E&OE...........
Well thank you very much Colin for those very kind words of introduction, Kim Keogh the State President of the Liberal Party in Western Australia, Ian Warner the Chairman of the Finance Committee, my many parliamentary colleagues, ladies and gentlemen. It';s always a great pleasure to me to come to Perth. I';m spending four days in Western Australia on this occasion and it';s a particular pleasure to renew my links with the business community of Perth and to have the opportunity of sharing with it some thoughts about where Australia sits at the present time and in particular where the Australian economy sits and where I think it might be heading.
It';s fair to say that there is a degree of uncertainty about the world economy. The United States economy suffered some severe shocks last year, the Australian economy managed to avoid any backwash from those shocks. And there is still a degree of uncertainty in the United States, particularly in the wake of a number of controversies that have surrounded the financial affairs of a number of large companies. And can I say on that issue, because it';s something that I feel quite strongly about, that it';s very important when you have some disappointing financial collapses, you have a lot of talk and a lot of legitimate examination of the behaviour of company executives in certain organisations, it';s very important that we preserve a sense of perspective. It is necessary to severely punish wrongdoers. There are laws against fraud and misbehaviour that should be very vigorously enforced. And when men and women in business break the codes of proper behaviour and behave improperly, even illegally, then they do a great disservice to all of us and they do a great disservice to the cause of competitive capitalism which is the basis of the generation of wealth in this country and the generation of wealth in other similar societies.
But I think it';s important in the process of saying that that we don';t overreact and we don';t in the wake of concern about the behaviour of some embrace a whole plethora of regulation and legislation that encumbers and affects the activities of the great majority of men and women in business which whilst they are robust, they are entirely proper, completely ethical and in accordance with the sort of standards that the Australian community would expect.
I say that because I detect in some of the debate that';s swirling around in the community at the present time a bit of a reaction that says oh we';ve had this terrible Enron, we';ve had terrible behaviour in Worldcom and we';ve had this and that, we have to bring in a whole raft of new regulation.
I have to say to you that I am not going to get swept along in that tide. I';m in favour of changing regulation and changing laws when I';m presented with a compelling case in the national interest to do so but I think it';s very important that in the wake of these things we don';t overreact because in the end the business community does need room to move, it does need air to breath as far as regulation is concerned. We already have a lot of regulation in this country that affects the business community and we always have to run the public interest test over any propositions that that level of regulation should be changed or in some way strengthened.
As you know, I';ve been away a little more often over the last couple of months than has been my wont. I';m not a Prime Minister who believes that you make an art form of overseas travel as one or two of my predecessors some years ago did. But it is necessary, given the globalised circumstances in which we live, it is necessary that the Prime Minister from time to time travel and from time to time interact with the leaders of other countries.
And I have to say that the visit I just paid to Europe was rewarding in many ways but what was the most rewarding element of it is the evident high regard in which Australia is held at the present time. And the remarks that were made to me by the Prime Minister of Italy, Prime Minister of Germany, Greece and other people I met were the remarks of leaders of countries that have taken real notice of what Australia has been able to achieve over the last few years. And the high esteem in which Australia is held at the present time is very much due, in my opinion, to three factors – the very strong performance of the Australian economy, and it';s not engaging in any kind of political triumphalism for me to say that our economy last year and likely this year has and will grow more strongly than that of any other developed country. And when you go to Europe and you talk about growth rates of 4% and you recite the series of reforms that have been embraced in the Australian economy over a period of 15 years that have lead to this very vibrant, robust Australian economy, it is a very strong and a very meritorious story and there is respect and regard for Australia as a consequence of that.
There is great regard still for this country because of the stand it took over East Timor. It was seen as the behaviour of a country that was willing to accept its responsibilities in this part of the world and it was ready to face the difficulties that would come in our relationship with Indonesia, our nearest neighbour, as a result of the stance we took but we nonetheless took it. And the way in which we have been able, in my view, positively to move on in our relationship with Indonesia, to rebuild it, after the events in East Timor is also widely noted.
And on a personal level of course Australians projected themselves so magnificently two years ago with the Olympic Games and put on display to the rest of the world all of the characteristics that we like to believe are most associated with being an Australian. Our openness, our lack of class consciousness, our easy going character, our technological sophistication and not least of course our sporting excellence.
So when you travel as a Prime Minister now of Australia, you are travelling at a time when this country is held in very high regard. I was asked frequently by the media as to whether I encountered any criticism of our stance on border protection. I have to report to you that certainly at a government level, and I didn';t detect it apart from one or two occasions which is understandable in great democracies, I didn';t encounter it at other levels either, I think it is fair to say that the difficult problems of illegal immigration are affecting all countries. It';s not an easy issue. Anybody who imagines that my government enjoys taking the stance that it does at the present time is mistaken. And anybody who thinks that there is some perpetual vested political interest on our part in a continuation of this state of affairs is also wrong but we frankly have no alternative other than to follow the policies that we are following at the present time. And I certainly had reinforced, when I was in Europe, the proposition that most other countries are looking in the direction of tightening their policies on border protection rather than going in the opposite direction. And whilst I wouldn';t for a moment suggest that this country is being seen as a situation or example to be imitated in other parts of the world, each country is different, it is nonetheless the case that the stance that we took is widely understood around the world and so far from it being a source of shame and criticism of Australia it is seen increasingly in different parts of the world as a stance that difficult, but nonetheless understandably, taken.
I think it';s very important as we look at what Australia has been able to achieve particularly economically over the last few years that we don';t get to a stage where we become complacent or believe that the moment has arrived to rest on our laurels so far as economic reform is concerned. The process of economic reform and you';ve probably in this very room heard me say this before. I';ve probably said this at the time that I was arguing the cause of taxation reform, I probably said it as I was arguing the cause of industrial relations reform a number of years ago, that the process of reform is never completed. And the globalised character of the world economy in which we live at the present time means that the reform process must go on and that is why the government is going to continue to persist with a number of reform projects it has especially in the economic area.
We are going to continue to persevere in trying to achieve further industrial relations reform. I regret very much that since the election of Labor governments in all of the Australian states industrial relations reform has not only stalled but has begun to go backwards at a state level. I think the changes that were made here in Western Australian were very regrettable at a state level. I think they have diminished the business climate here in a way that I don';t think is in the interests of the state. We';re going to continue to persevere in trying to get our unfair dismissal laws through the Senate. Some people have said to me well you';ve been trying for years, you might as well give up. Well I don';t have any intention of giving up because I believe that if we could get rid of those existing unfair dismissal laws, that more than any other single thing would make a contribution towards a further reduction in the level of unemployment in Australia.
Our unemployment rate now is a lot lower than what it was when we came to office and there are signs that if we can maintain the current level of economic growth we can get it down even further. But I think if we could achieve further reforms on the industrial relations front, we would be able to achieve something that might have been thought undreamt of a few years ago, and that is having a five in front of our unemployment rate. And that is why we are going to persist because you all know that the great generator of jobs in the Australian community is in the small and medium enterprise area. And if we can remove the impediments and the restrictions in those areas then I think we can make further progress on the unemployment front.
Can I say in relation to the sale of Telstra, which has been very much in the news, and I noticed that there was an opinion poll published earlier this week which said that a significant majority of the Australian community believe that the Government should retain majority ownership of Telstra. That poll did not surprise me because support for the sale of Telstra by the Government is not something that draws top of head or automatic support. It';s one of those issues that is not instantaneously popular, for reasons that I can understand. But we have a situation where if you pause and think for a moment, and perhaps this is an audience that might be predisposed to agree with me on this, I don';t know. But if you pause and think for a moment there is no logic in staying where we are. Staying where we are inhibits the capacity of a large corporation such as Telstra to perform freely and competitively in the marketplace. It can';t for example raise equity by share issues. We';re not going to buy, as a government, shares. It can';t go through a process of, to use a very old fashioned expression, of renationalisation. Is anybody in Australian politics seriously running around saying well if there';s a change of Government, an incoming Labor Government is going to buy back from the Australian public the shares that were sold over the past few years.
So you';re left with really only one alternative and that is at some time, and subject to the condition that I laid down during the election campaign, and that is that we have to be satisfied that services in the bush are, and I';ll use the colloquialism, up to scratch. And I think they are improving, and I think the point at which that judgement can be made is approaching, then subject to that there is no logical alternative other than to proceed with the sale of the remaining shares in Telstra. Now I don';t think it';s, as I say, instantaneously popular, and the fact that the majority of the public appears to be opposed to it puts an obligation on me in particular and all of my colleagues to continue to argue the case very strongly.
We';re also going to persist ladies and gentlemen in maintaining what we regard as one of the better business environments that this country has had over the last 30 years. Prime Ministers and Treasurers don';t mandate interest rate levels. In the sort of economic society in which we now live interest rates are determined by the Reserve Bank in response to market influences. But governments can make a contribution to the climate that conditions the response of the Reserve Bank to those market conditions. And the fact that over the last six and a half years we have repaid a very large amount of government debt, the fact that we have a debt to GDP ratio which is 4.6 per cent against an OECD average of about 35 per cent is a sign of course that we want market conditions conducive to interest rates which are as low as possible.
We';re not reluctant to take specific interventionary action to address a weakness in the economy as we did at the beginning of last year in relation to the housing industry. I';ve remarked to a number of my colleagues that although the doctrines of John Maynard Keynes no longer hold the sway they once did in relation to economic thought and economic practice, the doubling of the home savings grant for new homes that we announced early last year in response to the slump in housing activity in the December quarter of 2000 was a reminder to me that the nostrums of Keynesian intervention are not entirely dead even in the globalised economy in which we now live.
We continue ladies and gentlemen to be committed to the maintenance of budget surpluses. We continue to believe that although major taxation reform has been carried out and I hope bedded down and I again want to thank the business community of Perth and through it the business community of Australia for the way in which they co-operated, often with some individual difficulty because of the varied impact of tax reform on different companies, but nonetheless co-operated to bring about a reform that we all knew at some stage had to be undertaken and at some stage had to be carried out. But taxation reform in a way is never completed. There are some aspects of international taxation which bear upon the competitive performance of Australian companies and bear upon their taxation obligations in other parts of the world that are under study at the present time. And in particular we want to be satisfied that further reforms in that area that are needed to support the competitiveness of Australian companies are undertaken.
As a great trading nation Australia of course continues to be buffeted by negative world trading practices. You will be aware that when I was in Brussels, and while I might be tempted to do so I can';t claim that it was entirely as a result of my representations on behalf of Australian farmers, the European Union announced a proposal for the first time to begin the long process of changing the structure of the common agricultural policy. I was reported, and it';s an understatement to say so, I was reported as having reacted very cautiously to what the European Union proposed. And I had good reason for that caution because the proposals at the moment have only come from the commission, they have to be approved by all of the member countries, there is strong opposition to them from the French farming lobby, there is great scepticism about them from the Irish and the Greeks who are both great beneficiaries of the common agricultural policy. And even if these reforms are implemented, what they propose is to decouple the payment of subsidies from levels of production and if that is implemented what that means is that over time, because the payments are not related to production there';ll be smaller surpluses generated by European farmers and therefore the European Union won';t feel the need to subsidise the export of those surpluses into third world countries. Which is one of things that has proved so damaging to the efficient Australian farmer.
All of that represents a very faint glimmer at the end of a very long tunnel and there are many ifs, buts and maybes that lie between that announcement and some ultimate benefit to Australia';s very hard pressed rural producers. I leave you with one statistic in this area which demonstrates the task that we face. The level of subsidy in the European Union is 35 per cent of the total value of all production within the European Union. The level of subsidy in the United States for their farmers is 21 per cent of the level of total production within the United States. The level of subsidy in Australia is only four per cent of the total value of farm production in this country. When you occasionally read a spokesman for the European Union talking about what they want in return for any concessions to be made on the agricultural front I would say with respect to them that it is a pure negotiating ploy. Our levels of protection are lower, our trading policies are more transparent and our approach to world trade is more internationalist and global than most of our major trading partners. And the reason that it is so is that it is in Australia';s long term interests that we do everything we can to encourage an open world trading environment.
And as great exporting states such as Western Australia, and I am very conscious of the statistical comparisons between the population of Western Australia and the contribution that population makes to the total export earnings of the Commonwealth of Australia, I';m reminded of those statistics, I';m reminded of those statistics every time I come to Perth. I';m reminded of the contribution particularly of the mining industry but also the rural industries of this state. And I think of all of the states of Australia there is none that has a greater interest in an open world trading environment than the state of Western Australia.
The last thing I want to say ladies and gentlemen is to direct some remarks to the Liberal Party itself around Australia. We are in an unusual position at the present time, we hold power nationally but we';re out of office at a state level and at a territory level in every area of government. That poses a challenge for us here in Western Australia as it does in New South Wales and indeed in all of the other states. Can I say speaking from a national perspective that the spirit and the morale of our federal parliamentary party is very high. Our opponents at the present time federally are very divided and directionless and going through one of those periods in politics that every political party will go through. Can I say to all of you that whilst it is a situation that from time to time is of interest and of satisfaction to me, I';ve seen enough of politics over the 28 years that I';ve been in Federal Parliament to not develop any sense of complacency or any sense of smugness out of the disarray or difficulty of one';s political opponents.
We live in a very non-tribal political world. People';s political affections are more fickle now then they';ve ever been in the time that I';ve been in politics. Attitudes can change very rapidly and I';ve constantly warned and encouraged my colleagues in the Federal Parliamentary Party not to fall into any sense of complacency or any smug belief that because of the current difficulties of our opponents that that guarantees the outcome of the next election. Politics is a very uncertain game. I dare say that many in this room who might have attended luncheons that I addressed in the early part of last year in Perth probably would have thought to themselves that it might be the last time they were hearing me speak as Prime Minister. Because our fortunes in the early part of last year were to say the least fairly ordinary and we were seen by many as in the terminal phases of a period of government. And I have to say that there were periods and although I never lost enthusiasm and hope and commitment, there were periods when I recognised that we were facing a very tough fight.
So all of that is a reminder of just how changeable and how variable politics is. And the message I have for my Federal Parliamentary colleagues and the message I have for the supporters of the Liberal Party here today and all around the country is that it is precisely when your political opponents are going through difficulty, it is precisely when they appear to be suffering adversity, when it is time for an incumbent government to redouble its efforts to remain in touch with the community and to redouble its efforts to present itself to the community as a government of new ideas and of ongoing spirit and ongoing determination and commitment. And that is what we hope to do over the next two and a half years.
And in our relations with the business community can I repeat something I';ve frequently said at gatherings such as this. The Liberal Party, unlike our political opponents, is not owned by any one section of the Australian community. We don';t have a 60-40 rule operating at any of the state conferences of the Liberal Party. We don';t have 10, 20, 30, 40 or any percentage of votes allocated to business interests. But we do, very importantly, we have a broad sympathy with the philosophy of the business community of Australia. We don';t always agree with you and you won';t always like what we do. But we are a party that is committed to the cause of competitive capitalism. When I addressed the US Congress in June I identified some of the values that I held in common with most of the people in that Congress. And I said that one of those values was a strong personal belief that competitive capitalism was the true source of generating national wealth. And that remains the core economic philosophy of the government and I know it is a value that we share very much in common with the men and women in this room.
Can I thank you for the support that you';ve given to the Liberal Party organisation here in Western Australia. Can I think Kim Keogh for the great leadership that he';s given to the party organisation over the last 12 months in challenging times, and with his leadership the organisation was able to give tremendous help to me as federal parliamentary leader in a very difficult climate. I thank you for your past support, I encourage you to maintain it, not only for us but also for Colin Barnett and his colleagues at a state level. They face the difficulties and challenges which I remember only too well of Opposition. It';s the toughest job in politics being a leader of an opposition, be it federal or state, Liberal or Labor, I remember it very well, I have no intention of going back to it but I can empathise with somebody who';s currently experiencing it.
Thank you very much for coming today, as always it';s a great delight to be back here in Perth. Thank you.[ends]