E&OE.............
JOURNALIST:
Thank you very much for sharing your time with us this morning.
PRIME MINISTER:
It's a pleasure.
JOURNALIST:
I believe Australia and Japan relations remain one of the most stable
of bilateral relationships. Were there any further points that you
stressed during discussions with Prime Minister Obuchi yesterday?
PRIME MINISTER:
I said that I wanted us to reinvigorate the relationship. It's a very
strong relationship. We now have an opportunity together to take a
lead in the region to encourage further trade liberalisation through
APEC and ultimately through the World Trade Organisation. Both of
our countries have a lot to gain from a more open world trading system.
JOURNALIST:
A new round of WTO is to begin in November this year. What are the
issues of concern for Australia?
PRIME MINISTER:
Well we want it to be a very comprehensive round. We want agriculture
there, we also believe it should cover manufacturing and services.
It's very important that we all, in countries like Japan and Australia,
we give a lead because there are some countries that would if they
were not encouraged in the opposite direction, they would slide back
into protectionism and that would be not only bad for them, it would
be bad for the whole region.
JOURNALIST:
I believe there were some talks on the Olympic Games as well?
PRIME MINISTER:
Well the Prime Minister, particularly over dinner last night - one
of your champion judo contestants who will be almost certainly at
the Sydney Olympic games - he was very interested to hear the progress
that is being made and we are making tremendous progress and I'm quite
certain that it will be a marvellous celebration not only of sport
but also a celebration of what Australia means to the rest of the
world and we will have lots of visitors and I know lots of Japanese
people will come to Australia and enjoy themselves.
JOURNALIST:
I wonder how the trio is doing. I learnt the names off by heart -
Sid, Millie and Ollie? Are they busy preparing for the Games?
PRIME MINISTER:
I think there's tremendous enthusiasm in Australia. I think all walks
of life in Australia are going to be so well prepared for the Games
that they'll be beyond, I think they'll be the best ever.
JOURNALIST:
I thought it was quite impressive that those mascots symbolise certain
aspects of Australia
PRIME MINISTER:
Well they do to many people around the world they are a marvellous
resonance to people around the world of how they think about Australia.
Australia of course, is a very modern, diverse society, it's a very
open, tolerant society and it's a very friendly country and all of
those characteristics are going to be on display and those mascots
in a way remind people in a very warm way just what sort of country
Australia is.
JOURNALIST:
What is it that you would like to convey through the Olympics?
PRIME MINISTER:
Well that we are an open, tolerant, harmonious, welcoming country.
We also are very competitive and there will be a huge Australian team
at the games and we will be competing very hard. We're very proud
of our sporting capacity in a lot of sports and there will be plenty
of activity on the Australian side and we look forward to some outstanding
Olympic events.
JOURNALIST:
Concerning the events and updates within the Asia Pacific region I
believe you're personally watching the updates in Indonesia now that
the election is over. How do you assess the current situation?
PRIME MINISTER:
Indonesia is to be congratulated for its huge shift towards democracy.
There are 211 million people in Indonesia and this is the most democratic
exercise that the country has been involved in for almost 40 years
and it is a remarkable thing and I don't think Indonesia has received
enough credit for what has happened, for the transformation that has
been undertaken. The vote has not been finished, well the vote's been
finished but the count has not been finished and it will be a little
while yet before we know the final shape of the Parliament and who
the next president will be. It's too early for me to make a prediction
but I do welcome the fact that the vote has been completed with so
little violence, far less violence than people predicted and the Indonesian
people are entitled to take a bow for having achieved such a big transformation.
JOURNALIST:
Considering the current situation in East Timor what would be your
concern?
PRIME MINISTER:
Well we are concerned about the security position in East Timor. We
pushed very hard to have a free and open ballot and it's very important
that that occur and Indonesia's world reputation will be affected
badly if it looks as though a free vote is not allowed and that is
the message that I am conveying on a regular basis to the Indonesian
Government, and I know it's a view that is shared by Mr Obuchi, the
Prime Minister of Japan, and President Clinton and many others. We
are really saying to the Indonesian Government it is in your interest
and the interest of your country that there be not only the reality
but the appearance of a free and open ballot in East Timor. Because
if we have an outcome which people don't believe then that will do
great harm not only to the people of East Timor but also to Indonesia's
international reputation.
JOURNALIST:
What would be some of the area where perhaps Australia and Japan could
contribute to stabilising the society?
PRIME MINISTER:
Well both of us are contributing civilian police and that is very
important. We are contributing significantly to the cost of holding
the ballot that's been completed in Indonesia proper but also to the
cost of the operation in East Timor and we've also contributed some
millions of dollars of aid and Japan has also provided assistance.
We need to be there to help both in the transition to whatever form
of future government East Timor has. We also need to be there to help
afterwards, particularly if East Timor opts to go independent.
JOURNALIST:
There seems to be so much stress on issues like election because it
is telegenic in a sense. But what comes after the election, establishing
the order phase is equally important.
PRIME MINISTER:
Well in some cases it's more important. Now if East Timor decides
to separate from Indonesia then that new country will need a great
deal of help because it will be a very poor country. It has fewer
than one million people and it will need a great deal of help.
JOURNALIST:
And Australia would be standing by?
PRIME MINISTER:
Australia will help. We feel we have a particular responsibility but
we can't do it all on our own and we will need the assistance of other
countries, including of course Japan.
JOURNALIST:
I understand that you are envisaging Sydney to be a financial hub
in the region. Could you possibly elaborate on the programme and the
reform that is taking place?
PRIME MINISTER:
Well Australia of course is very, very strong economically at present.
We have a very high growth rate, we have very strong business investment,
we have undertaken a lot of reforms, and we have a very stable political
and legal system. And we have a very well supervised financial system.
And all of those things are very attractive because they bring stability
and predictability and transparency and those things are very important.
And the reforms that we have undertaken, and are undertaking, to our
taxation system will make it more attractive for securities transactions
to occur. We will be getting rid of stamp duty on share transactions.
We're undertaking a major review of our business taxation system.
We're removing stamp duty on certain financial deposits. So all of
these things taken together with our great lifestyle and Sydney in
particular, but not only Sydney there are other cities in Australia
that offer a great deal in the way of financial services. Australia
in many ways can become, because of the sophistication of our markets
and the transparency and the prudential supervision of them, becomes
a very attractive place in which to transact securities business.
JOURNALIST:
Am I right to say that a preparatory team has been launched the 1st
of July envisioning.?
PRIME MINISTER:
Well, what we have done is we're establishing really an office in
Sydney and to promote this and we have a Minister in the government
who is particularly responsible for this and his job will be to accompany
me on occasions, and on other occasions to go on his own to different
parts of the world to promote the notion of Australia as an international
financial centre. I'll be in New York next week and we're holding
a major investment seminar there to promote the attractiveness of
Sydney and Australia as a financial centre. Now we are in open competition
with other cities like Tokyo and Singapore and competition is what
makes markets strong and the financial system thrives on competition.
We believe that we can do it better than others and we are touting
ourselves around the world. But we do it in the spirit of strong competition
and rivalry.
JOURNALIST:
What would you say your advantageous edge is?
PRIME MINISTER:
Well we have a very strong economy. We have relatively low costs.
We have a great lifestyle. We have a very predictable, clear and transparent
legal and corporate governance system. All of those things are very
valuable.
JOURNALIST:
I believe a goods and services tax is to be introduced soon.
PRIME MINISTER:
Yes the 1st of July next year.
JOURNALIST:
But will it not dampen the economy?
PRIME MINISTER:
No, no, no because it's accompanied by big cuts in income tax. So
people will have more money in their pockets to spend. If anything
it will give a boost to economic activity and in the longer term it
will reduce business and export costs and therefore produce a more
efficient economy. It's a reform that we have needed in Australia
for 20 years and at long last it has been achieved.
JOURNALIST:
When we talk of reform, we often say reform is often accompanied by
pain and cost. What would those pain and cost be in Australia?
PRIME MINISTER:
Well some reforms are accompanied by pain and cost but you must remember
that if you don't reform then the pain and the cost is all the greater
because you reform in order to have a share of the changed world environment
in which you are living and if you don't reform then you don't get
that share and you suffer even more. But there is adjustment pain
associated with some reform and all governments have a responsibility.
We have isolated communities in Australia that are feeling the strain
of globalisation more than other parts of the country and we are trying
to look after those communities but not in a way that holds back progress
or reform. Because in the long run they have nothing to gain by putting
a protective barrier around Australia. In the long run you have to
go into new activities and new industries. If people are no longer
willing to buy the products of old industries.
JOURNALIST:
So that is the strategy of how Australia survived the economic crisis
that has given serious blow to major Asian economies.
PRIME MINISTER:
I think there are other reasons why we survived. We survived because
we strengthened our economy. We got rid of our budget deficit. We
got our inflation rate down and our interest rates down and we also
ran a very flexible exchange rate management system and as a result
of that we were able to shift our exports away from the declining
markets in Asia into some new markets in Europe and North America
and that greatly aided Australia. And we were helped also by the fact
that many of our exports to the Asian region were in the form of long
term contracts with countries like Japan and even though they were
affected in some way the effect was not so dramatic.
JOURNALIST:
Concerning globalisation of economy as you say. WTO certainly is going
to play a major role in enhancing that free-trade regime.
PRIME MINISTER:
Well it's critical that we open up markets and all of those communities
that are effected by globalisation have more to gain by opening up
new markets. A country like Australia needs expanding access to markets
and so does Japan. Japan built her prosperity in the 1960s and 1970s
on the strength of her capacity to trade vigorously around the world.
So it is in the interests of both our societies that we have a more
open and more liberal trading system.
JOURNALIST:
What are some of the voices that could be heard from your primary
industries sector.
PRIME MINISTER:
Well our primary industries are very strongly in favour of open trading.
Because we have a small domestic market and we are very efficient
farmers and miners. They are amongst the most efficient of all our
industries and amongst the most efficient in the world, and they don't
have any subsidies. They don't have the protection that farmers in
other countries, including your own have and as a result they have
more to gain than virtually anybody else from an open trading system.
JOURNALIST:
When you go back to Australia, what are the points that you would
like to talk to your public as fruit of your visit to Japan?
PRIME MINISTER:
Well that first and foremost Japan remains our best customer, it's
a very close relationship, it's a very mature relationship, and it's
more than economics. We are a model to the rest of the world of how
two very different societies can work together and achieve common
goals whilst respecting the cultural differences in each society.
And that's a very important message of cooperation to the rest of
the world. That both of us have a leadership role in the region in
encouraging the lurch towards protectionism that is evident in some
societies.
JOURNALIST:
Thank you very much Mr Howard for coming this morning.
PRIME MINISTER:
Thank you.
[Ends]