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PRIME MINISTER
TRANSCRIPT OF NEWS CONFERENCE, HYATT HOTEL MELBOURNE,
FEBRUARY 1990
E 0 E PROOF ONLY
PM: Welcome to what is going to be the first of regular
morning press conferences at which I will be available to
the media for questioning about the events of the day before
and the day ahead and any questions you want to address to
me at all. Before making myself available to you for
questions now, let me make this point to you that I called
the election last Friday and a very interesting pattern has
emerged from the Opposition on the issue which they regard
as critically important, and which is important, that is of
interest rates. On Saturday Mr Peacock, the Leader of the
Opposition, said that the market would move to lower
interest rates from day one, his words, " move from day one"
that was Saturday. Sunday we get Senator Stone, I quote
Senator Stone " I've never said, and I don't think anyone
on our side has ever said, that we will get interest rates
down over night". Well his Leader had just said it the day
before and Senator Stone was still at it yesterday. So we
had Monday's contribution where Senator Stone criticised
those of his own people who were making predictions about
the timing of interest rate falls under the Coalition
government saying, and this is Senator Stone Monday,
yesterday, quote " Nobody can give you answers to those
kinds of questions and nobody should because they would be
telling you lies if they did." Remarkable. Mr Peacock on
Saturday, from day one. Senator Stone saying that if anyone
said those sort of things they would be telling lies. The
remarkable thing about the interest rate saga is of course
the development this morning, where on AM Mr Peacock again
went to this issue and said they would be coming down. Why?
Because of the Opposition's policies in regard to a fiscal
policy and wages policy. The facts, of course, are that the
fiscal policies and the wages policies of the Opposition
would guarantee a blow-out of interest rates. Fiscal policy
they are confronted with the situation where this
government has had unprecedented fiscal restraint, fourth
successive year real reductions in Commonwealth outlays,
Commonwealth surpluses for the first time in the
Commonwealth's recorded statistical history, and against
that you have the credibility gap, the $ 6 billion unfunded
credibility gap of the Opposition. The fiscal policy would
blow out, interest rates with it. The other element, wages
policy of course as every commentator in the market
realises, the Opposition promising and inevitably dooming
Australia to, a looser wages policy, wages blowing out. So
looser fiscal policy, looser wages policy, inevitably higher
interest rates. So there we have the saga on interest rates
of the opposition from last Friday. Total confusion,
contradiction, but inevitably under the impact of their
policies higher interest rates.
JOURNALIST: come down but because of international
factors that these interest rates are going up will they
come down
PM: We've said they'll come down and I've been very very
responsible and modest about what we've said. But most
importantly what I've said is, in a sense what the financial
markets and the banking community itself is saying is even
more important than what the Prime Minister is saying. And
what they are saying, correctly, is that as a result of the
policy settings and decisions of the Government they are
saying that it is inevitable that interest rates will come
down. What I have said is that I agree with that but the
extent and the timing will be a matter for the banking
sector. Their assessment is the one in a sense which
matters most. What we have had to do is to create the
settings, the economic environment in which they are able to
make those decisions. And if I could just make this point,
if you remember during the latter part of last year when we
were taking a fair bit of flack, interest rates were rising.
We stuck to our settings because they were necessary. We did
not rely on monetary policy alone. We had, as I've said,
the tightest fiscal policy in the history of the country,
measured by the successive reductions in real outlays, the
proportion of outlays to GDP being right back to the lowest
levels of the 701s, the move into substantial surplus and of
course very importantly the public sector borrowing
requirement going substantially into surplus. So we had the
fiscal policy and the wages policy tight and in that setting
also monetary policy tight. Now they were hard decisions to
take, but I've never shirked taking a hard decision. The
important thing is those hard decisions having been taken,
the financial sector, the banking sector is itself now
saying that interest rates are going to fall. That is the
important thing.
JOURNALIST: ( inaudible)
PM: I think just to use the phrase, Peter, " tightening"
social welfare payments does an injustice to the Government
and the community in a couple of ways. Let me make these
points. There has already under my Government been the most
substantial tightening of the processes which are used to
determine the reality, the legitimacy of the claims made by
people claiming benefits. That massive reduction is
documented, is understood and accepted. There is no-one now
I believe in the welfare sector, or amongst the responsible
commentators in the community, that has not accepted the
fact that there has been this significant tightening. At the
same time as we ' ye undertaken that tightening we have
ensured that those who are legitimately in need have been
protected. If you like to get some indication of the
relative compassion of my Government compared to the
policies of our predecessors who are now urging the same
sort of approach. It is interesting to note that if you take
what I think must be regarded as a pretty fair example of a
group in the community in need if you take a married
pensioner couple with a couple of kids. Now under the seven
years of the conservatives, practising then the same sort of
policies that they are preaching now for the future, which
ultimately is what we are concerned about, that under those
practices then the real disposable income in the seven years
of their Government for that needy unit to climb by 2%.
Under my Government their real disposable income has
increased by 14% where they are renting privately. Now what
we've done therefore is to tighten up where there has been
abuse of the welfare system, then we've removed those
abuses. But that has enabled us, together with other
measures we've taken like taking pensions away from the
millionaires for instance, the totally untargetted welfare
in inverted commas, of the conservatives has enabled us to
give. And that's what the Australian community wants. The
Australian community is a compassionate community. I have no
doubt about that. They want those really in need to be
helped. We may get some wider message from this, Peter, also
about the opportunism of the conservatives when it comes to
elections. You will recall, and particularly journalists
here in the City of Melbourne will recall, 1984, Assets
Tests. Mr Peacock saying that surely as night follows day
the Assets Test was going to be abolished. But of course
they've come to accept that and the Fringe Benefits Tax.
These things are necessary. Now, as far as the present is
concerned, again, pure opportunism against the legitimate
policies of this Government. Now as to the particular
decisions that will be taken further in this area, I must
ask you to wait until Wednesday when in the Economic
Statement of the Treasurer there will be some additional
measures of relevance in this area unveiled.
JOURNALIST: Prime Minister problems of the Victorian
State have influenced the actual timing of the election. Do
you believe the that problems of the Victorian State Labor
Government impact badly on the image of Labor as a manager
of the economy?
PM: First part of the question no part in the timing of
the election. I've given the reasons for the timing of the
election. Secondly, no I don't believe that any difficulties
that the Victorian Government are having in any area of
economic management impinge in one way or another on the
Federal Government. I mean to believe that they would be is
really to say that you think the electors of Victoria are a
pack of unintelligent people, that they can't understand
that the State Government of Victoria has responsibility for
the conduct of economic management in this State and that
what they are being asked to decide in this election of
course are the issues of national economic management, the
issues of health care whether you are going to have a
continuation of Medicare or the chaos, which is the
conservative's position where they are looking to the
future, which is what we are about. We are going to have a
continuation of my Government's transformation of education
where two out of three of our kids stay on in school now as
compared to one in three under them. These things which are
within the providence of the Federal Government are the
issues that will be important for the people of Victoria.
Just as I said for instance in Western Australia, where I
have been recently. It was said there that because of
perceived problems of the Western Australian Government in
regard to WA Inc that the Western Australian electors were
going to be that unintelligent that they were going to say
I'll kick myself, as a Western Australian elector, in the
backside by giving myself a worse education system, worse
Medicare and health cover system. I'll hurt myself in that
way to give Mr Dowding, as he then was, a kick in the
backside. Now I don't think people operate like that. Now
going specifically to that part of your question which
involved the bank in Victoria, let me say that I am not
privy to all the details of that. But let me make the point
that the, I am sure the State bank of NSW has some
difficulties as well. Whether they are the same dimensions
or not, I don't know. But what you've had happen in the
last few years, that these banks have extended their
operations and in the extending of their operations they
seem, some of them, to have taken on what might be put as
second class credits. And as asset values have declined
then some difficulties have arisen. But I don't expect that
because banks in either, State banks in either Victoria or
New South Wales have experienced difficulties in their
banking decisions that any sensible person is going to say
that that reflects on the capacity for economic management
of my Government.
JOURNALIST: Mr Jolly's not at all to blame for the State
Bank? PM: Well, I think that what we ought to do, you and me and
the community is to wait and see what the statement is and
what the indication of the lines of responsibility are. As
I understand it, and I think this would be a matter which is
dealt with more particularly, more specifically this week,
as I understand it there is a complete line of independence
in the board of the State. Bank. But I'm sure that all that
will be exposed in detail later this week.
JOURNALIST: Do you support Treasurer Jolly to remain as
Treasurer? PM: Well, that of course is a decision for Mr Cain. But let
me make it quite clear in terms of the beatup story in one
of the Melbourne papers yesterday in which the journalist
concerned had made no attempt to contact me or my office or
Mr Hogg, but had written a story that Mr Hogg and myself had
sought to pressure Mr Cain to get rid of Mr Jolly. There
was absolutely, and is absolutely, no foundation for that
story as far as I'm concerned. There is no foundation. Now
I've known Rob Jolly, as you would appreciate, for a very
long period of time. He was with me at the ACTU. All my
knowledge of Rob Jolly is one of competence and integrity.
I don't think I need to say more than that.
JOURNALIST: Has Mr Keating ever discussed the projected
losses of the State Bank of Victoria with you and if so what
was PM: No he hasn't had any detailed discussion. And I'll
come to it detail because I'm not trying to do a shoofty
by adjectivaling my way out of it, if I can put it that way.
He's had no detailed discussion with me about that at all.
The only conversation is an indication well we know
there's some, we don't intend to be, y'know, particularly
privileged in information. It's fairly generally known.
And there was reference to the fact that there was going to
be some sort of loss in Victoria of reasonably considerable
dimension, but no detailed discussion about it.
JOURNALIST: do you accept that there is a case for
tightening particularly dole payments and is in part
prompted by the Opposition's Economic Action Plan
limiting dole payments after the election?
PM: We haven't been in office, in any of our period,
prompted by the ideologically blinkered and prejudiced views
of the Opposition. I mean, their record in the area of
employment and unemployment is so mired that
no-one takes them seriously in this area. I mean, you don't
have to go back long in history. They were the ones who
created the massive numbers of unemployment beneficiaries
the most massive increase in unemployment beneficiaries in
our history under the conservatives. Because they lacked
the capacity to manage the economy. So they have no
credibility in this area. No. What we've done is to say
you must conduct economic policy in a way which creates
jobs. I mean, that's the essential of dealing with the
question of employment and unemployment create jobs. And
so we've created 1.6 million, five times faster than them.
Now, at the same time we have steadily, as well as getting
the reduction in unemployment beneficiaries which comes from
the creation of more jobs, we've recognised that under the
systems which grew up under our predecessors, there was a
laxity in the administration. And so we've tightened that.
So you've had the twin pincers, if you like, moving on this
issue. One, the creation of more jobs and secondly, where
people were through lax administration being able to get
benefits where they weren't entitled, we've weeded them out.
There's been a massive increase in that process. Now I
believe you will see that what is going to happen is there's
going to be a quite dramatic, I believe, further step in the
process, philosophical and practical process of dealing with
this issue. The main thing that you have to do as a
concerned society, as one concerned with proper economic
management, one having compassion for those in need, but
also one concerned to ensure that people are going to be put
in the best position to help themselves is to make sure that
your expenditures are basically of a kind which are going to
put people into the training programs. Now we, as you know,
and you know much of the details about that, of the programs
that are already there, we'ye done a great deal to do that
transfer the emphasis from benefits to training. And I
think you'll find that that sort of thing will be enhanced
significantly in the sort of details that are going to be
announced. JOURNALIST: Just to return to the State Bank issue.
whether at that point in time they were raising State
Bank PM: No, the I've had no detailed discussion, no detailed
discussion about the State Bank situation with them. No
detailed discussion.
JOURNALIST: ( inaudible)
PM: Just a minute, I'll come back to you.
JOURNALIST: Will they be voluntary,
PM: I think you, I think you should wait and see, till
Wednesday. That's only tomorrow.
JOURNALIST: Can interest rates still fall in the climate
national wages outcome
PM: Yes, and I think if you'll notice some of the
statements made by commentators in the financial markets, an
expectation that our environment would be much more
conducive to that than the uncertainty of the Opposition.
What has characterised our period in office in regard to
wage outcomes is that the community, not only wage and
salaries who are entitled to have some knowledge and
expectation of outcomes, as are employers, but so are the
markets. What has been the characteristic is that we've
been able, after negotiations with the trade unions and some
discussion with employers, to say look that is the national
aggregate outcome of wages. And also associated in part
with that, inflationary outcomes. Now, under our policy for
six years, that's what's happened and the same thing will
happen again following Wednesday, that the community will
know with a very considerable degree of certainty, wages
outcome. They can make their judgements as well as seeing
the forecasts about inflation. And within that framework, I
believe, the other policy settings of previously tight
monetary policy and very tight fiscal policy, the three
together will mean yes, that there can be reductions in
rates. Against those certainties of settings you have the
opposite from the conservatives and this is being
acknowledged by some commentators in the market. In regard
to wages, as recently as yesterday, the two spokespersons
from the Opposition who presumably know most about this,
Stone and Hewson, were asked repeatedly by your colleagues
in the Canberra Gallery when they gratuitously called a
Press conference to give their instructions to the media as
to how they should conduct themselves. Then the media, not
unreasonably, said well could we ask you a couple of
questions. We ask you, what is your view about aggregate
wages outcome under your policies if you were in Government?
pass that one. Wouldn't, wouldn't answer it. In other
words, from the supposedly literate and knowledgeable
economic spokesmen of the Opposition you got no better than
you got from the Leader of the Opposition, whom they treat
with a certain amount of reserve when it comes to economics,
but they were no better. You know the classic answer that
Mr Peacock gave in Canberra when he was asked the critically
important question, critically important question as to
economic management, as to interest rate outcomes, he was
asked well what's going to be the wages outcome from your
policy. The historically memorable, lamentable, pathetic
response ' who's to know'. Well, in a sense people weren't
surprised that Mr Peacock gave that answer which is so
relevant to your question. What is likely to happen to
interest rates under the Government's policies or the
Opposition. Not so surprising to many people that Mr
Peacock said ' who's to know'. But yesterday you had the
supposedly literate and knowledgeable economic spokesperson
giving virtually the same answer. So, I repeat, under our
policies you will have, as you've had in the past, the
predictability. And that's related to a tight fiscal policy.
Against that tight fiscal policy of this Government you'll
have, as you go through this campaign, the $ 6 billion
credibility hole of their fiscal position.
JOURNALIST: The figures we get tomorrow, the figures we get
tomorrow in the Economic Statement will they actually
be economic forecasts as such or will they be more
targets...
PM: Well, they'll be precisely what they've been in the
past. I mean, we're not having a statement for the first
time. I mean, this is the beginning of we've been there
for seven years. We will be doing exactly what we've done
every year before and that is that we will be putting out
the figures on the basis of the negotiations that we were
able to have with the trade unions and in the context of the
historic approach to the social wage, we'll be able to say
these are the outcomes. Now, they will have the same status
as they've had for the previous seven years.
JOURNALIST: Speaking of Mr Peacock, as you were, yesterday
could've gone better for you... Mr Peacock says you were
totally rattled. Would you give him any points for
yesterday? PM: I certainly don't. I mean, just look at the facts of
yesterday. I make no apology for them. I went to a
conference about roads in the Opera House and I came to a
podium at which there was a total traffic jam. There wasn't
a centimetre of room left for me. And to the great
JOURNALIST: You laugh it of f now Prime Minister. You
didn't laugh it of f yesterday.
PM: I did laugh it of f yesterday and may I say, I mean, you
weren't there were you?
JOURNALIST: I was.
PM: Were you? And did you see the audience laughing with
me? JOURNALIST: Yes I did.
PM: Good, OK. So I was laughing, they were laughing and
importantly so were a lot of the journos. I was, I thought
it was rather amusing and obviously the majority of people
there did. So, I
JOURNALIST: But it happened again later in the day didn't
it? PM: Well, could I just finish the answer to the question?
PM: So I regarded that as a rather amusing episode,
certainly not a rattling one. The second one which is
giving Mr Peacock some hope, that I was rattled. There I
was, I went to this environment conference to launch a book
and there were people there wanting to listen and some
person, who is ackowledged as a bit of a way-out fanatic,
was there and took over and wanted to make a speech. Well
there were the kids wanting to hear what I had to say and
other people wanting to hear what I was saying. I thought
well there's not much point in, you know, having a shouting
match with him, so I, so I walked off until he'd finished.
When he'd finished I went back and I said OK it's launched,
saw the kids, gave them their certificates. Now all I can
say is this. If Andrew thinks, out of those two episodes,
that I'm rattled, I hope he continues to think it. I
really, sincerely Andrew hope that you're thinking that
Bob's rattled because mate, I'll tell you I'm not. I'm
looking forward very, very much to the rest of this
campaign. JOURNALIST: Do you think an inflation forecast of six per
cent for next year is realistic?
PM: I think of that order is realistic. But I will answer
all the ' se questions in more detail, as will Paul, after
he s made the statement tomorrow. But I think that sort of
order is realistic, yes.
JOURNALIST: You said on AM yesterday that under Labor
there'd be a considerable fall
PM: That wasn't a I mean it was very deliberate.
Not saying I can say it it's going to be three per cent,
four per cent, two per cent. What I said is a reflection of
what I said in answer to earlier questions here. The
Government doesn't set interest rates. What the Government
does is to conduct the arms of economic policy out of which
interest rates emerge. We've been prepared to make the hard
decisions which during last year and to the beginning of
this year meant high interest rates. Because high interest
rates were necessary. I mean you want to have a precise
measure. Just let me give you a precise measure which was
relevant to why we did what we had to do. In the previous
year we had broadly an eight per cent increase in
consumption and a four per cent increase in production.
Balance made up by excessive imports. So what we had to do
was to reduce the level of demand. We did that by the
combination of tight fiscal policy and wages policy
supplemented by tight monetary policy. And out of those
Government economic policy settings the interest rate
pattern emerged. Now as those policies have impacted, as
they have, and we've had the signs of slowing down which is
what is necessary, then the banking sector has already begun
its reductions within the interest rate structure. And they
have said, importantly, that there will be further
reductions including in mortgage interest rates. Now in
that context it's not for me to say how much. But when I
say considerable I think that is consistent with the
policies that we've put in place and with the anticipation
of the banking sector itself.
JOURNALIST: that the Government doesn't set interest
rates, doesn't using a word like considerable talking
down interest rates?
PM: No, and neither have they regarded it as such. There's
been no suggestion by the market that Hawke has attempted to
influence them. In fact I think there's an acceptance that
I've been quite responsible about it. It's, I suppose,
always a question of judgement as to what is the best word
to use. But I think it's a responsible word.
JOURNALIST: What do you think of Senator Richardson's
comments yesterday polls show a swing back to your
Government... in WA?
PM: Well, I agree with him. I am privy to some polling
that's been done which supports what Senator Richardson has
said. I think he rightly identified the one difficulty, the
really difficult seat of Moore, the difficulty of which is
associated with the redistribution. The redistribution has
made that notionally a Liberal seat. So that's that much
more difficult to hold. But I would agree with Senator
Richardson's assessment. And it really goes back to an
answer I gave here before to a question on this side. I
mean at all points the assessment about this horrendous
position that we were facing in Western Australia depended
upon, in my judgement, a fallacious assessment of the
Western Australian electorate. It meant, really, looking
at Mr and Miss Australia, West Australia, in the eye and
saying to them you're a mug. You really are a mug. That's
what the analysis meant. Because you were saying to them
you're not happy with Premier Dowding and WA Inc. This
federal election has got nothing to do with that. It's
about what sort of education policy the country's going to
have nationally, what sort of health policy it's going to
have, what sort of control over wages outcome it's going to
have. And you know that that's what's in issue. But to
punish Mr Dowding you're going to give yourself a kick in
the backside and give yourself a worse education system for
your kids, a worse health policy for yourself and your
family, less efficient economic management. You're going to
give yourself all those disadvantages to punish Mr Dowding.
Now that really does involve a pretty sad analyis of the
intelligence of the voter. And I never shared the analysis.
JOURNALIST: Prime Minister, is it the point that the lift
in your Government's ratings in West Australia are precisely
due to the fact that Dowding got the boot and Dr Carmen's in
as Premier?
PM: What I'm saying is that even if that hadn't happened,
even if that hadn't happened, what I was saying was that as
we went through the election and as I made these points,
then the judgement would've been made in the way that I'm
talking about. I don't deny however Paul, I don't in any
sense deny that we haven't got a bonus out of what you're
talking about.
JOURNALIST: Given that you hold a seat down here, why is it
that you haven't had any campaign launches in Victoria?
PM: Well, that would I mean the logic of that is that if
I held the seat of the Northern Territory I should have the
campaign launch in the Northern Territory. If I held a seat
in the ACT that I should launch the campaign from Canberra.
There's no logic in the proposition because I happen to hold
a seat in a state therefore that's where the campaign should
be launched. It's not a proposition that has ever
recommended itself to any leader of any party in the history
of this country I think.
JOURNALIST: Alright, why haven't you had any campaign
launches in Victoria?
PM: That's a different question. Because the judgement of
myself and those with whom I discuss these things has been
that it's been best to hold the launch on the three
occasions that I've been to the people in Sydney. I guess
the only sort of comment I could make, or justification of
the decision is that the decision has been associated with a
win. I mean we don't seem to have got it wrong on three
occasions. I guess three out of three is not bad. If I
could have 100% record in my punting I'd be very happy. Now
on this occasion we've made a different decision.
JOURNALIST: Have you given any consideration in the
truckies dispute?
PM: No I notice that I just had something put in front of
me before I came here, which the ABC news carried Mr Greiner
reportedly calling on me to intervene in the truck dispute.
Now let me just say this to Nick Greiner. Let me say it
quite directly. The key to this is in Nick Greiner's hand.
11.
I put the key in his hand last December. I offered it again
yesterday at the Opera House. Now what the truckies want
it's quite clear what they want is they want nationally
consistent road laws. While I can't agree with their
methods I agree with their objective. They want nationally
consistent road laws. Why in the hell shouldn't they want
nationally consistent road laws. In December of last year,
as I say, I gave Premier Greiner the key to the answer with
the blackspots program where I undertook to make in total
$ 120 million available, $ 120 million, the overwhelming $ 110
million on actual construction and another $ 10 million on
identification and associated research, on the condition
that the States moved to uniform national conditions. You
remember what they were? National .05 level, alcohol limit;
national licensing of heavy truck and bus drivers; national
uniform speed limits; speed limiters for heavy vehicles;
adopt zero alcohol limits for young drivers; increase
enforcement to ensure that one in four drivers are random
breath tested for alcohol in a year; implement a graduated
licensing system for young drivers; introduce compulsory
bicycle helmet-wearing; introduce daylight running lights
for motor cyclists; increase enforcement of seatbelt and
child restraint wearing. Now, as I say, there it was
offered in December with a very substantial allocation of
federal money. My belief is that I can get the other five
States to support this position and if Mr Greiner would do
so also then we have the answer. We have the answer. The
truckies legitimately want a national uniform position, as I
say. I identify with that. Not with their methods. I hope
that they will not proceed with their methods. But Mr
Greiner I've given you the key to the answer. Please accept
it. JOURNALIST: Accepting what you say about that, isn't this
dispute now being driven as much by the internal split in
the TWU as anything else and wouldn't it help
PM: Quite clearly Glenn there's an element of difference
within the union. But that doesn't in any way, in any way,
limit the validity of the point I've just made. Because the
issue in the first place, the issue in the first place which
the union pretty generally now seems to be coming towards,
is the question of the regulations in NSW. They are saying
they are disadvantageous and there's differential
regulations. What, without any doubt, the truckies whether
union driven or non-union driven are saying, is uniform
national standards. And I've given the answer to that. Now
I'm sure then if the Premier of NSW would respond positively
to that it's quite clear then that to whether there's some
difficulty within the union or not, quite clear if the
Premier would respond to that then we could resolve the
matter. JOURNALIST: As a result of the dispute several thousand
workers stood down and there' s supposed to be another
7000 If the standdowns continue
I 12.
PM: Well, I'm hoping, I mean in these sort of things you
take it step by step. I'm hoping that Nick Greiner, and I
can assure the Premier of NSW I'm not trying to get into a
political wrangle with him. But if the Premier of NSW would
positively respond I mean it's not a bad deal is it. I
mean the Prime Minister of Australia is offering $ 120
million to spend on the blackspots, the most dangerous
spots, and obviously NSW would get the greatest proportion
of that. What's the tag that the Prime Minister's putting
on it? The tag simply is agreement to national standards.
Now if the Premier will agree to that then the dispute on
any reasonable assessment is over. So in attempting to
resolve a dispute you try and get to the main issue and try
and get that resolved. Now that is the main issue as has
been put. And the key, the simple key for resolving it is
there. I'm sorry I've got appointments I've got to get to.
ends
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