4~ j. AusT IA~ tI
PRIME MINISTER
FOR MEDIA SUNDAY 11 JULY 1982
ADDRESS TO THE WESTERN AUSTRALIAN STATE COUNCIL
OF THE LIBERAL PARTY
It is always great pleasure for me to be in Western Australia.
Since I last spoke to the Western Australian State Council,
Sir Charles Court has retired as Premier. Through his vision
and determination, he made an unparalleled contribution to
the development and economic growth of Western Australia.
He was the driving force behind the kind of development which
is now . so clo3ely associated with the name of Western Australia.
Sir Charles is a great Australian, a great Western Australian
and a great Liberal.
I am certain that Ray O'Connor will build on Sir Charles'
achievements, and by leading the Liberal Party to victory
at the next State election will be able to maintain this
State's outstanding record. Mr O'Connor certainly showed
a determination to pursue Western Australia's interests at
the recent-Prmiers' Conference and Loan Council meeting.
0 These meetings were of great importance. The Loan Council
meeting was cone of the most successful for many years.
The Commonwealth's package to the Loan Council gave the States
total freedom, and with it, responsibility for deciding their
own borrowings and interest rates for electricity supply.
This was-not -only-an historic decision, it was a decision which
only a Liberal government could have taken. Labor wants to
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T centralise everything in Canberra and would never even . cotemplate..,
sharing such. reonsiihilities with the. Sates.
The added freedom, as well as the added responsibility and
accountability that the States have accepted, will be
welcomed by the community. The electricity decision was of
particular-importance for Western Australia. The Western
Australian government will now be able to proceed unencumbered
by Loan Council controls with the Dampier to Perth gas pipleline,
a project which will provide enormous economic benefits for
Western Australians. ./ 2
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The tax sharing issue was obviously vastly difficult#
but the Commonwealth proposal means that all States have
received significant real increases in their funds for
this coming year. It also provides a guarantee that the-
States which stood to lose, including Western Australia,
will receive real increases in their tax sharing funds over
the next -three yearo. In 1982/ 83, Western Australia will
get an increase in funds of at least 2% in real terms,
and a further real increase of at least 1% is guaranteed
in each of the following two years.
A further feature of the Loan Cowicil wair? th. cQ~ miitment
by the Commonwealth to grant $ 65 million for welfare
housing to the States. Following our housing package, this
grant: further underlines our commitment to housing, -and I
was delighted that Mr O'Connor gave it the strong support
he did.
r Pre si dentt,, We stern Australia has one of the most dynamic
economic recordsi in Australia. This State has been one of
Australia's economic locomotives. This record has not beenachieved
just by luck. It has been made possible by the creation
of an economic framework which encourages investment and
free enterprise and which recognilses the need for responsible
econo mic managemnent, a record which Liberal governments at
Fede 1a and State levels have made possible.
These policies are pursued on behbilf of the whole community.
We are the only political party in Australia which is not
encumbered by sectional interests. Above all, uni~ ke the
ALP, we are not answerable to a militant trade union leadership.
Responsible economic policies over the last few years have
enabl ' ed Australia to move against the international economic
tide and for some time, have enabled our economy to grow and
real disposable incomes to rise.
But we need to recognise that world economic conditions have
deteriorated ini a way that no-one' anticipated, and that with
this -continued deterioration, Australian economic conditions
have also changed. Industrial production in the Major World
economies has been falling, not rising. World trade actually
fell last year for the first time in over twenty years*
And real Interest rates in America and Europe are at historically
-high ' levels.
We have been told repeatedly that! economic recovery will start
soon. I suppose that if someone says that often enough and
: for long enoughk they are bound to be right eventually.
Personally# I.!; shall believe it when I. see it. in the meantime,
world recession has really started to hit Australia hard. its
impact can be n; een only too clearly by looking at what has
happened to our export prices for major commrodities. ./ 3
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Between 1979/ 80 and 1981/ 82 copper prices have fallen,
in constant prices from $ 1955 to $ 1631 per tonne, iron
andF-te-eIl pri-ces iromi-$ 2ll ' to $ 363 per tonne, aluminium
prices from $ 1410) to $ 1072 per tonne, beef from $ 2267 to
$ 1609 per tonne and wheat from $ 147 to $ 138 per tonne.
Yet--ave rage -e arn -ing s -increased in real dollar terms over
the same period by over $ 17 per week. While export earnings
have been fallingq, we have continued to pay ourselves higher
wages, continued to give ourselves shorter hours. This is
onl-yjmaking-Austicaliam indus-tries less competitive internationally
and encouraging Australian consumers to buy imports instead of
Australian producits. That means less profit for Australian
firms. it means less Incentive to invest and it means
fewe~ r jobs.
Whil1e all of this~ has been happening, inflation rates have
been ' falling amon,, g our major trading partners. Much of -the
Sdecline has resulted from the weakness of their economies,
and it has brought about much more-modarate-wage-demands.
Settlemients of 5 or 6 percent are not uncomon and that stands
in stark contrast with increases in Australia of between
and 20 percent when account is taken of shorter working
hours. All of this has created a situation in Australia of a different
ordei~ from that -prevai ling even -12 months ago.* Squeezed between
psi~ g.~? ag cut -, reduced-demand. and Aepresed epz'ic~ s-: as
resltof overseas conditions, it~ 4-iii t o-nd'i t 11firMS
have reduced their activity levels, started to shed labour
and to re-evaluate investment plans. Today the rise In business
investment, which had reached a 30 year record just a year ago,
bas virtually ceased, and ' while investant. xemains ata high
level it has done so because a substantial number of projects
. previoutly. started-have yet to be brought * to v. onmpletioi,.
substantial new in~ vestment decisions are unlikely while world
economic conditions remain as they are, and investment is
the basis on which Australia's groiwthjihd-, iireAlinofles,,
* ultimately depends.
Clearly, we must do everything we can to minimise the impact
fioMrid rxecessidn-on,. the Australiani-. eoonomy-.-q~ ust do..
everything we ca~ n to make sure that Austaais well placed
to tike advantage of any world upturn when it does come.
We cannot prevent world conditions from affecting us but. there
is-much we can do to help ourselves. Certainly this will'be
-Very muchnth. Gvxnet' mindfc.,
d1 ircumstances which -ire both different and difficult.
it is no longer necessarily a matter of the Government making
way for private sector activity, for activity is falling,
employment prospects are diminishing, and the world recovery
*-that' is. needed to. get the private sector. expanding aLgain. is not 4.. 4
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' It is also vital for Australians to realise more fully how " Iportant.
it: is to work together to overcome the present difficult
economic climate. We need to understand to a much greater
extent that as Australians we have complementary interests.
Thai is particularly true in the field.. of: Industrial
relations, where we must ta}. e every opportunity to establish
a mo~ re co-operative climate. Just a few days ago a task
force which included representatives of the ACTU, the
seagoing maritime unions, and the Australian shipowners
_ signed a proposal based on the Crawford Report into the
Australian shipping industry, designed to improve industrial
relations procedures in the shipping industry ana to allow
Australian ships to compete on similar terms with flag
carriers of Australia's major trading partners.
This report, which will now be considered by the Governm~ ent
in th-e budget ' ccntext, provides an example of what can be
achievecl when urions, management and governments are willing
_. to co-operate, willing to work together. The effects of
disputes at Australian ports, in particular our coal loading
porto, is a lesson to us of whiat can happen if we do not
co-operate with one another.
We a'e not being seen -as a reliable supplier of coal -by the
Japahese and the South Ycoreayis because our ports are so of ten
in a'state of disruption. Now that is partly because not
enough has been inveoted in infrastructure. -But ii is also -because
industrial ralaton.._ are so bad. . The problems of coal deliverieg fronith
East coast ports.. may seem somewhat distant from western Australia.,
Jt the interestn of -the whole of Australia are involved.
In )( 9rea a few wee) s ago, I visted the huge Pohang steel mill,
which is produci3. ngabout-ninemillion tonnes a year of steel
using coal from the Eastern States of Australia and iron ore
from Western Australia. The same company is going to build a
new mill, capable of producing at least as much steel again,
but whetherco-frm the -East-and iron ore from the West will
be used as the s; ource of supply for that new mill depends on
whether we can r-e-establish for Australia . s -potts a name
for reliability.
The Commonwealthi Government is'working with the governments+
of Quteenslana and NSW on the difficulties of the coal ifidustry
including the problems at ports. These problems are now too
serious to start apportioning blame. we must sit down together.
and t. ry to fh'li~ os
' The tripartite conference between the ACTU CAI and the
Government last kVednesday was another example of the co-operative
spirit that is needed. All parties at that conference
recognfised that we need to work together because we have
common interests. There was a wide measure of agreement
about -the economic problems facing Australia. A tripartite
working party will try to reach agreement on a cortWi0f
statdfementbn thea economy to the wage case hearing in August.
Clearly, with r-esolve, the ACTU., CAI and the Government can
work together. This is only a start, but it is a basis
on which to help build a better industrial climate. And we
must remem~ ber that our success as a nation in working together
will be critical to Australia's future and the economic
prospects o f oir children.
Mr President, the importance of this State is not only
based on its contribution to Australia's economic growth
in recent year;. Western Australia is of great strategic
importance. Aiistralia West coast is vital to Western interests
in the Indian Ocean and a Western presence in the Indian
Ocean is vital for the defence of Australia. it is also of
great importance as a trade route for Burope, the United States
and Japan--.
Much of the oil from the Middle East, for example, is shipped
throi~ gh the Indian Ocean to Europe, the. US and Japan.. The
presence of the Soviet Union in that Ocean must-be a warning
to us all that. our freedom and our democratic way of life should
not be taken for granted. if we were not pr~ epared to protect
our vital Interests in the Indian Ocean, then we would be saying
we w-ere -p-t epa red to * defend our way of life and contribute
to our own security.
The sudden eruption of the Falkland Islands dispute reminds us
of two lessons. First that military conflict can break out
with very little warning. Who would have thought just four
months ago that Britain was about to become involved in
a war? Secondly, it reminds us that a country wiftholit adequate
defences demonstrates to the world its lack of commitment
to the protection of its-teprr-Itorial integrity and of its
people. The Falkland islands were unprotected, ' They were invaded.
That is a lesson we should not forget.
The Government has an unswerVing commitrent to a. secure
Australia, a strong defence force and close co-operation
with our allies and friends. Australia's defence spending
has been increased substantially. outlays last year were up
by nearly 20%, well above-general-price -Incresso ewe
and 11 percent. We are in the middle of a $ 6 billion defence
re-equipment programme and in the words of the recantly
retired Chief of the Defence Force-Staff, we now ha. e the-; best
equipped and best trained force'we have ever had in peace time.
The Government is upgrading our defence deploymest. in N~ orthern
and West Australia through an expansion of the RAAF base at
Darwin and possibly at Tinda1 nqair Katherine to support the
tactical fighter force, which will include--the new FA/ 189;
thirough the creation of the highly specialised tWorforce which
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is expanding our surveillance in remote parts of Northern
Australia; through increased surveillance over the Indian
Ocean with the, new Orions, which are the raost advanced maritimesurveillance
aircraft in the world; through progressively
Modernised comnujnicatioris at North West Cape in co-operation
with the Unitea States; through the new patrol boat base at
Darwin; and through the creation of the naval base at
Cockburn Sound.
We are ensuring that our military aircraft and ships are
equipped with the latest, most effective equipment. Whilewe
have our own highly trained, professional defence forces,
defence co-operation with our friends and allies is also
essential and such co-operation has been growing In depth
and importance in recent times.
There* is the deployment of the B52s. We have joint ixercises
with Malaysia, .1ingapore, New Zealand and the United K~ ingdom
under. the Five ]? ower Defence Arrangements. Australian Orion
aircraft are stationed at Butterworth and the Mtalaysians
* co-operate in" the operational deployment of these aircraft,
and we co-operatbe in exercises with the United States.
Exercise Fxeedom Pennant, a joint Austral ian-UnIted State$
exercise is to begin this week. ' This morning I visited
tJ~ e-9S Peleliu wihich is taking part in this
exerqi-se, and J woula l ike to take -th is o'pportunity to Anroupce
that the USS Goldsborough will be visiting ports on Australia'sa
Eastern seaboard later this month.
These defence agreements are at the very heart of Australia's
defence policy and security. Today no free country can afford
to stand alone in the face of totalitarian regimes openly
hostile to our way of life. Even the'United-States -emphasises
-that-it can only guarantee the security of the free world-in
concert with. its traditional allies.
Two and a half weeks ago the ANZUS Council met in Canberra.
ANZUS is Australia's vital defence alliance with the United
States and New Zealand. That meting was overshadowed by a most
disturbing debate over visits to Australian ports by nuclear
armed ships. For years Australia has had a bipartisan policy
ofsipport for AN2rJS. That unity was destroyed by Mr Cain's
and Mr Hayden's announcements opposing the entry into Australian
ports of ships carrying nuclear weapons, statements which
would: have meant that no US, French or British ships cotild enter
our ports.
Mr Cain has continued to declare th at nuclear powered or armed
ships would never be welcome in Victorian ports, So far as I
am aware& Mr Burke hiar. not changed. his position of opposition
tro V7isits'by * nuclear armed ships, and Mr Hayden's reversal
of his position came in statements which were at all times
equivocal o. 17
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Do't it is not only on nuclear ships that the Labor Party
-has-called into cuestioi its real commitment to our allies,
in particular the United States. Two weeks ago Mr Hayden was
reported as repeating his insistenice that Australia must be
able to veto all. US orders " initiating military action" which
would pass through the joint communications facilities at
* North West Cape. That is an astonishing statement an
impossible demand.
The No rth West Capeis-a-relay station which helps ensure
that information can be transmitted to submarines. The United
States must be able to communicate with its submarines without
delay pr hindrance if it is to respond effectively to an
aggressor. Yet Mr Hlayden would weaken that ability, thereby
underiining the United States' military capability in this
Successive Labor Dfengg Mipisters in the Whitlani government
Saccepted the prationo of the North West Cape facilities.
SThey xrecognised there could be no'veto. Why then does Mr Hayden
now call for a Vteto? Why does he want to impose conditions
which he must know the United Stater, would not. accept.. conditions'
which he must know would mean closing down the facility.
I can only conclude that it is a pay of f to the socialist
left 1f his parlty.
* To clcjse the Noxrth-We 7fCajp__ facility would weaken Western
defendes, it would weaken. Australia's defence, it woUld
reduce the effectiveness of America's nuclear deterrent,
and it would undermine our relations with the United States.
When we look at the ALP's. lees than full-blooded support
for the American alliance, and At. the underlying anti-American
sentiment which so often comes out of the ALP, such as M4r Hayden's
statement last year-that-haw thought -there was " vast concern"
In the communit * y about America, we are entitled to ask ourselves
whether the reason why the ALP givea its support to ANZULS is
simply to avoid losing votes.
An Australian government must have a clear sighted view ofits
interests, its friends, its obligations and its
responsibilities. Because we are remote geographically
from major power centres of thie Western-MUliance, remote. from
the Unitbd States and from Europe, there is all the more
reason for us to have alliances which are firm.
It would be an irresponsibl2e, potentially catastrophic folly
to isolate ourselves from those alliances which help to
guarantee our security. Without allies Australia during the
Second World War would have been impossible to defend. This
year * we have celebrated the 40th* annivers.. ar. of the Batle
of the Coral Sea, a battle fought and won by the Ameri can-Navy,
a battle which was critical to Australia's defence. / 8
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That anniversary should remind us all that we cannot do without
-strong defence and close and reliable allies. And it reminds
us that our alliances must be kept in good order. I can
understand and Ic share the concern of people, especially young
people ,-. about thie dangers of war. The peace marchets in Europe
and America have shown how great those concerns are, and
although there is an element of Soviet manipulation and
exploitation behind these marches, I also have no doubt
mnany of those who have taken part In those marrches have
been completely sincere in their actions.
I made both thes~ e points in a recent speech in New York,
although the sec~ ond one was not reported at all. It is easy
to say that experience tells us that the only way to maintain
peace is if potential enemies can see that aggression does
not pay. But whole generations have grown up without any
experience of the circumstances of the last World War, with
little knowledge of the underlying reasons for NATO, ANZUS,
and the whole Western Alliance.
-I-believe -tha we have an obligation to present these
arguments and reasons to those who have not lived through
a global coniflict. Not in terms of weapons and rilitary
arrangements, but in terms of preservation of the liberal
democratic way of life, governed by respect for law.
K_-Antu Ilam conf ident* that wh~ n -the arguments in support of our
[-Y. allia~ ces and of resistence to aggression are presented in
these~ iterms, tbi~ n-young. people will be convinced by them.
I have spoken today about two principal issues which are so
vital'to us all the economy and defence. They are issues
which. underline the differences between the Liberal Party
and the ALP. Labior wants to abandon responsible economic
polioes. Their alternative policies will give no real
assistance in coping with a sustained world downturn# and they
would'certainly mean that we-would not be in a position to
take advantage of any upturn.
0 Whenever Labor has been in power It has abandoned respon sible
econoinic polib, 4es that has happened in New Soutjt Wales where even with..
a 17.2 percent. -increase In Commonwealth grants, Mr Wran has
had to put up State charges and taxes by in excess of $ 350 million.
Labor'left the Trasmanian economy in a total mesa, and David Tonkin
in South Australia has had to battle to restore his State's
economy after t-Vaf-earsof Labor mismanagement.
Labor'has little~ enthusiasm for our international alliances,
i n particular our vital alliance with the United States.
One doesn't have to go back to the Labor governmetbt to be
reminded of how disastrous Labor's policies are. Last week's
ALP conference has, shown us that in six and a half years
of opposition, -the ALP has learnt hothing.
As Liberals we know the road forward will not be an easy one.
Eut we also kcnow that we can confront its challenges with
responibility, determination, courage and success.