F76/ 166
J4 A& AL
PRI ME MINISTER
FOR PRESS AUGUST 13, 1976
TEXT OF AN ADDRESS MADE BY-THE PRIME MINISTER AT THE TASMANIAN
STATE COUNCIL
I am delighted to be back here in Launceston, in the Bass
electorate, to address this Tasmanian State Council.
On 28 June last year Launceston and Bass gave the lead to
Australia. In the Bass By-election the voters gave Kevin Newman a
resounding victory. They returned a most able and effective
advocate for Commonwealth and Tasmanian affairs. He has a
difficult, challenging and important task, and one which he
is undertaking with great skill and tenacity.
In the Bass election the Liberal Party made a number of firm
commitments to help the development of Tasmania. Those
commitments have been honoured.
We undertook to introduce full freight equalisation for Tasmania
in the light of the Nimmo Report. The scheme we announced
which has been in operation since 1 July 1976 goes beyond
the Nimmo recommendations. It is designed to provide that the
cost of transporting goods between Tasmania and the mainland is
approximately the same as moving goods by land a similar distance.
We will in addition be introducing a scheme for the southbound
shipment of producer's material and equipment.
The Labor Party promised action on freight equalisation for
three years. We have introduced a major scheme in our first
year in Government. As a result of the scheme, AN1L has
announced new schedules and an increase in its carrying capacity
to cope with the expected growth of traffic to and from Tasmania.
Tasmania has directly benefited in other ways from the change
of Government. The new federal financial arrangements will
bring some $ 4.7 million more to Tasmania than the old scheme.
We undertook to establish a Maritime College in Launceston.
Legislation has now been passed and funds made available.
The Advisory Council on inter-governmental relations will be
established in Hobart. We have also been actively aware of the
needs of the citizens of Hobart following the bridge disaster.
So far some $ 24 million has been spent by the Commonwealtias a
result of the disaster. In the current financial year, th / 2
Commonwealth will be making available an additional $ 16 million.
We will also be funding investigations into the design of a
second permanent crossing at a cost of about $ 650,000.
Since the election last-December, the period of neglect of
Tasmania has come to an end. Bass gave the lead and the
rest of Australia followed that lead last December. That
decision of the Australian people placed an enormous responsibility
on the Liberal Party both Federal and State.
For three years, the Labor Party had tried to impose its
socialist philosophy of government domination and centralised
power on Australia. As a result it was getting more and more
difficult to find a job: prices were rising constantly: taxes
getting higher and higher: Government and bureaucracy growing
bigger and bigger. Socialist incompetence and weekly scandals
were ruining Australia. It was obvious that Australia needed
a profound change of direction.
Australia needed a Government which believed that people
deserved incentives to achieve their best in all areas of
life; which would encourage productive private enterprise to
provide jobs; which would give genuine assistance to the
disadvantaged; which would protect people against ever-rising
taxes; which would govern not by dogma but by consultation.
Australia needed a government which would reverse the drift
of power to Canberra; which would take notice of the needs of
those areas neglected by Labor.
Above all, we undertook to give Australia a government which
respected the right of people to build their own lives without
being told what to do by a few people who claimed to know
what was good for everyone.
Our programme to restore a freer and more decent life for all
Australians was not one that could be implemented overnight.
We anticipated a " long and difficult" path towards full economic
recovery after the devastation of three years of Labor.
We did state our determination, during our first term of office,
to establish the right conditions for stable, continuing
growth.
A number of crucial steps had to be taken to establish these
conditions. Government spending had to be brought under control to free
resources to individuals and private enterprise.
Wage and salary restraint was necessary to allow business
to expand and create jobs.
Growth in the money supply had to be held back.
The fundamentals of this policy have now been set. ./ 3
ve-unciertook to control Government spending. Wle have
already announced $ 2,600 million savings on the forward
estimates for this financial year.
We undertook to control the growth of the money supply,
and we have done so.
We undertook to work for wage restraint. The Conciliation
and Arbitration Commission has acknowledged by its-recent
decisions within its wage indexation guidelines the
force of the Commonwealth's submission for-less than full
wage indexation in the current and prospective economic
conditions. The budget next Tuesday will be a further step in generating
greater confidence.
I n the election last December, we undertook to introduce
specific measures to encourage business to expand once more.
We introduced an investment allowance which has already begun
to stimulate activity.
We undertook to end the effect of inflation in increasing the
tax burden. We committed ourselves to introduce the M4athews
Coamittee tax indexation reforms over three years. We have
already gone far beyond our commitments in this vital area.
From 1 July personal income taxes have been fully indexed for
inflation.
This is' a reform of historic importance which will end forever in
Australia the unlegislated increases in taxation % 4hich the
Labor Party used so disastrously to'fund -its own-, extravagant
programmes at your expense. From now on, ifA governments want
to increase taxes they will have-to pass legislation. People
can now have absolute confidence that the secret tax rip-off
from inflation has ended.
There is growing evidence that the Government's policies are
working: business spending on plant and equipment has picked up
substantially; stocks are being built up again; retail sales are
improving; motor vehicle sales are high -one company has recently
announced a further $ 71 million expansion; other major new projects
have recently been announced; the stock market is moving strongly;
exports are exceptionally good; national production measured by
gross domestic product is now rising instead of falling,
There are still problems: inflation, while less, is still too
high; there is still room for greater consumer spending; unemployment
is still too high.
Lat m aefwmests onteuesmtapiltocyamtoegnitu hb turtan. The40,0
laet maeafwcmetonteuemployment siaitcatouhmc etrtain the40,0
unemployed labor predicted would bp-a consequence of their policies,
are still of great concern to this government.
There are however some heartening signs which should not be
overlooked. Available inforation shows that numboers employed
have grown since December, largely in the private sector. ' Many
people are concerned about unemployment among young people. While
there are indeed grounds for concern, the position is better than
some people think all but 16,000 of the 230,000 young people who
left school last year had been employed by the end of June this year.
In judging the implications of the unemp loyment figures, we have
to remember that the real rate of unemployment this time last year
was diguised by the R. E. D. scheme which involved 30,000 people.
Even the Labor Government realised this approach was ineffective in
providing a real solution to the unemployment problem and abandoned
it. Taking that in account, unemployment was worse last year than
this year. / 4A
Unfortunately, substantial reductions in unemployment always lag
in the early stages of recovery. A reduction in the number of job
seekers is never one of the early signs of economic recovery.
Initially, increased production is always generated mainly by a
more intensive use of existing labour.
What does tend to increase first is overtime, and overtime has in
fact risen over sixty percent from last June to this June.
Not until existing capacity, of both men and machines, has picked
up does the demand for unemployed labour strengthen.
There is another factor also to take into account as job
opportunities expand more people tend to come into the workforce
in expectation of finding work. This in turn can lead to the
number of people in jobs and the number out of work rising at the
same time. For example: in America where recovery has gone much
further than in Australia, unemployment increased in-June and July.
This occurred because strong growth in employment in those-months
was more than matched by growth in the workforce.
Wage restraint is a prerequisite for maintaining the expansion of
job opportunities. In the two years, 1974 and 1975, the level of
real wages rose by an amount equal to six years' normal growth in
productivity. Wage increases have also adversely affected our
international competitiveness over the last five years the
United States rates of earnings have increased by twenty-four percent.
Australia's have increased by a frightening eighty-three percent.
The resulting depressed share of national income g oing to businesses
halted investment and destroyed jobs. That is why we have argued
as we have in all three quarterly wage cases since we came to office.
Those who argue for undue wage increases at present are, whether
knowingly or not, advocating an increase in unemployment.' Every wage
increase granted today means that the chance of creating a new Job
tomorrow is diminished.
The New South Wales Premier would do well to remember this when he
argues for maximum increases in wages on the one hand, and for more
jobs on the other. It should be remembered that since the election
there, New South Wales which has only thirty-six percent of the
Australian labour force, has accounted for sixty-four percent of
the increase in Australia's unemployment. Of the 33,000 people who
have become unemployed in the last three months, 21,000 are in
New South Wales.
If the N. S. W. Government intends to act to improve the employment
situation, it should be discarding the socialist " dream"' policies
that Mr Whitlam. pursued policies which created an economic
nightmare. The New South Wales Premier should be more consistent:
he says that there should be wage restraint, then argues for maximum
increases in wages.
We all have responsibilities in overcoming inflation. Trade Unions
have a particular responsibility in the reduction of inflation and
the creation of jobs. Union leaders who sanction political strikes
are acting against the Australian community's interests in a sound
and prosperous economy.
The Arbitration Commission expressed its concern yesterday that
strikes are adding to the cost of production, contributing to
inflation and inhibiting the economic recovery. In the eight months
since the election we have brought federal government spending under
control; we have reduced th ieof the Commonwealth Public Service;
we have established an Investment Allowance; and suspended Quarterly
tax payments for private enterprise. we are reviewing the mass of
rules and regulations introduced by Labor. We have reined in the
growth of the money supply. We have fully indexed Personal Ihcome
Tax for inflation. We have introduced mandatory secret postal
ballots in all union elections. We have undertaken the most
extensive programme. of consultations with trade union leaders and
business. Inflation is coming down. The economy is recovering. We have
restored responsible management to the nation's affairs. Bearing
in mind the grevious state of the economy, some governments would
be content to focus exclusively on economic issues. This government
has shown that it is possible to combine effective economic action
with major reforms.
In November, we committed ourselves to protect spending on essential
education programmes against inflation. Despite severe Budgetary
restraints, we have increased real spending on education and
re-established triennial education planning. We committed ourselves
to making the most significant reform of Federalism since Federation.
Reform-which would provide State and Federal governments with a sound
basis of financial independence.
We have begun to implement these reforms. State and Local governments
will be given access to a percentage of personal income tax
revenue. These reforms will achieve a devolution of power which
will enable decisions affecting the citizen to be taken at an
appropriate level.
In our Policy Speech we said that the weak, the poor, the unorganised,
the people wanting to buy homes, had been fobbed off with words
instead of real assistance. We have acted decisively in these areas.
We committed ourselves to protecting the real value of pensions.
We have acted to protect pensions by adjusting them half-yearly
in accordance with changes in the C. P. I.
We committed ourselves to helping the aged. We have acted by
introducing a three-year $ 225 million programme to provide homes
for the aged. We committed ourselves to helping the disadvantaged
in ways leaving them the greatest scope for independence. We have
acted by introducing our family allowance scheme. This has been
recognised as the single, most important reform in the Austr . alian
Social Welfare system since Federation. It ended a system which
discriminated against the children of the poor, because their parents
did not have sufficient taxable income to qualify for the children's
tax rebate.
Over 300,000 families and 800,000 children who were debarred wholly
or partly from benefiting from the rebate system, are now being
assisted by the family allowance. The family allowance scheme does
not add to bureaucratic overheads and it places money in the hands
of people. It does not increase their dependence on the government,
butlets people make their own choices about what their needs are
and how best to meet them. It is a scheme which both assists the
disadvantaged and increases their independence.
We said that home ownership should be a national objective and we
committed ourselves to introducing a new home savings grant system.
We have introd'ced a home savings grant with more generous provisions
than the ones we announced.
We committed ourselves to retaining Mvedibank and making it more
efticient. We have not only retained Medibank, but extended its
operation. It was necessary to introduce changes to Medibank
because Medibank had to be paid for. We are not trying to hide
the fact that Medibank must be paid for.
Under our Medibank proposals health cover is universal. Everyone
is included in comprehensive and high quality medical and health
insurance. Pensioners and those on the lowest incomes pay no levy.
There will be choice of medical health insurance. As well, the
government will provide additional assistance to the chronically
ill and will subsidise low and medium income earners who want to
have intermediate ward accommodation.
There is an element of complexity btecause this is the only way
in which choice can be introduced into the scheme. But there is
a perfectly simple way for families to cover themselves and get
high quality health care. This is by paying the levy which has
a ceiling on it. This requires no action.
The Labor approach did not permit choice. The Labor Party and
the opponents of our Medibank reforms want to impose uniformity on the.
Australian people to eliminate choice and impose tneir-views on
the people of Australia.
In our term of office we have undertaken an active programme to
expand opportunities and protect the disadvantaged. We are
increasing funds for education. We have restored triennial
planning. We are reforming the federal system and giving the
states greater financial independence. We are strengthening the
capacities of local councils. We are retaining and improving Medibank.
We are securing homes for the aged. We have protected the
real value of pensions. We have introduced the historic family
allowance scheme. We have established a major new home savings
grant scheme. We are setting a new course for Australia.
We recognise that the strength of Australia is the initiative,
the imagination, the enterprise of its citizens; That the role of
government is to expand the freedom and the opportunities for
Australians, not tie the nation up in bureaucratic regulation and
government domination.
We recognise that needed reforms do not have to mean massive new
programmes of government spending. We believe they should be
reforms which protect and expand people's capacity to control
their own lives without domination by others. We believe our
philosophy of freedom and concern is in harmony with the real needs
of Australia and will produce a better life for all Australians.
We believe the vast majority of people want to work together to
make Australia the great country it can be.
What we have done so far is a beginning. Last year Tasmania showed
the way. Now it is up to the Liberal Party, and to every branch
and every member of the Party everywhere in Australia, to show
the vitality of Australian democracy and make Australia-an example
to the world. 1