TRANSCRIPT OF NEWS CONFERENCE, PARLIAMENT HOUSE
JULY 1989
E 0 E PROOF ONLY
JOURNALIST: When are interest rates going to come down
Prime Minister?
PM: You haven't learnt anything since I've been away. You
know I don't make a prediction about that. All I'm saying
is what I said before I went. That is that all arms of
policy, including monetary policy, will remain as tight as
they need to be for as long as they need to be to achieve
the objective of policy, and that is to bring down the level
of demand in the economy. There are mixed signals at the
moment as to whether that is being achieved at the rate that
we would like but on balance my own feeling is that we are
starting now to see the impact of the tightness of the three
arms of policy, including particularly monetary policy. As
I say, all those arms of policy will be kept tight until
we've achieved the objective which is necessary and that is
to get a greater, a more appropriate correlation between the
level of demand and production in the economy. We can't
continue a situation where essentially we have demand
running at 10-11% and supply at about five per cent. We're
not going to move away from having policy calculated to
eliminate that gap.
JOURNALIST: While you were away Prime minister some
backbenchers, including Bob McMullan, said there should be
an increase in sales tax on luxury goods and possibly
postpone the drop in the top marginal rate in order to
finance a mortgage relief package for the lower income
earners. Will that be seriously considered, that type of
proposal? PM: Let me say again what I have said before I went away.
When you're conducting economic policy you try and keep
abreast of whatever range of suggestions may be made about
relevant areas of policy. Now that doesn't mean, and I want
to make it quite clear, it doesn't mean because some work
may be done in certain areas that there is any intention of
bringing into effect the sort of proposal upon which that
work is based. We regard it as appropriate that all members
of the Government, including backbenchers, should have their
ideas about economic policy and other areas of policy.
where we think that it's appropriate to do any work on a
particular suggestion which may in fact have been done any
rate, then that will be done. But I want to make it clear
that as far as the settings of economic policy are
concerned, we think that they are right. Any suggestions
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PM ( cont): about a luxury tax for instance cannot be seen,
and I wouldn't imagine are seen, by any of its proponents as
going to the fundamentals of policy. By definition it only
affects a particular area of demand. It can't therefore be
a substitute for the basic settings which, as I say, we
believe are correctly set.
JOURNALIST: How seriously is the Government considering a
mortgage support scheme?
PM: It's not a correct statement to say that the Government
is considering it. All I would say is that that's an area
where you would need a lot of work to be done before it
could even be considered. It would require a great deal of
work. The fact that work can be done, I want to emphasise,
does not mean that any such proposal will be implemented.
As I had cause to say before I went away and I merely repeat
now, it seems to me that in regard to some suggestions that
are made it is appropriate for work to be done and that will
be done. But we will look at any such suggestions in the
context of the overall setting of economic policy. What
I've got to emphasise again to all of you is that as far as
the three settings of policy, that is fiscal, wages and
monetary, we believe that those settings are fundamentally
correct. Any of these suggestions cannot be seen, and would
not be seen, as any substitute for those fundamentals.
JOURNALIST: When do we find out the Government's attitude
on these suggestions? In the Budget or before?
PM: We're about something like six weeks away from the
Budget. We'll be getting into the hard work of ERC in the
very near future. I think it would be unlikely that any
significant decisions would be made before the Budget which
is, as I say, in six weeks time. It would be very unusual I
would imagine for anything to be done before that.
SJOURNALIST: Is it going too far to call this kind of
suggestion and the work that's being done now work on
ratbaggery?
PM: I think some proposals that I've seen could, without
an undue stretching of the English language, attract that
sort of label. But I wouldn't apply it to all the
suggestions that have been made.
JOURNALIST: Would revamping the First Home Owners Scheme be
an appropriate way of reducing the pressure on people
suffering under high interest rates?
PM: I understand some suggestions have been made in that
regard but you would have to have considerable doubts about
any proposals which involved increases in the outlays side I
would think in the present circumstances where what you're
concerned about is bringing back the level of demand.
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JOURNALIST: Is there any possibility that the top tax rate
cut due for January will be postponed?
PM: That's not something I've considered.
JOURNALIST: Are you satisfied with the way Mr Willis is
handling the question of waterfront reform?
PM: Yes.
JOURNALIST: A bit slow though isn't it?
PM: I've given you my answer. Let's talk about slow. What
are your standards of slowness? I can't remember, not that
I must confess that I'm an avid reader of your writing, but
I don't recall in my passing reference to your scribblings
that I ever saw in the period of the seven years of the
conservative government that you were talking about rates of
reform in that area then. But if we were to set the
standards of that period as relevant, then what's being done
by this Government in the area of microreform generally and
on the waterfront and the maritime industry in particular is
a hurricane pace.
JOURNALIST: Did you get a feeling overseas during your
recent visit that the international economic outlook is more
positive than has generally been thought and that this might
give greater support to the Government's economic policies
over the next 12 months?
PM: I'm certainly not going to use reverse policy now that
I'm home going to refuse to talk about overseas matters.
Let me say that generally speaking, yes. I thought that the
sorts of things that were being said by the politicians, the
political leaders to whom I spoke and economic commentators,
seem to me to be putting a somewhat more optimistic view
about the level of activity in the year or so ahead than
perhaps had been talked about before I left. That I think
is a reflection of two things. Both the types of policies
that are being followed by the major economies and related
to that the sorts of-assumptions that are being made about
commodity prices over the same period. If you take the two
things into account I think it is valid to say that the
international settings within which we'll be operating in
this period that you refer to are somewhat better than
perhaps had been anticipated earlier this year.
JOURNALIST: What's your response to the Fitzgerald inquiry
findings, in particular the gerrymander recommendations?
PM: Let me say generally that I think Mr Fitzgerald has
performed magnificently. It's very difficult to comprehend
the magnitude of the material that he had to deal with,
comprehend, distill and then report on. I join with others
who congratulate him on a job well done. I think he rightly
makes a quite foundational point that if you have government
corruptly elected and I'll explain that in a moment then
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PM ( cont): you are likely to have the circumstances in
which corruption can flourish. When I say corruptly
elected, the electoral system is obviously a corrupt one in
the sense that there is a perversion of the system in terms
of giving one particular group an overwhelming advantage.
It helped to create the situation in which that group
thought it could never be thrown out of government because
the system was corrupt, the electoral system was corrupt.
If you have a government which thinks i-t can never be put
out of office then that is precisely the sort of environment
within which corruption can flourish. That was the essence
of the analysis by Mr Fitzgerald and it was for that reason
logically that he therefore said that there should be
immediately moves to end that corrupt electoral system. Let
me say on that that it is somewhat surprising to me that the
Premier of Queensland who has said he will deliver lock,
stock and barrel on the recommendations of Fitzgerald should
now be hedging, as he so obviously is, on that foundational
point and talking of conceivably going to the next election
on this corrupt basis, this corrupt electoral basis. In
that regard let me say this. The Australian Electoral
Commission has, I believe, an enviable record for integrity
and competence and I understand that the Australian
Electoral Commission would be happy to provide such
assistance to the Queensland review as is appropriate. Now
let me make it clear what I'm saying there. I'm not trying
to intrude the Federal Government into this matter but I am
saying if there's some suggestion about a difficulty of
getting a review in Queensland in the time scale before the
next state election is scheduled for then I understand that
the services of the Australian Electoral Commission could be
available. I would certainly ensure that whatever resources
were required were made available. But I make it quite
clear that's a matter for the Queensland government. I'm
simply saying to the Queensland government that if they want
the assistance of the resources of the Australian Electoral
Commission I understand that the Australian Electoral
Commission is available and I'm saying that I would ensure
that whatever resources were necessary to facilitate that
would be made available.
JOURNALIST: There's been new recent support from economic
experts and business for a consumption tax. Are your
arguments against such a tax, which would help increase
savings, essentially political or are they economic and
could you outline them?
PM: The essential economic argument of course Michelle is
that this was on the table some years ago. It was rejected
by a pretty broad spectrum of the community. In the context
of that rejection we then moved to a very broad
diversification of the tax base by a range of measures with
which you are familiar. We are now faced with a situation
where one of the issues that we have to be sure that we have
under control is the question of inflation. That is
important intrinsically. It's also very important in terms
of getting the appropriate wages outcome. I can't stress
too much in terms of the appropriate economic policies at
PM ( cant): this time the crucial nature of the wages policy
that we've got and getting the right wages outcome. If
you'll excuse me I'll just spend a moment on this. It's
directly relevant to your question. We expect, as you know,
to get out of the wages system in 1989-90 a wages increase
of the order of six and a half per cent. Anything that was
to disrupt that by the expectation of a significantly
greater inflationary outcome than the one which has been
talked about would be economically disa-strous. May I say,
it's our capacity to get an appropriate wages outcome which
amongst other things very significantly distinguishes the
Government from the Opposition. I am amazed still to see
while I'm away and when I get back that they are talking
about a wages policy which would again guarantee the
economic disaster for Australia that they inflicted upon
Australia when last in office. They inflicted the disaster
of 11% unemployment, the first time the economy had gone
into negative growth, the worst recession for 50 years for
many reasons but essentially the main reason was they had no
wages policy. We have and that's what can guarantee that
the Government rather than the Opposition can effect the
proper handling of economic policy in this country. But you
see Michelle, if you were to talk about a consumption tax
now you would undermine the very foundation of your wages
policy. Because that outcome that we're talking about of
six and a half per cent, which is historically an
unbelievably low rate of inflation given the level of
economic activity, would be brought asunder if in fact the
unions believed that you were going to be having an
inflation outcome significantly different from that which
has been part of the negotiations. So it is essentially an
economic argument that is appropriate in my judgement for
the rejection at this stage of a consumption tax.
JOURNALIST: You said earlier that it was no time to be
contemplating increases in outlays. Is the Government
considering any major cuts in Government spending in the
August Budget?
PM: The processes of preparation of the Budget, as I said,
will be starting in the Expenditure Review Committee
shortly. I can say that there will be some areas in which
there will be savings. There will be some areas but I'm not
going to go beyond that.
JOURNALIST: Why is the Government continuing to have any
work at all done on a luxury tax or mortgage relief when the
Treasurer has said that such measures are mere embroidery on
the fabric of policy?
PM: I've had the opportunity of reading everything that the
Treasurer has said since I've been away, including that
phrase. I've also read where he's said that it's
appropriate that work be done in a number of areas,
including the ones that you're talking about. The fact, as
I say, that you do work in certain areas carries no
guarantee at all that action will be implemented in that
area. But it's simply responsible to see what are the range
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PM ( cont): of implications of undertaking a particular
course of action which is in the economic arena. It doesn't
mean that every suggestion that's made that you do work on
because some of them plainly don't warrant any work at all.
Some are of sufficient prima facie relevance to do that
work. As I say, I've read everything that Paul has said
about this. As I said when I was overseas, I am at one with
him in all that he's said in this area.
JOURNALIST: What assessment has the Government made of the
impact of the tax cuts on the level of demand in the
economy? PM: We believe that the first thing about that is that if
you hadn't had the tax cuts then you would've had an
increase in wages which would've been economically
unsustainable. Obviously there is an increase in demand
associated with tax cuts but the question, with respect, is
simplistic if you think that's the beginning and the end of
the question. What you've got to ask yourself is what
would've happened in the economy generally if you hadn't had
those tax cuts? Would you have had a containable wages
outcome? Now the answer is of course you wouldn't have.
You would've had a very significantly greater increase in
wages which would've had two things associated with it. At
least the same level of increase in demand but importantly
you would've had a greater cost impact associated with that
level of demand. The beauty of what's been done by the work
that we did in the early part of this year in getting the
tax and wage trade-off is that you get for a given level of
tax reduction with whatever level of demand increases
associated with that, you get it at a much lower cost to
employers than you would if you went the other way. So I
just put to you it's a very simplistic question if you say
what level of demand is going to be associated with the tax
cuts. You've got to say what level of demand and what level
of cost would've been associated with leaving a situation
where you would've had a wages free for all. In economics
you can never, or very rarely, be certain of anything. The
one thing that you can be absolutely certain of as a result
of what we have done is that any given level of demand will
be associated with a significantly lower level of costs for
employers in this country. I go back to what I said in
answer to Michelle Grattan's question, that this is what
distinguishes the Government and fundamentally distinguishes
it from the Opposition. The Opposition made an absolute
mess of the economy in an historically unprecedented way in
its previous term in office because it didn't have that
third arm of policy. It didn't have a wages policy. So the
only way you could control demand was by absolutely running
the economy down and giving yourself the historically
unprecedented experience of double digit inflation and
double digit employment. If you're going to have a proper
control of the economy, including control of demand and
costs, you've got to have a wages policy. That's what we've
got and what the Opposition can never have.
-7-
JOURNALIST: Your earlier answer on the outlays question
suggests that if there should be any sort of relief package
would have to be revenue neutral and funded either by
cuts in outlays or increasing revenue. Is that correct?
of general fiscal policy it would have to be revenue
neutral? PM: It's a good attempt to try and get-me to give you a
detailed outline of the decisions that are going to be
taken. I'm not going to do that. But I think I can go as
far as to say this. That quite clearly if you look at the
fundamentals of Government economic policy over the last few
years they have been associated with three successive years
of real reductions in Commonwealth outlays which have
enabled you to achieve this massive turnaround in the demand
that we make upon the community savings. A turnaround of
seven percentage points in the public sector borrowing
requirement. Turned the significant deficit into a very
significant surplus. That's all been associated with, as I
say, in the last three successive years of real reductions
in Government outlays. We're not going to be turning that
policy around at this stage. So without going any further
in answer to your question I can tell you that that context
of whatever increases in outlays there may be having to be
accommodated to our overall aim of reduction in real outlays
will continue.
JOURNALIST: Prime Minister there will be an increase in
real outlays in the environment won't there? Is that one of
the areas you will have to accommodate?
PM: Well we have already talked about that, but that's part
of a very very large total. What we have done in six years
of government, Laurie, is where we've brought down this
massive deficit that we inherited and moved to a very
substantial surplus, it hasn't meant that every area of
activity has been cut. The secret of the success of this
Government in creating massive increases in employment, in
having a situation where, I would remind you, as it was
pointed out in the appendix to the last May Statement, a
situation where the proportion of Commonwealth outlays going
on social justice programs has increased from 50 to 55 per
cent. Where you've have an $ 8.8 billion increase in 1988/ 89
in welfare programs. All that has been accommodated in a
situation of real reductions in outlays. So what that has
meant is that you've had to make the decisions about
reorganising your priorities. Now obviously, Laurie, one of
the great priorities facing this Government and any
responsible government around the world today is in the area
of the environment. So yes there will be significant
increases in outlays.
JOURNALIST: What I mean is, I wonder how you rate the
environment as an issue compared to the economy?
-8-
PM: It is not a question of it being an alternative. Your
question seems to pose it as an alternative. You don't say
do we have economic growth or do we do something about the
environment. You do both, we will be able to accommodate
significant outlays in the area of the environment. We will
be able to accommodate those within the general program that
I referred to which will involve a continuation of overall
real reductions in Commonwealth outlays-.
JOURNALIST: Your response so far to the reaction to date by
ASEAN on your proposal for a Pacific trading group?
PM: I am very pleased with the way its going. What you
have to appreciate is that the meetings that are taking
place in Brunei are now in two stages. What they've done,
the meeting of the ASEAN Ministers, they've noted the Hawke
initiative, if I can put it that way. When they've finished
their meeting they then have the post-ASEAN Ministerial
Council Meeting. Gareth Evans will be getting there today,
as will be the foreign ministers or their equivalents, for
two or three days of meeting with them. And now it is in
those meetings that there will be more detailed discussion
about my proposal. on all the indications that we have had
so far, not only from the ASEAN members but also from Japan,
Korea, New Zealand, the United States and Canada, I am very
optimistic that we will see that idea progressed and
processed. JOURNALIST: Mr Hawke, Premier Cain has proposed at the last
Premiers' Conference that the Commonwealth repay some of the
State debts and the Government promised a response to that.
What is your response to that?
PM: It won't be given at a press conference.
JOURNALIST: When will you be responding to that?
PM: I will have to talk with Paul and Peter Walsh about
that. We'll be having a talk about that in the near future.
They'll get a response in the relatively near future.
JOURNALIST: Mr Hawke, on the environment again. Given the
seriousness with which you take the environmental issues and
particularly the Greenhouse Effect, could there be a case
for mounting Senator Richardson's referendum proposal at the
next election?
PM: Well I suppose you could say there would be a case.
But I am not saying that because there's a case that that's
what will be done. There may be a greater case for not
doing it. This is an issue that I would just want to talk
through not only with Senator Richardson but others. It
really hasn't got to the stage yet of us considering it as a
matter of Government policy. It's obviously worth
considering. I haven't anything more to add to that.
-9-
JOURNALIST: Mr Hawke, do you favour Bernie Fraser becoming
the next Governor of the Reserve Bank?
PM: I think you may appreciate that the question of the
appointment of the next Governor of the Reserve Bank will be
on the Cabinet Agenda, the meeting to which I am going very
shortly. I don't intend to pre-empt consideration of that
matter by my Cabinet colleagues through making any comment
at this stage. I would simply say that-I find rather
ludicrous the observations, the gratuitous observations,
that have been made in regard to this matter by people in
the Opposition.
JOURNALIST: Will we get an announcement on that appointment
today, Mr Hawke?
PM: I would think so.
JOURNALIST: Is it a field of one Mr Hawke?
PM: I can't talk about Cabinet secrets like that Laurie.
JOURNALIST: Mr Hawke, before you went away you said you
were following events in Papua New Guinea on a day-to-day
basis. There have been some more developments while you
have been away. what are your feelings about that and will
you be discussing the situation of Papua New Guinea with
Rabbie Namaliu at the Forum in Kiribati?
PM: I can assure you that while I have been away I have
continued a day by day following of it. I have had the
cables and read them and discussed the issues with those
travelling with me. I think one must say that you can't be
but disturbed by developments there, developments not only
on Bougainville but with the murder of the minister in the
highlands. There is a degree of instability there which
must cause very considerable concern. When you remember
that the Bougainville copper mine provides the best part of
per cent of the revenue of the Papua New Guinea
Government, that's been closed for some time now and its
opening is uncertain. You have not merely the concerns of
law and order associated with what is going on in
Bougainville but you have the economic implications of it as
well. So yes I will be discussing these matters with my
friend Rabbie Namaliu. He will be travelling with me to the
Forum and I will have considerable opportunity to discuss
these matters with him. I'll do that because we as a nation
have a very real concern with what happens there. I can
assure you that we will do everything sensibly that we can
to try and ensure that the nation of Papua New Guinea has
the best possible opportunity of developing, free of what
are assuming rather worrying proportions now in terms of
questions about its stability. That's going to require
understanding on our part and on the part of the people of
Australia. As far as I am concerned that understanding will
be forthcoming.
JOURNALIST: Prime Minister, how do we know how to interpret
the growth in demand that will take place in the next month?
Can you tell us what the projection from Treasury is?
PM: That was a bit too convoluted for me. would you put it
again? Now that we know what?
JOUNALIST: Now that we know how to interpret the growth in
demand that will take place from this month, could you tell
us what the projection is?
PM: I am not going to refer to any details that I have from
Treasury on this matter.
JOURNALIST: Were you pleased or disappointed by overseas
reactions to your idea of a wilderness park Antarctic?
PM: Well generally speaking I was pleased because I knew as
distinct from some of those travelling with me what the
situation was in the United States. I had cause to say
that we got this great story about the rebuff to Mr Hawke
from President Bush. It may come as some surprise to you to
know or not. But we knew what the position of the United
States was, and we knew what the position of the United
Kingdom was. So nothing new there. We weren't certain
about the degree of support that we would get from France.
we got magnificent support following discussions that I had
with the Prime Minister, and I am putting it in the
chronological order that I spoke with them, the Prime
Minister, the Foreign Minister and the President. We got
full support for our position. That was tremendous. And
then in Germany I got the undertaking from Chancellor Kohl
that they would examine, without commitment, that they would
examine our position. I left with him a fully detailed
document on that position. And in Hungary I also got the
same commitment there that they would they were very
favourably impressed by our proposal and undertook to
examine it and let us know what their position would be.
So, if you take the position that we knew the United Kingdom
position and the United States position, there's no change
there, and we got the fully positive reaction from France
and indications in Germany and Hungary that they would
examine our position closely, I think that was a very good
outcome. I think we can say that with the support that we
have from India and France, the indications that we have of
favourable attitude in Stockholm, Brussels and Rome and what
I think will be inevitably the fact, and that is that the
public opinion on this issue will substantially increase in
favour of the proposal. I have a degree of optimism beyond
what people might have had a couple of months ago.
JOURNALIST: How detrimental is it that the US and the UK
in what you know is their position on this?
-11-
PM: It's not a question of detriment. We said when we made
the decision we realised that we'd have a long and pretty
gruelling fight to persuade people to our position. I think
that the advance that we have made in what is now less than
three months since we have made the decision is really far
beyond what people might have expected at that time. All I
can say is that I hope that the pressure of informed public
opinion around the world, including in-the United Kingdom
and the United States, is going to lead a clear majority of
the nations concerned to embrace the Australian position. I
am hopeful that that is what will happen.
JOURNALIST: Prime minister, in the unlikely event that the
world doesn't embrace that position, will you still leave
open the possibility of signing the Minerals Convention?
PM: No I am not looking at that because I think that if we
were to say well yes that's something that we could look at
I think people would question whether we were serious. And
we are serious, we are totally serious. I mean it doesn't
seem to us to make sense if you believe in the fragility of
the Antarctic and its importance to be retained as a
pristine continent, if you believe that, it doesn't to us
make any sense that you talk about protecting it via a
Minerals Convention. I am really, as I say, optimistic that
we are going to be able to get the degree of support which
would persuade people to change their position. I think
there is starting to emerge an understanding that the
context within which that work started, you can say the end
of the 70s and the beginning of the 80s when the idea of the
Minerals Convention was starting, people are understanding
that the context at the end of the 1980s is a quite
different one. There is simply a much greater understanding
around the world now of the importance of these issues and
the fragility of that sort of environment. So I think that
we are not going to be faced with the position of people
saying we have invested all that work in the Minerals
Convention, wouldn't it be a shame if we didn't culminate
that work. I think people are starting to understand that
the environment is different.
JOURNALIST: Did the Department of Foreign Affairs and Trade
nevertheless advise you that you need that option open and
did you ignore that advice? Is it true to interpret then
that you have ignored that advice?
PM: Well you're using a reasonable amount of imagination
there but I don't think I'd disclose any state secrets to
say this. That there are a lot of people in Foreign
Affairs, not only in our Department of Foreign Affairs but
in their counterparts around the world, who have invested a
hell of a lot of time and effort over the years in trying to
work up to this Convention. It is therefore understandable
that they have a degree of interest and commitment to it and
some of them may want to keep it much more on the table now
than I would think is appropriate.
-12-
JOURNALIST: Prime Minister, do you still believe that
living standards can be maintained this year and gradually
raised over the course of the
PM: On this question of living standards let's get some
basic facts established. In the period since 1982-83 up to
and including 1988-89, the financial year just finished,
real household disposable income per capita has increased by
over 10 per cent. Of course that's ref-lected, as you know,
the very significant growth in employment and also the very
significant decisions in terms of increased welfare
payments. And in this last year that has just finished,
what I said would happen, that is that there would be an
increase in standards, has in fact happened. You've had a
fairly significant increase in real household disposable
income in 1988-89 because of a number of factors. You've
had employment growth, significant employment growth, you've
had significant increases in profits, they are up, rural
incomes were up. You've also had the situation where
average weekly earnings were up around, the increase in
average weekly earnings were up around the inflation rate.
So in 88-89 there has been, in general terms, a significant
increase in real household disposable income. Having said
that, let me make it quite clear that I recognise that for
some people who have had significant increases in their
mortgage repayments that that generally valid observation
wouldn't apply for them. So there are some people, of
course, who have been obviously adversely affected. Now
that's the position from 82-83 up until the present and
particularly the delivery on what we said in 88-89 that
there would be an improvement in standards. Now as far as
what extent there can be of future increases in real
standards of income per capita it will depend obviously upon
the success that we have in bringing back the level of
demand from the unsustainable levels that it is now. That
will be a reflection of how long we have to keep tight
monetary, fiscal and wages policies. So I hope, as I said
earlier in this interview, that we will be successful
relatively soon in bringing back that level of demand. But
as to the likelihood of increased real disposable incomes
per capita in this year that we have now entered, 1989-90,
we have to keep in mind that the effect of the tax cuts, we
have to keep in mind the reasonably significant wage
increases that will be associated with the award
restructuring processes and also keep in mind the record
that we have in making sure that we look after those in the
community who most need assistance. So if you take those
things into account, as I say in the last year there has
been an increase in standards. The extent to which that can
be furthered in 1989-90, the year that we're in now, will
depend upon precisely how those factors operate. What I
want to see as compared to the position of the opposition
who seem to have learnt nothing from the disastrous way they
conducted economic policy when they were in, we want to see
that we will keep the arms of policy tight enough long
enough to get the level of demand down to sustainable levels
but in a way which will enable us to do what we've done
through our whole period of office. That is to keep
employment growth going
-13-
PM ( cont): within reasonable levels of inflation. If we
can do those things as we think we can then while we think
there will have to be restraint and not the improvements in
standards that otherwise would've been possible,
nevertheless we hope that as a result of the combination of
all the factors that I've referred to, that we'll be at
least able to maintain this increase in standards which has
signficantly occurred in the last year.
ends