E&OE....................................................................................................
Well thank you very much Joe. To Dick Humphrey, Maurice Newman, Alan
Cameron, ladies and gentlemen.
I am delighted to be here today. I was remarking to Maurice Newman
that it has been reasonably busy day. I started off in court in a
ceremony to mark the 175th anniversary of the Supreme Court
of New South Wales. I have just come from a rather more somber occasion,
a State Funeral for a former Premier of New South Wales at St James'
and now, I guess, I am paying homage to mammon by coming to the Stock
Exchange to launch this very important initiative.
As I am sure all of you know, amongst the many things that we have
sought to do as a Government is to promote Australia and as Prime
Minister of the entire country I talk generically but to promote Australia
as a centre for...global centre for financial services. We used
to, as Joe said, talk about it as a regional financial centre but
it is important to see Australia's potential as a global centre
for financial services.
And I am announcing today a number of important new initiatives and
not least of those is the establishment of the International Financial
Centre Taskforce that will ensure major participation in the quest
for Australia's status as a global financial centre very important
and valuable private sector involvement. This taskforce will be headed
by an executive chosen from the private sector with particular knowledge
of what is needed and the energy required to remove the barriers and
the impediments that now stand in the way of us realising our goal
of Australia becoming such a centre.
We are going to do a number of things apart from establishing the
taskforce which will be based here in Sydney in the central business
district. We are going to reopen Treasury's regional office in
Singapore. There will be a leading role for Joe Hockey, the Minister
for Financial Services and Regulation, as well as continuing his normal
ministerial duties, he will have responsibility as a roving ambassador
for me and for the Government to promote Australia as a centre for
global financial services. We are also going to establish a new committee
of regulators comprising the Treasury, the Reserve Bank, APRA, ASIC,
the ACCC and the Australian Taxation Office. We are going to improve
data collection to benchmark Australia's performance.
Now, our strategy to promote Australia as a world financial centre
is based on the belief that this country offers attractions that few
countries in the world can offer. First and foremost, we have a stable
economy. We have an economy that last year grew stronger than any
economy in the industrialised world. We have a strong, stable, well-supervised
and prudently regulated banking system. We have a clear coherent body
of law. We have sound traditions and principles of corporate governance.
And one of the fascinating things about economic debate in this country
and around the world in recent times is how some things that were
a few short years ago seen almost as impediments to Australia aspiring
to what we are about today are now seen as some of our greatest strengths.
I can even recall some businessmen a few years ago saying that we
were too stodgy, that our banking system perhaps was a little too
conservative, that maybe we should adopt the Malaysian model for promoting
investment, that maybe we should adopt this or that approach. Now,
of course, those very apparent signs of stodginess are seen as some
of the greatest strengths that this country has. Perhaps what some
would call our very conservatism in the approach of many of our financial
institutions, that is now seen as having been one of the virtues of
this country over the last few years and one of the reasons why we
have been able to stare down the Asian economic downturn.
As Joe said, over the last few years the Government has carried out
a number of major economic reforms which have helped deliver the strongest
Australian economy in 30 years, the lowest interest rates, the lowest
levels of inflation, significant rises in real incomes, all of which
have combined to give to this country in a general sense a level of
affluence and prosperity that we haven't seen since the late
1960s. And as I have said on many occasions the challenge of economic
reform in a globalised economy never disappears. We are where we are
now, the strength of today is the product of yesterday's reform
and the strength of tomorrow will be the product of today's reform.
And that, of course, brings me to the issue of taxation reform. Any
hope we have of making Australia a global financial centre will be
gravely threatened, if not totally destroyed, unless we can get fundamental
taxation reform. And one of the prices that this country will pay
years into the future if we don't have fundamental tax reform
is that we'll be denying the opportunity of capitalising on those
fundamental strengths of which I spoke a few moments ago. We do have
taxation laws at the moment which discourage the further promotion
of Australia as a financial centre. And one of the reasons for tax
reform is to get rid of the financial institutions duty, to get rid
of the bank account debits tax, to get rid of the tax on share transactions,
to reform our capital gains tax system, to replace the ramshackle,
out of date wholesale tax system with a modern internationally competitive,
broad based indirect tax. All of those reforms together will further
promote and add to the other strengths that Australia has and the
other appeal that Australia has as a world financial centre.
It's been one of my goals and it's been a goal of the Treasurer
since we're elected to office a little over three years ago,
to capitalise on the fundamental strengths that we have. A strong
economy, a stable political system, English is our national language,
strong rules, clear rules of corporate governance and a well regulated
financial system. They are all massive generic assets. But on top
of that you've got to look over the horizon and you've got
to grab hold of all of those things additionally that you can do to
make this country more attractive as a financial centre. And one of
those, of course, is fundamental taxation reform. And that's
why we went to the last election, spelling out in detail what we were
going to do. It's why we told the truth to the Australian people
at the last election about what we were going to do and it's
why there are many Australians at the present time who are angry beyond
belief that a government had the honesty and the candor to spell out
in detail what it intended to do and did not intend, try to slide
back into office on the basis of a generalised commitment to taxation
reform, but actually spelt it out in detail. And when you have gone
through that and you have won the election, and then you are told
by people, who themselves, did not spell out in detail before they
were elected what they wanted to do with the taxation system, you
begin to ask some fundamental questions about how effectively our
parliamentary system is operating. In all of the years I have been
in politics one of the constant complaints I have received is that
politicians don't tell the truth. They say that they won't
tell you what they are going to do or when they do tell you what they
are going to do, they change it after they have been elected. Well
in 1998 we told the public what we were going to do on tax. We haven't
tried to change it after we were elected. We are in fact trying to
implement what we promised the Australian people we were going to
do.
And I certainly as Prime Minister and all the members of my Government
believe that what is now occurring through the refusal of the Senate
to honour the mandate we were given not only calls into question the
proper processes of our parliamentary system but of course it will
do incalculable damage to the Australian economy in the future. We
can be an even stronger more effective nation economically. We can
become a world financial centre. We can continue to deliver higher
living standards to the Australian people, but we can't do that
without continued reform. We badly need taxation reform. It is the
greatest piece of unfinished economic business on the Australian economic
and political landscape at the present time. And it is urgent in the
national interest that that be implemented. And our strategy to make
Australia a global financial centre will be undermined if we cannot
achieve financial reform.
Can I say in conclusion, ladies and gentlemen, that I appreciate enormously
the opportunity that the exchange has given us to launch the details
of these new initiatives today and to give me an opportunity to outline
some of the goals that the government has in mind in this area. We
are very strongly committed and we do believe that this country can
become an international financial centre because it has assets that
other centres don't have and on top of that if we have the courage
and capacity as a community to make necessary future reforms to the
Australian economy then that goal can be realised.
Can I very warmly commend to you the work that Joe has done as the
Minister responsible for financial services since his appointment
to that position in October of last year. He will have a very active
and visible role in relation to achieving the goal of making Australia
a financial centre. He will work very closely of course with the taskforce.
He will be reporting directly to me as well as to the Treasurer regarding
the activities of the taskforce. And I see him as having a very active
part to play as a roving ambassador promoting the cause of this country
as a world financial centre.
Can I just say once again, ladies and gentlemen, that we do have enormous
opportunities at the present juncture in our economic and political
history. We do have the strongest set of economic fundamentals, far
stronger than many of us thought possible, even our more optimistic
moments a few years ago. And we have the capacity to continue with
that strength if we have the will and the application as a nation
to undertake further reforms. Doing well in a globalised economy is
a race that never finishes and it's not sufficient to look back
and say well we're doing better than we did thirty years ago,
we have to do better than our current day competitors if we are to
continue to stay in front of that race. And Australia has been doing
that over the last few years, we can continue to do that but only
if we have a capacity and a willingness as a people to embrace the
further necessary reforms, including taxation reform, which will maintain
into the future the edge that we currently have over so many other
countries and so many other competitors around the world.
Thank you very much.
[ends]