Fax from 3 Iit 321UrL a reJ
, MAY 26 ' 97 10: 42 P. 3
PRIME MINISTER
24 May 1997 ADDRESS BY THE PRIME MINISTER
THE HON JOHN HOWARD NIP
ENE* RtL-* NEETING-OF'NSW STATE-COUNCILI
It is as always a great delight for me to be with you this morning to say a few words
about the Federal political scene and to share wvith you a very important theme as we
approach the half way point of our first term in Government, And that is the theme of
keeping faith. And this morning I want to develop with you the way ii which the
Coalition Government has kept faith with the people who voted for it, how we have
kept faith with the interests of the Australian community and how we have kept faith
with the long term goals that we, as the Liberal Party, have.
When we were elected in March of last year it was rightly said that there were many
people who voted for us on that occasion who had never previously done so. And that
one of our prime responsibilities was to keep faith with those people commonly
called, often called, the battlers of Australia.
Ladies and gentlemen, one of the biggest problems that we inherited when we became
the Government of Australia in March of last year was, of course, the appalling state of
the budget deficit. I said then, and this is true, that there were sonic features of the
Australian economy that wvere good, that there were some that were bad and there
were some that were very bad. And one of them that wvas very bad was the fact that
we inherited a budget deficit of $ 10.5 billion. In the last financial year that the
KeatinglBeazley government was in power the national debt of Australia that's the
total of all the debts run up by governments in the past had risen to almost twenty per
cent of the total wealth generated on an annual basis by the entire Australian
community. And I am very proud to say that at the end of our first term in
Government, we will have turned that $ 10.5 billion deficit into a surplus of $ 1.6 billion.
Ane Afl 4 0 r3 fl.. 4
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Now it's not the most exciting thing in the world to talk about, it's not the only thing
in the world to talk about, but it's pretty fuandamental because if you are going broke, if
you are not paying your way, if you are borrowing on the backs of your children's
future, which is what previous governments had done, then you don't have many
options and you don't have much of a capacity to do anything else. But in the coming
financial year. 1997/ 98, my Government will repay $ 5.3 billion of Paul Keating's debts
and I am very proud indeed to be able to say that.
I'm very proud to-be able-to say that we-won't be-going into the financial markets in
1997/ 98 to borrowv anything because there will be no borrowing requirement by the
Commonwealth. And what, of course, that means is that we are laying the foundation
for a stronger and more prosperous and a faster growing future for all of the Australian
c o mmun ity.
So the first news, and the really good news about the Budget brought down two weeks
ago, is -thatit-has kept faith-with our ffundamental responsibility to-repair the budget, to
repair the national accounts of Australia and to make certain that once again this
country is able to pay its wvay, and Ae make no apology at all for having given it such
an enormous priority. But it's not just something that makes you feel good but it's
something that delivers hard and credible and strong gains and strong rewards and
strong benefits. There can be no doubt at a in my mind and there can be no doubt at
all in the minds of any fair observer but if it hadn't been for the deficit cutting policies
of my Government, we would have not have seen a two per cent reduction in interest
rates since we came to power in March of last year.
Those who created the problem, that's Mr Beazley and Mr Evans, can crow all they
like about how it would have happened anyway, and it's all the result of something
else. The brutal reality is that because we are not borrowing and in fact in paying debt,
there's greater room for the Reserve Bank to do what it did yesterday. And once
again we are keeping faith with the battlers. Delivering interest rate cuts which on an
average housing loan have been worth $ 225 a month, that's over $ 50 a week let me
repeat over $ 50 a week added to your disposable income, after tax, to the average
wage and salary earner. I can't think of a greater delivery on the commitment we
made to the battlers of Australia in March of last year than to be able to deliver that
kind of reward for their support, for their wage restraint, and for the fiscal policies of
the Howard Government.
So ladies and gentleman there is a great message in yesterday's interest rate reduction.
And that message is that there are rewards for wage restraint. It's much better for a
wage and salary earner in Australia to show wage restraint and get an interest rate cut
on a housing loan, than it is to lack wage moderation and to have the high wages
consurned by the progressive taxation system and higher interest rates.
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The strongest possible message that should go to the wage and salary earners of
Australia is that if you continue to show wage restraint you'll get fuirther interest rate
relief. That's the message that ought to go to the wage and salary earners of Australia.
Good on you for showing wage restraint. Good on you for being part of a combined
effort to tackle the economic problems of Australia. And there is a reward at the end
of the road and that reward is lower interest rates. And it is worth far more than a
wage increase, far more every time. And I think that is a reality that has dawned on a
large number of people in Australia. It is perhaps the reality that terrifies our political
opponents but it gives happiness and satisfaction to the battlers of Austraia and to
middle Australia, because they deserve rewards. I mean let us -not forget that we -still
have very high real interest rates in this country. They may have come down, but when
you've got an inflation rate of two per cent they ought to come down and there ought
to be a reward. And that is what I think the wage and salary earners of Australia have
received over the last fourteen months, and that is why they know that we have kept
We weren't elected to government to ignore the mainstream of the Australian
community and we have kept faith with that mainstream. And the budget that Peter
Costello delivered the week before last did the job on deficit reduction. It also, or the
first time since Federation, delivered something that, year after year, people have asked
me: " Why can't we have in Australia and that is an across-the-board tax incentive for
savings?" I have lost count of the number of meetings I've been to, I've lost count of
the number of resolutions that have been passed by Liberal Party gatherings calling for
a savings break. Those innumerable occasions when I've sort of been pinned against
the wall by an irate branch member who said: " Why is it that we are taxed twice on
savings, why is it that we pay income tax on our income and then we put what's left
over into some investment and wve're taxed on the return for that investment. Why is
it?" Well it's a good question. I was never able to answer it. But I always said, well
you know, good idea, good point, take it on board. And all the other sort of excuses
you're left with when you don't have an answer. You've all heard it, probably every
one otf you has had the conversation with me. I feel like it after twenty two years.
But at long last we're able to do something about it. And quite unapologetically it is
non means tested. Cheryl Kernot wants to put a means test at $ 35,000 on it. And
extraordinarily enough I am getting criticised for breaking a promise because the
savings initiative we brought in in the budget is more generous than what we promised
during the election campaign. Now this is the new ALP and from some sections of
the Australian media definition of a broken promise. If you deliver more than you
promise you have broken your promise.
So in other words, ladies and gentleman, be on notice from now on, if wve do in any
area more than what we said we were going to do, you can bet your bottom dollar that
sonme of those smart alecs will be on our backs, saying-, " Oh there they go again,
dishonouring their promises."
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I'm proud of the fact that I over delivered on my savings tax promise. I'm proud of
the fact that I've over delivered on the capital gains tax concession for small business.
And that's another group in the community with whom we have well and truly kept
faith, and that is the small business community. I said during the election campaign
that providing incentives to small business so that they could generate more jobs was
one of the great goals of a Coalition government. And we've kept faith with all of the
promises we made. We delivered the relief in relation to provisional tax.
From tile first of July this year, every small business operator in Australia will be able
to. sell. his-or-her business and -thirty-per cent, let me say, of new small businesses
being established in Australia now are owvned and operated by women. And I say that
very advisedly because it's one of the great growth areas of the Australian economy
where the influence of the women in our community is being~ increasingly felt. And
from the first of July this year, any person who sells a small business, whether it's
operatedthrougha-compay, a-partnership-or a-tru-st or whatever, will bec able-to invest
the proceeds of the sale of that business into any other kind of business. It do esn't
have to be the same, or anything like it. You can go from being a bookmaker to a
software operator, whatever you like. Doesn't matter what the combination is. You
can invest up to $ Sniillioii out of the proceeds of the sale of that business without being
liable for a cent of capital gains tax. Now that represents an over-delivery of a promise
and it represents a massiv'e new incentive for people to put their money into small
business. We've also changed the industrial relations Jaws to help small business. We made
major changes to Laurie Brereton's unfair dismissal law. And we had those changes
contained in the industrial relations amendments. And then six weeks ago when I
announced my small business response to the Bell Report, we went a step further in
relation to unfair dismissal. We said that any firm in Australia that employed fewer
than fifteen people would be completely exempt completely and utterly exempt from
any kind of unfair dismissal law in relation to a person who had been employed for less
than one year.
Those of you in the audience who run small businesses will know that if you could feel
that you can put somnebody on for a trial for up to a year, and if it didn't work out you
could let them know without ending up in the industrial relations commission, at the
end of a fairly modest claim like $ 15,000 or $ 20,000, modest it may be for the claimant
but crippling for you if you're starting a new business then you might be inclined to
take the person on. And that was our thinking it's a pretty reasonable proposition
and we brought down a regulation to give effect to it but predictably perhaps the
Labor Party and the Australian Democrats and Senator Harradine have said they're
going to vote to disallow it. They're going to vote to stop us giving small business in
Australia a greater incentive to take on people, particularly young people. Because thle
truth is that we will only substantially reduce unemployment in this country if we can
get the small firms that employ three or four people to employing four or five or six
that's how you're going to reduce unemployment in Australia. You won't reduce
unemployment by looking to the big companies. They're all down-sizing. You'll
reduce unemployment in this country by taking the shackles off small business, and one
of the ways you take shackles off smiall business is to take away the intirniidatorv effect
of unfair dismissal laws.
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It is as plain as the proverbial nose on one's face, yet sure enough echoing the
instructions of the trade union movement of Australia who told the Labor Patty they
couldn't support it. Two weeks the federal Parliamentary Caucus said it was going to
vote to disallow the regulations. And the Trade Union movement of Australia, what a
sorry group. I mean, if you think of the last 14 months, what's the most vivid memory
of the Trade Union movement of Australia trying the bash down the door of
Parliament House on the evening of the Feder-al Budget after having heard an
inflammatory speech from the President of the ACTU and the Secretary of the ACTU.
And -who -was-oDn the plat-form with them butnone other then the Leader of the Federal
Opposition. The fact of the matter is that they contribute nothing to the public debate about
employment. They contribute nothing to the public debate about Australia's economic
-future.. The Trade-Union -movement-in. Australia at the present time is locked into-n
introspective, backward looking attitude towards protecting what they have rather than
trying to build and grow the strength of the Australian economy, and their attitude to
unfair dismissal laws is evidence of that,
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Ladies and gentlemen wve have kept faith. We've kept faith with our families of
Australia. We introduced on time. without deduction, in fulll the $ 1 billion family tax
initiative from the first of January with greater equity to families with young children,
particularly those living on one income.
On 1 July this year we will again keep faith with the families of Australia by delivering
in fll, on time, without deduction the $ 600 million tax incentive scheme encouraging
people to maintain or take out private health insurance.
And.. what-a shame is that-our predecessors, what a crying -shame it is that our
predecessors hadn't acted in this area years ago. If something~ like this had been
introduced in the early 1990s we wvould nowv have 40 per cent of the Australian
population with private health insurance, instead of 34 per cent and they were told in
the early 1990s by the ANIA, they were told by the then Minister, they were told by
everybody-who-hac4any. understading of what private, health. insurance wa-al. about
that unless you provided an incentive, unless you put a floor under the fall in private
health' insurance, it would gather momentum and run the risk of becoming a selffulfilling
prophecy. And now you have the deplorable situation wvhere even sections of
the current leadership of the AMA are denigrating private health insurance.
We have inherited a very parlous situation in this area. I believe that the private health
initiatives that come into operation on the first of July will staunch the deterioration in
this area. They will put a line under the fall and over time they will lead to more
people taking out private health insurance. But we are certainly late in the game
because of the inactivity, the indolence, the ideological hostility to private health
insurance of the former federal Labor Government.
But we will keep faith in that area. We will also keep faith with the retired people....
We promised that we would put them on the same footing as pensioners in relation to
the tax free rebate and by the end of our term, first term in government, that will have
occurred. . And the savings initiatives will be of enormous benefit to self funded retirees arnd let
me say to them that it wvill be of enormous benefit if it is non-means tested.
And attempts to means test it, particularly of the type proposed by Cheryl Kernot,
show a complete misunderstanding, a complete misunderstanding of the situation and
the needs of self-funded retired people in Australia and they completely ignore the facts
that although interest rate reductions are of great benefit to small business, to home
buyers, to battlers who have young families to bring up, they're not all enjoyed for selffunded
retirees.
I know that. My Government knows that. My colleagues know that. And that is wvhy
we have a non-means tested savings rebate. That is why we have a tax incentive for
private health insurance. That is why we brought in a tax rebate for self funded
retirees and that is why we will always follow policies that keep faith with self-fuinded
retirees.
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-MA4Y 26 ' 97 10: 45 P. 9
But just remember who doesn't know that. Just remember that Cheryl Kernot and
Kim Beazley want to means test it. Just remember that they are opposed to the health
insurance rebate, Just remember that when they were in Government for 13 years they
hit the self fUnded retirees in the eye by treating them in a very discriminating fashion.
Once again, my friends, this is an area where we have kept faith with the people who
supported us and kept faith with the Australian community.
It remains the fact, ladies and gentlemen, that unemployment in Australia is still
unacceptably high. As always. unemployment is the. last of the indicators to come -Sood
ater a deep recession. We have made major changes to the industrial relations systemn
which over time because of their greater flexibility, their greater focus on wvorkplace
agreements, their rejection of the compulsory role of trade unions, will produce freer,
more flexible workplaces and ' will add to job creation.
It is also true, ladies and gentlemen, that you cannot hope for a sustained fall in
unemployment until we have a sustained and higher level of economic growth.
The great problem that this country has had year after year is that it has never been
able to run the economy at a high level of economic growth for a long period of time
without something going wrong and the shutters had to be brought down to stop the
current account blowing out or inflation going through the roof.
And we have had these major breaks on the rate of economic growth. We've had
these road humps along the path to sustained economic growth and we are starting to
see daylight on that front.
We are now in an era of very lowv inflation. We now have interest rates that are at pre-
Whitlam levels. We haven't had housing interest rates where they are at the present
time since the late 1 960s and it is an extraordinary achievement and it has a long term
significance if we can maintain it for the strength and stability of middle Australia. It is
v'ery important to their psychology. It is very important to the outlook for average
AustralIan families.
We have begun to tackle the structural impediments to Australian labour markets and
we have gone a long way down that path although there is further distance to be
travelled. We have fundamentally tackled the problem of the structural budget deficit. We are
not just relying on asset sales for a transient improvement in the Budget deficit. We
have made long term improvements to the budget deficit,
And by the turn of the century spending levels, as a proportion of national wealth
generated each year in this country, % ill be at the sort of levels they were in the early
1970s. And to go further than that will, of course, be to threaten the fundamentals of
the social security safety net which we will not do or to threaten such fundamental
areas as a necessary level of defence expenditure.
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And on that point, ladies and gentlemen, and on the question of keeping faith, let me
say another thing of which I am particularly proud, is that my Government has kept
Cith with its commitment to maintain the level of defence expenditure.
I know it is fashionable in some corners to say you don't need any defence
commitment now that the Cold War is over. I know it is fashionable in some circles to
say that there is a never ending, bottomless pit called the peace dividend and you can
keep on cutting and cutting and cutting defence expenditure.
Well, -that -is. a very misguided notion. I mean, our-levels of-defence expenditure now
are at historically low levels and it would be nothing short of a repudiation of our
responsibilities as a Government to cut them even fuarther. And that is why we have
quarantined them from expenditure reductions. At the same time we are going to
achieve a major shift in the emphasis of defence expenditure away from what I might
loosely.-call offialdem towa~ s-those men -and women. in the firont-ine
So, ladies and gentlemen we have kept faith on all fronts. We have kept faith with our
responsibility to repair tile economy of Australia. We have kept faith with small
business. We have kept faith with families. We have kept faith with self fuinded
retirees and very importantly we have kept faith with the battlers of Australia who
deserted the Australian Labor Party in droves in Mlarch of last year and the latest and
most dramatic piece of evidence was the interest Tate reduction that occurred
yesterday. And let me say in relation to that that the major banks of Australia carry a very heavy
responsibility in the interest of their customers and the interest of Australian
community to pass on in full and without reduction and without the delay the fall
measure of the official interest rate reduction.
Let me make it clear, ladies and gentlemen, I am no bank-basher, I never have been, I
understand the role of banks in the Australian financial system. I inaugurated a
landmark inquiry that led to the deregulation of the Australian financial system. I
supported the introduction of foreign banks into Australia. I continue to support tile
further deregulation of the banking system but it's pretty hard to believe that we have a
highly competitive banking system at the present time, when there can be delays of the
kind that we are apparently about to witness in the passing on of reductions in official
interest rates and those who argue that there are adequate levels of competition at the
present time might have a bit of explaining to do if that apparent tardiness in passing
on those increases actually occurs.
So, let me say again that it is in the national interest that those reductions be passed on
quickly and in full. The battlers of Australian who have waited a long time for their
reward and they are entitled to have it on time without delay and without reduction.
Finally, ladies and gentlemen, can I say something, you'd be disappointed if I didn't.
Can I say something about our political opponents .( interjection). . no, I'm a
charitable man.
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Can I say something about this marveilous thing called privatisation. I had a talk to
Peter Collins about this yesterday. Very interesting thing privatisation. That was the
thing that way back in the mid 1 980s I started advocating when I was first Leader of
the Opposition and the Labor Party said: oh dreadlial.
With their hand on their heart they said we would never privatise Qantas. We would
never privatise it was then Trans Australian Airlines. But, of course, the
Commonwealth Bank. I mean, the sweetest fruit of all of the tree of Barcaldine the
Commonwealth Bank. How could you ever privatise the Commonwealth Bank? Sure
enough that!' s what they said when we. were advocating it. Then they win. an election
in 1987 and Bob Hawke says: oh well, we'd better have another look at it.
So they did. They had another look at it. And then they started to privatise Qantas and
Trans Australia Airlines and then you camne to the 1990 election and we had a policy of
-privatising. the. CommnmwealiBank, and Paul -Keating-said oh, . nov-he said, what's
this, he said I'll write to them all, So he wrote to every single member of the
Commonwealth Bank Employees Association saying that it was a solemn commitment,
a solemn commitment this one, a solemn commitment of the Australian Labor Party
that it would never sell shares in the Commonwealth Bank. They even put out a
prospectus after they decided to sell half of it, saying they didn't sell the other half
I mean, if the provisions of the Companies Act was applied Ralph Willis would have
been in the slammer as a result of that.
But no, they ended up and of course the crowning glory of it all was that Beazley had
to come running to us before the 1993 Budget to guarantee our support in the Senate
if they went ahead wvith the sale of it.
I mean, we were consistent, we were policy consistent. We have always argued that
Governments have no business running commercial undertakings. And we have been
arguing it for years, we have been arguing it without alteration. But, of course, I
thought the hypocrisy had sort of scaled Himalayan heights in relation to the sale of the
Commonwealth Bank but then of course we come to Telstra.
We comle to dear Teistra. At the last election we said we would sell one third of it and
I said then and Mr Egan and Mr Carr here in New South Wales have delivered proof
positive of what I've said wvas right. But the real difference on privatisation between
myself and the Labor Party at the last election wvas that if they won the election they
were going to sell the lot having promised not to sell any of it, but if we won the
election we would sell a third, precisely what we said before the election we were
going to sell. And what Carr and Egan are proposing to do here in New South Wales,
which is, of course, a direct steal of the policies of the Coalition here in New South
Wales. But I have always said, and I said it again to Peter Collins yesterday, in politics
as in life, imitation Is the sincerest form of flattery.
They've decided to do something that federally they did when they were in
Government yet hypocritically they promised not to do when they were in Opposition.
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Time and time again the Labor Party has gone to the Australian people, be it here in
New South Wales, be it federally, be it anywhere in Australia and have said: We will
never sell any of the jewels in Labor crown. We will never sell any of these great
Australian assets, that Ben Chifley and Eddie Ward would roll in their graves if they
thought any of these assets were being sold and yet when they get into office they
relentlessly say: We need the money, so let's sell, sell the assets.
It is a bankrupt, hopeless, hypocritical policy. They believe in nothing, they stand for
nothing. And they demonstrate by that kind of blanket searing hypocrisy why they are
no-longer-the. government of Australia-and why-they are held in such low-esteem as the
Government of this State.
Ladies and gentlemen, Michael said at the beginning that the last three months marked
the end of the honeymoon. Well, let me say I've always thought that the basis of a
long-and stable and. happy marriage is a.. very long and. happy. honeymoon.-.......
We had a very long and happy honeymoon as a Government and I can'tellyou we are
going to have a very long and stable marriage with the Australian people.
Thank you
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Q A Session:
Question: Prime Minister wvould you consider provided funds from the
Commonwealth Government for the screening of prostate cancer which is prevalent in
men, particularly over 50 years. This disease is more common in men than breast
cancer in women and if left undetected can result in death. I understand that this
screening is supported by the.. Association in New South Wales.
Prime Minister: I was briefly associated with the launch of a video on prostate
-cancer. put-tege# 4ieriby the. Department of Veterans Affairs and-I do think it is an.-illness
which should be talked about with the same degree openness and the same
acknowledgment of the threat that it poses to the health of men and breast cancer and
other forms of cancer it talks about in relation to the health of women.
1 wiR -consider what-yotu ve-put4o me-and-willtalk , to-Mike Wooldt-idge a-beut--it*
Question: Prime Minister thank you very much, it was an inspiring speech. I have a
question. Is it possible for you to take out time on television and make that sort of
speech to the Australian people who regrettably, every time I see you on television
You're being asked some ridiculous question about something of really no great
interest to people other than journos. If you could really take time out to make that
sort of speech to the Australian people ( inaudible) I don't believe they do.
Prime Minister: .( Inaudible)..
Question: I am speaking to you this morning as a six generation citizen of the city of
Newcastle, I am pleased to hear your affirmation of faith of battlers.
This week there couldn't have been a more miserable Or embattled city in the whole of
Australia from what we felt in Newcastle. BEI has confirmed that it will withdraw
from Newcastle and we are in a situation where we wvill be losing very shortly 2,500
jobs from the current skilled workforce. The question is, Prime Minister. we are
looking at a situation where the best remedy of loss of workforce would be with
( inaudible) steel... Can You give us a pledge of your assistance to the steel workers in
Newcastle today?
Prime Minister; Well, can I just say a couple of things in relation to the BHP I
have said that we will match the offer made by the New South Wales Government of
assistance. We think that the way it was proposed was kneejerk, fairly superficial.
We think that there are better ways of spending the resources. We'll also look to
BHP for a great contribution than was involved in the New South Wales proposal.
We think that B HP should match the contributions to the Governments and we will
certainly work to that end. I don't ( inaudible) deliberately, but I think it's a fact of life.
Next Thursday, at their request, I will meet a delegation of steel workers. They're not
being filtered through the ACTU, they're coming to see me direct. And, a number of
my Ministers have been to Newcastle already and I intend to also go to Newcastle
sometime within the next few weeks. I haven't picked a particular day. There's no
point in going there just for show, I want to talk to the steelworkers, I want to talk to
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MAY 26 ' 97 10: 48 P. 14
the Civic leaders, I want to talk to the Chamber of Commerce and the elected
representatives of both political persuasions.
Of course, we have a Newcastle-based ( inaudible) Bob Hawke, this idea that
Newcastle/ Hunter is a Labor area, is quite wrong, it is not. It's a mixed political area
and we should try to tackle this in a non-political fashion.
Simon Crean, I trust, believes that ( inaudible)
It won.' t-be quite as devastating now-as it would -have been ten or fifteen. years ago,
because there has been a diversification. But Newcastle is a symbol of industrial
Australia. I understand that. And I understand the psychological impact of it. am not
unfamiliar with Newcastle. I have, through my wife, I have family connections with
the area ( inaudible)
( inaudible) can I just make one thing perfectly clear, it wouldn't have been any
different. If the Labor Party had won the last Federal election, BlIP would still be
closing down. Can I make that very clear they're now running around saying that if
we'd been in power it would have been different ( inaudible). I mean while they were
in power, BHP's payroll went from 56,000 to 24,000. ( inaudible)
But I am very sympathetic with the area. I know the psychological impact of what has
happened. We will match the New South Wales Government's offer. We will
encourage the company to match the contributions of the two governments and we will
see that what resources we put into it are all wisely spent. I've sent a number of
Ministers there already. I'll be going there again sometime in the next few weeks and
I'll be seeing ( inaudible) next Thursday unhindered by the ACTU.
Question: Is the next Budget likely to be showing more of these incentives ( inaudible)
and are tax cuts likely. ( inaudible). Also, just another question, ( inaudible)..
Prime Minister-( inaudible) well, I don't know that I want to speculate about next
year's Budget. But as I often say when I'm being interviewed, if I can get a wvord ill
with some of themn. I often say ( inaudible) always expect a few surprises. and I think
one of the things that people should understand is that we are about sensible reform
and sensible change, there's been a bit of debate about taxation over the last week, and
can I just repeat that if you're thinking about taxation reform in this country you've
got to ask yourself three questions. The first question is will it help create more jobs?
And the second question is will it make Australia more competitive, and the third
question is will it lift the living standards of the Australian people? So they're the three
benchmarks against which we will assess any changes we make in relation to the
taxation system. And the reason why we brought in the savings initiative is that I'm a
great believer in incentives. You can change ( inaudible) if you give people the right
incentive. And in giving people the incentive to save is a great gift. And what we've
done is tackled the savings problem on two fronts. By reducing the deficit we're
tackling public savings, and by giving people tax incentives we're encouraging private
savings. When the two things wvork together they complement each other and that
really is what a good sa~ rings policy is all about.