PRESS OFFICE TRANSCRIPT 20 JULY 1979 4
PRIMlE MINISTER'S ADDRESS TO THE IN AUGURAL MEETING OF THE
NATIONAL FARMER'S FEDERATION, CANBERRA.
It certainly gives me a very real amount of pleasure today to
open this new national farming organisation conference.
The amalgamation of farming youth organisations has been debated
amongst different organisations in different States for many,
many years. I think it was way back in the Second War that
one organisation was formed, designed to be one major, united
organisation. But, of course, it was starting from scratch.
There were many existing traditional organisations in being
which had no intention of going out of business. So, that
particular operation just added one more organisation to the ranks
of producer groups.
But, now, you have achieved a very great deal. A number of
organisations that have served Australia very well over the
time are going out of business, and you are forming one new
major Farmers' Federation.
I have alays believed, both as a farmer and as a politician,
that farmers and pastoralists need to speak with a strong voice.
You can deal with government much better if that is so. You can
do it so much better if you are speaking with one voice rather
than with two or three or four divided voices. So, I -welcome
very much what you have achieved.
In want to speak for a few moments, not only about the position
of rural industries as I see it, but about Australia, and
Australia's wider place in he world. Firstly, I would like
to try and get Australia's position in perspective. So often
press comment goes widely with the swings of the pendulum.
In January and February of this year there were so many optimistic
forecasts about 1979 and beyond that some people were almost
saying, " There are no problems left, the Government has done its
job, recovery is with us, that is the end of'it". Well of course
it is never as good as that. But then it was certainly not
as bad as those same commentators were saying in April and May
in this year when there were some shifts in monetary policy,
there were some changes that the government had to introduce.
The euphoria of January and February changed to what appeared
to be, from the Government's point of view, a totally dnjustified
gloom later on in the autumn.
We do need to get a sense of balance and a sense of perspective
in these particular matters, so that we can really understand
the nature of policy, where Australia is going, and what our
national objectives truly may be.
Now, what is the position today? As a result of Government
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policies, as a result of decisions, Australia is more competative,.
than she has been for many, many years. The first major
decision that started. to bring that about was the devaluation
two or three years ago. But then, what did the commentators say
about that? Some of them said, " madness, stupidity". But no
single act of the government,. I think, has proved more right
than that particular devaluation and the way in which the
management of the exchange rate has been conducted since.
It has been a material factor, coupled with the control of
inflation, and seeing that there are reasonable returns for
Australia's primary industries. . J It has also been a material
factor to enable the manufacturing industry to get a better
share of the local market and to move out into export markets
in a fashion that they just have not been able to achieve for
many years.
The balance of payments is now stronger than it has been for
a long while. Since February, private capital inflow has been
well over $ 1,000 million. In the eight months to February,
export prices rose almost twice as fast as import prices,
and that again, is good for Australia, and for Australia's exporters.
Next year, our expectations are continued, reasonable returns
for Australia's primary producers. In beef sale yard prices
are 2 to 3 times of those of a year ago. In wheat prices
we had a record crop last year. There are continuing high
export prices and there has been a larger area planted again
this year. So, granted reasonable seasons, which some Premiers
may claim to be able to control but the Commonwealth does not
claim to be able to control, granted these reasonable seasons
the wheat industry should also be in a very good position
throughout the course of this coming year.
The wool industry is looking to the future with confidence and
strength. Remember when about five or six years ago, the
very time government actions were needed to restore confidence
and strength in the wool market, the government of the day
pulled the floor out and reduced the floor by 50½. That did not
survive. I think it is the first time I noted a demonstration
by farmers outside the front of Parliament House. The cry
from Australia and around the world secured the reverse of that
decision. Over recent years, the floor has been steadily
increased and reserves are now lower than they have been for
a long while. The market is strong and there is no reason why
we cannot expect that strength to continue reasonably into
the future.
Rural recovery is certainly no accident. When times have been
difficult, there has been special assistance from the government to the
beef industry in particular. Longer term: measures have been
introduced. The Primary Industry bank which I think many people
were sceptical about they said that the commitment had not
really been fulfilled as producers might have expected
but since I the Bank has been operating, it has demonstrated
its success and has already refinanced over $ 100 million.
Income equalisation deposits were introduced some time ago, Although
not so much use when incomes are low, it is starting
to demonstrate the very real benefits to farmers and pastoralists
now.
With wheat stablilisation programmes, support for the Wool / 3
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Corporation, new and improved tax averaging that gives great
benefits to producers again not so much when there are no
incomes to average we are starting to see the benefits
through the last year of better returns and through the next.
The major part of the trade offensive overseas has been designe. d.
to secure reasonable outlets for Australi~ is major rural exports.
When we started the trade offensive into the European Community,
there were some who said, " Why are we bothering about this. We
have been excluded from that market, we should be concentrating
only in Asia". But, we took the view that Australia could not
ignore the largest and wealthiest trading group in the world,
we could not ignore them for two reasons: We had every right
to be able to sell into Europe, and we were very concerned
about the policies of export subsidies which so often damaged
our exporters in third markets damaged sugar, damiaged wheat,
whatever, you name it, and we had to secure, if we could, a
modification of that policy.
There has been no revolution in their attitude, but there has
been a change and the doors are open, We will now be in
continual communication with the European Community to build On
what has been achieved.
In 1974, we lost access to Japan for beef but that has been rebuilt
with global quotas now 110 11S.: O00 tons. Through the MTN
it will be significantly higher than that. Access to the United
States has been secured. . Many governments over the years
have talked about seculing a reduction in the American wool
tariff,, but it is our negotiations my government's negotiations
with the United States-which has, in fact, achieved
reduction in that wool tariff, at least with the administation
It is a question of confirmation, of course, by Congress, but
we have no reason to expect that there will be any difficulty
with that.
For the rest of the economy, through last year, non-farm gross
domestic product increased by 3 in real terms. In the nine months
to March, company profitability rose by over 20% and'in the year
to March, investment expenditure was up by 25%. Mining investment
was up by well over 40%. Under our predecessors, real investment
in mining and manufacturing fell on significant estimates by an
average of 8% a year. Is it any wonder that Australia got into
trouble as a result of that.
Now, the fundamental policy, of course, is to get the basics
of the economy right. to control inflation, to control
government expenditure, increased by 46% in ' 74-' 75 by 8.3%
probably a bit less than inflation as it might finally come out
through the course of the last year.
There are 56,000 less Public Servants than if the recruiting
policies of our predecessors had in fact been continued.
There have been unexpected events through-he course of this year.
The events -in Iran,, the extent of the rise in beef prices,
was not as predicted, although it was needed to
make up for the damage of past years. Thes-e things have obviously
added to inflation, but they have been good -for producers and good
for the balance of payments although the higher beeT -prices
and the record wheat crop . has given us some' inflationary problems. / 4
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Therefore, we had to act to exert pressures in the other
direction. So, we had a mini-budget.
If we had not had that mtini-b5udget, people
would have been entitled to say that if the Government were
still determined to overcome inflation, why was not the
government reactingto changed evcnts and taking the decisions
that it ought to be taking. As a result of it
and as a result of some fairly rigid expenditure controls
during the Premiers' Conference nobody should have any
doubts about our determination to continue with a path
that will bear down on inflation even if pressures of one
kind or another for a time, will be such that the downward
movement of inflation cannot be continued and indeed is
likely to move a bit in the other direction.
If there are pressures for increased inflation in Australia,
those same pressures are considerably worse in a number
of other countries.
One of the things which gives us a very great deal,
of concern about the future, and a great deal of concern about
what is happening at the moment and I know that that is shared
out in the wider community is the level of industr'ial disputes.
There is not the slighest doubt that the activities of some
trade union leaders could well destroy Australia's future,
prosperity, could well destroy Australia's living standards,
There is a selfishness in some trade union actions which I think,
knows no parallel within Australian society. It would seem
that a number of trade union leaders want confrontation, and
do. not want consultation..
It is worth noting that Mr Hawke has withdrawn the ACTU
from the National Labor Consultative Council. Many
of the actions of the union leadership would appear to be
irrational and totally unreasonable.
In some things, there is a lack of Commonwealth constitutional
power over State employees for example. State governmnents need
to act, and some with much greater resolution than they have in.
the-past. I think the position of-some State Premiers in
legislating to take matters out of the hads of indus-tr * ial tribunal,
leglislating to reduce hours, is totally destructive in the
sensible industrial relations environment. It is no accident,,
therefore, that in NSW there has been more disputes and worse
disputes than in other States in Australia.
The State Premiers have now agreed that the States should join
with the Commonwealth in discussing the arrangements, the sharing
of power between the. States and the Commonwealth. We want
to have a more rational arrangement than that which now
occurs, and achieve arrangements which will,. to some extent,
prevent the competative business between State and Federal
tribunals, and the leap frogging one with the other.-
In relation to Commonwealth employees, of course, we have the
clear power and the responsibility. We proclaimed the Commonwealth
Employees Employment Provisions Act. that was used in.. the Telecom
dispute, and as a result, the bans were lifted. Employing
authorities and the Public Service generally, have been told that
if they need to use the provisions of that Act, they will have
IWIIA W N_ -T-At0 7i
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the full support of the government. The Postal Commission
has been told of that. Already 2,000 employees have been
stood down under other provisions. The pay cheques going
out through the Postal Commission for a large number of employees
will be very empty cheques indeed, as a result of the provisions
that the Postal Commission has already used.
We have to make sure that those who. want to pursue
industrial action at this time or the sort that is now present
within the Public Service themselves have to pay a cost, rather
than the community alone paying the very substantial cost.
Some public servants believe they have a right to
determine what part of the work they do, and go on getting
their full pay. That is what has happened. Now there are
stand-down provisions in the Public Service Act, and for the
first time perhaps in the history of Australia public servants
are being stood-down and will continue to be stood-down unless
they do their full work.
What has happened in the Public Service has been condemned by
the arbitrator who wrote the stand-down clauses in the award,
and condemned by very senior public servants, such as Arthur Tange.
The Public Service Board knows that if the stand-down clause that
was written into the award two or three days ago proves inadequate
the Commonwealth Employment Provisions Act will be used fully
and effectively.
We are not going to put up with a situation in which public
servants, who basically have security of tenure, who have a
superannuation scheme which is second to none in Australia
and paid for by other taxpayers to a large extent, are going to
determine that part of the work which they do and that part
which they don't do.
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If, as a result of the attitudes of the Government in relation
to these matters, we have to put up with a period of difficulty,
then so be it. We were prepared, if necessary, for Australia
to be without telephones for some weeks or a longer period.
If it is necessary in relation to the postal dispute for Redfern
finally to be shut down until this matter comes to some sense,
then it will be shut down. It will be a price to pay and a
difficulty in the Australian community, but I think a fight
must be a fight over that particular matter rather than to let
it go on and drag on indefinitely with continuing disruptions and
difficulty. I hope that if we are in that position we will have
enough support from the community generally and people won't
say after the first week " You had better give in, it is a
bit difficult, I haven't got the mail", or whatever the service
might be. If that pressure then started to then come out of
the Australian community then it would undermine the Government,
which is seeking to do what it must, and that is to protect the
ordinary people of Australia against unreasonable and predatory
use of union power.
We also need to understand that nobody is saying in this that
people don't have wage claims, that sometimes they are not
reasonable. What we are saying is that there are procedures,
there are triubunals to examine these matters and make
judgements and we are saying that there is no need to use
strikes, bans and limitations in pursuit of claims.. If people
are going to do that, there will be a cost to bear, and not
just a cost to the Australian community. It is a question of
supporting arbitration -that is what it is abouat.
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There are other problems also oil, as you know We have
taken a number of decisions in relation to that. President
Carter announced some major policy initiatives two or three
days ago, but that policy is still deficient in one respect
because it does not have world parity pricing for fuel.
Unless you have that, a decision to limit into the United States
the quantity of oil that comes into the United States will impose
enormous and substantial rationing problems within the United States.
Price is the best determinant of wise and sensible economic use
of a scarce resource. OECD and other nations have recognised that
the decisions which Australia took just about a year ago in that
are inevitable and are right. They are painful and they are
diffucult. But there is no alternative.
There are three main elements to our policy: conservation,
suitable alternative forms of energy, greater oil search and
development and research. In conservation, world parity pricing
is obviously a very significant part of the policy, because
without that people won't really turn to other forms of energy
which might not be in such short supply they won't have the
incentive. We have a capacity to save up
to 10% of the petrol that we now burn by some changes in
octane ratings which will take place, by a small revision of
lead content in fuel, and by changed emission controls. As to
the first we have the power to do it; as to the second two it
is within the power of the States. We have four States in
agreement with our view. We have New South Wales and South
Australia, so far, determined to press ahead with the revised
and third stage of emission controls which will again lead to
more inefficient engines and more expensive engines. Against thE!
present fuel situation I don't believe that Australia can
afford to just throw away 10% of the fuel that we would otherwise!
have. I hope very much that the State governments will review
their positions in relation to the lead content and emi'ssion
changes. We are pursuing alternative forms of energy. Ag ' ain world parity
pricing has a significant part to play in that. There are
incentives to move to LPG. Commonwealth vehicles in the future
will be LPG powered, except for ones that have to go out into
the country, where the gas might not be available. Much greater
sums are being spent on research and development.
It ought to be noted, I think, that in a country like Australia
we can't match and shouldn't seek to match the enormous sums
spent on research and development in the United States and in
Europe, because they will be doing the work, the results of that
technology will be available. it would be wasteful of our
resources if we sought to match and do that work separately and
independently for ourselves. The sort of research we need in
this country is that which might be directed to the particular
and peculiar problems of Australia, not at the question of a
duplication of the vast sums that are spent in other countries.
In oil search and development, world parity pricing again is
significant, because it provides the incentive to companies
to go out and look for oil, to develop reserves. 600 million
to 700 million barrels have been added to reserves as a result / 8
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of that pricing policy. $ 500 million is being committed to
search and development quite directly as a result of world
parity pricing.
One thing that we all need to guard against: I believe that
around Australia now there is some evidence, I am told from
the Department of National Development, of unnecessary
hoarding of fuel. I can understand that farmers might be
concerned that they will not be able to get adequate supplies
of diesel for example when they have to sow their crops or
harvest their crops. -There is a responsibility to see that
there isn't a shortage in those circumstances. But if there
is unreasonable and unnecessary hoarding over and above the
normal requirements that farmers and pastoralists have had
in the past--that kind of thing of course can create a
shortage and create difficulties for other people for whom.
otherwise there might not be one.
The Government has made a decision to establish a body, a
national allocation and supply committee, which will have
represented on it consumers, producers, the States, representatives
of manufacturing industry, representatives of the rural industry
to advise government in relation to supply and allocation of
petrol and fuel if there is likely to be any shortage.
We recognise that there is a responsibility to make sure that
industries that need fuels at particular times of the year have
fuel available to them. We know very much-and you will understand
the reasons for the shortages of Avgas -especially in the
northern parts of Australia and in Queensland. I also know that
if people want to spray a cotton crop at a particular time, that
crop has to be sprayed, then Avgas will have to be available.
That is an obligation on the companies. It is also an obligation
on Government in those circumstances to make sure that essential
industries are not damaged by particular shortages at a
barticular time.
The committee that will be established will have a responsibility
to advise us in relation to these matters so that, if there are
particular shortages in particular areas and circumstances, we
will be able in conjunction with the states, to take appropriate
action. I think it is worth looking at Australia's position, generally
and comparing it with what is happening in a number of overseas
countries. If we do, it gives every reason to confirm the
strength and underlying stability of the Australian economy and
what we are in fact achieving within this country.
In the last six months inflation in the United States has been
running at an annual rate of about 12%. In the United Kingdon
it is about 13%, and on the admission in their own budget up
to 16% and 17%. In Canada it is about 10% and rising; in Italy
about 15%. Over the same period, Australia's inflation was
about 8%.
We know there are pressures in this country to put inflation
up. Thie Government has to counteract that and put the
movement again in the right direction. That won't be able to
happen for some time because oil prices will be moving through / 9
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the economy, and the effect of that will occur during this
quarter and the next quarter. So long as we can maintain
the competitive margin between Australia and countries
overseas, the competitive position of Australia's exports
and manufacturers will continue to be improved. During the
previous high inflation in Australia, of course, our inflation
was much above those countries I mentioned. So, under those
circumstances we were losing our competitive position and
getting into very real difficulties. But our industries
will still improve their position while we keep inflation
under that of a number of our major and significant trading
partners. If we look at growth rates forecast by the OECD for 1979
they are OECD forecasts,. they are not mine, let me emphasise
that Australia 4% real growth, that is well above the OECD
average; the United States the United Kingdom 1
Canada 31 % 0.
If we look at productivity improvement, the OECD again forecasts
for Australia in 1979 3 for the United States, nothing; for
the United Kingdom for Canada h%.
That points to some difficult situations in economies overseas,
and it points also to a significantly better position within
the Australian economy.
I believe, with the one question mark over industrial relations,
and that is going to have to be sorted out there can't be
any options for us, that we can look to the 1980' s with very
great confidence indeed. We can, and have it within our power
to keep inflation lower than that of many other countries.
That makes our now competitive industries even more competitive.
It makes our homes and export markets even more secure'than
they now are.
With economic stability there is a great encouragement to
investment. I have mentioned the private capital inflow for
the last seven or eight months. There is $ 2000 million worth
of new investment going to the aluminium, industry, another
$ 2,000 million going into the coal industry. Our great
national resources give us a capacity to get through difficult
circumstances much better than other countries that aren't so
well endowed.
If you look at other resource producing nations of conscience,
you will find some difficulties within them that give investors
cause for concern. That again makes Australia a much more
attractive country for investment than some others that would
otherwise be competitors.
So if we play our cards right, however difficult the world
trading situation miaht be through the 1980' s.---
I expect it to to remain difficult because I expect
inflation to remain too high in a number of major countries,
and with that beina so growth rates will be too low.--
Ile can look afterourselves well and secure a rprosperous decade
in the 1980' s.
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Because we have great resources of energy and minerals we
can attract investment. We have commodities that the world
needs, we have exports from the primary industries that the
world needs. We have secured, to a greater extent than before
I believe access to significant markets overseas. So it is
within our power. If we play our cards right, keep inflation
under control, run a sensible economy and have more sensible
industrial relations than we have in the past, then Australia
can have it made.
For all these reasons we have many advantages. It should also
be said that the Government has no intention to throw away the
advantages and the gains over the last three and a half years
and destroy the possibilities of the coming years. We have a
great future. Rural industries have a vital part to play in
that future. I have never been one to accept the view that
rural industries are less important to Australia than they
once might have been. Certainly our exports have diversified.
The proportion of people employed in rural industries is less
than it was. But without the strength of Australian rural
industries, without the exports that come from that, Australia
would in maany instances be a dying nation, and we have no
intention of allowing that to happen.
The strength of your industries is vital for the future of
this nation. It is importILant also, I know, for yourselves
and for your organisation and for the people who make up the
great Australian rural industries.
I have very great pleasure indeed in opening this inaugural
meeting of the National Farmers Federation. I wiish you all
good fortune in your future deliberations and I am sure that
you will serve the interests of your constituent parts well
and vigorously, as best you see their interests.