benefit. This matter
is still under examination. It does in a sense become less
urgent with an improving rural outlook, obviously. ./ 14
14.
QUESTION: Brandy, Sir, and the excise. Some people would regard that
as giving a glass of water to the drowning wine industry.
What is your general appraisal of the situation of increasing
the excise, which was a way of usingyof coursepwine excess.
PRIME MINISTER:
I think the wine industry is going to be very greatly assisted
by-the Budget.
QUESTION: ( inaudible)
PRIME MINISTER:
You are saying it was a way of using excess grapes, but to the
extent that grapes go into wine the industry is going to be
assisted. This is one of the reasons why there weren't
increases on wine, for example.
QUESTION: I It was intended to in actual fact put wine in a better
position in the market place than spirits?
PRIME MINISTER:
Well that was in our minds, yes.
QUESTION: ( first half inaudible) as I understand it the rather small
fellows with 30 or 40 acre vineyards rely on getting their
bottom of the market grapes into brandy as that's the only
outlet for them or they're going to be in strife, because
it's the increase in the excises that ( inaudible)
PRIME MINISTER:
Well if they are hurt by imports it's open to any industry
to go to the T. A. A.
QUESTION: Prime Minister, do you think this idea of limiting the amount
of non-farm income the primary producer can get under the
averaging system to $ 5,000-$ 10,000 do you think this will
affect the investment from ( inaudible)
PRIME MINISTER:
I don't know that it will to a great extent, but I don't
believe it's right I should get the benefits of tax averaging
from a Prime ministerial salary for example.
QUESTION:
What about Trust Accounts, Sir?
PRIME MINISTER:
What about them?
QUESTION: They seem to be hit. The Government a year ago was saying
to Parliament ' go into trust accounts.'
PRIME MINISTER:
I'm not aware of that.
QUESTION: I was aware of it.
PRIME MINISTER:
The Government as a whole I don't think was saying it.
QUESTION: But Trust Accounts have been hit.
PRIME MINISTER:
Some trusts have been hit, because we believe trusts have been
abused. There can be all sorts of trusts, and its a highly
complex matter, and some trusts over a long period have been necessary
proper and honourable mechanisms for helping to preserve a
farm and keep assets together. Because of the public furore
over some quite outrageous tax avoidance arrangements that
have been made it has tended to bring the name ' trust' into
disrepute. There is still an honourable and proper place
for trusts, but it depends how they are used and in what way
they are used. Trusts are still available of course, but it
depends how they use a trust. It is always the way in which
a trust is used, but I think part of this is the fact that
we have abolished death duties, the fact that we have got tax
averaging now really is an advantage, and Income Equalisation
Deposits. All these things need to be taken together and they
remove much of the need for complicated financial arrangements
that previously have become necessary, especially in times of
low income, to try and preserve the integrity of a farm. We've
been seeking-to establish ways in which farmers can do this
and leave a farm to their kids without having to go through
all sorts of complicated devices, and I think that's the
proper way of doing it.
QUESTION: Prime Minister, you seem to be banking a fair bit on a rural
led recovery.
16.
PRIME MINISTER:
No, not rural led. To get the economy right you've got to
get a lot of underlying factors in the economy right, and
occassionaly we are accused of wanting it investment led, or
consumer led, and now you've said rural led. You have
got to get all the underlying factors in the economy right...
inflation down, interest rates down, respectability of profits
in all sorts of industries.
QUESTION:
Wages down?
PRIME MINISTER:
Moderation in wages. When you say ' wages down', we still
estimate that average earnings will increase this year.
They increased last year, but at a much more moderate rate
than previous years, and that's obviously an important
element. Moderation in wages--wage restraint--is obviously
an important element in it. But what I have said in terms
of the recovery of Australia I think is this: get the
underlying factors right and especially inflation and
interest rates, and that makes it more profitable for
people to invest whether it's on farms or in businesses
of other kinds; it also makes us a preferred country for
resource developments. If somebody from America wants to
invest in a resource producing nation such as Australia,
they will look at political stability, they will look at
economic factors, and they will make a decision Australia
or somewhere else. one of the things we want to do is to
make this country a favoured country for that kind of
investment, and if we do that I think we can do Australia
a great service ( inauidible) activity in Australia,
especially when world trade is difficult, slack. World
markets aren't growing as much as they ought to to reduce
the total level of world unemployment. But because we are,
making better progress with inflation, and therefore will
make better progress with interest rates, we do have a
capacity to put Australia in a preferred position, to take
advantage of whatever investment is going. The same
circumstances put farmers into a better position for their
own markets, for exports. I haven't looked up all
the seasonal records, but I think you might have to go back
years to find a year in which the seasonal prospects
were as good, and in which you've also got beef, sheep and
wool and wheat prices all looking good you have had
good years for sheep, you've had good years for cattle,
you remember a time in the past when cows were $ 200 and
sheep were $ 1.50 or 50( but now they are all looking good
and all being good together is going to be the best news
for Australia's country towns, and I believe for many other
17.
businesses around Australia that are suppliers to the Australian
rural industries. I think one of the factors that has often
been underestimated in this economy is the importance of a
prosperous rural sector. If you have a depressed rural sector
it has a dragging effect on the whole economy, and that affects
businesses, it affects cities, it affects country towns.
But if the rural industries are looking to the future with
confidence then that's good for the whole nation. We have
got those circumstances. You would have been around in
country areas there is an optimism abroad which is great
to see, and I haven't seen it for many, many years.
QUESTION: Perhaps for the producer, but not for the person in the country
town. You mentioned the word ' town'.
PRIME MINISTER:
There is a lag.
QUESTION: The producer has not been hit, or has been hit less by the
Budget. The person in the country towns, the actual employee
in the country towns.
PRIME MINISTER:
I'm not talking about the Budget, I'm talking about the outlook
in rural Australia. And when the times become prosperous farmers
start to spend on deferred maintenance, replacing equipment and
all the rest. They spend more in country towns. If they want
to get some carpentry done, if they want an addition to a house,
if they want something else improved a lot of that is work
that comes out of country towns. Obviously there is a lag,
but a prosperous rural Australia is reflected in prosperous
rural towns, and that also has a flow through into other
industries in major capital cities.