PRESS* OFFICE TRANSCRIPT FRIDAYI 29 JUJNE 1979
DOORSTOP INTERVIEW WITH PRIME MINISTER
Question Mr. Fraser, the States' reaction to the Loan Council and.
the Premiers Conference so far has been quite angry. How
do you react in turn?
Prime Mi'n-Is er
I think the States' attitude is,. in a sense, predictable.
One of the things that hasn't come through I think so far is
the massive increas * e in general revenue grants of $ 644 million
between 13% and 14%. Now, that's an increase that's committed
by statute, by agreement with the Premiers, with the States, and
that. of course flows through to them-That's $ 644 million which
goes into a lot of their recurrent expenditure; can be used
exactly as they want. It's much much more than enough to cover
inflation. That means that if there is any shortfall in direct
housing funds, or direct loan funds, it is for the States to make
it up out of the $ 644 million, which is a very large amount of'
money indeed. So if any Premier goes away from the Conference
ultimately saying the reduction in housing funds or direct loan
funds is going to be bad for the construction industry, for the
building industry or for employment, that will be that Premier's
own direct decision. Beca ' use the reductions are nothing like
as great as the increase of $ 644 million which the States can use
entirely and absolutely-as they themselves determine.
Question Mr. Howard yesterday gave a very broad hint that if the States
want more money they can raise it themselves. Now, the interpre:--on
into that is that you want them to raise their own taxes.
Prime Minister
No. We don't want them to raise their own income tax. But,
over the last couple of years a number of States, I think all of
them, have said we, ' the Commonwealth, ought to cut taxes. We,
the Commonwealth, ought to get interest rates down. But now the* 1
are having to recognise that their urging of us to get our income
taxes down has consequences for them. It has consequences for
the funds we can make available for the States. Quite plainly,
we are not in the-business of putting up taxes to make more
money available to the States. We are not urging the States to
put up taxes. What I am saying is that the States can get a
proper balance into their own programmes by transferring general
revenue funds some of that $ 644 million which they can spend
entirely a's they themselves determine., We don't try and say
you've got to spend it this way, you've got to spend it that way.
They can spend it exactly as they like. I would hope very much
that they do transfer substantial sums into the capital works
area, I really would. / 2
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Question_ Nevertheless sir, a lot of the Premiers are saying that ini,
real terms in the overall package, they are worse off.
Prime Minister
In real terms in the overall package they would be slightly
worse off, yes. But that doesn't alter the fact that they can
transfer those funds. A 13% increase $ 644 million in general
revenue funds is a very very large amount indeed and I am sure
you\; ogidr e wih tat. Now, what. the States are trying to
concentrate on is the reductions in the loan area and in the
housing area and they are saying " this is a terrible-thing".
What they are not saying is that they can make up that shortfall
overwhelmingly by a transfer from those general purpose funds
and put it into the construction area if they themselves determine
to do so.' It's only in very recent times that there has been
any restraint at all on the growth of State Public Services and
over the last three years we have had the most rigorous restraint
on our own expenditures. You will find that States have all
brought in Budgets which have introduced many new programmes,
additional expenditure commitments, and at the same time, tax cuts.
I am not saying they are wrong to do that, but being able to do it:
in Budget after Budget does not indicate any particular stringency
on the State Budgets. If you look at the growth of revenue funds
over the last three or four years and these again are the funds
they can use any way they like the growth has been very very
large indeed. Much much more than enough to cover inflation and
give them additional surplus funds that they can spend any way
they like. In the major semi-government programme, the expansion
in the that programme over the last four to five years has also
been very great. That's why we are holding the programme this
year. Governments have been trying to raise too much money on
the markets and that has had a pressure in the capital market
which I think has been an unhealthy one.
Question_ Some of'the Premiers also said, sir, there have been no real
negotiations here. It has just been a matter of you laying down
what they are going to get and that's it.
Prime Minister
We hoped three years ago that it would be possible to come to a
genuine negotiation on some of these major matters of concern to
the States and to the Commonwealth. But unfortunately the nature
of this conference makes it very difficult to achieve that on
financial matters. In the industrial relations area and in the
energy area, we had a useful and constructive discussion yesterday.
But when it comes to money, they are all wanting money from the
Commonwealt'i. But none of them is-going to say7-if any State
ever was prepared to say, this is too much, I would then say a
genuine negotiation is-possible. But no State has ever been
prepared to say that. Every State is'always ready to say, this
is not enough. That doesn't create a negotiation. To have a
negotiation it's got to be possible for both parties to be
on either side of the argument. The States have always been on
one side of the argument: " Look, Mr. Commonwealth, it's not
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Prime Minister ( continued)
enough, you are being too mean. We want more dollars from you".
That mean more dollars from you as taxpayers. That gets back
to the taxes we have to raise. We are not inthat business. The
general thrust has been to try and get taxes down. The States
have supported us in that. ' But now, when there is some prospect
of being faced with the consequences of that, -they don't like
it too much.
Question But nevertheless, because you have been unwilling to negotiate
on money matters, at least one Premier said this conference has
been a waste of time.
Prime Minister
Well, I don't think it's been a waste of time. There have been
some very useful discussions on a number of matters. But again,
let me only say -that if I could see any State being on either
side of the financial argument, then I could accept that there
could be a proper negotiation. But when you have a situation thaz
no matter what sum the Commonwealth starts with, no matter what
we offer, the States say " that's not enough, the Commonwealth's
mean", well, that doesn't create the possibility of a negotiaticn.
I think that's one of the very unfortunate circumstances of the
Premiers Conference: one of the reasons of course, why in our
general philosphy we believe that the States ought to be respons--ble
for raising more of their own revenue and responsible for
determining how that revenue is spent because a State Goverrn'
can never be truly responsible if it gets a very large amount of
its funds from the Cornmowealth and then goes back to its own
State and says " look, I'm sorry, I'd love to do this but I
can't because the Commonwealth hasn't given me enough money."
Unfortunately I think every State from time to time wants to
hide behind the back of the Commonwealth in that particular way.
Question Do you have any comment on the industrial stoppages at the moment-;
Telecom and the Victorian transport strike?
Prime Minister
The transport strike I think is very much in the State jurisdict-on.
I had some discussions with Mr. Staley and Mr. Viner last night
about the Telecom dispute. Ministers will be discussing that
again today. It is a very serious one indeed. Again, it is a
question of employees, members of the trade union, not being
prepared to accept arbitration. I think in Victoria they are
striking against an arbitrated decision. People have got short
memories. . The. arbitration system in Australia was established
because, f a long while ago , the country tore itself apart with
industrial disputes and those in charge of our nation's affairs said
there must be a better way. So the arbitration system was devised;
an impartial third party, the umpire, to determine what should
happen when there is a dispute between employer and employee. / 4
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Prime Minister ( continued)
Broadly, the system has served Australia well. But it will
only continue to do that if both employers and employees
accept the umpire's verdict, both when it suits them and when
they don't like it,. so much. This is the greatest protection
to employees. They don't have -to lose wages through time lost
which they often never make up no matter what happens at the end
of the dispute. The trade union leaders who continually
advocate industrial action--the AMSWU who had their own national
stoppage in support of wage claims--is utterly destructive of
Ln: 2. own irsof their industrv's interests and of
Australia's interests. In the discussions that we had with the
Premiers yesterday, there was a very genuine desire on the part
of all Premiers and on the Commonwealth, to discuss these matters
together in great detail with our Employment and Industrial Relations
Ministers and Attorneys-General. Discussions also with the
peak councils of employers and of the trade union movement to
try arnd sort out some of the difficulties and try and move Australia
onto a better path. Again, it will take a degree of goodwill and
a real desire, on the part of all of us, to have -this nation
move forward. I appreciated very much the spirit of the Premiers,
of all parties yesterday in that particular discussion, because
their earlier knee-jerk reaction hadn't been entirely favourable
to the Commonwealth suggestion. That disappeared yesterday. against
the importance of the national considerations that confront the
Premiers and the Commonwealth.
Question Did you see the Telecom dispute, then, as an example of the need
for this particular conference you were seeking?
Prime Minister
I do. But what we've set in train with the States, is a longer
term matter; to look at the very fundamentals of our industrial.
framework to see whether changes are necessary, without any
pre-conditions or pre-ideas about what those changes might be.
Question Do you think those changes would remove such problems as with
the Telecom dispute.
Prime Minister
I think in the Telecom dispute it is a question of members in the
trade union movement being prepared to accept an umpire's verdict.
How we establish that mood throughout the Australian community
is very difficult to judge.... But I know that all Premiers and the
Commonwealth are determined to try and achieve o real advance.
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Question In the meantime, is the Federal Government going to make
any initiatives on this dispute?
Prime Minister
The Ministers will be meeting on the Telecom dispute during
the course of the day. 000---