I JAUSTRALIA&
PRIME MINISTER
FOR PRESS SEPTEMBER 17, 1976
EM{ BARGO: 7.00 p. m.
NEW SOUTH WALES LIBERAL PARTY CONVENTION
This last year has been an epic year for the Liberal Party..
The New South Wales Party made a major contribution to the
victory in the Federal election.
One of the great qualities of the Liberal Party, which has been
demonstrated again and again in both state and federal politics,
is its capacity for regeneration for the rekindling
of enthusiasm for its rededication to the ideals for which
the Party stands.
I have no doubt that the Liberal Party in New-South Wales
will return to office with -renewed vigour after this period
in'Opposition.
In the Federal sphere the decision of the people last December
marked a turning point in Australia's history.
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
social. ist 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.
Big Government was exaggerated to the point of caricature and
its costs became obvious to everyone. The consequences of Labor's
view that they knew best how everyone should live their lives
became more and more evident.. It could be seen in Labor' s
authoritarian legislation; in their economic incompetence;
in their attempts to evade the Constitution in the loans affair;
in their attempt to govern without Parliamentary appropriation
of money; in their attempt to breach the law and coerce the banks
to provide funds illegally after the Parliament cut off money;
and the attempt of Mr Whitlam and his friends to involve the
Iraqi Government in an Australian election campaign.
The decision of last November was a massive rejection of Labor's
approach in Australia.
The Australian people recognised on 13th December 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 every-rising taxes, and which would govern not by dogma
but by consultation.
Australia needed a government which would reverse the drift
of power to Canberra.
We undertook to provide that kind of Government.
W~ e undertook to give Australia a government which respected the
right of people to build thei~ r own lives without being told what
to do by a few people who claimed to know what was good for
everyone. In November last year, to achieve this objective, we placed
before the Australian people one of ithe most far-reaching programmes
ever proposed by a major party in Australia.
This programme encompassed: major -reforms to the federal system
a radical reassertion of the relevance of federalism.; tax reforms
which would have a lasting effect on the whole system of
government financing; a new approach to social security and
welfare which stressed the importance of directing assistance
to those in genuine need; one of the most detailed economic
programmes ever put before the electorate to control Labor's
inflation, revive private enterprise expand job opportunities,
and get Australia moving forward again; a foreign policy and
defence approach based on a realistic appreciation of Australia's
security needs.
This programme had two great merits. It reaffirmed the vitality
of the Liberal Party's philosophy and it established the
relevance of that philosophy to the needs of Australia.
It was an entirely practic ' al programme.:' It was designed not only
to revive the faith and confidence of people in Australia but
also to create the conditions in which Labor would not again be
able-to damage Australia as it had in the past.
Our programm'e to restore a freer and more decent life for all.
Australians was not one that could be implemented overnight.
Success in the attack on inflation is essential. to the achievement
of a number of important objectives, including a much more rapid
expansion of job opportunities.
The budget is not just an economic documrent-concerned with
narrow economic objectives.
It is an essential part of our social strategy to restore
opportunity and economic growth in Australia. ./ 2A
2A.
In the period since the federal election we have: brought
Federal Government spending under control after two years of
utterly irresponsible growth. and we have reduced the size of the
Federal Public Service. Under guidelines now established the Public
Service by June next year will be 26,000-less than. the levels
projected under the Labor guidelines for 1975-76.
These measures have made possible the major tax reforms which will
have a lasting impact, a number of vital measures of assistance
to industry and significant improvements in social security
provision. They have made possible: the full indexation of personal income
tax for inflation; a start to the introduction of trading stock
valuation adjustments for business, at not less than 50% in this
. year; increases in the retention allowance for private companies;
the 40% investment allowance; tax deductions for oil and mineral
exploration; removal of the crude oil levy and the phasing out of
the coal export duty. .1/ 3
We have also introduced a number of measures to aid rural
industry including an increased reserve price for wool and
an income equalisation deposit scheme.
These measures would not have been possible if government
spending had gone on at the same mnad pace as before.
They are part of our programmes to shift resources away fromi
government back to individuals and companies.
There is growing evidence that the Government's policies are
working. In the last six months national production has grown significantly
after falling in the previous six months.
Business spending on plant and equipment has picked up substantially.
In the last half year businesses have proposed major investment
projects . totalling almost $ 3 billion.
Consumer spending revived in the June quarter after being very
restrained in the previous three quarters.
Exports have continued to grow to record levels.
The time has come to put away the doubts about Australia's future.
The budget strategy is receiving greater support from
business and omuiythan any budget I can remember.
There is surely a message here for business itself. This is the
time to express that growing confidence in new plans to give
further heart to recovery.
There are still problems: inflation, while less, is still too
high, unemployment is still too high.
Let iie make a few comments on the unemployment situation.
It is an appalling fact that at the time of the federal election
last year private enterprise was employing no more people than it
had been three years earlier, even though during that period the
labour force had expanded by about 370,000.
This was a direct result of the mismanagement of the labour years.
It is because of our determination to secure a soundly based expansioe
of job opportunities that we are pursuing the policies we have
announced.
Unfortunately, substantial reductions in unemployment always lag
behind the recovery in output. 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 in
fact rose over 60% 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 is 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 occurrred because strong growth in employment in those
months was more tha matched by growth in the workforce. Much
of this was due to people re-entering the workforce.
Wage restraint is a pre-requisit for maintaining the expansion
of job opportunities.
The level of real wages Jn 1974 rose by an amount equal to three years
normal growth in productivity.
Wage increases have also adversely affected our international
competitiveness over the last five years, the U. S. rates of
earnings have increased by 24%, in Australian currency'*: terms
Australia's have increased by a frightening 83%.
The resulting depressed share of national income going 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 simply
arguing whether they know it or not for 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 has made remarks which show no
recognition of this fact. He has argued 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 36% of the Australian labour force, has
accounted for 64% of the increase in Australia's unemployment.
Of the 46., 000 people who have become unemployed in the last
four months, 29', 000 are in New South Walesalone what a record
for Mr Wran.
If the N. S. W. Government intends to act to improve the employment
situation, it should discard the socialist " dream" policies that
Mr Whitlam pursued policies which created an economic
nightmare. 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 Australian people are not going to be held to ransom by a
few extreme left-wing militant union leaders. Our secret ballot
legislation, already in force, will give rank and file members an
opportunity to state their view.. Other industrial legislation
is foreshadowed.
Given that there is reasonable restraint in wage and salary
demands unemployment can be brought down more rapidly.
To ease the problems of finding work in the short term the
Government is taking a number of measures and has others under
consideration. We are looking at terms of refcrence for a far reaching enquiry
into the Commonwealth Employment Service. The Government believes
it is now time for the operation and procedures of the C. E. S. to
be completely reviewed.
The Goverment has received many reports of firms being unable to
fill vacancies in areas of high unemployment. Clearly thc C. E. S.
must be geared to help solve this problem in the best possible way.
To assist those who cannot find suitable work where they live and
who wish to move to where work is available we have announced a
major scheme of relocation assistance.
This is one of the most enlightened measures of unemployment
assistance introduced anywhere. It is entirely voluntary.
It is wider than the scheme we foreshadowed in our election
programme last year. It is a new scheme which will take time to
get into operation. The Government will be monitoring it closely
tD see how the scheme is working.
The Government has particular concern for the school leavers who
will be looking for jobs in the coming months. Of the 230,000
young persons who left school last year the great majority have
now found jobs. But 12,7000 were still unemployed at the end of
J uly.
The Government w i1l shortly be announcing measuires to help
school leavers who have been unemployed for some time.
The difficulty a number of young people have found in getting jobs
has greatly concerned the Government.
Last week I annouinced that we were establis hina a
Committee of Inquiry into Education an" Training. This Inquiry
will consider a very broad range of miatters relating to education.
Among these it will undertake the first major inquiry of its kind
into the relationship between education and the labour market.
In the course of its inquiry the Committee will examine both
secondary and post secondary education. This of course looks to
the medium and longer term.
But oveirall our economic strategy is designed to achieve a
reduction in unemployment by mid 1977, and it offers the best hope
for a soundly based expansion of job opportunities.
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 increa~ sed -real
spending on education and re-estab~ lished triennial education
planning. WE! committed ourselves to making the most significant reform of
federalism since federation. A reform-which would provide state and
and federal governments with a sound basis of financial
independence.
We have begun to implement these reforms.
State and local government 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 are introducing legislatioii to brotect Pensions. by adjusting
them automatically half yearly in accordance with changes in the C. P. I
We committed ourselves to helping the aged. We have acted by
introducing a 3 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 Australian
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. It is of particular help to
aborigines.
The family allowance scheme does not add to bureaucratic overheads,
and it places money in the hands of people.-
it is a scheme which both assists the disadvantaged and increases
their independence.
We committed ourselves to further help in the housing area. / 7
We have acted by initiating a housing voucher allowanice
e.-zperiment. This experiment, if successful will
provide a new mechanism to make welfare housing sensitive to the
needs of the users rather than those of the planners. It recognises
the principle supported by the Poverty Inquiry that assistance should
be linked to the person, not the house.
Beyond the welfare area we said that home ownership should be
a national objective and we committed ourselves to introducing
a new home savings grant system. We have introduced a home
savings grant with more generous provisions than the ones we
announced. We committed ourselves to retaining Medibank and making it more
efficient. 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,
and there will be choice of medical health insurance.
Medibank is now so good that the President of the Australian Labor
Party rushed to become a member of Medibank Private. Under the
Labor Party's scheme hie had to be a mnember of a private fund
for similar benefits.
When we said we would retain and improve Medibank -we meant it.
The new scheme is so good the Victorian ALP even wants to become
an agent.
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 chioce the Labor Party and the
opponents of our Medibank reforms want to impose uniformity on
the Australian people to eliminate choice and impose their
views on the people of Australia.
In our term of office we have undertaken an active programme to
expand opportunities and protect the disadvantaged. Our Government
is a Government os social reform.
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 are protccting the real value of the pension by automatic
adj ustmnents.
We have argued in the Arbitration Commission to protect those
on lowest incomes.
We have greatly increased assistance to handicapped persons.
We have introduced the historic family allowance scheme.
We are exploring a housing voucher 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 and that the
role of the 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.
Every effort needs to be made to get a broad public appreciation
of the Government's policies.
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.