7
PRIME MINISTER
E 0 E -PROOF ONLY
TRANSCRIPT OF PRESS CONFERENCE AT IMPERIAL HOTEL -TOKYO
16 MAY 1986
JOURNALIST: Sir, can you give a guarantee to ordinary
wage earners tonight that the tax cuts as promised will be
introduced from September?
PM: I understand that in the discussions that took place
today it was agreed that there would be a special meeting
held under the auspices the advisory committee on prices
and income and that it was accepted all those represented
that anything which went to this question of the current
account problem would be on the table for discussion. Now
I have had discussions both the Treasurer and Mr Willis who
were representing the Government at that meeting and it is
my understanding from the Treasurer out of those discussions
that it has been made clear and he has made it clear that
there is no question but that the tax cuts will be delivered.
It is understood that the question of timing can be a matter
for discussion at this meeting. But there is no doubt that
whatever that discussion as to timing that the cuts will
be delivered in 1986.
JOURNALIST: So there could be delays by as much as what
time?
PM: Let me say that out of . the discussion I have had the
question of the timing of the cuts is accepted as being a
matter on the table for discussion as I understand it.
JOURNALIST: Is it your impression that the ACTU have
suggested that they initiated the idea that they might be
prepared to accept a delay?
PM: You mean in the meeting today?
JOURNALIST: No, I am now talking about the tax cuts either
yesterday or before today?
PM: I don't know whether at the discussion today the
suggestion of our possible delay of the implementation of the
tax cuts was raised by the ACTU. I simply don't know I am
not hiding anything from you. I haven't been informed as
to whether they raised the question or not. Indeed, as I think
you can appreciate, this matter has arisen apparently
spontaneously out of a discussion that arose at the meeting
a regular scheduled meeting of ACPI as I said to you today
earlier in the press conference that apparently during the
normal meeting the question of the current economic situation
came up and particularly the question of balance of payments
and the current account. And business representatives made
the observation apparently that they weren't in the same
position to be able to discuss these matters as was the ACTU.
And my colleagues, Mr Keating and Mr Willis, said well feel
free. I mean you should feel yourself free to be as involved.
The ACTU apparently responded and said yes, we are quite
happy about you being just as involved in those discussions.
And it was out of that sort of spontaneous discussion apparently
that there then came the agreement for this special meeting
under the auspices of ACPI.
JOURNALIST: Mr Hawke, you have been telling us for two
days that there is no need for drastic change of policy
yet it seems that your two ministers have launched
a meeting at which everything is on the table without first
getting your OK to that. Is that right?
PM: No, let me make it clear that I welcome this development.
We had in our discussions in the Cabinet and there were
discussions in the ERC the idea that some sorts of discussions
may be desirable later, had been talked about. Now when this
arose spontaneously at the ACPI meeting today it was perfectly
appropriate that this suggestion should have been welcomed
and been built upon by the Ministers representing the
Government there because it was totally consistent with the
discussions that we have had. And I welcome that. Let me in
regard to that part of your question Michelle, which talks
about drastic new directions. I don't believe that the fact
that there is going to be a meeting of this kind of which I
welcome should be seen as a drastic new change. I mean let me
remind you that the characteristic of this-Government since
we have been in office is that we do talk with the constituents
in the community. We have done it from the very first day we
have been in office and if a suggestion is made, as it was
at ACPI, that it would be appropriate to have such a meeting
then naturally we have welcomed it and it is totally consistent
with our whole approach in the conduct of economic policy.
JOURNALIST: What would the Government's. position be at. this
-point? PM: Well, what we will be putting will be worked out between
now and that time and I will stay in contact with my Ministers
and I would hope and expect that the meeting will be able to
be held soon after my return and by that stage, as a result
of the discussion that will be taking place in Australia and
my consultation with my colleagues, we will work out exactly
what we think is the appropriate position to take at that
level.
JOURNALIST: Do you believe the tax cuts ought to be deferred?
PM: I am not going to commit myself to that publicly now. I
think clearly it is a matter as I have indicated to you that
is said to be appropriately on the table. Now we will look
at it in the light of the most up-to-date information that
we have.
JOURNALIST: Wages is on the table as well?
PM: Well, I quess at least some of the people who will be
represented there will wish to talk about it Mike. Let me
make it clear, what I have been given to understand is that
there has been no bar put upon what should go on the table
out of the discussion which was held there at ACPI today.
JOURNALIST: Will the Government begin re-appraising the
policy between now and that meeting so that it can go to
that meeting with an idea of what it sees as the policy
direction ahead?
PM: Yes, obviously we will continue to do what we have
always done to look at the emerging circumstances, see what
the appropriate mix of policy is and that is what we have
done to this point and we'll continue to do it. And I would
say again that I welcome the opportunity that there will now
be within that ACPI framework to have a discussion in which the
Government's own thinking can be enlarged and assisted by
the views of those bodies represented. I mean the business
organisations, the trade union movement and the States and
the professional organisations.
JOURNALIST: What form will this meeting take? Will it be
open, who will chair the meeting, where it would be held?
PM: Well, the ACPI meetings are not open and I wouldn't
expect therefore that this would be. I mean don't let's get
the idea that this is a new summit. It is deliberately as I
understand it been expressed as a meeting under the auspices
of ACPI so it would not be a public meeting. As to where it
is held, I think that the ACPI meetings are normally held in
Melbourne, this one was. I think they normally are held there.
Now whether because there might be some enlarged representation
of the constituents....... it may be held in Canberra or Sydney.
I don't know whether they have addres-sed themselves to that.
I don't think where it is held is a. matter of importance.
JOURNALIST: Mr Hawke, you normally don't attend these
meetings. Presumably you will chair this one?
PM: I guess that is possible. I would certainly be wanting
to have an input in the preparation of the meeting and
JOURNALIST: Is it certain you will chair it?
PM: Well, I just haven't addressed myself to it. I have said
that I believe that the meeting should held after I get back
and I guess it is appropriate that I should be there.
JOURNALIST: Can you tell us please when you first heard about it
this morning the preferred plan
PM: No not this morning. I didn't hear about it this morning.
It was after lunch when I was informed that there had been
contact made to our office from the Ministers as to the
development and then I spoke first with Mr Willis because
Paul was flying back to Sydney. I spoke first with Ralph and
then I have been able to talk to Paul.
JOURNALIST: Was your specific approval sought?
PM: Of course it wa: Ij I mean he was* whx' would my approval
be sought. You have a meeting in which you were represented
by the Treasurer and the Minister. They are there in the
knowledge that the Government has taken the view that some
discussions may be desirable and out of this meeting the
suggestion arises following this observation of the employers
that they would like to be involved. The ACTU said yes that
would be a good idea. If my Ministers, the Treasurer and
Mr Willis, hadn't immediately grabbed hold of that and said
yes we welcome it they would have been derilect in their duty.
It is not a question of seeking my approval for that.
JOURNALIST: So there was a Cabinet decision
PM: Well, in the discussion that we have had in the Cabinet
and the ERC there have been a view that at some stage Geoff,
it may be desirable to have some wider discussions about
these problems. We haven't made view about timing. And so
wi'thin that context was once the suggestion the was raised
within ACPI it was a perfectly proper response.
JOURNALIST: To what purpose had this idea been proposed in
Cabinet? PM: It was just that we were having a discussion about the
economy and we certainly did in ERC. We are always doing that
there to watch the developing framework. And I mean I don't
want to say that even if it said now look, there has got to
be a meeting with the unions and perhaps with business by
next week. But it had been indicated that it would be likely
to be desirable to have such a meeting. No plans have been
made about and I am simply saying that when in the ACPI
environment the suggestion was made and there was this positive
position of the employers and the trade unions about such
a meeting then it's-just a perfectly natural extension.
JOURNALIST: Prime Minister do you see all of
going straight to this meeting?
PM: Well, as I understand from the discussion it has been
said that any matter that the people want to put on the table,*-
for discussion can be there. Now having said that I have no
reasons to believe that the substance of the Accord is an
issue. I have said before that there is provision in the
Accord for a looking at its operation in the light of
developing economic circumstances. Now there will be people
who will want to talk about some matters which are relevant
to that.
JOURNALIST: PM: Of course I can, they are not inconsistent. I have said
consistently that we have a position where the level of
activity that has been going on in the past that has produced
current account position which is not sustainable and our
policies are of course directed towards creating a growth
situation which is consistent with a reduction in our
current account deficit while maintaining growth and employment.
Arnd if the sort of meeting that can now be held under the
auspices of ACPI can be of assistance to the Government and
the community in achieving such a policy situation then that
is precisely the sensible thing to do. It is precisely
consistent with everything that we have done in the conduct
of policy since we have been in Government.
JOURNALIST: Mvr Hawke, do you think that Mr Keating's alarmist
statements the other day were meant
PM: I don't know that it would Greg, I mean I can't put
myself in minds of the employers but as I understand it Greg,
at ACPI meetings as with ERG what happens is that there is
some statement made about the current economic situation
and that certainly happens at the EPAC and I believe it
happens at ACPI. Now it seems that in that context that
part of the meeting of ACPI the observations were made by
the employers to which I have referred. I wouldn't think they
were prompted by anything that the Treasurer said before the
meeting. JOURNALIST: Sir, why is this being held under ACPI and not
through EPAC? I mean EPAC the main body that ensures that
you handles these sorts of things.
PM: Well EPAC has got a much wider representation and it
just happened to be the case that this was the particular
forum where it arose and where you do have relevant
representation. I mean you have the business organisations,
you have the trade unions, the have the States and you have
professional associations with the. Commonwealth Government.
And it seems an appropriate sort of forum in which that
should occur.
JOURNALIST: But you don't-have other people like, for example,
people representing the under privileged, the social-services'
area? PM: Well, they are not directly represented but I don't accept
that the State governments and the Commonwealth Government
don't have the interests of those people very directly
I just don't accept that.
JOURNALIST: Why isn't this a summit if all these people
are involved?
PM: Well, I don't think that a summit is appropriate. I mean
we hadn't at any stage in our discussions contemplated that
the circumstances with which we were dealing required a call
for a summit and nor apparently did those represented at the
meeting this morning. I mean I don't think that it is sensible
to be talking about a summit situation.
JOURNALIST: Would you allow the welfare sector......
PM: Well, I don't accept that their interests are not
represented by the Government's concern and I thin I given that
there is desire to talk about the particular problem
associated with the current account situation and balance of
payments that the constituents that are represented at ACPI
are appropriate.
JOURNALIST: Prime Minister, you said yesterday in response
to a specific question on tax cuts this August......
well, there is no decision been made tonight to put it
back and I would like you to show me the part of the transcipt
which says there has been a decision to put it back. What I have
said is that out of the discussion today the question of the
tax cuts has been said to be on the table and the timing of
it would be regarded as relevant in that discussion. The question
of decision on this matter will be one for the Government in
the light of the thinking of the Government itself and
particularly in the light of this meeting.
JOURNALIST: PM: Well, it certainly implies that it is a relevant consideration
for making fiscal and budgetary decisions relevant to the
current account problem which faces the Australian nation
and whether in fact out of all that discussion a decision will
be made remains to be seen. That is a decision to be made
as to a deferral but I would see nothing within either my
knowledge of the existing situation or what has been relayed
to me from discussions with the Treasurer and the Minister for
Employment and Industrial Relations which would lead to any
conclusion that the tax cuts would not be operative within
this year.
JOURNALIST: Mr Hawke, will this affect the current national
wage PM: Well, it is a good question Gedff, the question was raised
by Mr Willis and
JOURNALIST: With you?
PM: Yes,.:. as to the relationship of the timing of the meeting
and the national wage case and if in fact the actual hearing
of the national wage case had been formally finished before
the meeting was held it is a possibility, I want this in
respect to the Commission. I mean am I am not seeking to
suggest what may or may not happen. What Minister Willis
was putting was that if something concrete came out of the
meeting which could be considered of relevance to the
determination by the bench then it may be possible to re-open
simply for the process of making the outcome of that meeting
known. JOURNALIST: In those discussions you have had with Mr Willis
today did the question of delaying superannuation.......
PM: No although I will take it from what Mr Willis said and
what Mr Keating said that that would be a matter relevant to
be considered. I mean I say this subject to correction. I don't
recall in my conversation with Mr Willis that that was
specifically mentioned although I must say that it would be
not inappropriate for that matter to arise in terms of what
they did say.
JOURNALIST: Could you clarify what you had in mind in the
earlier meeting that came up in Cabinet? Do you think that
that could devise some sort of solution to the current account
deficit? PM: Well, no it was simply that people were looking at the
range of relevant considerations in the area of monetary policy
we talked about, fiscal and budgetary policy we talked about,
wages policy we talked about and within that context we simply
said that at some stage it may be necessary to have discussions
with the interest groups in the community that were affected.
Now, I don't want to say as I have made it quite
clear before that there is no suggestion we are going to have to
do that at point a, b or c. That was there and it was in that
context, as I say, I think it was very useful that the matter
arose at this meeting and that the opportunity has been taken
to have such a discussion.
JOURNALIST: Was the deferral of tax cuts discussed in Cabinet?
PM: I think at one stage someone may have suggested it? I take
it back. At one stage one suggestion was made may be
a possibility but there was no concrete discussion or detailed
discussion about it. When you are discussing a thing like the
future direction of economic policy and the evidence of the
problem in the current account area you are going to naturally
in wide ranging discussion, every possibility comes up. You
wouldn't be doing your job if you didn't look at all the
elements of it.
JOURNALIST: Mr Hawke, a week ago you and Mr Keating were saying
that things were travelling along in the right direction. Isn't
this all rath.-er an over-reaction to one month's balance of
payments figures?
-PM: Well, let me re-say these things Greg, there is some
suggestion that the figures are exaggerated by the treatment of
Easter in March which hadn't sufficiently been taken into account
by people who had been making their predictions. Now I want to
make it quite clear that I am not in a position to quantify that
and I don't seek to. But I think you will have to say that even
if you have-~ got to breakdown the April figures of $ 1.5 billion
to take that into account and that is still, I think, disturbingly
high figure. It would mean perhaps that you are looking to high
figures lower than the 1.5 but still of a disturbing sort of
picture. Now I hope and we believe that we have seen the worst
of the situation. I repeat as I have said to you before I think
that we have seen an increase in the volume of exports beyond
the level that was anticipated at the time of the Budget. ' 7C
We are looking at a decrease in the actual level of imports in
the last couple of months so I think the evidence is there for
a basis of optimism. But it would be foolish and irresponsible,
I believe, of Government to say, oh well, we can simply explain
these figures away, that we are certain we are going sufficientlyquickly
on the right course. I think it is an exercise in
responsibility to pick up this opportunity of discussion and
get the views of everyone involved.
JOURNALIST: Why didn't the Government then initiate it?
PM: Well, I have indicated that we had considered the possibility
perhaps of having such a meeting.
JOURNALIST: But done nothing?
PM: Well, I don't really think was saying that
we had considered the possibility and the relevance of such a
meeting at some stage. We hadn't felt it imperative to have it
now to make decisions the people involved
themselves at a relevant meeting made the suggestion that they
thought it would be a good idea then it was a perfectly
sensible thing to say, alright let's do it.
JOURNALIST: Given what you have been saying in the last
couple of days about wage restraint, do you think the unions
would wear any deferral of the current superannuation decision
or any further cutbacks in wages?
Pm: Well, I don't know Paul. I understand there were three
represenatives of the ACTU at the meeting. That was Mr Crean,
Mr Kelt, and Mr Mac~ ean. And I understand that there is a
meeting of the ACTU Executive in the week after next. Now
obviously any position and attitude of the ACTU would have to
come out of the meetings of the ACTU Executive. But I think
it is relevant that the leadership of the ACTU has said
that such a meeting would be appropriate in that anything
could be on the table. So that doesn't mean, I mean you can't
draw a conclusion from that that they are signalling any
agreement to specific courses of action. I think that it's
a good scene that both the trade unions anid theemployers are
going into a discussion with Government about this important
issue
JOURNALIST: Prime ' Minister, in view of the serious nature of
the discussions....... would you consider making it open so
that... PM: No. I wouldn't I don't think it is appropriate an issue
like this when I don't think that meetings of EPAC and ACPI
be facilitated in the way only broad sort of discussion that
needs at least to take place the public. But
I can assure you Ken, that following the meeting we will
endeavour to convey as much as we usefully can.
JOURNALIST: A large part of the economic problems are caused
by Australia's farming crisis and yet the National Farmers'
Federation are not represented in ACPI. They are already
making a noise in Australia about not getting an invite.
Do they warrant
PM: I don't think so. They will have the opportunity if they
wish to to put their views to the existing business organisations.
And if they want to put some new material the Government in
writing which they regard as appropriate they can do that. But
they have made detailed submissions about their views on
economic policy. We are not unaware of them. But I repeat if
they wish to make some new submissions to us then we would
be prepared to hear from them as to what they have got to say.
ENDS