PRIME MINISTER
TRANSCIPT OF NEWS CONFERENCE, PARLIAMENT HOUSE, 4 MAY 1989
E 0 E PROOF ONLY
JOURNALIST: Mr Hawke, what's your reaction to the CPI
figure or figures today?
PM: Well, I have two reactions. one is that it's at the, I
think, at the lower end of expectations and it shows that
the underlying rate of inflation at 6.8 percent, 6.8 to 6.9,
is lower than the sort of figure that had been talked about
before. But having said that, the second thing I want to
say is that I think the, while that underlying rate is lower
than had been talked about before, still too high and the
various arms of policy will be kept tight to ensure that we
get a further lowering of the underlying rate.
JOURNALIST: Do banks have any excuse to raise home loan
rates now?
PM: Well, I'm not here to tell banks how to conduct their
affairs. They've got a competitive system out there, but I
would, my own judgement on the figures, is that they don't
provide such an excuse.
JOURNALIST: Mr Hawke what do you think of the idea of a
pulp mill in Tasmania producing non-bleached paper products?
Would the Commonwealth be inclined to offer such a scheme at
least the same sort of incentives that you're prepared to
offer the other Wesley Vale proposal?
PM: Well I've had some discussions with Mr Field about this
and I'll be going down to Tasmania tomorrow night and I'll
be there on Saturday. I may have something to say about
this then. I think it's more appropriate that anything I've
got to say about it, I say in Tasmania then. You won't have
long to wait.
JOURNALIST: Mr Hawke, do you believe that the figures
should have provided a measure of what the inflation would
have been under the old measure just so that there's no
accusation of a fiddle?
PM: There can't be an accusation of a fiddle. Just let me
make this point. I understand that some elements in the
media have been desperately going around economists in the
private sector seeking to get from them some condemnation of
-2-
( PM cont): what the Statistician has done. One was rung up
and asked ' well what did you think?' He said ' I think it's
right'. He said ' damn it' the person who rang up said ' damn
it, I can't find any of you who don't agree with what's
being done'. They are right. I mean the position is that
the Statistician has looked at what has been happening, he's
made a decision that the previous method was not appropriate
and that what he's producing now is appropriate. You don't
keep producing an inappropriate method.
JOURNALIST: But wouldn't it have given us a better method
of comparison if it had have been published Mr Hawke?
PM: I don't understand your question.
JOURNALIST: With the old method you had, if a figure for
the old method had been published, wouldn't we have had a
better comparison between the old and the new methods?
PM: What's the point of, I mean the Statistician if he's
made a judgement, which he has, his own integrity and
competence has made a decision that a series that he was
producing was inappropriate then it would be an entirely
inappropriate and, I would believe, incompetent decision to
keep in the public arena something that's inappropriate. I
mean, while it may be of some assistance to the one body in
the whole community, that is the opposition, who want to
make something of this can't get any support from any
private sector economists for their view, why should you
pander to that one body? Everyone realises that this is
more appropriate and therefore our statistical and economic
system shouldn't be cluttered with the continuation of
something that's inappropriate.
JOURNALIST: Mr Hawke, would you give us a prediction for
this financial year's inflation rate, this calendar year's
inflation rate, or next year's inflation?
PM: Well, which one, do you mean. I mean, you had three
goes there, which one do you want? Just nominate which one
first. JOURNALIST: This one.
PM: This calendar or financial year? Well this financial
year is 1988/ 89 and therefore I can tell you that on the
year to date we are at, as I said, 6.8 to 6.9. Then you've
got to ask yourself what happens to the June quarter? As
has been indicated, as I've said myself, as soon as I saw
those floods occurring in New South wales and I think I was
the first to say ' there's a bit of a bad impact on the June
quarter of the CPI', so that will be somewhat artificially
pushed up. But you can see that we've got a situation, an
underlying rate of inflation in this financial year as I've
-3-
( PM cant): put it, in the order of 6.8/ 6.9. Now you want
to know about, I think you tried secondly this calendar year
and then you tried the next financial year. Well, as far as
both of those periods are concerned I would think, taking
out the one-off character of the floods which I think will
inflate it in the June quarter, we can be looking at a
decline in the underlying rate for two basic reasons. one,
that we already see as has been indicated in the Treasurer's
press release, we're starting to see the impact of the
benefits of the earlier appreciation of the Australian
dollar because the price of imported items increased by 0.7
percent in the quarter which is less than the overall, less
than half the overall increase in the CPI, so we do seem to
be getting some benefit of that early appreciation of the
dollar which has taken some time to come through. Secondly,
we have a position where we've negotiated a wages outcome
which is going to be reasonable and that should, I believe,
together with the gradual lowering of the level of economic
activity which policy has intended to bring about, in total
should result in a lowering, a further lowering of the
underlying rate of inflation.
JOURNALIST: When do you expect to see interest rates start
falling off Mr Hawke?
PM: Good try. Good try. Let me give you my standard
response. Standard because it's the right one. I do not
make predictions about short term movements in interest
rates because those movements in short term interest rates
are a result of a combination of factors including what
happens in this country and what happens overseas. So I'm
not going to be making any predictions about short term
movements in interest rates. I have only said, at the
beginning of this year in response to a specific question,
that I thought that by the end of the year they would be
down. I have no reason to change that, but I'm not going to
say anything about immediate movements.
JOURNALIST: You also said then they wouldn't be going up.
PM: Yes, well you can't avoid short term or long term. I'm
simply saying to you quite clear'ly now that as far as the
short term is concerned, I'm not making any predictions
about it.
JOURNALIST: Is your position greener than the Government
now on the Antartic issue?
PM: Greener or whiter? Let me make it clear that as far as
I'm concerned and the Government are concerned, we are
totally green or totally white as far as the Antarctic is
concerned. This issue will be coming before the Cabinet
shortly and I can tell you that my position is that I'm
totally opposed to mining in the Antarctic.
-4-
JOURNALIST: Does that mean signing, ratifying the Treaty or
PM: Well, there'll be arguments, there'll be discussions
about that. Apparently there are some views that you can
best achieve a guarantee of no mining in the Antarctic by in
fact having a minerals convention in place. There are
others who say the opposite. Now I'm going to be listening
to the arguments and discussions with a view to being
satisfied in my mind as to what course of action will bring
about a position of no mining in the Antarctic, of
guaranteeing that.
JOURNALIST: Can the Liberals and Democrats stop it, or is
it completely a decision by the Government?
PM: Stop what?
JOURNALIST: The signing of the Treaty. Does it have to go
through Parliament
PM: No, no, no. Don't try and conjure up a position that
what we're going to have is the Liberals with the Democrats
taking up a more appropriate environmental position than
this Government. I mean we haven't reached that peculiar
state of affairs. Their record on environmental questions
is one of vandals. They have no right or authority in
history to claim any substance, any position of merit in
this area and there's not going to be some magical
transformation in the historical position. It's this
Government which is the one which is committed to
appropriate environmental standards. I don't think I could
make it much clearer than I just have in answer to an
earlier question. As far as I and this Government are
concerned, we will be adopting a position which ensures no
mining in the Antarctic.
JOURNALIST: When will you have a decision on this
PM: I'm not
JOURNALIST: Before you go overseas?
PM: Yes. I would expect so.
JOURNALIST: Prime Minister two days before Peter Wilenski
gave that speech in the UN, you got a long letter from Mr
Isi Leibler complaining about apparently Australia having
eroded their support for Israel. Your comments yesterday
about the Wilenski speech or to allay the growing
concern of the Jewish community in Australia about
Australia's support for Israel?
PM: Well let's get the premises right. I did not, I
personally didn't receive the letter before the speech in
the United Nations. Let me say it quite directly in regard
to that letter as I've made clear to Mr Leibler I rather
object to approaches that have never happened before to me
in my 6 years as Prime Minister, that a letter is published
in full in the Press before I receive it and before I've had
the opportunity of discussions with the person who sends the
letter to me. I made that clear to Mr Leibler in the
2 1/ 2 hour discussion I had with him. Now the position is
quite clear about this matter. I think I couldn't have made
it clearer and that is that I believe the vote of Australia
was a correct vote and that our position amongst the 129
nations was the right position against the two which opposed
it and the one, Liberia, which abstained. I simply have
made the point that when I did see the text of the speech I
thought for the reasons that I put, it was unbalanced. Let
me make it clear as there is some suggestion that the
statement I've made implied some lack of confidence in my
Minister. It does not. I merely expressed on this issue I
thought there should've been another paragraph there. But I
take this opportunity of confirming my absolute confidence
in the Minister.
JOURNALIST: Was the text of that speech screened by your
Department Mr Hawke, before it was delivered?
PM: By my Deaprtment?
JOURNALIST: Yes.
PM: Not that I'm aware of. I think not.
JOURNALIST: Some members of the Foreign Affairs and Trade
Department believe that your criticism has undermined Dr
Wilenski's credibility. Would you accept that proposition?
PM: No I don't accept that. Let's not get too complicated
about this. Here is a case where in one respect I think an
error of judgement was made. Now I've expressed my view on
that. The position has been quite directly and graciously
accepted by my minister, he's accepted responsibility. As I
say it implies no lack of confidence, quite the contrary. I
think in the relatively short period that he's been Minister
he's done a quite outstanding job on behalf of Australia.
But here I believe there was an error of judgement. I want
-6-
PM ( cant): to make the point here as I did briefly in the
House yesterday that it must be understood what happens in
these explanations of votes in the United Nations. You have
the opportunity only of speaking very briefly. The text of
the statement by Dr Wilenski in fact only covered two pages
and you are not able in such circumstances to give a fully
detailed exposition of the Government's policies on the
matters which are under discussion. Of course, if that had
been possible then I'm confident in those circumstances
there that the sort of balance that I think was appropriate
would've been achieved.
JOURNALIST: The Opposition Leader says this reflects deep
divisions in the Government on the issue.
PM: If those deep divisions exist they haven't been brought
to my attention. No-one in Government has had any
discussions with me other than the discussion that I
initiated with the Foreign minister before I made the
statement in the interview that has been published in the
Jewish Press. I spoke with him, he accepted the point I
made. Apart from that discussion which I initiated with the
Foreign Minister no-one has raised the issue with me. Sc I
can understand Mr Howard, who is himself a victim of and in
the centre of the deepest divisions in the conservative
parties that we've seen for many, many years, grasping
hopefully at straws. But this is indeed a straw and it's
not a straw which will save him from the judgement that he
is a weak, feeble, unsupported leader of the conservative
forces in this country.
JOURNALIST: Did Senator Evans immediately see your point Mr
Hawke, or did he feel that the original emphasis was
PM: It was a very, very relatively brief and very friendly
discussion. He took the point
JOURNALIST: Well did he explain the error of judgement?
PM: That's something that really is I suppose that's
directed to the Senator but I mean I simply say this. That
in that post of minister for Foreign Affairs there's an
enormous amount of material that crosses his desk. I'm
aware of the volume of cable traffic because I read most of
the cables myself. There's an enormous amount of cable
traffic and decisions to be taken and you know how ever rany
questions you put to me you won't get me in a postion where
you'll find me being deeply critical of the Minister. I
think as I put it was an error of judgement on this issue,
it's accepted, and I think that should be accepted.
JOURNALIST: When did you have this conversation with
Senator Evans?
-7-
PM: It would've been last Friday, I was in Melbourne. or
was it the week before? I mean I've got to get it right.
It was the end of the previous week when I was in Melbourne.
So it would have to be, I think, last Friday week is my
recollection. I'd have to confirm that but I'm sure it was
last Friday week.
JOURNALIST: Is it a case that the Jewish community is just
not prepared to wear any criticism at all by the Australian
Government that
PM: Well, you'd have to ask the Jewish community what they
are prepared or not prepared to accept, but let me say this.
I think if you take the opportunity of reading the very long
interview that I gave to Mr Lipski and Mr Gawenda, which I
believe is published in their media this week, that I made
quite clear the foundational positions of myself and of this
Government. They haven't changed, and that is a total
commitment to the integrity and viability of the State of
Israel. That remains, as I say, foundational and
unchangeable. I've made it clear that I believe that we are
living in circumstances now where changes have taken place.
I believe that it is understandable that Israel should take
the view that there are some risks in accepting and acting
upon the statements that have been made by the leadership of
the PLO. Having said that however I believe that the
statements that have been made do engender a new situation
and that it is in the interests of Israel, of the region and
of the world that they should take the risks that they may
see entailed in entering into negotiations. I made the
fundamental point to Mr Leibler in repudiating the
presumption that he had made to put my arguments, that he
was totally wrong to put my arguments as saying that Israel
should gamble its future. That was an intellectually flawed
position in his letter to me and I so explained it. I said
that I wasn't asking Israel to gamble. I said that I put
this position from a position of strength as a gambler I
have a punt myself. But as I put to Mr Leibler, when I go
to the bookmaker and I have my gamble and my bet, I can't
after the horses have jumped say to the bookie, I'm sorry
bookie, I don't like the way the race is being run, I take
my bet back. Gambling doesn't operate like that.
JOURNALIST: Shame.
PM: Yes, shame as you say. Although if you're a good
punter you wouldn't have to often do it. But I'm making an
extremely serious point. I repudiate it as totally
intellectually flawed, Mr Leibler's analysis where he
presumed I deliberately use the word presumed in his
letter to state my arguments, that he stated my arguments as
saying I'm asking Israel to gamble. I make the point that
when you have a gamble, put your bet, you can't take it back
after the horses have jumped. What I'm saying of course to
Israel is something quite different. I would be the last
person to ask Israel to gamble but I am saying to Israel
-8-
PM ( cont): that they are living in a situation now which is
different and everyone realises that it is different. You
can make the judgement as to how different, how much weight
you attach to the statements that have been made by Mr
Arafat, but those statements have been made. And the fact
of them having been made and on their face meeting the
conditions that I laid down and I say I because I was the
first one in the international community to lay down those
conditions. They subsequently became accepted by others, by
the United States, I believe the Soviet Union and Europe and
other countries who are concerned with this issue. It was I
who first said that there were three conditions and the
three were the acceptance of 242 and 338, secondly and
following that the acceptance of Israel's right to exist,
and thirdly the denunciation of terrorism. It was Bob Hawke
who first laid down those conditions in the international
discussion on this matter. They've been accepted as a
reasonable basis of approach on this issue and the
statements of Arafat, at least if you want to take the most
sceptical view, at least on their face meet those
conditions. They so meet those conditions that countries
including the greatest friend and ally if you like and
supplier of assistance to Israel, that is the United States,
the statements of Mr Arafat so meet those conditions that
they have substantially changed their position. That is
they have entered into discussions with the PLO. No-one
including the State of Israel can argue in these
circumstances that there isn't a change. My position
therefore is not asking Israel to gamble but to say accept
the realities that there are changes, that there may be
risks involved in therefore entering into negotiations, but
you enter into those negotiations and discussions. If in
the process of doing that after taking that risk, if you
want to put it that way, if you find that your worst
apprehensions and assumptions of mala fides are borne out
then you are in a position where you can withdraw and change
your position. But to describe those realities as asking
Israel to gamble is, as I say, fundamentally intellectually
flawed.
JOURNALIST: On another subject Mr Hawke, does the American
sale of subsidised wheat to the Soviet Union plus the
likelihood of a similar sale to China indicate that despite
all the rhetoric, our legitimate interests really account
for nothing there?
PM: I must say that we are of course disappointed with this
announcement by the United States to refer their EEP
subsidised sale to the Soviet Union and to continue the
massive subsidisation by the United States of the Soviet
Union. As far as the Soviet Union is concerned historically
we are somewhat of a residual seller to the Soviet Union but
there is no doubt that our interests will be adversely
affected by this decision, if not in terms of access in
volume terms it will certainly have an impact in price
terms. what makes it the more surprising, if I can put it
-9-
PM ( cont): that way, as well as hurtful, is of course that
in commercial terms it was economically unneccessary. There
is a shortage of grain and there is no need in commercial
terms for the United States to make this decision.
JOURNALIST: On Mr Bowen's imminent record, do you
acknowledge that one key contribution from Mr Bowen to this
Government has been the stability and loyalty that comes
from a deputy who doesn't have leadership aspirations and is
it your wish that that position be continued when he retires
at the end of
PM: I'll simply say two things about that. Firstly my
assessment in appreciation of my mate Lionel Bowen goes far
beyond that, that's an element of it, I mean no-one could
have had a more loyal deputy than I've had in Lionel Bowen.
I don't want to say a great deal more about that because I'm
going to have the opportunity of saying it more publicly
shortly. But my appreciation of Lionel goes far beyond
that, it goes to my assessment of him as a man and secondly,
whoever succeeds Lionel Bowen as deputy Prime Minister in
the fourth Hawke Government will I know in that respect have
exactly the same qualities.
ends
0