SYDNEY CAMPAIGN RALLY, ST MARY'S 29 NOVEMBER 1977
As the Election Campaign enters into its second last weeki the
choice facing Australians is clear. The Government's policies
arc restoring Australia to ful~ l economic recovery, through our
great nation's growth and development; through development of
our natural resources; through growth of our industries and
through incentives to individual Australians to use their
abilities to the full.
But while we stand for the growth and development of Australia,
Labor offers nothing but the growth and development of big
government, and the death of incentive. Wle offer a strategy for
economic recovery which is succeeding. We have halved Labor's
inflation inflation is now down to about 9% and falling. It
should be down to between 6/ 7% by mid ] 978. We have achieved
this because of our restraint of Government spending and odr policy
for wage moderation.
Now interest rates are falling. Wle have brought about the first
consistent downward movement in government interest rates in more
than four years, and I am confident with present government
policies continuing that interest rates could fall up to 2% within
the next twelve months. This will have a significant effect on the
housing industry.
On an average new building society loan of $ 26,000 a two percent reduction
in interest is a saving of $ 520 a year that is ten dollars a week
for young people starting their new home. Wle are encouraging investment
and providing incentive to Australians to work hard and earn more.
Our taxation concesssions to business and mining have boosted private
investment. Our foreign investment guidelines protect Australia's
vital interests, but are flexible enough, and clear enough to attract
greatly increased sum of foreign capital. This private investment
revival is already well under way.
In the September quarter, there was a strong increase of 6.6% ( seasonally
adjusted) in private capital spending. The statistician's survey of
expected capital spending in the present half year to December, shows
a growth of fourteen percent. We must maintain the policies which
encouraged this recovery, and which will allow it to gather pace.
Our tax cuts for individuals relieve pressure for wage increases and
boost consumrer demand. Our historic tax reforms tax indexation and 7
-2-
reform of the tzx scales have benefitted all taxpayers at all
levels of income. Contrary to PMr Vhitlam' s loud poettos u
tax reforms have. not redistributed su:-, s fromr one section of the
community to another, except that 225,00) low income earners, including
tens of thousands of pensioners, widows, students, and others will
no longer have to pay tax.
There has however been a fund1amental distribution from the Government's
coffers to the private sector. Next financial year, under our reforms,
which are now law, taxpayers will pay some $ 4,000 million less tax
than under the old Hayden tax scales. Our tax reforms provide a. new
incentive to work by putting 902 of taxpayers on the same marginal
rate. Under the Hayden tax scale of 1975, once a person's income reached
$] 0,000 a year he paid tax of 45 cents from each extra dollar of
earnings. If Mr. Hayden's tax rates were still in force, a person
on average weekly earnings would be losing 45 cents in tax from each
' extra dollar of earnings.
Compare this with our new standard rate system of tax. Taxpayers on
$] 0,000 a year will pay a marginal rate of only 32 cents, and they
can increase their income up to $] 16,000 a year without moving on to a
higher marginal rate of tax.
The tangible results of the success of these policies is there to see.
Yesterday I announced the details of $ 6,000 million development
projects which are either underway or ready to go. These projects
will bring work to Australia. Mr. Whitlam. is rather foolishly
trying to deny, that these projects exist.
On Sunday, he said that the North West Shelf was worth only half of the
six billion dollars of investment to which I had been referring and the
rest somehow did not really exist. He must now be sorely regretting
this gaffe.
In fact, the three billion dollar North West Shelf Development is not
even part of the six billion dollars of development. It's additional to
the six billion dollars as are many other projects worth billions of
dollars, which may well proceed in the medium to long term. It is
through our policies of growth and development that we will overcome
the unemployment problem imposed on Australia. Labor increased unemployment
by ] 157%, almost 200,000 people, in one year. And Labor did not
just increase unemployment. It was not just that new entrants to the
workforce could not find jobs, the total number of people in work
actually fell.
We have reversed this treAd. Over the two years to August 1977, total
employment rose by ] 80,000. One vital reason for this is that
we are prepared to give Australian industry the protection it needs. Laboi
slashed tariffs across the board, even though they were advised that this
-would throw tens of thousands out of work..
On 27 June 1973, Mr. Whitlam directed that a report be prepared on
increasing imports into Australia. He wanted that report within 3 weeks.
On 15 July he received the report. Only three-days later, he implemented
a 25% across the board tariff cut. He didn't even show the report to
his Cabinet, and he waited weeks before tabling it in the Parliament. .3/
He waited until the Budget session and tried to lose it amongst the mass
of other Budget papers. And no wonder. The report clearly stated
that a 25% across the board tariff cut would cost tens of thousands
of Australian jobs. It went through industry after industry showing
how unemployment would be caused. But Whitlam went ahead anyway.
He was the only Prime Minister in Australian history to make unemployment
a deliberate act of policy.
Mr. Whitlam has learnt nothing. As recently as July he told the
. natlonal Press Club:
" There is no doubt that Australian industry is excessively protecte
protected that is the basic trouble with our manufacturing
industry in Australia."
The fact is that Mr. Whitlain was, and remains, the unemployment expert!
This Government has reversed Labor's disastrous tariff policies.
Our policies have protected Australian industry while at the
same time having significant success in the fight against inflation.
We have increased protection for industries with a total employment
6 over a quarter of a million Australians, major industries, such
as motor vehicles, clothing, footwear, textiles, plywood and
irany others.
Decisions have been taken to protect the textiles, clothing and footwear
industries for three years. And Ian Macphee, the Minister for
Productivity, is undertaking a cooperative study with all involved
in those industries, management and unions, to see how efficiency
and productivity can be increased during that period.
It was in the light of the disastrous recommendations set out in the
I. A. C. draft report on clothing, textiles and footwear, and the
failure of that and other I. A. C. reports to comply with the Government's
policy objectives, that we decided to change the law governing the
I . A. C.
We introduced legislation into Parliament to require the Industries
Assistance Commission to take into account, in making its recommendations,
employment in industries seeking protection.
The I. A. C. will explicitly have to report on the assistance necessary
to maintain present levels of activity in each industry which they
examine, how each industry's structure might be improved, and the
effects of its recommendations on employment in decentralised locations.
Under this government goods required by the Commonwealth
a re purchased from Australian man u fa ctL. uror s this is in
sharp contrast to the Labor government which bought in the
cheapstmakets versas. e have introduced investment
allowances to enable Australian industry to modlernise the
equipment to reduce costs.
All these policies arr designed to boost Australian industryand
thus boost jobs for Australians. Our training and
job assistance schemes are helping young people in particular
to learn new skills and already well over 120,000 people
have been or are being helped by these schemes.
We have decided that no strict finanacial constraints will be
placed on these programmes. No one eligible for any of these
programmes will be turned away. And I should say that from
February unemployment will fall and keep on steadily falling.
The tax cuts which will commence on 1 Feburary just two months
away will increase household income and spending power
injecting an extra $ 26.7 million a week into the economy.
Because this injection takes place at a time when inflation i. s
declining steeply, the tax cuts will have a positive
impact on jobs. They will lift consumer spending and because
inflation is lower, Australian manufacturers will be in a
much better position to compete with imports in meeting the
risingdemand. Our factories will get larger-orders and start working at higher
levels of capacity. As that development gets under way, there
willbe a demand for more employees. Investment expenditure
will continue to grow in response to this more optimistic outlook.
The February tax cuts are an integral part of the Government's
plan for continued, steady economic recovery. Labor offers
no alternative to our policies. Labor has no coherent economic
s trategy. Labor cannot even decide who the principal economic
; 7pokesmenshould be. Just last month Mr Hurford said he
would be charged with economic management by a Labor government.
Now Mr Hayden is claiming that he will be " the Minister in charge
of economic management". Mr Whitlam also says that Mr Willis
is partly responsible for economic management. D-Lr Hawke
insists in having his say. And of course Mr Whitlam himself
still stumibles into this area from time to time.
The conflicts and antics that have erupted between this unhappy
quintet during the past weeks would have provided considerable
entertainmentas sheer burlesque Were it not for the fact that
what they have been arguing over is our taxes, our well being,
our financial survival.
Labor would recall Parliament to repeal the tax reforms so vital
t o economic recovery and the creation of new jobs and it is now
clear they would do more. They would abolish tax indexation too,
burdeningthe average family man with higher taxes $ 6 a week
higher taxes, over $ 300 a year higher taxes. Yet they have
spentover a week trying to hide their confusion on this vital
subject. Last Sunday week, Mir Whitiam said tax indexation
would be postponed. By Monday, 1r Wh-itlam and Mr Willis
agreed that Labor would bring in full tax indexation by July.
By Wednesday morning Mr Hayden was saying Labor could not
commit itself beyond half tax indexation. And Mr Hurford
said he could not say what the Party's policy was, as he had
not read about it in the papers. By Wednesday evening, Ir Hayden
and Mr Hurford were disowning even half indexation.
By Sunday, , r Whitlam said he agreed with whatever Mr Hurford
had said. Apparently by that he meant the last thing
Mr Hurford said, whatever that was. Today, we saw
another act of Labor adhocery.
Mr Hurford the Shadow Treasurer, or whatever he is of the
Labor Party... you know, that party of social concern
realised Labor's tax schemes would harm 225,000 low income
earnersincluding tens of thousands of pensioners. So he put
forward another tax plan because the Labor Party is concerned
with helping those in need so he said. Labor is so concerned
with those in need that until we pointed out how our taxation
reforms helped them, Labor ignored the disadvantaged completely.
But what does Mr Hurford's after-thought do for those in need?
Exactly nothing.
It does not reduce taxes for low income earners by a single cent.
Because our tax cuts are already law. Mr Hurford wants
increases in tax for everyone, except those with incomes
under $ 3,750. Even for. them, he only proposes an ad hoc scheme
whichwill last for just five months in 1978-79. After that,
these pensioners and others would be worse off, than under
our existing legislation.
The confusion and division amongst Labor spokesmen on how they
would take thousands of millions of dollars more tax from Australia
is only matched by their complete disarray on wages policy.
In his policy speech MrWhitlam made the deliberately cryptic
remark that Labor would restore integrity to wage
indexation guidelines. For the next week, Australians witnessed
the spectacle of Mr Whitlam and Mr Hayden slugging it out
as to the true meaning of this secret formula. Mr Hayden
would say on one radio programme Labor's policy was for full
indexation up to average weekly earnings., while on another
programme, Mr Whitlam would be saying he wanted full wage
indexation for everyone. This was all too much for Mr Hawke
whopointed out with brutal frankness that from a Labor government
the unions would accept nothing less than full wage indexation
regardless of the consequences for unemployment of such an extreme
policy.
In a final effort to resolve the situation, the various Labor
Party factions represented by Mrl ilaw,-e, Mr Ilur ford, Mr Hayden
Mr Combe and Mr Willis conferred by telephone apparently
Mr Whitlam. was excluded because his opinion was not
considered important enough As a result of that conference,
Mr Hawke appointed himself spokesman and outlined what he
termed the " absolute consensus" of the five sp~ okesmen.
The degree of consensus reached can be measured by the fact that
M~ r Hawke then proceeded to contradict himself three times
within the space of one page stattcmi~ ent. First, he said
Labor would have wage indexation up to average weekly earnings.
Second, he said Labor mightL not advocate indexation above that
level. Third, by the end of the statement, he was asserting
that " a Labor government would be arguing quite clearly
before the Arbitration Commission that its general principle
was for full and automatic indexation for everyone."*
Wages policy is an essential element of economic policy yet
thereis now total confusion on what Labor's policy is.
Labor's mish-mash of conflicting policies on tax and wage
indexationi, indicates how little they have thought through
any of their economic policies. This is clear when their
varicus unemployment schemes are examined in any detail.
only the present members of the Labor Party would seriously
put forward a plan to rip huge sums in taxes from ordinary
Australians and use them to pay big companies.
What a betrayal of the working men and women of Australia.
Let's look at what some of tChe big companies would get.
Mr Uren's pet hate, Utah would get a windfall of $ 2 million..
Others to do well would include:
CRA $ 10 million
BHP $ 33 million
HIM 4.5 million
CSR 8 million
Bank of NSW $ 11 million
Ford 7 million
ACI $ 11 million
Dunlop $ 11-13 million
General Motors $ 10 million
Labor simply did not think this scheme through.
A survey last week or large employers showed that not one
could forecast any in~ crease in their own employment levels
if relieved of payroll tax.
Yet Labor should not be surprised. The Premier of South Australia,
Mr Dunstan, made it clear in September that a payroll remission
scheme does not work. / 7
He has tried it in South Australia with no result.
Unlike the Labor Party , the gov,. rnment has maintained
consistent responsible policies to restore Australia to economriic
health. We have a unitced Cabinet, a strong backbench, and most
important of all, the ideas arid the policies to take Australia
forwardstrongly into the eightieS. Many of these policies
were referred to in my Policy Speech last week.
Ishall mention just a few of particular relevance to this city.
We are concerned at the low standards of urban public transportand
we are expanding our programme of financial assistance to
improve city train and bus services. Our new five-year prog
national water resources programme will help to improve urban'
and rural water supplies. Our promise to abolish Federal
estate and gift duties will save thousands of families distress
and financial hardship. We are going to give telephone
subscribersa new deal by reducing chiarges for off-peak
long distance calls to about 40 percent of normal rates.
The Minister, Eric Robinson,' has initiated an examination
by Telecom into the extension of local call access to capital
cities from nearby areas such as the Penrith area, and comparable
areas near Melbourne and Brisbane.
There are. many more initiatives which I commend to you they
are all set out with detailed costing, in the Policy Speech
and supplementary statement published with. it. ' They form in
total a creative programnme of policies, within a responsible
financial framework.
Ladies and gentlemen, we have made great proftressin the last
two years, in restoring Australia to economic health, in
reviving initiative and enterprise, in protecting those
genuinelyin need, in getting our great nation moving again.
If-' s* been hard work but we are now seeing the tangible
results of that work. Australia is about to enter into a new era
of growth and prosperity. The fundamental question which
this election will decide is whether we will build on the
achievementswhich we have made, or whether Labor will be allowed
tothrow it away.
On December 10 1 am confident thatAustralians will recognise
that we have been doing the job we were elected to do, and
we'll be doing the job for Australia for another three years.