|Interviewer: Robin Hughes
Recorded: April 14, 1994
This is a transcript of the complete original interview conducted for the Australian Biography project. Each transcript page covers one videotape (approximately 35 minutes). There is also QuickTime video of the full interview available. To play the video, click on the icon in the right hand column. In addition, each question in the transcript is linked to the video. Clicking on a question will play the video from that point. (Help with this feature.) Optionally, you can download the video file for offline viewing (approx. 10MB).
The interview has been left it in its original state so that you can get a sense of how the conversation developed. The repetition of some questions, or a question followed by another question, is often due to the end of a particular tape or some other interruption, and has been indicated at the appropriate place in the text. There has been minimal tidying up of the text so that the flavour of the encounter has been kept.
You've told us about what your problems were when you first became prime minister, and the sort of things that had to be tackled. Now looking back from the other end, in hindsight, what do you think were the major achievements of your period as prime minister?
Well the major and enduring problems through the period were economic problems, because we not only had the legacy of the Whitlam years in relation to that, they were also difficult years for the world economy. There'd been the first and the second oil shocks which are so easy to forget these days. There'd been a drought across Australia, which was the worst in 100 years. Every acre of Australia was affected, and billions were taken out of the Australian economy and we also had a wages explosion - in a sense our policies had been too successful. Investment was going forward very strongly at the end of the '70s, much more strongly than it has since. Companies were profitable and unions, determined to ignore the wage-fixing system and the decisions of Sir John Moore, the Chairman of the Commission, demanded much greater wages, much shorter hours, in a way that added 25% to unit labour costs in the matter of a few months. Now this was bound to have a dramatic impact on the economy. The impact of it hit about the same time as the drought and this posed a new series of economic problems for the government. But the main problems of excess spending had been overcome, expenditure had been restrained within very narrow limits throughout the whole period. There'd been reordered priorities within Commonwealth government expenditure. We actually were fairly generous with the states, but we increased that part of the payments to the states which they were able to determine for themselves and reduced specific Commonwealth determined grants so there was a reorder also there, believing as we did that states should be master of their own affairs to as great an extent as possible. But anyway, our finances were in order, we weren't in debt internationally, we were paying our own way, we had lowered taxation generally. One of the more notable social welfare reforms was the abandonment of tax deductions for - or rebates - for family allowance and family assistance, or family dependants and the institution of a system of family allowances, which benefited about 800 000 families and children that had never benefited before from that Commonwealth's taxation support for families, simply because the families didn't have incomes large enough to get the benefit under the earlier system. We also were prepared to, and did, reorder expenditure priorities quite significantly in other areas, and we weren't just taking a view - all right, we've got to cut expenditure - we cut expenditure across the board regardless of the circumstances. We thought that there were both economic and social priorities that had to be met and that were quite important and urgent. I think that we introduced some very constructive changes into Aboriginal policy. We certainly embarked on a program of multiculturalism and acceptance of multicultural issues and the introduction of SBS, all of which broke new ground, and I think in many cases were a world first in an approach to ethnic minorities and their place in our case, in their place in Australia. So overall the government had a number of domestic objectives, which I think were achieved pretty well. Internationally, we had worked constructively and I think more forcefully through the commonwealth than previous governments had, and I suppose there were two main strands to our foreign policy - the development of relations within the commonwealth - there were some special concerns of course in relation to southern Africa - Rhodesia as it then was, and South Africa - but also we intensified Australia's relationships with Asia, which had really been begun by the first post-war Australian governments. I mean it's quite common for prime ministers to get up and say that they're taking Australia into Asia and that they're the only government that's done this and this is all new. But in fact there has been a very steady progression through each different government in all the post-war years, all of which have intensified our relationships with Asia. And you know, the beginnings of this were probably the Colombo Plan and Dick Casey, later Lord Casey. The early Menzies governments, the Japanese trade treaty which was the most - single most far-sighted and politically quite courageous act of any Australian government in post-war history. It was very close to the end of the war and emotions were still quite high. Some members of the parliament for example weren't going to go to a reception for the Japanese Prime Minister coming to Australia to commemorate that trade treaty. It was the ex-prisoners of war, prisoners of war of Japan who all jointly and together said that they were going to attend the reception and they expected every other member of parliament to likewise; that settled that issue. But there were obviously political risks attached. In effect it turned out to be one of the most far-sighted acts of any Australian government at any time. We didn't believe the British when they said they were going - not going to join the European Community. They mightn't have been deliberately lying to us, but if they weren't, they didn't know their own minds and we knew it better than they did.
It was of course Britain's entry into Europe that lent a certain urgency to the activities in Asia.
No, in a sense it wasn't. We were ahead of Britain. The Japanese trade treaty was signed years before Britain entered the Community. These were precautionary actions taken in anticipation of what Britain was going to do. The urgency was there in the government of the day long before Britain actually entered the Community. It's important to get the priorities and the order correct.
You were one of the voices in Australia that had a certain sympathy for Britain, although you saw that it would have negative effects on Australia, you understood that, you felt that Britain ought to go into Europe for its own sake.
Well for political reasons I thought they ought to, and in the end they did. Political more than economic reasons. But Britain has never been able to embrace the politics of Europe in a forthright and wholehearted fashion and while the trade and economic links of the Community are important, I don't think it's going to be possible to get political unity within the different countries of Europe. I mean in spite of all the framework that has been established, there has been no unity in Europe over Bosnia or the former Yugoslavia. The Germans have supported the Croats and did that long before the international community had decided that Yugoslavia should be broken up. So Germany more than any other country promoted the break up of Yugoslavia. And then of course, the French support the Serbs, the - or would like to - the Russians support the Serbs, they're all terrified of being entangled on different sides of a new Balkan crisis and therefore getting into conflict with each other. They don't have the capacity, it seems to me, to rise above the historic basis of these issues, which will enable them then to determine a European policy, because there isn't a European policy.
But you feel there should be?
Well it would be better if there were and it would be a safer world if there were and maybe a little more justice would have been done to Bosnian Muslims. But none of that's happened.
Now from Australia's point of view, when you were prime minister, you saw the need to develop close links with Asia and worked at that. In terms of Australia's general stance, one of the things that was being articulated more and more publicly and to some extent was something that had happened in the Whitlam years, was a clearer sense of Australia's independence to operate in the world. What did you do with that, with the whole question of Australia's independence in operating in international affairs.
Well, you know, I think that question is misbased. Australia has never lacked a sense of independence and I think it is only Australians with a massive inferiority complex who have ever felt that Australia is not independent and does not make its own decisions. If you want to go back to the pre-war years, it was Menzies as prime minister who wrote to our High Commissioner in London, Lord Bruce, [and] said in plain terms that the British do not understand Asia, in particular they do not understand Japan; we must make that our own special area of concern and interest to avoid the most terrible dangers. And the then government made up its mind to establish embassies both in Washington and in Tokyo at the same time. The decision in relation to Tokyo was overtaken by the war. But I think that shows that even a very friendly pro-British prime minister in Menzies well knew and understood that British interest in and concerns in Asia, were vastly deficient so far as Australia was concerned. And the idea that Australia has not had a sense of independence in its policies is again something that Labor governments in particular have liked to promote. Very often because they like to tie it to the republican issue. But it is not something that has been in the minds - a sense of independence - or dependence has not been in the minds of any post-war Australian government and it's just a nonsense to suggest that we have not been independent. People know very little of our constitutional history. And they know very little about forms of constitution compared to say, the Canadians and our founding fathers did have the benefit of the Canadian, the American, French, other constitutions in front of them when the Australian Federation was put together. Now the Canadians for example had to petition the House of Commons if they ever wanted to reform their own constitution or change it, or amend it. And it was Trudeau who persuaded the British to legislate in a way that gave that power to Canada, or back to Canada. But they gave it to Canada in a way which is probably incapable ever of being implemented. That's because of the restrictions placed on the power in the internal Canadian context. But the founding fathers of the Australian Constitution said, 'Well look, that's no good to us, we have our Constitution, but if we want to amend it we're not going to go back to the House of Commons. We want the capacity to amend it at will. But we don't want it easy. We want to make sure that there's a majority or there are a majority of Australians in favour of change, and therefore you need them, their vote.' - a majority of citizens and a majority of states. Again, something designed to protect the smaller states from the population majorities in Melbourne and Sydney. So from the earliest days we have been totally master of our own house. We have not had to refer to the British or to anyone else for any element of Australian policy. And to suggest that we have is just an absolute damn nonsense. It really is. And it really makes me angry when I see Australians suggesting that we are not, have not been independent, just because a prime minister goes to Indonesia, gets on his knees and kisses Indonesian soil and says, 'Now Australia is independent'. That's ludicrous.
So you didn't see establishing Australia as an independent entity in the world as a task you needed to perform because you felt that had already been achieved.
I didn't feel it. It is. It was. It is recognised as such by every country of Asia and by every country in the world and in the United Nations. Look, I don't know how ignorant of Australian history people can be. It was Australia acting as an independent country under Evatt as Foreign Minister who did much to promote the United Nations and often in ways that Britain and America did not like. It was Evatt as an Australian Foreign Minister who did much to bring forward and promote the independence of Indonesia in ways that the Dutch and consequently the British and the Americans did not like. You cannot find any element, any evidence of dependence in terms of Australia's foreign policy, certainly in the last 50 years. It's an absolute nonsense, and it's a piece of mythology that should not be allowed to persist.
So internationally, what did you see as your prime task?
Still to strengthen relationships with Asia because the history and cultures of Asian nations are so different from ours and Menzies in 1939 was entirely right, 'The British do not understand this. I don't think the Americans do. Other Europeans certainly do not'. I had an English prime minister saying to me once, 'Malcolm what sort of people are these Japanese? Do we have to take them seriously?' And I think that shows a depth of ignorance which is beyond belief.
Which prime minister was that?
That was James Callaghan, a Labour prime minister, and one would have thought that he'd know better. But it's a long way from Britain and their concerns are much narrower than they have ever been in the last two or three hundred years probably. But strengthening those ties on a continual basis is important, and with a number of Japanese prime ministers - Ahiro, Fukuda - we took a number of initiatives to make sure that that happened. We took the initial decisions which led to the formation of APEC by the Hawke government. If the initial decisions between Prime Minister Ahiro and myself had not been taken, which involved informal discussions between governments, business people and academics of the two countries, the later steps could never have been taken because we knew we had to drag along countries in ASEAN and other parts of Asia with us. It would have been much easier for Japan and Australia alone to take decisions but that, we knew we needed a broader objective than that. At that time youth exchanges between Australia and Japan were put in place and have continued ever since. When I was Education Minister I was the first Australian Education Minister to provide funds for the advancement of Asian languages and cultures in history in Australian schools, and I find the same policy being reannounced later as though it were a new initiative, 20 years after the event, 20 years after such programs had originally been put in place. Sure, if people want to provide more money for those areas, I'm delighted. But now as a consequence of that, Australia leads the world as a proportion of our population in the number of people who study Japanese and Chinese for example. And I think that's very important. But there still aren't enough Australian business people who can go to Japan and China and speak in their own language. They, when they come here, can always speak our language.
During the period that you were in office, what was the main thing you were trying to do with relations with the US?
Oh it depended on who was president. When President Ford was there, relationships were fairly stable. With President Carter, one of the first things we had to do was to make sure he didn't do a side deal with the Soviet Union, which would have made it impossible for the United States to keep her treaty commitments to us under ANZAS and there was a great risk that this was going to happen. And so we had to insist on consultation between ourselves and the Soviet - and, and the United States in relation to any treaty that the United States might have signed with Russia. But then of course, events moved on and President Carter got some good, hard lessons, about the way in which he could trust the Russians, or the Soviets. And at one point he said to me, 'But Malcolm, the President of the Soviet Union - the Chairman - lied to me, he lied to me!' And people have forgotten that it was President Carter who began America's defence build-up after he'd been in office two and a half years. He never got credit for it because he'd done so many other things which people didn't like. But this was during the period of the Russian invasion of Afghanistan. It's interesting that intelligence officers in at least four western countries had all the information on their desks before Christmas of that year, which would have led them to assume, if they'd read the information correctly, that the Soviet Union was going to invade Afghanistan. Not one of them read it, or interpreted it. Whether they'd already gone to Christmas holidays I don't know, but if they had and if the matter had been taken into the United Nations, the history of that period might have been quite different.
Out of all the things you did during the time that you were prime minister, is there any particular thing that you feel especially proud of?
Oh I suppose quite a number really, but there are different areas, so I don't know how you can compare them. We were the first government in the world to haul back on the excessive government expenditure and who really, putting it in a way that's, will not be typically accepted in Australia at the moment, to apply what Keynes would have advised in relation to the problems or economies in the middle 1970s. But we were pursuing policies of this kind long before Mr Reagan and long before Mrs Thatcher, and we did get our economy into order and at the end of my time there was no international debt of any consequence as far as Australia was concerned. That's a creation and a product of a later period. But then our social policies, family allowances, was a dramatic advance and change in terms of the way in which Australia dealt with its less well-off people and families who were in greater financial hardship. The changes to Aboriginal policy and the changes in the multicultural area, multicultural area in particular were world firsts. There was no other country in the world that was advanced in these areas as Australia has.
Where did you develop the ideas relating to multiculturalism?
Well, ideas pursued by government seldom come from just one source or one person. It generally emerges out of a process of discussion. I'd met, when I was responsible for immigration as a shadow minister in a period of opposition, I'd met a number of people in the Australian-Greek Welfare Association, people like George Pappadopoulos and others, and I'd met their counterparts in other parts of Australia and I was aware that there was a range of problems that government policies, as they were, were not addressing. And that the scattering of money around by the Whitlam government didn't really address the real issues at all. There was - I had an Australian-Greek on my staff, Petro Georgiou; Frank Galbally was also interested in these issues and so the policies would have grown and developed from a range of people, a range of concerns and experiences. You know, you don't suddenly wake up in the morning and say, 'I've got some ideas about multiculturalism', and put a policy down on paper. It's a question of evolution.
You felt pleased and proud of the way that you were handling the economy at a time when there was a drought and there were international economic problems to contend with and yet, in that situation you nevertheless lost the election in 1983. Why do you think that was?
I think we could have handled any two of the three problems we had - the drought, the wages explosions, which I really do believe was a deliberately designed act by ACTU President Hawke to damage a Liberal government. That wage policy was put in place in 1979 and it's that policy that the unions applied first through the metal trades, with great ferocity, and it was a question of strikes, and disruption to such an extent that firms were beginning to be put out of business. There was no responsibility in the ACTU in Mr Hawkes' time or certainly at the end of it.
You took a very ...
And - well let me - and also there was the second oil shock which - this in today's world is in the dim and distant past. But the three things, the drought, the wages explosion and the oil shock were really going to take their toll out of the economy in a major way and they did. I think any ... we had policies in place to address all of these issues and the fact that the economy grew very strongly in the latter part of 1983 and through 1984 indicates that we did have policies that would revive the Australian economy, because new policies, implemented by the new government wouldn't have any influence on the statistics for 18 months after their introduction. So that the growth in 83, 84 and the early part of '85 were not the result of Labor policies. They were results of policies already in place. The - but anyway, that's the way it happened.
Do you think that you would have lost against Hayden? Do you think that Hawke factor was as important as he thought it was?
Oh it might have been. I'm not sure and you know, one of the surprising things in this - I mean Bill Hayden said it first, by not fighting for his leadership in the Labor Party. Any previous leader would have.
And why do you think that was?
You'd have to ask him.
You didn't have a theory about it?
I guess what I'm asking is, were you expecting to win that election until that last minute switch of leader?
Oh I knew it was going to be tough. I really did. But Hawke had gained his popularity by criticising the Whitlam government very extensively and he was clearly going to be a tougher person to beat. You know, if I'd known that there was going to be that switch in leadership the sensible thing would have been to, all right, let Hawke get into the parliament and demonstrate that he's not really a very effective parliamentarian, which he never became. It wouldn't have been difficult to do that.
During the troubles with the unions which you felt were deliberately engineered, in order to destabilise your government ...
No not troubles in terms of trouble's sake. But I'm quite certain that the wages policy was foisted on the unions. I mean Hawke had to know that the policy was impossible. That it would do enormous damage, because the policy as stated in 1979 was going to add 25% to unit wage costs in Australia. Now anyone with any intelligence at all and Bob Hawke has some at least, must know that the economy can't stand that.
You adopted a very confrontationist approach to him during that period, over that wages policy. Do you think that if you had been less determined, less fierce in your opposition to it, that you might have been able to win the day or moderate it in some way?
Well what was confrontationist?
Well, you spoke very, very strongly against it and you - there was not an impression of any sort of attempt at conciliation with it.
Well, you know I don't think that was right. When Cliff Dolan was president of the ACTU and we were having discussions with the union movement, he said that he got a better hearing out of my government than he ever did out of the Whitlam government. We had extensive discussions with the union movement. But when you meet an ACTU president who's absolutely determined to press ahead with a policy that is totally irresponsible, what do you do? Do you say we'll take something that's half irresponsible? The Arbitration Commission agreed with us. They were making decisions that were quite different from the ACTU's policy but at the end of the day, in what, September-October 1981, Sir John Moore issued a statement saying he was making no more determinations because neither the unions nor employers, who were feeling prosperous at the time - they'd been making good profits, they'd been exporting, they'd been doing well - they felt they could give in. And major corporations were negotiating reduced working hours, while telling us that they weren't. It was certainly a difficult period, but I don't believe it was a time in which you - if the government hadn't tried to hold it up I think the - well I'm sure the union movement would have just swept over the industrial scene very much quicker.
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