FOR PRESS 5 NOVEMBER 1978
ELECTORATE TALK
The meeting of the Loan Council tomorrow is clearly of great
* importance for Australia. It forms an integral part of a long
history of Australian growth and development.
The history of Australia is one of innovation and enterprise
by individual Australians. It is a history of growth and
development of our vast natural resources.
We have had our ups and downs, but overall as a nation we have
enjoyed continuing growth and prosperity.
The main catalyst for the development of our country-has been
private enterprise individual Australian men and women of
initiative, with a capacity for sheer hard work and a willingness
when necessary to take risks.
Our farmers have built up a most efficient and productive
primary industry. Business people, particularly since the
Second World War, have brought about a very significant
expansion to our manufacturing base. In more recent times our
tertiary and service industries have grown strongly.
In the past 20 years, private industry has opened up vast new
natural resources projects and mineral export industries.
While the prime motivating force for the development of this
country must always lie in the hands of individual Australians
and private enterprise, Government has a vital role to play.
The Commonwealth Government must provide sound economic management
and a climate of stability that will encourage the private
sector to invest.
Reduction of inflation, control over Government expenditure and
restraint in wage increases are fundamental to the long term
economic stability of Australia. It is the Government's task
to strive for the right pre-conditions which will enable sustained
activity and growth by private industry. This was the message
of the last Budget. It remains a paramount objective.
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Government both Commonwealth and State has a further role too,
for it must be prepared to assist with transport, ports, power,
water and other basic resources.%
In the Australian Federal system, there is a long history of
co-operation between the Commonwealth and the States in
providing such resources as these.
The Commonwealth has been assisting the states in the funding of
new roads since 1923. For the past 20 years, the Commonwealth
has assisted the States in railway construction and updating
rolling stock, in particular the standardisation of railway track
gauges. The Snowy Mountain Hydro-Electric Scheme was a co-operative effort
with Victoria and New South Wales, which made an important
contribution to the economic development of Australia.
During the past three years, Commonwealth support for development
projects has continued to be strong. This year, the Commonwealth
will be paying to the States over $ 500 million for roads; on
railways, the Government will be providing $ 70 million over the
next five years to upgrade the National Mainline Railway Network;
and we have announced a five-year $ 200. million National Water
Resources Programme to improve Australia's water supplies.
In other areas too there has been increasingly close co-operation
between the Commonwealth and the States. Agreement in principle
has been reached on offshore matters -a subject which had caused
much heat and little agreement in previous years.
Close co-operation has also been achieved in the development of--
a national Companies and Securities Scheme, the training of
apprentices, joint arrangements to protect the environment and
counter-terrorist measures.
The Loan Council meeting tomorrow is another example of such
co-operation.
Together with the States, we have been exploring the possibility
of an entirely new approach to encourage the development of new
major resource projects in Australia.
one of the factors which investors must take into account in
making decisions on new projects is the availability of basic
facilities such as transport, water resources, energy supplies,
pipelines, and port and harbour works. We have been keen to see
that new projects are not held up because of the lack of
availability of these basic facilities.
Arising from discussions which I initially had with Sir Charles
Court in 1976, and after more than two years' study and discussion
with the States, the Loan Council broke new ground on this issue
at its meeting last June. / 3
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It adopted new guidelines for its future consideration of
proposals for special additions to the normal annual " semigovernment"
borrowing programmes and for overseas borrowings
by authorities to finance these additions. These additional
borrowings were to finance projects of special significance
for development.
It was decided that a special Loan Council would be held at
a later date this year to consider the first batch of projects
submitted by the States for approval, This decision was of course
taken before the Budget, and it was in the context of this
decision that the parameters of this year's Budget were set.
In accordance with the guidelines set down by the Loan Council,
a working party of Commonwealth and State officers have been
examining a total of 12 such projects proposed by each of the
State Governments. The 12 projects cover significant development
in all States.
Two projects have been submitted by New South Wales coal
loading facilities at Port Kembla and Balmain and the Eraring
Electricity Project.
Victoria is seeking additional borrowings for the vast Loy Yang
Power Project and the proposed World Trade Centre in Melbourne.
Queensland has put forward the development of coal export
facilities at Hay point and power station projects . at Gladstone,
Wivenhoe and Tarong.
South Australia wants to finance infrastructure for the Redcliff
Petrochemical Project.
Western Australia has submitted for approval the 1500 kilometre
pipeline to bring natural gas from the North-West Shelf to Perth,
water supply and rail facilities for an alumina project at Worsley
and the upgrading of power supplies in the Pilbara.
Tasmania wants to make additional borrowings to develop further
its hydro-electric power system and water supply projects in
Hobart and North-Western Tasmania.
The borrowings for these projects would be phased over a period
of up to eight years and the total applied for is an additional
borrowing of about $ 150 million this year, and amounts ranging
from $ 236 $ 393 million in the succeeding five years at
June 1978 prices.
The report of the working party on these 12 projects will be
examined at the Loan Council meeting tomorrow.
A responsible borrowing programme could greatly assist development
of a number of important new projects projects which would
obviously have a significant impact on activity, export earnings
and employment. / 4
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At the same time, the Commonwealth has a responsibility to
make sure that any programme of special borrowings approved
by the Loan Council is consistent with the over-riding need
to maintain our fiscal and monetary policy and thus to
nurture economic recovery.
It is for this reason that the voting procedure at the Loan
Council requires approval for any individual project by a simple
majority of which the Commonwealth forms a part.
It is these considerations which will be foremost in our
minds during our discussions with the States tomorrow.
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