FEDERAL COUNCIL MEETING OF THE
LIBERAL PARTY OF AUSTRALIA
Canberra, A. C. T. 8 JUNE 1970
รต peech! th_ ePrime Minister, Mr. 14ohngorton
Mr. President, Parliamentary Colleagues and Ladies and Gentlemen:
It will be twenty-one years next December since the
Liberal Country Party coalition assumed the Governme.. of this nation.
They are twenty-one years in which there have been three wars Korea,
the Malayan emergency and now Vietnam; twenty-one years of great
national development and industrial progress. There has been an
increase in the population perhaps greater than any other country has
had, except Asian countries, in that period of time. It has been
a periodd gready a~ pnded trade; a period in which our exports have
been immensely developed; a period of growing involvement with
that area of Asia to which we find ourselves contiguous; a period of
improvement of the living standards generally for our population; a
period of greatly expanded social services; a period a2 greatly
expanded opportunity for the individual.
We have helped to bring this about, because at the time when we
came into office, wa stood for the right of the individual to engage in the
occupation of his choice and to so conduct himself in that occupation as
he believed best. We stood ainstthe concept that the individual
ought to be told by the State that his enterprise could riot be f reely
used in a field of his own choosing because there were ce-rtain areas
in which the state might forbid it.
We stood for the concept that the Government should create
a climate where individual enterprise was encouraged, and where
the planning of enterprise and its expansion was a matter for the
myriad individuals engaged in it. We stood against the concept that
all planning in all fields should be undertaken by a government or
governments and forced upon the citizens of this country.
We stood for a political system where elected representatives
of a party should themselves decide the policies to be followed by that
party. We stood & Insjt a system which made elected representatives
subject to direction and instruction from unelected persons from
outside. And that we were right in all these attitudes ic, I believe,
evident from the results of this past twenty, nearly twenty-one years. / 2
Since I spoke to you-: ast, s~ e _ j
two years ago, other significant advances havedeen made in many
areas in Australia, and new initiatives have been taken.
We have found ourselves in a situation where our own
defeuce has necessarily had to occupy our attention in a way which
it has never needed to do in the past years of our history. We have found
ourselves in a situation where our involvement with the countries -of Asia, our
political involvement, our economic assistance has necessarily hald to
grow because we have become contiguous to, and in a sense, a part of
this region of the world, this region of Asia in which we live.
I do not need, I think, to explain to you the new initiatives
which my colleague, the Minister for Defence has undertaken in the field
of defence, the new burdens imposed upon this country, n or the new
economic assistance which my colleague, the Minister for External
Affairs has beea instrumental in extending to the countries to our North,
nor the political initiatives which led, just recently, to that Conference
in Djakarta initiated by an Asian nation to which we were asked and to
which we so greatly contributed.
In other areas, we have gone into an overseas shipping
service let me quickly add, Sir in, partnership with private
enterprise. We have given attention to the requirements of the aborigines
in our midst. We have managed, after some attempts which did not
succeed, to redistribute electoral boundaries. We have given attention
to new roads agreements, adding $ 500 million over five years and
breaking the old requirement that 40 per cent of this must be spent in
country areas. We have taken the decision to convert to the metric
system. We have taken the decision to introduce nuclear power. We
have taken many initiatives, one of which I will speak of later, to provide
incentives for, and to help to maximise Australian ownership of
Australian industry. We have greatly increased aid for the performing
arts, established an Australian film and television development
corporation. We have introduced a tapered means test which gives
incentive to people to save and to earn because their pensions are
not automatically cut out if their means as assessed or their earnings
are above a small amount, and in this particular field of social
welfare, increased pension rates, increased unemployment and sickness
benefits, given full health insurance for low-income families and newlyarrived
migrants, are in process of introducing the new health scheme
and embarked on a omprehensive -programme of. homne care for the aged.
Sir, these are only sonio of ihe new things, some of the
new initiatives which have been taken in-. that period of time, and I
believe that they continue the tradition of this Party to care for people
and to bring new thought to new problems as they arise.
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Sir, we had in -the progranmme which we have followed,
three proposals in particular which have occasioned much debate in
the country and in the Parliament. One is the health scheme promised
at the last election which I very much hope will become law this week;
one is the Act to set up the Industry Development Corporation which has
already become law, and one is the proposal to discover which Government
has the legal responsibility for the seas which lap Australia's coast.
Each of these matters is important. Each of them, I think, is
illustrative of an approach of the Libemal Party, and about each of them
I wish to talk to you briefly.
The medical benefits scheme, or the health scheme, is
designed, as you know, to remove the fear of heavy doctors' bills
from the insured patient. In order to do this it was necessary to
remove that fear from those patients who had to attend special ists
and who therefore became liable for the higher fees which specialists
charge. And in order to achieve that it was necessary that Government
subventions and fund benefits should be greater for such patients than
they were for patients who did not need or receive specialist treatment.
This led to considerable opposition from a section of the
doctors and this opposition was reflected in debates in the Party room
and in the Parliament. It also led to protracted negotiations and
discussions between my colleague, the Minister for Health, the
Australian Medical Association, and organisa tions representing sections
of thc. general practitioners.
The main arguments advanced agains t the proposals
were if specialists received higher bcnefits frorm the funds and the
Government, evc.,-y doctor would seek to become a specialist and
there would be no general : izactitioners. But since specialists now
charge and receive higher fees from their patients, it is, I think,
doubtful if this argument is valid.
The second argument
consult specialists without having to
everyone would consult a specialist.
not believe that this will happen, but
scheme will finally decide this point,
out to be well grounded, then further
to it. was that if patients were able to
pay a monetary penalty, then
For a variety of reasons we do
only time and the operation of the
and if the fears expressed turn
attention will have to be given
But now, or shortly, all those who need medical
attention, even of the most specialised kind, will be able to get it
without incurring a burden of crippling debt. I think this is an advance
which illustrates that care for the individual which is the Liberal
approach and of which the organisation and the Party can be proud.
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but I must warn you of one thing.
Neither our scheme, nor the scheme of our opponents,
will achieve its desired end unless the majority of doctors charge the
co~ mmon fee and unless that common fee is only altered at reasonably
spaced periods and by reasonable amounts.
Turning now to the Austral ian Industry Development
Corporation, I speak of an Act which was attacked, for reasons
incomprehensible to me, as an Act which somehow violated . Liberal
principles. Let me give you some of the reasons for passing this
Act. Ouir nation is going throtgh a period of industrial
expansion and of great mineral development. We need large and
continuing infusions of capital from overseas in order to sustain this.
In the last five years, one-sixth of all such investment capital came
from oversea-s. And inevitably that infusion of capital tends to bi ing
with it a greater degree of overseas ownership and control of our
la rger industries and our mineral developments and ultimately cf
our processing of our minerals.
As one example of this, overseas investment in mining
five years ago was $ 34 million in the year. It has risen to something
like $ 250 million in the year, while Australian control production
in minerals alone has dropped from 63 per cent in 1963 to 47 per cent
in 1967. At the same time, Australian requirement to service
existing capital by remitting abroad, has risen from 8. 3 per cent
to 10. 5 per cent of our export earnings in the last five years. And
there is a build-up ot commitment s for further remittances in the
future because income earned in Australfia by overseas investors
and ploughed back has more than doubled in five years.
Sir, these are prices we can afford to pay for
development. We can afford to pay, for 4w benefits ' we
get outweigh the costs of which I have spoken, and we couldn'.. develop
as we should without this influx. But though they are prices we can
afford to pay, they are not prices we should pay unless we must.
So we should provide the opportunity to retain as much Australian
ownership and as much Australian control as we can, provided we
do not inhibit growth. To that end, we have brought down guidelire s for
borrowing inside Australia which provide incentives towards
Australian ownership. We have brought down a'takeover code"
and we are proposing to bring down the matter of convertible notes
which again -will provide an opportunity and incentive for Australian
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ownership. And the Australian Industry ievelopment Corporation is
designed to further these ends.
It is designed to borrow abroad, on behalf of Australian
companies which ask it to do so, which it judges to be viable, and which
might not themselves be able to borrow, and which might '-ereforo
have to surrender equity to an overseas partner.
Its objectives cannot be claimed to be opposed to Liberal
principles, and indeed, I do not think I have heard its objectives so
claimed. Nor, do I believe, can its method of operation. True, it is
provided with capital by the Government, but it will be autonomous.
It ' will be governed by directors drawn from the field of private
enterprise and applying the judgments and standards of private
enterprise to applications to borrow. It will have no power to
interfere with a company or to act financially on behalf of a company,
unless it is by that company asked to act. It will be subject to the
same taxes as other companies engaged in its field. It will compete
on equal terms, and it cannot do any more than compete.
It will indeed offer a choice to a borrower, and the
preservation and expansion of the right of choice has always been a
basic tenet of Liberalism, ever since 1949 when Sir Robert Menzies
pointed out the need to retain the right of choice.
Sir, if this is a departure from Liberal principlae,
a foray into socialism, then I suppose on that test, so is TAA, or
the Commonwealth Trading Bank or the State Savings Banks or the
Australian National Shipping Line, or a myriad other enterprises.
I think that this action will, in the future, be hailed as a service to
Australia. I believe it will help to retain the greatest possible
Australian ownership of growing Australian enterprises without
interfering with that inflow from abroad that we need. Indeed, I think
it will be an adjunct to the growth of Australian private enterprise,
of Australian private enterprise industry and to help it grow as
Australian industry. Surely, Sir, these aims are proper ones for a Liberal
Party. In turning to the proposal, somewhat loosely described
as offshore minerals legislation, we turn to one which has, I think,
been greatly misunderstood. It has been referred to as an attempt
to take the benefits of mineral deposits on the seabed away from the States.
It isn't. It has been described as an attempt to take away States' legal
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rights. It isn't. It is purely and simply an attempt to discover,
by the only means known to me, who is legally responsible for the
cortrol of the seas around Australia, who has legal rights which are
at present in unresolved dispute.
We want, and we believe, that the nation needs a
clear legal definition of this matter which we do not now have. Both
the State Governments and the Commonwealth Government claim this
legal responsibility and both claim it from low water mark to the outer
Continental shelf. The legal claim of the States is not confined to the
area between low water mark and the three-mile limit any more than
the cl aim of the Commonwealth is confined to the area from the threemile
limit to the Continental shelf.
We are the only nation which does not know what the
legal position is and where sovereignty lies, and it can surely not be
claimed to be an act of centralism to seek to discover this. In
Canada, the issue was resolved by stating a hypothetical case to the
High Court or the equivalent of the High Court. It is not possible
to do this here. Here, all that can be done is for an Act asserting
legal responsibility to be passed and for that Act to be challenged in
that High Court which was set up by the Constitution for the purpose
of interpreting the Constitution in cases which are not clear. Nor
will this clarification, when it comes, prevent full Commonwealth,
State co-operation. The petroleum agreement, which specifically does
not resolve the q uestion of legal responsibility, will continue. And
agreements patterned on the same lines can be entered into concerning
all other minerals, and we are prepared to enter into themn.
But as a nation we will know where we stand. We
will know whether the nation's writ runs inside and outside the threemile
limit, whether it runs in part of the area but not the whole, or
indeed whether it runs in any of the areas. And it is hard to see why
this question should remain any longer in doubt, hard to see why this
question should remain in doubt any more than questions relating to
defence or overseas trade or the other sections of our Constitution
where primary responsibility is not in doubt.
It is hard for me to see why there should be
objections to Constitutional methods of clarifying the Constitution, and
it is certain that after clarification, Commonwealth and State co-operation
in the granting of leases for minerals, and Commonwealth, State
agreement s for royalties and fees in administration can be patterned 7
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on that petrolewnm agreement which it is so oftmauggested should be
followed. Those, Sir, were three of the new initiatives, the
new actions taken which, because they have occasioned country-wide
debate, I thought I should speak of to this Conference.
I turn now to another question of debate, of relations
between the Commonwealth and the States.
As far as financial relations are concerned, Sir,
you will know that the previous agreement is shortly to run out and a
new financial agreement requires to be negotiated. At the moment,
discussions are continuing between Com,-monwealth Treasury officials
and State Treasury officials on this matter.
At the Premiers' Conference, it was made clear, I
think by me that there would bejia new agreements to be worked out
between us, more available for State Governments than would have been
the case bad the old agreement continued with its set down yearly
increases. And we were able to meet one of the specific requirements
of the Steering Committee, which was that the area of State debt should
be reduced and gradually taken over by t. he Commonwealth, and the
charges on it revoked, and that there should be, each year in the
future, a sum of money which previously would have been provided
as Loan money on which interest wac charged but which, for the future
would be provided as a share of revenue for the States to spend as
revenue rather than as Loan funds.
For the rest, the matters of betterment factor and
things of that kind, this is still the subject of negotiation between us.
Last time I spoke to you on this general matter, I
said this: ,' In my view, Sir, it would be unthinkable for an
Australian Government not to have the overriding power
over the maintenance of the Australian economy as a whole".
And this, I am glad to see, has been endorsed by the report of the
Steering Committee. I also said
" If there is a requirement for cheap power in, for
example, Gladstone in Queensland, in order to be able to
bring about industrial development which vtill benefit the
nation; if there is a need for a pipeline or some other work
in South Australia to carry natural gas, which in turn will
benefit the nation, and if these things cannot be achieved without
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' hssistance from a national governmnent, then a
national government needs the right and capacity
to assist in these things.
I imagine there would be few here who Wo uld dispute that approach,
and particularly in view of the Steering Committee's recommendation
that provision for the needs and problems of the less populous States
be maintained. Last time I spoke to you, I suggested that there was
a need to see that the facilities for the education of a child were
roughly comparable no matter in what part of. Australia that child
was educated. And I suggested there wEas a need to ensure that
facilities for the care of the ill in Australia were roughly the same,
no matter in what part of Australia that citizen becaine ill.
I said then I did not think it right or proper to
describe such suggestions as those of a centralist. And I repeat
that I do not think they indicate a centralist way of thinking. But there
are always those who seek to over-simpl ify everything and to apply
labels. There are always those who seek not to have the kind of
discussions I called on us all to have and which we have had with
benefit, but rather to make prejudgment and to use these labels.
In his address today, the President referred to
the word " centralism" and " centrali& e. I am not entirely sure what
these words mean for they are rarely defined by those who use them.
But if they mean a system or person who wants all power, all policymaking,
all administrative decisions concentrated in one place, then
there are none of us here who could possibly be described as centralist.
And I believe that all of us here could properly be described as
opponents of centralism, if that is what it means.
Similarly, if a federalist is one who believes that
a national government should have no responsibility and no voice in
such matters of nation-wide importance as education or health or
national development or agriculture or in any other fields, that there
is no room there for co-operation between a national government and
a state government, then I do not think that such a person is a true
federalist or serves the nation well.
Indeed, Sir, these words, these labels, unless they
are defined in depth, have no real meaning, but the danger is that
they are labels which can be used as a substitute for thinking. A
proposal may be advaoced or a practice may develop which is new
or different and I speak not only of proposals advanced for po-wers
to come to Canberra or practices which develop, I speak of the
living thing of federalism where, in either direction, proposals can / 9
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be advanced. And in such a case, always if such a thing happens,
there should be analysis and examination in depth to see whether what
is proposed is advantageous to the nation as a whole, to each of the
citizens who make up the nation, just as they make up the various
States, and whether it is adva~ ntageous to a State or States or to the
citizens who make up the State or States.
There should in such circumstances always, in an
ad hoc matter, be debate of a friendly and constructive kind, not
debate designed as an advocacy of previously-determined positions,
but debate designed to discover argument and to discover where
the true balance of advantage lies, whether the goals sought are
proper goals and whether they might perhaps be better attained in
some other way; to discover whether the proposal fits properly inlto
the co-operative federalism which we seek to retain. Too often,
this exercise in thinking can be avoided and sometimes is by the
initial use of a label and the condemnation of a proposal on the basis
of that label. Let us always, Sir, examine these things on the
basis of a close analysis, close examination, looking at the merits
or demerits of any proposal and looking at the continuance we all
desire of an evolving but not static Liberal federalism in Australia.
I think that those who do not wish to do that perhaps will do both
Australia and the Liberal Party a disservice, for we cannot remain
static, and we do wish to preserve a federal system which our
opponents, should they have the chance, would undoubtedly destroy
completet. y as they have made more than evident over the last -year.
Sir, we believe in a federal system but not a static
one. Our opponents don't believe in a federal system at all, and this
is a great and continuing difference between us.
We were told this morning, Sir, in your speech,
that we must discover what the Australian people hope far and that
we should seek to govern as a government and seek to Zdvise as an
organisation in such a way that we can best attain those hopes and
wishes, and indeed we must.
Many of these hopes and wishes must already be
knownqjqeAd the wish of young people to be able to obtain adeposit for a
block and to build a house on it without facing a lifetime of heavy
debt, the hope for continuing improvement in education opportunity
and let us not be apologetic on this, for education opportunity under
the various State Governments and with some assistance from the
Commonwealth has improved immensely over the last decade. But
there is always room for further improvement.
There is the hope otbeing-able. to-retire in
modest comfort and of being cared for when ill without crippling
bills; the opportunity for personal development, personal development
of talent and personal atisfaction in life by engaging in an occupation
which gives satisfaction to the individual.
Then there is the wish for reasonable stability
in prices and the cost of living, the desire to cleanse the environment
in which many now live, the sense of bel tonging to and contributing
to a nation growing in material wealth, . In personal opportunityy , in
Christian concern for the unfortunate. And, of course, the desire
and the wish that all this should be done with, if possible, no taxation
at all: Many of these new hopes and asplxations are good.
But they have sprung from the prosperity created in the climate we
have provided in the last twenty years A-which has taken the more
pressing problems which used to intrude away. Well they cannot
all at once be met. But the way which will meet them best is the
Liberal way, the way of creating a climate where individual enterprise
and the right of choice to the individual will be continued, the way
where competition is fostered but laissez-faire is not allowed to run
wilId, the way that has stood the test of time and which has made
Australia not a perfect state for it is very far indeed from that
but a country which offers its citizens be cause of their exertions, and
because of the wise husbandry of the results of their exertions, a
fuller life, a life of more opportunity than perhaps of any other country
I know. We will go into the future as a. Party with heavier
burdens for our defence than we have ever known before because of
changing world situations, with greater involvement with the-nations
who our neighbours, with these new problems I have sketched to you
before us needing to be overcome, but with the firm and unshakeable
belief that the way to overcome them is not by all-embracing state
planning, is not by abolition of a federal system but by that general
approach which we -have followed for over twenty years and which,
projected into the future, and changing slightly to meet changing times
and changing problems after debate, will best meet those problems
for the good of this nation and all those citizens who live in it.