E&OE...
Thank you very much Pat for that wonderfully generous introduction. To Barry O'Farrell the Leader of the New South Wales Opposition, my Ministerial and Parliamentary colleagues, ladies and gentlemen. When Pat started employing the racing metaphors, both horse racing and foot racing, I was reminded of the metaphor or, I think it's a metaphor that I constantly use in relation to economic reform. And that metaphor is it's like participating in a foot race towards an ever receding finishing line. You never get there, you've always got to do more, but you know that if you slow down or worse still you stop, you're not going to win the race because there'll be other people who will surge past you and that metaphor has been followed very much by the Government over the last 11 years.
I think the best two Budgets this Government has brought down was the first Budget in 1996 which because it had to take a lot of very, very difficult decisions laid the foundation for later Budgets and then, of course, the Budget that was bought down on Tuesday night. It's interesting that in his reply to the Budget last night, the Leader of the Opposition offered no criticism of the Budget, not one item in the Budget did he criticise, an interesting commentary, an acknowledgement perhaps that there wasn't a lot in the document that could be criticised. Everyone knows that Australia is living in very prosperous circumstances and I'll come in a moment to this canard that's been put around that the only reason Australia is prosperous at the moment is because we have a mining boom in Western Australia and Queensland. But we are doing well by any measure and I won't bore you with all the statistics but the two statistics of which I'm proudest because they illustrate more than anything else the great human dividend out of good economic policy, is that we do have a 33 year, almost now, low in unemployment and the figure yesterday of 4.4 per cent unemployment was unimaginable even 12 or 18 months ago and within that there's an even greater statistic and that is that the level of long term unemployment, and that is people who've been out of work for more than a year, is at its lowest level since statistics of that character began to be kept and it's actually fallen by 22 per cent in the last year.
Now just think of that for a moment. These are the people who probably are of families that lost their jobs in the 1970s and fell into a culture of never being in work and it is an amazing thing that you can have a fall of that magnitude in that group of people and these are people who find it very, very hard to get work and I know we all recognise that you need a combination of incentives and other policies to make sure that people try hard to find work and we sometimes think there are some in the community that don't try hard enough, but there are some in the community who no matter how hard they try they just haven't had the background or they haven't had the skills, they haven't had the motivation that we've been given because of our more fortunate circumstances. And I'm really, as an exercise in what is the ultimate purpose of good economic management and that is to deliver a great human dividend, I think those two statistics above anything else make me feel immensely proud of what we have done over the last 11 years. I mean, this is something that a Labor government that is meant to represent the battlers of this country would not have been able to do and can I say with some feeling that if Labor returns to government at the end of this year and let me tell you very frankly at a Liberal Party gathering, that is a distinct possibility. I wouldn't want anybody to leave this lunch imagining that the next election is a foregone conclusion, it is not. One of the things Labor will do which will reverse what I've just been speaking of is to bring back these ridiculous unfair dismissal laws which have been such a terrible burden for small business.
I believe, I cannot prove, but I believe, maybe in a few years time we'll be able to prove it when all the statistics do their retrospective and all the research is done, but I believe although I cannot prove that one of the major reasons why unemployment has accelerated its downward descent over the last year is that freed of the burden and the tyranny of unfair dismissal laws, small business has taken on record numbers of new people knowing that if it doesn't work out in the case of an individual that person can be let go without the threat of being told by the Industrial Relations Commission in effect you better pay them $30 or $40,000 go away money and get back to running your business which of course was the experience of just so many people under those former laws. You'll hear a lot of debate not only in Parliament itself but in the media about what will be the issues at the election and there will be many issues as there always are at elections but the one that will dwarf all other issues is a very simple proposition and that is which side of politics is more likely to maintain and guarantee the future delivery of the economic prosperity that we now have and we'll be resting very much of our case to the Australian people on that proposition. We'll not only be talking about what we have done over the last 11 years, but not excessively, we'll also be having something to say about the sort of things that were contained in Peter Costello's Budget and I think the greatest quality of that Budget was that it took the prosperity we now have and dealt with it in two ways.
When you have a prosperous economy the current generation expects some dividend from that prosperity and certainly we delivered a dividend. We delivered a dividend to the generality of the community through tax relief and we delivered a dividend to particular sections of the community that we felt needed attending to and particularly to retired people and also particularly to Australian families. But we also very wisely, in my opinion, laid aside a portion of today's prosperity in order to secure tomorrow's prosperity and amongst the initiatives of which I'm particularly proud is the provisions for education. There's a funny argument that goes around in political circles sometimes, it goes roughly like this; that really the Liberal and National parties are not particularly interested in education, that that really is an issue that the Labor Party is interested in and the Liberal Party tends to preoccupy itself with other things. And I was thinking about that odd notion the other day and I reflected back over the last few decades about some of the great educational movements in Australia. Many people would argue that the foundation of the modern university system in this country was in fact laid down when Menzies was Prime Minister of this country and he implemented the recommendations of the Murray Commission way back in the 1950s which established a major federal role for university funding in this country and laid the ground work of much of the strength of the university sector.
And I also recall, of course, that the great breakthrough which brought justice to non-government, particularly Catholic schools in this country was at the instance of the Menzies Government again where a century of discrimination against people who chose to educate their children according to the embrace of their faith was ended with the introduction of direct government assistance to independent schools and there's not a political party in Australia that is now game to argue otherwise although beneath the surface it is still the passion of the teacher unions in this country which have so much influence on the Labor Party to end government assistance to independent schools. And, of course, in more recent times the reforms that were introduced by Brendan Nelson when he was Education Minister, piloted through a very hostile Senate which gave the university sector greater flexibility and opened up new streams of revenue coming into those universities. Now that is not to say that there weren't some reforms carried out by the former government which we were able to support. We actually supported the introduction of the HECS system which ended the absurdity of the Whitlam Government's proposition that you could have free tertiary education. No country can afford completely free tertiary education, and it was always a fraud on the Australian public for the Whitlam Government, to pretend that that could be the case. So when the Labor Party in the 1980s came along with the HECS proposal, we supported it as we did other sensible propositions that the Labor Party put forward in government. So on Tuesday night when Peter Costello announced the Higher Education Endowment Fund, of which the $5 billion contribution is only a beginning, nobody should imagine that that fund will remain with only $5 billion if we continue to accumulate surpluses and to run the economy well, it will be added to as time goes by. It will provide and ever-increasing stream of revenue into Australia's universities to invest in capital works and research facilities. So when Peter announced that measure and all the other measures he was following a long line of Liberal reformers and a long line and tradition of Liberal commitment to higher education in this country.
I noticed last night that my opponent, the Leader of the Opposition ran an advertisement on television, it was a very interesting tactic to run a paid advertisement the night you give your reply. Now it's an interesting tactic, and I'll say no more than that but he's arguing that he's a fiscal conservative. Now what he's really saying is that he wants the world to believe that he's a responsible economic manager. Now you normally don't have to advertise that fact, if in reality you are a responsible economic manager, and this morning I tried on radio, in my regular interview with Neil Mitchell at 3AW Melbourne I tried to analyse the proposition that the Labor Party and its current leader are responsible economic managers, are fiscal conservatives. And I thought of the 1996 Budget. Now in 1996 we inherited a $96 billion debit, we had an annual Budget deficit of $10.5 billion and we had to do some fairly unpopular things in 1996. Not everything we did then was the least bit popular, but by taking those measures we started to get the Budget in control and it meant in a couple of years we were starting to yield surpluses rather than deficits. And the point I wanted to make was that over the last 11 years I cannot think of a major fiscally conservative economically responsible thing we have done that the Labor Party did not oppose. They opposed getting the Budget back into surplus, they opposed, therefore paying off the $96 billion debt and much of the repayment of that was due to the proceeds of the privatisation of government assets such as Telstra, not all of it but quite a bit of it, they opposed that. They opposed Peter Reith's industrial relations reforms which for the first time introduced Australian Workplace Agreements. They kept opposing in the Senate, in fact on forty occasions they voted in the Senate against our proposals and this is when we didn't have the numbers in the Senate, to repeal the unfair dismissal laws. They opposed our reforms of the waterfront, which are now being dramatised, I don't know how accurately I must get hold of the tapes and have a look. But they are being dramatised on the ABC at the present time, they opposed all of that. We used to have a crane rate of 17 an hour in our ports and we were told that was world's best practice by the Maritime Union of Australia and you couldn't do any better and it's now 27 or 28 an hour and that really is getting close to world's best practice. They opposed tax reform, they opposed the second round of industrial relations reform and they've continued to oppose a number of other less important, but nonetheless significant economic reforms. And I guess employing the old adage that it's not what somebody says it's what somebody does that demonstrates the character and the real nature of whether or not they hold to a particular code and a particular attitude in relation to economic management.
But ladies and gentlemen, the Budget was the Budget of a government that has presided over and contributed by its own policies towards a very, very strong economy. Our opponents say it's all due to the mining boom, they either say it's due to the mining boom or it's due to the rest of the world and in a sense they tie the two together. My opponent said last night that it's all been fuelled by China and to some extent India, well I place very great importance on our trade association with India, but if he really did understand the composition of Australia's trade he would understand that if our economy is fuelled a lot by our export performance then the three countries that deserve a special mention are, of course, China, Japan and Korea which represent our three best customers in the Asian Pacific region. India is an important customer, but it's no where near in the same league as far as Australia is concerned with Korea, that's only a minor detail, but you know I would just like to remind the public occasionally that the Leader of the Opposition is not too flash when it comes to economic detail, only a minor point I know, but you know. You see I actually read what he says and I listen very carefully what he says and that was a little mistake but we've made a careful note of it and it will turn up again, but...I can assure you.
But, my friends, this argument is put around a lot and this argument is that it's all due to the resources boom. Now we have had a fantastic resources boom. As Don Argus, the Chairman of BHP Billiton, in his classically understated way says it's a great time, John, to be in resources, and it certainly is a great time to be in resources and thank goodness for the resources boom. But, let me tell you that it's a bit of a myth that that's the only reason we are doing well. Those unemployment figures yesterday, 70 per cent of the new jobs in those figures yesterday were generated in New South Wales, Victoria and South Australia. In fact there was a net fall, tiny net fall in the number of jobs generated in Western Australia. Let me also tell you that the proposition that all of the revenues that we are collecting, additional revenues we're collecting, are due to much much greater profits in the mining sector, but that is also a bit of a myth. Now the profits are good and the miners should pay their share of tax, every last dollar of it like everybody else. You can't run a good economy unless people pay their taxes, pay their taxes in full and pay them on time, not a penny more, but also not a penny less. But actually when you look at the statistics the major reason why we have done so well revenue wise over the last few years is the fall in unemployment and the fact that there are more people in work and there are more people who are earning higher incomes and the boom in PAYE tax payments and those associated otherwise with individual tax payments has been very significant. Let me give you a very interesting statistic. I know you can't hypothecate these things but it rather does make the point that the Budget surplus that we're predicting that we'll have is almost exactly equivalent to the interest savings on the deficit that we used to pay and by not having a deficit we save $8.5 billion a year. And the other figure that's very interesting is that if we had the unemployment rate that we had in 1996 which was 8.5 per cent instead of an unemployment rate of 4.4 per cent we'd probably be outlaying about another $4 billion in unemployment payments or, and correspondingly not collecting any taxation on the wages that those people would have otherwise earned and therefore paid tax on. And when you add those two figures together you get almost exactly the sizes of surplus which is projected for the forthcoming year.
Now, I know the accountants and economists amongst you will say well you can't really do that, it's all sort of mixed in and it is all mixed in and I acknowledge that I'm not expounding a perfect economic theory and my economics teacher at Canterbury Boys' High if he was still alive would think heavens above, I thought I taught him better than that but the truth is that it does in a metaphorical way illustrate that by taking the country out of deficit and putting it back into surplus we have given ourselves the capacity to do so many things that we weren't able to do before and that has been very much the story at the heart of this government's performance.
The final thing I want to say to you is about industrial relations. We have carried out a lot of major economic reforms in this country. None has been more important than the changes we've made to industrial relations because just as today's prosperity is a product of yesterday's reforms then tomorrow's prosperity will be a product of today's reforms and it will be a terrible shame for the economic future of Australia if these industrial relations reforms are rolled back and it will be the first time in a generation that major economic reforms carried out in Australia have been reversed. I've frequently said that if you took yourself back to 1980, and I know there are some in this room and I'm looking at two of them right at the moment at this table, two of the younger members of the audience that they probably weren't studying Budget form or indeed any other form very, very closely then and there'll be some in this room in the same situation, but if you went back then to the beginning of the 1980s you would say that there were five things that this country had to address, five reforms we had to address to get it in shape for the 21st century. We had to de-regulate our financial system. We had to do something about our very, very high levels of tariff protection which had produced a lot of inefficient industries behind a high tariff wall. We had to do something about getting the government out of running businesses that it's appallingly bad at running, in other words privatising Government industries. We had to do something about our old fashioned, arthritic taxation system and we also had finally to do something about our industrial relations system.
Well the good thing about this country is that over the last 27 years we have actually addressed all of those five major areas of reform and I never mind acknowledging that a couple of them were addressed by the former Labor government and in Opposition we strongly supported them. We didn't try and frustrate the de-regulation of the financial system, it in fact came out of the recommendations of the Campbell Inquiry which I'd established as Treasurer. And we certainly didn't run a fear campaign about tariff cuts which we could easily have done because running a fear campaign on something like tariff cuts in blue collar areas of the country would have been a very easy political proposition but we accepted the argument that in the long run this country had to become more competitive and more outward looking. Now by contrast, our opponents have opposed tax reform, they're opposed privatisation and they've opposed industrial relations reform. But that is not the point of the narrative. The point of the narrative is that those five great reforms have been enacted and that's one of the reasons why we're doing as well as we are and wouldn't it be a tragedy if one of those were reversed and that is industrial relations reform.
And today a lot of the news surrounds the announced resignation of Tony Blair, the British Prime Minister. Now Tony Blair is the Labour Prime Minister of Great Britain and I'm the Liberal Prime Minister of Australia and we're on the opposite sides of the political fence. That hasn't stopped me having a very warm regard for some of the attitudes that he's taken and I have greatly admired the enormous courage that Tony Blair has displayed in joining the fight internationally against the scourge of terrorism and if people ask me what will be his greatest legacy I believe his greatest legacy will be the courage he displayed in relation to that issue and against very fearful odds within his own political party and we who follow politics very closely know that one of the hardest things to do is to confront the mainstream of your own party on an issue where you feel differently than it feels. But what Tony Blair was willing to do when he became leader of the British Labour Party was to tell the British Labor Party that if it were to fit itself for government it had to break the union domination of that party. He told the British Labour Party when he became its leader in 1994 that it had to embrace and accept the industrial relations changes carried out by Margaret Thatcher and those industrial relations changes had transformed Britain. I remember Britain in the 1960s and most particularly in the 1970s. I lived there in the 60s, I visited it in the 1970s and it was a country with a great history of which I was very fond but was nonetheless in terminal decline economically and Margaret Thatcher turned that around and to his credit Blair was able to say well there are certain reforms that we have to keep. Now if you think I'm referring to the failure of another Labor leader to confront his party and tell them that it has to rid itself of union control and union domination you'll be absolutely correct and I can't think of a more appropriate day to draw that analogy and to make that comparison.
Friends, I conclude by thanking all of you for coming along today. We have come a long way economically, the country has come a long way economically over the last 10 to 15 years. We've had great reforms, we can't afford to reverse any of them and what's more we have to embrace still more reforms into the future. I thank you for your support, I ask for it to be sustained even increased manyfold over the weeks and months ahead because we do face a great fight, a great crusade to preserve not only the political gains of the last 10 years but also the great economic gains for our country. Thank you.
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