E&OE....................................................................................................
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.
[ends]