Thank you very much Peter for those very warm words of welcome. Helen Kroger, Robert Doyle, my Federal and State parliamentary colleagues, my fellow Liberals and fellow Australians. Before I address some of the domestic political issues, I know that I speak for all Australians in expressing a very strong sense of understanding and compassion with Australia's Catholic community as his Holiness the Pope, in failing health, prepares to meet his maker. This great man has not only been an inspiring leader to the one billion Catholics around the world, he's been a great example of Christian dedication to people of all Christian denominations and indeed of all faiths. He will also be remembered as a person who helped lead the fight for freedom which led to the fall of the Berlin Wall and the role that he played in bringing freedom to his native Poland will always be remembered by those of us, and that includes all of us who will forever remember the fall of the Berlin Wall and the collapse of Soviet Imperialism, as being the great defining moment of post World War II politics. So as we think of this wonderful man in his hour of trial, we think not only of his contribution to the world wide church and to Christianity but we think of his contribution to the world wide cause of freedom which has helped shaped the lives of all of us in the last sixty years.
My friends this is, as Peter said, the first meeting of the Victorian division of the Party since our magnificent victory on the 9th October - a victory that I don't mind confessing exceeded my best expectations. I keep reading that I am a very cautious man; yes I am, particularly when it comes to predicting the results of elections. I never allow myself too much enthusiasm. I had butterflies in my stomach on the morning of the 9th October and I suppressed any enthusiasm I had. I had a little flutter of excitement when one of my son's told me heard on the radio of some exit poll coming out of Tasmania at 3.30 in the afternoon (and having sort of been singed by exit polls in 1998 which told me that I was going to lose, I was not very interested in getting too excited) but as that wonderful evening unfolded, we were able to relax and to enjoy an astonishing victory.
I can remember the sense of exhilaration as I watched the television screen and with the electorate office computer in the study at Kirribilli House as well, sort of comparing the numbers and we started to see this wonderful trend in Victoria and I think it was Michael Kroger who was on Channel Nine, he said I can declare that there has been an increase in the Liberal vote in every seat in Victoria. And that of course felt very good news for the Liberal party and extremely bad news for the Labor party.
I join Peter in congratulating Helen and Julian and all of you on delivering such an outstanding result in Victoria. We not only held our seats and increased our majorities but we gave ourselves a buffer for the future which is always a very valuable thing and the way in which seats like Aston and Casey and Flinders increased their majorities in a spectacular fashion. The way in which, and I particularly welcome Jason Wood and Andrew Robb and welcome back Russell Broadbent, the way in which, emphatically, Russell reclaimed the seat of McMillan to the Liberal Party added to a wonderful evening. So can I, from the bottom of my heart, thank all of you not only for the victory in 2004 but for the support and loyalty that you have demonstrated over the nine years which I have had the enormous privilege of being Prime Minister of this wonderful country of ours. And can I thank all my Victorian Federal Parliamentary colleagues, most especially my friend and colleague Peter Costello who has been the principal architect of the economic achievements of this government over the last nine years.
This division has sent a wonderful team to Canberra over that nine year period and as we plan the reforms that are necessary to maintain the momentum of the Australian economy and the esteem and regard in which this country is held around the world. Victorian members of the Federal government will play key roles in all of those processes. But having won a great victory and having, at this first State Council meeting, reflected on the particular achievements of the Victorian division, it is a question of getting on with the job. Six months have past since the last election. Challenges are ahead of us now which perhaps were not quite as evident six months ago, although the fundamental road map remains and it's a road map of continuous reform. You don't have the option of marking time in managing the economy or managing a country. You either go forward or you go back and any government that thinks the reform of government has been completed, and says to itself well we did a lot in the first term, we did even more in the second term, we did a lot in the third term, we can now coast in the fourth term, is doomed to be a government which has only four terms in government. And if we are to have a fifth, sixth and a seventh then the process of reform must go on.
There are three areas of reform that I want to touch on today which are very important in the area of reform. The first and most important of those is of course industrial relations. Mr Beazley delivered a fascinating speech yesterday. It was a speech that was meant to establish his credentials and his energy and his enthusiasm for economic reform and as I read through the speech I was waiting to find the little nuggets of reform that were going to indicate to me that he'd changed, that he was different from what he had been when he led the Opposition between 1996 and 2001. But I was disappointed, although not surprised. I found a paragraph that said it all and that paragraph essentially said that there is no need for any further industrial relations reform; that it's a dated argument that belongs to the 1980's or the 1990's and what that means is that at the first hurdle of reform, the Leader of the Opposition has fallen. Anybody who argues that further industrial relations reform in Australia is unnecessary doesn't understand the first thing about this economy, doesn't understand the need for further reform in that area if we are to maintain productivity, if we are to continue to be competitive, if we are to consolidate the transformation of this economy from an economy where wages were fixed by the ancient process of conciliation and arbitration to an economy where wages are based upon the capacity of firm to pay the affordability of wage increases and the productivity of the workplace.
And if anybody imagines that our reform agenda (and the details of that will become apparent in the weeks and months ahead), our reform agenda in industrial relations, our further reform agenda is about cutting real wages, I invite them to look at the last nine years. I had no prouder boast in the last election campaign, than the boast that as Prime Minister of this country I had seen the real wages of Australian workers rise by 13 per cent in nine years, whereas under the former Government they had risen by less than three per cent over thirteen years. In other words, the Liberal and National parties; the parties of small business, the parties of commitment to free market economics, have been better friends over the last nine years to the workers of Australia than the Labor Party could have ever have dreamt to have been over the previous thirteen years.
I say to our critics - and I noticed that the Trades Hall Council here in Victoria is labouring fairly unsuccessfully to organise a nationwide strike against our industrial relations reform - I say to them, and I say to other critics of the government's policies, we are a party of high wages, we are a party who believes in rewarding the workers of Australia and it's not rhetoric, its reality. We have done it. I said when I opened the Liberal Party's campaign in Western Sydney in September of last year that we delivered a 'quadrella' to the workers of Western Sydney as we had to workers everywhere in Australia. We delivered higher wages, higher employment, lower taxation and more opportunities for their children and lower interest rates.
So ladies and gentleman, as we go into industrial relations reform, as we embrace more change in that area, it will not be based on any pursuit against the interests of Australian workers. Rather it will be designed to reinforce the strong commitment we have to the workers of Australia.
Another area of course that cries out for reform is the area of workforce participation. We are now experiencing the lowest unemployment levels in 30 years. They are a product of the economic success of this country. They are a product of the balanced and surplus budgets of the last nine years. They are a product of the industrial relations reform we've been able to get through the Senate during that period of time. They're a product of taxation reform. And coming together we have factors that have produced an economy that has given us the lowest unemployment rate in 30 years. We now face not a surplus of workers, but a shortage of workers, and that is a big structural challenge for this country. And it does mean that we need to address areas of workforce participation, that we have to remove the disincentives of work against people either remaining in the workforce if they're of mature age, re-entering the workforce after caring for somebody, if that if their wish, and generally removing disincentives in other areas. We cannot afford as a nation to have people who can and want to be in the workforce, not in the workforce. And we require therefore a raft of policies, touching upon the mature age, touching upon people who are on social service benefits at the present time, addressing the disincentives for single parents to re-enter the workforce.
And let me say on that subject, it is not injustice or imposition on a sole parent to give that person the opportunity and the training and the skills and the encouragement to re-enter the workforce once their youngest child has reached the age of six. And let me say to those people who are already suggesting that this is some kind of harsh and onerous policy. I'd invite them to have a look at the research that was delivered to the economic conference that took place in Melbourne this week and under the auspices of the Australian newspaper. I ask them to have a look at a bit of research produced in a speech by Anne Harding of the NATSEM organisation; an organisation that in the past has delivered objective economic assessments and certainly hasn't echoed the political mantras of this government. And what that research conclusively demonstrated was the remarkable fairness of the taxation and welfare policies of this government over the last nine years. What it demonstrated was that the lower income groups in this country had been protected. What it demonstrated, as had been demonstrated in the past, that the family tax benefits system has delivered in proportionate terms more real gains to low income families than to any other section of the Australian community.
And just as I cite our achievements on real wages, (to rebut the suggestion that our industrial relations agenda is about cutting wages) so I point to our achievements in the area of family tax benefits to rebut the claim that what we are talking about in the welfare to work agenda is some kind of attack on the living standards and the fair treatment of the low income people - particularly the sole parents of Australia.
But there's another area where reform is needed and the initiative for this reform lies not only with the Federal Government but it also of course lies with the State Governments. And that is to ensure that our federalism system works better than it does at the present time. And what Peter was saying about the responsibilities of the states is absolutely right. Over the five years from 2005/2006 (that's the coming financial year) the financial windfall to the state of Victoria from the introduction of the Goods and Services Tax is projected to be about $3.2 billion. In other words Victoria over that five year period will be $3.2 billion better off than it would have been if the revenue sharing arrangements I inherited from Paul Keating as Prime Minister had been continued. Now that is the basis of our argument that the states have the obligations they entered into when the GST was delivered to get rid of the state taxes to which Peter has referred. I have been, over a period of probably 20 years or more, attending Premiers' conferences either as a Treasurer or as a Prime Minister and for many years the constant cry of the State Premiers, and this came from State Premiers of both political persuasions. It came as strongly from Charles Court and Joh Bjelke-Petersen as it did from Neville Wran and John Cain and from Bob Carr and Steve Bracks. And what they said year after year was give the states a fair go, give the states access to a growth tax and they will then deliver in full the services in areas like public hospitals, police, public transport and government schools, which are their bread and butter responsibilities.
And that of course, well responding to that, was the basis of a lot of our thinking when we introduced the Goods and Services Tax. Goods and Services Tax did many great things. But one of the greatest things it did was to give the states access to a growth tax and I thought when that was introduced that the Federal Government, having delivered on its side of the bargain, the states would do the same. That not only would they wisely spend the additional revenue they had, but they would also meet their obligations to get rid of burdens from state taxes. And over the weeks and months ahead the states of the Commonwealth of Australia face the challenge of whether they are going to fulfil their part of the bargain for federalism represented by the introduction of the Goods and Services Tax.
They can no longer claim the alibi that they don't have enough money - they are rolling in money. The states have received benefits from the GST far ahead of anything that was predicted either by us or by them and they have an obligation not only to deliver in full the services they owe to the people of Victoria and New South Wales and Queensland and so forth, but they also have an obligation my friends to deliver the removal of the taxation impost to which Peter referred in his speech.
We do, as all of you know, expect to enjoy the rather unexpected bonus of control of the Senate on the 1st of July. It wasn't something that I expected, but I'm very happy. I won't fail to be aware of it. I won't fail along with my colleagues to factor it in to all of our decision making. But it does give to us an opportunity to do some things that we never dreamt for a moment we'd be able to do. It carries with it a great responsibility not to disappoint those who voted for a Liberal Government in the belief that one day things like unfair dismissal imposts on small business would be removed, that one day other changes that are necessary in order to further free the Australian economy could be achieved.
And I make the simple promise to all of you that we will not let you down. We will not squander the mandate. We will not dishonour the loyal support that Liberals have given to this Government over the last nine years by wasting the opportunity of control of the Senate. But I make another promise to you - that we won't use that authority in a reckless and arrogant fashion. The Australian people do not like either recklessness or arrogance in their governments. They want governments to worry about them and their interests and not worry about their own interests and I promise that my Government will use its authority in the Senate from the 1st of July in a wise fashion. We'll introduce what we said we would introduce. We'll also introduce some things in a number of areas that we never thought we'd be able to do. But they'll be consistent with our philosophy and they will be respectful to the interests of the overwhelming majority of the Australian people.
The last thing I want to say to you my friends is something about Australia's place in the world. Over the next week Australia will host two very important visits. Tomorrow evening the President of Indonesia, President Yudhoyono, will arrive in Canberra and this, apart from a brief visit from President Wahid towards the end of his presidency several years ago, it will the first visit by an Indonesian President since President Suharto came here during the term of the Whitlam Government in the first half of the 1970s. It's a very important visit, it's being undertaken by a man who represents a new hope, a new inspiration for the people of Indonesia. Indonesia has undergone a tremendous transformation. It is now the third largest democracy in the world. It doesn't get enough credit in my opinion, particularly in Europe, for what it has achieved over the last few years. President Yudhoyono is the first directly elected president of his country. He has already undertaken some very bold economic reforms. We sometimes have to take a reality check when you talk about reform. One of the things he's had to do is to cut the fuel subsidy for millions of Indonesians by 30 per cent.
Now we talk about the toughness of economic reform, just imagine the political and economic challenge that's involved in a country with 220 million with a much lower living standard that we have, the challenge that's involved in reducing the fuel subsidy - which affects every single individual and every single family by something in the order of 30 per cent. He does represent a very important hope and a very significant hope for his country.
His election was a triumph for moderate Islam over the forces of evil and extremism. The terrorists want him to fail. The good, decent, moderate Islamic people want him to succeed. And who can doubt where the interests of our country lie - they lie in forging a close friendship and a close partnership with this country. We are different nations. We'll always be different, but destiny has thrown us together in this part of the world and I believe there are new opportunities and there's new hope that we can work together in our common interests.
And later this week of course we'll also welcome the Prime Minister of Malaysia and it will be the first visit to Australia for more than 20 years by a Malaysian Prime Minister and both of these visits demonstrate the importance of our region to the future of this country but it is also a reminder that in the world in which we now live we should never narrowly define the interests of Australia. Our region is very important and it's our first area of our immediate responsibility, but the rest of the world is also important and this Government will never narrowly define Australia's foreign policy interests and we'll always see us as having interests of a broader and more global character.
My friends, thank you again for the tremendous support that you gave to me, to Peter and to all the other members of my parliamentary team. I have been a very fortunate individual. The greatest privilege that can come the way of any citizen of a country is to be given the sort of responsibility that I've had over the last nine years. It's something that I've treasured, it's something that I've never taken for granted, but it's something that I would never have had had it not been for the loyalty and support of the Liberal Party.
What I have achieved in public life I owe to the Liberal Party. I owe it to that great collective of people around Australia which those sitting in this room, this hall, are part. I've never lost sight of that, I never will, but I warmly thank you for the support you've given me.
Thank you.
[ends]