TRANSCRIPT OF THE PRIME MINISTER ON AM 23 April 1985
E 0 E PROOF ONLY
HARRISON: the Prime Minister, Mr Hawke, to talk about
some of the unpopular decisions which camne out of Canberra
yesterday petrol up by 4 cents a litre, and that will give the
Government a nice dividend of another $ 640 or so million in a
full year, and there are to be cuts in Government spending
up around a $ 1 billion. Mr-Hawke did not specify where these
cuts would be made. They're to be announced in what's described
as an economic statement in May, even though it won't deal with
revenue, that does sound remarkably like what used to be called
a mini-Budget. Well all this is being headlined this morning
as a signal of the Government's determination ' to make
tough economic decisions. But are they in fact so tough, but
is the Government merely-trying to give the impression of being
tough. Mr Hawke is in our Canberra studio now with Prue Goward
and Warwick Beutler.
BEUTLER: Mr Hawke, if. we could deal with the petrol pricing
policy first, it's generally interpreted as'a good economic
decision but I'm sure that that's not the way motorists will see
it when they pull into the petrol pumps on May 1 and find that
petrol has gone up by 4 cents a litre.
No, obviously motorists would prefer not to have an
increase in prices, but motorists are not-only motorists. They
are citizens in the broader sense and what the citizens of
Australia want, I believe, is sensible economic policy making by
this Government which is going to ensure that the economic
recovery which we've initiated in our two years in Government
continues so that there's solid growth with more employment
opportunities. And ' you're not going to get that unless you're
prepared to make the relevant economic decisions, and this is
one of them.
BEUTLER: How do you justify the 4 cents a litre rise to motorists
though?
PM: Well very simply.' It's a continuation of the policy which
has been endorsed now by both Parties, that you have what we
call import parity pricing, which moves the price of Australian
crude in line with the Arab light marker price. And that, of
course, in our terms has gone up because of the devaluation of
the Australian dollar. And it should be noted, if you want to
bring the politics into it and I welcome that fact that they've
done it, but the opposition has supported and endorsed the
decision that we've taken. So it's not a question of the motorist
saying it's a terrible Government, it is a bi-partisan, acrossthe-
board approach.
BEUTLER: Well your colleague, Victorian Premier John Cain,
doesn't think so. He says business needs this like a hole in the
head. PM: Yes, well Mr Cain does not have the responsibility for
the economic management of the Australian economy as a whole.
Now I can understand State Premiers wanting to say things which
they regard as helpful for them in terms of their domestic
politics. That's alright. We learn to live with that. Mr Cain
and Victoria have been the beneficiaries of Australia's economic
prosperity under the policies of this Government. And you can't
have it both ways. If you want to be the beneficiaries of our
good economic policies then you have to understand that hard
decisions at times have to be made.
BEUTLER: Can we read from the decision that it is more important
for the Government to be seen to be taking those tough decisions
and getting the deficit down than worrying about the inflationary
effects of the price rise in petrol.
PM: No, no. Look economics has been called the dismal science
and in one sense it's the-dismal science because it's very rarely
the case that an economic decision taken for the best possible
aggregate of reasons is not going to have some adverse impact
somewhere in the economy upon some people, perhaps on a lot of
people. That is in the. nature of ec6noftic6s. If it were just
a case of managing an Australian economy wher: e you just sat
back and pressed this button and that button and-: watched the
grins~ light up in the faces all over Australia, it would be very
easy. But life and economics is not like that. We have come
to be living beyond our resources.
BEUTLER: How have we been doing that?
PM: Well let me just make the point if you look at the
Government of Australia and go back to 1949 to 1985, that means
Australia has been governed now for 35 years since ' 49 by
definition that's simple arithmetic, and out of that period
there's only been five non-Labor years. The situation in this
country, the economic structure, the attitudes, the assumptions
have basically been fashioned by 30 years of non-Labor Government.
Now what we inherited when we came in was a deficit that was the
highest that had been seen. We were looking at a $ 9.6 billion
deficit. Now what we've been doing is trying to cut in to the
deficit we inherited. We're going to continue to do that and
we'll do it in a way which means that Australia's economic
growth will be sustained. We rescued it from recession. We've
brought high levels of growth. To be able to continue to do
that, to enable the private sector to expand, the Government must
bring down the level of the deficit so we don't have those
upward pressures on interest rates in the market. That's what
we're doing.
BEUTLER: But how can you tell ALP supporters that they're
living beyond their means. Surely that's just an insult to them.
PM: Why is it an insult? I accept that they are intelligent
people, and that they will understand that you can't have
a situation of, as I saya $ 10 billion deficit we were looking
at when we came in, which just meant you were going to have
interest rates going through the roof, which meant that it was
the ordinary people of Australia, the ones who have the least
capacity to protect themselves, that were going to suffer the
most. GOWARD: Mr Hawke, does living beyond itsmeans include the
trade union movement.
PM: Trade unionists are Australians. All Australians have
got to understand that we, in aggregate, can't go on just
having spending programs which you finance out of the deficit
and which you're then going to be borrowing money and pushing
up interest rates. Because that not only means that you're
going to be pushing up interest rates as suc h and imposing
pressures upon people. By definition that ' Means a lack of
capacity then, or will, on the part of the private sector to
go ahead with an investment and create jobs. And we've got the
position which people have got to understand, I've been saying
it for years, I repeat it now, that you will not have a healthy
Australia unless you have a healthy priVate sector. The private
. sector provides three out of every four jobis in Australia.
GOWARD: I take it by that you don't mean that wage levels in
this country are too high.
PM: Well, wage levels cannot go on rising in real terms. There's
a case for being able to sustain the real level of wages through
time and so that there is in that way, as productivity increases,
a gradual adjustment to capacity. But it's not just a question
of wages. It's the whole attitude of Australians that have
tended to build up under all these years of conservative Government
that you can just say you're living in lotus land. We're not
living in lotus land. The world does not owe Australia a living.
GOWARD: Well does that mean that the long term trend for
Australian wage rates is downwards.
PM: No, it doesn't mean that. What it means is that you've
got existing levels, productivity is increasing through time,
and there's got to be a preparedness and let me say to the
trade union movement and on their behalf, they have been very
co-operative and I have publicly, and I again do now, acknowledge
the co-operation of the trade union movement with the Government
in attempting to create an economic environment in which growth
can occur, that has taken place. We've had very substantial
economic growth. And I look forward to the continued
co-operation of the trade union movement. But it's not just
the trade unions. It's no good just talking about them.
It requires all sections of the community to understand that
we have a basically very strong economy, one which if managed
sensibly with the co-operation of the Australian people, can
go on to very much better things. But it's a question of
not seeking too quickly to grab the fruits of what should be
regarded as longer term harvest.
GOWARD: Well looking at your partnership with the ACTU and
the Accord, ACTU Secretary Bill Kelty, amongst others, is
reportedly critical of the Government's handling say of tax
reform and he says that you've lost your way.
PM: Oh, well, you have read as I have read this morning the
front page of the Financial Review where it is said in some
private conversation Mr Kelty may have said something. It's
very interesting that you get some alleged private conversation
being the subject then of a headline saying this is Kelty's
position. He hasn't said it to us. I haven't seen him say
it publicly.
GOWARD: So you think your relationship with the trade union
movement over the Accord is strong.
PM: I think th-e relationship with the trade union movement over
the Accord is strong. I don't mean by that that-. the trade
union movement agrees with everything we'vye done. Of course
they haven't and it wouldn't be a good day for Australia where
they did agree with everything we did, or where we operated
in a way which would only do things thdte the trade unions
movement liked,. That's never been my position. I-said in the
election campaign in February 1983 that you must: understand,
I said to them directly, that we won't be always'doing things
that you want. We won't be the handmaiden, the Government
won't be the handmaiden, of the trade union movement. It's
not and it will not be. What we have tried to do successfully
is to talk with and co-operate with the trade union movement
because this country does not want any more the confrontationism
which marked the seven years of the previous Government and
which was part of the reason why we subsided into the worst
recession since the 1930' s.
BEUTLER: What effect do you expect yesterday's announcements
to have on business confidence and on the value of the dollar
which seems to have-remained much the same at about 63 cents
overnight. PM: Well I would hope that the markets would see this as
evidence, not of something new, I mean we have made it quite
clear that we were going to take the. firm and tough economic
decisions that were necessary to keep this economy going on
a good path. But here, you have the proof positive of that.
I woUld hope that will have beneficial effects. I think it
will. BEUTLER: How real will the spending cuts be in next month's
economic statement.
PM: Well as I said in the press conference yesterday, Warwick, if
you'd been in the Expenditure Review Committee and watched
the Ministers going through the grinder as it were, there's
no doubt about the reality of the case.
BEUTLER: Turning now to the brawl in the Victorian Branch
of the ALP, the violence continued yesterday. Do you believe
the hardliners in the Left should leave the Labor Party.
PM: Well, let me put it this way if they will not accept the
decision and if they think they can carry on like this, there's
no place for them in the Labor Party. If they, as I said at the
press conference yesterday, the decisions have been taken, I've
worked a long time to get this and so have a lot of other people,
those decisions have been taken. They will stick. They will
not be changed and certainly they will not be changed by this
unacceptable behaviour of an extreme element of the Left in
Victoria. Now they've got to make up their mind. They either
realise that this decision is there and it's going to stay and
live with it, or they should reconcile themselves to the fact
that this Party is not for them.
BEUTLER: So if they keep up their attacks on the-Party you'll
PM: * Now don't go putting words into my mouth. I think I've
made my position quite clear. The, ba'll,. is in their court as
to. how they behave themselves.
BEUTLER: Mr Hawke when you spoke yesterday of Australians
livifig beyond their means, you sounded very much like Malcolm
Fraser. If you accuse him of not living up to his rhetoric,
why can we be sure that you will deliver.
PM: Well, there's a big difference you see. You had seven
years to watch Malcolm Fraser in office and you saw him preside
over a disaster where he could talk, and not all that he said
made sense, but where some of things did make sense he didn't
match them with action. Against that seven years which led
to disaster, seven years which produced 340,000 new jobs, you've
seen us in office for two years producing the same increase in
jobs in 23 months that took him 88 months to do. You've seen him
lead Australia down into recession, you've seen us lead it out
of recession into very strong economic growth. And, of course,
the other thing is what I talked about before. He believed
that you could govern by the principles of confrontation. I
rejected those when in Opposition and asked the people of
Australia to believe that the policies of co-operation and
consultation were better. Now two years of that have produced
the record. They have produced record growth in employment,
record economic growth, they have produced the lowest level
of industrial disputation for seventeen years and it's halved
the inflation rate. So there's the answer to your question.
Look at the record. Look at the results.
BEUTLER: How much tougher are you finding the job of being
Prime Minister now.
PM: Oh, I'm not finding it any tougher. I mean the hours
are abominable and it means that you get a little bit more
susceptible to the flu. I've had the flu for two or three
weeks now which is a damn nusciance, I'm just getting on top
of it. So there's that physical pressure, but I don't find
it tough in any other way, I enjoy it, I love the challenge.
BEUTLER: You're still enjoying the job.
PM: Yes I am indeed.
GOWARD: Mr Hawke, industrial relations is al-ways going to be
the fear of the international investor about the Australian
economy. If you look at industrial relations in'Queensland, say,
your Industrial Relations Minister, believes there's a danger that
that type of Sir Joh legislation there could spread. Now the
international investor might actually Welcome that but I wonder
if the threat of that type of legislation is a convenient stick
for both you and the business community to beat -the trade union
with this year every time it sticks up its head..
PM: No, I don't use that sort of approach. And you talk about
the international investor. If you attribute any degree of
rationality to the international investor, he's going to say
let's look at what's happened in Australia. We had seven years
of the non-Labor alternative and what we had was continuous
disruption, high levels of industrial disputes, continual
confrontation. What have we had under two years of Labor
a dramatic reduction in industrial disputation there's a point
where I repeat where we've had the lowest level of industrial
disputes for seventeen years. Now if he's got rationality, the
international inveptor is going to say, if I could coin a phrase,
goodness gracious me, that's a much better situation and he's
right. Now I've said before and I say it again, the situation
in Queensland will not be resolved by these processes of
confrontation. Ultimately, and I hope sooner rather than
later, the Premier will realise that there has to be discussion
and negotiation. I have said quite clearly, I repeat it again
on this program, there's not right all on one side in Queensland
or all wrong. You've got to have a situation in essential
7.
industries where the people are entitled to expect if they
are going to get continuity of supply. The point is that in
Queensland that can be achieved by the process of sitting down
and negotiation, hammering out a settlement of disputes
procedure which I believe will be honoured by the unions and
I am prepared to play my part in bringing about that situation
and * so is the ACTU. If we do that we can get what the people
of Queensland want and need that is continuity of supplies
in the electricity industry and we can also have a situation
which I believe the great majority of Queenslanders and Australians
want, and that is where we remain a country in which we don't
have the legislation of the dictatorships of communism or of
the extreme right. It's only in countries like that, where
you have the sort of legislation which Sir Joh has brought in.
Look, what does Sir Joh, what do people in Australia say about
Poland. When you had a situation there in a communist country
where you had Solidarity arising and saying free men and women
ought to have the right to withdraw their labour, everyone around
Australia, including Sir Joh, recognised that clarion call and
said of course there are basic human freedoms which should
exist irrespective of political systems. Now this is mass
hypocrisy. We recognise it in Poland. We applaud those who
fight for it but we allow in Queensland a situation where
the opposite is done.
GOWARD: Just quickly, Mr Hawke, the new economic realities,
dyou believe that they make reshaping the Accord later in
the year necessary.
PM: Oh no, we've been quite relaxed about the way we discussed
this.* The Accord has worked very well and that's universally
recognised. It allows for discussion between Government and
the trade u~ nions-as to what may need . t64 be Idone in emerging
economic circumstances and that provision wil~ l be applied.
ENDS.