E&OE ......................................................................................
Thank you very much Larry for that very generous introduction. To your
wife Jenny, to Don Page, to councillor Lyn Beck, Dr Brian Pezutti MLC,
many other distinguished guests, ladies and gentlemen.
As I think you have probably read and heard, I am in the middle of what
is, give or take the odd interruption, such as the flight down to Melbourne
last night to go to a certain dinner which I gather a lot of this audience
watched on television, is a week long visit to different parts of regional
Australia. I have variously called it a visit to regional Australia, to
country Australia, to the regions or to the bush, because as you know
those expressions these days tend to be a little interchangeable. And
it has so far been for me a very fascinating, instructive and in many
ways also quite rewarding experience.
I am doing it because I understand that in different parts of regional
Australia there is legitimate concern that the benefits of the national
economic strength that Australia has at the present moment is not being
as evenly shared as it might have been. And it is very important that
those of us who live in areas which are doing very well economically,
it is very important that we understand that there are some of our fellow
Australians who through no fault of their own, are missing out on the
benefits of generic national economic strengths. It's also been rewarding
for me because, and instructive, because it has reminded me that there
are many parts of regional Australia that are doing very well.
I was in Port Lincoln in South Australia at the weekend and I saw for
the first time in some detail the marvellous tuna industry which is bringing
enormous export income to that part of Australia. But the next day I went
to Quorne in the Flinders Ranges area, a rural community that is almost
a metaphor for the challenges that many parts of the bush face at the
present time. A district heavily dependent on the wool industry, facing
the twin vice, I suppose, of a fairly severe drought in that part of South
Australia as well as low commodity prices. And then I went to Bourke,
a very famous town in Australian history, and Australian folklore, a town
that has been racked by very unhappy relations between aborigines and
other Australians over the years, but I found a community willing to work
together in all its parts to face that problem and also a community that
had the opportunity to embrace a very strong cotton industry over the
last ten or fifteen years which had provided a tremendous economic stimulus.
So, it is a rewarding interesting experience because it drives home to
me the genuine despair of some people and a legitimate and understandable
despair, but it is also a reminder that everything is different according
to where you are. And that of course is something that Larry understands
very well in this electorate. Richmond of course is a very varied electorate,
it is a combination of what you might call some elements of the old rural,
it's got very strong service industries based on tourism, it's got very
significant levels of unemployment, it has people who are broadly described
as in some ways committed to an alternative lifestyle but all part of
the community. So it does have particular challenges. And speaking as
I know I am to a lot of people who share Larry's and my commitment to
the Coalition's success I know that it does contain its measure of political
challenges.
Larry is right, we are living in an environment where it is fair to say
that Australia is a stronger, more confident country than what it was
just on four years ago. We were able to stare down the worst of the Asian
economic downturn with virtually no impact at all. We've seen significant
reductions in unemployment, we have much, much lower interest rates now
than was the case four years ago. We have very low inflation. we have
strong levels of business investment. We've embraced some very fundamental
economic changes and most importantly on that front of all, on the 1st
of July we are going to see the introduction of a new taxation system.
And I don't underestimate for a moment just how major that change is,
but nor do I for a moment, concede to anybody that it is other than a
hugely beneficial change for the entire Australian economy. And it is
very important that all of us see tax reform and the new tax system as
being exactly that. We had a description for it a couple of years ago,
we said not a new tax, a new tax system. And it is very important that
we don't look at it in its segmented areas. It is very easy to run a scare
campaign on the application of the goods and services tax to an individual
item. I can in isolation mount an argument for having no goods and services
tax on any item you name. I can in isolation indeed mount an argument
for having no taxation at all. And sure, hooray somebody says and I understand
that.
And in some kind of utopian concept you might want to argue for that,
but we live in a real world. We live in a society, I think that fundamentally
believes that there is a limited, but none the less important and strategic
role for the government. The faith of the Liberal and National Parties
is built on a belief that people doing their best with as little government
intervention as possible, as lower levels of taxation as possible, that
that is the best kind of society. We believe in people being given the
encouragement to get out and make their own way, to build their own fortunes,
to start with nothing and to build it up through working hard and hopefully
leave it to the next generation.
Now that is the kind of society that we generally believe in. But we
also as a community believe that there have got to be some basic services.
We are not a society that wants to see people starving in the streets.
We are a society that believes that the government has some social responsibilities.
To provide a decent social security safety net. And I have certainly found
since I have moved around the Australian community that the concerns that
people have in the areas that are doing it hard, are concerns about very
basic things. People who live in the outback want the same access to medical
practitioners as you and I have. They want some basic services from the
state governments, as well as from the commonwealth government. They want
to share in the information technology revolution, they don't want an
Australian society where you have haves in the cities and the coastal
areas in information technology and have-nots in the more remote parts
of the country. So we have to achieve a balance.
And one of the reasons we have decided to reform the Australian taxation
system is that it will provide, because the GST revenue is going to the
states, it will provide them with a greater capacity to deal with the
fundamental responsibilities and services which under our federal system
are the responsibilities of state governments. For years and years and
years, people have argued that we needed to reform commonwealth/state
financial relations. For years, people have argued, particularly state
premiers, of all political persuasions, whether it has been Charlie Court
or Joh Bjelke-Petersen or Henry Bolte or Neville Wran, or any of them,
all have said the same thing. We need a reform of commonwealth/state financial
relations. Well the GST will deliver that. It will deliver the single
greatest reform to commonwealth/state relations since World War II.
But most importantly for people in the regions, and most particularly
for those in the regions that live long distances from the major population
centres, taxation reform will mean cheaper fuel and cheaper business operating
costs. The significant reductions in the cost of diesel fuel as a result
of the introduction of the new taxation system will be of enormous benefit
for people who live in rural Australia. So I want all of you ladies and
gentlemen so see the new taxation system for what it is. It is a bold,
fundamental embrace of a new way of structuring taxation in this country.
It will produce cheaper fuel, cheaper exports, lower business costs, a
$12 billion cut in personal income tax with 80% of Australian taxpayers
on a top marginal rate of no more than thirty cents in the dollar. It
will provide compensatory benefits by way of increased pensions and allowances
for retired people and self-funded retirees. The business tax section
will almost halve capital gains tax and it will lower the corporate tax
rate from thirty-six cents in the dollar to thirty cents. Now they are
the positives. And it will also very importantly replace entirely the
existing wholesale sales tax, with in theory seven rates of tax, with
a single rate goods and services tax. And it will also over time as GST
revenues build enable the states in relation to the financial institutions
duty to abolish it almost immediately and subsequently the bank account
debits tax and a variety of state stamp duties.
Now it is a very big reform and there are going to be a lot of scares,
there will be a scare a day, and the tabloid press won't be reluctant
to run some of those scares. They will run the negatives. And we will
need to reply. And we are going to have a very vigorous and active five
or six months. But it is a fight worth having and it is a cause worth
fighting for, because in the end this country is going is going to have
a more competitive taxation system. In the end you will be able to look
back and say we are glad they went the extra miles, we're glad that Howard
and Anthony were prepared to get out there and fight for the cause of
taxation reform.
I have believed in fundamentally reforming Australia's taxation system
now for more than twenty years. And there have been various attempts over
the years to do something about it. I am not doing it because of some
blind ideological commitment. I am not doing it as some kind of easy political
relaxation, because it's not. It certainly isn't, it is anything but comfortable
and relaxing on occasions if I can borrow a phrase that somebody once
used. But what I am doing it for is because I believe deep down that we
need these kind of reforms, and I believe that people are elected to high
office in this country to do something positive and if you're not willing
to do something positive you might as well get out of the way and let
somebody else have a go. And we live in a political environment where
the public expects their governments and their leaders to deliver outcomes
and to deliver results.
We're no longer as tribal about our politics. There are more and
more people who float around in the middle. There are more and more people
who are easily attracted by peripheral people who offer magic solutions
only to be revealed as having feet of clay in a fairly short period of
time. What people want are governments that are prepared to embrace problems
and to adopt policies that are going to bring about fundamental change.
And I know as somebody who, in different ways, has had something to do
over the last 20 odd years with the intense debate about economic policy
in this country. I've known for a long time that we needed to do
basically about four or five things to make our economy more internationally
competitive. We needed to open up our exchange rate, we needed to have
a deregulated financial system. We needed to get our budget in order to
get it back into surplus and out of deficit. We needed to do something
about our arthritic industrial relations system. We needed, in my view,
to get the government out of running businesses that it's no good
at running and I'll come to Telstra in a moment as I'm sure
you'd be disappointed if I didn't mention it.
And we also and very importantly needed to do something about our taxation
system. Now in different ways in various stages all of those things have
been tackled and one of the reasons Australia was able to lick the Asian
economic downturn, in fact the overwhelming reason was that our economic
position was strong. If we'd still been in deficit, if we hadn't
shown the rest of the world that we were prepared to embrace economic
reform that global economy in which we now live would have punished us
very severely and I wouldn't have believed that 18 months ago that
we could have done as well in the face of that Asian downturn. And I'm
so pleased that we took the decisions we did in 1996 to get the budget
into shape. Some of those decisions made us unpopular. Some of them made
us unpopular in areas of regional Australia. I know that but in the long
run we delivered a much greater benefit and that was that we were able
to essentially protect and waterproof this country against that very severe
economic downturn.
But you can never stop this process. We have to keep going and if we
are to protect ourselves against the next adverse international circumstance
when it comes along, and it will come along at some stage, we need to
have completed the next round of reform and that means making this country
more effective as far as its taxation system is concerned.
So I believe in taxation reform because it will make Australia stronger
and better economically. I believe it will improve our international competitiveness.
I believe it's a fairer system. I believe once it's been introduced
and fully understood, people will find it a less complicated system than
the existing arrangement and that is why I ask all of you to go with us.
We'll go through some difficult times politically over the next few
months on this issue. There'll be plenty of scares but keep our eye
firmly fixed on the long term aim and that is to give this country a comprehensively
better and comprehensively new taxation system.
One of the things that I mentioned, talking about the sort of things
that were needed to make this country more competitive, was to get the
Government out of running those things that private enterprise is better
at running. And I mentioned Telstra. I know not everybody in the community
including a number of people who support the Coalition are totally convinced
about the desirability of the full privatisation of Telstra. Let me tell
you why it's government policy. Let me remind you that that policy
says that we won't proceed to the full privatisation of Telstra unless
we're satisfied that the community service obligations of Telstra
are being fully met. It's a condition of moving to the sale of the
rest of Telstra that there be a satisfactory inquiry carried out into
those community service obligations. But I believe and I hope that the
Australian community will agree with me that as time goes by it will be
increasingly absurd and inappropriate for this country to invest tens
of billions of dollars in a telecommunications company when that money
could be alternatively invested in other forms of public expenditure or
public investment because the ownership of Telstra represents a public
sector investment by the Australian tax payer.
It's a question of making a choice. Do we think it's better
to have tens of billions of dollars tied up in a telecommunications company
or would we rather see those tens of billions of dollars used to pay off
part of our national debt. We've paid off a lot of it but if we were
able to sell the rest of Telstra we could make the Commonwealth free of
net debt by about the year 2003 and that's only three years away
from now. And we'd have something left over as well, quite a large
amount left over. And wouldn't it be better to see what was left
over, invested for example in accelerated commitment to infrastructure.
Wouldn't it be better to see that money invested in another way.
Isn't there a better way of investing billions of dollars of public
money than tying it up in a telecommunications company and in the process
raising all sorts of difficult issues when for example you have a telecommunications
company now which is owned just over 50% by the Government and it might
want to invest in say a media asset and that raises questions as to whether
it's appropriate for the Government to have an investment in another
media asset.
As time goes by, I believe it will be increasingly inappropriate for
the Government to own just over 50% and it will be increasingly desirable
and in the national interest that we should invest that additional money
in other forms of public investment including public investment in infrastructure
in regional Australia. That is not to say that we won't continue
to commit significant resources to infrastructure in the regions but it
means that if we were able to sell Telstra, we would be able to accelerate
and increase the level of commitment to infrastructure in different parts
of the country.
Well ladies and gentleman, can I just finish by saying this. The Government
is about more of course than economics. It is also about the kind of country
we have. It's about the kind of society we seek to build. Larry mentioned
East Timor, he mentioned the way in which I think we were able to demonstrate
the historic commitment of Australia for standing up for what was right,
not only in our own region but also around the world.
One of the things of which I am very proud that the Government has been
able to do and I pay tribute in particular to the work that Alexander
Downer has done as Foreign Minister has been the way in which we have
been able to rebalance our foreign relations. When I came to the Office
of Prime Minister, I felt as though I had inherited a situation where
my predecessor in the Government of this country saw our relations as
being exclusively and totally involved in the Asia Pacific Region. The
Asian Pacific Region is the most important region to us, is now and will
always be but there's more to our relations than our own region.
We are in every way as a country a citizen of the world and we have important
relations in Europe. We have important relations with the United States
and I think we've been able to rebalance those relations. We've
been able to play a very strong role in our own region and we've
been able to do that because we've been economically strong and because
we've been able to argue very very strongly for the right things
to be done in our region.
But it is important to see the Government in dimensions beyond what it's
achieved on the economic front and Larry was kind enough to mention many
of those things. I think also our health reforms and I am delighted to
know incidentally that as a result of the introduction of the tax rebate
and the lifetime health cover proposals which you are seeing advertised
on television at the present time with the use of those umbrellas. I've
very happy to report that some of the major health funds in Australia
this year have announced that they are not going to increase their insurance
premiums. Some of the major funds to date, at least 30% or more of Australians
who have private health insurance will not only have the benefit of the
tax refund but largely as a result of that they won't see any increase
in their private health insurance premiums over the next 12 months and
that is a direct result of the determination of this Government to preserve
the private component of the health insurance in this country. We're
not a government that believes that health should be totally a public
monopoly but we are a government that believes that the supplementation
of the public sector by the private is very important.
Ladies and gentleman I am delighted to be in Larry's electorate.
He's frank enough to know and I'm realistic enough to agree
with him, this is a tough seat. It has been made a bit more marginal by
the redistribution. He's been a terrific Member. He's an extremely
able and respected Minister. He's taken to his responsibilities as
Minister over the last 12 months in a very effective and energetic fashion
and I really do admire him greatly for that. I admire the work he did
first as a Parliamentary Secretary and more recently since the changes
following Tim Fischer's retirement as Minister for Community Services.
Can I say because this is a Coalition dinner and I have been all of my
political life a strong believer in the Coalition how much I enjoy working
in harmony with John Anderson who took over as Deputy Prime Minister from
Tim. Tim did a tremendous job, he lead the National Party through some
difficult times, he kept the faith he supported loyally the decisions
that we took as a government and John has done exactly the same thing.
He's a man I admire and respect and trust totally. He brings great
integrity, great intelligence and great decency to his responsibilities.
The National Party is well served in the Federal Parliament with its
younger Deputy Prime Minister and its younger Ministers like Larry Anthony.
It's a strong Coalition. And all of us know from past experience
that the great years of the Liberal Party and the National Party have
been when they've worked together. The Menzies / Fadden, the Menzies
/ McKewen, the Fraser / Anthony and now the Howard / Fischer, the Howard
/ Anderson years. They're the great years of the Coalition. Division
is death, unity builds success, encourages and inspires loyalty and gathers
support.
I don't take the next election for granted. Every election is hard
going in this country. You can't predict anything any more. Look
at Victoria. I will regard the next election whenever it occurs and it
is due at the end of next year and I'm in no hurry to make it any
earlier let me assure you of that. I think things are going very well
at the present time and I am a great believer in people getting, great
believer in people getting full value. Three years is pretty short and
there's no reason to make it even shorter but it will be a tough
fight. The nature of the electoral process in this country has changed.
People expect good governments and they have a right to expect good governments
and understandably they look for new hope, new definitions, new proposals,
new ideas. But if we work together we can make it, we need your support,
we thank you for the support you've given over the years. You've
got a terrific young energetic Local Member whose got a great future in
Federal politics as your representative. Give him all the support you
can over the next couple of years.
Thank you.
[End]