ij_,, AUSTKALIA
PRIME MINISTER
E & O0E-PROOFONLY
TRANSCRIPT OF PRESS CONFERENCE WITH MR JIM KIRK AND
MR BARRY COHEN 22 NOVEMBER 1985
Ladies and Gentlemen, I would like to take this opportunity of
introducint to you Mr Jim Kirk-and say on behalf of the
Government how pleased we are that Jim has accepted my offer and
request to him to be come the Chairman of the Australian
Bicentennial Authority. I would like to say at the outset too
that I am pleased that when I consulted the Leader of the
Opposition, Mr Howard, he indicated full support of the
opposition for this appointment. I would just briefly like to say
one or two things about Mr Kirk, he would be well known to you.
He served in the Royal Australian navy during the second world
war, Very importantly he became, in 1976, the first Australian
Chairman and managing Director of Esso Australia. A company with
-which he has had an association with for some 49 years, I think,
Jim. He was the co-founder of the Business Round Table which was
one of the organisations which merged into the Business Council
of Australia and on the formation of the Business Council of
Australia became the original Deputy Chairman of the Business
Council of Australia. He is on the board of the Macquarie Bank.
He has also had an active association with the PBEC which is the
Pacific Base and Economic Council of which he is Deputy Chairman.
He is a past president of the Australian-American A ' ssociation.
The Government believes and I am very pleased, as I say, this is
a bi-partisan position, the Government bel-ieves that Jim Kirk
brings to this position all the qualities which will ensure that
the preparations for and then the celebration of the Bicentennial
in 1988 will be in the very best of hand and will ensure that it
will be a year in which Australia can be proud. I will just make
this final point and that is that in regard to the position of
the Chief Executive who regarded it as appropriate that we should
make the appointment of the Chairman first and one of Jim's
initial responsibilities will be to look at the organisation, to
fork his judgment as to the sort of person that will be required
to work with him as the Chief Executive. Under the legislation itis
the responsibility of the Chairman to make that appointment.
He will, of course, be consulting with me but essentially this
will be the responsibility that he will have. And I am certain
that he will be able to find a person who will discharge that
responsibility admirably. Therefore with Jim in the position and
the Chief Executive position to be filled the Government has
total confidence in the successful preparations of the
Bicentennial. JOURNALIST: Prime Minister, did the problems of the Bicentennial
make it difficult for you to convince anybody to take the job?
PM: No, it didn't. You will appreciate that we were fortunate in
getting John Utz and I should, in introducing Jim, have said I
did in the press release how indebted we are to John for filling
in that interim period. John Utz was prepared immediately to step
into the breach that was created and we have deliberately taken
our time. we have thought about this. There was no difficulty and
indeed Jim's name was one which emerged no just from one source
but from a number of sources and I am pleased to be able to say
that as soon as I raised it with him he was affirmative in his
response. JOURNALIST: Was there no one on the board at the moment who was
suitable or available Mr Hawke?
P1M: The composition of the board as you will appreciate. A
representative one and from States and groups and it was not the
source to which one would look for this position.
JOURNALIST: Mr Hawke, what is the state of play on the
consideration of trying to get back the money after......
$ 500,000 payout?
PM: The interim Chairman Mr Utz put this matter in the hands of
a solicitors and council and I as understand it he is still
awaiting advice from them.
JOURNALIST: Mr Kirk being realistic about it, how hard is it
going to be to find a Chief Executive and would you have a
preference for an Australian over perhaps anyone from overseas?
KIRK: Well, the second half is pretty to answer. I would have
preference for an Australian because I feel that the Bicentennial
is an important event for Australia and I feel that all those
people out there that are Australians that feel same way and we
have got to do something good about it. So we should have an
Australian doing it I think. Now difficult it is going to, be is,
I think, probably very difficult because remember it's a short
tenure and we'd offer something but we don't offer any long term
job for the individual. So it's not going to be easy but we'll
find the right person.
JOURNALIST: Sir, what attracted you to the job of Chairman?
KIRK: I guess the challenge as much as anything and the fact
that Australia has done a lot for me over the years. And if I can
contribute something back, I am happy to do so.
JOURNALIST: Sir, when would you like to have an appointment of
Chief Executive? This side of Christmas?
KIRK: I'd like to but I think we will be lucky if we have anyone
in line by then. This is the wrong time of the year to be
looking. But we will be trying. If we find somebody next week I
would be making the recommendations.
JOURNALIST: What-do you see as your-first responsibility given
the controversy that's surrounding the Bicentennial: of late? How
do you propose......
KIRK: I guess as an Australian I'd say to find out what the
hell's going on. I don't really know, you know I'm the new boy
and I have got to find out what exactly exists. I suspect that
there is a lot of good there just waiting to surface.
JOURNAL. IST: what sort of ideas dn voi have for the Bicentennial?
-" KIRK: That's a good question you know. I like the thought of the
tall ships. I happened to live in New York at the time of their
Bicentennial and I saw the big ships. And that impressed me and I
was also impressed by the way the little, I guess you would call
them villages in the old days but theye are still 20,000 or
30,000 people cities in the US had their little programs and what
had generated in the way of national support. And I think that
these committees that we have got could well-lead to the same
sort of thing here. Because the Bicentennial is for Australians
for Australians you know. It is not really for governments or for
others sitting at the top, it's for the whole of the people of
Australia. JOURNALIST: So you would like a fairly decentralised set of
celebrations? KIRK: Well, you know, I don't like work so I'm a decentralist
from way back.
JOURNALIST: Do you envisage any changes in the direction of the
programs so far?
KIRK: I am really not in a position to know. I have had a
briefing paper that I got yesterday that makes me an expert. You
know, anybody that has ready something like that after 24 hours
is an expert. But I really couldn't tell you whether they are
good bad or indifferent. They look pretty good on paper.
JOURNALIST: With your background though, would you be interested
in introducing some new themes. Perhaps private enterprise......
PM4: This bloke has got a monopoly on it you know.
KIRK: I am really a believer in the work ethnic and I am
certainly a private enterprise individual. I have been all my
life. But al * so I recognise the responsibilities of governments
and others and you know it's a two way street. You couldn't
operate the country without a government and I doubt if the
government could operate satisfactorily without private
enterprise so it's a two way street.
JOURNALIST: Do you think......
KIRK: I don't yet know what public servants I have got to work
with. But I can tell you that if I am regarded generally as a
peoples man I think in most of these parties. When I left the
company they always said that and I get on well with people but
if they run me the wrong way I am-a-little bit intollerant so
we'll see what happens.
PM: Talking about people there is one think I meant to say in
introducing Jim that I was in Melbourne recently and had the
pleasure of presenting Jim with the Award for 1985 of the
Business and Professional Womens and Advance Australia
Affirmative Action Award for the businessman who had done most to
advance the cause of Affirmative Action in business in Australia.
So it's, I think, a eyrelevant aspect of Jim Tirkl's
background. JOURNALIST: Mr Kirk, given all the difficulties that are
apparent in the job. How much would the bloke or blokette that
you employ as Chief Executive how much should he be paid?
KIRK: Well, that's a good question you know. You have got to
make sure that you pay for the -job to be done but you also can't
disturb a whole other pay schedules of many other peoples in the
process. what we may be doing is looking for somebody from the
private sector to perhaps be seconded with us contributing
something. But I really haven't had time to work out anything
there and I can't tell you whether it will be a man or a woman. A
woman has got just as much say. In that Award I got they gave me
a badge that says now I was an honorary woman. And I look under
the shower every morning to make sure.
JOURNALIST: What was the result?
KIRK: I haven't changed as far as I can see.
JOURNALIST: Mr Kirk, what sort of severence arrangements have
you negotiated?
PM: Now, Paul, cut it out.
KIRK: Maximum.
JOURNALIST: Mr Kirk, do you believe Dr Armstrong or Mr. Reid were
badly treated in any way?
KIRK: I don't really know to be honest. You know, I read no more
than what was in the newspapers, nothing else.
JOURNALIST: Well, from what you read in the newspapers?
KIRK: I hate to say it amongst this wonderful group but I get
confused with what I read in the newspapers most of the time.
JOURNALIST: Were you wary about taking the job on because of
what happened to Mr Reid and Dr Armstrong?
KIRK: Not really for that reason. I have got enough confidence
in the people report in any circumstances to say that if I do a
job they will recognise it. If I don't they will recognise it
too. No, that doesn't trouble me. I was a little bit worried
whether after turning 65 and retiring after 49 years as to
whether I should take on something as responsible as this but I
feel I can contri'bute so I did.
JOURNALIST: Mr Hawke, apart from the appointment did the Cabinet
make any further decisions in the discussion on the Bicentennial
today?
PM: Yes we had an overview, Michelle, of the national program
and let me say this that, that will now that the Cabinet's done
that will be going with Mr Kirk to the board, the next meeting of
the board and with approval of the Government they nodl.,,, be
proceeding to flesh out now the details of that national program.
A lot of it has already been done and I think I can say on behalf
of Jim, because we did talk about this, that if in the relatively
near future, after he has had the meeting with the authority, he
would be in a position to have a more detailed press conference
where there could be an opportunity for you to have a closer look
at the sort of things to be developed in the national program.
JOURNALIST: How much of a role will the updated public service
division now be playing in this whole program?
PM: Yes, a good question. What we decided needed to be done
after the recent events was recognising the legislative position
under which the ABA is an independent company. We nevertheless
wanted to have a situation where the relationship between the
Government and the Authority and it's Chairman in particular
could be put on a more efficience and effective basis. So you now
have a division there under Ron Harvey who had the responsibility
of doing all the preparations for the two summits from press to
the Government, very particularly in the work he did there. Under
Ron we now have I believe a group which will work closely with
the Authority and I think, without being exhaustive, the sorts of
things that they will be ensuring is that Jim and the Authority
through the Department will have the ability to tap into all the
resources of Government so that the various governments and
authorities will be there with their resources available to be of
assistance to Jim and the Authority in whatever way they wish.
There has been the understanding reached before Jim's appointment
that the presence at the meetings of the Authority are
representative of the Department so that we will be informed of
what is happening in that way. There will be the reporting in the
financial sense to us of expenditures of the Authority and very
early, of course, I introduced Jim to Ron and I think now we will
ensure in this personal sense, the relationship is there, to
ensure that the very significant resources of the Government will
be made available in a way which is consistent with the
legislative independence of the Authority.
JOURNALIST: So it's a helping role and a watchdog role?
PM: I don't like the word watchdog because I have total
confidence in Jim Kirk. I wouldn't have asked him to take the
position if I didn't have that total confidence. But I think that
Jim and the Authority would appreciate that with the very
significant expenditures of taxpayers money that are going to be
involve it is appropriate that we be kept informed of the way in
which those expenditures are being undertaken. So I don't use the
word watchdog. That carries an implication that we don't have
confidence. I am totally confident in the new set-up and I am
certain that combined resources of Government channelled through
my Department and the activities of the Authority-now under the
leadership of Jim Kirk will produce outstanding results for
Au st rali a.
JOURNALIST: What was the level of interest taken by the business
community in the events of Mr Reid and Dr Armstrong?
KIRK: Well, a lot of it harpened Just after or around the time I
was retiring and I haven't been, for instance, haven't been to a
Business Council meeting since then and so on. So I find that
hard to answer but I don't think there is anything to worry about
that I know of but you know I am not really informed.
JOURNALIST: Would you think appropriate if you had any
discussions with either of those......
KIRK: Well, I don't have any problem. I have talked to John Reid
since it's all happened. In fact, I was at a dinner the other
night with him at Government House in Sydney and I talked to John
Utz. But I haven't heard anything that would cause me any
problem. JOURNALIST: What did he say when you said you were taking the
job?
KIRK: I didn't tell him that. I didn't even know then.
PM: He didn't know then.
KIRK: I was just talking to him generally.
JOURNALIST: Mr Hawke, could you tell us the terms of Mr Kirk's
appointment? PM: They haven't been finalised yet. We have had some general
discussions about that but they will be conditions which will be
appropriate to both the job and the very considerable amount of
time that he will be putting into it. It's quite clear, I think,
that you would appreciate Alan, that as we get now closer and
closer to the time the position of Chairman will occupy more and
more time. So there will be conditions which will be, I believe,
mutually acceptable, relevant and appropriate.
JOURNALIST: Is the appointment until June 1990 much the same as
Mr Reids's, is it a four year appointment?
PM: It will be going certainly into the period after the end of
1988. Now just precisely how long again we need to finalise that
but you will appreciate Alan, that the responsibility of the
Chairman just can't finish on December 31st, 1988.
JOURNALIST: So it will ivlecn ct
PM: There will be an exchange of letters between us.
JOURNALIST: Mr Kirk, what do you think will be the themes of the
Bicentennial in 1988? What do you think the Australian
achievement has been as you see it? What makes you proud to be an
Australian? What do you think the t~ ry should demand?
KIRK: That's pretty tough to just bring on me at this stage but
if you want just my personal opinions of things. I would like to
look to Australia as the future and that means getting the
children involved, getting them to recognise our nation and our
flag and to mean something to them. But at the same time you
can' t forget all the people that ha%-marle Austral ia what it i s.
So it's a combination of all those things but really I haven't
had time to think as to what would be my specific suggestions or
anything to do with it. And you know a lot of people have got to
contribute to what we finally come up with.
JOURNALIST: One aspect of my question was what makes you proud
to be an Australian? Perhaps that's a way of exploring it
further.
KIRK: Well that's a good question you know. I worked for an
American company for whole of my life but I was a true and true
Australian for the whole of my life. There were a couple of
occasions when I had a chance that I might have changed that but
I never ever thought of anything but Australia has home and
Australia has been something that has been very good to me. I
wouldn't have served in the Navy and I wouldn't have stuck up for
Australia around the world like I do if I didn't believe it. It's
just something that's here, I don't know why it there but it is.
JOURNALIST: Would you like to see a new flag?
KIRK: I don't know about the flag really. I am an advocate of
Advance Australia Fair mainly because I learnt it at school and
didn't have to re-learn it when it came along. The
JOURNALIST: You actually know all the words?
KIRK: I really had trouble. I am still inclined to go back to
the old words but you. know that's only a matter of time. On the
flag, I don't know. I have heard the arguments, I have never
decided myself which way I'd like to go frankly.
JOURNALIST: Mr Hawke, will you be delegating more of your
responsibilities to Mr Cohen on the Bicentennial as you suggested
a couple of months ago?
PM: There w * ill be an arrangement whereby he will have the
obviously the main day to day ministerial responsibility in the
same way as other Ministers assisting me do have. But we have now
developed, I think in a sense, as a result of the difficulties
that we experienced a very satisfactory arrangement between
ourselves. He consults with me but I repeate he will have the day
to day ministerial responsibility.
JOURNALIST: Is it fair to say that Mr Kirk was your appointment?
PM: Yes. When I say yes directly and unequivocally like that I
took to the Cabinet, I was convinced that he was the man for the
job and Cabinet unanimously endorsed that.
JOURNALIST: Mr Hawke, Mr Harvey has already shed'-some staff in
his new position. Will Mr Kirk have similar powers and do you
think this second appointment will set the Authority back on the
tracs? PM: It certainly won't set it back. Put it back on the tracks do
you mean or set it back. I didn't quite hear what you said set
it back in its tracks or set it hack on thn~ trackIrs?
JOURNALIST: On the tracks.
PM: One of the things that Jim will obviously be doing will be
to go in and have a look at the Authority to make an assessment
of the adequacy of staff. As far as numbers, that could be up or
down. One of the things I was very pleased he immediately said to
me that he would be doing would be to go around to the States and
talk to the States. And the judgments he makes about the
operation of the Authority will part reflect, I think, the
discussions he has with the States. In general, yes, I believe
that the appointment of Jim Kirk, the experience, the integrity,
the enthusiasm, background that he brings to it will ensure, as I
said at the beginning of this conference, the unquestionable
success of 1988. Both its preparation and the actual celebrations
in that year.
JOURNALIST: Apart from the celebrations and the national road
program. Do you envisage that 1988 will see a more lasting
monument perhaps in the way of something for Australia?
PM: There will be a number of elements Ken, of permanency. That
will be at the national level and also in the important
Federal/ State level. You will appreciate that in early year
prices $ 48 million was allocated to joint Commonwealth/ State
programs and those programs quite clearly already have produced
projects which will have lasting benefit at the national level
yes. There will also be projects of an enduring nature and I
suggest, as I. said before, that in the fairly. near future Jim
will be able to have a more detailed conference with you to go
into those details. But I do mention, for instance without being
exhaustive, the National Maritime Museum. We also are hoping and
expecting that we will able to have a Bicentennial national
science centre. I just mention those two as examples at the
national level as distinct from the State/ Commonwealth
co-operative events which will be lasting memorials of the
Bicentennial.
JOURNALIST: When you suggested in the House that the response of
the current account could be a bit more drawn out change in
Australia's industrial structure I think you said. Are you
suggesting there is some change in the budget forecasts?
PM: No, I wasn't meaning that. we still think that we will
start to see the effects of the depreciation in the second half
of the financial year instead of the first half, of 1986. In
dis cussions with th e Treasurer I have no reason to believe that
the sorts of projections that we were talking about are going to
be any different, that is that looking at 85-86 the current
account deficit as a proportion of the GDP should be of the
order, talking of year on year, about down to four and half, 4.6
per cent. And then looking at June 86, down closer to 4 per cent
and then 86-87 down to the order of about three and a half per
cent. The point I was making really, Mike, was not comparing it
with the Budget, but I was really making the point with earlier
periods in Australia's history, talking about the change in
industrial composition and the international market. I think I
was really making the point on the export side that given the
composition of our exports and the depressed international market
for some of our primary products might take a little bit longer
than perhaps in earlier periods to get the benefits of the
depreciation on the export side. Although I did add in my
question there, I didn't go into detail. But in talking to the
business community at the Business Council and also in some
private conversations I have had around with the business
community, there is no doubt that export opportunities have
opened up and are being exploited in the manufacturing sect or as
a direct result of the significant depreciation. And indeed it
would be surprising, if, given the way in the Australian
manufacturing sector in the last decade has become leaner and
more efficient, it would be surprising if the depreciation of the
magnitude we are talking about is not producing those effects.
on the imports side, it is inevitable we believe, that with a
per cent depreciation, it is inevitable that the domestic
producers are going to be able, in the period I have been talki ' ng
about, to pick up some of the benefits of the depreciation. So
that was the sense in which I was making the point.
JOURNALIST: What do you think are the preconditions to reducing
interest rates?
PM: Well, I think the market has got to be satisfied that the
benefits of depreciation are going to work through in the way
that I have referred to, Greg. It is one of the elements. I
think also that we have got to agree that it is impossible when
you are trying to analyse and weigh the components, the factors
that have led to the decisions in the market over recent weeks.
It is impossible to say there is that percentage for that factor.
However, you can say that one of the factors has been, perhaps
some uncertainty if you like, about the 3.8 per cent wages
outcome. Now, I believe that as the market comes to appreciate
that that wages outcome is one which is going to be consistent
with very considerable wage restraint into the future. And
certainly, consistent with a much lesser wages outcome than would
be the alternative wages policy. Then I think as that
realisation increases that will be an important condition of
improvement in the interest rate situation. It goes back to
really what both I and the Treasurer have been saying for some
time now in the current context that we firmly believe, are
firmly convinced, the Government is firmly convinced, that the I
fundamentals of economic policy are right. we have had, earlier
in Xthe year, to be associated with some tightening of monetary
pb'licy which was appropriate when we had that weakening of the
dollar earlier in the year. And more recently in the last couple
of weeks, also we have done that. We believe that if you look atthe
evidence of private demand, if you look at evidence in the
wages sector, the compliance, the overall compliance of the trade
union movement to the Accord to no extra claims, that as that
understanding comes through and: we start to see the benefits of
the depreciation in the current account in the first half of next
year. Those are the broad sets of conditions which are necessary
to produce a more favourable outcome in the interest rate area.
JOURNALIST: Prime Minister, it is now nearly four weeks since
the end of the Commonwealth meeting. The group of eminent
pesns doesn't seem to be that much closer of being formed. I
knowcerainnames have been put forward. I am just wondering
what is holding it up or is it falling into a hole.
PM: No, it is not falling into a hole. There are three names
that are quite definite. one of whom you are aware of. The
Indian nomination has been finalised, Mr Singh. And the UK, Tony
Barber. The Commonwealth Secretary General, Sonny Ramphal, isr
engaged in discussions with the Africans and I spoke to him on
the phone last week. He is certainly relaxed about it. Julius
Nyere is not available. And let me say I had a very, very
interesting letter from Julius and it is important that it should
be understood that the fact that he has not been able to accept
the Chairmanship in no sense reflects any lack of enthusiasm on
Nyere's part for the concept.-He has-committed himself to the
success of the concept. But for legitimate internal reasons he'
can't do it'. But he will be giving it his full support. Now, I
am confident from the discussions I had on the phone with Sonny,,
that in the quite near future the full group will be finalised.
And I am hopeful as I was in the Bahamas they will be able to set
about doing what we regard, and the Africans regard, as an
important job.
JOURNALIST: Mr Hawke, you have had now for some time the
Democrats proposals on tax. Do you intend to give them some 1
concessions and are you confident of getting the tax package
through intact?
PM: Let me say this Michelle that Paul Keating is conducting the
negotiations with the Democrats. I haven't sought in any way to
interfere in that. He has spoken to me about it. I think he is
confident of his capacity to reach a position where we can get an
acceptable agreement with the Democrats. And on that basis,
therefore, I expect the. legislation will be passed.
JOURNALIST: You are willing to be flexible?
PM: Well, we obviously want an acceptable package to be passed.
And we understand the realities of numbers in Senate. If there
the floating of the dollar. And secondly, with the deregulation
of the financial markets. Now those were decisions not taken
lightly, nor taken in ignorance of the implications of those
decisions. We knew that when you made those sets of decisions,
that the market was going to havre more capacity to influence day
to day results. But I want to make this point that we made those
decisions within the overall framework of broad economic strategy
which was based upon the proposition that this country has
experienced to its great detriment, the alternative strategy.
That is the strategy which meant that the previous Government
deliberately limited itself to traditional economic instruments
which meant monetary policy and fiscal policy. Now that stance
of policy was disastrous fo-r this country. It produced, and I
know you have heard me say it many time, but it is relevant to
say it again, it produced the worst recession in this country's
history for 50 years. Now we have deliberately put into place a
Prices and Incomes Accord which gives this Government another
instrument of policy. It has, to use the words of the OECD
Secretary, been brilliantly successful. And we believe that it
would a negation of what the Australian people voted us into
government for to walk away from that strategy which has produced
record growth and importantly, record employment growth. We are
proud of that achievement. And I believe that the Australian
community shares that satisfaction and pride with us. So our
task is to use those traditional instruments of policy with the
additional important instrument of policy which we have equipped
ourselves with which has produced this remarkably low level of
wages growth, which you saw in the statistics last week. Now, we
believe that we can retain those instruments of policy. We
believe that the fundamental results that have been produced,
that is a reduction in real unit labour costs back to the level
of the late l960s, which is again, as you know, the obverse side
of the coin return of the profit share back to the same level of
that period. That. those fundamentals of very significant
increase in profit share, reduction in real unit labour costs,
employment growth, that those results are what the Australian
people want. They haven't emerged by accident. And part of the
process of the emergency of those results has been the freeing b. p
of the markets. So we don't look at the markets with antagonism
and say look what you are doing to us. We say it was a
deliberate act of policy to free up the markets. We believe that
we can accommodate that freeing up of the markets in the
framework of this additional range of instruments of policies
that we have given ourselves.
JOURNALIST: How do you know monetary policy won't be a kind of
blunt instrument that it has occasions in the past the long
lags involved, some evidence of that in other countries?
PM: Well, I think it follows logically from the question and
answer I just gave Mike. That if in fact we only had monetary
policy and fiscal policy, the traditional instruments upon which
the Fraser/ Howard Government relied, then that question would be
much more relevant. But we have a situation within which we have
been able massively to contain wages growth. And because that
instrument of policy which the Liberals didn't have the wit, the
wisdom or the intelligence or the understanding or the philosophy
to embrace. Because we had all those things and have done it,
then we don't impose the same burden upon monetary policy as you
would have to in the absence of that additional instrument of
policy. I can assure you that the * Treasurer in consultation with
the Reserve Bank, and in discussion with me, are watching very
closely the impact of the combined policies that are appl. ying,
including monetary policy. And we therefore think we are not in
the same historical framework as our predecessors. We have more
flexibility, more room, to use those range of instruments in a
way which are not going to have the blunt and disastrous results
which occurred under our inept predecessors.
JOURNALIST: Mr Hawke, is it possible to identify or even
speculate on the Australian..
PM: No, I don't think it is. Not in a quantifiable way. All I
can say on that is that if the Treasurer and the Reserve Bank
believed that there was some activity t 1! ere, identifiable
activity which was, if I can use theA I~ erng maliciously applied to
the detriment of the Australian economy, I believe that would
have been brought to my attention. It hasn't.
JOURNALIST: Do you think it is a necessary pre-condition of the
Accord it has full wage indexation. And if the markets don't
accept that there is wage restraint Will you be going to the
ACTU and asking for some deduction in that full indexation?
PM: Well, let me take that in two steps Greg. Firstly, I think
there is an increasing appreciation, and I say that not
hypothetically, but through discussions with the Business
Council. There is an increasing understanding and adequacy of
the agreement negotiated with the ACTU. It was a matter of
considerable interest to me in my meeting with the Business
Council two weeks ago, that the President of the Business
Council, Bob White, actually said that they saw that the
arrangement was a reasonably sensible one. Which was something
that they weren't saying at the time that it was made. In other
words, they can see that the three elements of that arrangement
are important. And I emphasise those three elements. Firstly'
the 2 per cent discount. Secondly, the spreading out of the
productivity claim which is to be taken in terms of
superannuation. Now that, except in isolated circumstances, that
is not going to apply until July of next year and will be
negotiated through industry in a way which take account of
differing degrees of capacity within the economy. And thirdly,
the third element, is of course. may I still talking about the
second point say this, that you would understand that one of the
benefits from the business community's point of view of the
productivity increase being taken in superannuation rather than
wages is that you don't get the same degree of on-cost impact as
you would otherwise get. And the third point of the negotiation
is of course the agreement to no extra claims. Now, I believe
Greg, that it is indisputably right to say now that there is a
clearer perception and understanding in the business community of
the. relevance of that agreement-. And therefore what we are
seeing is that by the time we get to the next * wages case that
that two per cent that has been negotiated would be about the
amount, almost precisely the amount that would have been arrived
at by the processes of calculation of the Commission. And may I
remind you that in the judgement of the Commission, they, in this
last case, they said that they believed that the deferring of the
discount, the deferral of the discount until next year would have
a minimal impact upon the respective inflation outcomes. And I
believe that that is clearly right. And I think that the
business community increasingly sees that that is correct.
Therefore, I don't apologise for the length of that, because it
is relevant to your question. I think the pressures, the
expectations, of some further approach were greater before there
was this clearer understanding of this whole impact of the deal
that has been negotiated. So therefore, I don't see those
pressures being upon us now. I say this however, that you recall
that the last paragraphs of-the agreement with the ACTU provide
for further negotiation if circumstances require. We don't see
that at the moment. But the fact that those provisions are there
is relevant. And if the judgement in the judgement of the
Government it became necessary to do that then we would do it.
ends