E&OE……………………………………………………………………………………
Well thank you very much John, to Julie Olsen, Rosemary Craddock the president of the South Australian Division, Senator Robert Hill the Leader of the Government in the Senate, my other ministerial and parliamentary colleagues, ladies and gentlemen.
I want to thank you very warmly for supporting this lunch which provides me with an opportunity to launch and to highlight some of the main features of the Government’s policy statement relating to wealth generation and the interests of the business community of Australia. You are all aware of the extraordinarily difficult and challenging times in which we live and the stressing circumstances that confront not only Australia but all other freedom loving nations at the present time. It is an occasion that requires all of us who care about the values that we hold dearest, the values of liberty and freedom, for all of us to work together and to stay together and cooperate both within Australia and around the world, to effectively counter the terrible challenge of terrorism. It will not be easy, it is not without danger, it is not without immense challenge. But we have no alternative, the world simply cannot close its eyes and hope this terrible threat will go away because it will not. And only by taking the most tenacious actions of the type outlined very effectively and very courageously by President Bush will in the end we triumph over this challenge to our age and this challenge to what we believe in and what we stand for.
And one of the many challenges that have out of the sad events of the 11th of September is the impact it’s had on the economies of the world. Of course the human toll is immensely more saddening and immensely worse but the economic toll is widespread. It’s more severely felt in some industries than in others and it’s more severely felt in some nations than in others. Fortunately and not least because of the good economic policies my government has followed over the last five and a half years, we are better prepared than most to cope with the harmful aftershocks economically of the terrorist attacks. If we had not got our budget back into balance, if we had not repaid $58 billion of the $96 billion of Labor debt, if we had not reformed our taxation system, if we had not reformed our industrial relations system, if we had not delivered the lowest interest rates in 30 years, if we’d not cut the company tax rate from 36 to 30 per cent, if we’d not halved the capital gains tax for individuals, and so the list goes on. If we’d not taken all of those measures we would now have a far gloomier economic outlook. And it’s very important, especially in the context of the next four weeks of this critical election campaign that we remind the Australian people that the actions we have taken, many unpopular at the time over the last five and a half years, but all calculated to aid Australia’s national interest, to put Australia’s interest first, the great dividend from those actions is that we enter this new difficult and challenging period better prepared and in better shape than would have otherwise have been the case.
Now one of the goals of the Government has been not to slavishly serve every whim of the business community of Australia but broadly to promote its interests because our goals and your goals are really the same. We all want a prosperous Australia, we all want rising employment, rising profits, growing international competitiveness, a more attractive investment climate, the most benign taxation system that a community can have consistent with the need to raise revenue to provide necessary services. And there’s no doubt that the Australian business sector has enjoyed the benefits of the economic times of the last five and a half years. The higher productivity, the lower inflation, the lower interest rates, the more internationally competitive taxation system, the better industrial relations climate, fewer strikes, less union interference and union domination. So much of that would be at risk if a Labor Government federally were to be elected.
But today ladies and gentleman I don’t speak only of the government’s record, impressive though I believe it to be. Today’s an opportunity in launching this policy document to outline a number of initiatives for a third term of the Coalition Government if it is re-elected on the 10th of November, which will be directed to building on the changes we’ve made over the last five and a half years to make us even more attractive to overseas investment, to stimulate greater investment within Australia and also to respond to some of the concerns that have been expressed to the Government by the business community, legitimate concerns, about the operation of some government agencies and some statutory office holders within the broad Federal Government structure.
One of the things that the Government has an obligation to ensure is that its dealings with Australian business are efficient, fair and transparent. And this is particularly true in the two key areas of taxation and regulation. A lot of the interface between the Government and the business community in these areas takes place through the Commonwealth statutory authorities and office holders. And it’s here that the business community is entitled to expect and to receive the highest levels of good governance. The Government will therefore focus very much in its next term, if it receives one, on improving the structures and the governance practices of all of its statutory authorities and office holders. And particular attention will be afforded to those that impact on the business community. But as a separate and quite distinct initiative and bearing in mind in part a number of concerns that have been expressed from time to time over recent years and recent months, the Government proposes through a new initiative to strengthen the advice given to Government in respect of matters of taxation administration and process.
We intend therefore to establish a new position, that is the position of the Inspector General of Taxation. This person will be an advocate for the ordinary tax payer. The position will report to the parliament through the Treasurer and will provide a new source of independent advice. His role will be to act as an advocate for all taxpayers, including Australian business. And to provide an avenue for more effective conflict resolution between taxpayers and the Australian Taxation Office than currently exists.
Ministerial control of tax policy and legislation will remain as it should with the Government and the inspector general’s activities will not be directed towards legal adjudication. But it has become very evident to me as Prime Minister and also evident to the Treasurer that there are areas of legitimate complaint and concern between the business community and the taxation office which cannot be resolved through the normal political process because of the need, quite properly, to insulate the individual affairs of tax payers from the political process. Yet the issue cannot remain unaddressed and the Government believes that the establishment of this new office will provide people with a capacity to ventilate their legitimate concerns, it will impose greater requirements of good governance on the Australian Taxation Office. We are all accountable, you are accountable to your shareholders, I am accountable to my 19 million shareholders and no aspect of Government, be it the taxation office or any other agency of government should in any way be immune from full accountability.
The second announcement I make is that we intend, if re-elected, to carry out a comprehensive review of the competition provisions of the Trade Practices Act. Australian business both large and small need to be assured that legislation and administrative practice will not act against continued growth and productivity. Strong but effective trade practices legislation remains crucial to the Government’s commitment to encourage the success and the fairness of business activity. We need legislation of this kind to promote effective competition. We need to make certain at all times that the balance between big and small business in the competitive interaction of economic behaviour is always correct. And while various aspects of the trade practices act have been reviewed over the past few years, a wider review of the competition provision is now warranted. We therefore, under the chairmanship of an independent person, will carry out a review of the Trade Practices Act to report by August of next year. Its terms of reference will be to continue to encourage an environment where Australian business can grow and compete internationally; provide adequate protection for the balance of power between small and large businesses; support the growth of businesses in regional Australia and deal fairly with the affairs of individual companies.
The third area of great concern I know to many in this room, to me and to all Australians is the need to ensure that we resist the trend towards Australia becoming a branch office economy. And one of the more pressing issues facing business leaders is how to run and expand their companies in an increasingly competitive global environment. We remain very strongly of the view that Australian companies can effectively compete and succeed on the global stage while remaining based in Australia. The need for globally competitive taxes and taxation systems is vital if Australian based firms are going to compete successfully. That’s why we introduced a more internationally competitive company tax rate of 30 per cent. However the pressure that remains on some companies to relocate their headquarters offshore underscores the need for further improvement. The recent protocol amending the double taxation convention between the United States and Australia, which removed withholding taxes on most dividends, was a major step in facilitating a competitive and modern tax treaty network. More broadly the Government will as a matter of priority on re-election examine where the features of the current taxation arrangements still exist which effect the decisions of businesses to remain in Australia or to relocate here in preference to other countries. We’ll pay particular regard to whether Australia’s international tax regime acts as an impediment to Australian companies attracting domestic and foreign equity, acts as an impediment to them expanding offshore and whether it acts as an impediment to holding companies and conduit holdings being located in Australia.
I turn to a fourth item, namely that of venture capital. So very important in a growing and expanding and innovative Australian economy. Because in an increasingly competitive global environment reducing taxes on equity flows will significantly enhance the ability of companies to manage their capital base. The Government therefore intends to extend the previously announced exemption for capital gains on venture capital investments by providing venture capital limited partnerships with flow through taxation treatment. The Government’s decision will provide Australia with a world’s best practice investment vehicle for venture capital and is expected to result in increased international investment in Australia. It will also improve Australia’s access to overseas expertise for start up and expanding companies. These changes, which will apply from the first of July next year stem from the Government's commitment in Backing Australia’s Ability to ensure that venture capital investment is encouraged.
Fifthly I turn to the area of the taxation treatment of expatriates. While positioning and encouraging Australian companies to take on the world we must remain mindful of the fact that a global company needs access to global talent. The government recently announced changes to various tax rules which reduced the cost of employing skilled expatriates. In recognition of the importance of attracting highly skilled workers from around the world the government will further enhance and amend certain foreign source income and foreign investment fund rules for expatriates, resident in Australia for less than four years. The Government will also seek to address concerns that departing non-residents have with capital gains tax liabilities on the unrealised gains on their foreign assets. These changes will further reduce disincentives for the recruitment of skilled executives and professionals to Australia.
And finally in the very important area of winning investment the Government intends to respond to the recommendations of the report delivered some months ago by Dr Ian Blackburn who conducted a review into the Commonwealth’s effectiveness in promoting and attracting foreign direct investment. We intend to accept broadly the recommendations of the report which will continue our activity in encouraging overseas direct investment. A national strategic framework for investment promotion and attraction in Australia will be developed as a matter of priority. And that framework will be developed in the context of Australia’s overall objectives for economic growth, industry and regional development. Investment promotion and attraction will in future be delivered through an autonomous prescribed agency to be known as Invest Australia. It will involve a greater partnership with the states and territories and the investment activities of other Commonwealth agencies will be incorporated into Invest Australia.
Ladies and gentlemen the specific policy commitments I have outlined there represent a very significant part of the Government’s third term agenda for continued activity, reform and change in response to the needs of the Australian business community. But crucial to those changes and indeed crucial to everything that any Government can hope to do is the maintenance of very strong economic growth. It is only through a growing economy that we have the capacity to fund the public services that a modern society needs and a compassionate society expects. Over the last five and a half years we have been an active reformist Government. We haven’t always got things 100 per cent correct, we have made our share of mistakes, but we’ve been willing to respond to expressions of concerns where those mistakes have been made. It is undeniably the case that the Australian economy is stronger, more diversified, more internationally competitive and less cloistered than it was five and a half years ago.
The strength of the local economy here in South Australia is a product of that national economic prosperity. It is also due in no small measure to the pro-business policies pursued by John Olsen’s Government. I have always been very sensitive to the particular economic needs of South Australia. And the actions we have taken in relation to the motor manufacturing industry, the actions we took to support the construction of the Darwin to Alice Springs railway, the commitment we’ve made to the wine industry and a whole list of other initiatives undertaken by the Government which are of particular importance to South Australia and to the people of Adelaide as well as being of great national significance.
Finally can I say to you that over the course of the next four weeks we have a great challenge as Liberals. This is not a lay down misere this election, it never was, it isn’t and it won’t be. The electoral climate in Australia is always volatile and always very challenging. We have a strong record to look to, we offer at a time of intense international uncertainty and concern a capacity as well as a record of stability, of predictability, of knowing what we believe in, in what we stand for. We are opposed to a group of people who for the last five and a half years have sought to do nothing other than feed off the inevitable friction caused whenever major change is undertaken. The whole philosophy of the Leader of the Opposition over the last five and a half years was summed up in a moment of total candour to his Labor caucus in December of 1999 when he said comrades, we’re going to surf to victory off the back of discontent with the GST. That was their whole philosophy. Their whole philosophy was to hope and pray that the world would come to an end when the GST was introduced. They cared not a jot for Australia’s national interest, they did not put Australia’s interest first, they put the Labor Party’s interest first. Their whole pattern of behaviour over the last five and a half years has been to criticise, to oppose, to be negative and to engage in guerilla tactics. And now as they approach the election and they find that their capacity to define and explain themselves to the Australian electorate is very limited they are looking around to blame everybody other than themselves. If they have a difficulty defining and explaining themselves they are the victims of their own negativity and their own shortsightedness.
Over the last five and a half years we have taken a lot of tough and difficult decisions. And I know there are people in this room who violently disagreed with some of the stances I’ve taken and my colleagues have taken. But they’ve always been stances that have been taken in the cause of putting Australia’s interest first. And the end result is that we have a stronger, more respected, more resilient Australian nation, both economically and socially.
But we are not resting on our laurels. I don’t seek to be re-elected as Prime Minister simply on the basis of what I have done but also on the basis of what I want to do. And some of the things I want to do in the area of business policy I’ve outlined today, and are contained in the larger document. But what I do want to do over the next term is to ensure that the conditions of prosperity, now widely enjoyed by the Australian business community, certainly under some pressure as a result of the post September 11 climate, but nonetheless there’s a capacity to continue those conditions of prosperity and growth. I ask for your help, not only over the next four weeks but if we are successful over the subsequent three years to continue the process of growth and expansion and development of the Australian economy. Recognising always that the wealth of a nation is ultimately dependent upon the entrepreneurial spirit, the risk taking disposition and the animal spirits of its business community. We cannot have wealth without entrepreneurs. We cannot provide revenue for taxes unless people make money. A nation needs profitable businesses to be successful and all of our policies are committed to achieve that outcome.
Thank you.
[ends]