Subjects: strength of Australia; industrial relations; petrol prices; road funding; achievements of the Government; innovation statement; economy; Fran
E&OE..................
Well thank you very much Fran for those very kind words of introduction, Ladies and gentlemen I'm particularly delighted to be in Fran Bailey's electorate, because if ever there was a political fighter, and I admire political fighters, it is Fran Bailey.
This isn't, in political terms, an easy call. It's a very diverse electorate. It's an electorate that's always sat on a knife edge and as such you need a particular character and a particular level of personal commitment. And I want you to know, in carrying the Liberal banner in the electorate of McEwen at the next federal election, Fran has the unswerving and enthusiastic support of her Prime Minister and also of all the other senior members of the Federal Government. This morning is an opportunity for me to say a few words very directly to you, predominantly as supporters not always uncritically of the Government and of the Party, about where I see our country and where I see the Government.
In many ways you look at the state of Australia, if I can put it that way, you look at it from two perspectives. If you look at it as a nation, it's rarely in my view in its history been stronger economically and stronger in a psychological sense. Over the last year the experiences we've had with of course the Olympic Games and the wonderful respect that Australia won for what it did in East Timor, the other great sporting achievements of Australians in other fields of sporting endeavour and generally the attitude that is now held around the world towards this country. I don't think it has ever been as high as it is now. And that's not just the idle boast of a Prime Minister knowing that there's nobody in this audience that is going to disagree with him. But it is borne out by the experience that I've had in mixing with world leaders as recently as the last APEC meeting in Brunei.
And economically the country, if you look at it as a nation, it's very strong. We have still very strong levels of economic growth, we have low inflation, we have lower interest rates than we used to have, we've got our budget back in order, we have undertaken major reforms and there are more on the way. Unemployment is a lot lower than it used to be.
But having said all of that I also recognise that the benefits, and this is where you really get looking at Australia from another perspective, the benefits of that national prosperity in particular are not always as evenly shared as they might be. And of course in no society can you ever evenly share prosperity. What you must seek to do is to give people an even break as far as opportunity is concerned and to have a decent social security safety net to look after people who can't look after themselves. And then accept that some people inevitably in life are going to be more successful and do better than others.
So one of the challenges of the Government I lead is to make as certain as we can in a difficult environment, that the benefits of national economic strength and national economic prosperity are spread throughout the community.
Now I know that as I move around Australia that things aren't the same everywhere. They do vary. There are challenges in non metropolitan Australia that don't exist in some of the metropolitan areas and vice versa.
The long term decline in commodity prices has had a very devastating affect on the incomes of farming communities all around our country and it's a generational trend and no Australian Government can reverse a worldwide trend in the prices of our commodities. But we can understand what's happening. We can do our level best to ensure that services are retained in rural areas of Australia and we can also make certain that small businesses which are the backbone not only of rural communities but of outer metropolitan communities, that small business is given as good a go and as great a break as any Government can possibly give it.
And one of the things that has driven me for the last ten or fifteen years of my political life from a policy perspective has been the importance of having an industrial relations system that is as kind and accommodating to small business as it possibly can be.
I suppose when I became Prime Minister there was nothing I was more enthusiastically committed to than the cause of industrial relations reform. Because I had long thought that this country needed an industrial relations system that allowed people at a workplace level to make their bargains and to make their agreements. And an industrial relations system that didn't give a monopoly of power to the trade union movement.
Now some of you may wonder at why I even mention things like that because it is said that we have a new era and that everything has changed. Well I am concerned as Prime Minister that there does appear to be an industrial relations regression going on in Victoria with the new Government. And I think that is disturbing and I think many of the industrial relations reforms that were undertaken by the former Victorian Government are under threat and from a national perspective that is disturbing to me. From a Victorian perspective I think it would be particularly disturbing to a lot of people in small business.
As I've moved around I listen to people. I know for example that people are very unhappy about the price of petrol. I want you to know that the Government is very unhappy about the price of petrol. I would also like to say that the major reason why petrol is much dearer now than it was is that the world price of crude oil has gone up a great deal over the last nine or twelve months. And that is something I have to say to you with all the candor I can muster, I can't control. President Clinton, when he was in the White House, couldn't control it, and much and all as I welcome the accession of President Bush to the White House, I will predict that he won't be able to control the world price of crude oil either. Now we affect the price of petrol by imposing a petrol excise, and that petrol excise has been imposed by Labor Government's and by Liberal Government's. And every six months the excise is increased in line with the inflation rate, and the reason you do that is that excise is, what's called a volumetric tax and it's not an ad valorem of tax, it's a fixed rate. If the price of an article to which the GST applies goes up, well the nominal tax collection goes up because it's an an valorem rate. And that's the reason why you have half yearly indexation, and that was introduced back in 1983 on petrol and on tobacco and on alcohol by the former Labor Government. Now we continued that, I'm not going to pretend that we didn't continue it, I think there's been too much humbug in this debate, particularly from our opponents about what they, I mean it's very easy to criticise and then run away from committing yourself to implement the natural consequences of your criticisms, but I'll come to that in a moment.
Now we looked very hard before Christmas at the possibility of postponing in some way the excise increase that took place yesterday, because we knew it would attract criticism, and we knew there'd be a lot of people arguing that we should defer it. And we decided, after a lot of careful consideration that it would be better, from a long term point of view, to invest $1.6 billion of additional money over four years, that's $400 million roughly a year, into road funding and for most of that to go to councils for local road purposes. We took the view that that would be of more lasting value than action that would affect the price of petrol, potentially, and not necessary actually but potentially, by no more than 1.5 to 1.7 cents a litre. The sort of adjustment that could be wiped out by a fluctuation in the world price overnight. Now we thought about it very hard, and the reason I'm spending a few moments addressing it this morning is that I know it's something that's on peoples minds. And I listen to what people say, and I know that it is very much on their minds. And you are entitled to know, both as citizens and also as supporters of the Government, and of Fran's, you're entitled to know our thinking. You should know that we have not ignored the issue, you should know we've thought very hard about it. From a budget point of view we couldn't afford to both spend money, extra money on roads, and also provide the excise relief which would have involved about, up to about, $450 to $500 million a year, we couldn't do both so we decided to spend it on roads.
Now some of you will agree with that and some of you will disagree with it, as will other people around the country. But that was the reasoning that we went through. Now we hear Mr Beazley say he's going to introduce a Private Members Bill next week, well I mean that is just a stunt. I mean Mr Beazley will be credible on this issue if he stands up in the Parliament next week and says if I become Prime Minister after the next election, I will reduce petrol excise by 1.7 cents a litre. Now I mean he may do that, I don't know what he's going to do, thus far he's been the most policy lazy Opposition Leader I've ever seen, but that's a matter for him. But in this game increasingly Australians are looking for plain speaking and they are looking for their political leaders to acknowledge that you may have inherited a policy of the former Government and that you've continued it, I mean I'm not pretending that the Labor Party is responsible for the half yearly indexation of excise just because it was started under the Hawke Government, I mean we've continued it so when you continue the policy of a former Government you're responsible for it. I think it's humbug to pretend otherwise, and equally to be taken seriously the Opposition Leader has got to do more than introduce a Private Member's Bill, he's got to say well I'll cancel that increase and he's also got to tell us where the money's coming from, he's also got to tell us whether he's going to maintain the road funding commitment as well.
But in the five years, ladies and gentlemen, that we have been in Government, there's one thing that I have endeavored to do year in and year out, and I'll continue to do through this year and beyond, if the Australian people re-elect us. And that is to continue the process of reform and change in those parts of our lives and in those parts of our economy where I believe that change and reform is necessary. I often think that the art of good Government is to find those things that need changing, because they're no longer working, and work like fury to change them in a way that people find comfortable and accommodating. But equally those things in our community that don't need change, and continue to work and continue to be of value and relevance, to hang onto those with an equal degree of commitment. And I guess some people who occasionally scribble things in the newspaper about the Government and me, sort of scratch their head and say it's funny you know he believes in reform in certain areas but he doesn't believe in change in other areas, and some of these scribes think that's peculiar. I think if you looked at your own lives none of you will find that particularly peculiar. There are some things about your lives that are no different in terms of the emphasis you place on them, and the importance you place on them, your attachment to your families, your attachment to your local community, your attachment to your local football club, your attachment to the sport or activity of your choice, that's probably been the same for most of us for 30 or 40 years, or more, or less, depending on our age.
But equally there are other things that have changed beyond all recognition, the way in which information technology is now affecting us. I mean our young son is returning home from overseas from five or six weeks tomorrow morning, and I reflect upon the number of times I've spoken to him at my expense on the mobile phone since he's been away. And I compare that with the time when I had a working holiday in Europe in 1964 and I rang my mother, I've got to say at her expense, on one occasion. That one occasion I think was then 30 pounds for about a three minute conversation, and we all know how those sorts of things have changed dramatically. And that in a way has been something of a touch stone of the approach that the Government has tried to take. There are things that we need to change because they're no longer working. We needed a change to the tax system because it was no longer working effectively, we needed to change our industrial relations system because it was no longer working effectively. We needed to stop the habit the former Government had got into of spending beyond the nation's means. I mean it was no easy task to inherit an accumulated national debt of about $80 or $90 billion and then to find that the people who left to you then tried to stop you doing anything about it, that was no easy task either. So what we've endeavored to do in the time that we have been there is to embrace reform and change where it's necessary, but where it's not necessary we've tenaciously defended those practices and habits of the Australian people which continue to serve us in very good stead.
Now I don't underestimate it, if I can talk to you as supporters of Fran's, I don't underestimate the political challenge that is ahead of us. It's difficult, we live in a less tribal political world than we did 30 or 40 years ago. There are fewer utterly rusted on supporters of both sides of politics, there is a belief in a world where a lot of change is occurring that occasionally you hear people offering simplistic solutions, and that they can be enticing, although in the long run they're not very effective. And in the lead up to the election we're going to continue to embrace change and reform that's beneficial to the community. We've had to take some difficult economic decisions, and I know that a lot of people have had to adjust to the change involved in those, and I'm very pleased that as a result of the budget being in better condition that we're starting to see the emergence of what I might loosely call something of a social bonus from those changes. If you look back at the period since the Olympic Games of last year you've seen some very major initiatives by the Government. We announced a $1.4 billion program in conjunction with the states to tackle the problem of salinity and water quality. From a long term point of view there's hardly an issue more important than that to Australia. If we don't do something about it in 20 years time the drinking water of the people of Adelaide will not be fit for consumption in two out of five days, and that's a disgrace for a modern nation such as Australia. The Defence White Paper is the most comprehensive blueprint for the future defence needs of this country you've seen in a generation. And it's been very widely acclaimed throughout the defence community and the Australian community, and it's seen as a very strong blueprint for the future, and it's given an injection of morale and hope to our armed forces. You've also seen, as I mentioned earlier, that major roads program. That increased by 75% the money coming to local councils for local roads. And with declining rate bases in many of the outer and non-metropolitan areas of Australia that's a very important injection of money.
And as Fran mentioned, earlier this week I unveiled a $2.9 billion program to put more resources into science, innovation and technology, and that's going to double the number of Australian research grants. And research has always been a great strength of this country, it is amazing just how many inventions and discoveries and bright ideas that have come out of this country, and of all the Noble Prize winner's Australia has produced only one of them, Patrick Wright, was other than a scientist or a researcher. And there's a great deal of legitimate pride in Australians in what our scientists and our researchers can do. We need to stop some of them going overseas, you never stop all of them, and you shouldn't try to, and it's a two way process. The new head of the CSIRO is not an Australian, he was chosen after a world wide search, just as we send bright people to other parts of the world, equally bright people from other parts of the world come here. And I mention these things to make it plain that the Government's agenda, although it is very much focused on insuring that we have a strong and growing economy, it's also not neglecting other things that are very important to our country's future.
Managing the Australian economy this year will be harder than what it was last year or the year before, because there is a degree of unevenness occurring with the United States economy, and that's been made very plain by Dr Greenspan, the chairman of the Federal Reserve, probably the most influential economic figure in that country. And that will have a consequence for Australia, it need not be, if the economy is properly managed, it need not be an unduly negative consequence. I remind you that two or three years ago when the Asian economies went into a tailspin, most people thought that was going to engulf Australia, well it didn't. And the reason it didn't engulf Australia was that we had taken a number of steps to protect ourselves, and because we had a flexible exchange rate we were able to move a lot of our exports out of Asia into Europe and North America. And because we'd got our budget in shape international financial markets took a more positive view of Australia and it really was a very major economic achievement that we were able to avoid the impact of that Asian economic downturn. But we are going to have a challenge to manage the impact of the US slow down, and also other influences such as very high world oil prices. And it will require a degree of skillful economic management which the Federal Opposition clearly is not possessed. They're not good economic managers, they demonstrated that in Government, and they've demonstrated through their policy laziness in Opposition no real sign that they've changed in Opposition. And in the end I believe the Australian public will make judgements on the capacity of people to manage our economy, but also the capacity of the two sides of politics to deliver good outcomes in many of these other important non-economic areas.
I don't take anything in politics for granted. I've been in politics now for 26 years. II have to say I find it more stimulating and rewarding and satisfying now than I have at any time in my political life, because I have an opportunity to do some positive things. And I promised myself when I became Prime Minister that I would spend every waking hour trying to make a difference for the better. You only get one shot at it and you've really got to use the time that's there to have a go. Now I can't keep on having a go unless I've got people around me who've been given a go by their voters and their electors, and that really brings me back to where I began, and that is the importance of the re-election of Fran as your local member. She is a very hard working person, she's a very forthright person, she's spoken to me very directly about the concerns of this electorate. We all recognise the importance of having local members who are willing to articulate the concerns of their constituents. She's spoken to me about the impact of fuel prices, she's spoken to me about the impact of some of the adjustments for small business in relation to the new taxation system. She's made it very clear to me that overwhelmingly the tax system has been very well received in her electorate, but there are issues relating to the Business Activity Statement, and other documents that people are required to fill out that she wants the Government to look at, and we are, I've indicated that. We've always said that we would be willing to fine tune the implementation details of it. We think the tax system, over all, has been well received in the Australian community. Certainly it's had a less inflationary impact then the federal treasurery, a lower inflationary impact than the federal treasurery predicted. But we'll go ensuring that the implementation is as smooth as it can possibly be.
But I do want to warmly commend Fran to you as a very hard working dedicated conscientious member. As a person with a small business background she understands the life of a lot of you in this room, because many of you are involved in small business. And it is the backbone of so many communities and I do hope that all of you will give her the strongest possible support that you can.
I believe that if we continue to be an active enthusiastic committed Government, and a Government that relates to the cross section of the Australian community, we have a good chance of winning the next election. But it will be tough, and it will be no tougher anywhere in Australia than it will be here in McEwen. And that is why it's so tremendously important that all of you give Fran the maximum possible help. I'm most encouraged by this gathering this morning, it is a great pleasure to be back in Fran's electorate. I wish her well, and I'll do everything I humanly can to get her back as the member for McEwen and I ask all of you to do exactly the same.
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