PRESS OFFICE TRANSCRIPT FRIDAY, 29 JUNE 1979
PRIME MINISTER INTERVIEWED FOLLOWING PREMIER'S CONFERENCE
LIVE ON ABC'S
Question The Premiers have been painting you over the last couple of
days, you and your Treasurer I suppose, very much as the
financial villians. How much do you believe though that the
Premiers and the States that they run are capable of reining
in their expenditure in the circumstances in which we all
find ourselves now.
Prime Minister
I believe they could rein in expenditures much more than many
have. You've only got to look at the growth of State Public
Services over the last five years compared to the growth of
the Commonwealth. The growth in the States has been very
great indeed. I haven't seen the signs of stringency that
we have in the Commonwealth. In most of the recent State
budgets there have been pretty generous expenditure programmes
and generally tax cuts in addition and very few increases of
taxes. But I think one of the things that might be misunderstood
is that on the revenue side, because of the formula, the Commonwealth
was extraordinarily generous to the States and of course the
Premiers wouldn't be emphasising this. But in revenue they
got $ 644 million more 13% to 14% more. That's more than enough
to make up for the shortfall in loan funds. If they want to
spend that revenue money on capital works, on housing, then
it is entirely their decision to do so. I would certainly hope
that they do so.
Question Are you worried particularly, given that you felt that you had
to make cuts somewhere, about the consequences of the cuts in
capital works, particularly unemployment.
Prime Minister
I would certainly be worried about it if the States use all that
vast addition to recurrent expenditure on recurrent expenditure.
You see it is nearly 14% more. Much more than enough to cover
inflation. If they put a large part of that, as they can if they
want to, into capital works, well then the capital works industry
is not going to be harmed at all. / 2
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Question Mr. Hayden is forecasting I think an extra 20,000 unemployed
as a result of those cuts. Is that, do you think, a reasonable
figure?
Prime Minister-
Mr. Hayden is always forecasting various things and I don't want
to comment on that. If I could say one or two other things about
this Premiers Conference.
Question Do you think there will be more people unemployed, though, as
a result of the cuts in capital works.
Prime Minister
I can see no need for it at all, providing the States trandfer
that great excess in the revenue account to capital. That is
within their capacity to do so and I hope that as they get back
to their own States they will do what is best for their own
people and make that transfer. Many of them have in past
years. You've only got to look at the very great increases in
revenue funds year after year after year and at the exception of
this year, the very great increases in the semi-government loan
programmes which I think have nearly doubled in four or five years.
Question Is it fair to say that one of the objectives of the Premiers
Conference, from your point of view, was to try and keep the
States out of the money markets in loan raising activities to
some extent.
Prime Minister
Not only the States, but also the Commonwealth. Because Governments
have sought to raise much more money in recent years there has
been pressure on the money markets. It has put pressure on
interest rates. A lot of institutions, after they are holding so
much Government paper, they just don't want any more Government
paper. They think their portfolios get unbalanced. There is
a general view in the Commonwealth that there has been too much
Government paper, too much Government borrowing and that it needed
to be restrained.
Question
Mr. Howard, your Trea surer, indicated yesterday that money supply
was running at something like 12 percent. Do you think that
anything that's been achieved over the last two days is going to
help bring it under-control.
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Prime Minister
The mini-Budget in May was a necessary first step in that.
I would believe that the decisions we've made now will also
help the money markets. We will have to wait and see, but of
course the most important instrument will be our own Budget.
I think Mr. Howard has made quite clear the reasons for that
increase in money supply. We didn't like it. But it wasn't all
bad news;* a gobd wheat crop and better wheat prices and more
capital inflow. That all in part is good news for Australia
but it does have some other consequences as well.
Question Do you think that we can anywhere near to the Budget target
between I think it was 6% and 8% money supply.
PrimeMinister-
That was in this financial year and how much of 19 78/ 79 have
you got? No. It is going to be over that by about the amount
that Mr. Howard indicated. If I could, while I am speaking to
you mention one or two other aspects of the. Premiers Conference.
It is not only financial matters that we discussed. At this
particular meeting we put the final touch to a historic argument
that has gone on between the Commonwealth and the States and has
disturbed governments for years. That comes out of the Seas and
Submerged Lands Act. We've now got to final agreement with the
States on all the issued involved; offshore mining, fisheries,
marine parks, and all the things that affect the States offshore,
whether it is within the territorial sea or outside the territorial
sea. There will be a package of legislation I believe in the
Budget session which h~ as been agreed with the States and this
has shown how governments working together can put to rest an
argument that had been created by a High Court decision. But
they've put the argument to rest by rational and sensible discussion
over a couple of years period. I haven't got the slightest doubt
that'the decision we made in the Premiers Conference today on
this issue will be regarded as a historic landmark in the
constitutional development of Australia.
Question Can we look at another issue, not directly related to the
Premiers Conference. What is the Government intending to do about
the Telecom dispute which is having very serious effect at the
moment. Prime Minister
We were examining this a few moments ago with Telecom officials
and Ministers who are in Canberra. We will be on Monday morning
seeking leave to appear before Mr. Justice Staples and have the
matter referred to a Full Bench. Telecom have been wanting the
matter heard to the Full Bench for some time. They have been
wanting the matter arbitrated. They have not been able to achieve
that. It is becoming very serious. The first step is to try and
get it to a full bench. The Government of course has other
options open to it, but we hope the matter can be arbitrated.
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Prime Minister ( continued)
We fail to understand why the normal system has not achieved
that up to the present time because it is not a question of
saying Telecom are right and the union is wrong. It is a question
of getting the matter to arbitration.
Question
Are Telecom acting under Government instructions at the moment,
or at least under Government advice.
Prime Minister
We discussed the matter together, but they have been trying to
get the matter to arbitration for days and days. We support
them in that. They weren't doing that under Government direction.
It was their own inclination; here's a problem, they've got people
making claims. They don't want to go off into a sweetheart deal
outside the indexation guidelines because if we did that we
certainly would jump on any Government instrumentality. What
we are saying is " let it go to arbitration. Let it be arbitrated".
That seems to me to be pretty reasonable. Telecom will abide
by the result of that arbitration and of course the Government will
have to whether we like the result or not. But at the moment,
because of some strange views around, we can't even get it to
arbitration within the Conciliation and Arbitration Commission.
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