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Thank you very much Michael, to my many federal and state parliamentary
colleagues and my fellow Liberals here in New South Wales. As always
it's a great pleasure to be back talking to the New South Wales
Division of the Liberal Party. And this morning I want to share some
thoughts with you about the Australian federal political scene which
are very important to our party and to our country over the weeks
and the months ahead.
We will of course sometime in the next nine months have a federal
general election. When that will be and what form that will take I
am yet to decide and in making that decision I will naturally take
the counsel, not only of my federal parliamentary colleagues, but
also of the Liberal Party organisation here in New South Wales and
throughout Australia. And it is therefore appropriate that we begin
to assess the choice that the Australian people will need to make
when the next federal election is held because elections, be they
state or federal, are all about choice. They're about deciding
whether you will go down one path and continue in a particular direction,
or whether you will change direction and go backwards down another
path. And I use that word backwards very advisedly in the context
of the next federal election, because it will involve a choice about
going forward or about turning around and going backwards. Because
over the past few weeks the Australian public has had driven home
to it just how negative, reactionary and backward-looking is the federal
political alternative on offer.
My Government was elected a little over two years ago. We were elected
following thirteen years of Labor - thirteen years which increasingly
saw a government drift away from contact with the ordinary men and
women of our nation. A group of people in government who became arrogant
and lazy and out of touch, and one of the things that I've encouraged
all of my colleagues to avoid is falling into the trap of being arrogant
and out of touch. And I believe that we have worked very hard to avoid
that and the success that is now becoming more evident to the Australian
community is the reward that we are beginning to see as a consequence
of avoiding that arrogance. Everyone knows that we are living in a
very turbulent region and I don't think I have gone through a
week in public life in Australia where the potential turbulence of
our own Asian-Pacific region, particularly Indonesia, has been more
apparent than it has over the last week. And if ever the truism that
we are part of the Asia-Pacific region was driven home to the Australian
public it was driven home over the last week. All of us will hope
that as change is undertaken in Indonesia that the direction will
be towards a more open and a more inclusive Indonesian society.
I have never taken the view that Australian Prime Ministers should
pontificate about the leadership of other nations. Good relations
between countries are built on mutual respect and that includes accepting
the decisions that other nations make about their leadership and their
constitutional forms and their way of government, but equally demanding
of them that they accept the decisions we make about our leadership,
our constitutional forms and our way of government. And I've
followed that approach since I've been Prime Minister and I'm
sure it's been the right approach. We have good relations with
Indonesia, we are a friend of Indonesia's, we've been a
regional mate of Indonesia's but we have not been an uncritical
commentator. We are prepared to defend our own interests and our own
rights and to have our own views but we stop short of telling other
countries how to run their own affairs. Now I don't know precisely
the ultimate form of the change process which is underway in that
country. And who governs that country and the form of that government
is a matter for the Indonesian people to determine. I do know that
I want the country to have peace, I want the country to have a greater
measure of personal liberty, and I want the country to have increased
living standards. And whatever may have been said of the government
of that country for the past thirty two years, nothing can gainsay
the fact that the living standard of the average Indonesian has risen
dramatically during that period of time. And the way forward for Indonesia
is through economic and political openness and co-operation with the
nations of the region. And we will continue to be a good friend, we'll
continue to help where we can as we have in the past, but like any
other great democratic self-respecting nation we will of course require
in our relations with that country as with all others, a basis of
mutual self respect.
But what has happened there and what indeed has happened in the region
over the past few months has driven home to the Australian people
the need for a government that delivers safety, security and stability.
And the clearest possible message has come from the economic management
of my government epitomised by the recent Federal Budget, and that
is that against the backdrop of enormous regional turbulence we have
delivered security, safety and stability to the Australian people
and to the Australian economy. And I ask the very obvious rhetorical
question: Where would we have been now against the background of what
has happened in the Asia-Pacific region if we had not followed the
economic course we embarked upon in March of 1996? Where would we
have been if we had left Mr Beazley's black hole of $10.5 billion
unfilled? Where would we have been if we had taken the advice of the
Australian Democrats? I mean they sometimes make the big spenders
of the Labor Party look like skinflints. Where would we have been
if we had taken the lazy option and adopted the views of having one
government you were paralysed and did nothing? The truth is that if
we had not cut the budget deficit, if we had not got on top of the
enormous debt that we inherited from Mr Beazley and Mr Keating, this
country now would have been weaker, more vulnerable and at the mercy
of the economic turbulence that is swirling through the Asia-Pacific
region.
So what we are facing at the moment is a very clear choice. Do we
hang on to that stability, security and safety which my government
has delivered, or do we go down a backward risky economic path which
is being mapped out by the Labor Party? The Labor Party says it believes
in fiscal responsibility but opposes every measure to deliver it.
The Labor Party says it believes in budget surpluses but has spent
two and a quarter years trying to stop the creation of a budget surplus.
The Labor Party created the problem - they lit fire to the building
and they've tried to stop the fire brigade putting out the fire.
And yet they pretend to the Australian people that they too are a
party of economic responsibility.
The Labor Party in 1998 is a monumental economic risk. The Labor Party
if re-elected would undermine the security the stability and the safety
against the background of Asian economic turbulence that my government
has delivered. And it's not only at the macro level that the
Labor Party is a risk, it's also at a level that directly affects
people in this audience and affects the great bulk of middle Australia.
One of the greatest gifts of my government to the battlers of Australia
and to middle Australia - has been the enormous reduction in interest
rates that has occurred since 1996. To the average homebuyer it's
worth $300 a month and that is the equivalent of $100 a week pay rise.
If Labor is re-elected that will be put at risk because as certain
as one can be of anything in politics, if Labor gets back into power
interest rates will start going up again. Because Labor is a party
of big spending. Labor doesn't believe in budget surpluses, Labor
believes in budget deficits because that's what they did when
they were in government, despite what they said to the opposite. And
the biggest risk to middle Australia of a re-elected Labor government
will be higher interest rates because the low interest rates we now
have are a direct result of the economic policies of my government
-without them there would have been much greater pressure on borrowing
in the financial markets and therefore much higher interest rates.
So we do have a very clear choice emerging - we have safety, stability
and security against the backdrop of Asian economic turbulence on
the one hand and on the other hand the enormous risk of returning
Labor to office federally, and that risk is symbolised more than anything
else by the threat that a re-elected Labor government would pose to
the level of interest rates - not only for housing but also for small
business. Because they are now at their lowest level for more than
thirty years. You have to go back into the late 1960s to get interest
rates for housing as low as they are now and back into the early 1970s
- before the Whitlam government began to take an axe to Australia's
economic stability - to get the sort of interest rates for small business
that are now becoming daily more apparent.
We therefore ladies and gentleman do have a very clear choice. And
it's a very clear choice that it's the responsibility of
all of us as members of the Liberal Party to communicate to the Australian
people, either at a federal parliamentary level or at a branch or
conference level. Because it goes very much to the kind of Australian
community we are going to have as we go into the next millennium.
We often talk about the future - we talk about our goals, we talk
about our vision for the future, we talk about our hopes for the future.
I believe that one of the greatest legacies that a government of Australia
in the late 1990s, in the closing years of the twentieth century,
one of the greatest legacies that that government could aspire to
leave to the generations of the third Christian millennium of the
twenty-first century would be a debt-free Australian society. When
I think of the future that my own children will enjoy and hopefully
their children will enjoy, one thinks of the prospect that they might
have a society that is not only socially stable, racially tolerant,
politically liberal, but also a society that is free of debt and a
society therefore that provides a sense of continuity and a sense
of economic predictability that is so very important.
All of our economic policies have been designed to deliver that stability,
that safety and that security which is so important. We don't
pursue economic policies because we have some ideological obsession
with it. Change for the sake of change is of no use. Change is only
worthwhile if it delivers a benefit to society. And every single change
that I've embraced as Prime Minister has been a change that I've
believed will make Australia a better nation. I believe that one of
the greatest gifts of statecraft in modern society is to choose between
preserving those values and those institutions we've inherited
from the past that are worth preserving and getting rid of those attitudes
and those practices that are worth getting rid of. And when people
say to me do you believe in change my answer is I believe in change
if it's for the better but if it's for the worse or if it's
simply neutral then I'm not in favour of it. And that is the
attitude we ought to take. Beware of those people who say that change
just for the sake of experimentation is something you ought to embrace.
But equally have the courage to throw out something which is clearly
working against our interests. And it's in that context that
we have approached economic, industrial relations and other change
since we've been in office.
We want to reform the Australian waterfront not because we want to
destroy the Maritime Union of Australia, or we want to prevent trade
unionists working on the Australian waterfront. We want to reform
the Australian waterfront because that will be good for the Australian
economy. We want to reform the Australian waterfront because that
will create more jobs and generate more investment and make Australia
a more competitive exporter in an increasingly competitive world trading
environment.
We reduced the budget deficit because that made Australia stronger
and more secure and it has meant that against the background of the
Asian economic turbulence that we are a much more stable society that
we might otherwise have been. Equally when we turn our gaze to the
next great area of economic change that will be good for Australia
- that is taxation reform - we view it not as turning the world on
its head, not as a revolution, we see it rather as the next necessary
desirable change to further strengthen the Australian economy. We
want a new tax system because the present one is not good enough.
We want a new tax system because the present one is not fair enough.
We want a new indirect tax system because the present one penalises
exporters. We are one of the few great trading nations in the world
that has a taxation system that actually penalises Australians that
want to sell goods and services overseas. And that's the reason
why we have to get rid of the present system because it's hurting
Australia. When we line up against nations that have a different indirect
tax system, an indirect tax system that does not impose any penalty
on inputs to the manufacture of goods that we sell overseas we are
at a disadvantage. Because the present system does impose that penalty
and that alone is argument enough for changing the present system.
So tax reform is not about revolution. Tax reform is about the evolutionary
building of further advantages and further protections for the Australian
economy and for the Australian community. It's about making Australia
a more competitive nation. It's about removing the unfairness
of a wholesale tax system that says that if you can afford to buy
a Lear jet you don't pay any indirect tax, but if you're
like most of us and can only afford a family car you pay twenty-two
per cent. It's about a taxation system that back in the 1950s
said that you only paid the top marginal rate of tax if you earned
in Australia in today's dollar terms about $500 or $600,000 a
year. But now you pay that top marginal rate of tax if you earn something
round $50,000 a year. And by the time we get to the year 2000 it will
be down to around $39,000 a year. Now we can't go on with that
kind of taxation system. That's why we want to change it. There's
nothing revolutionary or radical about that, to me it is plain up
and down common sense and that's what tax reform is about, is
adopting a common sense sensible measured approach to change that
will make Australia a better country. There are very few nations on
earth left with the indirect tax system that we have at the present
time because most of them have had the wit to realise that such an
indirect taxation system works to Australia's disadvantage.
We're not going to introduce a tax system that is going to hurt
the poor. One of things I'm very proud about is the way in which
my government has maintained the social security safety net in this
country. I think we are long past the day when there's any serious
argument in Australia about the desirability of having a social security
safety net. We don't believe in anybody being allowed to rort
the welfare system anymore than we believe that people at the top
end of town should be able to escape their taxation liability. They
shouldn't be, because it's unfair and it imposes an unfair
burden on the rest of us and the great bulk of wage and salary earners
who are in no position to take advantage of fancy and dubious arrangements.
I want to make it very clear that our tax reform will be directed
to ensure that people who are escaping their fair share of the tax
burden will be required under those reforms to do so, and any suggestion
to the contrary is completely wrong. But we need tax reform because
it will further strengthen us and because it's a necessary next
step in the process of making Australia ever stronger, more stable
and more secure against the background of what is occurring in our
region.
Ladies and gentlemen over the next few months we will of course be
unveiling the details of our taxation policy. But we'll be going
to the next election whenever it is being held against a background
of very significant achievement over the time that we have been in
government. We have been willing to tackle issues of long term importance
to the Australian community. We have strengthened the economy. We
have improved industrial relations. We have reasserted the rights
of the mainstream of the Australian community against the clamouring
of noisy minorities without being insensitive to the responsibilities
of government to look after the vulnerable and the weak and the disadvantaged
within our community. We have adjusted Australia's foreign policy
so that whilst we preserve the great priority of our relations with
the Asia-Pacific region, we haven't ignored the very important
linkages that this country has with Britain and the rest of Europe
and with the nations of North America. I have frequently said that
Australia occupies a unique intersection of history, geography, culture
and economic circumstance in this part of the world. We are a projection
of western civilisation in the Asia-Pacific region. We are a nation
that has very strong historical links with Europe. We have deep bonds
of shared democracy and liberal values with the nations of North America
and we are located in the Asia-Pacific region. And our own society
has been enriched through the immigration into this country of hundreds
of thousands of people from the Asia-Pacific region. And when you
put all of that together it gives us a great advantage, it gives us
a place in history and geography and culture and economic circumstance
that no other nation on earth can possibly occupy. And if we are sensible
and positive and if we don't see those historical and economic
and cultural linkages as being mutually exclusive but rather blending
together to give us a unique position in this time of history then
we have an enormous opportunity to build a very special society playing
a very special role in this part of the world.
So we'll be able to go the next election whenever it is held
proud of the record of economic stability and reform, proud of the
fact that we have given Australia a proper role in the world and the
affairs of the world and also having a practical vision and a solid
set of values as we go into the next century.
But can I just finally address a few words to all of you as members
of the Liberal Party organisation. Election campaigns are not won
by members of parliament alone, they're not even principally
won by members of parliament. They are won by the combined grassroots
efforts of the men and women who make up the rank and file of political
parties. I need your help whenever the election is. My colleagues
need your help and all of us together need to mount a very strong
and effective grassroots election campaign. Election campaigns are
never easy. They are becoming harder each time in this country because
we now live in a state where politics is a lot less tribal than it
used to be and there are fewer people in the Australian community
whose political allegiance is permanently rusted on to one or other
side of politics. And there are a lot more people swinging around
in the middle and therefore you can have significant movement one
way or the other within a very short period of time. So I don't
take anything for granted. From the moment I was elected two and a
quarter years ago I said that we couldn't take the result of
the next election for granted and that remains the case.
But I'm greatly encouraged by the unity and the strength of our
own parliamentary party. I'm greatly encouraged by the support
that I've received from the organisation and I'm greatly
encouraged by the fact that in the face of very considerable difficulty
and adversity on a number of issues the Government has gone the distance
and stayed the course and the public is beginning to appreciate and
to respect that and to understand that and to see that as a great
strength. There are always times in public life, there are always
times in the lives of political leaders, in the lives of government,
when you're going to go through periods when everybody is criticising
you and everybody is expressing doubt about the wisdom of the course
that you are following. And like every other government worth its
salt we have gone through periods like that over the last two and
a quarter years. But because our cause has been right and our objectives
have been in the national interest we have stuck to our course and
that has been evident in areas like economic reform. There were plenty
of critics eighteen months, a year ago, who said we'd gone too
far. There aren't many of them now. They're very grateful
that we did do what we did a couple of years ago. And they're
very grateful that it was a couple of years ago and not this budget.
And they're very grateful that we had the foresight and the determination
to do it. There are people who were critical, our opponents in particular,
of some of the things we have done in respect of industrial relations,
but we've stuck to course and we're going to continue to
pursue the course. We're going to continue to pursue the cause
of waterfront reform for example, because it's in Australia's
interest that it be achieved. That's what governments are elected
to do. There's never any point in being in government if you
don't do something with it. There's nothing more pathetic
in public life than to be given high office and be elected to a position
of power and responsibility and then squander the opportunity that
that great gift from the people gives you. And that has been something
that has very significantly affected the way in which we have conducted
the affairs of government.
But ladies and gentlemen I'm very proud on behalf of the Federal
Government to give this report, to map out the choice that lies ahead
of the Australian people. Whether we continue down the path of stability,
security and safety or whether we go backwards and put at risk the
achievements of the last couple of years in particular go back to
the era of high debt, high deficit and high interest rates and high
unemployment that was the legacy that we inherited from Mr Beazley
and from Mr Keating.
Ladies and gentlemen again my very warm thanks for the tremendous
support that you've given me and given my government over the
last couple of years and I look forward with great enthusiasm to the
challenge of the weeks and the months ahead.