PROME MINISTER
FOR MEDIA WEDNESDAY, DECEMBER 5 1979
ADDRESS TO THE QUEENSLAND BRANCH OF THE
INSTITUTE OF DIRECTORS
Queensland, of course, has always been in the vanguard of
development in Australia, and as we approach the 1938s,
the contribution to be made by Queensland business leaders
in ideas, in innovation and in action, will I hope, have
telling significance for all Australians.
As we approach a new decade, Australians are rightly interested
in the prospects that this period holds for all of us.-I
believe there is a strong concensus in the community that over
the last four years we have been able to haul the economy back
from a position where its weakness was threatening the well-being
of all Australians.
We are now in a position where our economic stability and strength
give us due optimism for the 80s. I want to say something to
you today about the processes that have been at work to effect this
revival and the prospects which are in store for us in the years
ahead. I believe that a combination of factors is now at work
in our economy which will create opportunities for further
economic achievement and social well-being. But to these
opportunities must be added the will of government, business
and industry leaders to see that today's prospects become
tomorrow's realities.
It is little more than four years since Australia and its
economy were wilting under the excesses of Labor government.
No regard had been paid to the size of the public sector.
Commonwealth budget outlays increased dramatically. In fact,
the expenditure of all public authorities rose by 105% in three
years. Welfare costs reached unacc. p able levels and health
costs in one year rose by l13%. All: tiiswas matched by an increa: e
in personal income tax revenue of 125% in three years.
The money supply grew rapidly, as did the level of wages.
Profits fell. These were changes which shook the very basis
of our economic structure. They were changes felt by all
Australians. Understandably, the economy was incapable of
absorbing them. / 2
Sip.
Jj, AUSTALiA
2
These factors contributed to an inflation rate in one 12-. onth
period of over 17% more than five percentage points ab. ov the
OECD average. By September this year we had reduced tht rate
by eight percentage points, to alrost 3 points below the United
States' rate; and seven percentage points below that in the
United Kingdom.
This is a significant demonstration of the success of our
economic policies. I present this picture of the Labor years
for two reasons. In the first place the Australian Labor Party
is making a token claim for the right to govern Australia and
manage the national economy through the
Yet its recent ALP conference in Adelaide demonstrated that
its policies on wages, the growth in government spending and
the size of government are not just a translation of the period
when they were in government; in many instances they are more
ambitious, more provocative and potentially more reckless.
Indeed the need to control inflation is not mentioned in any
of their policy statements as an over-riding economic
objective. The second reason I make reference to the Labor record is that
only by having it at hand, can a full appreciation be cained of
the nature of the task we face, and a proper measure mad of
the success that we have achieved.
The objectives I outlined to you in 1976 are still valid today.
* They are central to achieving continuing and sustainable economic
gr wth. Thz Gont ha playd it part. In the lat three
years there has been' little real growth in Commonwealth government
expenditure compared with the three year increase under Labor of 4-.
We have begun initiatives which increase the rewards for effort
and encourage investment. We have simplified the tax scale
which allows for a significant increase in earnings before the
taxpayer moves into another bracket.
This in itself is an incentive to greater effort as overtime
or additional part-time employment can generally be worked
without attracting a higher tax rate. The overall result is
that from this week, 90% of taxpayers are paying tax at tha
lowest marginal rate of 32 cents in the dollar.
As well, we have raised the minimum income level at which
tax has to be paid. Now uo to half a million Australians
on low incomes no longer pay any tax at all.
V7e have abolished federal estate and gift duty. We have introduced
the investment allowance. We have raised the private company
retenticn allowance. Our new energy policy is providing the
necessary incentive to oil exploration.
Our attack on inflation; our seeking of reasonable wage
increases; our reining in of government expenditure; our
success in reviving investment; all have been matched by
an increasing public awareness that Australians in the 3'-j
should continue to reject a disturbing dependence on government
in favour of a greater sense of individual responsibility. > J
3
Many indicators suggest that our efforts of the past four years
have produced significant results. Our inflation rate at the
end of last September was 9.2% compared with the OECD average
of 10.6%, USA 12.1% and the , UK 16.5%.
This has helped make our industries internationally compet
Costs are down. Exports are up. Private capital inflow into
Australia in the last financial year was the highest since
1971/ 72.
Factory production, as measured by the ANZ Bank index, has
increased by 9.4% in the year to September 1979. In fact,
the increases that are taking place are broadly based and have
beenachieved in 26 of the 30 categories measured by the Bureau
of Statistics. This trend is confirmed in other areas.
Real investment by business increased significantly last year.
Civilian employment in the year to September grew by nearly $ 3,000.
Gross value of rural output this financial year is expected
to increase 65% on ' 77/' 78 levels.
We are now placed to enter the ' 80s with prospects for the future
much better than those in most of the industrialised world.
This assessment can be made because of our strength on three
major fronts. In the first place our economy is one of the
strongest in the world at a time when the world economy is
plagued by the problems of inflation and slow growth.
Secondly we have abundant raw materials, materials the world
wants and needs.
Thirdly, our energy resources place us in a uniquely priv. i. lejcd
position. Coal, natural gas, LPG, crude oil, electricity and
uranium represent an impressive total. endowment of energy
commodities. This is true at a time when the threatened extremism of some
countries gives the problem of energy shortage a greater urgency
than might otherwise have attended it. Our objective in the
must be to combine the strength of our internationally
competitive economy; the wealth of our natural resources and the
availability of low cost energy development to secure economic
growth for a long time to come.
The Government is determined to accelerate this process.
We believe we are advantageously placed to undertake a
major national development programme. The first step towards
this was taken last November at an historic meeting of the Loan
Council which approved a new borrowing programme to finance
future national development.
We are determined that the private investment and development
should not be impeded because of inadequate facilities, whether
they be power-generating plants, coal loaders or ports. In
particular with the emerging international energy position,
the Government's responsibility is to capitalise on our natural
resources and secure the future supply of electricity. / 4
A
The development of coal processing -electificity, projectCs in*
A"-Ustralia is not only central to our energy pol_' v, but a~ so
it enables major processing of our own minerals to be udrae
in Australia which will reap enormous benefits for all p , S 14ins
,' ihthis in mind, we approved, 12 months ago, 12 na-io:-.-
dev. elopment projects e stimated to cost $ 1.7 billion. Of_ a,
alzmost half $ 896 million was for the develozrnent of: Dow., er
genaeration facilities in Queensland, New South Wales,
Victoria, Tasnania and ! W-estc--n Australia.
Four of the remaining seven projects were designed to zfacilitate
either the export of our energy reserves or the domeszic-use ofalternatives
to liquid fl. Thas-' in'itiatives 2f2 to
at the June neeting of: the Loan Council wdher-e approvali.
principle was granted for the electrification of the railway
systep here in Brisbane.
Yesterday, i announced that-for the first time the Corun-c wealth
' dz~ a~ i~ 4t-ib Ca n COUnci
of its own for Loan Council approval.
One of these is a proposal for the electrification of' the
1Me bourne Sdney railway link. This represents a compr.-: n-s: e
initiative by the Co. mon-. weaIth to create a major transn; or:-
facility util-ising electLricity an alternative coal firm
energy resource which we must increasingly take. advantage of
in the next decade.
in fact, the national developmi~ ent pro) grmme must seek. to mk
the use of coal fired electricity forr mnany purposes o-n-e of h
central goals in the ' 80s. Without foreshadowing State
initiatives I can. say that -that princ-inle is embodied in
the proposals for discussion this Friday, where a further
$ 300 million of projects For electricity power generation
and almost $ 200 million for railway electrification,
excluding the Melbourne-Sydney project, will come up for
decision.
As an indication of the momentum that is gathering in tr~
national development progracne, the Comm. onwealth last mnn
invited the Premiers to bring forward further proposals for
coal based electrification projects.-All these programmes
complement development projects in mining and manufactL-uring
totalling more than $ 10 million which. are now either r-ea-3v to
go cr for which. L feasibility studie's are already wel. lI a Q1ance~.
W.-e are indeed well placed to capitalise on the advantages that
a neLalthy econormyz~ and o~ ir abDundance of-1: a2 ebrcs~ 1
bring to Australia in the next decade..
5
But . Australia has always been rich in
human resources as well. We are going to need these resources in
the years ahead. Our skilled labour; our development and appiication
of new technology; our entrepreneurial skills provenly successful
in innovation, production, programming, managing and marketing;
all these are essential parts of our future plans. The Australian
character itself is no less important. Its competitive instinct
must be encouraged. The competition in the ' 80s will extend
beyond our own shores. But we are ready for these challenges
and will welcome the rewards that can flow from an outwardly looking
competitive. approach. In business and in government we will need
to adopt a truly international approach.
The strategy of looking mainly to the domestic market was
appropriate in the earlier stages of our industrial development.
It is not a strategy which will take us successfully into the
There is no going back to it.
The fears of the 80' s only exist for those who want to meet
the new decade with the solutions of the past.
The changes that have occurred in the world economy: the emergence
of new economic power blocs; the increased export capacity of
developing countries in both manufactures and services; all
require their own form of adjustment by everyone.
None of these changes. are temporary. Those who imagine them
to be so, merely yearn for a past where business and industrial
life was safe and more comfortable. We all know there are no
profits to be made in the past.
Our economic machinery is geared to move us confidently into
the That is not to say there won't be challenges and the nc d-i'r
Change for business and industry in the next decade. But we
must never forget that challenge and change also contain
undeniable opportunities. Australian industry is already
successfully making adjustments in a wide range of areas.
There is already, underpinning many of the industrial projects
of the future, an outward-looking, forward-thinking, progressive
sense of management.
I am not suggesting rapid and dramatic change. Rather,
1 am advocating a continuing adjust; ent that is grad-Ic
and manageable; an adjustment that is already occurring
throughout many'sectors of the economy. One of tomorrow's
challenges lies in identifying the best markets. Rapid
industrialisation has occurred in the economies of East
and South East Asia, and China has emerged as a major
market not only for foodstuffs but also for raw materials.
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This has resulted in a continuing shift in the direction of our
exports. In the last financial year our exports to Asia had
more than trebled what they were at the beginning of the decade.
This trend will continue as real incomes rise in the. East Asian
and South Eastern region, producing a quickening in demand for
consumer goods, industry and development in these areas.
The position with imports is much the same. In the last financial
year they had reached a level more than four times greater than
what it was at the beginning of the decade. This continuing
rise in imports from Asian countries has resulted from the
improved quality and competitiveness of their products
coupled to a conscious effort made by the Government to promote
trade with Asia.
You will recall that last year Australia sponsored and hosted
the ASEAN Trade Fair in Sydney and a second such fair will be
held in Melbourne next August.
There is growing trade between Australia and Asia and this
is to our mutual advantage. Newly industrialising economies
will need for their growing industrial bases a wide variety
of imports coal, iron ore, alumina and aluminium, iron and
steel, agricultural and specialised industrial machinery,
management and technical consultancy services.
Australia has the capacity to meet these demands. There has
been one interesting by-product of the changing international
economic order. The increase in price of liquid fuels wZs
initially thought to have only negative consequences for Australia.
Yet now it offers major opportunities for us which are already
being accepted. For example, as countries find their energy
costs mounting, aluminium smelter projects are moving to
Australia where our massive reserves of coal provide us with
-low-cost energy and the opportunity for processing raw
materials here in Australia. So you can see that. far from
being intimidated by the decade ahead we should be inspired. / 7
7
Real growth often occurs most rapidly when circumstances
us to face hard decisions; invite us to take opportunities;
invite us to exercise initiative.
Government h. a respo nsibility to create the climate wich
this can occur, so that there will be rewards for risk-taking.
For four years we have dedicated ourselves to the application
of responsible policies. They have been designed to reduce
inflation and inflationary expectations. They have sought to
restore a stable climate in which business can make decisions
and help create employment.
I believe our policies have resulted in strong gains. These
gains have not been easily won. The comp! le: ities of tody
don't admit the simple solutions of the past.
The 80' s in business and industry will be the decade when we
must look outward, not inward; when we must be aggressive in
our market thinking, rather than tentative; when we must take
advantage of our geographical position rather than lament our
geographical isolation.
I am confident that in the 80' s our Government can provide the
climate and the freedom in which business and investment will
prosper. The buzz of debate about the future of our industries has become
incessant. Where we go in the 80' s is essentially up to us as individual
entrepreneurial Australians.
Today I have tried to present to you a prospectus of development
for the
It is full of challenge; rich in potential rewards.
I am sure that business and industry, as in the past, will play
a vital role in securing progress and achievement in the
We are entitled, with some optimism, to look forJDL. rd to te
lasting benefits this will provide to all Australians.
Thank you for the invitation to be with you.
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