AU2TMALIAN INT= OF MANAGEMENT
TWELFTH GENERAL MANAGEMENT CONFERENCE
Hotel Canberra, Canberra, ACT 29 OCTOBER 1970
peeh ythe Prime Minister, Mr. John Gorton
Mr. President, Ladies and Gentlemen
It is not my intention tonight to dwell on election issues. But rather
I will talk about some of the developments and some of the challenges that Australia
faces and therefore that you and your Institute face. These are the direct concern of
management, whether it be management in government which, in terms of economic
management, seems to run in tandem with another organisation outside which
sometimes makes things diff icult; or management in private industry. The
opportunities ahead will only be fully seized and fully utilised by the proper exercise
of management in all spheres.
And this year, Sir, is an important year. In a sense it is Year Cne
Year One of the decade of the Seventies. Sir, those seventies hold for Auztralia
more opportunity if we have t1-will to grasp it if we are prepared to put in the
effort required to grasp it than ever before in this country and possibly in any other
country. We are getting now the people we need to populate the continent. Indeed
the results of twenty-five years of immigration 1policy, uncomfortable as it m~ y have
been from time to time because immigration policy is inflationary unless you are
going to do it the way the United States did in the 1890' s when they shipped peo,' le in
and said " Fend for yourself" and we don't but the results of twenty-five years
of immigration policy, population-wise, are beginning to pay off.
We have discovered here recently, and are still discovering, and will,
I am positive in the future, discover more, deposits of. mineral wealth greater ' than
our fathers could never have dreamt of and which could well result in our being
the envy of the other nations of the world.
And, thirdly, we are still creating and attracting, through good
management, both governmental and private, capital to keep our people at work, to
bring in still more people and to develop those resources we are discovering. And
if you cast your minds, not o~ nly over minerals, but over the new industries, such
as wood chips, such as fisheries, such as the manufacturing industries which have
expanded so greatly, you will, I am sure, have the same concepts as I have of what
this country can be turned into by good management. I don't by that mean that labour
is not the basis of all production, because it is. But I do mean that no matter what
the labo~ ur force in a particular industry, no matter how well and efficiently that force
works, the results and the productions from that force will only be fully effective
if proper management is brought to bear. And this is why I think the Lstitute is so
important. o. v a / 2
All of these things that have happened in Australia, including, Sir,
the new developments in education which you referred to, the advanced training for
management which I think was generated when I was Minister for Education and
Science. All these things have not come about by chance. They have conie about, I
think, by reasonably good management at every level and they will be accelerated
by that better management at every levol which is the objective of this gathering
here today. And as we get bigger, and as we get stronger, as our responsibilities
increase, so the demands on management will grow; for just as a new order of
schools is going to be required to deal with the technological revolution going on
around us now, so we will need a new order of management, highly specialised and
highly trained. For this purpose, to help towards this, this proposal for
management training was introduced.
I do not know, or pretend to say to this Institute, just how this
advanced management training should be coiiducted. Most of the argument at the
mome-nt is where it should be conducted whether in New South Vkales or in
Victoria. That we can leave to one side. We can have a centre of excellence. We
neea-not get rid of other good business training schools We cart have two centres
of excellence as we grow. The location is not significant. The curricula and
the philosophy of approach are, and it may well be that there should be not postgraduate
management following directly on from graduate management, but that
there should be required an interval of practical experience in the world of business
and of commerce. It may b. 3 that there should be required " sandich courses" where
for a while a man works in the business world of commerce and industry and then
goes to academia and then comes back. Whatever it may be, I do hope, with you,
that we will not see from this Institute turned out the theoretical people of whomyou
spoke, but the practical people who will require this additional ability in
order to i ke the full use of their management potentials. And this is the objective,
and this is what you are concerned with and this is what will be worked out in this
country as other things are worked out by discussiDn and by experience.
Sir, our population now has passed the 12-4 million mark and,
continuing my theme of what is possible in this country, our natural growth and
migration being at some two p. er cent a year, we, I think, will see, short of war,
which I discount a major war an economic depression which I also discount
a doubling of our present population by the end of this century. And that is fairly
good going, and that will make us by the end of this century a population of the
size of Canada today. Sir, there are great prizes, there are great opportunities
for service, not only to one's industry but to the nation in which one lives.
And this being so, I think there are two questions posed for the future.
What kind of a society will it be as it increases in size? And how, then, will we
continue to develop it" I am sure that it has the opportunity again given good
management to be a society which will provide, to those citizens who malke it up,
a better life than any other society in any other country in the world has yet
provided. 3
3.
There is an oppo~ rtunity to see that the individuals who make a country and
who are the most important components of a country, will be given the oyportun ity
to develop their own desires, their own aspirations. whether it be to be a top
manager of a great firm, whether it be to be an opera singer, whether to be a farmer,
whatever it may be, there will, I think, be an opportunity here because I believe we
will have the material resources which will enable governments to divert those
resources to give opportunities to the citizens of its nation. And this is the sort of sxmiety
that I expect we will see in this country in the years ahead.
But how then can we provide those material resources* You, Sir, spoke
of the theme of this conference as being the outlook for international business for
Australia. The outlook for international business for Australia must, in the ultimate,
depend on the capacity for Australian industries of all kinds to produce at a cost
which will enable that which is produced to be sold in competition overseas.
If this is not able to be done, then there is little outlook for the future of
international business. If this is done, then the outlook is almost limitless, except
of course, when countries suddenly change trade treaties and put impediments in the
way of 6a primary produce.
But leaving that to one side, Sir, we have not done badly in this country
in this field over the last decade. Our rate of inflation has grown at a slower rate
than any other significant trading cuuntry but one. But I am sure you will agree with
me that it is essential that it should continue to grow at a slower rate, arAd it would
be better if it didn't grow at all, cr grow only very little. And the deciding factor
in this matter is not entirely gowernmental action but the action of arbitration courts.
What ' world destroy, in my view, the opportunity -Zor international businesos in
Australia, would be the introduction at this time of a 35-hour week which must either
reduce the amount produced for a given sum of money or, if the irlea is to work
hours and have five hours' overtime, must produce the same amount of goods at a
much greater cost. This we simply cannot afford to do if we are concerned with
international business and growth.
But there is also the question of national business to be cons-idered and
here, I think Australia faces a priblem which in a sense is new, and certainly is
greater than it has ever been before. We have had periods in the past when we have had
trade recessions, when we have had depressions. But when that has happened in the
past, all sections in the community and all kinds of businesses have been affected by
that trade recession or by that depression. But today we face a situation where a great
segment of Australia, the rural area is, unlike other sections of industry, hit hard by
the fact that the world either will not buy what it produces, or will not pay for what
it produces the price that is required to allow production to continue. 4
And this is not a matter which just affects the rural sector..... not at all.
Because let that sector be affected and it will not be long before all sections are
affected. These are the people who buy the machinery, who buy the refrigerators, the
motor cars, the trucks, who keep the demand in the country towns for the manufacturers
to fulfil. And what happens in that section of this country will inevitably affect all
other sections. And so here too, because, in the case of manufacturing industry, what
can be sold internally affects the price of what can be sold externally, and therefore
international. business here, too, there is a problem which we as a Government
will tackle. I think we must tackle it by seeking to help with long-term finance for
those who are, in banking terms, worthy of long-term finance, for reconstruction of
properties, and with help for those who have to leave a rural industry to establish
themselves in other areas. This we can do. But if on that section of industry which
cannot pass on any cost increases there is to be imposed again the additional cost of
this 35-hour week, then whatever we may do for that industry will not prevent it going
to the wall. And if it does, because of what I said, it will affect all industry and
international trade. And these things, Sir, I am sure your Institute would have well in
mind. Sir, I would finish on this note. If we can restrain the cost of what
we produce, if we can restrain any rises, if management will-see that the increases
in productivity which management can bring are shared between those who labour
and those who provide the capital, if management can see that with costs stable, prices
can drop and this is possible if that can be done, then there is, as I said, an
almost unlimited prospect for international business from Australia.
We will only do it, I think, by keeping the spirit of competition alive
and by that I don't mean by allowing laissez-faire to run rampant, but by keeping the
spirit of competition alive. I am sure those of you who are in management will
agree with me or some of you will that the spirit of competition is a little
uncomfortable sometimes for people in private enterprise. Because it is competition
it does require harder work, it does require to go out and sell, it does require to
make a better product and it is easier and simpler to avoid this if possible by
having a merger or by arranging for price controls applying through an industry. This
is not what I mean by keeping the spirit of private enterprise alive. But I think
there will always be enough individuals in this country who will see that true
competition does remain and if it dGes, and if government can be orevented from
intervening too much and just provide guidelines, then, again, Sir, this Institute,
if it can see that this happens, will have served a great national cause.
One more thing. I have opened my mind to you as to what I think
is possible for the future of this country, as to the growth which is attainable, as to
the riches which are there. I reiterate something that I said perhaps two and a
half years ago or more. I want to see as much Australian control as possible of
those riches as they grow, of those resources as they are discovered and developed.
I can say this now with more confidence, perhaps, than I could before, because
before, at once, I was attacked andpeople said, " If you say this, there will be no
capital inflow from overseas. If you say this, it will dry up and there will be no
development. But we said it, we said that was what we wanted, and the overseas
companies of significance understood that and have responded to it. And then we
said we would put down guidelines for borrowing fixed capital inside Australia,
and the more Australian equity there is in an enterprise, the more fixed capital will
be able to borrow from abroad. And people said, " If you do that, you will
, frighten off overseas capital. It is a very skittish animal. It won't come. But we
did it and overseas capital has continued to come.
Then we thought it would be helpful to do something about con~ vertible
notes so that a class of investor who required an income could invest in Australian
equity, could invest in Australian companies and change that to equity when the
companies were profitable, and that was another step. And the2n we put up and some
of the bankers here still don't like it the AJDC, in order to help to see that if
capital was able to be borrowed overseas at fixed interest for Australian development
it should be done, and then paid off and the development remain in Australian hands.
The capital from abroad is still flowing in, in spite of all these steps. And I say
this to you. Sir, quite urepentantly, I think they were good steps, I thin-' they
were good management and I think that in a few years' time, people will look
back and say so, and that there will be more Australian ownership of Australian
resources than there otherwise would have been, which in my view i s good
management. But ask me back in a few years and see whether you agree w~ ith me on
that. For the moment, I agree with you in your objectives and in the way you are
seeking to attain them and I thank you for letting me come and talk to you tonight.