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Western Mining Corporation Director discusses the company's drop in profits and international trade policies

ELLEN FANNING: The head of one of Australia's largest exporting corporations has, this afternoon, backed Dr Hewson's claim that the United States and Japan are squeezing us out of world trade. The Managing Director of Western Mining Corporation, Hugh Morgan, claims these trading giants are wrecking the rest of the world with their protectionist policies. Equally, however, Mr Morgan declined the opportunity, in this interview with P.M's Libby Price, to criticise Australian government policy as he has done so often in the past. He spoke to P.M. following the release of Western Mining's annual result which saw a drop in equity profit of more than 55 per cent, a result Hugh Morgan considers good in the light of such a weak world economy.

HUGH MORGAN: We certainly are continuing an investment program which, quite clearly, is a demonstration of faith that the products that we produce should position us well into the future, and so we view the 1994 period with much more confidence than we do the coming 12 months.

LIBBY PRICE: You did say earlier that you have, in the past, been critical of the Government, and yet, at the moment, surely the line being taken by the Prime Minister that we'll sit tight on interest rates would be of benefit to you.


LIBBY PRICE: So for once, you're actually quite happy with what they're doing?

HUGH MORGAN: I'm not happy. Well, there are some parts of the government policy which must be applauded. I think the Prime Minister has taken a position on, let's say, tariffs, and I think he's to be applauded for that. For my point of view, if I was - and thank God I'm not - running the government of the day, I do believe that you've got to look at your future, not as a risk undertaking, but you're a trustee. You're in charge of the assets of a whole community and you don't risk, and we have been risking, for some years, hoping that things would turn around.

LIBBY PRICE: But what of current policy? Are you happy with how the Government's reacting to the Australian dollar and pressure on it, particularly from the Opposition, claiming that interest rates will have to go up?

HUGH MORGAN: Well, those are short-term considerations. If one looks backwards, all I can see, month by month, year by year, is that we are accumulating substantial external debt, and the only way the community's going to pay for it is to increase their exports. And to be able to increase their exports, they have to be competitive with the rest of the world. They can't complain about the rest of the world. You just have to be competitive in it.

LIBBY PRICE: So if we can't complain about the rest of the world, would you then disagree with Dr Hewson's comments when he attacked Japan and the US saying we're frozen out of the market?

HUGH MORGAN: Oh, I think that's fair enough, in terms of trying to ensure that other people change their practices, but we are not going to influence the battles of the majors. We've got to position ourselves and be street smart and be very competitive.

LIBBY PRICE: We may not be able to influence, but you are one of our country's major exporters, a trader. Do you feel that the current relations with the US and Japan are affecting exporters such as Western Mining?

HUGH MORGAN: Yes, and that's why one should be very supportive of the Government's position on the GATT round. The general agreement on trade and tariffs is something that the Australian Government has consistently played a very active role in seeking to bring about reforms - one which should be applauded.

LIBBY PRICE: So should one, in the same breath, also be supportive of Dr Hewson in criticising the US and Japan?

HUGH MORGAN: Well, the criticism of the majors is that they have got themselves into a brawl between elephants and, therefore, it's appropriate for those people who get squashed in between, from time to time, to make themselves noticed, and say: Hey boys, you're wrecking the rest of the world. There's no doubt that all of the policies that run against the objectives of GATT are going to hurt a country like Australia, other small countries as well, like Australia, and therefore, a call for the major countries to behave themselves is well-placed.

On the other hand, it must be devastating to each of the majors, as they brawl with each other, and so the President, I guess, is sick and tired of the common market agricultural policy and what it does to Australian farmers, what it does to his own farmers, and responds with muscle. You know, it's a brawl. And likewise, the Japanese have policies which deny access to their markets.

LIBBY PRICE: Should we be brawling back, though?

HUGH MORGAN: Well, we're not in a position to brawl, let me tell you. We're so small we've got to be very polite and position ourselves street smart. That's the best I can say.

ELLEN FANNING: Hugh Morgan, from Western Mining Corporation.