PRIME MINISTER
TRANSCRIPT OF HOWARD SATTLER, 6PR
27 January 1986
E 0 E Proof Only
SATTLER: How are you going?
PM: Good.
SATTLER: You are looking well.
PM: You have got to look well in Western Australia.
This beautiful weather you have got, Howard.
SATTLER: You have just got the job with our tourist
bureau. Today we are going to look particularly at
the issues where the State and Federal Governments cross
paths because that is why you are here. We have got
a state election on on February 8th. And there are
a number of areas which I am sure have been talked about
previously. Interest rates is not a bad one to kick
off with. And they were thought to be a big
factor in the last state election.
But it seems that Brian Burke has successfully hived
off, if you like, the blame if there is any) nyu
Government. How do you feel about that?
PM: I don't know that that is what Brian has done.
He has recognised the factual situation and has taken
very effective steps to contain the impact of the upward
move in interest rates. And those moves that he hras
undertaken I support entirely. The Australian people,
including the people of Western Australia, understand
when you are talking about interest rates you just don't
pick that out. You look at what is happening to the
control of the economy as a whole, in which interest
rate policy is but one element. And they see the fact,
recognised again today, that Australia's economic performance
is at the top of the world scale. That has again today
been acknowledged in the United States. We have got
higher growth, higher employment rates than anywhere
else. We have got the highest employment growth rates
in our country's history. When in that total mix of
policies you have to do something in one area to protect
what is happening elsewhere the people of Australia
understand that. I
SATTLER: Brian Burke is so confident he has said that
khjlidsistnow on. imterest rates frm ee on nh
e veI s going to go aongii. o ~ u ou have stepped
SATTLER cont: back a little bit from that. YOu are
not as confident as him?
PM: It is not a question of being confident. I am
not getting into the area of making definitive statements
about what is happening in the interest rate area.
We can see the moves that have taken place recently.
Brian has referred to the assessments that have been
made by independent economists in that way. They say
that interest rates have peaked and it is perfectly
legitimate for him to point to that.
SATTLER: Are they people to be believed? Well, if
you had one person saying it, then I guess you wouldn't
place much emphasis on it. But what Brian Burke has
said is that if you loolI. ' YOinments that is what they
are all saying. And if you get the range of comments
I * think that is something to be taken into account.
SATTLER: Let's talk about a couple of other areas.
Interest rates was one. But the fertiliser bounty
and you made him very happy about that but I am
not so sure that you don't regret having given it to
the Western Australian people.
PM: I am fascinated as Prime MInister the way that
you and other analysts after the event say didn't
he do it wrong or I wonder now doesn't he think hie, WiJsh
ke'd dopie, it differently. I just don't know the basis
for this analysis that you undertake. Let's just look
at what the facts were. This issue arose in a period
when the Cabinet was in recess. We weren't due to meet
until the 20th of January. I had resumed the Prime Ministership.
I had had a fortnight off in which I had handed over to Lionel
Bowen. I had resumed the Prime Ministership. I was operating
from Sydney. Brian Burke came to see me in that interregnum
before the Cabinet met and said look I have got a particular
problem in this election situation. This is a big issue, is
there something you can do about it because the anti-dumping
duties as having this very serious impact. I said I will
meet you. And I met him with Senator Button and Mr Kerin
the two relevant ministers. And I undertook to talk about
it with him because he, from Western Australia, was putting
it up there. And it was done on the basis all right I will
give you a decision which is relevant to you he whole matter
affecting Australian farmers generally will fte considered
in Gbitzf% That was a perfectly logical way to
do it. It was the proper way to do it.
A particular issue Mr Burke was confronted with it, we gave
him an answer. We then considered it in Cabinet. We will
be making a decision which will be giving the benefit of this
protection to all Australians. ' So I just don't quite understand
what you are on about.
SATTLER: Well, it is just the fact that he had it happen
for Western Australia
PM: H-e was there and he quite properly in that situation,
I have got an immediate issue can you do something. Yes
I will but I tell you I am doing this in the context that
YR t~ 1A1 ARFefldthe whole thing when Cabinet meets. That
SATTLER: Oo land rights. You seem to have kept your options
open there on legislation. Although he
says look if someone tries to impose land rights
on me I will ? quit. Could you afford to lose him under those
circumstances. PM: We won't be losing Mr Burke. I dealt with this issue
yesterday) Howard. I simply said that I have a full understanding
of Mr Burke's position. We have made it quite clear that
we would hope that these matters can be handled at the
state level. It is what we want to see happen if we can.
Nothing will be done in regard to Western Australia that
doesn't take full accountas Mr Burke has said needs to be
taken account, of Western Australia' s rights and interests
in this matter.
SATTLER: So there could be land rights legislation at a
federal level which will have different application in different
states.
PM: You don't put it exactly correctly. What we have said
in the Parliament and outside, the MInister Mr Holding has
said, that we would prefer a situation where the actual states,
by their legislationcovered. this area of interest with generally
broad principles being observed. Now what Mr Holding is doin3
is having discussions with all the states and with interested
parties.* That sort of thing is going" And in regard to western
Australia where this issue has been in the public arena, and
a question of possible legislation was in question last year,
we have said all right we understand Mr Burke's position,
And nothing that we will be doing will be done without full
consultation and cooperation with him. Now there it is.
It is quite clear in South Australia you have a situation
where the state will make its decisions. Discussions are
going on with Queensland, New South Wales, Victoria. Despite
the frantic-efforts of a bereft Mr H-assell and a Liberal Party
which is internally divided here and divided federally where
Mr Hassell and Mr Howard are in totally different positions
on fundamental things like interest rates. They are desperately
trying to whip this issue up. bo1r
SATTLER: Will we definitely have federal/ lanI rights legislation
this year?
PM: There is no definiteness about that. And I repeat that
the Minister has said on behalf of the Government we prefer
a situation where this issue could be covered by states.
Now he has said that, and I have said it and I say it again.
CALLER: Welcome to WA. The subject I would like to speak
to you about today is interest rates. I note recently that
the Finance Ministers of the large Western economies have
held discussions to devise means of reducing interest rates
in the international market place. How successful do you
think these discussions will be in finding a solution to the
interest rates problem given the complex state of the world
and its money market. And if these talks do produce positive
results, when can we in Australia expect interest rates to
drop?
PM: Thanks very much for that question. It is probably one
of the most profound questions I have received on talkback
radio. It is very important because what happens in the areas
that you are talking about will have its effect, to some extent,
on the economic fortunes in this country. You-have got to
go back a few months and recall that these ministers met in
the latter part of last year in Tokyo and decided then that
they were going to take action because of the way in which
the United States dollar impact was adversely affecting theme
And money was going into the United States, H-Iigh interest
rates and of course as far as they were concerned they believed
that not enough was being done internally in the United States
to create an exchange rate and interest rate environment which
was going to help them. As a result of their very significant
operations, they did have the impact that they set out to
do. They have recently met again and have, as I read it,
refrained from taking the level of intervention in the exchange
markets that they did then in regard to the dollar. But I
think the important thing from our point of view is that they
are prepared, they have indicated a preparedness nowto act
in a way which will bring about a more appropriate relationship
in interest and exchange rates to facilitate better trade
and capital flows between the major countries of the world.
Now from our point of view, the fact that they are prepared
to take this action, they have demonstrated last year that
they would, it seems to me is useful. But then coming to
the final point of your question, what sort of timetable of
impact does that have on Australia, neither I nor anyone.
else can answer it because the fact that Ministers see the
problem, they then have to be prepared to obtain within their
own constituencies. in eL41
country the determination of the governmental and financial
authorities to take the series of steps that are necessary.
As I say, at the end of last year, the latter part of last
year, action was taken. And I just draw the conclusion from
that that if during 1986 developments in the United States
are adverse in a way which they will make the judgement that
requires further action, they will take it. And that
is, from Australia's point of view, a plus. Having said that,
that still leaves the situation where we in Australia have
to make our sets of decisions, which, within the whole framework
of economic policy, to get the sort of right outcomes here
as far as we can determine it ourself. And I simply want
to conclude by making the point that since we have been in
Government, it is nearly three years, we have consistently
made the related sets of decisions which have brought about
the position, recognised again this morning it! 3 happening
consistently where the international judgement has been
that the Australian economic performance is at the top of
the international table. So we will continue to make the
decisions here which will give us high rates of economic growth,
high rates of employment growth' and with sustainable levels
of inflation. To the extent that there is a greater preparedness
internationally to make the right sort of decisions between
the major economies and the United States that will be a plus
for us as well.
CALLER: Mr H-awke, welcome to the West. OVer here we have
had a lot of talk about privatisation from Mr H-assell and
the Liberals. I wonder if we could have your views on what
you think about privatisation.
PM: The first thing 1 have got to say is that you need a
radar set to track Mr Hassell on this. Back in October, just
relatively a few weeks ago, Mr Hassell was embracing this
word with the greatest enthusiasm seen for very, very many
years. He was so in love with the word that he said he was
going to keep using it all the time because it sent shivers
down Mr Burke's spine. That is how important, how central
to his strategy privatisation was going to be. Of course,
Mr H-assell and the conservatives here have found out that
it certainly sends shivers down people's spine. But not Mr
Burke. It sends shivers down the spines of the electorate.
And so having found out that the electorate doesn't like
privatisation, Mr Hassell is now saying he doesn't, and it
is not an important part of the campaign. It was going to
be the centrepiece, now it has been cast aside. Now, that
may be all right in one sense for him to say that but I don't
think people are going to really believe him very much.
Particularly, as Mr Howard, his Federal Leader, is still in
love with the concept. Let me say this it is a load of
hogwash. And everyone who knows anything about running the
affairs of the community understands this. You have got the
position where, if the Conservatives were ever given the chance
and remember they haven't won a mainland election the Liberals
since 1980, so they are not going to get the chance, but
if they were it would mean they would be thinking about getting
rid of operations like Telecom, Australia Post and the
Commonwealth Bank. And in many of these areas, in the nature
of things, there is already monopoly position so they would
be handing over a monopoly of
to their friends in the private sector who would then make
a decision whether they would provide services or not. And
their criteria as to whether they would provide services
to the public would be in terms of whether they could make
a profit. So you look in the area of Telecom for instance.
The people who would suffer would be the people in rural
Australia. At the moment, and it is fair, it is absolutely
fair, we people in the major metropolitan areas, because of
the density of operations really provide a subsidy through
the public utility of Telecom, to people in country Australia.
Now if Mr Hassell and Mr Howard have their way, and they
sold off Telecom to their private friends then the people
in country Western Australia would either not be getting a
service or would be paying infinitely more for it because
no longer would there be the cross subsidisation. And David,
it is because the electors have seen that in South Australia
they spoke very clearly on it that Mr Hassell is running
away from what just a short time ago he said was the central
piece of his philosophy. Now, I simply don't believe that
in his mind he has run away from it. Just through the term
of the campaign he is going to say it is not important.
But if the electors of Western'Australia were to do what of
course they won't, and that was to give him the opportunity
he would be in collusion then with Mr Howard to try and impose
upon the people of Western Australia, this stupid policy.
And let me say to rural Western Australia it would be the
people in the country areas of Western Australia who would
pay most dearly if the Hassells of this world were ever given
the chance to play around with this dreadful concept in Practice.
SATTLER: Prime Minister, I wonder what you might think about
SATTLER cont: the concept or the prospect of privatisation
in reverse story in the weekend papers here that TAA looks
like it might buy East West Airlines.
PM: I saw that. I don't know whether there is any substance
in that. Let me simply say in regard to airline policy
which I understand is very important for Western Australia,
that as you know we have got Mr May conducting the enquiry
at the moment. We will be looking forward with very much
interest to Mr May's report and we will examine that. And
in that context the review which has to be undertaken later
down the line, in terms of decision on the two airline policy
will be taken.
SATTLER: The next caller wants to talk about airlines.
Good morning Sam.
CALLER: Good morning Howard, good morning Mr Hawke.
PM: Godd morning Sam.
CALLER: My problem, Mr Hawke, nothing to do with politics
or elections. Regulation of international airfares. It seems
that we have cartel with a benchmark set by Qantas, they set
the fare, then all the other major international airlines
ha-V6 Ot 1d follow. Now when Mr Beazley was the Minister
for Aviation I asked him the same question. He said the
Government or the Transport Department do not set the airfares.
But on getting in touch with the international airlines they
inform me that the benchmark is set by Qantas and all the
other airlines must follow. Now, is any idea of deregulation
of international air fares? That is the first question.
I will give you the next one quick so you can get cracking.
Our international debt Mr Hawke 75 billion. It costs a
lot of lolly for interest on that isn't it.
PM: Let me deal with them in that order. As far as the
international air fares are concerned it is not right to
say that Qantas sets the benchmark and then everyone else
follows. It is a pretty competitive area. What you may have
been seeing is just recently Qantas did, as I read, make some
changes, some competitive changes. And they were then followed
in that area by others. But at other times the initiative
has been taken by other airlines, other than Qantas. And
Qantas with the others have tended to then react because none
of the airlines in this very, very competitive business can
allow one to establish an air passenger or freight schedule
which is way out of line with our own. Otherwise they go
fairly quickly out of business. Now in regard to international
debt the second part of your question. The two or three
points that need to made about that. Firstly, most of that
debt to which you refer is the private sector debt. In other
words, the private sector has undertaken borrowing against
investment projects here in Australia which in their commercial
judgement are going to produce a cash flow which is both able
to service the debt and provide them with a profit. That
is the simple criteria under which the private sector operates,
and properly operates. So they are covered by their investment
PM cont: and the cash flow expect,-' ions out of investments
they have made wittn that borrowing. Als far as
Australia's government borrowing is concerned, we are more
than covered by our own reserve position. Having said that
thirdly, however, we don't believe that one can go on accumulating
a foreign debt forever at an increasing rate. And our policies
have been directed towards ensuring a turnaround in our current
account deficits. And we believe that that is in the process
of succeeding. By the end of this financial year that the
current account deficit will have been reduced down to about
4 per cent from the level of about 5 that it has been earlier.
And we are not talking boastfully about this, but we are
quietly confident that set if related decisions that we've
taken in this area will as far as Government can make the
appropriate decisions be having it moving in the right direction.
But I go back on the first point. I must emphasise to you
tEhat predominantly the level of that debt is as a result of
commercial decisions by the private sector.
SATTLER: Okay let's take a call which is probably most
appropriate today bringing Australia together. Hello Alf.
CALLER: Good morning Mr Hawke and welcome to West Australia.
I would like to thank you very very much for the job you're
doing for this country and to bring all us together. And
we are talking to each other as Liberals, Democrats, Country
Parties and so on. So now we are really a united nation and
I hope you keep doing the job for a long time to come.
Thank you.
PRIME MINISTER: Thank you very much Alf. Well what might
one say after that except to say very seriously I hope that
this time Australians will this Australia Day weekend just
take a little time to think back what's happened in Australia
in the last three years. I think we are a very, very much
better, more optimistic country now in 1986 than we were in
1983 and that's because the policies we've been able to pursue
as you say, up to a very large extent been based upon trying
to bring Australians together, to get them to work together
and I think thef7ve responded magnificently and I want-to
thank them and karticularly, while I'm here the people of
Western Australia because in the very significant growth that's
taken place in Australia in this latter three year period
Western Australia's contribution has been outstanding. So,
thank you for thanking me and I reciprocate and thank you
and the people of Australia for their cooperation.
SATTLER: Last call for the Prime Minister today. Good
morning Thomas.
CALLER: Good morning Mr Hawke.
PM: Good morning. That doesn't sound like Thomas.
CALLER: It is.
PM: How old are you Tom?
CALLER: I'm thirteen.
PM: I see, what's Your comment or question Tom?
CALLER: Jell, I'd like to ask you why fuel prices differ
and how long is petrol going to stay down?
PM: I see. Well, why they differ through time and in various
places I guess you mean Thomas. Well, if yol. z look at it
through time, there are a number of factors that will determine
it. At the Government level we periodically, every couple
of months now, review the price and that takes account of
really two things. What's happened to movements in the
international level of fuel prices, the crude that is involved
because our policy is called the import parity pricing policy
because we want to conserve our own resources by pricing them
in relation to what's happening in the world market. So that's
one factor, that what's happening to those international crude
prices and what's happening to the price of our dollar, our
exchange rate. And our decision therefore, each couple of
months, will tend to reflect those elements. So that through
time will have an impact. Then, secondly, both through time
and between places the actual discounting policies of the
major oil companies will affect it and they might be making
different decisions in different places and in different times.
So those are the two different sets of elements Thomas that
have an impact upon the price of the petrol pump.
SATTLER: Prime Minister, thank you for coming in today.
You talk about Australians and wanting to meet more Western
Australians. Well, I understand that you're going to be at
the Subiaco Australia Day Picnic at Lake Monger today
and at Fry Park, Kelmscott at 6 o'clock tonight. Plenty of
fresh air, hey?
PM: I am. Monger Lake is going to bring back some memories,
' cause that was just at the back of the hill where I lived.
I used to go down there as a kid and swim and play around.
SATTLER: Alright, thanks for joining us. I know there's
some bad news coming up in the cricket shortly which will
upset you.. I think we had 2 for about 130 or 40 or something
like that.
PM: Oh, dear, oh dear. Well, we' re sitting pretty comfortably
to get in the final though I think Howard.
SATTLER: Thanks for joining us.
PM: My pleasure. Thank you very much indeed.