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To my friend and colleague Richard Court, to Mr Peter Middleton,
my other state and federal parliamentary colleagues, ladies and
gentlemen.
As always it's a huge delight to be in Western Australia.
And as always as Prime Minister of the Commonwealth of Australia,
I acknowledge very genuinely the immense contribution, particularly
at this time, because of the importance of export income to Australia,
I acknowledge the tremendous contribution of the State of Western
Australia to Australia's aggregate national wealth. And I particularly
acknowledge the leadership over decades that has been displayed
by coalition governments in relation to the development of the resource
sector of Western Australia. And the announcement to which Richard
referred a few moments ago is yet the latest in a long list of resource
projects which if they had not been developed and there had not
been the visionary leadership in this state on our side of politics
to develop, the Australian nation today would be the poorer and
all of its citizens would be more vulnerable to the uncertainties
of a hostile global economy.
Ladies and gentlemen there are a number of reasons why it's
always a delight to be in Western Australia and why it's important
as Prime Minister of the entire country that one regularly visits
every part of the Commonwealth. One of the reasons of course as
many of you will remember is that my predecessor systematically
insulted the State of Western Australia by going for a period of
I think of almost twelve months between visits. And one of the things
that I resolved to do when I became Prime Minister was to visit
this State on a very regular basis to meet the business community,
to hear their concerns, to take their advice - or at least listen
to it - and sometimes to take it. And to meet the people of Western
Australia. And also if I had any spare time to do the odd bit of
campaigning for my federal colleagues who hold such a high proportion
of the seats in this State.
I want today to say something about the economic fundamentals of
Australia. For reasons you will understand I am not going to explore
future levels of anything. But I am going to say something about
the fundamentals of the Australian economy because it's very
important we understand how strong our economy really is. And when
I make the claim and when Peter Costello makes the claim that our
economic foundations are stronger now than they have been for twenty
five years that is no idle piece of political rhetoric.
We do have the lowest inflation rate in the western world. We do
have a strong level of business investment. We do have a situation
where, having inherited a budget deficit courtesy of Mr Beazley
of $10.5billion, in just two years in three Budgets we have turned
that into a surplus of $2.7billion. And I take the opportunity of
congratulating Peter Costello as my Treasurer for the excellent
job that he's done in the economic management of Australia.
Ladies and gentlemen some people at the moment are making comparisons
between Australia now and Australia in 1986 when my predecessor
as Prime Minister, then as Treasurer, made that chance remark from
the kitchen somewhere in Victoria when he was talking on the telephone
to John Laws, it was later elevated into a very carefully designed,
politically shrewd remark - in fact it was an off the cuff observation
- about Australia becoming a banana republic. Now I think it's
worth me running through a few comparisons between Australia then
and Australia now. And I think it's very relevant to the economic
debate which is taking place at present. In mid 1986 our inflation
rate was 8.8%, our underlying inflation rate is now 1.5% and the
headline inflation rate is the remarkable minus at .2%. The current
account deficit is forecast now to be 5.25% of GDP - it was well
above 6.5% in the mid 1980s. In the mid 1980s we had a budget deficit
of 2% of GDP, we now have a surplus of 0.5% of GDP. Our debt servicing
ratio - a very very important measure of long term economic strength
internationally - our debt servicing ratio was 15.3% in the mid
1980s - it is now 10.8%. And our terms of trade in 1998 are significantly
better than what they were in the mid 1980s.
Now I mention those figures ladies and gentlemen not to burden
you with a lot of statistics but merely to make the observation
that the underlying strengths of the Australian economy now are
the soundest that they have been for a very long period of time
and they are infinitely more sound and more durable and more beckoning
to the rest of the world than what they were in the mid 1980s. It
is obvious that if we had not taken the measures we took when we
came to office in March of 1996, the Australian economy now would
have been infinitely more at risk than it is. And I do invite you
for a moment to contemplate what would have happened to economic
management in this country if we had not taken the measures that
we took in 1996.
Can you imagine where we would be now if we had persisted with
running a budget deficit of $10.5billion a year, if we had not tackled
the accumulated debt of $95-100billion a year. Can you imagine where
we would be if we had to set out to reform our industrial relations
system, that if we had pretended that the Beazley/Keating approach
of constantly running up debt was the only way forward for Australia.
And in view of everything that has happened, particularly in the
Asia Pacific Region, I can't stress too strongly how weakened
and vulnerable and enfeebled the Australian economy would have been
under that kind of leadership and indeed how much stronger and better
placed it is under the sort of leadership that it's been given
over the past two and a quarter years.
And of course in that context one has to contemplate the prospect
of handing over the management of the Australian economy to the
treasuryship of Gareth Evans. Of handing over the management of
the Australian economy to people who fought tooth and nail every
measure that my Government took to restore the strength of the Australian
economy after it was elected to office. Not only did our Labor predecessors
create the problem and leave it behind for us to fix, but they set
about systematically trying to stop us fixing the problem. Because
if you go through the records of the current Parliament, you will
find that virtually every single measure that we took to get the
budget into surplus was in fact fought by the Australian Labor Party
and if they had had their way they would have perpetuated the economic
legacy that they bequeathed to us in March of 1996.
Now I mention these things ladies and gentlemen because in the
nature of political combat people are going to be making judgements
about economic performance over the next few months. Of course we
have an election in this country sometime between now and when the
election is constitutionally due. Now I hope all the ladies and
gentlemen of the press got that because that's the story out
of today. We will eventually have an election. When that is of course
is something that is yet to be resolved. But it is important, as
we draw close to that election whenever it is, that we do remember
what the situation was in March of 1996, we contemplate what my
Government has done to turn that situation around and we also properly
ask the question, what would have happened if the former Government
had stayed in office and what might happen if it were returned to
office at the next election. Labor would be a huge economic risk.
It's track record demonstrates that and nothing which is being
said in the two and a quarter years that we have been in Government
alters my view on that and I notice that Mr Beazley today said that
he had been Prime Minister over the last couple of years unemployment
would have been down to 6%. It's funny that in the time that
he had a go he got a post-Depression level of 11.2% and at average
8.7% over the whole time that his party was in Government.
But ladies and gentlemen, having said something about the fundamentals
of the Australian economy I want to narrow my focus of my speech
to two very important issues. And one of those is the issue of taxation
reform. We need self evidently as a nation to build our competitiveness
to the maximum extent possible. The past few weeks, the past few
days, the past few months, have driven home like perhaps no other
set of circumstances have driven home the reality that we live in
a globalised economy. Some of us might wish it otherwise. Some of
us might like to believe you could turn the clock back and you could
return to a nostalgic era when we weren't in a global economy.
Whether we like it or not that is just not possible and in order
for this country to survive and to prosper and to build the living
standards of Australians all over our continent what we have to
do above everything else is to be competitive. And every single
measure that my Government has taken over the past two and a quarter
years has been designed to build the strengths of the Australian
economy and to improve its competitiveness. That is why we set about
curing a budget deficit. That is why we have set about reforming
the industrial relations system. But there is one great untouched
area of economic reform which is crying aloud for attention. It
is crying aloud for attention like no other area of economic reform
and that is the overwhelming need to reform Australia's increasingly
outdated and old fashioned taxation system. This is a cause that
I have spoken about on many occasions in the past in the various
positions I have held other than that of Prime Minister. It's
got a lot of form, it's got a lot of track record and it's
got a lot of history - the taxation debate in this country. It was
attempted in the early 1980s by the then Treasurer in the Fraser
Government and he was unsuccessful. It was attempted by the then
Treasurer in the Hawke Labor Government and he was also unsuccessful.
It was attempted by John Hewson as Leader of the Coalition in 1993
and it was also unsuccessful so far as the electorate was concerned.
Now I guess with that sort of track record the hypothetical man
from Mars would say: why on earth would anybody be stupid
enough to attempt it again?'. Now that's not a bad question
- on the surface. Well let me examine it for a moment. Let me put
to you very seriously that if you care about the future of this
country and if you care about its future economic security and competitiveness,
this is really the last great opportunity, perhaps in the political
and business experience of most in this room to achieve taxation
reform.
We have a rather rigid political system at the moment where it's
every difficult for one side of politics to get control of both
Houses of Parliament. In fact that hasn't been the case since
the middle of 1981 and the prospect of that changing under the current
electoral system is just about zero. Now some people say to me "oh,
John, forget about this taxation reform, what you ought to do is
to go the election on your policies on your record, talk a bit about
Labor say how bad they are and invite the public to put you back
and if anybody says anything to you about taxation promise them
a meeting." Now that of course is what Bob Hawke did in 1984.
But ladies and gentlemen I can't do that and what's more
I won't do that and the reason that I can't and won't
do that is that the Australian public would treat it with justifiable
contempt.
They would say that this man and his Treasurer have gone around
the country over the past few months and told us that taxation reform
was necessary and desirable and now when they get a bit close to
the event and the heat is on they go to water. But there's
another reason why you can't solve it by having a meeting and
that is that there's absolutely no prospect that you'd
get agreement at the meeting. At the end of the day governments
are elected to make decisions, they are elected to govern, they
are elected to give a lead on fundamental political and economic
reform. And what is more if we did have a meeting and we came up
with some mish-mash out of that meeting we'd then have to have
an election because there is no way that the Opposition parties
in the Senate would vote in favour of the proposal that might come
out of that meeting.
So however you look at it, politically, economically and strategically?
The imperative is that we present to the Australian people - as
we will - a comprehensive taxation reform plan before the election.
Now I know it is difficult and I know there will be a scare campaign
and I know that Kim Beazley, despite the fact that he wholeheartedly
supported Paul Keating's 12.5 consumption tax in 1986 and Gareth
Evans threw down his glasses and his papers after two days of discussion
and said that nobody had been able to punch a hole in the Keating
idea in 1986. Despite all of that, they will campaign with all the
vigour at their disposal in a negative, despoiling fashion to stop
the cause of tax reform. And Peter Costello and I and our colleagues
will need all of your help and all of your goodwill and all of your
support and all of your commitment to win that great debate. And
I don't underestimate the battle that lies ahead but there
is really no alternative. If you are to have a decent taxation system
in this country, if we are to break out of the unfairness and the
uncompetitiveness of the present system there is really no other
moment and there is no other way. However you look at it, putting
it off is not going to solve the problem and therefore it is absolutely
essential that we embark upon the course to which we are committed.
And I believe that if you appeal to the Australian people in the
right way and if you fulfil two very important criteria in that
appeal then you will be able to win support for something as fundamental
as taxation reform.
There are two things that we have to do above all else. We have
to persuade the Australian people that delivering a different taxation
system is in the national interest. It is not enough to say it's
in the interest of the business community or it is in the interest
of families, important though those groups are. It's not enough
to say it is in the interest of the farmers or the city people or
whatever. What we have to do is to demonstrate that Australia will
be a better country economically, a fairer country economically
and a more competitive country economically with a new and fairer
and better taxation system. Because at the end of the day Australians
are great patriots, they may understate their patriotism. They may
not be as demonstrable as Americans or others but deep down all
Australians wherever they live worry about the reputation of this
country, worry about the sort of future which is going to be left
to their children and grandchildren. And they worry about the strength
of the Australian economy around the world.
So if we can pitch our campaign, which we definitely will, towards
the cause of delivering a taxation system which is fairer and better
in the national interest then that will win wide appeal. The other
thing we need to do is that we have to demonstrate that the changes
we have in mind are fair and they are fair to all sections of the
community. That they are not a giveaway to the rich but equally
they are changes that recognise the importance of the wealth generating
and the wealth creating sector of the Australian community. And
they must be reforms and changes that protect the vulnerable and
the weak and the poor within our community because none of us, particularly
those charged with political responsibility, should ever forget
the fact that there are genuinely vulnerable and weak and poor people
economically within our community. And that has always been a very
important part of the Liberal legacy to care for those people as
part of our broader policies of national and economic development.
Taxation reform is very dear to my heart. I know it is very dear
to the heart of the Treasurer and it is very dear to the heart of
many people on our side of politics. We've had the courage
to tackle the deficit problem. We've had the courage to tackle
industrial relations. We've had the courage to tackle many
other issues that have come our way over the last two and a quarter
years. And I regard tackling taxation reform as the next logical
step of strengthening and buttressing the Australian economy in
an increasingly uncertain world. And what is happening in the Asia
Pacific region and what is happening globally at the present time
makes it more, not less necessary, to pursue the cause of taxation
reform. Don't be misguided by anybody running around an saying:
oh there is a bit of difficulty on the world currency markets,
there's a bit of turmoil, there is a bit of a meltdown in the
Asia Pacific region, therefore in these uncertain times you ought
to put taxation reform on the shelf.' That would be completely
the wrong thing to do. It is precisely at a time like this that
a Government should retain its nerve and its determination to pursue
the next logical element of economic reform and that is taxation
reform.
My friends, the last specific issue that I want to address is one
that was referred to by Richard Court and that is the issue of native
title reform. I am very aware that the Native Title Act in its present
form has a more adverse effect on the people of Western Australia
than any other State in the Commonwealth. I am very aware of the
clog that it represents on the development of the resource industry
in this State. And I am very aware of the loss of wealth that has
already occurred as a result of the negative operation of that legislation.
That is why we set about after the Wik decision to create a balanced
plan, a fair plan that provided the basis of lasting and effective
reform to the Native Title Act. And one of the most aggravating
and unreasonable and inaccurate claims that is made about the Government's
Native Title Bill is that it represents in some way a sell-out of
the interests of all people in the Australian community other than
the farmers and the miners - it doesn't.
It does, of course, represent a proper accommodation of the interests
of the farming and mining communities, not only in Western Australia
but throughout the whole of the country. But it does take into account
the proper and legitimate interests of the indigenous community.
And it is the product of a genuine attempt on my part, helped by
a number of my colleagues, to build a compromise which respected
the basic principle of the Mabo decision but also gives security,
both in terms of title and process to the farming and mining communities.
And the proposition that the only way you can settle the issue is
for us to further compromise completely ignores the fact that in
arriving at the position where we are now, we have already compromised
a great deal in the eyes of many people within the Australian community.
And I say that very deliberately at present because there is some
debate about whether or not now might not be the time to see whether
the minor parties and others in the Senate would again address the
native title issue.
Well, can I say that if I got an assurance that the Native Title
Bill was going to be passed through the Senate if it were presented
again in its present form, of course I would present it again. But
until I receive any such assurance, the idea that the Government
should further compromise is absolutely ridiculous. I went through
months of difficult negotiation with States, with the mining and
the farming communities and with representatives of Australia's
indigenous people. And I arrived at a situation which was not entirely
satisfactory to any one group but did represent a decent and honourable
compromise and it's that legislation that is now lying twice
rejected by the Federal Senate. And it's that legislation which
constitutes the only proper basis on which we can satisfactorily
resolve this issue. And this proposition that by some way brokering
a compromise of the Native Title legislation will shut people out
of potential election to the Federal Senate is completely misguided.
Indeed, if the Liberal and National parties were to negotiate away
their position on this issue, that would provide a very fertile
breeding ground for more rabid propositions that would say to Australia's
rural communities, those parties that have traditionally represented
your interests are no longer willing to do so.
So I want to make it very clear to you, I make it very clear in
the presence of your Premier, that I was very serious when I said
in May of last year, when with Tim Fischer I met a group of pastoralists
and debated this issue at Longreach in Queensland that having arrived
at a commitment to my 10 point plan, we were not only determined
to put that into legislation but we were determined to pursue that
legislation until it was approved in accordance with the Constitutional
processes of the Australian Parliament.
Can I finally say to all of you, ladies and gentlemen, that when
I was elected as Prime Minister I made what I regarded then and
I still regard as the most important commitment that any Prime Minister
on any side of politics can make to the people who choose to elect
you and that is, I said, that I would endeavour to the best of my
ability to govern for all Australians. That although we campaign
on our own political platforms when we are given office we have
a responsibility to govern for the entire community. And that commitment
I have taken seriously and I will continue to take seriously whilever
the Australian people choose to have me as their Prime Minister.
But I also take very seriously the links that my Party and the National
Party have with the business community of Australia. We, of course,
are not owned by the business community in the way that the Labor
Party is owned by the trade union movement. There are occasions
when the business community disagrees and disagrees very strongly
with measures that we have taken. And in my dealings in the last
24 years I can recall occasions when the business community has
been critical of decisions taken by the Liberal Party and I am sure
that will be the case in the future. But we do share a broad spectrum
of agreement on a large number of issues. We do believe that the
wealth generating sector of the Australian economy is crucial. We
do believe that the bulk of the jobs in this country come from the
wealth generating sector. We believe in decent levels of profit.
We believe in decent compassionate capitalism. We believe in attracting
business investment. We believe in the minimum levels of Government
intervention consistent with maintaining a proper social security
safety net. And we believe very much that this country has to play
a very pro-active role both in terms of exports and imports in the
world economic environment. And over the last two and a quarter
years I have been very grateful to the advice and the communication
that I have received and had with the business community all over
Australia and not least here in Perth.
And I want to say how important it is that the linkages established
by such groups as the 500 Club not only be maintained but also developed.
Being in Government in modern times is an extremely challenging
task. No one country in the world is the complete master of its
own economic destiny. Even a nation as powerful as that of the United
States must live by the constraints of a global economy. And we
see in relation to Japan, the second most powerful economy in the
world, a very powerful living out of that proposition that we are
all part of the global economy now and whether we like it or not
we can't escape it. And it is, therefore, very important in
the process of governing, the Prime Ministers and governments that
hold the essential values of private enterprise of investment and
all the things that flow from it maintain their close links with
the business communit