PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 2664


Photo of McMahon, William

McMahon, William

Period of Service: 10/03/1971 to 05/12/1972

More information about McMahon, William on The National Archive website.

Release Date: 24/08/1972

Release Type: Interview

Transcript ID: 2664

Well, now, one of the major subjects which is
occunying Federal political attention at this.' moment
is Ithis matter-of re-aluation-of the Australian dollar.
In its annual report this week, the Reserve Bank camne.
out quite definitely. it -would appear in support ofthe
notion of revaluation. The report. does not specifically
mention the word " revaluation"~ but nonethele!: s, the ,. hole
tenor of the remarks.-iJt made on this-subDject seem to
indicate that it war-.. in ' favour of it. Then we had onwhat
night was it T'uesday night, the Leader of th-e
O) pposition in an interview macte a statement to the effect
that he ondorsed what the Bank,-had to say. Yesterday
as sor'e nowspaper-report-ri today for example, the
Adelaide Advertiser -renorted today that Mr Whitlam
came undar sustaincd attack from Labor MPs yesterday
for advocating revaluation of the-dollar. On This
Day Tonight last night, the. Deputy Prime Mini, 7ter, 1" r
Doug PAnthony came out flatly in op~ position to revaluation.
In Parliament today, the Prime !-inister has-endorsed that
stand. On the line from Canberra at this time, I have
tho 1Prime MinIster, the Right Honourable William McMahon.
Prime M4inister, can i ass you if there is any
disagreement in Cabinet on whether or not there should be a
PM.-Not so far as I am awire. I di-d say in Parliament
today that in the course of the last twoc days ycsterday and
today, I had discussed this question both with the Deputy
Prime Minister and the TreaSurer w: eo Js functionally responsible
for those problouis. Thcere was no disagriement between us.
0. WFere you aware that Mr :, anony planned to make his
statement against revaluation last night?
Q. You were not?
PN1-INo. I don't think thpt mattered because I had
discussed it w Ith him oarlier in the day.
Q. The suggostion which arose last nig~ ht which has been
taken up by some people is that Mr A1nthony simply took matters
into his own hands.

PM: I don't think that is true because I : iscussed it
with him earlier in the day. But I confirm that he didn't
discuss with me beforehand the question o f going on
Q. On a matter of this importance, perhaps, some
people might think that would have been expected?
PM: Oh, I don't think so because I had only on the
previous Sunday gone on television myself and I had made
the Government's position clear. in other words, as I
listcned to what he said, I don't want to say he necessarily
did this, but it did appear as though he had followed
exactly the same lines as I had. So I couldn't object in
a caso like that.
Q. Can I ask you what factors would lead Cabinet to
a new assessment of this matter?
PM: If it were brought up by the Treasurer and I
don't think it will be because I h-ave already mentioned
it to the Treasurer -we could consider it again. But I
gave four good reasons why we should remain w, hee we were,,
and I stick to them.
0. Would you like to go into those again?
PM: Yes, I indicated that when we revalued on the
last occasion, I had five important problems in mind. The
first one I had to consider the interests of thcse primary
producers who would have to meet comnetition from the
producers of countries that devalued, and I didn't want to
affect them more than they had been, The second point was
that in the case of our mineral industrics, we were going
through a particularly tough time, and who lost about
$ 8 million ( Australian) for every cent we revalucd against the
American dolhr and those who had their contracts made in
US dollars would suffcr further losses, and I didn't think
it was appropriate at that time. Then we had to think of
the manufacturers Australian manufacturers who had to
compete with the manufactured goods of the people from
overseas and, for that matter, import-competing manufacturers.
Then, most importantly, was the economic climate of
confidence in Australia itself. i did not beliovc it would
help our cause by revaluing upwards any further than we did.
In other words, when unemployment is proving tough to handle,
when confidence has to be restored then further revaluation
would, in my opinion, havo done harm and I wasn't prepared
to permit that to happon.
Q. You think those factors still apply?
PM: Yes. ./ 3

Q. What about the economic climate? you think
it is no different?
PMI: It has moved a lot further, yes. it's a lot
better. But I would like to sea it much better before TI
would contemplate any change.
Q. The Reserve D~ ank, while not spociF-ically
using the word l" revaluati. oni, su) ggested it pir etty clearly
in its report this week as a means of ccmbatina, inflation.
You do not agree with thatT
PM: ImpJlicitlvr thle Reservc-Ban'! said that it thought
there should be further rev'aluaition, that is appreciation
of the P.. 1. stralian currency. It looked at it from a purely
monetary point of view, i, as the head o~ government, had
to take a wiAdor vie,-, part ' icularly with relation to
unem-ploymcnt and clonfidcnce and sus3taining Australian industry.
Q. The Opposititon Leader, M4r Whitlam, has been accused
in the House today of committina a nnlitical crime by suggesting
that the dollar shnu.' i. be revalued. Do you go along with
PM: I wudtusc those T. o rdo, no. But what I will
say is that I thin, ihe ' Wa-S extremol> foolish, and he made it
-aooear that he has little no knowledge of economic or
financial problems. 1 am amazed that lie e-von got involved
in the problem becau~ e ilt becamye ovu3he did not know
what he was talking about.
Q. Mr Trritlam's attitude wvas that he w,, as endorsing
Sirfllv what the Reszerve:. Bank said.
PM. N-0, it is not. No it is not. He was endorsing that,
but he went much further. Hie accepted personal responsibility
for what he said. ; Lid for that -xitter, there was a second
question in the D3ouse toda. y that confirmed that as the view
of certainlv a la~ rqe section of the Lab: or Party.
Q. There a feeling abroad that w-, hichever Party wins
the ncxt olection,...... bo~ th the Government and the 0Opposition
at the momcnt !, ould. l stand against revaluation, but come the
election when it is ver there will be a revaluation.
Dco you have anx, cormment on that?
Ptl : oJ -lW e are putting , hv-o f irst o.-f all, sc. far as I an conccrned and the Gcvernment
is co-ncernead, wc: -arc not contemplating revaluation. We are
not;-conteriolating changes in the value of the currency. It
is obvious, too, that thcre iL, a T. 7ide differance of opinion
wi1 thin the Lab'or Party itsclf. Ane'. th ose who ara exoressing
o-pini( ns believe that thero shoul,' be a rcv., luation. I
don't know which side would triui--th. .14

Q. Do vou believi that tjie
-Co~ nmlet-ely uitcd e n revaluaton.?
PM: believe.-they fie Y-es.
Q. All right; Sir. Tha. nk you for talking to me.

Transcript 2664