j
INTERVIEW WITH ALAN JONES, RADIO 2UE 24 APRIL 1985
E 0 E PROOF ONLY
JONES: I have on the line with me, from Canberra, the Prime Minister of
Australia, Mr. Bob Nawke. Good Morning Prime* Minister.
PRIME MINISTER:
Good Morning Alan.
JONES: Prime Minister is the. f all in the dollar a reflection of the fact
that for years now we've overvalued ourselveq?
PRIME MINISTER:
Well it's a. reflection of a number of things, and without attempting
to weight all those factors Alan, the large and increasingly obvious
deficit in* our: current account has played its part in the
assessment that's mfade by others. We were, I believe, overvalued
at the time of the float and It was natural enough that the dollar
would come down. I've said that this was to be welcomed and It was,
on balance, very much a cost to the Austr * alian economy but it did
go too far, and that's in part the reason why in recent days I and
Paul Keating have been aggressively making clear that the central
directions of Australian economic policy remain unchanged and are
firmly in our hands. The value to Australia of the devaluation
should be mentioned. , I mean I'm not arguing with what you've been
saying but I think, with respect to you Alan, it was rather
one-sided in the sense that on balance, as I say, Australia will
be better off because of the devaluation. It means that we're
better off in two substantial ways:. firstly, as you partly
indicated, our exporters, our farmers'and our mineral producers
are better off and that is good for us good for them and good
for us. And secondly, it means that our manufacturing industry
will be more competitive, significantly more competitive, and my
friends in the business community in manufacturing industry have
told me that already they are getting orders now which they would
not have expected before and that comes from senior people in
manufacturing industry. So for those two reasons we are better off
as a result of the devaluation and now as we are recovering
we've bottomed, i believe. That will mean that we will still have
a net devaluation but it will mean that the value of our dollar is
getting more towards the right level one which will properly
reflect our position and which will certainly have those beneficial
effects that I talked about. We have the responsibility, if I
could make this final comnunt; we have the responsibility as
government of ensuring ' now that those very significantly beneficial
effects of the dievaluation are not dissipated through the beginning
of a new inflationary spiral. I want to give you and your listeners
and the Australian public a reassurance that the government will
enptirp thnt thin rieto^ irnt hannen.
JONES' Wel. l Prime Minister that's I didn't mean to underestimate the 2.
impact of the devaluation and the slide, so to speak, of the
devaluation and the slide in the dollar and I think those points
are well taken. I'm just wondering though to what extent, to
repeat I suppose the general thesis of what I'm saying, there is
a perception overseas and recently when Nakasone was here there
were problems about coal exports not getting where they should be
going and there's a problem in Queensland now. I must say that I
am sure all Australians would have viewed with some concern the
behaviour of the Crawfords of this world in Victoria at the
weekend which constituted nothing more than a personal attack on
you.
If I could just say that you came to the position of
Prime Ministership with a very strong reputation as a tough leader.
You were very popular at the time you were elected and still are
popular. There may well beaa. t ime mightn't there in the
immediate future-when you're-going to have to take some of these
people on in the way you did when you headed the union movement?
PRIME MINISTER:
Ku Well just let me go to the general point you made first about
unions and then to the more particular points, Alan. You refer
to the difficulties that have existed at certain points in the
industrial relations field recently, I think again-you must put
this in its general pdrispective. We had the figures for
industrial disputes out for January and what we've got now under
this government is the'lowest level of industrial disputes in
Australia for. 17 years. Now that'. s not a fIgment of my
imagination.-' That's the cold statistics of the Australian
Statistician. The best industrial relat ions situation for 17
years, and that's the aggregate position which the Australian
business community is recognising and welcoming. They are saying,
and they are' saying it not only here but they are saying it
overseas, that they are Baying to potential investors and traders
with Australia " Look the Industrial relations situationi in
Australia has very significantly improved". It has. Now I don't
meaui from that, Alan, that we should become complacent we should
not. And where a dispute arises which should not arise then you
will find that we've been tough about it. For instance, the most
Sdirect area that I can ' deal with'is in the area of our-own
employment the Commonwealth Employees. Now earlier this year
they tried to take us on. They thought tbat by going on strike
they could force an eight per cent wage increase out of us, or
something of that order. We said,* " It's not on". And we wore
that, we would not cop it and now it's gone back into Arbitration.
Now that's the general point I'd make. Coming to the particular,
you referred to the Crawfords * of this world well I believe that
the public will make its judgement. I have fought now over the
last two years hard, and-at certain times almost singlehandedly,
but then with increasing support, to have established within
Victoria the correct principle. That is, any union is entitled to
be affiliated to the Labor Party if it'wishes to be and the fact
that some people don't like the right wing leaning nature of that
union is not a bar. Now I've had to fight a long fight on that.
We've won. In the process If Mr. Crawford wants to behave in
the disgraceful manner that he did then I believe that it will be
something which works to the disadvahtage of him and those around
him and to the advantage of those of us within the Labor Party who
are committed to having a Party which reflects the nature and the
aspirations of that great constituency out there in Australia
which votes for us.
JONES: Yes well I don't think I agree with you, and I think that some
people mnight think that the Prime-Ministership has made you a bit
too courteous to these people.
PRIME MINISTER:
Oh I don't think they'd say that, and I can assure you that I have
been quite clear about it, and I repeat on your program Alan, that
the Labor Party is not going to change back to accommodate the
wishes of those extreme left wing elements. We are not going to
change to accommodate them. If they don't like the sort of party
the Labor Party is becoming, that is, a party more attuned to the
people who vote for us, then they will have to make their decision
to go elsewhere.
JONES: Well said Prime Minister, and I'm a ure that's most welcome. Can we
just go to the question of expenditure because this is'something
that you have talked about now for some time and if you don't mind
my saying the-perception is that on the very important questions
as I say there on tertiary fees where you would have had a
significant opportunity to reduce the size of the deficit, those
of your persuasion were beaten. How successful do you think you
can be with this program to reduce expenditure which you've often
said is absolutely essential to proper economic management?
PRIME MLINISTER!
Well let we put it, that the proof of the pudding-is in the eating
that. we've undertaken already. In the period since we have been
in office,. Alan, we've significantly reduced the deficit we
inherited and I ' ye given the undertaking that when we present
the Budget in August of this year there will be a further
significant continuation of that process. I've been amused, as I
think perhaps you have been too and I think I can say that knowing
your background which I respect, I think you probably were a little
bit amused by the goings on in our Parliament yesterday when our
Opposition were trying this ridiculous exercise of saying that
Mr. Hawke's billion dollar cuts weren't real. I just want to make
the observation that I assume tbat when the expenditure cuts of
a billion dollars are announced in May that I'll have John Howard,
my friend John Howard, getting up and telling all the people that
are screaming and carrying on and saying we shouldn't have done it
" Oh look don't worry, it's cosmetic. It's not real. It's just
Mr. Hawkq making it up".
JONES:. ( Laughs) Yes, I appreciate your point. Well they are the problems
of Prime Ministership though aren't they?
PRIME MINISTERt:
I admit I appreciate that they have got to try and do something
but I didn't think that was very effective.
JONES: No, well it is to be hoped that well we haven't seen them that
they aren't cosmetic because-that's the big issue. And the other
one of course taxation PM.
PRIME MINISTER:
Alan I can assure you they are not cosmetic. I've gone through
agonising hours in the Cabinet room with the Expenditure Review
Committee and the Ministers and others involved can assure you that
they are real.
JONES: Good, well now with that PM, t he question of taxation and again
I know you've talked about the summit and all that sort of
business but independently of-what that might produce it seemed to
me that there were two at least two-pronged attacks there. One
was that we must reduce personal tax. Two; that we've got to
supplement what we've lost there with an indirect tax of some sort.
Those seem to be two simple premises. Are you still winning that
argument?
PRUME MINISTER:
Well let me-put it exactly as it is, Alan.. I've made it clear
this is Paul Keating and a number of other people that we
believe that-the existing tax system has become debased,
i nadequate, inequitable, economically inefficient and certainly
far from simple, andtbere is for all tbose reasons a desirability
to reform the income tax scales in a way which is possible will
reduce significantly the burden of direct personal income tax.
Now those things are true and if you are going to be able to do
that and maintain broadly the same levels of expenditure that the
people want in tbe areas of defence, education, social welfare.,
roads,-etc, then you have to roughly get the same sort of revenue
from elsewhere. Now I've -made it quite clear that ideally, and
certainly Paul has, that ideally that is what one wants to do and
I can assure you that is one of the packages that we'll be putting
to the summit in our white paper. That sort of scenario will be
there. What we've got to be sure of, Alan 0 s that if we can get
down that path, that you've got to be sure that in net terms you're
not going to be making people worse off by an increased burden of
Indirect tax which more than-comipenisates and leaves people worse
of f. You've got to be sure that you don't produce that result.
You've also got to be sure that you can protect those in the
community who would be worse of f without compensating mechanisms.
For instance, low income people dependent on social welfare
Payments who are not in the area of getting benefits by way of
Personal income tax-cuts would~ if you just left them there with
a rising price coming from an increased Indirect tax, they would
be worse off.
JONES: Quite. * But you've given those assurances that the people at the
bottom will be looked after.
PRIME MINISTER:
Well all I'm saying Alan, and I know that you understand that,
but you have got to make sure that all the elements in the
community who would otherwise be hurt by the change would have to
be protected. So I'm simply saying to you that the proposition
which you put is correct. That's the approach which we believe
is the proper and desirable one. We've got to make sure'that the
mechanisms are fully available to ensure that those who you and
I think all reasonable people would want to see protected are
capable of protection.
JONES: Prime Minister, finally, the difficulty of government has never
been better reflected in the last 24 hours than what I argued on
this program yesterday was an eminently responsible decision
about parity pricing has been lampooned from one end of the country
to the other. * You a * re going to have to, obviously in implementing
decisions, face some of this flak. What's your own personal views
of that problem?
PRIME MINISTER:
I've never been frightened of facing flak. I think you'll
recognise, Alan, over the years that I've been prepared to cop
flak in a whole range of situations. I've never walked away from
it and I never will.. If I . think> the principle is right that's
where we'll go. Let me say, in regard to this decision on
petrol pricing these things: firstly, it is a well-founded
bipartisan policy and I pay: credit for the Opposition for them
not trying on this issue to run away from it. They said they
support the position. Now it is supported across the political
spectrum because it reflects a sensible economic reality. That is,
( Liwne . airnee xdheaaulsitnigb lew itqhu atnhtei tipersi, c inwgh icofh wae cosmtmioldl ithya vew hitcoh imipso rnto, t ahnedre
so import parity pricing is a relevant and economically sensible
policy. Secondly, that even with these changes'Australia still
enjoys just about the lowest price for petrol anywhere in the
whole of the western world. That's point two. Point three: I
have said that we will not be using the revenue which arises from
this decision simply to undertake new expenditure programs. It
will be used to ensure that either the deficit is reduced or we
take other compensating measures which are necessary to protect
the economy, We are not regarding it as some windfall gain just
to finance some additional government expenditures. And tbe
fourth point is this: not everyone across the land has criticised
iti. I welcome the way in which you, many sections of the business
community and others have recognised that if government doesn't
take the right and correct tough economic deeisions we will be
worse off in the long run..
JONES: You' re dead right, PM. I'm sorry -unfortunately as you know,
you have your problems'and I've got mine. I've got the news
coming up and we'll have to call an end there,* PM1.
PRIME MINISTER:
Sure, and thank you very much indeed.
JONES:
Thank you for speaking with us. PM, and keep putting those tough
lines out because I think the country needs it and they're
looking for that from you.
PRIME MINISTER:
Thank you very much indeed.
JONES: Thank you Prime Minister, speaking to the Prime Minister of
Australia,' Mr. Bob Hawke.