PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 11321


Photo of Howard, John

Howard, John

Period of Service: 11/03/1996 to 03/12/2007

More information about Howard, John on The National Archive website.

Release Date: 13/08/1999

Release Type: Speech

Transcript ID: 11321


SUBJECTS: Visit to Japan/USA, the Australian economy, taxation reform, youth

unemployment, Asprey Report, Ralph Report, national gun control laws, drug

abuse, building a social coalition, establishment of the Santos School of

Petroleum and Engineering at the University of Adelaide, corporate philanthropy,

Davis Cup.

Thank you very much, John and to your wife, Julie, to my many Ministerial

and other Parliamentary colleagues, to you, Cory, the President of the South

Australian Division, ladies and gentlemen.

It's a great delight, as always, to be back here in Adelaide, to have the

opportunity of giving a little bit of a stock taking to the business community

of Adelaide about how the Federal Government is going and where we see the

Australian economy at the present time. And can I endorse very enthusiastically

the sense of optimism transmitted to you by the Premier. The visit that

I paid overseas very recently to Japan and the United States was but the

latest in a number of visits I've paid overseas in the various capacities

I've held or used to hold in the political structure of Australia. And I've

been going around the place, particularly to the United States and Japan

now for a number of years. And I have to say that the best thing about the

most recent visit was not so much specific outcomes or specific issues discussed

because they were, although important, they were not the principle focus

of the visit, and not certainly the best thing about the visit, but the

best thing of all was the great sense of confidence in which, or with which,

Australia is now viewed around the world. And over the twenty year period

or more that I've been visiting the city of New York, as a Treasurer, a

Minister, a Shadow Minister, an Opposition Leader and the first occasion

as Prime Minister in 1997, I don't think I have found a greater sense of

positive feeling towards Australia and the achievements of the Australian

economy than I did on this particular occasion.

And what that really underlines, ladies and gentlemen, is that the greatest

dividend of all out of the economic achievements and the economic strengths

of Australia at the present time is a sense of self belief and a sense of

national achievement and national dignity and national capacity which I

believe the economic achievements and the economic recovery of the past

few years has given Australia.

I've said on a number of occasions in the past that when I became Prime

Minister in March of 1996, I felt as if I had become the Prime Minister

of a country, great though it was, was something of an anxious outsider

knocking on the rich mans club of the Asian-Pacific region seeking admission.

But over the last three and a quarter years, a lot has changed. The most

significant thing is that we have been able to successfully stare down the

worst recession that region has seen since World War II. And we have stared

it down to an extent and in a way that a year ago if I had addressed a gathering

like this, and I probably did address a gathering like this about a year

ago, probably almost to the day because I normally address gatherings like

this when I come to the State Conference of the Liberal Party here in South

Australia. I probably would have said here something to you something along

the lines of "Well, things have gone pretty well. We've got the Budget

back into balance. We've implemented a number of industrial relations reforms.

We've seen a little bit of a reduction in unemployment but we would like

to see more and we're about to release the 800 pound gorilla - that is tax


And indeed we did. In fact, I think today is the first anniversary of the

release of the 800 pound gorilla. The first anniversary of the release of

taxation reform, I think Rob Gerard hosted a dinner for me in Canberra in

his then capacity with the ACCI, he has so many capacities I think it was

the ACCI. But a year on the landscape is very different. I would have said

to you a year ago "Well, we have done pretty well, I think we can work

our way through the Asian economic downturn but it's going to inflict a

lot of damage and economic growth is going to slow down".

A year on, of course, I can report to you that we have in fact succeeded

beyond my wildest expectations. I have to be honest with you, I didn't predict

a year ago that we would do so well. And we have done well for a number

of reasons. The most important of which we are at long last getting the

benefit of a series of economic reforms that have been embraced in this

country over a number of years. And they include some reforms undertaken

by the former government. And I've always been willing to give the former

government credit in one or two areas where I believe the reforms it undertook,

particularly in relation to changes to the financial system have been of

great long term benefit to this country.

But over the last few years of course under our administration we've been

able to turn a $10.5 billion deficit into a healthy surplus, we've been

able to bring about major changes to the industrial relations system that

have lifted labour productivity in this country quite significantly, we've

delivered the lowest interest rates in thirty years, the lowest level of

inflation in more than three decades. And in a sense, most heart warming

of all, the news we got yesterday that nationally, Australia has the lowest

unemployment rate for more than ten years. And that in the three and a quarter

years that we have been in office, we have been able to reduce the level

of youth unemployment in Australia by 5.8 percentage points. It is now the

lowest recorded since statistics began to be separately taken in relation

to youth unemployment.

And in the end, ladies and gentlemen, giving hope to young people to get

jobs is about the most important mission that any government at a state

or federal level of either political complexion can have in this country.

So we've achieved a great deal over that period of time. And most recently,

of course, negotiating fundamental reform of the tax system through the

Australian Parliament has been probably the most important achievement of

all. You are all aware that we took the tax reform plan to the last election.

You are all aware of some of the risks that were inherent in that, but in

the end you do have an obligation to campaign for reform when you hold a

great public office. And that if you are not prepared to argue for things

that improve the well being of the country, people are entitled to question

fundamentally whether there is much point in your remaining in office. People

are not elected Prime Minister or Premier or indeed to senior ministerial

positions just for the satisfaction of having got there. And the whole purpose

of being in government is to bring about reforms where they are necessary.

And this country has needed taxation reform for a quarter of a century.

About the first report I heard of when I came into Parliament was the Asprey

Report. The Asprey Report was written under the chairmanship of the late

Ken Asprey, who was a judge at the Court of Appeal in New South Wales, and

it was commissioned by Billy Snedden when he was Treasurer and it was delivered

to the Whitlam Government in 1975, not a good year for that particular government,

but it was delivered to them and believe it or not, you know what it recommended?

It recommended the introduction the introduction of a broad based indirect

tax, and it recommended that it replace the wholesale sales tax, and it

recommended some reductions in personal income tax as part of the package.

And here we are at long last 25 years later, we have finally got that through.

Now it wasn't in the exact same form that we put to the Australian people,

and I was sorry about that. And I know there are some people in this room

that were sorry about that. And the original model would have been better.

But I couldn't get that through. The only way I was ever going to get that

through the Parliament was to get the support of Senator Harradine. And

he said "No". Or "I cannot" to be precise. And he couldn't

and he didn't. So, I then opened negotiations with the Australian Democrats.

And I found those negotiations straight forward and honourable. I don't

agree with the Australian Democrats on a lot of things and they don't agree

with me on a lot of things. But I found Senator Lees a thoroughly decent

person with whom to deal and a person of honour and a person of her word.

And you can deal with anybody who brings to negotiations that kind of good

faith. And we got an outcome, less than perfect, but an outcome that was

85 - 90 per cent of what we wanted. And of course we are going to implement


There are going to be inevitably as you implement tax reform, there is going

to be detail, there is going to be complexity. But I assure you that we

are going to commit the resources to make certain that the Australian public

fully understands what we are doing and the Australian public is fully informed

about what we are doing, the business community is fully informed, about

the advantages of the goods and services tax. And the advantages of this

change for the business community, leaving aside for a moment business tax

to which I will return, leaving that aside for a moment I can assure you

that there are enormous benefits that will flow in terms of reduced export

costs, reduced business costs, reduced fuel costs and other advantages from

the fundamental reform that we are proposing. And that will, of course,

come in substantially into effect on the first of July next year. And the

benefits for South Australia, given the strong manufacturing industry base

for this base are probably greater than for a number of other states. And

you've already begun to see some of the changes which are involved with

already the reduction in the higher rates of wholesale sales tax down to

the more standard rate of 22 per cent as a precursor to the total abolition

of wholesale sales tax on the first of July in the year 2000.

As well as what was contained in the taxation reform plan taken to the Australian

people, we invited John Ralph, supported by Rick Allett and Bob Joss, two

other very prominent Australian businessmen, to report to us on reforms

to the business taxation system. The Treasurer and I received that report

from Mr Ralph a little over a week ago. And I want to record the profound

gratitude of the government, not only to John, but also to Rick and to Bob

and to all of the other people who worked on that report.

I'm not in a position to make it public just yet. I'm not in a position

yet to say exactly how we're going to handle the process of decision making

and subsequent release of either or decisions and the content of the report.

I want to say, however, it is about the most comprehensive and detailed

examination of any aspect of the working of our economy that I have seen.

It's a very well written report. It does contain some wide sweeping and

wide ranging recommendations.

Inevitably it has become a matter of understandable public knowledge that

a number of issues are central to the proposals that have been examined

by the report. Clearly there is a debate about whether we should have a

lower rate of general taxation for companies paid for in part by the removal

of some existing provisions, particularly accelerated depreciation. There

are clearly going to be considerations of whether we should alter our capital

gains tax structure. I've already said, and I repeat here today, that because

we live in a global world economy where there are seamless flows of capital

across boarders, increasingly followed by seamless flows of jobs, it's essential

that Australia ask the constant question, is it as attractive to invest

in Australia as it is to attract in other countries, particularly the United


As a nation we have had a remarkable record for a people of only now 19

million we have had a remarkable record of discovering things. Over the

years we have been extraordinary in our inventive capacity but we have often

been very bad and very negligent in our capacity to convert those inventions

to our commercial advantage. And when I addressed the Federal Council of

the Liberal Party a few months ago I spoke of not so much building Australia

into a clever country or a lucky country both of which we already are. But

rather building Australia into a 'can do' country. A country that can readily

convert its intellectual capacity and intellectual capital to great national

commercial advantage.

And therefore one of the things that we have to look at when we examine

our tax system is whether there are enough encouragements and incentives

within the system for people to take risks and to invest in ventures. And

that inevitably means we have got to look at the capital gains tax.

I mention those things, ladies and gentlemen, to recognise the reality that

part of the debate in responding to Ralph, part of the debate is fundamentally

about those sorts of considerations. We haven't reached any final decisions

yet. We hope to soon. We are in receipt of a lot of advice and that's fair

enough. People have different points of view to put and it's part of the

democratic process in a nation like Australia that people with commercial

interests, legitimate commercial interests, and commercial concerns should

be able to put their views and to put them very strongly.

I can predict now that the final decisions we take won't satisfy everybody,

they clearly won't. We are very mindful of the importance of some of the

existing tax provisions for particular sectors of Australian business. We

are also mindful that when you are looking at the impact of tax reform on

particular sectors and particular companies you have got to take into account

just not one section but rather the aggregate impact of tax reform right

across the board. And it's fair to say that some sectors of industry have

gained relatively more from the changes contained in the plan taken to the

electorate last year than other sectors because the spreading of the broad,

the base of the indirect tax in this country has brought about that result.

But above all, I want out of the business tax reform process I want this

country to have a modern, competitive taxation system. One that makes it

attractive for the world to invest in Australia as well as one that makes

it attractive for Australians to invest in Australia and also importantly

and increasingly for Australian companies to invest abroad. Because we should

never see foreign investment in this country as being simply a one-way process.

So they are the sorts of considerations that I want to bring to our consideration

of taxation reform in the business area.

I have spoken, ladies and gentlemen, so far about essentially business and

economic matters. But to, I guess, vary slightly a biblical injunction,

governments don't live by bread alone either. And governments are not just

about taxation and bottom lines and industrial relations and privatisation

and share ownership. Governments are also about the kind of society we want,

the kind of society in which we live. And that's why I am particularly proud

of some of our greatest social initiatives.

Our determination at the very beginning of our term in office to achieve

national gun control laws in this country which have meant that I hope,

and I think most people hope, that we may in years to come be spared the

horrific murder rates and crime rates that are so evident in the United

States of America. And time will tell how effective that has been, those

changes but already the evidence is that they have started to have a positive


It is why the Government is so resolutely committed to a three-pronged attack

on the drug menace of putting more money into law enforcement, more money

into educating young people who against the dangers of drug abuse, indeed

the dangers of taking certain drugs at all let alone abusing their consumption.

And also putting additional resources into helping people who have got a

drug problem kick the habit and change their lives for the better.

And the Federal Government has committed an additional $500 million over

the last couple of years towards that campaign. And I can't think of a social

priority which is more important to me and is more important to the future

well-being of this country. And it is something that touches everybody in

one way or another. It's not just something for a Prime Minister to talk

about at a gathering of people representing social welfare organisation.

It's something a Prime Minister ought to talk about at a gathering like

this as feelingly as he may talk about it at any other gathering.

And I have tried to do that, ladies and gentlemen, within the embrace of

an approach to social policy which I have called building a social coalition.

That's based on a belief that in our kind of society you can't do anything

completely on your own. We now have a far more realistic view in Australia

about what governments can do. We went through a crazy period along with

a lot of other nations around the world 25 or 30 years ago believing that

all you had to do was to expand the role of government, get the government

to spend more money and everything would be solved.

The Whitlam Government tried that, the Johnson Administration tried that.

I can think of a few State governments around Australia over the last 15

years who tried that. They started running businesses, they started getting

into this or that commercial activity where they didn't belong and it all

fell in a heap. And no State knows that better than South Australia. And

then there was perhaps a bit of an over-reaction and we got to the idea

that the only thing that, in the eyes of some, the only thing that mattered

was individual greed and individual gratification and that's not the right

response either. And I think as we come to the end of this century and this

millennium we have probably got a more civil balance in our community about

the respective roles.

The Government does have a limited role but it's a strategic role. The business

community has a very important role. The great welfare organisations of

Australia, like the City Missions and the Salvation Army and the St Vincent

de Paul society, they have a very special role. Not just the role of compassion

of looking after people but also the role of giving policy advice to governments.

And philanthropic individuals have got a role. And it's in that context

that the Government has advanced greater cooperation between the Government

and the business community in the area of philanthropy. And we have given

a number of very significant taxation concessions over the last few months

and over the last year to encourage that.

And it's in that context, ladies and gentlemen, that I am particularly delighted

here in Adelaide in the presence of the Managing Director of the company

to announce the extraordinary generosity of Santos Ltd which is to enter

a joint venture with the University of Adelaide to establish the Santos

School of Petroleum and Engineering. And the Santos company will be making

a provision of no less than $25 million to the establishment of this school.

Can I say to the company and to its Managing Director, Ross Adler, that

this is precisely the kind of philanthropic venture that Australian companies

should be encouraged to undertake. The sponsorship is intended to lay the

financial foundation of the school for at least 20 years. And it is believed

to be one of the largest financial contributions ever made to a university

in Australia.

The school will provide high quality research and professional training

in an area of strategic importance to Australia's economic development.

And it's a long-term investment in Australia's knowledge and skill base.

And the Government itself wishes to demonstrate its support for this partnership

and we are going to provide a $1 million grant over five years to fund a

professorial Chair in petroleum engineering. And in recognition of that

great gesture by the company the Commonwealth Government Chair, funded Chair,

will be named the Ross Adler Chair in Petroleum Engineering at the University

of Adelaide.

This particular gesture by the company is a great source of satisfaction

to the Government. I know it will be a great source of pride and satisfaction

to the University of Adelaide. It's a marvellous benchmarker and role taker

for the University of Adelaide, for Santos, for the city of Adelaide and

for the State of South Australia. And it's a great demonstration of the

philanthropic spirit of this city and it speaks volumes for the sense of

civic responsibility of the company and those who have founded the company.

This is a good example of the sort of social coalition of which I have spoken.

But everybody has a responsibility in achieving outcomes. Each has a special

role to play and a particular contribution to make. Our great responsibility

as a national Government is to provide the fundamental underpinning and

the fundamentally positive economic environment in which people can do things

and to aspire to do even greater things. And as we come towards the end

of this century we approach the end of the century and the next millennium

with a great sense of hope and a great sense of optimism.

I find as I go around Australia a sense of national resolve and a sense

of national pride and a sense of national, perhaps contentment is not the

right word because contentment speaks too much of complacency and oversatisfaction,

but a sense of great achievement that we have been able to do something

with our economy and we have been able to do it in a civil and a fair way.

We have not just delivered lower interest rates and lower tax we have also

delivered lower unemployment. We have preserved the social security safety

net, we have tackled fundamental social problems and we have also had, of

course as Australians want in recent months, we have had some remarkable

successes on the sporting field.

And I was reminded when John was talking with great pride about South Australian

exports that at the end of our trip to North America Janette and I spent

our last day in Boston and we saw a great South Australian export performing

in Boston. We saw a tremendous performance on the first day of the Davis

Cup by Lleyton Hewitt. It was an absolutely remarkable performance and it

was a great source of pride for me as Prime Minister to wish him well before

the game and to congratulate him afterwards. And I have got to tell you

that the duo of the Prime Minister of Australia and the Honourable Andrew

Peacock, Australia's Ambassador to Washington, cheering the Australians

on surrounded by these very stony faced sullen and partisan Americans was

quite a sight to behold. And all of that in 41 degree heat or 101 or 98

or something as the Americans still translate and as I remember from my

younger days.

But, ladies and gentlemen, thank you very much for coming today. Thank you

very much for the support that I know a lot of you give to our great political

cause. I hope that our stewardship is seen as a proper discharge of the

hopes that you have invested in us. We'll continue to try. I'll continue

to work closely with your Premier who I admire and I congratulate for the

success he has finally achieved through persisting with his plans to reduce

the debt that he inherited here in the State of South Australia. And again

I warmly thank Ross Adler and Santos Ltd for its great generosity and its

great demonstration of what I mean when I speak of corporate philanthropy

in Australia. Thanks a lot.


Transcript 11321