4-AUSTRAWAI
PRIME MINISTER
FOR PRESS 4 APRIL 1977
N. S. W. LIBERAL PARTY DINNER, SYDNEY
There are times, I believe, during the course of an election
when the people of a nation make fundamental choices about the
sort of country they want to live in.
A choice of one party over another at such watershed elections
maps out the future; it determines whether some alternatives
are made more difficult to take up in the future.
This is a point which all of us, as Liberals, are conscious of.
We know that it is not easy to limit the power of the State
after it has developed past a certain point. It is not easy
to restore the conditions necessary for individual initiative and
enterprise after they have been beaten down for a prolonged period
It is not easy to get State governments to accept responsibility
after they have been long deprived of it. It is not easy to
quickly restore the private sector to health after it has been
stifled into stagnation and despair.
Watershed elections mark the point at which decisive choices
are made. 1949 was such an election. In that year, Australian
voters voted firmly against nationalisation and govertment
Q by regulatUon. Had that choice not been made, then it would have
been increasingly difficult to make later.
The capacitiesupozuwhich Australia depended for progress and
growth, the intiative and creativity of the Australian people,
would have been undermined.
-1975 was another watershed election. The power of the Labor
government, and its intrusion into more and more areas of
Australian life was increasing. The economic malaise which Labor
had thrown Australia. into, was growing deeper.
All Australians were gravely damaged by Labor approach. In
Labor4a last-two -years, persistent inflation of over 16 percent;
unemployment had trebled; wages had grown enormously;
average earnings in imanufacturxing industtry had grown 53 perccent
in tb-e. two years to October 1975; company profitability
, was di sastrous; the deficit was out of control.; there was
cSord level of i-n. dustrial disputes. Far worse than in 1975;
Government was printing money at an excessive rate; there
was a mzjor shift of resources from the private to the public
sector,
those'least able ,/ to defend themselves the poor, the unemployed,
those on fixed-incones suffered cruelly. The Labor Party
ha not learne-d from the damnage they caused to many areas of
our life. Only a few days, ago, Mr Whitlam made a proposal
that woul~ d effectively mean. all women under 60 would be
given unamplcyro-nt benefits. Thids would cost $ 3,300 illion.'
Acost all wsrla~' ould have to pay for in terms of increacC4
taxes or higher inflation.
The Liber al National Country Party Government has now been in
office for fifteen ront-hs-This has not been long enough to
redress all. the damage inflicted by Labor. It has been long
enough, to make a start in restoring the private sector to vitbu.
and health. A start to reducing inflation.~ A start in halting;
uncontrolled growth of the public sector in this country.
kard the stiatwe have made has been a substantive one.
Fundamental ito the progress w~ uich bar. been made XS. the principle
that the only sure road to full economic recoveiry is the revival
strong innovxtive private enterprise. To do this, we have
implerented a proper vonetaxy policy. We have argued strongly
before the krbit-ration Commission for the wage restraint which it?
essential to zreducing inflation. We have an appropriately balanee9,
external policy. We have pixrseed a responsible budgetary policy.
-The , ravth of the public sector has been halted. On
current estimates, the proport bn of gross national product
attributable 6%. o the ~ Comonwealth will fall this financial year
The rapid growth'-of the Commonwealth public service has been revese)
By reducing staff ceilings, we will have cut the nixmber of
Co~ mnwealt. government employees by ] 4,000 by June this year.
Conpaxed to ! Mr WbitAam's staff ceiliags this is a reduction
of 33, I000--
vieaave made major taxation reforms. In fifteen imonths, we have
established a record in this area of which ' any Liberal can be prc0_ c.
76/ 777 / 1
Personal income tax Index~ ation 990 ] 050
Investment allowance 100 450
Company tax indexation; trading stock valuation
adjustment 400
Taxation of income from rpining and petroleum 0
* Distribution requirements for private companies 1
Bstate duty. ( spouse deduction) 2
Income eqdlalisation deposit 17
1110 1985
In* the Seconda-year, t'hese arowint to -tax -reforru amoun-in to
$ 3,095-4. The. results ofE our policies are already be-% comidng appctrtc,, h
For th.= b first time, in tiree years, economic growrth matches the
levels of the 19601S.
' rhee-ws a 5? signifcant improvement--i -the -rate--o, inflation
the most reliable figures we have avallahle showed an inflationi
& vrc of 10.~ 7 percent, compared with a rate of around 16 pex76 -f--ii -1 * l
A start has been made a good start. But both inflation and
unemployment must be reduced further.
The recovery, oif which the early signs are now apparent, must
be sustained and consolidated. We are coordinating all the arms
of economic policy controlled by government fiscal, monetary
external. policy. To ensure that the downward trend in the
underlying rate of inflation which we have achieved in 1976,
is Maintained. For the defeat of inflation is the esential
pre-reqtLisite for employment and long term economic growth.
There is another area where the government has, introduced
major new initiatives I refer to our new policies of Federalisr,
The Whitlam Government believed that all problems were best; solved
by the all-knowing Coimn nwealth Government. Labor was not
prepareed to leave decisions of importance to the States. Just ag
were not: prepared to leave to individual Australians choices
affecting their-own lives.
The Whitlam Governint, consistent with their ideology, were
thoroughgoing centralists.
They used zll the Comm1onwealth's power to. intervene in fields
which had previously been-th preserve of the States. We havet
lntroduced a new' edrlspolicy wIh has reversed i
inexorable, slide towards ever. increasing Commonwealth domina-tion~-.....
central to this policy is our initiative ol tax sharing. The State
now receive! a fixed percentage of personal income tax
receipts. Stage 11 of the tax sharing arrangements will be
the subject of discussion with the States at the Premier's
Conference next week. It will enable each State to impose a
surcharge or grant a rebate, on personal income tax collected by
the CoxrimnireAlth.
Tax sharing will give the states a greater autonomy and capacity
to meet their responsibilities. it will also make themn more
accountable-. The states will be able to set thieir own priorities.
They have received generous grants from-[ he Commuonwealth thie; year
and a far higher proportion of these are untied. This gives increasesi
independenlce to the States. And alsuincreased responsibility.
If a State chooses to give a high priority tq &-particular new
project, or grant a new tax concession,. that is its right.
But it will have to justify its priority to its citizens.
No longer will states be able to blame the (_ Cmmouwea. 1th for their
own deficiencies.. -And--th-at-i-s-the-way it should'-e
Our commitment to Federalism extends far beyond financial matters.
. I-awide range of matters, the Commnonwealth has been r . eady to
consult and cooperate with the States. An excellent example is
our recent preliminary agreement with the States on companies
and the securities industry. While many details have yet to be
finalised, it has been agreed that a National Companies and
Securities Commission be established. This mnuch-needed reform has
been achieved with the full cooperation and backing of the States.
Its approach stands in sharp contrast to the centralist legisilatioRI
' which Labo; r tried unsuccessfully to push through without
Consl . tation with the States.
There are a npuJ~ ber of other areas in which the Commonwealth 1! 3
currently seeking with the States, an agreed sharing of powers.
And th4 adoption of complementary policies and the elimination
of unnecessary duplication. Both the Commonwealth and the States
have passed legislation requiring environmental impact statements
to be made before certain projects may proceed.
We are seekcing to ensure that in each case, only one environmental
assessment need be m~ ade. One which satisfies the requirements
of both spheres-of gover-m-nent. Discussions with the States to
achieve the end are well wider way.
I am pleased to be able to say that the responsible minister,
Kevin Newman, has progressively reached accord with each of his
StAte counterparts with whom discussions have taken place.
Perhaps the most important outstanding matter regarding PederalSt( ac .
relations is the vexed question of jurisdiction over the sea and
seabed off the coast of Australia.
A Comonwealth Act, the Seas and Submerged Lands Act, was passed in
1976. it jeclares that sovereignty over the'Australian territoriaL
sea aud coxtinental shelf is vested in the Commonwealth.
. T~ he validity of that-Act has been upheld by the High court.
In theory, the Commnwealth could now assume exclusive powers
-over. a wide range of activities. Shipping, navigat16n, marine
pollution, offshore mining, fisheries, marine parks, even jetties
and other port. facilities, extending below low-water mark.
M4any of these fux~ ctions have been carried out -in the mxain quite
satisfactoricly by the States-But the legal basis for some
of such activities has been thrown in doubt. A further difficulty
is that there is a pressing need to ratify certain international
conventions which affect offshore areas,
Despite the apparent potential. for Comonwealth intervention,
we believe that Commnonwealth/ State cooperation is essential.
Ther ' e would be little point, for example, in the Commronwealth
making decisions about the siting of port facilities.
And we have no interest in doing so.
Some people appear to have forgotten that State cooperation is
essential in many matters.
-If the State concerned was not prepared to provide the roads,
railway, and other infrastructure to service the port, then any
plans the Commonwealth might have could not succeed.
Similarly, the use of offshore power in many areas depends on.
the agreement of the States, who control the land.
The Cormzonwialth has no intention of assuming roles, that have
long been pc-rfornt~ d satisfactorily by the States. It may wel~ l
be -nec'essary to devise -entirely new approaches in this area.
We must ensure that the states have constitutional power, -to
exercise those functions which properly they should be able to
exercise. I am confident, that the skills and imagination
of the legal advisers of the Comnwealth and the States, are raore
than adequate to meeL thisa challenge.
I have put ILn hand a comprehensive review of all aspects of thiLs
many side pr~ oblem.
When the review is complete, we shall be consulting further with
the States.
The new federalism policy of the Government, confers more real
power on the States.
But it also places on the States greater responsibility.
Regrettably, todate, this sense of responsibility has not always.
been demons trated in state programmes. For example, there is
at present a clear need for maximum restraint in government
spending. The Coionwealth has played its part by dutting back
progranunes and reducing the Commonwealth public service, but the
States have allowed their public services to increase rapidly.
At a time Wht'en the Commonwealth has substantially reduced the
number of Commonwealth employees. States and local government
employment bas risen sharply.
When the figures are adjusted for our employment creating schemes,
in the year to November 1976, State and local government employees
rose by. 3.3% This is a matter we shall be discussing -in someO
detail at tha* Premiers Conference n~ ext week.
We have also been active in the area of social reform, taking
important steps to protect individual rights and liberties against
the governent and other large organisations.
-6-4
Last Thursd~ y Tony Street tabled. in Parliament another
morst importan piece of legislation.* A bill to amend
The Conciliation and Arbitration Act.: The Bill gives
additional protection to the rights-of individuals, particularly
employees and independent contractors. It establishes an
Industrial Relations Bureau. An industrial ombudsm~ an, to
secure observance of the Conilisation and Arbitration Act,
and awards given by the Arbitration Commission.
The object of these measures it to introduce, into industrial
relations, the same principles Of ciVil liberties and equality
before the law, that we all take. for granted in all other
areas of activity. This policy-was.. endorsed overwhelmingly at
the last election. The legislation has taken a long time tp'
draft. And we wish to leave time., for the legislation to be fuLlly
explained, . and understood, and we shall consider suggestions
for amendment.
But-anyone who suggests that the bill should be withdrawn because
it upsets a section of-the trade-union leadership cannot havet
thought through the full consequences of what they are saying.
If the only industrial 1egislation that may be impleme nted
is that acceptable to those few., but influential extremist lunio~ n
leaders. People who are dedicated to the destruction of our
system iof government. That says souething very disturbing
about the way our society is heading. Trade unions are arrongst'h
largest and most powerful organisation In this country. And it it
tight that they should be strong. But the pernicious theory that
unions should be the only organisations in our society which shouldl
fall outside the rule of law is a direct blow at the very basis
of our democratic systemr.
Finally a word of the referendums The four proposals on whiLch
you will vote on 21. say simultaneous election, replacement of
Senate casual vacancies with Senators of the same political party,
votes in referendums for Aust ralian in the ACT and Noxf Jern Terrtio
retiring age for judges, are Al fair, and sensible measureSi.
They do' not affect States' rights. And unlike most
referendums they do not seek further power for the Coxmrmnwea: lth.
I urge-all of you here, to lend your active support to the vote
' yes' campaign-It am confident that with your help they wiLL. all
be successful.