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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 community. So I thank
you for the support you have given. I thank you for the contribution
that you have made to building a better Australia. I am an optimist
about our country's future. I think we have the prospect before us
of entering the next century