E & OE…………………………………………………………………………………..
Mr Lou Russell, the President of the Chamber, Katie Lahey, ladies and gentlemen. Can I first of all thank the Chamber for the opportunity you’ve given me tonight on this very important anniversary, this very important milestone in the Chamber’s existence to share with you some thoughts about our country, about its general condition and more particularly about the condition of the Australian economy.
At the present time for a whole combination of reasons it’s very appropriate that we reflect on the general condition of Australia and not just on the economic state of our country. We are on the eve of the hosting of the greatest sporting event in the world, the Sydney Olympics. This weekend we’ll celebrate a very important milestone, along the path to reconciliation between the Aboriginal people of this country and the rest of the community.
Next year we will celebrate one hundred years of the federation of the Australian nation and all of this takes place against the background of a world that has changed forever from what it was a few short years ago. And for that reason, I congratulate Katie and the Chamber for the focus that you have given to the social responsibilities of business through the launching of the project of the common good.
And the remarks that you have made tonight Katie echo in some respects the notion embodied in what I’ve described over the last few years as the concept of a social coalition. And these things give me the opportunity to reflect for a few moments on not only the changes that have occurred in the economy, particularly as a result of the information technology revolution, but also the changes that have occurred in political life here in Australia and around the world in recent years.
And just as we now all live in a globalised world economy and the things we took for granted only a few years ago and the paradigms that governed us only a few years ago have changed. So it is with politics and I am very conscious as the leader of a political party, as a leader of the government as somebody who from time to time hopes he is abreast of contemporary political thought. I am somebody who is very conscious of those changes. We no longer live in such an ideologically driven political environment. Our politics now is a lot less tribal than it was ten and certainly twenty or thirty years ago. It is no longer possible to stereotype people quite so readily, to predict their political allegiance, to assume that they will maintain that allegiance for a lifetime. Just as businesses become more competitive, so politics has become a lot more competitive and that is a good thing too because nobody should ever be guaranteed a market share.
And we all have to fight a lot harder and be a lot more imaginative and we all have to be a lot more adaptive to the changes and the unpredictability and uncertainty of politics adds a very special character and a very special spice to political combat as we enter the twenty first century. And this is quite relevant in a way to what Katie had to say about the common good and one of the reasons why I developed the notion of a social coalition.
What I mean by a social coalition is to recognise that no one section of the community can solve the problems we confront acting on its own. One of the reasons I developed that notion and have tried to give some expression to it over the last two years in particular is a result of observing how politics has gone through several phases over the twenty five to thirty years that I have been involved in public life. In the 1960s and 70s there was a view, given expression to here in Australia through the very energetic federal programmes and government activities of the Whitlam Government. Given expression to in the United States by the very interventionist policies of the Kennedy and Johnson Administration, under the title of the Great Society, there was a view that every problem could be solved if only you had more government. That every problem would be solved if you had a Federal Government programme, particularly in countries like Australia and the United States. And that seemed to be the solution to society’s short comings and society’s challenges.
But that of course as we know didn’t work and we saw in the 1980s in particular, a retreat from that view. And perhaps too great a retreat from that view and the idea developed that in some way if you simply allowed market forces to operate in a completely unrestrained way, there would be some kind of mystical, trickle down effect that would solve every conceivable social problem. And I think we’ve found in recent years that that hasn’t quite worked either. And we’ve come I think to accept that neither of those models was entirely relevant, entirely appropriate and what we need to do is to find something and we have begun to find it, something that recognises that Governments have a limited but none the less strategic role to play in society.
But Governments alone can’t challenge, let alone solve all of the social problems of society and I have tried to propagate the notion of the social coalition. And what that notion simply says is that yes the Government does have a role, an ongoing role in the area of social welfare. It’s the responsibility of Government to provide the social security safety net. And when I talk of a social Coalition and when I talk of a greater role for business, I don’t have in mind that the Government should withdraw. I don’t have in mind that the Government should hand over to the welfare sector or the business sector, the ongoing responsibility to provide the social security safety net. But what I do recognise is that the Government is not very good at providing some things separate from the social security safety net. Government agencies aren’t always the best at providing coal face social welfare counselling and personal relief and helph. And I have tried in my time as Prime Minister in areas like drug abuse to very heavily involve volunteer organisations with Government resources.
And the Premier of NSW and I, and I am pleased to say in an area like this, there are no real political barriers, the Premier and I today launched a government programme in the drug area. Funded by the Federal Government but utilising the services of State Governments and involving the welfare sector facilities to provide compulsory diversionary programmes for people who have a drug problem as an alternative to being caught up in the criminal justice system.
And what I have sought to do through the social coalition and that is why I welcome so much what Katie had to say in her introductory remarks tonight is to say well, there are some things that we do well because we levy taxation on your behalf and I know you love us doing that. We have the resources to provide a social security safety net but we need to enlist and enrol the efforts of great volunteer organisations and not just to help people in their hours of need but also to provide policy advice and I have tried to involve those organisations in providing policy advice and right at the present time,
I’ve got a reference group shared by Patrick McClure who is the Director of Mission Australia, one of the great welfare organisations, not only of this city but of this country to give that advice.
We need the involvement of the business community and I welcome its growing participation and I always say, I am not asking business to give more, I am asking more businesses to give. Because there are many men and women in business who have given magnificently over the years and have very very strong senses of social responsibility. So there is as Katie quite rightly said there is a growing role and it’s not just a question of philanthropy, it’s not just a question of writing a cheque important though, those things are, it is also a question of playing a very constructive role in promoting social improvement and social change. Because it’s a terrible cliche to say that we live in a world that is changing very rapidly and the sort of economic and social change that the information technology revolution is bringing about will I believe be seen by future historians as probably greater than the impact of the industrial revolution on society at the time it occurred.
So it is both a challenging and very interesting and very stimulating time to have an opportunity to lead a government, to have an opportunity to lead a business Chamber to have an opportunity to run a business in this country. And of course the primary responsibility, the core business if I can put it in that corny fashion that the business community is to make a profit and nothing that I have said about the important social roles gainsays that fact. We do need a society that generates wealth and we need a society that lives in as benign an economic climate as can be created and in the time that we have been in government we have sought to do that.
We have sort over the last four and bit years to challenge some of those things that needed change. We set about very directly and very vigorously to tackle the fiscal deficit that this country suffered from and of the many things that I am very proud to talk about none probably more so than the fact that in the five budgets that Peter Costello has brought down, we will have eliminated about 50 billion of the 80 billion dollars of debt that we inherited as a Government on your behalf in March of 1996. And we are very proud also of the Industrial relations reforms that Katie mentioned.
And one of the very good things about Australia’s economic performance in the last few years is that we’ve been able to give to the average wage and salary earner, not only greater job security because we’ve generated almost seven hundred thousand more jobs, but we’ve also been able to give them notwithstanding the recent increases significantly lower housing interest rates and also significant increases in real incomes because nominal wages have run ahead of the rate of inflation. And part of that has been due to increases in productivity. And some of that productivity gain has come from the fruits of greater investment in technology and some of it has come from significant improvements in industrial relations.
So when we look back over that last four years I hope we can see a pattern of a government that’s been willing to tackle some issues for the longer term. To recognise that any of us in public life only have a few years to try and make a difference and you have to take every opportunity and sometimes you can get criticised for the pace of change. There’s sometimes a suggestion that society is suffering from reform fatigue but in the sort of world environment in which we now live you really have no alternative but to keep reforming and keep being more competitive. And it’s not good enough to look back and say well the Australian economy is better now than it was ten years ago.
That might be satifying if you are making a political speech but if you are trying to win a market in this month in this year, at the beginning of the twenty first century the thing that matters is whether you are as competitive as the other companies and the other countries that are trying to win that market and that was why it was so tremendously important that Australia was able to live through the economic downturn that hit the Asia Pacific region a couple of years ago. And we now if we continue on our current path, we can have the double benefit of having lived through that downturn but now begin to get some of the fruits of the recovery which is now gathering pace in some of those Asian Pacific countries.
I went last weekend for the first time as Prime Minister to Korea. One such country that was hit very hard and to its very great credit took the economic medicine, and very quickly, that was needed, to bring about a downturn, and the adjustment was very severe and it had a lot of very heavy social implications but now that country has turned itself around and it’s again starting to be something of a performer in our part of the region and a very important customer to Australia. It’s been consistently amongst the three or four countries that have bought more from Australia over the last ten years than any other. So the picture as I look at it, the state of the nation to borrow the title of tonight’s dinner is over that period of time a very positive one.
But as I say the reform task is never over. We can’t afford as a society to have reform fatigue. We do need to better explain, to better understand the reactions of people to change. But if we imagine that we can stop the world and somehow or other opt out for a couple of years from the global economic environment, I think we’re very sadly mistaken.
And that is why the biggest economic reform, in case you hadn’t heard at all, is coming on the 1st of July and that is taxation reform. I don’t think there is a man or woman in business, I hope there isn’t, anywhere in Australia who hasn’t heard of taxation reform and who isn’t 100% ready for the introduction of the biggest change that is going to come our way so far as taxation is concerned in our lifetime.
I don’t need to tell you that the process of getting the reform originally together as a coherent policy through the late months of 1997 and into 1998, that was very hard. And it did involve a lot of consultation with the business community and I want to record now my great thanks to many people in the business community for the very positive attitude that they took towards tax reform. The attitude taken by this Chamber, the attitude taken at a national level by the ACCI, the attitude taken by the Australian business group, by the Business Council, by the Minerals Council, by many other business organisations put the national interest in front of immediate corporate interest. I know that there are some companies represented in this room tonight that are not entirely happy with some aspect of tax reform, I know that. But I found with this exercise a great willingness on the part of people in business to put the national interest in front of sectional interest. And that gave me a great deal of encouragement. And it meant that it was possible to reach out beyond the immediate knee-jerk reaction of people in companies and find support for something that was in Australia’s broader interests.
We persevered with reform, even though it was unpopular and politically risky because deep down I’ve known and I think many people in this room have known that we’ve needed to reform Australia’s taxation system for more than a generation. In fact I can still remember a year after I entered parliament, it was in 1975, there was a report tabled by the Whitlam Government which had been commissioned by the late Billy Snedden when he’d been Treasurer, called the Asprey Report, and it was chaired by the late Ken Asprey who was a judge of the Court of Appeal in New South Wales and he was given a brief by the then government to review Australia’s taxation system and recommend some fundamental changes. And interestingly enough he recommended the introduction of a broadbased, indirect tax; and he recommended the abolition of the wholesale sales tax; and he recommended some reductions in personal income tax; and he recommended some changes in the regime to include some kind of capital gains tax. It all sounds very familiar. And it’s broadly consistent with what a quarter of a century later it’s finally been possible to get through the Federal Parliament, not entirely in the form we originally intended, but nonetheless 85 to 90% of what the Australian people voted for in October of 1998.
And the good thing about this reform is that nobody will ever be able to say that the Australian people haven’t voted for it. And when it comes in, as it is on the 1st of July, I believe that it will be widely accepted. I believe that within a relatively short period of time after it has been introduced the great bulk of the Australian community will look back and ask what all the fuss had been about and what all the political controversy had been about, what all the nitpicking had been about and what all the minutiae of the analysis had been about. Because Australians in my experience will embrace and accept and facilitate reform, provided you can satisfy them on two key criteria. You must first of all convince them that the reform is good for Australia. And I believe that most Australians accept and I find this an interesting constant in all of the surveys that are done about tax reform, even though they might say the majority of people wonder whether it is good for them, or good for their company, or good for their family, most people think that tax reform is good for Australia.
And the second thing is that you persuade them that it is a fundamentally fair change. And I believe with all of the changes in social benefits, the very significant reductions in personal income tax, the reductions in capital gains tax, the abolition of provisional tax and all of the other benefits – the reductions in the price of fuel in rural areas of Australia, all of those things together I believe have produced a view in the Australian community that it’s not only good for the country, but it is also fair.
But as I said to Rob McKeogh a moment ago, before I got up to speak, it’s a little bit academic now debating all of these things, it’s going to happen on the first of July. And we in the political world will find out fairly soon what the reaction of the Australian public is going to be. But I am very optimistic about that reaction because I think Australians are fundamentally very positive, optimistic people. If you take them into your confidence, if you give them the detail of something and you persuade them of the national interest imperative in change and reform then I think you have a great chance of taking them along with you.
But ladies and gentlemen, can I conclude at where I began and that is to congratulate the Chamber on its 175 years. Can I thank you for the opportunity you have given me tonight to share some thoughts with you, not just about economics, but about the general condition of our country and the relationship which ought to exist between the business community and society. And I was heartened by what was said tonight. I was heartened by the emphasis that has been placed by this Chamber on the social role and the social responsibilities of corporate Australia, because with that attitude then it’s fair of me to say and I think fair of the Australian community to say to all of you that the heart of Australian business is good, that it is doing well economically, it is alive to its, not only its responsibilities to its shareholders, its first responsibility but also very alive to its responsibility to the Australian community. And as we enter the twenty-first century, that isn’t a bad place for Australian business to be and it’s a magnificent way for it to make a contribution to the years ahead for our nation.
Thank you.
[Ends]