ii VTR ALl A
PRIME MINISTER
TRANSCRIPT OF INTI" ERVIEW WITHiDAN WEBB, DAY BY kY, CHANNEL 7,
7 APRIL 1987
E & O0E -PROOF ONLY
JOURNALIST: today in McEwan, tomorrow in Isaacs. These
are two of Labor's most marginal seats. Now in these areas,
as in many other areas across the state, people are still
trying to come to terms with Australia's economic crisis.
They don't understand it. They know it's getting harder to
live. Housing interest rates are still high, things cost
more, living standards are falling. There's talk of selling
off airport terminals and embassies to reduce the national
debt. And yet iliuust evory day we rpad of some new
multi-million dollar take-over. The share market is booming.
The rich seem to be getting richer, but there's little cheer
for the averago Lamily. I'm dolightRd the Prime Minister has
agreed to talk to us about whdt's happoning to Ax-tralia and
the likely prospects for the future. Prime Minister, thanks
for coming in.
PM: Pleasure to be here Dan.
JOURNALIST: What has caused this latest economic downturn?
PM: It is very simple. Basically, Dan, Australia, as you'd
appreciate, historically has sold very much of what it grows,
diga oit nf the ground, overseas. Our wheat, our wool, our
dairy products, our iron ore, our coal, LILhos sorto of
products. The standaid of living Australia has been able to
enjoy In tMV p5bL depanda upon * he prices that the people
overseas will pay us for those things that we grow and dig up
out of the ground and send over there. In the last couple of
years there has been a very drastic decline in the prices
that they have been prepared to pay us for those things. It
llasi'L Inrolod y A-rision on the part of Australian
workers or Australian fa~ zers or Aust raiian Ml1IWs Lu iorhl
less hard. It's simply that the world is paying us less.
Lot me Uiva you an idea of what that's meant. It's meant the
best part of 9 billion has been Wiped our national
income. That s nine thousand million dollars los that
Australia had. IL I can put that in terms of Australian
families, it means per family on average of the whole of
Australia, we've lost something like $ 2,000 per family. And
so the Government, responsibly, has had to take account of
2.
that. We've had to have policies which reduce the am~ ount of
activity in Australia, which reduce the demand in Australia
for imports because we can no longer afford to pay for those
imporLs by our export earnings. There ' s a gap, a very, very
big gap and we just simply cannot go on borrowing from
overseas. The world in not going to say to Australia will
you keep on having the same standards by just not earning the
money but borrowing it from us. So we've had to go about ~ he
task of reducing demand and you mentioned interest rates,
we've had to have a tight mnentary policy with hiqher
interest rates as pacL ulf the policy for roduoing the lovL
of demand. No Prime Minister in his right mind wants to d'~
that. You wouldn't live with a higher interest rate for a
day longer than you had to. But that's what's been necessa~ y
to adjust ourselves to the fact that the world is not paying'
us as much as they used to.
JOURNALIST: You mentioned that we've had to reduce activity
in Australia. is that development activity?
PM: It's just the level of actual activity which is reflected
in the demand for goods from overseas. We've had to bring
about a situation where we buy less from overseas because
we're not earning as much to buy from overseas. And the only
way, if you've got that gap between that -amount -that you earn
and that level that your buying from overseas, that gap, you
have to borrow. And you just can't keep on borrowing. So
we'v e had to roduoo the level rif Petivity so that we're not
demanding from overseas as many goods and services.
JOURNALIST: Now this economic statement that we can expect
next month. Is-that going to hit people's hip pockets? Or
is it just curtailing of government spending in Australia?
PM: A curtailing of Government expenditure means an impact
upon people. For instance, last year when we were being hit
by this phenomenum that I refer to, for instance, we had to
ask the pensioners of Australia to forego for six weeks the
increase in pensions that they were expecting to get. So
that's a government decipion about what you do in regard to
paying pensions. And that of course hit them in the hip
pocket. An'A T jimst want to take this opportunity, as I have
around Australia, of just saying how magnificent the
pensioners in Australia were. I've now talked to tens of
thousands of them, I've had letters from them and they say Mr
Hawke, we understand that if Lhe. country is poorer, we have
to play a part in that and I must say that the magnif icent
response of our elderly citizenn has been a marked contrast
to some of the greediness of some other sections of the
community. JOURNALIST: You're referring to the unions?
PM: No, I'm not referring to the unions. Let's make it
quite clear that the unions generally have been magnificent.
It's the first time in Auttralian history, Dan, where we've
had economic growth as we've had in the period 83-84-85, very
substantial growth and a reduction in-real wages. It's the
first tim 4it'q ever happened because the unions have played
their part. There have been one or two dishonourable
exceptions, but overwhelmingly because of the co-operation of
the trAde UniOns Hluy've lu~ tiod thoir deman'* fnor the
first time in history a reduction in real wages when there's
been economic growth and that has been very much responsible
fuL the fact that wo've had rt-' nrd Amployment growth. If we
hadn't had that restraint by the unions, we wouldn't have
been able to create the 3/ 4 million new jobs that we have in
Australia. That ic a record amplnyment growth in the whole
of the post-war period.
JOURNALIST: on to reducing the deficit. Now if
governments, and that is.. your Government, and-all State
Governments, as I understand will have to reduce their
borrowings. If they all have to reduce their borrowings, how
can privaLa people-borrow thoe -onormnt" I sums of money
overseas to perpetrate the take-overs that are going on.
PM: What you've got. to. understand is that where you do have_.
a -deficit on your current-account-that-I -was talk-ing-ebout
before, then there has to be borrowing overseas to finance
that. And some of the borrowing that goes on in the private
sector brings money in to balance that deficit in the current
account Rnt you go now to another area of change in the
structure of Australian industry. There should be no
assumption, whether it's in the television indusLLy, I might
say, or in the manufacturing industry or in the service
industry there should be no assumption that the present
uwnership is naoroeanct. Nnna at all. The community has got
no vested interest in saying that there is a perfect
concrete-set, sort of ownership of the resources in
Australia. The very essence of change and responding to
challenge is that existing ownership can change. That you
can got nvw munaoment, new ownership and that's what happens
all the time in television. In the media industry ot which
you've been part.
JOURNALIST: Yes, I want to come backtto that in a moment.
PM: Just let me not go away from that because the Herald and
Weekly TAmoa rnvrip. thpv were the masters of take-overs.
They bought up little papers here, liLL1 paperA tneru. Mwy,
they said it was much better that you have the dynamism of
change, that a little show that is operating there can't
opwLdLe as well an It Llia gyer-p Inrnld and Wookky Times
conglomerate were to take it over. That was the very essence
of the Ierald and Weekly Times. It was good for the Herald
and Weekly Times when they were Lliw ones who wore taking nvar
.1
something here, there, everywhere. It was marvellous. It
was the very essence of the free enterprise, capitalist
system. But when it happened to them suddenly this dynamic
frnA enterprise system, which means that everyone is opened
tn purchased, to be grabbed for change of ownerghip.
Suddenly, it was different. Why! Had the principle changed?
No, instead of being the taker-over, they were taken over.
JOURNALIST: Had you envisaged for a moment what has happened
to the modia Inductry?
PM: I said when we started these dibuubslons a couplo ot
years ago in the Cabinet and it started really on the basis
of regional television because when I came to government I
was convinced that we had to end the situation where
non-metroplitan viewers in this country didn't have the same
choice as their city cousins. In the city we had the choice
of a whole range of stations, but out there in
non-metropolitan Australia they had this monopoly situation
where owe monopoly owner just provided tho one and I said
we have got to change that. We have got to change the system
so that, in fact, we can get the position for the whole of
Australia that everyone, wherever they are, will have that
same element of choice. And I said that what we have got to
do to do that is to get a change, we have got to get rid of
the two station limitation rule which stopped, which was a
And I said-then, in those discussions, and my
colleagues, particularly the ones most immediately concerned,
will remember it, I said once you unleash the forces of
competition. you will just be amazed how quickly it will move.
JOURNALIST: Can you just explain, before we have to end
this
PM: Yes.
JOURNALIST: Fairfax are in breach of the law by buying
Channel 7 the existing law. They appear to be in breach of
the foreshadowed law with their ownership of
PM: But you see the way that the law is operated and the
Broadcasting ' rrihinAl is operated, there has always been this
period of qrzuu where there hao boon a traren'tinn, that the
effect of that transaction would, for the time, put them in
breach of the law. That has been understood. But what has
got to happen, clearly, in that the legislation which we
bring in has got to be passed by the Parliament. I have
heaid œ iuises from 3omo of the Liberm1a, some of the National
Party and of course always from some of the Democrats that
thoy will frustrnta That they won't allow the law to be
passed. I think that is very unwise to assume that that Will
happen. It would certainly be extremely unwise for those
poliieh^ 1 pnrtiou to stop thi' law because it is that law
which is going to mean the extension of competition
throughout the whole of Australia. And I believe that all
your viewers, particularly those in non-metropolitan
Australid, are going to oay ' we want onmpAtttion'. And they
are certainly going to say, I think, that they want that part
of the law which is going to stop cross-media monopolisation
because it was a part of the law that we are going to be
bringing in in the various regions. You are not going to be
able to have the situation where one person can dominate the
television, the radio and the print media. And that is
something that ought to have been brought into this country a
long time ago.
JOURNALIST: But as you zead Lthu piupuad lw, FdiLZdA will
have to' 1l off some of its ownership of Channel 7?
PM: You' eemn to be saying that with great hope. Do you want
to get ri of this mob? Not very good employers?
JOURNALIST\ No, but I want to know what moral right they
have to be moving people around and threatening their jobs
when they are in breach of the law?
PM: As I say, the way that the Broadcasting Tribunal has
operated, Dan, is that there has been this period of grace
where an actual transaction takes place in regard to the
previous law. There has been a period of time within which
the purchasers and vendors have had the opportunity of
bringing themselves within the law. That same period of
grace has beenopaxating-and.. nnw, . of., course, the-whole-of . the
industry is waiting to see what the Parliament will do in
respect of our legislation. When that is passed then
everyone will have to be-within that legal. situation. And
within that position which would give a 75% spread, as you
know, of reach then, obviously, John Fairfax would be within
he-law.. -I . can. understand.-your-views about John Poirfax,
Dan. I don't think that you unwise to be sceptical about
JOURNALIST: I have no particular-brief for-him . or . ior the
Herald for that matter but there are a lot of people in the
television industry and in the radio industry, as you know,
as a result of the change of media ownership who are worried
about their jobs and the future?
PM: But you know Dan, ithe Luleviiu1n iidubLiy, thu media
industry is no different. Do you know there are a hell of a
lot of people out there, your viewers who work in the motor
vehicle industry, they work in the textile, clothing and
footwear industry they work in a whole range of industry
and every day of their life, Dan, they have been subject to
the dynamism of the change, of people taking over other
enterprises. That has been happening to them for yoaro and
years and years. What is happening to you people in the
ina. lustr. y iv h-hhh} n ip g t^ yniiT-vicwnrn for a
very, very long time. There is no reason why you should be
in a different position.
JOURNALIST! NO, but one of the diUZIaui we dahked you in here
was to see if you could give an assurance to all those people
out there that Australia will be a better place to live Inl
1990.
PM: Obviously it will be because this restructuring of
industry is absolutely fundamental. Let me remind you. In
the election campaign ' 82-' 83, at that stage BHP was
k6.
considering Clos1ng down the SLeel iztlusLy. I said ' no, we
won't have an Australia without a steel industry'. And I
said we will bLiUy ini a plan for the rotructuring of the
industry which will involve the co-operation of the unions
and BHP and the State Governments. And now, instead of
having a steal industry which is going to disappear we have
got one of the most competitive steel industries in the
world. We are restru turing the motor vehicle production
industry. We are restructuring the textile, clothing and
footwear industry; the'! heavy engineering industry; the
shipbuilding industry;/ the chemical industry. And we have
got to do all of that for the reacons that I gAid t-tho
beginning of thio program Australia can no longer ho a
country which depends, \ for its standard of living, on our
wheat, our wool and our dairy products, our iron ore and our
coal. The farms will remain important. The mines will
remain important but we have got to restructure our industry
so that we are more competitive in manufacturing industry,
more competitive in service industry. So that Australian
lidusLLips vdi provide more of the thingo that previously we
are buying from overseas. And so that we can compete in
manufacturing industries and service industries overseas
new markets. That is what has got to happen. And none of us
yuvuILiinWLb, oppositions, trade uniono, omployors oan gay
we are going to shelter in the past and say we had that
Lhiue LbwfuLu dand that is sacred. If wo havo got any
commitment at all to our children then we have got to say
that nothing is sacrosanct in terms of previous structures in
industry. We have got to make the industry more competitive
so that we can sell things that we haven't sold before. So
that we can provide goods in Australia that we haven't
provided before. Until we do that we will not have a secure,
auetainable baciv for imprnving living standards.
JOURNALIST: Prime Minister, thank you very much indeed.
PM: My pleasure, Dan, to be with you.
ENDS