M. s PRESS OFFICE CANB TEL: 61-062-732923 19,10,90 11: 45 No. 003 P. ui
PRIME MINISTER j
TRANSCRIPT OF DOORSTOP, WILLOUGHBY LEISURE CENTRE#
WILLOUGHBY, 19 OCTOBER 1990
2 9 OE PROOF ONLY
JOURNALIST: Mr Hawks are we In a recession?
PM;, Weil, technically, no and I'm not trying to avoid your question. The economists' definition of a receasion is when you have two quarters in succession of negatve growth. We're not in that position but I don't avoid thb fact that
there are economic problems for a lot of people. But as I've explained in the Parliament as I think is understood by the people. We have n ot deliberately tried to create a hardship for Australia but there's a simple statistio which must be understooO it's not complex economio jargon. in the last year we increated, as a notion, we increased our expenditure by 8 per cent. We only increased our production by four per oent. We made up for that four per O* nt gap by
just borrowing from overseas people from their savings to finance our extra consumption. Now you can't go on doing that. So we had to slow down the level of Australia's activity so we could cope because if we hadn't done it ourselves the rest of the world would have done it for us in a very vioious way. Now I think people know Bob Hawke over all these yeare. He's not one who trie to hurt. He tried to help. We had to do that because if we hadn't done that the world would have done much worse things. So we've slowed things down and now we're reaching a point where our Imports are tolling and our production Is greater then our consumption. Now ...
JOURNALIST; Prime Minister
PM: Now just a minute. NOw that's what had to be achieved. We've done that and I think therefore as we go into 91 we will see the recovery take place in a sustainable way.
JOURNALIST: Prime Minister last night the Australtan dollar fell through US77 cents, Will this Impact on fuel prices and therefore the CPI?
PM: It's Impossible to predict because what's happened to international oil prices is quite remarkable. Let me just give you a couple of figures which will show what I mean. Before the Gulf crisis the price of oil was US$ 20 a barrel.
it moved gradually up and then it jumped to over 840 a
M.' s PRESS OFFICE CANB TEL: 61-062-732923 19,10,90 11: 45 No. 003 P. O-
2.
barrel between a week and two weeks ago. Now it's down to
about 36 and we can't make any decisions at a point where
it's moving So unpredictably and when we're not sure what's
going to happen in the Gulf. What we all hope in that the
crisis will soon end. In those circumstances, you know, we
will get back to normality in petrol pricing. It just would
be irresponsible to make a decision at this point on that
issue. JOURNALISTt How strong will the recovery be, Mr Hawke?
PM: What we've got to do for some time, as a nation, is to
make sure that our increase in production is above our
increase in consumption. But I think we're capable of doing
that. We haven't had the collapse in the employment market
that oharacterisad the 82-83 period. I want to see that we
can continue the reoord employment growth. Not necessarily
S at the same rate. In this period of office we've created
1.6 million new jobs. Ninety per cent of them in the
private sector. That's been e rate of job creation more
than twice as fast as the rest of the world. That's been
great for Australia and I want to see us retaining
employment growth as we go into 91 and through 92. 1 think
we'll do that but we mustn't as a nation think again that we
can just go on consuming, through private consumption and
investment, we can't consume more than we produce. That's a
discipline as a nation that we have to keep upon ourselves.
JOURNALISTi inaudible.
PMt Just a minute. One at a time. I'll get to yours.
JOURNALIST Whit are your expectations though in terms of
growth and employment growth in the next six months?
P14: We think that the GDP for 91 will be positive. As to
Just precisely what the level of growth will be you just
can't now, in these volatile oircumstencea, put a precise
figure upon it because since we framed the budget you've got
the Gulf crisis-. That does introduce uncertainties. We
believe that growth will be positive for the year and
employment growth with It will be positive. We have saoid
that there might be some increase in unemployment but that
employment will remain positive. You had a question here.
JOURNALIST: The recovery, Prime Minister, are you saying it
will happen in the new year or at the beginning of the next
financial year'?
P14: I'm saying that it will happen as we go into 91. It
will happen during 91 in my judgment.
JOURNALIST: Wall that appoers to be at odds with what you
maid to the Business Council last night
P14 I know what I said. I mean I was the one who said it.
You'll see that it's not at odds.
PRESS OFFICE CANB TEL: 61-062-732923 19,10,90 11: 45 No. UUO
JOURNALISTs Ig the Deputy Governor of the Reoerve lank
wrong when he says parts of the economy are in a deep
recession? PH; No. Of course he's not. I mean the economy is made up
of parts and if you look at the rural sector there are parts
of the rural sector which are In very deep problems. mean
you take the wool industry and the wheat sector. They are
in very deep problems. Sacause In those circumstances,
overwhelmingly, because of the collapse of international
prices. No-one can deny it. We've asserted it. We've met
with representatives of the National Farmers Federation and
the Grains Council. We tecognise, for instance, that those
sectors are in v ary deep problems.
. OURNALIST: 1f we're not trusting though the two terms oi
negative growth as a definition for recession, I mean, how
Sshould we be defining Lt then?
PH: I didn't * e8y you don't aooept that. Where did you get
that question from?
JOURNALIST: Why are you and the Treasurer reluctant to use the word receson7
PM: It's not a question of reluctance. I mean, I've got up in the Parliamenr] t and said I don't resist the definition. The definition which is accepted by the economists. I mean I don't run the economics profession. That In the technical
definition of two successive terms of negative growth. That hasn't ooourred. Z don't hide behind that technical definition to say that no we haven't got problems. We have and I've said that in the Parliament. But the point I'm making, and which has got to be understood, is if we hadn't taken the action deliberately that we have with tight fiscal policy, tight wages polioy and tight monetary policy to slow
the eoonomy down, as we now have, then the rest of the world would have imposed a much worse solution upon us.
ends