Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Transcript of Interview with Peter Martin:'The World Today': 3 September 1993: Fall in the Australian dollar



Download PDFDownload PDF

Leader o f the Opposition

3 September 1993 REF: TRANSCR\WH\DT\039

TRANSCRIPT OF RADIO INTERVIEW JOHN HEWSON MR THE WORLD TODAY, PETER MARTIN

E & Ο E - PROOF COPY ONLY

SUBJECTS: Fall in the Australian dollar

Martin:

John Hewson what makes you say that the Budget is to blame. We heard earlier from someone in the foreign exchange market that commodity prices were the trigger at least for today's fall?

Well I have no doubt that factors like commodity prices have a big impact and I think that if you look at the Budget documents, the Budget documents were pretty optimistic about world growth and particularly domestic growth and I think the weakness of commodity prices is just another way of throwing pressure back on

peoples1 assessments of the Budget, and they see that you know this Budget's left us particularly exposed. It was an attempt to be a political document not an economic, document. It didn't in any sense set out to solve our economic problems and it's left us particularly vulnerable to further deteriorations in the world economy in things like commodity prices. It all comes together. There's no doubt that since the Budget was brought down there's been downward pressure on the currency the reserve bank's been intervening to prop it up and as time has gone by the full extent of the of the fact that the Budget is a dud has been recognised and that's obviously playing into the

markets assessments as well.

Is it what's happening with the Senate and with the Opposition threatening to hold up parts of it. Is that part of the uncertain message which is being sent to investors overseas?

Hewson:

Martin:

Parliament House. Canberra. A.C.T. 2600 Phone 277 4022

REF: TRANSCR\WH\DT\039 2.

Hewson:

No I mean there's uncertainty because the government delivered a dud. I mean the Government has delivered a grossly irresponsible Budget in economic terms. It's one that didn't face economic reality. As I say it was a political document designed to minimise the political damage that they'd done to themselves by lying through the last

election, ...

Martin:

But if i t .. sorry... if it's not that dispute with the Senate what is it particularly about the Budget which is causing concern overseas?

Hewson:

The underlying factor is that it's not a Budget that solves our economic problems in fact it says quite explicitly, unemployment doesn't improve, debt will get worse, inflation will get worse, interest rates will under upward pressure. I mean it's one that does not face reality, and in that sense the ... it is increasingly going to be seen by financial

markets and others for the extent to which it fails to address those problems.

Martin:

Are the markets right to be selling the dollar?

Hewson:

Well I don't make those judgments but it hasn't surprised us that since the election ... since the Budget, I'm sorry, there's been downward pressure on the dollar.

Martin:

You expected the Australian dollar to be lower, do you expect it to be lower still?

Hewson:

I thought market reaction to the currency, sorry, market reaction to the Budget would increasingly be negative, I think markets are getting increasingly apprehensive at the extent to which this Government's out of control, and the Prime Minister's own performances this week have shown just how out of control he is personally, and how can one who is so out of control pull his Treasurer back into control and the Budget

is going to be increasingly exposed as a Government... as a failure as an irresponsible Budget in economic terms and that will bring its financial market responses.

REF: TRANSCR\WH\DT\039 3.

Martin:

Do you expect still more negative reaction?

Hewson:

Look I am not predicting negative reaction, I just think that over time the uncertainty about this Budget will grow because you know they're no closer today to delivering the Budget than they were the night they brought it down, in fact they're further away and you know we've been suggesting that they go back and do it again. They're going to have a break in Parliament in the next couple of weeks, bring back a new

Budget.

Martin:

And do you believe that the uncertainty will continue to unravel and that there will be continuing pressure on the Australian dollar as a result of what's happening?

Hewson:

I think the inadequacies of this Budget will be increasingly exposed and that will bring with it uncertainty. Financial markets react of course to a lot of other factors as you've said but the increasing unease in the community about the Budget, the increasing evidence that it doesn't address our economic problems and that the Government is

really not able to put a Budget in place, it's all going to be part of the uncertainty that will grow... yes.

Martin:

John Hewson, thankyou very much.