PRIME MINISTER
JUITnSSBY THE PRIME MINISTER, MALCOLM' FRASER
TrO THF, PERTH CHIAMBER OF COMbiERCE
MAONDAY, 7 DECLM13ER, 1981
It is a pleasure to once ag~ ain visit Weatern Australia, and a
particular pleasuire to have this opportunity to address nmenbeys
and quests oft tlie Perth Chamber of Comerce.
The Chamber was founded over ninety yearg ago so it has e~ xiated
for longer than the Commonwealthi itself, and this is a force ft).
reminder of what a young nation Axiotalia is, and of our enormoms
progress in achievement as 14 nation for % qe a. 3. know that
Australia is one of the best countries in the world.
It is through) the activities of organisationq suob as this
Cham~ ber that the values that have made Australia what it is havio:
bceen promoted and preserved = valuies that place their emrphasis on
individcual initiative, private eriterpyise anid economic freedomn,
The fact that promotion of these values corresponds to the
commercial interests of the Chamber's merabers in no sense detracts
from their support. for them, for as Adam Smith pointecl out over
two hundred years ago, the competitive pursutit of private
initerests inoreases thle well-being of society as a whble.
Western Australians have a history of strenuous support for*-
econoimic development and growith, arId the economic policie, Jpureuikt
by the Commonwveilth Governmenit over the l~ ast six yearrs havle been
designred tQ create the conditiona in wbich sustainable growth
is possible.
Toni. ght I want to examine the whole question of grovith in oar
economy: Its importance to us as a nation; the conditions unlder
which growth can be secured; the achievements wve have made in
restoring growth in the last few years; the difficulties we face~
In rnaintansir n that achieveplent; arid the strategy we need to
keop going abead,
Growth is an objective we all swpport, that we must all iuontlnua
to strive for, not simply for its owtn sake but for the sake of the
risiiiq re-a3 inc-omes and improvewntf iii 3iving standards it ca;-
bring for ourselves and for our cbildren, and for the salke of the
Capacity it creates for help to be given to less fortunate and
qeuinel1t-y njeedy people. Sustained growth will niot occur just
becakise we wanL t Yt takes the rich pIice frmqvrxeiS.
policies that create the opportunity, and the * incenti ve Ifor
private eiiterprise to play the, leading xole in the economy.-13ut
it also takes a corruritrnent from people to work for the rewards that
are available, and an understandinqi that all PAustraliants, not Just
the powerful. or the militnnt, are entitled to jshar). e in those rewards.
2.
It% the last two years in particular, growth hae been tistore4
to the Australian economy. Indeed, in comparison with the rest
of the world, the Australian economy has performed remarkably
well. While the major OECD) economies are expected to have total
growth of about 2% over the two calendar years6 1980 and 1981,
the Australian economy i% expected to grow by about
Moreover, while the Eur~ opean Economic Community has seen
unemployment rise from an average of in 1980 to Over
in August 1981, Australia's usiemployment rate for the: Iast
12 mtonthsi has been lower oil a month-on-month banis than in the
pxevious-four years, anid over 300t000 new jobs have been~ created
in the last two years; and although inflationary pressures have
been declining overseas, Australia's inflation rate remains beloyw
the OBC[) average,
The main-foundation" for our recent* outstaidiuig-performance--ies
in the renewed confidence of businessmen to inivest in all seotors
of the economy. For while real.* private * investment in most otherc
industrial countries is flat or declining, real private businesia
i'nvestmnt in Australia rose by over 21%. in 1980/ 81 the Btronqest
growth in threa decades it should rise by a further 10-1516
in real terms this year. Ahd ainae much of that investment will
only begin to bear fruit in future years we are not only growin; y
faster than other industrial. c-ountries today, we are also laying
the basis that shoii. d enable us to coittinuw to do so.
if Australia has doi-e compartively wlWestern Australia has done
even better. Ovar the last two years, employment has Increased in
this State by an average of 3% per aimnum, leadingj to a significant
fall in the unemployment rate from 7.3% to 5.6t, The aubstantiiil
level' of p lannied investment in the future should see this reduced
further/ for of the $ 35.5 billion of investment identified by
the Department of Industry and Corrtlerce survey as being Jn the
connitted or final feasibility stages, iqesterfl Australia accoxinted
for $ 11.5 billion over 32% of the total. I: t i( 4 little wonder
that -there has ' been a' siqnif icant'net migrationf f rom-the-astern
States to Western Australia in recent years.
', 4hije the grovith that wee are now experiencing in~ Abstralia is shcAred
throughout-all* sectors -of the economy, the -development of our
abundanit resources especially our oil and non-oil energy
resourcog is the m~ ajor driving forca. Despite the possibility
of Tnore stable energy pricer, in tbe next. few, years, the sharp
iiicrease in world~ energy prices5 oveT the~ t 1.970' s haE; stimrulated
an irrevertible drive towards substitutioni of alternative energ
sources, and Australia is a major beneficiary of that trend,
Indeed, Australia now has a role asa one of the few Significant
energy suppliers to an' energy hkingry World, a role which will b-e of
great value to the world economy, and to ourselves. Moreoever,
bacause of the availability of abutidant and relatively cheap energy
In Australia, we have a comparative advantage In the esta) lismimt
or expansion of en ergy-in tens ive industries. iHany of the projeot6
already under way have a Moentu Of their own that will see
invest[ mtent in them continue over the neXt fewyears, but contiinued
world xeceasion is ma1~ ing busifles. 5mn nervovs about the future
ancd limititig tile cash. flow from * current exports that provide a
m~ ajor1 part of tbe ftinrd for new investume1t. / 3
9-3
Conditions in the world economy* pose a threat to Australia's
economy especially to future investment prospects, The longer
wor~ d recovery is delaye4, the more marginal planned projects
become anid there are signs that rcecovery is going to be delayedl
somne time yet. The U. S. econlomy which in effect represents one
third of the industrial world now appears likely to have littUle
or no grow'th for several quarters to come, The major European
economies are likewise showing only marginal growrth at best.
While the British economy appears to be finally showing aome
recovery, Germany is still in recession aind unemployment is
continingxw to rise sharply in most European~ countries,
The 2result of the continued recession overseas will be continu d
depression in commodity prices and a halt to the already igesrablo
growth in world trade. Indeed, the GATT has suggested that the
volume of trade will actually decline in 1981 from the laval of
1980 ana Astralia's current account deficit is already show~. ing
signis of these influences having an effect. While there are signs
that gjovernments in North America and Europe with the notabl. e
exception of France are at last restraining money supply grovith
and seeking to reduce Budget deficits in a more realistic endeavour
to Jconxtrol-inf lation'And' r~.' stoire private sector confidence, Austra3iats
experience clearly illustrates that it takzes time for even the
right policies to produce results.
While Australia cannot totally insulate itself from unfavourablie
wor. 10-w3. de -influences/ we can meet the challenges that they pose,
arid )' eep going ahead. in order to do so, it is important that 6we
have the right policies in place to retain businessm~ en's confidence
in outr long-term strength but it is alrao important that all
Axistralians understana ' that by their actions, and by their
attitude~ s, hang our growith prospects in the years to come. of
central importance to those prospects Is our ability to Improve
our initernational. competitiveness by improving otir productivity
and by restikaining the growth of our labol. ir costs. Australia's
produotivity jrowtti in the 1960' s-ana 1970' s' wafs only half th'e-
OnCD averAge, and as a result our: eal income grOVIth has lagge6
behind thAt of maiiy European counitries.
There are many things we need to do to improve our national
producti~. ity, and strengthen our growith potential. We need to
maiiita-in the stable environment which this Goverrnment has
established in which private investment, emabodying newi technology
can flourish; and we need to contiiixi to encourage investment
from overseas, with the new ski~ lls -managerial and technical that
it brings. We need to eliminate imperfectinis-iin ou r apprientic~ irh3p
anld train) ing systems, which are not piroviding skilled Workers in
the niumbers we require althougjh I ama pleased to learn that a
record number of apprentices were in training at June 1981, we! need
to shift resources. into the prodtiction of things that Australia does
be s t; and we need to increase competition in the Australian econouny
in all fields, and elininate rotriotive practices bY unions at-li
businesses, Moreover, we need niot onl. y to conti-nue to restrain the
size of the Government sector, but also to improve its performance.
In paxrtioular, piiblic enterprises must be run on efficieFnt and
cormeoial lines, subjecL to compelltive. pressures wherever pos; sible.
./ 6
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4.-
The Commonwealth Government has created a policy environmvnt in
which these objectives can be pursued. Wec have w~ ade a nkimber of
decisions which are leading to crda and ph -L-eucinsi
protection levels for a wide rangje of products. W~ e have sougtqt
to imlprove the efficiency of Alistralia'S capita. trar) ets, and
are Presentl. y considerinq the many recomendations of the Campkel.
Cowiittee. We have ta}; en steps to return to the Private sector
a num~ ber of activities which rightly beloncj there, arnO to redtice
the burden of regulatioii on indu ; ti'y. Wai hnave establish1ed an inqlukry
into one of the Con'. onwealth Government's laixfest ail-horities
TCelecom with a view-to in~ creasing its efficiency, an~ d creating
Opportunities for priviate sector competition, and we are soon,. to
establish an inquiry into the wage fi>,. ation systemi.
The Government is awsare that change can be disraptive if it is
too dramatic. We wanit gradual and3 predictab. 1le Change, afterl. fxul).
consultation and consideration, for we must continually seek t.(
iinprove Australia's economic performance. I kniow that somec,
especially in the manufauturing seotor, have folund thew-Relves
uiet]. e by buchig of inquirieS thaf; may have an effect onf
the environment they faae% But we are now coming to the end of
the pro~ jressive series of IAC ) eV-iC! WS Of a; SsiSLTrIC~ E to r.' artickkla)
iindustries~,, and will soon have co7mi. pleted ou-con) siderati. on of the
M4otor Vehicles Peport. By early next year our long-standing
comkmitment, to a qeneral reference on protection levels Will bc*. Met,
and the references on ex,. port incentives and Bu( getary assistance to
inifukstry will, have been deal. t with.
Once those inquiries are comtpleted and conIsidered, industry ca~ n
looh forwar), I believe, to a subgtanitial perioO of stability within
which to forn their investmeiit plans, and furtherL improve their
prdutviythoghl thpir o, 141 effortg. If We can r: aise prodl. ctivity
we %. ill be betterv able to protect oursel. ves f rom the consequences
of depres'sed mnark~ ets overseas and we will1 be able to. afford 1h. er
r: eal living standardIS for al. l Aist~ aiayl famrilies, In the en) d,
however, much, depends on the attitudes, -of iiirvidiua). Augtiralians,
of Xtnions, anld of managemelent.
If everyone believes that the -L Of impro! vinig producti~ vIty, is
someone elsc'-s, or the Cov i'merL' 8, if we~ pcetend that Mustra). ia's
~ qel-ben~ rwill continue to improvte autot-,' atice, 11Y, the-n WC Will be
vwnl) ing on danqeroust gound indleed., U'or the World ve live il . is
highly comptitive, andl couintries overseas will not regard
themsr! vc-us as Owing any pexlfs; vours.-to Australia.,:, We il. sn
or Swim oi ouvr oinn merits, on our owjjjn attitudes,
I attitudes are ir'potant to prLdcivt gothey are -A least
-is irripotant to dvelopments in o-ir labour: markets. The b) ene: fitsq
of improved produC~ kctivity and rot cert ainl) y -increase the. capacity
of thme economy ti.: raise rea. inon. e. s. 1ndeed in 1980-81, hougeholds
ree~ vdan inlcreaste-ill their1 rea]. disposable intcomes, after tax,
of nea-rl., $ 3 billioni, B3ut it neceds to i-icore clearly reco rd-_ e
thlat C01ntinue-c g~ rowqth depLe. ndls on unions not attemupting4 to gl: ab for
themselves al), of tho benre. fits of current grnwtlh. We~ must share the
henef its of qjro', Ah lmte! c> onswpt. ioni and. inrvest-mtent betw:! Fn
pgsandj profits if Ve are to enable avid e-. courVa4e futLher growth
in th* future, and surely no-one wou. l~ d deny that the gnie~
underprivileged and needy also hiave a legitimazte claim to a share
of incrceaqedl national inCOTMes; i to i1T?. CO: Ve theiir lot,
It also needs to he better xinderstood that it is in,' portarnt that
wage restr-aint be exercised int all sectors of the economy.
For while oroployers in the large part of the eooomry that is
naturally Protected froyra ovLerseats cosipetition, irncludinq the
public sector, can relatively ezAsily pass on wageP inareases; int
higher prices, those wage increases8 be-rome pace-set ters thtokighott
the work force arid in flowqing on to export arid import Oooipeting
sectors they destroy our inteirtational competitiveness and
undermine business confiaence and the incentive to invest.
The current rounid of wyage climTs and setteme~ nts is prooeeding at
a brisk pace, The averag3e settler, sint so fair a ppears to b~ C ! 14 the
vicinity of lO1Zcovering significant proportion of w*& ge' iol
salary earners, There are even higger claimsi otitstanding, flow-ons
are e>: pected by othler % workersq, -arid a iiationa). %-, age case has ee
foreshadowed for early next year. At. the same titne, there is
continuing pressure for shorter wor}; ing hours, pressure that
appears to be greater in usriathan in other count-vies.
We are already % yoll.-off xn Australia in terms of paid holidays,
and we cannot afford to ( jut hours worxed fuirther unl. ess our
productivity performance imr~ v. es mar) kedly. we are facing a mnajor
assakilt on Australia's labour costs aiid i~ nternational com~ petl'AivCevsE
anl : assault tqhich, uinless it is cheaked soonj Vill compounl I-te
problem~ s causaed by kiifavourabile ove rseaps ecoytorti conait ions.
Thi~ s is not somrethincj % 41ich Covern: nti-it a) r. on. cart bring, unaer cont~ ol,
although we have done Ohat w,, e can. Wc liave put into plao e
appropriate fiscal. * And monetary policies. W: have established
regalal: and fruitful consultationis with peal; ortlanisat ions, especJiall
thce ACTLI. We have given okieves power to) ta e irrT,% edate aoction
against xxnreasonable industr: ial activity in the public secto,:, and
have used that pow'er on several. occasions to good effect, and wo
have unexer consideration legal chaliges that woi). d likewise st engthel
the hand of private sector eimploye-i S faced with daniaging and
irresponsible strikesl. But it %' ouldb e a nistalhe to thinht that
Governilts call solve all the pl blemq that exist.
There is anl xirgert need for. employer8 to take a lead in persuading
unions that there is a limnit to the econemy's Capaci. ty to pay) and
that ex: cessive wyage ai are & amaging to growfLh prospec4: tS, anld
to eniploynment prospe-cts of those. without -jobs, as we). 3. as to thoqe
who are already emi-ployed. ThPerle i. S arl efqUall~ y uYXget nlek! 4 for
moderate uinionists to use thei~ r powers of persuaS, 3ofl and to pirevent
the minority extremcist eleinents from impotsing their irresponsible
will-On thle majority, And therte-is a need for the Labor Party to
play, a more responsible and positive role in rcnsting
that have the potential. to . raethe future for all. AustralisnS.
Augtr alia has bean described as " thre: luc)' Y coxuitru", and indeed
it is. And this State of Western Aus": tralia is lkuc1; de1i than wot
Bt good fortwie can be wastedf eoid nothincl will. lead to it being
wasted niore cluic) kly than then weong attitud( es, I / G
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Growth and properity is somethinicg % e MAll want a heritage
we oWe to our children. For it parL, the COr-r. onwealth Cove. rnniellt
is aeteimined to maintain the policies that have restored private
sector confidence, and strengthened our prospects for the future,
But ultimately it is in your hands in the hands of individials,
employers and employees that Australia's futuce lies,
All Australians must be prepa-ed to grasp the opportunities we
have, to work to earn the rewards, and to he f. e> ible enough to
reapond to changing mwt.. ket conditions. If the enthusiasm and
the energy X invariably find displayed in Wqeste Au. ajlaji, is an-y
guide to Australia's future, we have a bright fuLuce indeed.
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