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Well, thank you very much Mr Thomas, to your joint President, Mr Hale,
to my ministerial colleagues including in particular Senator Nick
Minchin the Minister who directly relates to your organisation, Peter
Reith, Robert Hill, Philip Ruddock, to Kim Beazley the Leader of the
Opposition, other distinguished guests, ladies and gentlemen.
I certainly do remember that occasion some seven and a half months
ago when I launched the AI Group at the National Press Club. And I
took the opportunity then of commending all of those who had played
such an important role in bringing your organisation together. And
I look back over that seven and a half months and I can record that
quite a bit has happened. We launched a tax policy a few days after
your group was launched. We then had a federal election during which
the principal issue of debate was the taxation plan detailed by the
Coalition. We enjoyed, those of us who were successful, the results
of the election and perhaps even more importantly than all of that
I think since the launch of your group and during the past seven and
a half months the true extent to which the Australian economy has
been able to stare down the worst economic recession the Asian-Pacific
region has experienced in decades has become apparent to all of us.
There was a time in the middle of last year when the majority view
amongst economic commentators was that some kind of quite significant
slow down was just around the corner. There was a widely held view,
I guess based on the experiences of past economic history in Australia,
that it just wasn't going to be possible for the Australian economy
to avoid the impact of the Asian downturn. But through the later months
of last year and certainly in the first three months or so of this
year that sentiment has turned around. And now it is no exaggeration,
it is no piece of empty triumphalism for somebody in my position or
any of my senior Ministers or people who talk about these things to
assert the obvious and that is that the Australian economy has performed
remarkably well, that we have enjoyed very high economic growth for
a sustained period. We have the lowest interest rates in 30 years,
we have a persistently lower inflation rate than we used to have.
In three years we have turned a deficit of $10.5 billion into a surplus.
We have presided over very significant levels of business investment
and very importantly we have been aided and you as exporters have
been aided by the very intelligent management of the Australian exchange
rate by the Reserve Bank of Australia. And all of these things have
come together to give to our economy a sense of strength, a sense
of resilience and a sense of optimism that not even the most enthusiastic
of us may have thought possible seven and a half months ago and indeed
12 months ago.
So it is possible as I speak to you tonight on behalf of the Government
and congratulate you on the progress that has been made with your
new organisation over the last seven and a half months and particularly
to you Mr President to thank you for a thoughtful and constructive
speech which as this organisation and its predecessors has always
done, made a very good contribution to the ongoing economic debate
in our country. One of the many encouraging things about the taxation
debate which we have had in this country and we continue to have is
the way in which it has been possible to bring forth intelligent,
thoughtful debate about the long-term structure of our taxation system.
The core of our taxation reform is, of course, comprised in the legislation
that is now before the Australian Parliament. But the process of business
tax reform which we highlighted in the lead up to the election is
a very important, indeed crucial, element of the long-term challenge
of economic and taxation reform. And I think all of us are greatly
in debt to John Ralph for the way in which he has been prepared to
bring his great business and accounting skill and integrity to the
task of presiding over the taxation reform group.
Australia is indeed fortunate to have men and women out of the business
community like John Ralph who are willing to commit themselves to
such an important task. And I do warmly welcome the way in which your
group has responded tonight and has put forward its views and made
its constructive, intelligent, thoughtful contribution to the debate.
And knowing as I do the diversity of the companies that you represent
forming that consolidated view would not have been easy. And it is
an act of leadership and an act of courage on behalf of this organisation
to do precisely that.
But, ladies and gentlemen, although we gather at this dinner at a
time of tremendous optimism about the Australian economy, at a time
when because of rising real incomes, low interest rates and the lowest
unemployment level in eight or nine years the purchasing power and
the sense of optimism of the average Australian is at a very high
level and we are therefore entitled to feel a sense of satisfaction
and a sense of pleasure as Australians about that.
I don't speak to you in any sense of smugness or complacency
about that situation and mine is not a counsel of resting on our oars,
mine is not a counsel of saying the reform task is behind us. Indeed,
the reform task in the modern economy is never behind us. There is
no alternative in the modern globalised economy in which we all live
than to go on indefinitely with the process of economic reform. The
idea that any nation that wants to preserve a decent living standard
can opt out of reform, the idea that there is such an alternative
to ongoing economic reform is to completely misread the changes that
have occurred in world society over the last 20 years.
We are permanently part of a globalised economy. That will never change.
There is no going back to the creation of national fortresses where
barriers can be put up against the rest of the world. We may delay
and temper the impact of change but in the end it will envelop all
of us. And the intelligent response of national policy makers is to
take the opportunity to reform on an ongoing basis and I can't
think of a time in Australia's recent economic history that bodes
better for ongoing economic reform than in the early months of this
year. It is precisely because our economy is doing well, it is precisely
because we do have low interest rates and low inflation and a strong
budget position that we should embrace in a very enthusiastic manner
ongoing economic reform. And this is exactly the right time to be
reforming our taxation system.
I have been involved in the debate about taxation reform in this country
now for something like 20 years. In a former government I argued the
case for broad based indirect taxation. I remember giving my old political
adversary, Paul Keating, very strong support in the middle 1980s when
his Government advocated the introduction of a broad based consumption
tax. But in all of the occasions that it has been on the table before
I can't think of a time when it is more appropriate for taxation
reform to occur. We have low inflation, we have an opportunity to
grab by the scruff of the neck and consolidate even further the competitive
advantages that our strong economic position are providing us around
the world. And the boost to our exporters that a taxation reform package
would give. The way in which our farmers and our miners would be made
more competitive through the changes we have in mind in relation to
diesel fuel and the list goes on.
And on top of that, as we were reminded by Chris Richardson of Access
Economics only a few days ago that the planned personal income taxation
cuts which will provide an enormous additional boost to personal spending
power will, in fact, come in at the very time that some of the capital
spending in this country in areas like the Olympic Games and so forth
would be going off the boil. And Mr Richardson made the very interesting
observation that on past occasions when governments have delivered
personal income tax cuts they have often chosen the wrong time to
do it. And he said that on this occasion the personal income tax cuts
that are planned under the Government's taxation package are
coming in at precisely the right time.
Not surprisingly I argue very strongly to you as I will to any audience
anywhere in Australia the long-term economic benefit of the taxation
plan that we took to the Australian people last October. It is not
without importance in that debate that the detail of that plan was
quite unparalleled in Australian political history. No government
before ours had presented in such minute comprehensive detail a blueprint
for such major and fundamental economic change. And that is a consideration
that we believe should certainly not be lost on the Parliament as
it deliberates on that plan and makes a decision some time during
the next three months.
I have no doubt that the long-term cause of economic reform in this
country, I have no doubt that the long-term cause of making this nation
an even more competitive nation will be done a very grievous blow
if that plan is not implemented. And I would not want any of the people
who are here tonight to underestimate the determination of the Government
and my own personal determination to ensure that the verdict of the
Australian people last October on that issue is given full effect
to by the Parliament of this country.
Could I also say to you, ladies and gentlemen, that it is not only
in the area of taxation reform that I believe further reform and change
should take place. I welcome the remarks that have been made about
the Government's workplace reform agenda and I want to acknowledge
the contribution that Peter Reith, who is here tonight, has made to
the reform process in our Government. It hasn't always been easy
and there was a time almost a year ago in relation to the waterfront
reforms where there was no shortage of people who were ready to criticise
what the Government did in that area but time has vindicated those
decisions and the productivity improvements particularly on the Melbourne
waterfront have demonstrated the wisdom of the actions that were taken
by the Government.
But we have foreshadowed further reform in that area and one of the
principal reasons why further industrial relations reform is needed
is the contribution that it can and will make to providing further
flexibility in the Australian labour market. We are disappointed that
the Senate has chosen thus far to reject our attempts to entrench
youth wages within the Australian industrial relations system. We
are also disappointed thus far that those who had the numbers in the
Senate have rejected our attempts in relation to the unfair dismissal
laws. We will persevere with those measures again in the future because
we believe they and others are important to the long-term and sustained
attack on unemployment levels within the Australian community.
So, ladies and gentlemen, my message to you tonight is not a message
of smug complacency and satisfaction, it is not a message of saying
to you look what a terrific job has been done in relation to the Australian
economy. Quite naturally, I, as Prime Minister and my Ministers take
some pride in the Government's economic achievements. I take
some pride in the fact that we took the difficult budget decisions
three years ago which helped deliver us the economic security which
is now working to the benefit of all Australians. But this is not
an occasion for smugness and backslapping, it's not an occasion
to say what a great job we have done, it's an occasion to acknowledge
the real strength of the Australian economy. But above all, it is
an occasion to recognise the undeniable reality of modern economic
life.
There is no alternative to the reform process. Arguments about reform
fatigue are important in so far as they remind those in government
and indeed all of us involved in public life that the obligation to
reform carries with it an obligation to explain the benefits of reform
and the reasons for reform. And I have always believed that the Australian
people can be persuaded of the wisdom of economic reform if two conditions
are satisfied. The first of those conditions is that you must persuade
them that it is in the national interest. And the second of those
conditions is that you must persuade them that it is, generally speaking,
fair to all sections of the Australian community. And if those two
obligations are discharged then I believe the Australian people as
they have demonstrated in relation to all of the reforms that have
occurred over the last 20 years the Australian people will respond
to and they will support those reforms.
But there is no national interest to be achieved in anybody seriously
believing or anybody seriously arguing the proposition that in some
way the Australian people and the Australian economy can opt out of
the globalisation process, that we can turn our backs on the realities
of modern economic life. That option is no longer available. But in
asserting that reality I, of course, accept that the overwhelming
obligation on myself as Prime Minister and the members of my Government
to explain to the Australian people the ongoing benefits and the ongoing
advantages of economic reform. If we can seize the moment which our
remarkable economic strength gives us to press ahead with reform we
can give to future generations of Australians an even stronger economic
base on which they can prosper and build their lives and the lives
of their children.
Can I say to the members of the AI group which, of course, was formed
out of two other great industry organisations with whom I have had
a lot to do over the years. And as I have looked around the audience
tonight I recognise many familiar faces going back to some I met 25
years ago when I first entered Federal Parliament. I want to thank
your group, I want to thank its antecedents for the contribution that
they have made to the cause of industry in this country. I think your
President did us a service in reminding us of the ongoing fundamental
importance of manufacturing industry to the Australian economy. And
I admire the way in which Australian manufacturing has changed and
modernised particularly over the last 10 or 15 years. The way in which
it has picked up the challenge of successive governments in this country
to shift its emphasis to exports. The way in which it is in no sense
of shame or lack of pride in its past the way in which it has shared
its image of being entirely concerned with what was regarded as the
old traditional industries and the way in which it has embraced the
new technologies and the new export opportunities that go with those
new technologies.
I thank you very warmly for inviting me here this evening. I thank
you again Mr President for your constructive contribution to the taxation
debate and more particularly I thank the members of your group for
the tremendous contribution that you continue to make to the employment
of a million Australians or more and the building of the strength
of the Australian economy. Thank you very much.
[ends]