X)A'JE:8111 JULY 1982

SUBJECT: IN!T E:T\'1 L WI1' lffl'1 PflIflb 1: liR, X

CARLTON': There is a lot to talk aboiit on the politicatl.Scene at. tile irozv(nt obviously thje Ifa~xk.e/H-ayden row, thle Ivranium dciision by the ALI"rc-deiai Conference- yesterday, and thtj economywith prospects as gloomy as they have beer,.in a long vh~ile, both for b-.usiness anti forlabour wvith untimployment lik~ely to rise. Let.'slook at all those questions and pertiaps a feumtore, w~ith the Primbe flinist.vr. Good tmorn 4.ng.Thanks for joining vs.

Good raorning.

ChRLTOfl.;

PM:

CARLTON:

Primre Minister, I would lith. to go through a~w~hole lot. +of questions wvith you brut. I cannotresist starting with the obvious, Have youanything to Eay on the Iaydc-n/Hawke issue?

H~o except. thtYL I think it is probably Irrelevant.

H~OW do you ILEan?

V~ell I do not think i t. ma'tters,

CARL'tON: It does not trattc-r Nvbo lead,$ the Labor Party,you can still beat. them?

Yes.

CARL'ON:

Pit:

CARLTON:

CARL'rON:

Is there a certain delicious irony in watchingMr. Jlauke do to It.r. Bayden wbat. Andrew Peacocktried to do to you?

Oh I do 4ot thinU so because, you itnow, frc'wthe m~oment Mr. flauke came into the Parliamenthe wvas bound to try and tmake a grab and it wasonly a question of seeing \,hen it would be.

14m. And it has core sooner perhaps, ratherthan later?

Oh I think from him~ he m~aybe have exhibited afair aiwunt. of patience already.

(LAUGHS) Allx-ight. They think apparently, orM~r. Hawke's thinking, is that he can lead

.Labor to victory against-you but t-hat far, Baydercannot. Do you see it that way?

Itell -I do not really want to ccomment on it allthat muQch. I do not know that. it. would inakem~uch dg.&ference and that is vhy I think it isirrelevant. If you have read the FINAN~CIALREVIEW this m~raing I think that if M~r. H1awkedid becomie Leader you would start. Lo find morearticles, like the one on that being written.

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TR ANSCA I PT; TBL MIKE CARLTON KORB'IN-6, PA1110 2GB, SYNNEY.

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1(ht -the cult of personality, that sort oft h irng?

)NO) no, there Xuas just. an artcle, prettySolidly written, that %wa. quiestio~ning %zhetherUcr. Hauke vas Primwt M~inisterial1 material andauggesting very strungly that he vas -not. 1kAuI think That w~st people in the media have inone sense left him alone because, you knowohe has not been in that position. lie has justbeen a private Itember of Par Ii amtent

CAflLTOU:

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CacLTON

CAR~LTON:

But I really do not think it inatters, all. thatmuch, I really do not.

Allright chariszatic perhaps but not PrimeMinisterial material. Would you agree with thal

Viell charisrmtic does not always- trake goodPrImre M~inisterial material. but that is notnecessarily a conrmnt on M~r. 1iavke.

Yes. I think Mr. Hayden might. agree with youon That lot. (LAUGHS)

Oh there are some things I do agree with M~r.Hayden about. You rlght be surprised.

And do -ou share a similar opinion of Ur. Hawke"l

Pit:

CARLTON:.

PH:

CARLTOX.:

PH:

CARLTO4

PHi:

I have not spoken to him about it in depth.I do not think you would know wrhat I thought -of

Yes, allright. We will leave it there if youlike. I would like to get dowa to one of theissues discussed yesterday at that Labor.Conference -their apparent softening of- theLabor line on uranium. How do you see that?.

Well do you think it is a softening of a lineto promise aomebody that you are not goingstrangle him quickly, you are only going' tostrangle him slovly?

Which would you prefer?

Yeah, I &ee whiat you mean but the Left Ving issaying that 11we were sold out, that vwe cannotcut the uranium Industry off immeiately it vieget to Goveraceat". It does seem to be asoftening to that extent, doesn't it?

Welrl'if you regard that as a sof tening would yovlike me to read you a cuple of words from theResolution?

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CA1L'rON:

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CARLTON:

Yes Sure.

An ALP Government would give a total co=-itmento preventing sty nevi mines being developed and,also another bit "our ni ium position vould b total, unequivocal cozoitment to phaI~e outIAustralia's Involvemeat in the uranium iadustrYSo the only difference is, you know, one waschopping it off, pushing sozebody off the gang-lplank, the present policy Is phasing It out.Nocw nobody knaws how, under uhat circumstances]over vihat periosd the phase out process voild Itake. But that is,. you know, that. Is the onlysignificant difference.

Mm So it uould still be# In your view, a.Labor Governmrent would still be the death kzelfor the uraniua industry in this: country?

The Resolution says. very plainly that that iswhat it is,

No new mines, phasing out all existing involvedIn the industry. That is, you knowx, those w.or 41are very clear I think.

Allright. 1iou i=portant do you see that a's anelectioh issue? Is it one that you would beanxious to pursue in the next F'ederal electionwhenever that is?

Well..a good part of it goes to tbe credibilityof Australia as a trading partner, as a placeIn which to Invest. People have put theirdollars out to develop uranium mines in goodfaith. Ice are moving into a very harsh,-.competitive world where there Is a very realrecession in countries overseas and there arecany much, much worse that Australia and, inthose circucmstances, we want Australia to be.an attractive place, you knou, for people to.inveat In and the kind of behaviour that would ibe required under this Resolution on uranium,

*you know; investors would look on that in apretty uncomplizentary way and they would sayto themselves "well If Australia is preparedto do that In relation to uranium is itprepxred to act In that way In relation to,other investgmentst other activities".

so you are saying It increfses the uncertaintyof what a Labor Government would der withforeign investoent generally?

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CARLTON

PM:

Yes I thinh it vizeuld. Arid at P. time uhertthe world mas v'ery ccupetitive alid verydittilt and e-speci::tlly at a timce xwhen Y;WEhave done a nuvlber ot things to' 6amage0,.jrselves %te cannot asfford thrit sort otpol icy., V, )hzixe got to be hi reliable.trading pa-rtn-r. We have got to deliver -ontire. Ife bave got to get rid of the disputesand stri)kes and the holdups in shippingtbrough our ports and fe-establish a name torreliability.

Yes, allright. Let's mo~ve on then troin that.I think you have =-die your vic-vs pretty elevron tbait.. The ecoDCTjy itzef- all the signsat the wmnent are looking very bad are't, they'.

Well the overaeas recetasion is really stai-tin:,to hit Australia hard. Somie of- the miningcompanies are in very g;reat difficulty. -Thepa.,use in the price of' oil over th-- last yettror two has mrade coal~ coriver-sion lessattractive and they have slo~te'd that dun-That vould not have maele much differencebecause, especially in aconme poxts, xre raninto bottlenec1,s Yvith the export of coal andthe port facilities have not been adequatelydevelopcI. Inlernal transpc.rt facilitieshave not V~een adequately developed &nd, yculbnowl it would be very easy to sit doun andblaw people for this that "ut- ld beresponsible for these things but I bave tak~enthe attitude thtat -it is too ii~pcortant.. for-Australia and I have told 1,1r. Itran andQueensland also that it is not a question 0fblaming people~ for \,vhat. has happened,- it i sa question of doing uhat ue can together toovercome the pro~blem,~ 10 re-establishAustralia's reliability at the earliest point

Yes. You arce saying are bAically atthe mnerey, though, 1 suppose the Azvricarteconomy and the general wiorld downturn.

WVell# in those things, -Ies. but 'ue havecontracted to deliver tonna.cs of coal. Wecould not deliver because of industrialdisputes,, because of inadequate facilities.Let ume, give you an exam-ple: wthen I was inKorea a few wreeks ago I visited a large mcoder:n"w steel mill making 9 raillion tonnes ofsteel a year. The same Company is going tobuild a new-steel mill-producing a little moroThe first mill is based on Australian coal aniAustralian iron ore but. the second xwil 1-notbe-unless-w" can-re-establi-sh reliability YL.knowt out of Australian ports, for coal andiromi. ore.

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C A RLT ON Which you do not nee happ'ening in New SouthI

Well I hope it will. We are working now withthe N~ew South Vales Goverrajent. and I hope veryrsuch that tbe industrial disputes hich hav.edone so much to Oa~.age exports, throughN~ewcastle in particular, are tAargely cover andthat can get back to delivering coal andfilling orders in a proper %ay. I do n~ot*think can entirely overcome the problemuntil an addition~al coal loader is Inoperation.

CARLTON:

PH: But, you kcnow, this Is sor-etbing that affectsAustralia's general trading reputation,

CARLTON, Yes.

P'i 4 At a timre when the world :Is tough, %when %%eare affected by American recession and Interestrates and lo", or bad, world tradingconditions. Wle just c.annot afford any otherupsets, &ny other, you kinow, problem-s.

CARLTON: Ift. Aliright but Prime Minrister that is stillonly one corner of the coony isn't it? Hereat hoze we have these high inltereSt Tates,wre have un~ertployment likely to rise don't N~e?

PR: Coal is only one corner of the e~conomy certainlybut the American recession and low world tradeis affecting the whole econozzy.

CARLTON: Yes.

PM: N~ow it Is starting to hit the economuy prettyhard.

CARLTFON: Yes. Do you believe u.teployment is going torise again? In fact, th~e new figures are outtoday I believe.

PM:Well I do not know what any f igures are thatmight have been or m~ight be coming out todaybut in the trading conditions that we arefacing I think it is going to be itpossibleto prevent a rise in ure.-ployment. I believethat was accepted at the tripartite conferenceyesterday which I think was a very successfulconfereace. For the first tire unions,industry leaders and governments sat down.togetber and, you know in terms of what ishappeniag in the e-conczy there- As not totalbut a significant. measure of agreemient.

CARLTON: Yes.

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1 think the three parties have a co!7,oaV'iew that there are sioe very rcalproblemis iihead of Australia and that 'ueall ought to work togeth-:r to do iubat wecan to overcome those prcsblemns and toininimise the .i-pact of overseas recessionon Australia,

Yes. Those problemis are going to beSignificantly higher unem~ploymnt, businessseetrs to be in big trouble now, The miningboon seems to have burst, doesn't it? Where.do we go from here?

Ifell what wre are going to have to do is totry and, you kaowx, do everything we can tominimise the im~pact of world recession onAustralia. You cannot prevent it entirelybut you can take some action, And obviouslywTe are going to be lookiing at this in our ownBudget deliberations. In addition to that,we have got to mtake sure that Australials;industry is in a position to take advantageof any world iupturn wben it does come. YouRnow the shorter hours and 'the wage increasesthere %;ere pretty high through last year havedamasged Australia's cor-petitive positiorn andif you are getting ten to twenty percen't wageIncreases in Australia at a tiite when peoplein fterica or Britain or Europe are acceptingsix percent %rage increases it obviously makesit easier to sell other people,8 goods andharder to sell ours.

Rlight. Now you cobviously pujt that to theunions yesterday and e--ployers would haveagrecAd. Did you get any result from that?

0O% 1 think, you hnuw, I do not oant toattribute to people m~ore than might beappropriate, but I think there Is a generalrecognition that wages a-rmongst other thingsdo have a significant imtpact, upon theCOmPetitive Position of Australian industry,and If you wanted to bundle a number of thingsin together IWAges, world trading poSition,the fall in coodity prices,in fact, in marketsoverseas, 1 think there would be agreeme~nt thatall these things co~bined have made the positionof Australian industry very difficult indeed.

Right. At those talks yesterday did you secureany agreement from the unions or even a hintfrom the unions that they inight lessen the pushfor higher wages and shorter hours.

%fell that is what a lot of it w'as all about. Ithink the~re is an implicit uaderstanding thatthe pressure in these areas has done a gooddeal of daimage in the past, That is-myinterpretation. I said it was il7 plicjt. I am

not saying it was Said openly. Because wewere really approaching the problem. Herewe are now in J-uy 192 I(t Nvas not mquestion of tryin~g to cast blase by any ofus on wrhat had happened in the past. Thereu1as no point in fighting over old battles.If the wage increases, as we believe, weretoo high over the last twelve months, 1hequestion is how best can that be uabsorbedhow beat can you, you know, go througih theperiod ahead of us without malking theposition of Australian industry anidconsequently the employm~ent of Australianseven m~ore difficult than it now is.

CARLT03: Yes, Well one way uf doing that would betaxv cuts wouldn't it qad possibly in thenext Budget?

PM: Yes but one of the things we did point outis that at a period of falling activity,falling growth, a government's revenue wasalso falling and there might be P- very realquestion at the tine of our o'an B3udgetdeliberations. This question was put to thepeople at the meeting yesterday. Should wyegive priority to helping people who are atwork, vho are pa~ying thxes, who did getreasonabl.i age incre-ases through the lasttwelve months or should be try and givepriority to helping people aho are notemployed or who may lose their .Jobs?

CARlLTON: So in no semse was there a deal struck;that the unions would ease off on wiage demnand.if you cono up with a package of tax cuts?

PM: There was not a deal struck in- that sense andit was not a m~eetixng desigae-d to achievedeals at all. It was exploratory. Themeeting demonstrated the good faith by thethree parties and it demonstrated the comncomitment to do what they can to worktogether. N~ow there is a Tripartite WorkingParty which is going to be examining a numberof issues. The Trreasuzrer will be discussingin more detail) I think, today or tonorrow,taxati.-n issues. Senator Chaney or SenatorChaney's Departmental people will bediscussing In detail elem~ents of the socialwelfare/social security systein and, inaddition to that, the Tripartite WorkingParty is going to continue work in ua effortto put together a coron statem~ent on theecoaco=y. It m~ight be put to the IlooreConference on.Wages. Noew I am not saying thatc-an be achieved. There is a coamitt.-eat to tryand achieve it.

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PH:

YiOU sound q[uite hopeful Of tHat.

W~ell I believe the Conference uas apositive step foroard rind to get r~p~n~h. from~oifferent constituencies sitting (toiintogether and being determ.ined :o try andwork together I think rcepresents a quitesignificant step. I do not want to overstateit but I also believe that Australians areoften fed up with wh~at appears to bedivisiveness between different groups ordifferent people in different positions whenthey really believe that Australians shouldbe sitt~tng down and working together to tryand solve some of the problemxs we have as anation and as a people.

Allright but. agreemnent aside, there munst stillbe enormous political pressure rom the voters,quite sim~ply, for tax cuts, It has been talkedabout. It has been headlines for a xibile,hasn't it? Can you grant themn?

Well you 'uII have to read John )Noward'sBudget speecb to learn the answer to that.

You must. be anxious -to do it. wvith thatpolitical pressure mouutirg.

I think everyone is alyi-ays anxious to have taxcuts. I fura sure you hate paying taxes and Ido. Wfe all do. But at the same time we allask for goverm~ent services of a irreat.variety of kinds.

You are sounding perhaps less optimistic cowabout tax cuts than you were and the Treasurerwas about a mouth ago,

%fell, you know, let we come back to thequestion that I put to the meetinjg yesterday:should we give priority to people who *re inwork who are paying taxes wh. ~2opaytax or ahould we try and give priority topeople who are out of wiork or Nvho may becomeout of work as a result of the situationAustralia now finds itself. There are somepolicy implications in that question.

Yes, so wdth Lnecployment rising, for instance,mere people out of work, you may haive todevote more money to social services andobviously less to the possibility of taxcuts.

Well Ii there are more p~eople on unem:loyment.ben~efits there is an im~eiate and automaticrequirer.ent but, you kniow, 'ubat I was reallyaskicg the meeting was should we be exam~iningother thiags uhich might ease the im-pact ofworld recessioa 3n important sectionsof the Australian co--':jnity,

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Allritght, rrlne Iinister, thc- \ihole thrust ofyour econ(--ic policies since 1975 has been toscrewv downa on the Budget Deficit* ha~ti it?floes that conrtin~ue now %una:.at-,V?

YTell look we are in difficu:lt and differentcircumstances. We had to screw dovin on the)3udget Deficit which had got to aibout livepercent of gross doaestic product, arid thatvias very high, aad at the &a-e ttve we hadto mrake vay for private induistry investmentand a year ago private investirent was runningat a thirty year record. It had gror-ae-normously. It continues at a high rate.But people are not going to be making m~ajornew InveSTment decisions in the currentclim.ate because they will want to sere aupturn In trade, they willopportunity to get better markets or getgreater access to rmarlkets before they makethose de-cisions. So private ir.vestrient islikely to start running dous once the currentinvestment plans have been comnpleted.

Does that make a case for loo-sening the. screwson the Deficit?

Ifel1., let me only say it is on of theconsiderations th~at we will heed to have- in ourraind during our Budget deliberations anddiscussions next week and the, ieek. after.

Kz. So in simple layr!an's terms there maybe a case for the goverrnment pumping a littlem~ore money into the econom-y than it has been.that practice in past Budgets?

WellI you put it in very blunt. term~s and Iwould not want to use those terms at themr cn-zwet but I do vant to m~ake the. point,circumstances, have changed and wie have gotto examine the implicatio~ns of those change-dcircurstances for our own. Budget p'l1icy.

Prime Minister, I am about out of time butI vtould just like to put to you uhat I see a&a sua-rary of uhat you have been saying. Theecouncy is io for a rough timze for lphateverreason but you see somie hope in the faict thatemployers, the unions and the Goverament areat least getting together on it. Would thatbe fair?

'lea it is$ it is. I think you have summed itup and if there is going to be a rough timefor the Australian ecoaomy and for a largenumber of Australians we owe it to everyoneto do uhat we can to vwork together.

C ARLTON But t~at rough tire is ahead?X.

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Ves I thiak it is. \Ve ai~e a great trading,nation, Thirty percent ot our nationali1ncome is depeadent upon trade. You haveonly got to look at the dramatic falls incuooity prices, the very real diflicultiesthat the miners are An, the fall in theprice of rural exports, the difficultiesour mantufacturers are in selling in theexport mark(ets they have gained.

And the dollar down and the share mrarketdovin.

And %yell, you know, the share mrarket cdown,that is a consequence really of all theseother things and world trade is sbrinking.It has not been growing. In all thesecircumstances a difficult time ahead isunavoidable.

Prime Minister, I know you will not tell me%hen you are going to call a Federal election.I will not even bolher to ask yuu but thanksv'ery much indeed for being with us thismorning.

Ifell tha-nk you very m~uch, 'bye 'bye.

CA~TON: Prize lminiscer tialcolm Fraser on the linethere from Canberra. it is pointle-ss to askhim uihen and if he plans to call a Federalelection because he has not even tol(I DougAnthony yet, if indee-d he knous himself, soI do not go in for those hypotheticalquestions. And tu sum it up as wi.! did withthat last question, there is a rough timeahead for the Australian economy forwhatever reason. Whether you agree withM4r. Fraser's reasoning behind it or not hehas at least come out and said two things:bad timne for the economy, bad time obviously-therefore for our trade overseas, the miniligboom down and, as he said there, unemploymentup. The hope, perhaps, is in those meetings.he had yesterday with trade union leaders,with business leaders, and there does seemfroz those meetings to be sone co~mmon causeor at least commn agreement that somethingsomeuhere has got to be done. T~hat is perhapsthe only optimistic sign going at the moment.'the unemployment figures xvill be out today.The latest figures, and they are expected -to.show soraethirg of a rise to put it mildly,they could be very, very bad new~s indeed.There you have it, straight oa the line, thePrime 1jibister frcc Canberra.

A TT M~T I ONFR~OMh

J 114 BONK ERSALLIY I3ROKE

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