Subjects: regional Australia; economy; trade; water rights; illegal immigrants.
E&OE..................
Thank you very much Mr President, ladies and gentlemen. This is the first time I've addressed in the five-and-a-half years I've been Prime Minister this joint gathering and I welcome very much a forum as representative as this to address some remarks more particularly to the outlook in country Australia and to take the opportunity that this forum gives me to say a few things about the Government's approach to some of the challenges and some of the opportunities in those parts of Australia outside the large metropolitan centres.
It is of course in looking at the scene in country Australia it is something of a paradox. We do so against the background of over the last five to ten years having experienced and gone through a growing debate about the divide between country and city Australia. And the concern that many have expressed about that divide and about the disadvantage suffered by many communities in country Australia has been well founded and quite justified. And yet right at the moment if you examine the experiences of many commodities, if you look at many communities in country Australia, we find that some of the conditions are the best that those communities have enjoyed for many years. We have very high export prices for most key farm commodities and they're expected on our advice to be sustained through the current financial year. Wool in the last financial year is up 34%, dairy products are up 33%, cotton is up 29%, beef 22%, wine 19%, and wheat 15%. And at its Outlook 2001 forecasting conference ABARE predicted the net value of farm incomes to rise by 29% in the year 2001-2002.
And if you look at the employment scene, contrary to the conventional view, employment growth in many of the non-metropolitan areas of the Australian states has been larger than it has been in the metropolitan areas. And employment in Australia's agricultural, fisheries and forestry sector, has grown by around 4% since late 1998, led by 19% growth in the Victorian agriculture, fisheries and forestry industry over that period.
So we are, in trying to examine the economic conditions of country Australia we are presented with that paradox. I think all of us welcome the very significant upswing in commodity prices. There are a number of reasons for it. It's not because we have a low dollar, it's because we have a super competitive exchange rate. But our export industries are doing extremely well. I would also argue very strongly, indeed passionately that another reason why our export industries are doing well is that the introduction of the new taxation system over a year ago has taken all of the embedded indirect taxes that used to constrain our export performance out of the whole export sector. The export sector, particularly the farm export sector, has benefited enormously from the improvement in industrial relations that have taken place over the last five-and-a-half years, most particularly the greater efficiency and the greater productivity on the Australian waterfront as a result of the reforms introduced quite courageously by Peter Reith back in 1998.
But when you take a broader longer term view it does nonetheless remain the case that there are some significant ongoing challenges in many parts of country Australia. You can't generalise. Many of the regions of country Australia are doing very well, and indeed even before the upturn in commodity prices of which I've spoken they were doing relatively well compared with the rest of the rural sector. But it's a belief that there still needs to be a longer term response and a longer term declaration of ongoing commitment to country Australia that my colleague the Deputy Prime Minister released on the 29th of August, his Stronger Regions, a Stronger Australia document which sought to put into perspective not only the individual things that we have endeavoured to do for country Australia over the last few years, but also some of the proposals we have for dealing with those areas of country Australia that are suffering particular disadvantage.
Of course the foundation of rural prosperity remains national economic wellbeing and country Australians along with the rest of us have benefited through dramatically lower interest rates - another reduction today of a quarter of a percent. And when you reflect of the days of bill rates of 21 and 22 percent for many of Australia's primary producers it is a world away from that experience. The lower levels of inflation, the stronger industrial relations scene, the other benefits for non-metropolitan Australia in relation to taxation arrangements for diesel. Adding all of those things together the generic economic condition remains of enormous significance to country Australia. And it remains my view and I think the view of many who observe the rural scene, that the greatest thing that has happened for country Australians, particularly people running farms and businesses over the last few years, has been the significant fall in interest rates because the significant fall in interest rates has made a contribution to tackling the enormous debt problems that many people in rural Australia have faced and continue to face for years ahead.
But in his statement released less than a week ago, what the Deputy Prime Minister sought to do was while recalling the many things that the Government has done for country Australia he sought to outline an approach based on what he called the stronger regions package whereby as a centrepiece of that approach local communities were to be encouraged, drawing on advice from government organisations such as CSIRO and others, local communities were to be encouraged to put forward proposals to the Government as to the most effective way of achieving economic revival and economic recovery within their individual regions. And what was different about this is really the process has been reversed. I can recall having a very lengthy discussion with the Deputy Prime Minister about this approach a few months ago when he indicated to me that after examining very exhaustively other approaches that are being adopted in other parts of the world to deal with the challenge of economically under performing regions and economically challenged regions, the view had been formed that the best approach was to invite local communities in a spirit of self initiative and self help to propose after a proper process of filtering and consultation the most effective way of achieving economic renewal and economic recovery. There will always be, given the long term trend in world commodity prices, there will always be certain regions in country Australia that are going to be under severe pressure and there will be some areas of country Australia that will undergo major social and economic change and will need major and significant economic restructure.
But what we have endeavoured to do was a number of approaches, most importantly of course is our generic commitment to strong national economic conditions, has been to put a floor under conditions in those regions and then provide through the new strategy that Mr Anderson has outlined, opportunities for those regions to strike out in new and different directions into the future. He outlined as the centrepiece of the initiative a sustainable regions programme that will cost $100 million over four years and be based on helping community leaders in selected regions to develop local solutions as solutions to the challenges that they face. The regions will be selected on the basis of criteria including unemployment, family income and also the region's commitment to taking charge of their own future. And I just want to take the opportunity for a few moments to expand upon the philosophy that under pinned that statement made by the Deputy Prime Minister.
Regions are productive, they have a future and they are integral to achieving Australia's national goals and objectives. Our belief is that in relation to the regions that are performing less effectively, a philosophy of self help in partnership with the Government is the best approach to apply public policy for the future. And that's why we believe it is up to those regions to formulate their own plans in local communities and it's the responsibility of the Government after those plans have been formulated to respond in the best way that we can to facilitate their goals and objectives. So rather than the Government having formed a view that a region is in need of assistance, proposing particular solutions which often aren't appropriate and are unlikely to work, we are intending in the future to reverse that process and invite those regions to put forward proposals to the Government. And in this context we're providing resources and tools for analysis and I mentioned the role of CSIRO. And we also intend as part of this strategy to conduct a comprehensive analysis of regional business needs.
But of course putting out this philosophy and maintaining a very strong commitment to strong generic economic conditions has not been the only way that the Government has responded to the particular needs of country Australia. I made it clear some years ago that I accepted that not every part of Australia was enjoying an equal measure of the economic prosperity that we were seeing as being quite evident at a national level. And I recognise and I acknowledge that the Government had a responsibility to respond to particular areas of disadvantage and particular needs of country Australians. And that is why in four or five major areas you will recall that over the last 18 months to two years the Government has responded in a very substantial way to the under provision of services and a very strong argument that the divide between country and city Australia ought to be closed as much as possible.
In the area of road funding, the Roads to Recovery Programme involving a commitment of $1.6 billion, the bulk of which will go to country Australia has responded to an oft repeated and long advocated need. The challenge of providing more effective and accessible medical services in country Australia was also something that was brought home to me on my many visits outside of the metropolitan area to different parts of Australia. And in the budget last year and also apart from the budget process, and again in the budget this year with our practice nursing proposals the Government has sought to respond in a long term way to the desperate need of many country communities to retain the general practitioners and the specialists and also in many areas to gain access to their services where they are now not available.
In the area of communications, the Government has and continues to make very strenuous efforts to bridge what Senator Alston has called the digital divide between city and country Australia. And we can look to a very long, and I think impressive record of responding. The Government for example, through the $250 million Networking the Nation Programme which was established from the proceeds of the first partial privatisation of Telstra and also the $670 million provided under the social bonus initiatives from the second partial sale of Telstra. And the money coming from both of these provisions has resulted in improved access and lower costs for telecommunications services in rural communities through programmes to deliver un-timed local calls, increased mobile phone coverage, enhanced television reception and improved access to the Internet. We carried out a telecommunications inquiry under the chairmanship of Tim Besley and we've announced a $163 million response to that service inquiry. And we've made it clear that we want to be satisfied that the communications needs of country Australia have been properly addressed before we give further consideration to additional privatisation of Telstra. And that $163 million involves an $88 million provision to improve mobile phone services including the provision of mobile services to nearly all towns with more than 500 people. A $52 million programme in partnership with Telstra to improve Internet performance over Telstra's dial-up network. $52 million to establish a national communications fund for significant telecommunications projects in rural and remote Australia involving the education and health sectors. And also a strengthening of the regulatory safe guards.
And in the very important area, the fourth area I foreshadowed, in the very important area of natural resource management the Government has a very creditable record of performance from the time that it was elected. Because we have placed enormous emphasis on protecting and enhancing the health of Australia's natural resources because that's important to underpinning our future economic growth. The Natural Heritage Trust, inaugurated after the 1996 election was renewed in the budget with another $1 billion, making a total of $2.5 billion over a period of 11 years. And that Trust has supported almost 11,000 individual projects across Australia with hundreds of thousands of people involved. And the great bulk of the projects that have been funded by the Natural Heritage Trust are in country Australia. And we also, in that same general area, are the first government at a national level to tackle the enormous problem of salinity and water quality. More than a quarter of Australia's rivers are close to or beyond sustainable extraction limits, nearly 6 million hectares of Australian farm land are at risk of dry land salinity and it's said that this could treble in 50 years to 17 million hectares being at risk.
This programme which involves cooperation with the states on a dollar for dollar basis will involve initially $1.4 billion over a period of years and I use the word initially quite adviseadly, and the programme will address salinity and deteriorating water quality across 21 priority regions throughout Australia.
I've also announced recently after my visit to the wheat belt of Western Australia not only particular measures in relation to the declaration of exceptional circumstances but also a review of the criteria applying to exceptional circumstances decisions because I do not believe that they have been operating as expeditiously and as efficiently and in some ways and areas they have been operating in a quiet arbitrary fashion under the existing guidelines. And we have established a number of working groups of Commonwealth and state officials to examine how they might operate more effectively.
And finally of course, to any audience concerned about country Australia, the issue of trade equity looms very large. It is of course the ongoing view of the Government and I buess of to just about everybody in this room that the rules of the World Trade Organisation work very much against the interest of a major agriculture exporting nation such as Australia. It remains our very strong commitment to do all we can at multilateral fora and also bilaterally to obtain improved access in world markets for Australian farm exports. We have had some success. We've had, paradoxically, given what I've just said about the World Trade Organisation rules, we've had real success in relation to our fight with the United States regarding Australian lamb exports. And the agreement that the America assistance would cease in November represents a significant achievement by Mark Vaile as our trade minister and does indicate that on occasions the World Trade Organisation rules can work to our benefit.
I indicated yesterday that I did not expect that in principle commitment would be reached with the United States, when I go to Washington next week, to negotiate a free trade agreement between Australia and the United States. The reason for that is that right at the moment the administration is endeavouring to get trade promotion authority from congress and if negotiations for free trade agreements with individual countries were on foot or immediately in prospect of being on foot at the time of those negotiations and discussions between administration and congress that would be likely to compromise the outcome that the administration wants. I regard this as very much an issue of timing and it is my view that the issue will be returned to after the question of trade promotion authority has been dealt with.
Suffice it to say, and I say it to this audience and through you to the rural community of Australia, we have absolutely no intention of entering into any free trade agreement with the United States or indeed any other country that does not involve significant benefits for Australian agriculture. It is of course a desire to get a better deal for Australian agriculture that is one of the driving forces behind our interest in negotiating a free trade agreement with the Americans.
I don't pretend to you it will be easy, I don't forecast that it is going to happen. But given the size of the United States economy and the overall complementarity of our economy and that of the Americans it makes good sense particularly against the background of rather faltering progress in multilateral fora, it makes a great deal of sense for this country to least examine the possibility and see if we can achieve the negotiation of an agreement on satisfactory terms.
The very last thing that I want to say to you is something of a non-economic and a non-trade character so far as country Australia is concerned. I am as you all know somebody who like the majority of Australians grew up in the suburbs of a major city, in my case Sydney. But my understanding of and my attitude towards my view of and my sense of identification with my country has always been very heavily defined by the contribution that country Australia or the bush as I tend to call it more often, has made to the shaping of our identify as a nation. And therefore when I as Prime Minister think of ways and means in which we might help country Australians, and help the regions that are in difficulty I'm not only thinking of it in economic terms, I'm thinking of it in national identity terms, I'm thinking of it in social terms.
I cannot conceive of an Australian nation and the sort of nation that I grew up to love and identify with, I cannot conceive of it without a strong and thriving rural sector. The prosperity of the rural sector is going to wax and wane like the prosperity of other sectors of our economy. And some regions will do better than others, some regions will need to adjust, some will adjust beyond all recognition with what they may have been a generation ago. But there does need for overwhelming social and national identity reasons, there does need to be maintained in this country a strong and enduring rural sector. And that remains a bedrock commitment of the Government I lead, it's the reason why we've endeavoured to achieve generically strong economic conditions, it's the reason why we have responded very generously in many of those areas such as health and roads and communications and the like of which I've spoken. And it's why in his major address to the National Press Club last week John Anderson outlined his new philosophical approach to responding to the needs of particularly disadvantaged regions. The Australia of the future must have as an integral part a strong and thriving rural sector and all of the policies of my government will continue to be directed towards achieving that outcome.
JOURNALIST:
This morning the Shadow Trade Minister Peter Cook responded to your comments yesterday on trade and he's made the suggestion that the trade and investment agreement with the US that excludes agriculture might be a way forward for Australia to at least foster some kind of agreement. I'd like your response to that PRIME MINISTER:
Well I think that's a bit defeatist. I mean surely leaving the politics of it aside, surely the logic is that you should see if you can negotiate a free trade agreement. Put it all on the table and see what comes out of it. And if at the end of that process you can't well you might look at something else. But I just can't for the life of me see why we would, if the opportunity becomes available, and it's, for the reasons I've outlined, we're not going to get an in principle agreement next week. But once the exchanges between the congress and the administration have been resolved satisfactorily, it makes far more sense to see if you can't negotiate a full free trade agreement. Now if you can't, well you might look at something else. But I think it's fundamentally defeatist not to endeavour to try and negotiate a broader understanding.
JOURNALIST:
Prime Minister you mentioned regions helping themselves. How would that actually work. Will it be local government areas?
PRIME MINISTER:
Well, I don't think we would seek to be arbitrary about what's a region. This is one of the problems we've run into with exceptional circumstances. I found when I was in Western Australia that you quite literally have a, you can have a situation where one please.side of the road is declared with exceptional circumstances and the other side of the road is supposed to be over- brimming with prosperity. And of course it's never quite like that. I wouldn't seek to be prescriptive in advance. in a way the regions would be self-selecting according to the particular circumstances. They might coincide with local government areas. They might coincide with commonly understood geographically described areas. They might be a mixture of the two. But the important principle that John outlined at the Press Club last week was that instead as so often happens, has happened in the past, you get a region that's performing poorly, its got a lot of difficulties and the Government, the Departments all get together and say well what we ought to do is this, that or the other or perhaps say nothing at all. What John's philosophy represents is an attempt at the local level for those leaders of that region taking advice from many organisation to develop a proposal which can then be put to the government and if they're appropriate assisted to provide help in those areas. The other great value of this approach is of course it recognises that, as I said in the beginning of my speech, that there are many areas of country Australia that are now doing very well. And there are some areas of those areas that have been doing relatively quite well even through the general difficulties of country Australia and we do have to have a capacity to separate those from the areas that aren't performing nearly as well.
JOURNALIST:
Prime Minister one of the biggest issues facing rural Australia today, or probably all Australia, is water. Who's got it, who doesn't have it, how's it allocated. Certainly successive Victorian governments have led the way in determining a process whereby water can be allocated and that has come at some expense to many Victorian farmers. Recently NSW, a group of farmers were given a multi-million dollar compensation pay-out I suppose you might call it for, to give up a lot of the water that they have in their areas for the greater good of the community. Would the federal government consider doing something similar for Victorian farmers equally affected?
PRIME MINISTER:
Well I support the view that, I mean water rights properly defined are in the nature of property rights. I don't think people who have their property rights taken away from them by governments should be regarded as ineligible for compensation. I'm not going to sort of make an open ended commitment to the Victorian Government as you invite me to do. The Victorian Government of course is going to be pretty well off as the years go by as a result of the GST they don't want. And the whole purpose of, I mean I noticed the other day Mr Bracks was trying to shed responsibilities, its interesting you get a growth tax for the first time in 50 years and you want to get rid of some of the responsibilities. But I'll resist the temptation to say anything crasser than that on that subject. But look, the point you make is a very serious one. Water rights are a huge problem for many farmers. What has happened in NSW might be a model or it might not depending on what responsibility governments are prepared, particularly state governments, who have the legal power to allocate water. We don't have the legal power to allocate water. We don't have any legal power to take away rights. We wouldn't seek to argue that any government should take away property rights without providing proper compensation. When I announced our salinity action plan I did indicate that if down the track it became necessary for action to be taken that might affect existing property rights, and that action could only be taken by state governments, legally, we would be willing to consider providing some assistance in relation to that. And I made that general commitment in those terms and subject to those conditions when I got the endorsement of the Premiers to the Salinity Action Plan. And of course action on salinity is clearly related to at some stage, water rights. But I just want to underline the point that my approach is that people who have rights should not have them taken away by government without proper compensation.
JOURNALIST:
What have you learnt about the talents of the Taxation Department in understanding and handling smaller enterprises in the light of the need to rectify the Tax Department mistakes in BAS and contracting legislation.
PRIME MINISTER:
Well I learn a lot about it from reading you Robert. Look, there are a number of aspects of the implementation of the new tax system that I wasn't happy with. And I was very active in bringing about some changes. I was very active in getting some changes to the Business Activity Statement, very active in getting changes to aspects of the contractors legislation, and I guess what has to be said is that when you have an enormous number of changes of this kind, an unprecedented level of change to our taxation system, that is going to put a strain on the administration and I think in a way the jury is still out as to whether the tax office responded magnificently to that challenge or responded ordinarily, or responded in the way that I think you suggest it did. I think to some extent the jury is still out on that. There has been a series of, how shall I put it, transitional challenges, in the introduction of the new system. I am very much alive to that can I assure you. And a number of my colleagues are very much alive to it. And we are very keen to, consistent with not rolling back the GST, to continue to fine-tune the administrative implementation of the system. I don't make any apology at all for fine tuning the administrative side of the new system. We'll continue to do that. And I think we shouldn't get hung up about whether that's a back flip or a triple pike or whatever. I mean the reality is that you bring in a new taxation system and you bring in changes of the magnitude that we have you are going to have some administrative glitches and you're going to have some administrative challenges. And I just want to repeat here today that we continue to be ready to fine-tune it. And that, as you know, is quite different from lifting the GST on particular items or particular activities. That is roll-back and we're against that. We're not going to do that. I think I'd say the jury is out on the main question that you asked.
JOURNALIST:
Given that the Tampa crisis has now passed, do you see some scope to restore bipartisan consensus to the treatment of this issue? And specifically given that Kim Beazley says he supports 90% of the legislation now before the parliament dealing with the processing of asylum seekers in Australia, would you be prepared to compromise on any aspects of that legislation to ensure an outcome before parliament rises before the election?
PRIME MINISTER:
Well I don't know. I hadn't intended myself to raise this issue. But you've raised it and that's fair enough I'll answer it. I don't frankly know what the Opposition's position is on this. My criticism of Mr Beazley on this is that he's flip-flopped from one side to the other. When I made the statement to the parliament that we had asked the SAS to go on board the Norwegian vessel, he immediately got up and said at a time like this the last thing the Government needs is a negative, carping Opposition. And I thought that was a pretty fair statement. Four and a half-hours later, after we introduced our Border Protection Bill he was saying that I was fanning racism, exploiting wedge politics and promoting Hansonism. At the weekend when I announced a deal with New Zealand and Nauru, he said that was a humanitarian solution to the problem. And the next day Bob McMullan said it was a humiliating solution to the problem. I mean you can't have it both ways. I mean on an issue like this you've either got to be for essentially what the Government is doing or against it. Now if the Border Protection Bill had been passed, we wouldn't now be having a court case. If the Border Protection Bill had been passed in the amended form that I offered and that was with a sunset clause of 6 months, it would have then run out in February of next year. And if you had a Labor government by then well they could just decide to leave it run out and if we were returned well we'd consider whether we were going to revive it.
Now as far as the legislation is, the other legislation that is held up in the parliament is concerned, he says he's in favour of 90% of it. But like all of these things the 90% is not the problem. It's the 10% that he's against. And the key thing is whether you're going to have what they call, they lawyers call, a privitive clause. Whether you're going to have a provision that once a tribunal in effect has made a decision you can't go on endlessly appealing that decision. That's the problem. That's the problem that Philip Ruddock's been railing about now for a couple of years. And I see no sign that they're going to give way on that. I mean he says that he wants bipartisanship, and yet sort of acts in a different fashion. I mean we determined a course on this and if the Opposition is prepared to give us bipartisanship well that's fine. I don't think bipartisanship is an end in itself unless you're bipartisan about the right thing. I mean it's not good public policy for the Government and the Opposition to agree about the wrong policy. It's desirable to have bipartisanship on issues involving our relations with other countries where there is an immediacy about them and where there is particular sensitivity and particular tension. Now it ought to have been possible in my view for the Opposition to have maintained bipartisanship on this issue, consistent with his initial response. But he has gone from one side to the other almost on a daily basis. And that Border Protection Bill, if that had been passed by the parliament then, and could have been passed on the basis of a 6 month sunset clause, then all of the concerns he had would have only related to a 6 month period which would have involved an election with the possibility of him being in charge of things after the election. I hope not. But that's in the hands of the Australian public. And that election as you know will be held before the end of the year.
So you're essentially looking at a period of three months during which all of these unimaginable disasters might have been perpetrated under that Bill. Hardly likely as it would involve at least a period of 4 or 5 weeks of caretaker government during the period of the election. It seemed to me that that was a very very simple proposition to have accepted. It would have obviated any legal doubt because it would have put beyond the reach of the court what many people regard as the right of government to decide these things. Now it hasn't been passed. That was his decision. I don't really think it's very credible for him to come back and say well look we opposed you on things but we're still interested in bipartisanship. I mean I'll be convinced they're interested in bipartisanship if they demonstrate it on