7
FOR MD) IA FR~ IDAY, 6 ? OVMER 1981
ADDMd SS TO r'R-E SOUTH-AUS. 1R'ALIA. N CHABER O
IL. is a pl; easure to again-vi-sit -South Austraia and a particular
pleasure to be able to address this gatheringJ of memibers of the
Soxith Akistralian Chatmber of Comperce an~ Industry for it 3. F
to a significant eytent ini your hands, the hands of private
enterprise, that Australia's economic prospects -am. those
of Lhi ' State rest,
I arLm aware that econoic recovery in Syout~ f ustralia has not
boen. as robust as in zcome other, Staptes buot there are now signs
emerging of a privat'e sector revival. In P. itclr tIe.. s
of jobs that occurred between and 1,079 has been ar3rested'
mid ths nim.--be r n-f em p. oy. b ans o ncz. re i-hp sn rn Mc
uiobleins clf Souith Akistralia h; ve cute vv I numberx Of
years, and ceannot be remedied overnlqht, The n~ ost im~ prtanmt
recir~ emiint for Gorrjet na0113e1! 1Tra I 11ih'e1 1( eve2e
ecnoi prfrane nyour12 State 3S elSe:, Whe-re i_ to
pursue p0Joi. Es that will create a sztble economiLc evrw~ t
irn WhIch bu ive5srl can-confidently, inake decisions nocsnry
for econo1ic q3: 0,0-th.
Your State Government, under David Tokh s rei cognised
need, and haE; talken active s'teps to put such policies in place..
in Particular youlr Go ve rmnt has rec ogilsed the n'eed to recftrz. in
its ow dse1, nanc on resotrceq1 to control itl's ovin spending, holdl
Sback the oJf. it L recei. pts, cut bacJ, on bux: ecucracy and to
Create 0 PSOt~ 1t:! 3! " rl ouagn eiWrwanet So. that ivate
Sector development crm occur. In that, . its pl. icieu are four--sqnare_
w1' t h 1t-h ose o f t he Co n teaIlCG, o v e r! n t 11
All of the economic decisicnis of the C1-, rrnmc'nwea). zth cGovernnment over
the rinst six yeairs our budget. stratteg], r.. norleta. ry policy, InDrJust; ry
poLi, 10o1uCr e conoic3 poiC i T a 1I ' a h a bLe en rju .2.6 by
one qererl beliE. Thazt is, tLlhat Ii3u3 Di{ 3X n
pAvCteentcrp'r2s aC tha'-.1sriq o, ; I rs-~ i
the-so0ulce of cr; n iomnfalli Actaiia fr~ l.
a3 well a; 3 the main i~ iet an thCeja; ir-m of o~ c~ nc
frte adjmn witrh~ t whc tu olicI o; 1 carn0 stI. n
.11 ef : h tb hi,: o ~ Tils1' h'oicc spl~ cr pa. 2zo ia-
POJliticianls andc bureaucra1: 0s Cannot 3; now what people really %.' ant_
Governme-nt cannot -Zhela Ei r, ormiation transmitted through
market prices whioh reilec individualil preferences, and the
incentives provideI ) by opportunities fcor profit Pni even %.. here
the inarket mechanksm i3 said to " fail" t%-here is no guarantee
that political or bureaucratic & t ision-ma inc can do any better.
This is not to deny the existence of an important role for
goverrnmerit. It clearly has suoh a role in providing defence, law
and order, and social welfare; in creating the I-asic cle-ments of
the sort of society in which Australians wish to life; and n
establishinq the basic frameawork withlin which coirpetiti-ve free
enterprise can exist and flourish for the benefilt of all.
While it is not possible to defin.-, witIR any precision, what the
appropriate limits to government should be, there must be limitcs,
and they shiould be m~ ore narrowly drawn than matny goverruflents, liere.
and ovte. rseas, have previously recognised.
I believe it to be no exAaggeration to say that it was inlarge
ireasure i faillure of~ goverroments to recognise those lim itst ' to(-ether
with a failure to recognise the inappropriateness of ' Kcyne~ iani
deficit fiinancing in the post-war circu-ristarnes that ) ies at
thbea e o-lie worl1d-wide slowdown that 3till. persistFs todny.
To be sure, the oil 5h-oc} 6 of the 1970' s played a substantial
role in finally bringing on the -recession blit inflation wasq
already enddemic bI-y thc-late 1960'" already U11 errir" Iir( Cg private
sector cofli. Cjeflce. Covert-ment initerven~ tion arayr 2waL. Acri
far beyond its-approprlkate bounds.
In* Austra: ia, these underlying, pro; Aemt were co~ pu'ddby th-Ie
econ~ omic policies pursued between .1972 and 1975. Can -anyolie
lorcjIet -lhe & Ilm" oSt u~ eivle46% increase in qo':, erntmient
spending th at occurreed in a single ytr or tile $ 3.5 billical
deficit In 1.9715/ 76, sci. e 5% oft rDP, and whIch woul. d have IbLen Jhighor
bUb for spenin-Cf Cuts; -we introd_' uo'c. d onT ts_: t. Urig Office? The
governmn, of that time~ failed to un&! rstanid that ) rapid girot. ith
of government spencl5. ng and massive bugtdeiicits prorotc
iiiflation) undermine business. confidence, arid steaA away the
resourcecs nte-dec1 for priva-: te erilterpris growth.
And it ccon,-iunderl th-le daroqe it caujf. cd by creating a sense. of
iritailiivandl uncertainty in policy. There, Were large and
er-ratic cianges in the exclidnge rate t sudde:-n, in, 2-1'/ e and"
ill-c~ sidrod ut in tariffS, a severe credit sne~ n
11 t inuicu ncet. IaIn-tU: y ar III-n pDo). relating -to fol.': _ in vustrrlt.
Although Autralia s ti. I b i: a r s Mecf t;( FsarE; of t-hC3_ e
of cconcoi. c m ccenAustr ali a s1 pr osptS ha chijd
ii-.-ueasurably in the ! ant six~ ye5r&, They have Chi-c bo~ u;
the prese~ it qover has put into(' effect afl ajPproC.& h 2Lo
vernen~ of a c-oeeydfrntkr. I-?
our approach recoc' ei that inl o3-. rdizr to reduce inflation it
necetisary to wind ok Gov. ernme~ nt spending, to eldiminata Bucqet
deficitrQ. to cut b: kon wa ; eful burecaucracy and to
eradicate unnecesqnry . Znd coulnterrroductive requlation.
T11is had to be donie tc i& estere privzite sector confidence and'
give private enterpxise teoom a., nd Zhe incentive 1-6-grori.
The improvcmentB that have occurred in the-kustyalian eGcoloUmy;
the creation oi: soroa 300,1000 private sector jobs irt the last
two ycttarz, the ztl: ong est growth of bi., siness . lnv, 3tmtent in over
three deccades which occurred in 1980/ 81, and the. further stronq_
* real. cro-wth in inve~ qtient and GDP that is expected to conti. nuco
in this financial yea-, have all occurred despite a more pxrolo) Aqed
slowdo* wn, in the world econorny than many had predlicted,
Indeed, Australia's economic performance stands ir, star%
contrast to that-of rost of t1-he worlc~ s major ecaonies. That
we have been able to 8winm again~ st thle interflational tide has
only been poaible bDacavse of a combination of sound3 over). l
econormic. rin--keient policies, Other policlevs which ha.-Ve
sought to maintain a strong, proflttihle manufacturing sector,
and our crgod fortune in having substantial resource CIndodfl. mitE;,
especia' 11y of coal and other en~ ergy noaterials.
AB a nation Aisralia can have a role a& one of the voLry few
Sze-at onergy giver to the world, a role which is not only
of value to the world econorny andl to ouorSelves, but even more
so to the people of energy lhu_;, gr' nations wh! oaeC futuw'e
depends soQ much on) obta ining supplices of enercgy from othe-r
countrieFs, such as tAustraxlia. Becausc the world si-owdoi1ni i's
in art cauised byr th. f-rs. i ilpce, a positive in-, atv
o has bepn retdto invest in the decvop-ient of Mistralia's
o-oil cncrq r e F. r0 lif And c~ u of our i. np-: rt pz-rity
pricing rclicy for oil; the Fearch fQor dompstic oil c; r'e
to reduce our dependency on ove~ rseaSSsUuMp 3e 9rCvf
a atca I I.
The b) erlEfitS Of these deivelorlmnts are not xestr-icte& to the
resource-induistries, they havo f lowed throitch to all s ectors of
ti-e econom. y, and 3re reflected in hiqher, nu, I'c~
strOngly yro. in Ir tai salea,-s andinrz-e ra ic. l
jtn~ d; to be,: r coqrnised, how--ever, that the maintelns. Ce of
01oi!, xec-: ent eoci * r-orro'lnce P; hile it' van b ~ iim
nA-ilUe-n c; d y actions we tn . e on our Oyvm account does dnpand
in some m.-easure o -r w orl1d e c 0rn 0m i CCcC ) 1 itLi on3s h o m
of the ; wuqtralian Ecoiomy to trad e ajic, invez-tmeflt , flows W~ hich
in the longt zun contribu;-,, t0 sin ifrcait-to 927owth andc
pTiiu spur~ stty' al2~, a~ s h~ at-e at which
roar~ ert2, esPccxiJJy in tiA-e cc-C-rrL-our r~ cr~ auc
is i n pr-rt ta . inci plce i anticipation Of a r~ O yftor'.
The jue ti. On Of loI) t isLF hSPPen'illc to veze eon ie. S is of
sub:; tan ] La concern -o d~ ve-lo,. rmji, j Of our attitu" De and~
pol. ioies over th-T'ext few11 Ve--a~ f7 TPhF poefro" Q rnce. oi
the LIS eco,-nomiy Over thcñ Ilex ye~ ar 0z' torezmdrin uncertin,
there has been neqgative 9o. hin the & lsto quarters,;
although th, 2re have b1-een recently some reductions in intL'erest
thev rer-main higb; and r Ctin n h SAr1to
rate have tapered off, Eu~ ropean countries NL'e tig! htened
rrionetary policie and raisea-interesL 2rates, in part-in
re.= ktion Zo the highn US ratea, A s a result rezal inte: es t
rates hxve: risen world-wide to levels not seen for n'. any
years, and ivestment ana acti~ vity levelsi rf, 1ni. & p~~ d
For too 3ong, inadeq,, ite attention vas paid to the pro', teri
and the con equnences of inflation, and asra result world
reco-.: very ha', be deayed3 far longer thani Ltogo hv
The continuing~ s1oo-. n, the dzajav in recovery, has consequ-ances
~ Austcaltha wa muast-aniojoate, and adapt to. A rca Cy,
there are indications~ that in somn e; Can~ e, Pec a
slowingq dorvm in demand frortm o r ; eas. F~ or oxesnple, the rate
of growl-h Qf ; Dr coal e:' p~ rts 7,? Ay In-i tc dinir n5.6h, and A~
ron andLste in'iustry i~ s expariericinig cre: asirig dift lculty.
Teaare nion! theleas, some br~ c-ght spotsF on thi world economic
hoiizcn. Fir-st, thE~ re is incr Sin: 1 evidEnjce thit. govlerrir~ ent~ i
inT N 1r th 74merica and Durope now are girasping theplc nettle
nr~ i rd5oXt Cases, are r UrSuiTg p~~ iswihoff the
yrj zi 0 ; p fxed: ucing~ it!. 5t ion anda rcstocing ' the. c ni~ enc-2 ot
their Private sectors
I I e tI ; e~ te_ C'' Jh: OonflI to strongq ro
Siric. e that * ry has beaen adAvnexotqcL
0 G atZit_ i -Liwk~ t l1l 1enC ~ tj~ nheriover
yevor t uOa y delPiend on whethe-r Jpanese loirestic ri'temnrd
terposition as a na~ or mntar : eL_ ior Au~ tral! ias expot, shoua
offer AiustreZ-lia soecomfortL wle ot. her econor-ies s'trAugle
to eq4c1-a e-om their deressed cniin
" Cir" whi. 14E tHh vrosn )' 20t that cil rices rr~ ay. now, stabiL 1e
rnIiqht mod _ rate th'e rq fo~ r oiir r~ s : 01y theñ
coor~ ato -the bz! Tzaf41 of us ll a-a irn the long run wilntalter
th~ e tre! ndja tcwards conver.! ion to-nor-cil enery or.
H-o we'. e rdsi thneso hc'p"_ fu3. sicins, the zis~ tht 0 rl
oct-m cru~ r o~ rot th--t f c Ic ~ ee f% Yn j chc
for tne Pustralian ec. nomrw oveor t h rCCx.. e as et,
xiec w; sIt a I I t h e r n, tnal-u.
jxaS Sur~ bi il ingi tip on~ the jiiOdus rial rel at ionz, arl ; wacies
front that threatc-. to mnderrrIi-rne out,. tentin) ~~ i. t~ e~ j
( nI t ht Ct 0ou pv. i esz to wa r ds niaufectur-Iri iustriez.
Inducatrial probjem ann -the wacqeq pUt3-h arc-forem_-ost among Ono
thet~ to he con , i of h~ irf: asrel~ ative economnic
z;' Uiccs. it. is -tempi-in to thi; k that r! enewed economic
activity has incrraF-' d thLc econoimy's -capacity tcF pay higher
w2es, and there is acnr'e tzuth in that, muoh of that new
activity its foocussecd on invesLrmnir which will bririg itS full
benefits in the futurc. zxcet8Sive wais settliem4Y~ ts in
antici ation of these benoits are a recipe for ensuring the
exetdbernefitf will not _ nvenjtuate, for unless _ we can
keep our ctsinternationally competi1-tive anrl our inflation
below world: 1 levels, major p-ojects w ill be aeforred or
abandoned, to the cost of the whole economny.
Australian workers and their fariilies have a right to expect
that they will share in the benefits of our reanewed r owtAC,
and indieed they have already done s: o, for last year haureholds
in Australia xeceived an increase in their real dispoaable
after tay of V-. 7 Ibillionl. fL> ut a-major t'fforL Is
. req-ired b: y elmplcyers5 an6 governments to par-suade trade unions,
and all the people of Australia, that while thfe . growth in
output any year sets an upper limit on what the economjty
can afford' to pay, wage and salary eanrers are not the only
group who have claims to a share.
Busine-s ha-s a claiM to A sha-e to finsnce the reinve-st-ment
t11hat in vit". al to prsr ( and roertya to pay out 1t-ho
itie; tO i-jvest; hndi the ' CnQuijneiv, upndexprivilec-' d
-aze ' to 1t-' Prove -110 r lot.
In the case of induistri-2l re~ lations more geeraly, governzrent
can mak: e a contribution, by establi; hling," a frxme ozk* Of
. intitu-tioris and lawa-, but imduiatrial r-alations carmot
ultimately. be detextri-ned! by r cgoc~ v-n, e rtn romnt 3c tions,
forinusr'ial relatioris are essentiolly xelaticirs bet-ween
p~ opjle, a-rid cdepemlI upon how peopl. e doal -with each ot1107r7
slhat is neec~ dl-1 is -4' a anrC ed approach w, i-h cotie. im
against. unre-asonable Oeands, with co-operation to maintain
good e'tos and to onsure tha he reward's of, econoii'. c
progreas are fairly shared.
The Goveriurent tLl has a~ xTtiptedj to malntain such a ' balzmce
at the two levcls at which it is directly i-nvolvead in iJnduzstria).
relations -in our dealings wi. th the union Aezdershi. p and ei: 1ployer
organisations on tho. one hand; where we hJave, edeveloped
regular 0011 L tcation C with Peak oriiairiand in u
d~ aip~~ swith ouro~-; ye onj t1he oLh r, ~ nr ehavr_
nc. 1t ! ie n r ou r I c c,, a1Vp owe, r s t o t e~ f i aotL nk jr IS t
unrasnabe nc'u activity m rcp_* c to) uzse thoz; e
powers to 0003 effecEL
Sislar 1r71 t r m, S Iookinq it lecial po~ in ht
',,' uldi FreY~. zh-n th of-P. V. co
Z) it S C, f ~ i a ~ 7crcn-30 iV 0 n e ' A
esahdn aco-r-~ r~ tve PlY. it thzlt is vit i1
to P. xjskraials future P_ the rr2So w.~ oircl d econonmic
coL1ions -rc: npin so une n I3( O~~ lnuatrr
ind~ r~ e, an in ur ricies torc poltec. on of irldktries
are Clearly. also Of Particular ilmrPOzlauce aAtepeettne
q'ove. xen is n,-ore ac'Ce ' aw thi-an this Government of
thc. irportance to Aurjt alja of a strong, poial auatrn
Sector as-a major source of enzploymrent in our cities~, our
xegiopal centres,. and co'untry to-irs, ana as a major ' source
incomlegqo~. prosperity for our nati. oiisCh
* of this -Govemment have been d ' siqnred prcit, ely to restore
c~ nf-dence and ' Che capacity to vgro'a to all Secoxors of the econorn]
and we havae , ven cons-i~ rable a~ sistaj. c-to industry to aid its
recovery f5rom thAi deoressed conditions of tUhE. mi&-19701s.
* Having createa condjtions under -which-the s tyrent i anid
proftblt. oftefmfataih ector has been b'i3. t up, t
an-anyone. Serio'uIsy bie'eve thlat wta wo~ ld nIow take a,-Lions t
~ dest~ oyth? strailia neds a manuta ctu ring ! 5ect~ r tAhat iu.
Mhpe Gove , Ient-' z polioie towarda protection are of particular
sign if ican ce -in. s xe -dx O-1* 2 objective o, 4 Incoreasingq thcj
int, , rnatil'onal ccompetitive'nass of Au~ tralian industry ic \ Cf~~ l
* GrackuEli~ srm arnd px. eiota 41ity ' have~ bE En 3' em': erht.-' n u;
Stra . egy On T' L~ It: is" tkis GoVel~ n whc ha
r( Ucogni-sed t'hat w-hen ChVan( JE! I'S industry zmcwf the
A-toij~~ clearnit idel C on the . frc1o}-1ihin
hihhe chn~~ are to: take placz az w~ ell ais time a" Id
to adapt. orJ U7w 1 in rCl A e a A-C
indUStrV a3 Well aS to thr-C01-01t1mity whichl th'at approanchn
Ahavjci Is t-naew pxot. ec . Qin p~ i~ la,-for tete>: tilesolohn
ando A~~ xindustry, whicoh cce ito fo h
-' rrining Cf n~ ext year:.-CUaatt r~ l aeisi On ' illvistrates
tbe cPac~ ity a ea'n~ O of thc. Gov; ri t-find a IC. th
towards modeirzte and gra-dual adjust-mnlt for inCdu. 1trie3 in wPJioh
so rtanv thoii nde, of -eotle in At. Aare involved.' It is
allic -a deiinw~ hh received the support of tho irndusitr. y
arid tho urniprns has alreaudy given thce inelist_-ry so!-ne ne w incenti'c-s
to ih'.' est' est1-ructure a'nd rcorq~ i2 T. s and ' has ' Alreaco; led to
at$ eazch in some instzancos, for ne', me-r) keta; overseas.
The de-i-oA. that We ro" c7 face on t. 1% inote'r -ehaclo.-i'nd'ust-ry
dis onthat i eiin awarI is of su~ ata iqnifica., noe to
Se. lth AsrXa-is a paticuia-lv difficuli1 one : 1 ~ nw
aw~ are tha-t a thu-of 3~ ainfJ~
aep~ ner~ t n thz + is-trdu . r for a~ loc-Y; e, 8' iSV~
~ a~ T~ lt. a~ Ci abI~ w_ ! have mnct. 0 yc uoe
pZc)( ucts3 t1-han ' ever, before in. the history of the industy.
Governnw, l be e~: n to C~ A decision lin IIC il t~:
that inD3% AtrV along a ~ t of; at h. 2
0)
-ican bi
to VC)' k to-cn'c-œ h: . E c c2rchael Cnj~ l-Y
the, 0nl~ c. o aS cC'' i vo:: ns UZ
: L P; r k ar 3. -in our ow-: n a! 13 ./ 7
-7-
With a strong manufacturing base, abundant energy resources
as a source of growth and security, the right policies to
create the stability that is essential to business confidence
and to create the incentives necessary for sustained growth,
and the right attitudes among Australia's employers and employeas,
our future is bright indeed.
I can assure you that for its part, the Government is determined
to maintain the strategy that has brought Australia its renewed
prosperity.-the vell-being of all Australians and their families
depends uponrus doing so. -000000000--