Embargoed until delivery PRIME MINISTER
FOR PRESS 26 SEPTEMBER 1977
ADDRESS AT QUEENSLAND CONFEDERATION OF INDUSTRY DINNER, BRISBANE
Thank you for the invitation to address you. Tonight I would like
to take this opportunity to talk about the Government's actions in
a number of areas related to Australia's economic wellbeing and
prosperity, and particularly with respect to manufacturing industry..
Since coming to Government we have pursued a consistent and
coherent economic strategy aimed at reducing inflation, and at
providing the private sector with the room and incentive to grow....
Given the situation Labor created, nearly 200000 additional
unemployed in one year, inflation at a peak of 19%, Treasurer
succeeded by Treasurer, excess by excess the Government's
achievemwents-have been significant.
We promised we would halt the growth and extravagance of big
government._ This we have done. Last year, the Government's
share of gross domestic product fell for the first time in years.
The number of Commonwealth employees has been reduced by 12,000.
Under Labor's policies, they would have risen by 19,000.
We promised we would reduce inflation. When we came to office it
was running measured by the CPI adjusted for hospital and medical
services at 16.7%. By the end of June this year it was down to
10.2%, and other indicators show it has gone down further still.
One major factor in this success was that we significantly reduced_
the Government deficit by half a billion dollars in each of two; o
successive Budgets.
A second major factor was that, because of our policies, wage costs--.
grew less rapidly in I 76-77 than in the preceding year. Because
of our ability to reduce inflation and set the conditions for
further economic growth we have been able to take a first step,,,
towards a sustainable lowering of interest rates. We promised
we would restore the conditions necessary for company profitability
to return to more normal levels. In the financial year just ended
company profits increased by 23.5%. We promised we would reform
the crippling tax system and significantly cut taxes. This too we
have done. Because of our restraint on Government spending we were
able to introduce personal tax indexation and major company tax.
reforms for corporate taxpayers in our first Budget. / The same
The sa-ne commitment: to restraint enabled us to make a revolutionary
ref orm to the personal tax scales in our second Budget) a
revolutionary reform that restores the incentive to work harder-:-
and more productively, and to earn more. We saw how damaging
Labor's-high taxes-were to the individual and the economy. W
were determined as-a Go'Ynment to set the conditions* in which
all Australians had-the opportunity to regain the prosperity-and.-
freeaom of choice-to exercise initiative and achieve their ownM
goals. The new tax-system introduced -in the last Budget pr-ovided..,
tax cutszfor people at-all income-levels every taxpayer will -be
better off. No one will pay tax on the first $ 3,750 of Income*,:-
and 90% of taxpayers will pay only-one rate, 32 cents in the:-
dollar on the remiainder. . The weekly tax payable by, say, a.-
person with ' a dependent spouse -will from next February be--
markedly less than -that payable under Mr. Hayden's tax scales.;-~--
If he earns $ 120 a week, his tax bill will be down 65%. If ei
earns $ 300 a week, his tax bill will be dpwn
The tax reform will be of particular benefit to small businessmen--
They not only will have their tax reduced, but as-earners of
. widely' fluctuating incomes, they will gain more than most ppople.->
from the new -standard rate applying over a wide income range.
. Ia zesult of this tax reform and -tax indexation, taxpayers,,.
will save $ 1,371 million this year, $ 1,857 next year.
Et is clear that these are huge sums. They represent enoros..-
sav'ings savings that were only. possible because of the
restraint we exercised over. Government spending.
In 1977-78, unrelenting pressure on inflation will be maintainiedl
and fur-& ther economic progress will be made. Demand and activity
axe expected to gather pace over the course of the year...
increased domestic demand will again be concentrated in the
private sector, and gross non-fa=~ product shorild increase by
over 4W between the June quarter. of 1977 and 1978.
And we will do this despite the efforts of some people in the
Parliament to ' undermine the economy.
Iwant to sa'y that there are many things that are legitimate and V
proper political practice in a democracy the Opposition j
ound to criticise the Governaent, and the Government no
responds in kind. But-there are areas where partisan pltc
has no place and the value of the nation's currency is one ' 1
t-se areas. Whnen a ' arliamentarian -not an academuic, -not a-
&~~ e~ zitrbat a formner Treasurer -consistently makes statextents . t
' Phiach cast doubt on our, external position, he is behaving with-,..
_-z--xesponsibillty. lie ia deliberately trying to weaken
t~ n-eu s~ alandollar ard our ability to attract internatio; a.*-:. V
, nvest.-ent. Unortunately, he has learnt nothing from, his
~ rL1-pell as Treas urer. lie is cynically trying to weaken
._. Ler1CY. IEe is suibordinating the national interest to the-V
~ u~ of partisan politics, and there is no doubt about how
-Lhe Astralian people will respond. They will conden~ n him for
i-they will. condemn his party. / I ha~ ve
-3
I have so far outlined the broad sweep of our economic policy
and the contribution it has made to the improvement of the
Australian economy.. Now I would like to focus on two parts
of our total approach our industrial relations policy and our
manufacturing policy.
We have taken constructive action to improve Australia's
industrial relations framework, so unions and management can
more effectively comnunicate and settle their differences..
and arbitration and a determination to reform industrial legisla-
-tion, so that the canons of equity, justice and protection of-4i:
individual civil liberties in other areas of our law apply in
1 this area.
In our first'twenty two months of office, as we promiused, we have:-
legislated for secret postal ballots for the election of off icers-'
of unions registered under the Conciliation and Arbitration Actand
to require new elections at least every four years. Aswe::-
promised, we have established the Industrial Relations Bureau and*.
the National Labour Consultative Council. As we promixsed, we have
amended the Trade Practices Act to ban damaging secondary boycotts.-
We have legislated to give the Government the necessary powers to-, 7
suspend, dismiss and stand down Commonwealth employees in
particular circ tances.
Our firm but fair industrial policy has met with considerable
Isuccess. In the first six months of this year.. Austxalia has had
the lowest level , of industrial disputes, and the least number of
working days ost during this decade. In the first Bix montbs of;
1974, 4,214,000 working days were lost through industrial disputes.
In the first six months of this year, 718,000 days were lost a,-
reduction of 83% on the position three years ago. As a result of.
our secret ballot legislation, unions are making gceater use of
the Electoral Office to run their elections. In. the twelve months:
since the legislation was introduced, there were 244 such applica. t-
HButtio ns. there is evidence that a few unions have not fully complied
with the legislation. The Arbitration Inspectorate has found
4 evidence of recent breaches by two unions the Analgamated
Metal Workers and Shipwrights Union, the the Builders Labourers
SIFederation. If the industrial Registrar confirms that breaches':"
have occurred, new elections fully conform~ ing with the Act will-. J.*,
have to be held or the unions concerned will face prosecution._
This valuable work of monitoring compliance with the Act will-.
shortly be taken over b~ y the Industrial Relations Bureau.
I Despite these great improvements, disruptive industrial disputesparticularly
in the construction, mining arnd maritime industries-
31 are seriously Impeding economic recovery. Though the statistics
show a marked improvement, extremist union leaders have become
more skilled in creating the maximum of disruption and dislocation.
while using smaller numbers of workers. The Government Is
deter-mined to uphold the law in industrial relations. The
time has passed when the law Is applied in every area except
industrial relations. The Government's firm stance over the
air controllers and p6stal workers disputes should leave no-one
in any doubt about our resolve on this. / We
I.
We will be bringing down further legislation in this session,
alfter due consultation with the National Labour Consultative
Council, on the , Industrial Relations Bureau and on the protectic
of the rights of -individual unionists.
over the last few years, manufacturing industry an industry
which provides almost one quarter of our national production,
supplies-one f ifth -of our'exports, and employs* over 20% of ' our
workforce has faced multiple problems. We are committed to
establishing the conditions in which industry can confidently
-ace the future -conditions in which it can take long-tem. n
Investment and employmnt decisions with greater certainty.
Our actions give substance to this commitment. We have intkodf:
the investment allowance, and just extended it for two years.
Re have introduced the trading stock valuation adjustment, and
. increased the retention allowance for private companies. Th-esc
reforms have helped the acute financial strains the taxation sy
imposed on business. In this financial year, they will reduce
tax payable by companies by about $ 600 million, which significr
exceeds the estimated yield of $ 203 million from the inc: rease ;' I
* company tax.
our industry policy aims at assisting the operations of privatce
industry. This is shown by our actions in the recent Colgate-
Palmolive application before the Prices Justification Tribunal.
to protect the rights of companies to determine their ow-n level.
of adverti. sing; by our instituting comprehensive consultative
machinery with industry; by our establishment of a Ministerial
Purchasing Committee to give preference to local industry.
Oujr stand on protection Is unequivocal. We will not reduce
itrotectiol where this would lead to greater unemployment or
. rcduced economic activity. We will provide industry with the
degree of security and stability it needs.
P~ a_! y in this Government's term, we wrote to the l[ AC to ensure
that aII 1AC reports gave due consideration to the employmenteffects
of its recommendations. The draft 1AC report on Textil,
Clothing and Footwea r, however, made it clear that amendments t..
, he Act were necessary if the Government's policy was to be
. implemented, and we acted inunediately to restore confidence and
maintain employment in these industries, arnd to guarantee the
p) resent level of activity for three years. The Government
~ naanfully cordntteZ1 to the principle of independent inquiry
~ zoi-dQustzy assistance matters.*
';' Ilme Government's changes will mDake sure, first, that the IAC wl.* AW
ke into account the need for a balanced development of industx
i the tustaineed growth of the Australian economy. Second,-thAt
~: aares to achieve structural change will only be at a rate
~ ttACeconomy can absorb. Third, tha~ t any such changes will
lead to added unemployment or capital wastage. Fourth, thc
n -il~ ster will be able to issue supplementaxy guidelines to the
n srpecial circxnnstances. Fifth, reporting guidelines for
tj) 1AC will be written into the Act.
In ' the. current circ%= mstances, we. have decided not to-send the
: AC -_ the ; five: remaining references on metal products under the
tariff-review-programwne. Reference to the IAC would have damaged
confidence . and-resulted ina a major-cuxtailment of investment
plans ini the' industry.
Mr. 0 Presidentj major . advances have been made in establishing a
climate in which industry cart plan and invest with confidencein.'
which new opportunities exist for business initiatives and
new. investment.-While profits in some industries are still not
high enough, profits . are moving the right way not the wrong
way as they did in the dismal years of 1974 and 1975. we
all have a-part to play in economic recovery business leaders#
unions and the Arbitration Commission. 4 The private sector employi
mo~ st of the workforce and makes most of the decisions. -it
develops the technologies which carn underpin improvements-in.
living standards.. The. Arbitration Commission needs to un~ derstandthat
a decision of the sort it made in the last national wagecase,
which gave an even greater degree of indexation than
applied on average, 4nL-1976-77 slows down economic recovery.
Trade union 14aders must consider-. the unemployment consequences
of their demands for higher pay for those presently in jobs.
Because we have reined-in Government expendituxe, because people:.
bave been provided wiith much needed tax reforms which will-foster
enterprise, and initiative, because business has been provided
with assistance and room to grow, b~ ecause the inflation rate
has been reduced, -the conditions for a return to full prosperity'-
ate clearly emerging.
For full prosperity to be-realised, we all have to take a
decision to co-operate with one another to mobilise effectively 2:.
our abundant natural and human resources in the nation's
interest. I have no doubt that people around Australia
have taken that a~ edlslon.