PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 11341


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: 17/05/1999

Release Type: Speech

Transcript ID: 11341


Well, thank you very much, Maxine. To Graham Wallace, Chris Anderson,

Peter Charlton, ladies and gentlemen.

It's a particular honour for me to be here tonight, to say a

few words about the importance of your industry, perhaps one or two

other things as well and also to present awards to the winners. And

can I at the beginning congratulate Peter Charlton and his publication

for its sponsorship of these awards and Cable and Wireless of course

for its sponsorship of this gathering tonight. I can remember Peter

Charlton rather excitedly saying to me as we both boarded an aircraft

about ten years ago that he had taken over this magazine and he hoped

to make something really big of it. I think you have been very successful,

Peter, and I think the prestige of these annual banking and financial

awards is a testament to your energy and your drive.

The last year has been a very good year indeed, not only for the Australian

economy, but also for the banking and financial industry. You don't

need reminding that we have seen over the last year in relative terms

probably the greatest performance of the Australian economy for about

three decades. We have been truly successful in staring down the worst

economic collapse that the Asia Pacific region has seen in the lifetime

of most people in this room. And one of the reasons that we have been

able to do that is that we have had a very stable, a very secure,

a very well regulated and an increasingly outward looking banking

and financial industry in this country. And it's worth exploring

for a moment as to how that happened and also relating that series

of developments with other challenges and other issues that Australia

faces at the present time.

It will be twenty five years tomorrow since I entered Federal Parliament.

And the banking and financial system of our nation in the mid to late

1970s was vastly different from what it is now. It was inward looking,

it was insular it operated in a different world environment, it operated

not entirely under a fixed exchange rate mechanism but under a system

known colloquially there as a crawling peg whereby the bands within

which the Australian dollars rate of exchange moved were strictly

circumscribed by government officials. And of course, no foreign banks

were allowed to operate in Australia. In 1979 when I was Treasurer

the Fraser Government commissioned the establishment of the Campbell

Inquiry. That Campbell Inquiry as everyone in this room knows was

quite historic in that it recommended major deregulation of the Australian

financial system. Some changes to implement those recommendations

had been made before the change of government occurred in 1983.

And although in opposition the Labor Party had been opposed to financial

deregulation when the Hawke government came to power there was a refreshing

change in policy. The new Prime Minister strongly supported by the

Reserve Bank of Australia argued for and secured the floating of the

Australian dollar and from then on his Treasurer, Mr Keating, my predecessor

as Prime Minister, set about enthusiastically implementing with some

change as a result of the recommendations of Vic Martin's committee

the recommendations of Campbell. And he did that with very strong

bipartisan support from myself as economic spokesman and generally

from the Coalition Opposition.

And so it came to be that as a result of that set of circumstances

and that chain of events Australia developed through the 1980s and

into the 1990s one of the most modern, progressive and outward looking

banking and financial systems in the world. The Australian approach

was seen as something of a model and in a number of areas we trail

blazed for other countries which in other areas it had been our custom

to follow. And in coming to office in 1996, my Treasurer, Peter Costello,

established the Wallis Inquiry which conducted something of a stocktake

of what had happened post-Campbell and recommended a number of other

very significant changes.

So, thus you can see that over a twenty year period we have had a

long continuity of reform and outward-looking policies in relation

to the banking and financial system. And it has borne fruit because

the strength and the stability and the progressivity of our banking

system is one of the reasons why we are seen as having such economic

strength in our region. And one of the ironies of watching how Australia

has performed with other nations in the region is to recall some of

the thing that were said about our banking practices and our economic

practices only a few years ago by some of the nations in our region

that seemed to be out performing us economically. There were even

suggestions that we were too stodgy, we were too conservative, we

were too heavily regulated and some of the prudential requirements

were too severe. Nobody says that anymore. One of the bull points

of the Australian economy is that we have a stable, strong, secure

and well and prudentially regulated banking system.

And it is a source of strength, it is a source of reassurance and

what a few years ago was perhaps seen as stodgy is now seen as one

of the reasons that makes Australia an extremely attractive place

in which to invest.

Now, the lesson in all of that, ladies and gentlemen, is that we can

have great reform, we can have beneficial change, we can have a world

class structure in this country if necessary reform enjoys strong

bipartisan support. It would not have been possible to have the strong

banking and financial structure we now have in this country had it

not been for the fact that both sides of politics saw the national

benefit and the national interest in that area. If one or other side

of politics at various stages over the last twenty years had run an

emotional, populist campaign against financial deregulation we would

not have the benefit of that deregulation which is there for all of

us to see. And it would not surprise you for me to say that there

is a lesson in that in relation to the great and burning economic

issue of today and that is taxation reform.

It is true that reforming Australia's taxation system remains

the largest piece of unfinished economic business in this country.

Of all the great challenges of economic reform that were obvious twenty

years ago to any serious player upon the Australian political scene,

one of them was taxation reform. We have reformed our industrial relations

system, although there is still more work to be done. We have reformed

our financial system quite dramatically, we have demolished the old

stultifying tariff structure that encourage inward looking introspection

so far as our industries are concerned. The one great area of further

reform remains our taxation system.

And that is why at the last election my government committed itself

with all the perils involved in total disclosure of every last detail

to the reform of that taxation system. [Tape break]...that

if we made full and accurate and painstaking disclosure our moral

case to ask that our proposals be passed through both Houses of Parliament

would be compelling, if not overwhelming. Reforming Australia's

taxation system is essential for many reasons. It's essential

to ensure that this country remains competitive in a global world.

It is no good saying to you that we are doing better now that we were

five years ago unless I am able to say to you that in five years time

we will be outperforming our competitors. In a global world it is

how you do against the other competitors in the race, not how you

do compared with how you were doing five years ago that really counts.

We need to reform the Australian taxation system if we are to realise

our dream of making Australia a world centre for financial services.

Because imbedded in the taxation reform package is the removal of

many taxes like the bank accounts debits tax, the financial institutions

duty, the stamp duty on share transactions, all of which contribute

towards providing reasons why financial institutions may not establish

their activities and do their business in this country.

We have so much going for us in the generic economic social and political

area that we would be very negligent indeed if we didn't remove

the other barriers that should be removed in order to realise that

dream. We have a stable political system. We have an absolutely superb

lifestyle. We have clear rules of corporate governance. We have an

incorruptible legal system. We speak the English language. We are

beautifully situated so far as the time zones are concerned and we're

seen to have an economy which has outperformed most not only in our

region but around the world. We therefore have a wonderful springboard

from which to launch our drive to become a major financial centre.

But one of the things that we need to remove, one of the barriers

we need to remove, is of course the barrier of a taxation system which

is not as conducive to making this country a financial centre as it

might be.

So, my friends, there is a lesson from the experience of financial

deregulation in the long run the national interest ought to prevail,

in the long run we should stop playing games about important reforms.

We didn't play games about financial reform and for that I have

always given credit to my political opponents. They should stop playing

games with taxation reform because the national interest demands that

we rid ourselves of a taxation system that has long outlived its usefulness.

Ladies and gentlemen, can I in advance congratulate all of those who

will be taking awards tonight. Can I thank the participants in the

banking and financial industry of Australia for the contribution they

have made to our national economic wealth, for the contribution they

have made to innovation in financial products, for the contribution

they have made to establishing the reputation of this country as a

wonderful country in which to do business.

I have valued for a long time my association with the financial community

not only of Sydney but of Australia generally. It is an industry and

a community that has changed enormously over the last twenty years.

And it has been associated during that period with the dynamism and

the change and the reform zeal of the Australian economy and the Australian

nation. It is truly part of the globalised modern Australia. It plays

an impressive role. It looks back on a year of enormous achievement

and quite rightly tonight those who have been the stars of that achievement

will be well and truly recognised by their peers. Thank you.


Transcript 11341