23 November 1997
E&OE...............................................................................................................................
(tape begins) All of these meetings were very valuable preludes to the full Leaders’ meeting tomorrow and the day after.
In relation to the Australian-Chinese relationship, both of us agreed that we had taken major steps forward in the twelve months that have elapsed since we last met on a bilateral basis at the APEC meeting in Manila. At that particular time, there were a few diversions in the Australian-Chinese relationship. All of them have been removed. My visit to China some months ago cemented the improvement in relations.
I told him of my intention to host a reception in Sydney in December marking the 25th Anniversary of the establishment of diplomatic relations between China and Australia. A senior member of the Chinese administration will be attending that meeting.
We agreed that the dialogue that we had established in relation to human rights was very helpful. He obviously understood and appreciated the constructive approach that Australia was taking on the international stage concerning issues that bore upon China and China’s relationship with other parts of the world. I think both of us were able to conclude that a twelve month effort on both our parts had significantly improved and strengthened a fundamentally sound relationship, but nonetheless a relationship that does need special care and attention because we are vastly different societies and many of the things that we regard as important are not as high on the scale of priorities for China and to some extent visa versa.
As I have said on other occasions, the relationship between Australia and China is very important. The economic potential is significant. The people links between our two countries grows on a regular basis and it is very important that any Australian Prime Minister have a strong personal relationship with the President of that very large country. He, of course, has cemented his position of authority since the Party Congress earlier this year.
My relations, on a personal basis, and Australia’s relations on a country-to-country basis with the Philippines are very close. President Ramos and I are old friends. He, of course, has strong family links with Australia and he was able to report on some very good economic progress that has occurred in that country under his leadership. He has done a great deal to strengthen the Philippine’s economy. He indicated to me that it would probably be in a few months’ time that the IMF conditionality applied to the Philippines will end and he was able to report to me, I am sure with a deal of pride, the steps that have been taken as a result of that and also voluntarily to strengthen the Philippines’ economy.
My meeting with Mr Chuan was very welcome. He has only been Prime Minister of Thailand for a period of two weeks and faces a very significant series of challenges. He was able to give me a fairly detailed account of the steps that have been taken by his Government to implement the conditions imposed by the International Monetary Fund. He expressed his personal gratitude and that of the Thai people for the ready assistance Australia had given as part of the financial package organised by the International Monetary Fund because it involved, in the case of Thailand, the currency swap. He said that it was a gesture that was very widely appreciated and was a signal of the close relations between Australia and his country and Australia and the region.
We all agreed in our various discussions that it was timely, indeed uncannily so, that the APEC Leaders’ meeting should be taking place at this time because APEC brings together the leaders of all of the nations of the Asia-Pacific region. And, therefore, all of the nations in the Asian region were strictly defined who are directly affected by the financial turbulence that has hit this part of the world over the past few weeks.
I know that the next two days will be an excellent opportunity and a challenge to the Leaders of APEC to deal frankly but calmly with what is occurring in our region. To understand some of the reasons for it and also, more importantly, to put in place a possible constructive responses to recognise that a global economy carries an immediacy and an instantaneous reaction which wasn’t so present when we lived in the less globalised environment. And to have the Prime Minister of Japan and the President of the United States, as well as the Leaders of some of the countries in our region that have experienced difficulty in the one spot, and to be able to exchange views and ideas and work towards common solutions and responses, is indeed fortuitous - although one would wish the circumstances, financially speaking, were different.
Can I say just two other things: that I am more than ever of the belief, and it’s something that can’t be repeated too often, that Australia has weathered the storm of this turbulence in better shape than most because our economic foundations are so strong. The action that my Government took when it was elected in the face of some criticism, some cynicism and some derision from our political opponents and some others - I stress only some others - to reduce the budget deficit, to get our house in order, to protect ourselves against the proverbial rainy day, the wisdom of that action has been emphasised again and again by the circumstances of recent weeks.
If we had left the Budget deficit unattended to, if we had continued the profligate budget policies of our predecessor government, Australia would be weak and more vulnerable, the living standards of Australians more at risk and the international esteem in which Australia is held economically would have been much diminished. I am immensely pleased and immensely proud that my Government has put Australia’s economic foundations in order and it does give us a capacity to weather these storms far better than we would have otherwise been able to do. Any questions?
JOURNALIST:
Prime Minister, the Yamaichi collapse today in Japan. Can you give us your reaction to that and what it will mean for us?
PRIME MINISTER:
There is no immediate consequence...or there are no immediate effects as far as Australia is concerned. The depositors have been guaranteed protection. The Ministry of Finance in Tokyo has issued a statement to that effect. It is also my understanding that the preliminary assessment is that the net worth of the institution is positive. That particular institution has been experiencing some difficulties which pre-date what has happened in the financial markets and in the region over the past few weeks and months.
JOURNALIST:
Have you had discussions with the United States on the bailout of Korea?
PRIME MINISTER:
I am not aware of any approaches at this stage. Our view, obviously, is that whatever occurs should be under the auspices and supervision and subject to the conditions imposed by the IMF. It is very important that that be understood. There is no...there can be no suggestion that arrangements be made outside the general orbit and general control of the IMF. It’s very important that the writ of the IMF continue to run because in that way appropriate conditions will be imposed because there is no magic pudding solution for some of these difficulties. Australia will deal with each proposal and each situation and each request as it comes along and I’m not going to talk hypothetically at this stage. I don’t know the full extent of the IMF package. There has been a lot of speculation. It’s probably not appropriate for me to add to that, I simply make the point that Australia has demonstrated her credentials regionally speaking in relation to Thailand and Indonesia obviously we’ll deal with other situations if and when they arrive.
JOURNALIST:
Prime Minister, in your speech at lunch today you spoek of your effects on growth in Asia, at the least, it could impact on Australia’s growth performance (inaudible)
PRIME MINISTER:
It’s very important that everybody, particularly the Prime Minister, make measured, sensible, accurate and not over rhetorical statements at a time like this. The direct impact of that particular firm ceasing operations, suspending operations which, I think, technically is what has happened. The direct impact on Australia is non-existent to negligible, for obvious reasons there is depositor protection. The question of what long-term impact there is on growth in Australia by what’s happened in the region is just quite impossible at this stage to try and measure.
Now I don’t say that to escape trying to answer the question. It just happens to be true. It depends what impact it has on those exports or the activity that brings forth the exports from Australia to countries like Japan and Korea and it also depends a great deal on the momentum of domestic economic growth in Australian and it’s just pointless myself or any other senior members of the government at this stage trying to quantify in whatever language you might want to use to measure the impact. It’s not possible for anybody to assert that things like this can forever have no impact, I mean that’s unrealistic but on the other hand we’ve got to be very careful that we don’t exaggerate the potential impact. And you’ve got to remember that the Australian economy is growing quite strongly at this stage. The indications are for a very good finish to the year. There’s been quite good employment growth over the past two or three months, there’s been very strong forward projections on employment. The general indicators are better now then they’ve been at any time over the last 18 months and we have very low interest rates and very low inflation and in a relative sense we are increasingly seen as a safe haven, a secure country in which to invest, a country that runs a very transparent, prudently supervised banking system which is tremendously important at this time.
JOURNALIST:
Prime Minister, in your meeting with Jiang Zemin, what impressed you the most and from now on, in developing the relationship between the two sides, what would you (inaudible)?
PRIME MINISTER:
The thing that impressed me both was the spontaneity of the agreement between the two of us that the last 12 months has been a very good year for Sino-Australian relations that we have regained all of the momentum that the relationship used to have and we’ve added value to that momentum. And we’ve been able to mark out some territory of our own so far as the bilateral relationship is concerned and that was demonstrated in the stance we took in relation to the Hong Kong handover. Symbolic though that stance may have appeared to some it was a stance that almost as an after thought gathered replications from other countries it had adopted a different point of view. The bilateral dialogue that we’ve established regarding human rights overall the spontaneity of the common agreement between us was a thing that impressed and reassured me and encouraged me most.
JOURNALIST:
When you met with Jiang last year you said you met with a few diversions, one of them was James Peng. Did you raise that today?
PRIME MINISTER:
Well I certainly did raise the Peng case with him. Yes I did. And he continued to point to certain judicial impediments in relation to Mr Peng. I indicated to him that I would be continuing to pursue the matter as would Australia. Bearing in mind that there is a history tour on both sides and every country will argue particular cases and I certainly will on behalf of Mr Peng because he is an Australian citizen and I will continue to do that. You spoke about diversions. I think the diversions that I had in mind were of a different kind. There will always be, particularly with the growth in the number of Australians with Chinese desent, the growth in the number of Australians who were born in China, there will be an increasing number of cases involving individuals.
JOURNALIST:
You emphasised your insistence of the different positions on greenhouse gas (inaudible), What are you expecting on greenhouse (inaudible)?
PRIME MINISTER:
Well I don’t know that I will speculate in advance of that but we will be arguing for some recognition of the fact that different countries have different situtations. I’m not at this stage going to sort of put my precise attitude on the line. You know what it is and you can correctly assume, (inaudible), infer, assert, proclaim that what I argue for at the Leaders’ meeting will be consistent with the line that I’ve been arguing for publicly and which is won some wider acceptance. Including I noted with interest today the Canadian business community
JOURNALIST:
Did you raise it with President Jiang Zemin?
PRIME MINISTER:
No I didn’t.
JOURNALIST:
What are you expecting the Asia Pacific (inaudible)
PRIME MINISTER:
Well there are a number of things I would like. I’d certainly like a reaffirmation of the benefits of trade liberalisation of opening doors rather than closing them in times of difficulty. I’d like some recognition of the importance of a transparent financial system, transparent banking system and I think the other thing that’s also very important, a reaffirmation of the partnership both in times of better fortune and in more difficult times between the various member countries. I think those three things are very important and I think the other thing that I’ll certainly stress, and different countries will put a different interpretation on it, but the importance of the strength and maintaining the strengths of economic fundamentals and economic foundations. I can’t stress that too much. At a time like this having strong foundations is the best protection , the best policy, the best response, the best insurance, the best protection against being hurt.
JOURNALIST:
Prime Minister, could you expand today on your comments on financial services (inaudible) and the Wallis Inquiry recommendations?
PRIME MINISTER:
Well what in essence, there will be more things said at Geneva, but what in essence I was saying that we were going to bind ourselves under the WTO in relation to those financial reforms which does represent a significant further advance.
JOURNALIST:
By your Government?
PRIME MINISTER:
Yes, the ones that have been announced, yes. Not those, the ones that were announced in the wake of the Wallis inquiry, yes. By our government yes.
JOURNALIST:
(inaudible)
PRIME MINISTER:
Well you can in the Westminster system bind a future government. The first thing that I read in Dicey’s law of the Constitution.
JOURNALIST:
Does it not open that to claims of...
PRIME MINISTER:
Well there could be, yes. But when you say can we bind them? What I’m really saying is that a future government decided to pull out and run the risk of compensation, well, I can’t stop from doing it. But that would be a long way in the future.
JOURNALIST:
Did you discuss it with the Opposition at all?
PRIME MINISTER:
No. It is not normal for that to occur.
JOURNALIST:
Would you need to legislate to do that Mr Howard?
PRIME MINISTER:
I think some legislation could be needed. But I wouldn’t expect there to be any trouble because Mr Evans said he supported us and I can’t believe that the situation would be otherwise if Mr Evans has said that.
JOURNALIST:
But you don’t know.
PRIME MINISTER:
What about Mr Evans?
JOURNALIST:
You don’t know if Labor would support it?
PRIME MINISTER:
Well, the Labor Party indicated that it supported the Wallis recommendations and when the Treasurer tabled the report, my recollection is that the then Shadow Treasurer said that he would support most of the recommendations. Now, they may change their position in the sort of back-to-the-1950s Labor Party policy approach, or should I say the 1940s. I mean they are even less progressive than Bob Carr on privatisation. At least he’s prepared to take the conference on. In this sort of approach to these matters, perhaps they will go back to the attitude of the 1930s on the banking system and oppose it but we are operating on the basis that if any legislation were needed, and frankly, off hand, I don't know in relation to the binding whether that is, but I am just operating on the basis of what they said earlier.
JOURNALIST:
Mr Howard, how far would you be prepared to go in terms of the World Trade Organisation (inaudible) in terms of throwing open the financial system. (inaudible)
PRIME MINISTER:
Well that would be assessed in accordance with two things, the foreign investment policy that we’ve been operating for a long time which looks to the national interest in relation to foreign acquisitions and also the statement that was made by the Treasurer when he responded to the Wallis Report.
JOURNALIST:
It’s been reported today that you have been prepared to offer an olive branch to the Aborigines (inaudible) just compensation.
PRIME MINISTER:
That was a strange report because it reported something that was always the case in two respects. Firstly, I am always prepared to adopt, if the merits of the argument suggest it, I am always prepared to adopt a reasonable approach to the indigenous community of Australia. My legislation represents a reasonable approach to the indigenous community of Australia. That particular article suggested something new that wasn’t new. I was surprised at it and I have spoken to a few people back home about it and they were equally surprised, and I am just surprised that it was written in that fashion.
JOURNALIST:
But are you prepared to move on the just terms question in light of the Senate report?
PRIME MINISTER:
Nick Minchin indicated that that particular recommendation merely confirmed, was consistent, consonant with what was already our position. It has always been our position that just compensation be paid. It has never, ever been our position that if any acquisition occurs and thereby an extinguishment takes place, and bear in mind that under the present, the Keating Bill, native title can be compulsorily be acquired by a state government. It has always been our position that there be just compensation paid and we went to great lengths in structuring the Bill to ensure that we visited upon the states a requirement to pay just compensation, because there is some doubt under the Constitution, there is some doubt under Constitutional law where they absent the involvement of the Federal Government, a state would strictly speaking be entitled to pay just compensation. One of the reasons that we wanted a Federal Act was to rope the states in so that there could be no argument, and I want to make that very clear. Just compensation in the full sense of that word has always been our intention and we would never have contemplated the situation where it wasn’t.
JOURNALIST:
Prime Minister, in light of the Asian currency crisis, especially in countries like Korea and Japan (inaudible) industries like cars will be less competitive, one commentator has said that small coal mines would...
PRIME MINISTER:
No I don’t. It’s very, very important.
JOURNALIST:
Do you rule it out though?
PRIME MINISTER:
Rule what out?
JOURNALIST:
(inaudible)
PRIME MINISTER:
You are asking me to rule what out? I am sorry, I don’t understand your question.
JOURNALIST:
That there won’t be an impact on areas like cars or whatever.
PRIME MINISTER:
What I am saying Fleur, is that it is very important for everybody not to deal with this matter in a, how shall I put it, in a kneejerk fashion. I said earlier that it was unrealistic to pretend that there would be absolutely no impact but it would be entirely too early, it would be entirely inappropriate for me to even try and respond to a question:, do you rule something in or out in relation to a particular industry. I mean, I am not going to do that. I don’t have enough knowledge, nobody does and it is not in the national interest that I do so. I mean I, at the moment, my responsibility is to care for the national interest, and the national interest is not served by my being, my allowing myself to rule in or out seriatim the particular impacts on particular industries. That does not serve the Australian national interest and I am not going to do it.
JOURNALIST:
Just on the Asian currency crisis, Prime Minister, is there a danger that expectations are too high about the (inaudible) what can be achieved?
PRIME MINISTER:
It is very important that the expectation not get too high. That is a very valid point. At the end of the day, international economic action is the sum of two things. It is the sum of the quality of the domestic economic policy of the participants plus the areas where they agree at a leadership level to act in concert. Now at the end of the day the domestic policies of the 18 APEC countries will have a much greater impact on the stability of their region and the welfare of their people and the living standards of their people and the employment prospects of their people than concerted economic action agreed to at a leadership level. However, that is not unimportant, particularly given the economic history of the last few decades, the capacity of the world to impact in a more intelligent way, in a concerted fashion, based on better information has being one of the highlights of the post Bretton Woods era of economic management in the world.
So you are right to say we shouldn’t expect too much but it would be wrong of all of us to say there is nothing we can do. At the end of the day, however, nothing replaces the quality of domestic economic management.
JOURNALIST:
(Inaudible)
PRIME MINISTER:
My Wallis position?
JOURNALIST:
(inaudible)
PRIME MINISTER:
I wouldn’t seek to suggest for a moment that what I said today put a different light on what was said post-Wallis.
JOURNALIST:
Mr Howard, many of the leaders have come in their own national jets. Do you think there is a lack of national prestige that we don’t come in our own national jet.
PRIME MINISTER:
Are you serious? Come on, Andrew.
JOURNALIST:
(inaudible)
PRIME MINISTER:
That’s one of those questions that no matter what answer I give, particularly to you, is going to keep me out of trouble. So why do you think I should answer it? Give me one good reason why I should answer that? One, just a tiny good reason. Look, I did, you know exactly what I am saying.
JOURNALIST:
(inaudible)
PRIME MINISTER:
It’s not sitting back at home. It’s being used regularly by the Air Force. That’s why they charge it out to the Prime Minister’s Department at full flick.
JOURNALIST:
(inaudible)
PRIME MINISTER:
I am tempted, I am tempted to say something else but we are dealing with something serious at the moment.
JOURNALIST:
Are you worried that the nervousness in Asia might close doors rather than open them?
PRIME MINISTER:
Close doors rather than open them? Yes. And that would be mistake. In each of the discussions I have had today I have stressed that point. I was very gratified to receive an assurance from the Prime Minister of Thailand that that wouldn’t be the case in Thailand and that’s very important given Australia’s contribution to the Thai bail-out and also the fragility in the financial markets that that country experienced before the IMF bail-out. It’s hard to say at a time like this that you should continue the open door because some people think that the closed door gives greater protection. It really doesn’t any more than lack of transparency in a banking system gives you protection. All it does is to postpone the problem and make it even bigger when it eventually is visited upon you.
Transparency of Australia’s banking system, for example is a tremendous asset at a time like this.
JOURNALIST:
Mr Howard, you said before you were pleased by the response of the Canadian Business Council to the greenhouse response. Have you had any other response since you have been here?
PRIME MINISTER:
No. That’s the only substantive comment that I have heard in relation to greenhouse since I’ve been here. I just thought it was interesting, given the comparisons that can be drawn between the structure of the Canadian economy and the structure of the Australian economy, we have quite a lot in common. We don’t have everything in common but we have quite a bit in common. I thought it was an interesting remark.
[Ends]