AU. SrRALIA,
E. O. E. Proof Only
TRANSCRIPT OF PM TO WINE-GROWERS IN THE SWAN VALLEY, 28 SEPTEIIBER 1983
a situation that may involve some difficulties in respect of
some of the decisions which we had to take in the recent Budget
and it's a measure of your attitude that you have been prepared
subsequent awards and I do say thank you very much to you and you
Peter for providing your premises and those who organised today.
As Gavin has said unfortunately we do have a very tight schedule,
but I appreciate the opportunity of spending a little bit of time
with you. I won't take up too much because I think it is much
more important that I listen to you than that I speak to you.
There are a few things I would like to say which I hope you
understand as being relevant to the position which we find ourselves
in today.
When we came to office on 5 March we inherited an economic
situation which was very very much worse than we had been led to
believe by our predecessors. You have read about this, bu[ I
must remind you of the fact that when we went into the campaign
in February of this year, we were told by the previous government
that the deficit situation that the incoming government would be
operating in in 1983/ 84 would be about $ 6 billion. Now, that
is a very large deficit for any government to have". to operate in.
We were somewhat apprehensive about it. We knew that we were
going to have to do something to stimulate the economy which
would mean a vast increase in the deficit.
The day after we were elected to office we found from the officials
who knew the facts, what the previous government had not told us
about it wasn't $ 6 billion deficit that we as a Government were*
facing, but a $ 9.6 billion an extra $ 3.6 billion.
Now I don't want to talk in economic jargon to you, the language
of professional but I do want to ask you to understand what
that meant for a government coming in who wanted to try and look
after the interests of all Australians. Now, if we had operated
on that Budget of $ 9.6 billion and gently tried to do something
else to try and get the economy moving, then all Australians would
have suffered all Australians not just people here by one
particular decision, but everyone would have suffered because
there would have been an inevitable pressure on interest rates
which would have sent interest rates very much higher and that
would have affected wine growers, trade unions, home owners,
farmers you name it.
Now, we weren't prepared to go along on that basis. I
particularly want to say to you that if a government is going
to bring that deficit down and avoid those problems for
everyone including people like yourselves, then decisions have
to be taken. You don't get rid of a deficit like that by
simply sitting at your ( iesk in Canberra and saying " oh bother,
I wish it would go away". You have got to make decisions and
there are two sets of decisions that you take if you are going
to bring that deficit down.... quickly increase in interest
rates. ( inaudible)
You have got to make some decisions which are going to involve
raising more revenue and on the other hand you make some
decisions which cut down on some existing programs.
They are the only boundaries you have got. The only thing that
we have if we were going to try and do the things which are going
to give the best result for all Australians. We like to have to
do some of the things that are necessary, but we had to impose
some increased charges. We had to
I want to say this to you. In the result, the Budget that was
brought down by our Government, read to the House by Paul Keating
on 23 August, was without question, ( inaudible)
It was the best received Budget in recent memory and it was
well received because generally people, including those who
probably have to suffer some impost-that they would rather not
have done, realise that in the event that taking our action will.
bring the deficit down. That's going to be the result.
Now we haven't had to sit there and say we think this is what
will happen. We have done it and already there. Since we brought
down the Budget interest rates have not risen as . they would have
done if we hadn't acted in the way we did, but infact interest
rates are coming down. The fact of that reduction in interest
rates which are coming down largely because of the actions that
we put, mean that people like yourselves, people round the place,
are better off.
Now, before you try and save your money, if you are going to
get that result, you're going to get a position where interest
rates are not going to rise, but in fact, as they have, fall
had to make decisions to produce that result. We have done
that. You benefit. All Australians have benefitted and will
continue to benefit from that.
Now, let me give you that background by way of explaining that
a number of decisions have had to be taken to produce that result.
Now, I want to say to you straightforwardly that when you are
drawing up a Budget you are faced eventually ( inaudible)
with those decisions which cover a whole range of departments
we reach decisions have to be taken about items to the benefit
of everyone.
It was put to us I come now directly to the question that
was of some concern and I understand it was of some concern to
you. We were faced wich evidence impartially from government
officials people who were conccrned with the ( inaudible)
of the revenue. We were faced with a problem of substitution
in industry and they know which could only be met cffectively
by the imposition of the excise on grape spirits.
In this case, not because we wanted co make unnecessary problems,
for Australians, in this case we made that decision in respect
of the $ 3 increase. Now, once we had made that decision that
was in the Budget we had representations made to us that in
fact this was going to impose burdens which : were simply not going
to ( inaudible) with the southern areas a crippling nature.
Now I indicated straightforwardly we did not intend that as
a seriously we had the represeanations made to us. We looked
at the other alternatives raised facing this issue consistent
with our commitment that there had to be some ( inaudible)
in the community so that we could make sure that we didn't have
rising interest rates which would produce the better results that
I referred to
We obviously, as a Government, had to depend upon the
representations that were made to us. We obviously can't
And as Gavin has said, the representations that were made to us
these were somewhat loaded in respect of the larger interests,
particularly those who had raised the standard in the area of
table wines.
VWhen I was listening to the representations that were made, what
particularly John Kerin, our outstanding Minister for Primary
Industry, had to say. we reached a decision where we may be able
to meet a large part of the concern by reducing that excise and
that is what we did.
I am conscious I don't try and walk away from the fact I am
conscious that that creates some problems and I am going to
say this to you
Firstly, that I think that others like yourselves perhaps aren't
( inaudible) by the larger representations which governments
ahnadv e shtoo rtta ktiem e abI ohaardv e agnodt htheraet Ii s wwohuyld plairkteic utola rhleya r ind irtheec tllyim firtoedm
you the which
for you by the decisions that we have made.
The other thing that I want to say is this we are conscious of
the fact that within the industry not just here, but right
uasc rosslo oAkuinsgtr aalita the thhoaut sitnhge rei ndisu satr ym ootodo asy outh ec ani ndguets tray bheattse rput to
structured industry. There are arguments, as you know, for
ofrno mw inwei thanind tthhee ainrgduumsternyt tahnda t cyeorut aihnavlye gfrootm too uttasxid eo n oathbeoru t fotrhme stax
of alcoholic intake, beer and it is inequitable that you are not
being taxed on wine generally.
L
Now ( inaudible) along that path because we want to in
fact be able to have more detailed discussions with the industry.
That is what I put to you. John Kerin, a highly respected
and experienced Minister knows primary industry better than
any other Primary Industry Minister in the post war period.
He's got practical and intellectual experience and I
instructed John that I want him from now on as he goes through
this year and prepare for an overall lick the prcblems of
your industry. I want him to have discussions with you and
also I hope that he will actually come and talk with people
like yourselves as well as the representatives and the people
who are voted to see what are the best ways in which we as a
government can be of assistance to the industry at the same time
as meeting our commitments with the Australian community as a
whole. So you can see I haven't come to you with some weak excuse te
say, right we made a mistake, we are going to get rid of the
decision. I haven't come to you and said we are going to
( inaudible). I have come directly to you and tried to explain
to you why in the interests of all Australians we have had
to raise revenue ( inaudible) and of this day each one of
you who is in a bank situation where you are paying for money or
in a situation where you are going to
As a direct involvement of decisions that we took
as a result of those decisions, anyone in
involving the borrowing of money we are distinctly better off
now because we took that range of decisions and I ask you in
respect of something better to do that there may be expansion
because of the reduced that were taken regaring excise...
That was part of the tactics that has produced that improved
situation with regard to interest rates. I ask you
We did not take those decisions with any sense of trying to
impose burdens for the sake of doing it, everything that we did
has been we have been trying to create an economic situation
in which we can get the economy moving and if a borrowing
economy, an economy in which more people are employed, and in
which the employed people are going to have higher incomes
which ultimately determine your welfare so it's not just in
terms of your net income costs down, ultimately the other
determinant is how much of your you have got once the
capacity of
That is what. we have done trying to get this economy moving
and we In the last few years before we came in
the economy was going like that unemployment was increasing,
jobs were declining. All these we have reversed
in respect of which we have had to impose this increased
charge, as a result of what we have done, by the end of 1983/ 84
this economy will be growing at a rate of 5-6% per annum
against the decline offered you before.
It is in that situation that we will produce a growing economy
with more people at work, with higher annual incomes,
that there will be a much greater market for your products.
You will be better off on your income side as a result of the
decisions that we have taken, so I do ask you as responsible and
concerned citizens
in line with election commitments.
We see, in particular, inuediate decision which is of some
concern to you in an overall context and I want to say this
to you from the end of 1983/ 84 as a result of the reduced
interest rates tlhat will have been operating as a result
of tne and higher demands which there will be for products,
I venture to suggest to you that we take all those things
into account and you will be, on balance, as you go into 84/ 85,
you will be in a betteir position and I say that also in the
context and I give you an indication that the whole of this
industry and how we can be involved in it and how we can be of
assistance to you will be a matter of continual discussions
by Mr. Kerin and he will report to me.
Thank you very much indeed for your attendance.