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BHP Chairman, Sir Arvi Parbo, says Australia has lost touch with the reality of economic growth as the linchpin of social wellbeing

PAUL MURPHY: Australia's biggest company BHP, while performing well, is certain to be affected by the less favourable conditions. The Chairperson, Sir Arvi Parbo, told shareholders at the annual general meeting in Sydney, not to expect a repeat of last financial year's impressive performance. He also claimed Australia had lost touch with the reality that economic growth is the linchpin of our social wellbeing. Managing Director, John Prescott, explains Arvi's comments to Phillip Lasker.

JOHN PRESCOTT: Well, I think we're seeing too much focus on a whole range of other issues, without those issues in fact, being properly addressed, and what Sir Arvi meant was that the base for economic prosperity and for the standard of living of all Australians depends so much on our ability to grow, and to develop wealth in this nation, so that it can be shared around.

PHILLIP LASKER: So are the greenies highjacking the debate, are they?

JOHN PRESCOTT: Well, I think it's not just the greenies, but various interest groups are highjacking the debate and we've seen many frustrations to potential projects in Australia from the greens, from Aboriginal interest groups, and from many other people, and what we at BHP would like to see, is those groups required to establish their position in an objective way.

PHILLIP LASKER: Can you see any evidence that the Government is changing its priorities, that they are ready to adopt a more favourable approach to investment projects?

JOHN PRESCOTT: I don't think there's any hard evidence of that at the present time, but there clearly are indications that the Government is addressing the ecologically sustainable development subject matter earnestly and there have been some signs from Ministers, certain Ministers, that the Government will address some of these development issues in a more favourable way.

PHILLIP LASKER: How long to we have?

JOHN PRESCOTT: Well, I think we're already too late in some respects. We've got a major balance of payments crisis; nobody any longer argues that we've an external debt that's too high. We have a problem with our savings, we're importing too much capital, relative to what we're saving at home. In that respect I think the Government has done a job in reducing inflation and I think that's extremely important, and it must be sustained.

PHILLIP LASKER: What about the Australian dollar. Obviously you'd like to see it much lower?

JOHN PRESCOTT: Certainly, in a short term I'd like to see it much lower, because I think the evidence is that it can't be sustained competitively at its present level. In the longer term I'd be quite happy to see it higher, provided that the performance of the Australian economy justifies it.

PHILLIP LASKER: Where should the Australian dollar be?

JOHN PRESCOTT: I don't think you can put a figure on it, but it's much lower than it is today.

PHILLIP LASKER: The Government says the Australian dollar is at its value, because the market is showing some confidence in the Australian economy in the way its run.

JOHN PRESCOTT: Well, I think that ignores the fact that the Australian dollar is the fifth or sixth most highly traded currency in the world and that's disproportionate to our place in the world economy, and I think it reflects the fact that people speculate in the Australian dollar and the value of the dollar is not driven by the underlying depth of the Australian economy so much as it is driven by people speculating the dollar.

PAUL MURPHY: BHP's John Prescott with Phil Lasker.