Thank you very much Ian for those warm words of introduction, and I know I speak for everybody in saying how glad we are to have you back at full strength as a senior member of the federal government.
Michael Caltabiano, the State President; Shane Stone, the Federal President of the party; Lawrence Springborg, the Opposition Leader and leader of the National Party; Bob Quinn, State leader; my Federal and State parliamentary colleagues; ladies and gentlemen.
It is a huge buzz to be back in Queensland addressing your State convention. It's always great to come back, to have the opportunity of trying to summarise the challenges and the opportunities for the Federal Coalition and I echo in that context what Bob said about the importance of coalition. One of the fundamental reasons why we have won three elections and why we have been able to implement progressive policies to strengthen Australia is that we have maintained a very strong Federal coalition. It is an absolute bedrock requirement of success on our side of politics that where the opportunity of a coalition exists it be taken advantage of and implemented very effectively. And I can honestly say that in my Deputy Prime Minister and leader of the National Party John Anderson I have somebody who I totally trust, and indeed I've often remarked he's about the most intrinsically decent person that I've met in public life. So coalition is critical. Your possibilities of success at a State level lie in working together with your colleagues in the National Party. There is only one political enemy in Queensland, there is only one political enemy in Australia, and that is the Australian Labor Party.
When we came to office seven-and-a-half-years ago we set ourselves three great goals for Australia. We wanted to provide our nation with three fundamental things. We wanted to provide Australia with national security, we wanted to provide Australia with economic strength, and we wanted to give to the Australian people a continuing sense of social stability. And if we look back over the last seven-and-a-half years I believe that we have made giant strides towards implementing those goals. We do live in difficult, changed, and in some circumstances frightening international conditions. But we have to preserve a sense of perspective about it. The war against terrorism that we've been reminded of with the anniversary of the attacks in America in September of 2001 only this week. The war against terrorism is likely to go on for a very long time. It will not easily be won. It is not that kind of struggle, it is not that kind of battle. And it will only be won through the united efforts of people who share a common love of freedom and a common understanding of what the root cause of terrorism is really all about.
Terrorists hate us because of what we are and what we believe in, not because of what we have done. Terrorism seeks to diminish, humiliate and destroy free and open societies. Those who strive for freedom and openness and individual liberty are the enemies of terrorists around the world irrespective of their race and irrespective of their religion. In the past few months more Muslims have died at the hands of terrorists than have Christians or Jews, and they have died at the hands of terrorists because terrorism is as much the enemy of Islam, it is as much an obscenity in the eyes of Islam as it is in the eyes of any of the other great religions of the world. So in these difficult circumstances we must of course continue in cooperation with our allies and our neighbours in our part of the world the fight against terrorism. And in providing a sense of security we have expanded our commitment to defence, we have increased resources available to our intelligence agencies, and we have markedly increased the levels of cooperation with intelligence agencies and police agencies in our part of the world.
When I became Prime Minister I knew I faced with Peter Costello as Treasurer an enormous struggle because Mr Beazley and Mr Crean together, with their former mate Mr Keating had left us with a budget deficit of $10.5 billion. I immediately faced an enormous task in cutting expenditure in order to get that budget under control. But there is one area I put a circle around, and I said would not suffer any budget cuts and that was the area of Defence. That decision has largely been forgotten now, and many at the time thought it was rather old fashioned even tokenistic. I can remember some people saying, he is living in the past doing that. That is no longer the issue. As times have demonstrated and developments have proved that wasn't the case at all. Not only have we preserved defence from expenditure reductions, but we have massively increased our commitment to defence expenditure. I will say again that I can only see an incline in the level of defence expenditure for this country as the years go by.
Our second great goal of course has been to give this country, in addition to a sense of national security has been to provide it with a strong economy, and even our fierce critics are reduced to acknowledging that over the last 7 1/2 years we have conducted economic policies that have delivered economic strength to Australia. Their best excuse to say is it was all the good work of 15 or 20 years ago instead of acknowledging the fact that the budget reforms, the industrial relations reforms, the taxation reforms and all the other reforms that we have introduced over the last 7 1/2 years have made Australia a stellar economic performer around the world. It has given to this country creditability and a respect and strength, which has enabled it to speak with a louder voice and punch in a higher weight division that might otherwise be the case, given the size of our population.
When I look back over the last seven-and-a-half years, one thing I remember time and time again, is that at every turn, every time we wanted to reform the economy, every change we wanted to make to benefit Australia, the Australian Labour Party opposed it. They opposed our budget cuts, they created the problem and they tried to stop us fixing it. It is bad enough to leave an incoming Government with a huge deficit, it multiplies the political crime to then prevent them implementing the measures that are needed to sort out the mess. That is what Labor did, at every turn Labor objected to what we did and in cooperation with the Democrats and the Greens and others with one notable exception in relation to the Democrats on the GST they used their numbers in order to prevent financial measures being introduced. If it hadn't been also for the Democrats agreeing to a number of reforms in the area of industrial relations, we would not have made progress on that front either.
We have delivered very strong economic conditions in this country. In many respects the Australian economy is stronger now than it has been at any time since World War II. You would have to go back to the 1960s to find a period of such sustained economic strength and the strength that the 1960s was build on a rather insubstantial foundation. It was built on a foundation of a highly protected economy of high tariff wars, a fixed exchange rate, a more inward looking, a less globalised attitude towards world economic affairs. Now we are performing well and out competing most nations in a open globalised world environment.
These things haven't happened by accident, they have come about because of good policy. Along the way we made some mistakes, along the way we have ruffled some feathers and we have probably offended some people and probably made a few decisions that even some people in this gathering today would have disagreed with. The outcome has been wholly positive. The outcome has meant that notwithstanding the drought, and let me take this opportunity particularly here in Queensland of saying to the rural people of our country, that although we have had very good rains and although the drought has begun to break in many areas, I know full well that the effect of the drought is still very severely felt in many areas of Australia. I also understand that if there are not follow up rains we are going back into drought conditions. We are almost you might say at the tilting point, so far as the breaking of the drought is concerned but it should not be assumed, that all our travails on the drought are behind us, particularly in relation to the livestock industry. The grains industry, seems to be heading towards a reasonably good outcome but in relation to the livestock industry it is still very different. But despite the drought, despite the weakness of the world economy, the Australian economy has continued to perform very strongly.
There are a few comparisons that I would like to make this morning. They are what I call grassroots, bread and butter comparisons, but they illustrate the product of good economic policy. You don't run the economy well in order to get some kind on PhD in economics or to get some kind of certificate from an international financial organisation. That is not the point of it. You try and run the economy well to provide the Australian people with jobs, to provide the Australian people with affordable housing, to provide the Australian people with investment opportunity, to provide the Australian people with hope that their children will be able to secure jobs.
In reality going back to my 3 goals, social stability is in part the product of economic strength. The stronger your economy is the happier and more stable and cohesive your society is. That is what it is all about. It is not some kind of end in itself. It is the means to the very important end of social stability and social cohesion.
In 1996 the average homebuyer in Australia was paying $450 a month more than that person is paying now. Just think of that, the average mortgage took $450 a month for service in 1996 compared with now. In 1996 when we came to office the unemployment rate in Australia was 8.2%. Last Thursday it came in at 5.8%.
In December of 1995 there were 141,000 apprentices in Australia. Apprenticeships were really withering on the vine, there are now 390,000 apprenticeships and traineeships in Australia. In the 7 1/2 years that we have been in Government, real wages in Australia have risen by 10.2%. In the 13 years that Labor was in Government, real wages in Australia rose by 2.3% and what is worse, Hawke and Keating used to boast about how they had suppressed real wages as a contribution towards reducing unemployment.
Ladies and Gentleman, one of the great stories that that tells, is that the party that once paraded itself as the party of the Australian worker, delivered to the Australian worker, lower real wages than we have, higher interest rates, fewer apprenticeship opportunities for their children and fewer job opportunities for the entire Australian population. Going from that level of the macro level as the experts say, this countries national debt on an annual basis is about 5% of all the wealth we produce a year, 5% of our gross domestic product. The average of the OECD is about 45%. In the United States it is closer to 48% or 50% and in Japan it is over 100%. It gives you a dimension of the way in which we have restored the international financial strength and the international financial stability of our country.
I take you through these things because it is important after of 7 1/2 years that we do not lose sight of the scale of the achievements. It is important that we don't take for granted that you can have those sort of economic conditions irrespective of what kind of policy is introduced. You will be hearing those comparisons from me quite a lot over the next few months, over many months into the future. There are going to be a lot of other people hearing those comparisons as well. . Some of my opponents heard those comparisons in Parliament on Thursday. And as I go around the country I will be talking about them because they are the visible dividends of the economic discipline of the last seven-and-a-half years and they have underpinned a nation which is internally cohesive and respected around the world. And we do strive for social stability. We strive to maintain the Australian tradition of an egalitarian society, of a society built on the great history of Australian mateship, of our capacity to absorb millions of people from different parts of the world. coming in the circumstances that we determine, and coming to a nation that has always extended a friendly hand to the people who come to this country and are willing to embrace the Australian life and to make a contribution to this nation's future. And let us particularly remember that there are within our nation some 280,000 people of Islamic background. And the overwhelming majority of them like the overwhelming majority of every other ethnic group are dedicated, decent Australian citizens who are trying to make a contribution to the future of this country. And at this time of international difficulty let us not lapse into any scapegoating or name calling. Let us understand that they are friends and fellow Australians in our midst and extend the hand of warm friendship to all of them.
Well that my friends is in a sense to borrow the words from the introduction, from the movie clip, that's the journey, that's where we've got to. But I want to share a few thoughts with you now about the next little while, the next year or so, and that is the challenge that we face. There's a mistaken belief around the country that the Federal Government is unbeatable. There's a mistaken belief that there is a country mile between us and the Labor Party federally. There isn't. Bob Quinn talked about the scale of the challenge that he and Lawrence have. If we lose eight seats at the next Federal election we're gone, we're out of business, and the Labor Party is the government not only in the eight State and Territories, but also at a national level. The history of Federal elections has always been that the result is very close. In my 29 years I've only seen four emphatic results. The two in the 1970s, Bob Hawke's win in 1983, and our victory in 1996. It's always close because that is the nature of the national political contest. And what I ask of all of you is to make certain that we hang on to every single seat that we have in Queensland, and if we can win more well that's terrific, it's an additional bonus. But if we lose eight we are out of office. Any Liberal anywhere in Australia who thinks that the next election is a walkover, who thinks that because the Labor Party is having some difficulties about its leadership that that's going to guarantee us victory, they're deluding themselves. The Labor Party is a resilient, determined political machine. It never rests, it never tires of trying to drag down its political opponents, it never tires of trying to win back the support and the regard of the Australian people. We have huge a fight and particularly here in Queensland because we've had magnificent results federally in Queensland since 1996. Really the historic achievement of the Liberal Party and the National Party in Queensland over the last three elections has been quite remarkable. We have to keep that high level of representation because it will be essential to us holding on to Federal office.
So I know that there's a been a lot of debate in the last few weeks and I guess it will go on for a while into the future about the Labor Party. I don't intend to say anything about the Labor Party leadership myself today. Essentially that is a matter for the Labor Party itself to work out. But can I put the proposition to you and may I put the proposition to the Australian people that in my view for what it is worth their problems are more about policy and belief than they are about leadership. I think the great criticism that can be made of the Australian Labor Party is that they have wasted the last seven-and-a-half years. They have failed to develop an alternative set of policies to attract the Australian people. I saw Barry Jones on Sunrise this morning. It's always interesting to see Barry, he's always got some interesting views. And basically what he was saying was that the Labor Party's problem is a problem of working out what it stands for and what it believes in. And I think the criticism that can be made of it is that over the last seven-and-a-half years it's been too negative, and it hasn't used the time in opposition to develop alternatives. The Australian people will never vote for you if they don't know what you believe in and what you stand for. And the greatest imperative of political leadership at a State or a Federal level is to communicate to the people what you believe in and what you stand for, and even if they don't agree with you they will respect you for the strength of your convictions and they'll get out and vote for you even if it may be against the grain of their own personal beliefs. And I think the fundamental weakness of our opponents has been that they've developed no policies and they've been too negative.
I mentioned a moment ago how negative they'd been about our reforms. I contrast that with the fact that when we were in opposition we often supported reforms that they brought in. If it hadn't have been for our support the Commonwealth Bank would never have been privatised, if it hadn't have been for our support Qantas would never have been privatised. When Bob Hawke introduced tariff reforms towards the end of his prime ministership we supported him, we didn't oppose him although it might have been politically opportunistic to do so but in the long run we believed the reforms were necessary. When Keating tried to reform the tax system in the 1980s I supported him. I didn't oppose him. And in the end he was torpedoed not by the Liberal Party but by Bill Kelty and Bob Hawke. And we did that because we believed that what they were doing was correct. When they introduced the Higher Education charge, HECS, we supported that, we didn't oppose it. We were in other words acting in the national interest even in opposition. Contrast that with them now. We could have 80,000 more jobs in small business. That's not my figure. It's the figure of the business community, if the Senate would get out of the way and pass those changes to the unfair dismissal laws for small business that we've been trying to get through for ages. But no, they believe in eternal negativism, and they have very great trouble taking a position on anything. I mean let me give you a wonderful contemporary example. Right at the moment we are trying to negotiate a free trade agreement with the United States. It's going to be very difficult and we won't be able to successfully negotiate it unless we get a significant concession on agriculture from the Americans. But if we can pull it off, if we can link our economy with the greatest economy, the strongest economy the world has ever seen and an economy that is going to grow in relative strength not decline in relative strength as we go through the 21st century, it has to be in the overwhelming interests of the Australian people and the Australian community. Now what has been the response of the Labor Party? When we first announced it they said they were opposed to it. Craig Emerson and Simon Crean, and Emerson was then the trade spokesman, he said we're against it, it violates our belief in the World Trade Organisation principles. So for months and months and months the position of the Australian Labor Party was that they were opposed to it. And we had the leadership dialogue between the Americans and the Australians in Melbourne a couple of weeks ago and it would appear that maybe perhaps conditionally depending upon there might have been a change. And the Leader of the Opposition made a speech at that dialogue in which I am told that it sort of said well they have moved from a position of opposition to maybe neutral depending upon what the outcome is. I mean that is, if I may say so, seriously, that is the problem more than anything else and far be it for me to give my opponents advice but in the end the Australian people take a very intelligent view of political behaviour. They work out whether a party believes in something, they work out whether a party stands for something, and they work out whether a political leader believes in anything or stands for anything and ultimately that does more to determine their vote than the individual personality or the attitude of the individual leader.
So ladies and gentlemen we have come a very long way together and I stress the fact that we have come a long way together over the last seven-and-a-half years. I would never have had the success that some people are nice enough to say that my government has had over the last seven-and-a-half years without a tremendous team, without a great group of Federal members not least here from the State of Queensland, without a great coalition with the National Party and without tremendous support from the party organisation. I joined the Liberal Party in the second half of the 1950s. I joined it a couple of years after I left school and I left school in 1956, and I've been a member of the Liberal Party ever since. I believe in it, I owe it everything that I've achieved in public life and it's given me opportunities and support and I owe it a debt of gratitude that I can never repay. And I take this opportunity of saying to all of you members of the Liberal Party here in Queensland thank you very sincerely for the help you've given me, the loyalty that you've extended to me, the understanding that you have extended on occasions when I've undoubtedly done things that deep down you wondered about. That is the covenant between a political leader and the members of his or her party where there's trust on both sides. I've always tried to do the right thing by the Liberal Party and in return you've always tried to do the right thing by me. I'm deeply grateful for that. It's a great experience to come back to this annual convention. I wish the division well, and Bob I wish you and Lawrence well in your challenges in the months ahead. John and I will be there to help you and there to help turn the State tide here in Queensland. But ladies and gentlemen, together we have a great struggle ahead to win that fourth election. It won't be easy and it will only happen if we all work concertedly together. Thank you.
[Ends]