Well thank you very much Mr president, my parliamentary colleagues, our guests from overseas, Mr and Mrs Bob Herbert, ladies and gentlemen. Can I start my remarks tonight by endorsing what the president has said about Bob Herbert';s contribution to the leadership not only of the Australian Industry Group but his decades long advocacy of the cause of industry policy, reforms to economic policy and of course his speciality of industrial relations. I feel a particular kinship when I talk about the speciality of industrial relations because in earlier years before I again became Opposition Leader and the Coalition was elected in 1996 there was no area of public policy that I focused on more heavily and I regard it as more central to the reform of the Australian economy than that of industrial relations. And because we';re pausing for moment to recognise the contribution that an outstanding man has made to industry policy and economic development it is important to acknowledge that of all the things that have transformed the Australian economy over the last 10 years nothing has been more important than the changes that have been made in the area of industrial relations. And nothing in my view is more important to preserve and to build on for the future than the area of industrial relations. It is natural when one looks back on a period of seven years in office to think of some of the significant contributions, some of the metaphors for the success of policy, and two come very much to mind which are related to industrial relations, one of those concerns the remarkable improvement in the hourly crane lift rates on the Australian waterfront. When they languished it somewhere in the order of 18 before the reforms of 1998 and now they have even surpassed the goal we set ourselves then of 25 to sit around 26. And I think also of the increases in the real wages of Australian workers over the last seven years, a real increase of more than 10 per cent and that is a reflection of the improved industrial relations, it';s a reflection of the greater productivity of the Australian economy flowing from those improved industrial relations. Because in the end good economic policy is never an end in itself, unless good economic policy delivers more jobs, higher incomes and greater material satisfaction to Australian workers it doesn';t deserve the name of good economic policy.
So can I join others in expressing my respect for the work that Bob has done and in the process share with you just a few reflections about where the Australian economy sits at the presents.
Many speeches are made about the fact that our economy has grown more strongly that just about any economy in the western world and far more strongly than most over the last few years. That hasn';t happened by accident, it';s happened because of an accumulation of economic changes and reforms, stretching back over a 15 to 20 year period. Including important reforms made by the previous government which drew the very strong support of the Coalition parties in Opposition, and I think particularly of financial deregulation and the very significant dismantling of tariff protection which has helped make the Australian economy more competitive, more open and as a result contribute enormously to our economic growth.
In more recent years we';ve had the very important gains on the industrial relations front that I touched on. And I think of your group';s support for those reforms. I also think of the very strong and robust support involving in some areas the sacrificing of some immediate interests of your member companies for the process of taxation reform when it was launched by the Government in 1998. We don';t think about it so much now because its become bedded down, but in 1998 the support of your organisation for taxation reform was very important, particularly in areas where trade offs between depreciation allowances and lower company tax rates needed to be made and where inevitably with these things there was some winners and there were losers. But your organisation rightly took the view that we should strive to have only one winner and that was the Australian economy and you took the view that taxation reform was in the long term interests of the Australian economy, and I take the opportunity tonight of recording my thanks to your group for the support you gave then to that very important reform and the support that you';ve continued to give to other reforms of the Government over the last seven years.
It is right that your president should have exhorted all of us to continue the process of reform. To use what has become a clich‚ international competitiveness is a never ending race, you never reach the finish line, your only goal is to stay sufficiently far in front of your competitors. And so it is with economic reform, we cannot afford reform fatigue in Australia, we';ve had a lot of it over the last 15 to 20 years, we will need even more over the years ahead if we are to maintain our current strong economic position. And we will face some pressures in a number of areas which will make the fiscal challenge even greater. I cannot see this country spending less on defence in the years immediately ahead of us. I said yesterday and I would repeat tonight I can only see an incline over the years ahead in the expenditure that we must make available for defence. The world in which we live is very different from what it was in 1996, and even then the Government saw the need when it came to office to quarantine defence from any of the cuts that were being applied elsewhere in order to eliminate the very large Budget deficit that we inherited, and so it will be in the future that defence will remain a very important priority.
The other very important challenge we face is of course the demographic one. In common with all western countries our population is ageing. The process is not as bad in Australia as in some but it is infinitely worse that we might have contemplating in the 1960';s and the 1970';s. We need policies that will encourage greater workforce participation, particularly for the age cohort of 55 to 64 where the participation levels of Australians is significantly below that of other OECD countries. We will also need to find further improved policies in the area of workplace and family balance. The Government has done a great deal in that area but more is required because the right policies there will facilitate more easily proper workplace participation levels. But the ageing of our population will impose strains on the cost of health serving, of pharmaceutical benefits serving, and therefore governments both now and in the future will need to take the right decisions in these areas consistent with fair policies in a social sense but also fiscal rigour. We will need to maintain as a Government our reputation for running surplus budgets. We don';t need to run large surpluses, but we do need to avoid the fiscal mistake of lapsing back into deficit. One of the great boosts of this Government, and a good and proper boost, is the extent to which we have paid off government debt. At just under five per cent Australia has one of the lowest national debt in the OECD and that five per cent figure contrasts with something in the order of an average of the OECD of around 45 to 50 per cent.
The two clouds hanging over the Australian economy at the present time are paradoxically a drought, which you don';t normally associate with a cloud, but also of course the hesitant character of the international economy. We have maintained a remarkable economic performance and a remarkable growth rate, despite the hesitancy of the international economy. And as the United States economic recovers, and if the tentative signs of that recovery are consolidated that will be important to Australia as it will be to other economies around the world.
In the months immediately ahead we have the very important challenge of the negotiation with the United States of a possible Free Trade Agreement. I have to make it plain of course that we';ll only enter a Free Trade Agreement with the United States if there is a proper return for Australia. There will need to be significant progress made in the area of agriculture in order to make it worthwhile for this country to sign. But we are energetically committed to the objective, and I';m happy to the say that the President of the United States is likewise energetically committed to concluding the negotiations by the end of the year. But many hard sessions of negotiation lie ahead of us before we can say that this very important goal has been achieved. The important and the value to Australia of reaching such an agreement is immense, the United States will economically bulk larger in our future and the world';s future over the next 50 years then even it has over the past 50 years. Those who imagine 15 or 20 year ago that the post-World War II economic dominance of the United States would begin to decline have been proved wrong, and the association economically and otherwise that we have with the United States will be more rather than less important to Australia over the next 50 years.
But none of this proper emphasis on our relationship with the United States in any way diminishes the fundamental and crucial importance of Australia';s economic and other links with the nations of the Asian Pacific region. At the weekend after attending the Pacific Island Forum meeting in Auckland I will go to Beijing to meet for the first time the new President and the new Premier of the People';s Republic of China. One of the great economic achievements of this country over the last few years has been the doubling of our exports to China. The conclusion of the giant liquid natural gas deal with Guangdong province by the North-West Shelf Consortium last year, with considerable help and involvement of both governments was something of a landmark in the relationship between the two countries. It was an investment by China in the stability, the predictability and the reliability of Australia as a long term partner and a long term supplier and a reliable friend for years into the future. Our economic links with North Asia are strong and they are deep and they will be very important to the Australian economy as the years go by. It must be the responsibility of any Australian prime minister and Australian government to take trading and economic opportunities where they arise. You can never confine yourself to one region of the world, you must never focus on one part of the world to the exclusion of others. And we have sought to live by that rule in the time that we have been in Government. We';ll pursue a Free Trade Agreement with the United States and if that can be achieved it will be of remarkable value to our long term future. But fully consistent with that we will continue to build the already strong economic relationships and links that we have with those nations in our immediate region.
Ladies and gentlemen, can I conclude by saying one thing on a more personal note, in the 29 years that I';ve been in Federal Parliament I';ve had a very close association with this group and its two predecessor groups, the Chamber of Manufacturers and the Metal Trades Industry Association. We haven';t always agreed, we';ve sometimes argued on individual policy issues, we';ve sometimes wondered whether the direction of each other has been right. But for the main we have been working together to achieve something that we jointly regard as absolutely important to the future of this country and that is the nurturing and the development of the wealth generating sector of the Australian economy. We all believe in a fair and decent Australian society. We all believe in a society where those who no fault of their own are entitled to the benefit of a helping hand and a social security safety net. But what I';ve always found of your organisation and its predecessors is that like myself we all know that you can only build an economy that has the capacity to do that if you encourage and support wealth generating industries. And its been the policies of the Government, they';ve been designed to promote that over the last seven years and I hope in the years ahead we';ll continue to work together to achieve that objective.
Thank you again for inviting me tonight, I appreciate very much the contribution that your group has made to the development of industry policy and I wish all of your members well and great prosperity for the next year.
Thank you.
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