1/
PRIME MINISTER
TEXT OF SPEECH BY T1HE PRIME MINISTER, MR HAKE
TO THE FOREIGN POLICY ASSOCIATION,
NEW YORK,
16 JUNE.
AT THE NATIONAL PRESS CLUB IN WASHINGTON YESTERDAY I HAD TH-E
OPPORTUNITY OF OUTLINING MY NEW GOVERNMENT'S GENERAL APPROACH TO
INTERNATIONAL AFFAIRS AND ITS SPE. CIF-IC APPROACH TO OUR ALL-IMPORTANT
RELATIONS WITH THE UNITED STATES, I STRESSED THEN THE IMPORTANCE OF
OUR MANAGEMENT OF OUR NATIONAL ECONOMY rO THE EFFECTIVENESS OF OUR
FOREIGN POLICY, TODAY I WISH TO DEAL WITH OUR GENERAL APPROACH TO
ECONOMIC AFFAIRS B0TH NATIONAL ANDI INTERNATIONAL, AND TO SAY
SOMETHING ABOUT OUR SPECIFIC APPRO) ACH TO THE ROLE OF AMERICAN
BUSINESS IN THE AUSTRALIAN ECONOMY.
-YESTERDAY, IN SPEAKING ABOUT IN) ERNATIONAL RELATIONS
GENERALLY AND THE LUNITED SlATES-AUSI1RALIA RELATIONSHIP IN PARTICULAR,
I STRESSED THE THEMES OF CONTINUITY AND INTERDEPENDENCE THE
ESSENTIAL CONTINUITY OF THE MAJOR DIRECTIONS OF FOREIGN POLICY AND
THE BASIC INTERDEPENDENCE OF THE NAl IONS, THEIR ECONOMIES AND THEIR
SOCIETIES. TODAY, I WISH TO TAKE UP THOSE THEMES AGAIN, IN THE
CONTEXT OF THE ECONOMIC POLICIES 9JF MY GOVERNMENT.
AMERICANS AND AUSTRALIANS SH414E SO MUCH IN THE WAY OF POLITICAL
TRADITIONS, ECONOMIC INSTITUTIONS AND ECONOMIC INTERESTS THAT WE CAN
AT TIMES ASSUME TOO EASILY AN EXACT IDENTITY OF VALUES AND INTERESTS.
THIS CAN LEAD TO THE DISAPPOINTMENT OF EXPECTATIONS IN OUR
RELATIONSHIP WITH EACH OTHER. THuIS IT MAY BE USEFUL FOR ME TO POINT
OUT ONE OR TWO MORE WAYS IN WHICH OUR EFFORTS TO ACHIEVE NATIONAL
ECONOMIC RECOVERY DEPEND ON FEATURI& S OF THE AUSTRALIAN ECONOMY AND
SOCIETY THAT DIFFER FROM YOUR OWN.
THE FUNDAMENTAL CONSTRAINTS ON AUSTRALIAN ECONOMIC
DEVELOPMENT ARE LITTLE AFFECTED BY A CHANGE OF GOVERNMENT, AS A
LIGHTLY POPULATED COUNTRY, WITH LARUiE RESOURCES THAT CAN BE CONVERTED
INTO INCOME AND WEALTH ONLY THROLIBH INVESTMENT AND INTERNATIONAL
TRADE, OUR LIVING STANDARDS DEPEND HEAVILY ON THE MAINTENANCE OF A
LIVERAL INTERNATIONAL TRADE AND PAYMENTS SYSTEM.
OUR NATURAL PATTERN OF TRADE SPF-CIALISATION, WITH
RELATIVELY STRONG EMPHASIS ON EXPOk'lS OF PRIMARY COMMODITIES,
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CAUSES OUR ECONOMI. C FORTUNES 1o BE AFFECTED MORE THAN MOST
INDUSTRIAL COUNTRIES BY THE SITUATION IN THE LARGE ECONOMIES
OF 1HF. NORTHERN HEMISPHERE.
MORE IAN IN MOST OTHER INDUSTRIAL COUNTRIES,
AUSTRALIAN ECONOMIC GROWTH DEPENDS UPON THE INFLOW OF CAPITAL
FROM A& ROAD. THUS IN AUSTRALIA, 1NIERNATIONAL FINANCIAL
DEVELOPMENTS ARE IMPORTANT DETERMINANTS OF LONG TERM ECONOMIC
GROWTH AS WELL AS OF SHORT-TERM ECONOMIC CONDITIONS.
ANY AUSTRALIAN GOVERNMENT MUST COUNT AMONGST ITS MAIN
TASkS THE MANAGEMENT OF DOMISTIC AND INTERNATIONAL
RESPONSES TO AN EVER-CHANGING, WORL 1 ECONOMY. WITHIN THIS
CONTEXT, OUR RELATIONSHIP WITH THI-UNITED STATES IS OF
CENTRAL IMPORTANCE: AS ONE OF OUR IWO LARGEST TRADING
PARTNERS: AS OUR LARGEST SOURCE OF DIRECT INVESTMENT: AS A
PRINCIPAL. DETERMINANT OF CONDITIONS IN WORLD COMMODITY AND
FINANCIAL MARKETS: AND AS THE MAIN SPONSOR OF THE LIBERAL
INTERNATIONAL TRADING AND FINANCIAL SYSTEM THAT HAS FACILITATED
POSTWAR GROWTH IN AUSTRALIA AS IN THE WORLD AS A WHOLE.
OVER THE POSTWAR PERIOD THERE HAS BEEN A REMARKABLE SHIFT IN THE
GEOGRAPHICAL PATTERN OF AUSTRALIA'S RELATIONS WITH THE INTERNATIONAL
ECONOMY, AWAY FROM THE UNITED KINGDOM AND EUROPE TOWARDS THE
ASIA-PACIFIC REGION. THIS HAS HAD SEVERAL CAUSES. FIRST, THERE HAS
BEEN THE RAPID GROWTH IN TRADING OPPORTUNITIES ASSOCIATED WITH THE
' INDUSTRIALISATION AND STRONG ECONOMIC PERFORMANCE IN NORTHEAST ASIA,.
AND MORE RECENTLY IN SOUTHEAST ASIA. SECOND, THE WAY IN WHICH EUROPE
HAS TURNED INWARD, ESPECIALLY ON AGRI1CULTURAL TRADE, HAS PUSHED
OUTSIDERS, INCLUDING AUSTRALIA AND ITS PACIFIC NEIGHBOURS, INTO
CLOSER ECONOMIC LINKS WITH EACH OTHER AND WITH OTHERS OUTSIDE THAT
INWARD-LOOkING BLOC. THIRD, THE WITHERING OF THE OLD IMPERIAL
TRADING SYSTEMS HAS FREED AUSTRALIA TO TRADE MORE INTENSIVELY WITH
ITS NEIGHBOURS IN ASIA. FOURTH, THE GOVERNMENTS AND BUSINESS
COMMUNITES OF OUR REGION HAVE APPLIED CONSIDERABLE EFFORT TO BUILDING
THE RELATIONSHIPS ESSENTIAL TO THE STRONG EXPANSION OF TRADE.
CRUCIAL TO ALL. OF THIS HAS BEEN THE ROLE OF THE UNITED STATES:
INDIRECTLY THROUGH ITS CONTRIBUTIONS TO THE UMBRELLA' OF POLITICAL
STABILITY THAT WAS NECESSARY FOR 1H-EXPANSION OF ECONOMIC ACTIVITY
AND TRADE, AND DIRECTLY AS A MAJOR PARTICIPANT IN THE ECONOMIC LIFE
OF THE REGION.
ADVERSE DEVELOPMENTS IN OUR INIERNATIONAL ECONOMIC ENVIRONMENT
WERE PART OF THE CAUSE OF THE ACUTE ECONOMIC PROBLEMS IN AUSTRALIA
WHICH MY GOVERNMENT WAS ELECTED TO OVERCOME. -WE WILL WORK TO IMPROVE
THAT ENVIRNMENT, ALTHOUGH WE DO NOT DELUDE OURSELVES THAT A COUNTRY
OF AUSTRALIA* S SIZE CAN EXERCISE MUCH INFLUENCE OUTSIDE ITS OWN
IMMEDIATE REGION. BUT WE CAN AND DO AIM TO IMPROVE AUSTRALIA'S
DOMESTIC POLICY RESPONSE TO INTERNATIONAL ECONOMIC CONDITIONS.
WITHOUT IN ANY WAY FIGHTING THE AUSTRALIAN ELECTION CAMPAIGN OVER
AGAIN IN NEW YORK, 1 THINK IT IS FAIR TO S * AY THAT WHILE INTERNATIONAL
CONDITIONS HAVE CONTRIBUTED CONSIDERABLY TO AUSTRALIA'S RECENT
ECONOMIC PROBLEMS, THESE DIFFICUILTIES HAVE BEEN GREATLY EXACERBATED
BY THE NATURE OF THE RESPONSE TO THE-M.
DOMESTIC ECONOMIC MANAGEMENT
WHEN MY GOVERNMENYT TOOK OFFICE IN MARCH, AUSTRALIA WAS
EXPERIENCING INFLATION AT'OVER ELEVEN PER CENT PER ANNUM, OR TWICE
THE RATE IN MOST MAJOR O. E. C. D. COLUNTRIES, AND UNEMPLOYMENT AT OVER
TEN PER CENT. DATA RECENTLY TO HAND INDICATE THAT THE MARCH QUARTER
THIS YEAR WAS THE THIRD SUCCESSIVF OUARTER, AND THE FIFTH IN TWO
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YEARS, IN WHICH ECONOMIC ACTIVITY CONTRACTED.
THE AUSTRALIAN LABOR PARTY DURING THE ELECTION CAMPAIGN OFFERED A
PROGRAM OF NATIONAL RECONCILIATION, RECONSTRUCTION AND RECOVERY. THE
MANDATE CONFERRED ON MY GOVERNMENT E: Y THE PEOPLE OF AUSTRALIA IS
QUITE PRECISE. IT IS TO RESTORE GROWTH, REDUCE INFLATION AND ARREST
THE EXPLOSION IN UNEMPLOYMENT.
WE SAID IN THE CAMPAIGN THAT, UNDER OUR POLICIES, THE ECONOMY
WOULD GENERATE IN THE ORDER OF HALF A MILLION NEW JOBS OVER THREE
YEARS. THIS STOOD IN VIVID CONTRAS1 TO THE LOSS OF OVER ONE HUNDRED
ITHOUSAND JOBS IN THE PREVIOUS YEA(. THE POLICIES THAT I WILL OUTLINE
TODAY ARE DESIGNED TO FULFILL OUR COMMITMENT. WORK THAT HAS BEEN
DONE SINCE WE TOOK OFFICE THREE MONTHS AGO SUGGESTS THAT OUR
OBJLCTIVE IS WITHIN REACH. BUT EV-N SUCH A DRAMATIC REVERSAL IN THE
TREND OF EMPLOYMENT WOULD MAKE TOO LITTLE PROGRESS IN REDUCING
UNEMPLOYMENT. ACCORDINGLY, WE ARE COMMITTED TO ADDRESSING THE
SPECIAL PROBLEMS OF; THE LONG-TERM UNEMPLOYMENT THROUGH A COMMUNITY
UNEMPLOYMENT PROGRAM. WE ARE COMMITTED TO REVIEW THE WHOLE RANGE OF
TRAINING AND RE-TRAINING SCHEMES TO ENSURE THAT THEY ARE RELEVANT TO
' A RAPIDLY CHANGING ENVIRONMENT. WE ALSO AIM TO ENCOURAGE INNOVATION
IN WORK PATTERNS, TO'ACHIEVE AS CLOSE A BALANCE AS POSSIBLE BETWEEN
THE NUMBER OF PEOPLE WANTING JOBS AND THE NUMBER OF JOBS THE ECONOMY
CAN DELIVER. BUT OUR MAIN INSTRUMENT IS IMPROVED MANAGEMENT.
BEYOND SPECIFIC.,. GOALS,. THE ELEMENT OF OUR APPROACH TO
ECONOMIC. POLICYTHAT MOST DISTINGUISHES US FROM THE FORMER
GOVERNMENT IS OURCOMMITMENT TO THE SEARCH FOR COMMUNITY
CONSENSUS ON THE./ GREAT ECONOMIC ISSUES, AND ABOVE ALL TO
MORE CO-OPERATIVE AND LESS COMBATIVE MEANS OF DETERMINING
WAGES LEVELS AND INCOME SHARES.
WE BELIEVED. BEFORE OUR ELECTION, AND OUR BELIEF HAS BEEN
CONFIRMED BY OUR EXPERIENCE SINCE THE ELECTION, THAT SUCH AN APPROACH
IS MORE LIKELY TO'ACHIEVE THE RESTRAINT IN INCOMES CLAIMS ESSENTIAL
FOR SUSTAINED NON-INFLATIONARY GROW1H.
WE BELIEVE THAT A MORE CO-OPERATIVE APPROACH TO ECONOMIC
POLICY-MAKING, INVOLVING CLOSE CONSULTATION WITH THE MAIN ECONOMIC
INTERESTS, ESPECIALLY BUSINESS AND UNIONS, WILL FACILITATE
ADJUSTMENTS NECESSARY TO RESTORE AUSTRALIAN ECONOMIC GROWTH. WE
BELIEVE AS WELL THAT A REDUCTION IN INDUSTRIAL CONFLICT IN AUSTRALIA
WILL IN ITSELF IMPROVE ECONOMIC PERFORMANCE.
IN DRAWING UP OUR PROGRAM, WE HAD IN MIND TWO PRINCIPAL
INSTRUMENTS FOR THE BUILDING OF NAllONAL CONSENSUS ON ECONOMIC POLICY
ISSUES THAT HAD BEEN HIGHLY DIVISIVE IN AUSTRALIA. THE FIRST WAS A
PRICES AND INCOMES POLICY, BUILT AROUND AN ACCORD PRIOR TO THE
ELECTIONS BETWEEN THE AUSTRALIAN LABOR PARTY AND THE AUSTRALIAN
COUNCIL OF TRADE. UNIONS. THIS ACCORD EMBODIES COMMITMENT TO
CONSULTATION BETWEEN A: LABOR GOVERNMENT AND THE AUSTRALIAN COUNCIL OF
' TRADE UNIONS ON MAJOR ECONOMIC POLICY MATTERS AFFECTING ORGANISED
LABOR. THE SECOND INSTRUMENT. FOR.' BUILDING NATIONAL CONSENSUS ON ECONOMIC
POLICY ISSUES . ASfA NATIONAL ECONOMIC SUMMIT CONFERENCE, WHICH WAS
HELD WITHIN A. MONTH OF'.. MY TAKING OFFICE. PARTICIPANTS INCLUDED
ELEVEN MINISTERS. WITH'ECONOMIC RESPONSIBILITIES IN MY GOVERNMSNT, THE
PREMIERS AND SENIOR ECONOMIC MINISTERS OF OUR STATE AND TERRITORIAL
GOVERNMENTS, ALL MEMBERS OF THE EXECUTIVE OF THE AUSTRALIAN COUNCIL
OF. TRADE UNIONS, THIRTY-FIVE LEADERS OF BUSINESS ORGANISATIONS AND
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AuSTRALIAN BUSINESS, AND SIX LEADERS OF PROFESSIONAL AND COMMUNITY
OHGA ISAT IONS
ONE PARTICIPANT WHO WOULD HAVE BEEN KNOWN TO SOME
OF YOU HERE TdDAY, WHO MADE AN IMMENSE CONTRIBUTION TO DISCUSSION AT
THE SUMMIT, AS HE HAD THROUGHOUT HIS CAREER, TO AUSTRALIAN BUSINESS
AND PUBLIC LIFE, WAS SIR KEITH CAMPBELL, CHAIRMAN OF THE COMMITTEE ON
THE AUSTRALIAN FINANCIAL SYSTEM THAT BEARS HIS NAME. TRAGICALLY, SIR
KEITH DIED A FEW DAYS AFTER THE CONFERENCE, TO THE. GREAT LOSS OF ALL
OF 1S. THE NATIONAL ECONOMIC SUMMIT CONFERENCE IS WIDELY
RECOGNISED AS HAVING CREATED A COMMUNITY OF OUTLOOK AMONGST THE MAJOR
ECONOMIC INTERESTS THAT HAS NO PRECEDENT. IN OUR PEACETIME HISTORY.
THE SUMMIT. WAS MEANT TO.-AND DID MARK THE BEGINNING OF CONSENSUS
IN ECONOMIC POLICY-MAKING, NOT THE END. SINCE THEN. CONSULTATIONS
WITH UNIONS AND BUSINESS HAVE LED TO AGREEMENT ON THE FORM THAT A
PRICES SURVEILLANCE AUTHORITY SHOULD TAKE, NAMELY THE EXCLUSION OF
AREAS OF THE ECONOMY WHERE THERE IS ADEQUATE COMPETITION, AND THE
AVOIDANCE 7OF' COSTLY BUREAUCRATIC PROCEDURES. AGREEMENT HAS ALSO BEEN
REACHED ' O. ijHE FORM AND ROLE OF AN ECONOMIC PLANNING. ADVISORY
COUNCIL,, WI-ICH WILL CONTINUE THE WORK OF THE SUMMI1> AS A MEANS
THROUGH WHECH-THE GOVERNMENT CAN INFORM AND SEEK ADVICE FROM LEADING
FIGURES FROM BUSINESS, TRADE UNIONS AND COMMUNITY GROUPS.
I MUST EMPHASISE THAT OUR COMMITMENT TO CONSUL. TATION . WITH THE
UNIONS. AND ' BUSI'NESS , AND OUR iSEARCH FOR. CONSE. NSUS,-DOES : NOT INVOLVE
ANY ABROGATION' 0F10UR ' RESPONSBILTY AS A GOVER. NMENT... ULTIMATELY,
THE GOVERNMENT ' ALONE RESPONSIBLE $ OR NATIONAl', ECONOMIC POLICY.
BUT WE'BELI EVE AND THE. EXPERIENCE OF' THE SUMMIT AND BEYOND HAS
BORNE" OUT OUR -BELIEF, THAT CLOSE CONSULTATION CAN ENRICH POLICY AND'
STRENGTHEN THE ABILITY OF THE GOVERNMENT TO CARRY OUT ITS INESCAPABLE
RESPONSIBILITIES. t.' REASURER,.' PUL. KEATING, PRESENTED TO THE SUt1SIT
A DETeA iLED -STATEMENT' OF THE NEW GOVERNrENT ' S APPROAIñ TO ECONOMIC
POL: IY. HE PROVIDED TO SUMMIT PARTICIPANTS, AND TO THE AUSTRALIAN
COMMUNITY, MORE DETAILED INFORMATION ON AUSTRALIAN ECONOMIC
PERFORMANCE, POLICY AND PROSPECTS THAN HAD EVER BEFORE BEEN MADE
AVAILABLE BY AUSTRALIAN GOVERNMEN1S. THIS SHARING OF ECONOMIC
INFORMATION WILL CONTINUE TO BE A FEATURE OF ECONOMIC POLICY-MAKING
UNDER THIS GOVERNMENT. A SHARED PERSPECTIVE ON ECONOMIC FACTS IS
OBVIOUSLY A NECESSARY PRE-CONDITION TO SHARED PERSPECT. IVES ON POLICY.
IN TURN, SUCH SHARED PERSPECTIVES ARE NECESSARY TO PROVE THE
POLITICAL BASE FOR CONTINUITY OF POLICY. 7
MY GOVERNMENT HAS STRESSED THE DEEP-SEATED NATURE . OF
THE POOR AUSTRALIAN ECONOMI'C;. PERFOMACE IN : RECENT YEARS: THERE
ARE NO-QUICK OR EASY SOLUT jONS. WE HAVE:. STRESSED THE NEED TO FIGHT
INFLATION AND UNEMPLOYMENT SI. MULTANEOUSLY. FOR THAT, CORRECTPOLICIES,
STEADILY APPLIED . OVER' A LONG PERIOD, ARE NEEDED. AND I
BELIEVE. THAT THIS IS NO W-BETTER UNIDERSTOOD : BY THE AUSTRALIAN PEOPLE
THAN EVER BEFORE.
DURINGTHE ELECTI ON CAMPAIGN : WE ARGUEDTHAT WAGE
RES TqAT WITHiIN'AHE'PRICES:.. AND: INCOMES ACCORD. WOULD SUPPORT THE
' U T. 0 NAT IONA4ECN ' C REOVERY THROUGH MCDERATELY*
EXPANS1: ONARY FISC . POL'. CY. WE REM'AIN COMMITTED TO THAT. GENERAL
APPROACH.-' HOWEVER INFORMATION PROVIDED TO US BY OUR OFFICIAL
ADVISERS': SOON A4 TER . YWE TOOK OFFICE SUGGESTED THAT THE POLICIES
HAST ILy'INTRODUCED BY THE PREVIOUS GOVERNMENT IN THE LEAD-UP
TO THE ELECTION: WOULD ALREADY YIELD A BUDGET DEFICIT FOR
98~ q3-84 SIGNIFICANTLY IN EXCESS QI' WH4AT WE HAD IN MIND AS
mODER -ILLY EXPANSIONARY'
THE CONTINUAl ION OF INHERITED POLICIES AND PROGRAMS
WITHOUT AM NDNENT WOULD HAVE LED TO A 1983-84 DEFICIT OF ABOUT
DOLLARS 9.6 BILLION OR ABOUT 6 PERCENT OF G. D. P. BROAD ESTIMATES
SUbI3EST THAT ABOUT HALF. OF THIS MAY BE CY CLICAL IN NATURE.
B'UT ABOUT HALF, REPRESENTING AROUND THREE PERCENT OF GROSS
DOMESTIC PRODUCT, SEEMS TO D'E STRUCTURAL, AND COULD BE EXPECTED
TO CONTINUE EVEN IF STRONG RECOVERY OCCURS.
THE REMOVAL OF THE STRUCTURAL COMPONENT OF THE
DEFICIT, WHICH WILL BE NECESSARY FOR-THE MAINTENANCE: OF . ECONOMIC
STABILITY IN T-HE LATER STAGES OF ECONOMIC RECOVERY-. 7WILL REQUIRE'
CHANGES IN FISCAL SOE0KX. EEDOIIYT NLST-IMULUS*'
PROV5DED BY THE STAUCTURAL, DEFICIT tIPRORTEFowl', 8384
WH~ 7PI VAT E INVEST1E. NT I S EXPECTEDIS, -,,, REMANLWJIH
RE.. CES SION CONDITION -Q'BUT',' THE SUSY E AUCC-OF-RECOVER'i I LL
REQU RE-fACTIVE MEASURES TO HAULINj TCURL. ECT' I
1 94~; AN 1I985-86 V E N'EI ! 93~ W2IT L; L BEJ; u SR
T0B'ediWTHAT TASK' E 4? WRE EA TO AVOID-' PRESSURES. Ih -, i, 4N C
MARkE* TS'-' S RECOVERY , pROCEEDS THROUG$ 5hEj YEAR.
TH ONET MOVED QUICKLY AGAlINST,:. THE STRUCTUA. L. B U DG E TDEFICIT."
WE -WER* E COMMIT'TED DURING.: THE-* ELEtCTION CAP1NTO. STIMULATE1
THE HOUSING -INDUSTRY AND YOINROUEMPEWLOY_ ET..-
PROGRAM. TtJMNTHS. AFTER'. 71AKI. NGB' OPCEWE.. , ANN OI1N PCZOMEASURES
-WRCI 4; S ~ ULTANEOU -tN'-TED'. THES~ eEUEkf~, O-zRtf -' hE
PRd6R'AM, AND-t ORE ' THANOESE11TR'x*. f iN., I8 4 fH., ROIGH',.
-1-R 4G E,, 7 OF 4' E EN a rl,: 5 '! NERTD
. rq
ADJUSTME 0SN GLONGSTANDI NG ' EPTSADCCESO. OR*--EXAMPLE-;-
WE FOUND'. L~' EESSARY TO A 0P tCY( A 4N* CO kE-TE ST T40 CER-tAIN-' AGEPENS
I REMOYE, PROSPECTjIYEL-Y4Q SO. ME7 OF, THEY-1AT:
CONCESSIZONS: i't& SOCIATED* WIHL1_ SI~ PRANNUATION'. 7T.-v
NET--EF, S, TVUE~ S: O~ EUEi
t ItS SQ. ETYE~ kS.. THIS R4tRESENT8':* A., RE uTj ON I1 THE
STfUtTURA IfD9FI1C. 1T* I'N -T HE OUTERYASOFABU1 PE R' r~ F b . GR OS S
DOMES T 1C-' PP RODUCT...
T HE. OVERALL* AMO OUR B U DGE T & TRATEGY.
IOS ~ M1NTINSUBSTANTIAL FISCALtETIMULUS: 1NTE IDIAT E.
FUTURE, t. BUT To: ENSURE THAT T HE6, STRU C TU R AL'!] D & iC IT I S. ED
BACK INTHE-COURSE OF RECOVERY-F-AS THE DEMAN6 õ OF ' PR IVAE"
INVESTMENT ON FINANCIAL MARK ETS*.-4N CREASE
OUR BUDGET : STRAT. EGY IS, O COLRSE, CLOS Et L IN KE D,. IT-; A . tl,, A P P R0A C H
TO'fONE TARY: QPOLI. i-: WHILE WE--E~ jkT' THE:. BEI -" THT CO tRO ' F ',' TH* 4E
lIN~ 1 "'~ AGREGATES-ALONE ' CAN .' DEL I VER NONIFA I'ONARY'%* kOT;'
B EL IEV5-. . TNAt'.. T-E! RE IS A ROLE_ g1 GON-VLE TTAG-T> O~
MIOOFNJ OEHTFA' 4R'Y* kN, GERMWOW'r' ' TSHU PP~ Y CC-IT MISOO7T-uE lNTTH. ErNICT1EOSN T O3 IN'P4RINOLVQID UEP: TJIU-AS" TE ' yF~ CETO-: ftI--
CONS fDR-' ESRAL AN FEAIE,~ -SEAR I NGI MN. I PR CLJT1
WAGEG t Aq-GENERAT. ED W-I-. THIP4. IH-.; CNTA~' E'' GE-* , YT
TR( S~ 1S AYOJ -D ESI GNED. 1T-! O ' CiB NLAT QAY1lPUssW
P4TTINGB4-' k' :,, O. GR'OWTH -i441TrHIt-tal I S.' CNTE EZC~. OJC
WAGS ~ T-iG-STEM"*.; 1 -NCURRENT-. TPRSE! T
DEL~~ AA y, O-SRC IRCU TANCESXT-O-..
LtS": NFATlbt4* A OUTLOOK WIL EREIlNFORPEDtbY* MON 41 Yr -p OLI-cy.",-
THE ' SUMMI-T,.* SOMMUNIGUE RECOMMENDED-THE' . RE-TURN TO,--CENT* RAL1! ZEA..
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WAGE-SETTING SYSTEM. STEPS HAVE BFEN TAKEN ALONG THESE LINES.
WITHIN THE CENTRALISED SYSTEM WE ARE EXPECTING NOMINAL WAGE INCREASES
IN THE ORDER OF 3 TO 4 PER CENT.. IN THE CURRENT CALENDAR YEAR,
COMPARED WITH THREE OR FOUR TIMES THAT LEVEL IN EACH OF THE PRECEDING
YEARS. I WOULD EXPECT AMERICANS . TO, BE-, SCEPTICAL ABOUT CENTRALISED,
WAGE-SETTING, AND IN PARTICULAR ABOUT,: WHETHER IT WOULD BE CAPABLE OF
-DELIVERING A GREATER DEGREE OF WAG. E RESTRAINT THAN COLLECTIVE
BARGAINING ALONG AMERICAN LINES. : THIS IS ONE AREA WHERE AUSTRALIAN
TRADITIONS AND-INSTITUTIONS ARE . HARKEDLY DIFFERENT FROM THE.. AMERICAN.
IN AUSTRALIA,' STRONG TRADI. TIONS.," OF RIGID WAGE RELATIVITIES READILY
TRANSFER WAGE GAINS BY STRONG> UNIONS THROUGHOUT THE ECONOMY, EVEN IN
THE FACE OF SUBSTANTIAL GENERAL ' UNEMPLOYMENT. THIS HAPPENED IN .1981
WHEN WAGE GAINS BY SOME SECTIONS OF-THE WORKFORCE THAT WERE FAVOURED
BY AN INVESTMENT BOOM IN THE-RESOURCE SECTOR LED TO A GENERAL WAGE
EXPLOSION THAT WAS AN IMPORTANT CAUSE OF OUR CURRENT DIFFICULTIES.
THE TRADE UNION MOVEMENT HAS ACCEPTED.. THAT THE RETURN TO A
CENTRALISED SYSTEM MUST BE. ACCOMPANIED. BY THE REPUDIATION OF
SECTIONAL CLAIMS. IF THERE IS COMPLIANCE WITH THIS UNDERSTANDING,
THEN THERE ARE GOOD PROSPECTS THAT ECONOMIC RECOVERY OVER THE NEXT
FEW YEARS WILL BE ACCOMPANIED BY SUBSTANTIALLY LOWER RATES OF WAGES
GROWTH THAN HAVE BEEN EXPERIENCED IN AUSTRALIA OVER THE PAST DECADE.
SUSTAINED ECONOMIC GROWTH WILL REQUIRE COMMUNITY
ACCEPTANCE OF TECHNICAL AND STRUCTURAL CHANGE IN THE ECONOMY
TO FACILITATE INCREASES IN. PRODUCTIVITY AND INVESTMENT. ONE
OF THE AIMS OF CONSULTATION AND CONSENSUS'WILL BE TO BUILD.
COMMUNITY UNDERSTANDING AND . SUPPORT FOR ' SUCH CHANGE. ALREADY
THERE ARE SIGNS THAT AUSTRALIAN WORKERS AND THEIR TRADE UNIONS
ARE PREPARED TO ACCEPT CHANGES IN MANNING PRACTICES WHERE THIS
IS RECOGNISED AS BEING IMPORTANT TO. PRODUCTIVITY INCREASES
AND THEREFORE O. LONG-TERM EMPLOYMENTSECURITY. ALREADY WE
ARE-SEEKING SUBSTANTIAL IMPROVEMEN: SN.:. INDUSTRIAL RELATIONS
ON THE WATERFRONT: AND IN THE.: BU. DILiNG INDUSTRIES, WHERE IN
THE PAST, EXCESSI. VE . DISPUTATION HASIMPOSED HEAVY COSTS ON
AUSTRALIAN DEVELOPMENT. AUSTRALIA'S EXIERNAL POLICIES
THE EXPLOSION OF AUSTRALIAN COSTS I-N 1981 AND 1982 WHEN THE
UNITED STATES AND MUCH OF THE REST OF THE WORLD WAS ENTERING A
REMARKABLE PERIOD OF DISINFLATION, LEFT THE AUSTRALIAN DOLLAR HIGHLY
VULNERABLE. SINCE LATE 1976, THE IAILY.. VALUE OF THE AUSTRALIAN
DOLLAR HAS BEEN SET BY REFERENCE TO A TRADE-WEIGHTED BASKET. OF
CURRENCIES, WITH THE RATE BEING. VARIED FREQUENTLY BY SMALL AMOUNTS
AGAINST THIS BASKET IN RESPONSE. TO MARKET CONDITIONS. I SUPPOSE THE
SYSTEM CAN BE DESCRIBED AS A-HEAVILY MANAGED FLOAT. IN RESPONSE TO
DOMESTIC INFLATIONARY PRESSURES,'. OUR AUTHORITIES WERE FORCED TO
ENGINEER A SUBSTANTIAL DEPRECIATION OF THE DOLLAR AGAINST THE BASKET
FROM AUGUST 1981 ONWARDS. A FURTHER ONCE-FOR-ALL DEVALUATION WITHIN
DAYS OF THE MARCH 5 ELECTION RESTORED AUSTRALIA'S RELATIVE COST
POSITION. THE PRESENT EXCHANGE RATE SYSTEM WILL CONTINUE.
IN AUSTRALIA AS IN ALL COUNTRIES, DEEP RECESSION BRINGS PRESSURES
FOR INCREASED PROTECTION. THE PROTECTION ISSUE CUTS ACROSS PARTY
LINES IN AUSTRALIAN POLITICS. MY GOVERNMENT BELIEVES THAT
AUSTRALIA'S INTERSTS WILL BE SERVED BEST BY CRHDUAL MOVEMENT TOWARDS
LOWER PROTECTION. BUT WE DO NOT BELIEVE THAT THE INTERESTS OF
PERMANENT MOVEMENT TOWARDS A MORE LIBERAL TRADING STANCE WOULD BE
SERVED WELL BY RADICAL REDUCTIONS IN PROTECTION AT PRESENT, WHILE
UNEMPLOYMENT REMAINS EXTREMELY HIGH. WE WILL NEVERTHELESS RETAIN
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pROGRAMS FOR GRADUAL LIVERALISATION OF IMPORTS IN THE TWO MOST HI; HL Y
pROTFCTED AREAS OF AUSTRALIAN MANUFACTURING INDUSTRY, TEXTILES
CLOTHING AND FOOTWEAR, AND MOTOR VEHICLES, IN THE INTERESTS OF
PRESERVING CONTINUITY IN THE ECONIMIC POLICY ENVIRONMENT. SPECIAL
DIFFICULTIES'MAY LEAD US TO PROVIDE SOME INCREASE IN ASSISTANCE FOR A
STRICLLY LIMITED PERIOD IN ONE OR TWO OTHER AREAS. BUT THERE SHOULD
BE NO DOUBT' ABOUT MY GOVERNMENT'S COMMITMENT TO TRADE LIBERALISATION
AS THE ECONOMY STRENGTHENS IN THE YEARS AHEAD.
I KNOW THAT THIS GREAT FINANCIAL CENIRE, NEW YORK, HAS A SPECIAL
INTEREST IN OUR APPROACH TO REGULATION OF THE FINANCIAL SECTOR. THIS
WAS THE SUBJECT OF THE MAJOR INQUIRY CHAIRED BY THE LATE SIR KEITH
CAMP1F. LL. MY GOVERNMENT HAS RECENTLY ANNOUNCED A REVIEW OF THE
CAMPBELL REPORT RECOMMENDATIONS IN THE LIGHT OF OUR OWN OBJECTIVES
4ND PRIORITIES. ANY DFTAILED STATEMENT OF OUR POSITION MUST AWAIT
IHE RESULTS OF THAT REVIEW, WHICH WILL NOT BE AVAILABLE FOR SEVERAL
M'ONIHS. HOWEVER, YOU SHOULD KNOW THAT WE SEE NO VIRTUE IN REGULATION
FOR ITS OWN SAKE.
MORE GENERALLY ON FOREIGN INVESTMENT POLICY, GUIDELINES FOR
FOREIGN INVESTMENT IN AUSTRALIA HAVE BEEN DEVELOPING UNDER SUCCESSIVE
GOVERNMENTS SINCE THE 1960S.
THERE HAD BEEN VARIOUS POLICIES ADDRESSED TO ASPECTS
OF FOREIGN INVESTMENT BUT A COMPIEHENSIVE POLICY WAS NOT" FORMULATED
UNIIL THE PREVIOUS LABOR GOVERNMLNI IN 19' 5. WHILE THAT POLICY WAS
ELABORATED BY THE LIBERAL-NATIONAL PARTY COALITION, THE FUNDAMENTAL
FEATURES HAVE REMAINED UNALTERED. THIS HAS REFLECTED THE
CONSIDERABLE DEGREE OF BIPARTISAN POLITICAL SUPPORT AND, MORE
GENERALLY, COMMUNITY SUPPORT FOR THE ROLE OF FOREIGN CAPITAL IN
DEVELOPING AUSTRALIA'S INDUSTRIES AND RESOURCES.
THE FOREIGN INVESTMENT POLICY OF SUCCESSIVE
IAUSTRALIAN GOVERNMENTS HAS BEEN BASED ON THE TWIN PILLARS:
FIRST, A RECOGNITION OF THE SIGNIFICANT CONTRIBUTION THAT FOREIGN
CAPITAL CAN MAKE TO THE DEVELOPMENT OF AUSTRALIA'S INDUSTRIES AND
RESOURCES: AND SECOND, OF THE IMPORTANCE, AT TIHE SAME TIME, OF
PROVIDING ADEQUATE OPPORltJNITIES FOR AUSTRALIANS TO PARTICIPATE IN
THAr DEVELOPMENT. IN ECONMIC TERMS, FOREIGN CAPITAL ENABLES
AUSIRALIA 10 HAVE A HIGHER RATE OF GROWTH IN ECONOMIC ACTIVITY AND
EMPLOYMENT THAN WOULD OTHERWISE BE THE CASE.
WHILE RECOGNIZING THE IMPORTANT ECONOMIC BENEFITS FLOWING FROM
FOREIGN INVESTMENT, GOVERNMENTS HAVE ALSO BEEN AWARE OF THE NEED TO
BALANCE THOSE BENEFITS AGAINST AN EXCESSIVE INCREASE IN FOREIGN
OWNERSHIP AND CONTROL OF AUSTRALIAN RESOURCES AND INDUSTRIES. THIS
HAS NOT BEEN SO MUCH A MATTER OF CONCERN OVER THE POSSIBLE ECONOMIC
COSTS OF FOREIGN OWNERSHIP. RATHER, IT HAS BEEN A RECOGNITION OF
CONTINUING COMMUNITY CONCERN THAT THE DEGREE OF FOREIGN OWNERSHIP AND
CONTROL SHOULD NOT EXCEED CERTAIN BOUNDS.
VARIOUS STATEMENTS BY THE TREASURER AND MYSELF SINCE
ASSUMING OFFICE HAVE AFFIRMED THE RECOGNITION OF THE ECONOMIC
BENEFITS OF FOREIGN INVESTMENT AND ACCEPTANCE OF THE BROAD THRUST OF
THE POLICY THAT HAS BEEN IN OPERATION FOR SEVERAL YEARS.
THE TREASURER HAS ALSO ANNOUNCED THAT AN EARLY
REVIEW IS BEING UNDERTAKEN. THE TREASURER HAS INDICATED
THAT THE MAIN EMPHASIS OF THE REVIEW WILL BE ON POLICY CONTINUITY,
ALTHOUGH THERE MAY BE SOME CHANGES OF EMPHASIS, PARTICULARLY IN
RELATION TO REAL ESTATE, AND FOR LOCAL EGUITY REQUIREMENTS IN
MANUFACTURING. ANY SUCH CHANGES OF EMPHASIS WOULD BE APPLIED
/ 8
FL-EXIB3LY SO AS NOT TO EXCLUDE INVFSTMENT THAT WOULD BRING DENEFITS TO
4USTRAL1I4A UNDER THE ESTABLISHED POLICY, FOREIGN INVESTMENT PROPOSALS ARE
CONSIDERED CASE-BY-CASE BY THE TREASURER, IN THE LIGHT OF ADVICE FROMi
A FOREIGN INVESTMENT REVIEW BOARD.
IN ITS FIRST TWO AND A HALF MONTHS IN OFFICE, THE GOVERNMENT
CONSIWDERED 228 FOREIGN INVESTMENT PROPOSALS, OF WHICH 208 WERE
APPROVED AND 20 WERE REJECTED. ALTHOUJGH THIS RATE OF REJECTION IS
SOMEWHAT HIGHER THAN THAI UNDER 1HE PREVIOUS GOVERNMENI THE MORE
RECENT FIGURES REFLECT A NUMBER OF FACTORS AND, ESPECIALLY AS THEY
APPLY TO ONLY A LIMITED PERIOD OF TIME, SHOULD NOT BE TAKEN AS
INDICATING ANY NOTABLE CHANGE IN POLICY.
UNDER THE ESTABLISHED POLICIES WHICH WILL BE BROADLY MAINTAINED
BY MY GOVERNMENT, AMERICAN CORPORATE, INSTITUTIONAL AND PRIVATE
FINANCIAL GROUPS INVESTCD APPROXIM1ATELY DOLLARS 6 BILLION IN
AUSTRALIAN ENTERPRISES DURING THE FIVE YEARS TO 1981-82. THE UNITED
! STATES RETAINED ITS POSITION AS THE LARGEST SOURCE OF DIRECT
INVESTMENT CAPITAL, WHICH IT HAS HELD FOR MOST OF THE POSTWAR PERIOD.
A SUBSTANTIAL PART OF AMERICAN INVESTMENT IN RECENT
YEARS HAS BEEN IN MINING AND RELATt D ACTIVITIES. THE
TECH4NICAL AND MARKETING SkILLS, MANAGEMENT AND FINANCIAL
STRENGTH OF AMERICAN CORPORATIONS MADE A CRUCIAL
CONTRIBUTION TO T1HE DEVELOPMENT OF THE MINING AND
PROCESSING INDUSTRIES WHICH PROVIDED THE MAIN IMPETUS
TO AUSTRALIAN ECONOMIC GROWTH THROU6iH MUCH OF THE I
PAST ONE AND A HALF DECADES. THE POLICIES OF MY GOVERNMENT
WILL FACILITATE THE CONTINUED EXPANSION OF THESE INDUSTRIES
AND THE CONTINUED PARTICIPATION OF FOREIGN CAPITAL IN THAT
EXPANSION. THERE MAY BE SOME APPREHENSION AMONGST UNITED STATES
INVESTORS ABOUT THE EFFECTS ON THE MINING INDUSTRY OF TWO
ASPECTS OF THE PROGRAM UPON WHICH MY GOVERNMENT WAS ELECTED:
THE COMMITMENT TO INTRODUCE A RESOURCE RENT TAX ON THAT
PART OF MINING INCOME WHICH IS PROPERLY REGARDED AS
ECONOMIC RENT: AND OUR POLICY ON URANIUM MINING.
WHILE THE MINING INDUSTRY IS UNDERSTANDABLY ANXIOUS
ABOUT ANY PROPOSALS TO CHANGE TAXAl ION ARRANGEMENTS, GIVEN
THE NORMAL HUMAN TENDENCY TO FEAR THE WORST, I AM CONFIDENT
THAT THE INTRODUCTION OF A RESOURCE RENT TAX WOULD INCREASE
RATHER THAN DIMINISH INCENTIVES FOR EXPANSION OF THE
MINING INDUSTRY. AT THIS STAGE OUR PROPOSAL RELATES ONLY t
TO OFF-SHORE PETROLEUM AND COAL. THE PROPOSAL IS TO
REPLACE HIGHLY DISTORTING EXCISES, ROYALTIES AND EXPORT
TAXES BASED ON THE VOLUME OR VALUE OF PRODUCTION EBY A
RESOURCE RENT TAX BASED ON CASH FLOW. NO LIABILITY FOR
RESOURCE RENT TAX WOULD BE INCURRED UNTIL ALL CASH
OUTLAYS HAD BJEEN RECOUPED WITH INIEREST AT RATES THAT
WERL SUFFICIENTLY HIGH TO MAINTAIN INCENTIVES. UNLIKE
THE CHARGES THAT IT WOULD REPLACE, THE RESOURCE RENT TAX
WOULD NOT INHIBIT THE DEVELOPMENT 0OF MARGINAL MINES, OR
THE FULL ECONOMIC RECOVERY OF LOW-GRADE OR LESS ACCESSIBLE
PARTS OF MINERAL DEPOSITS. UNLIKE THE CHARGES WHICH IT
THE EXTENSION OF OUR MARKETS BEYOND OUR OWN REGION,
INTO MORE DISTANT PARTS OF THE WORLD WHI1CH YIELD LOWER I
RETURNS AF7TER MEETING TRANSPORT COSTS. AS WAS UNDERLINED
./ 9
: S y DISCUSSIONS IN PARIS LAST WEEK, REFORMS ALONG IHESE
. LI NL COULD BE EXTREMELY IMPORTANI TO OUR EMERGENCE AS
MAJOR COAL SUPPLIER TO EUROPE.
; uNDER AUSTRALIA'S FEDERAL CONSTITUIION, MY GOVERNMENT
; HAS AUTHORITY WITH RESPECT TO OFF-SHORE PETROLEUM.
jIN THE COAL I. NDUSTRY, HOWEVER, OUR POLICY CAN BE
IMPLEMENTED ONLY THROUGH CO-OPERATION WITH THE STATES.
THE FEDERAL GOVERNMENT WILL NOT INTRODUCE A RESOURCE
RENI TAX ON COAL UNLESS IT IS POSSIBLE TO REACH AGREEMENT.
WIIH THE STATE GOVERNMENTS ON THE kLPLACEMENT OF
DISIORTING CHARGES CURRENTLY APPLIED BY THEM.
IN THE CASE OF URANIUM POLICY, SOME OF YOU MAY FIND
nY COMMENTS OF LESS COMFORT. YOU WILL APPRECIATE THAT THIS
IS AN ISSUE OF INTENSE DEBATE WITHIN THE AUSTRALIAN
COMMUNITY, NOT LEAST IN MY OWN PARlY. OUR POLICY PROVIDES
FOR THE CONTINUATION OF SALES UNDER EXISTING CONTRACTS.
THERE IS A SPECIAL ISSUE IN RELATION TO FRANCE, BECAUSE
OF THE TESTING-OF NUCLEAR WEAPONS IN THE SOUTH PACIFIC.
PENDING A POSSIBLE RESOLUTION OF THESE PROBLEMS, PRESIDENT
MITTERRAND AND I HAVE REACHED AN UNDERSTANDING THAT
THERE WILL BE NO FURTHER SHIPMENTS TO FRANCE UNTIL AT
LEAST OCTOBER, 1984.
INTERNATIONAL ECONOMIC POLICY
I HAVE ALREADY EMPHASISED THE IMPORTANCE TO AUSTRALIAN
ECONOMIC DEVELOPMENT OF INTERNATIONAL ECONOMIC CONDITIONS,
AND OF A LIBERAL INTERNATIONA.'. TRADE AND PAYMENTS SYSTEM.
SINCE LEAVING AUSTRALIA TWO WEEKS AGO, I HAVE
HAD THE OPPORTUNITY OF LEARNING AT FIRST HAND FROM PRIME MINISTER
SOMARE IN PAPUA NEW GUINEA AND PRESIDENT SOEHARTO IN
INDONESIA, ABOUT THE DAMAGE THAT THE WORLD RECESSION HAS
WROUGHT ON DEVELOPING COUNTRIES IN AUSTRALIA'S OWN REGION.
PAPUA NEW GUINEA AND INDONESIA HAVE HAD REASONABLY GOOD
RECORDS OF ECONOMIC STABILITY AND ECONOMIC MANAGEMENT OVER
THE PAST DECADE, AND YET THEY HAVE BEEN FORCED INTO MASSIVE
DOMESTIC ADJUSTMENT PROGRAMS BY THE CONTRACTION IN WORLD
TRADE AND LOW COMMODITY PRICES OF THE PAST FEW YEARS. MANY
DEVELOPING COUNTRIES, ESPECIALLY THOSE WHICH BORROWED
ESTENSIVELY AND WERE ENCOURAGED TO DO SO ON INTERNATIONAL
MARKETS IN THE 1970S, ARE EXPERIENCING EVEN GREATER
DIFFICULTIES. TMEGE COUNTRIES, LIKE AUSTRALIA, MUST LOOK TO STRONG
CXPANSION IN WORLD TRADE IN THE PROCESS OF INTERNATIONAL
ECONOMIC RECOVERY. ANY FAILURE OF TRADING OPPORTUNITIES
WILL HAVE TRAGIC CONSEQUENCES FOR MANY DEVELOPING COUNTRIES.
BUT THE CONSEQUENCES OF FAILURE WILL GO BEYOND THESE
TRAGEDIES FOR INDIVIDUAL COUNTRIES, TO THE FOUNDATIONS
OF INTERNATIONAL FINANCIAL AS WELL AS POLITICAL STABILITY.
ON THIS VISIT I HAVE BEEN GREAILY ENCOURAGED BY THE EVIDENCE OF
STRONG AND BROADLY BASED RECOVERY IN THE UNITED STATES ECONOMY. A
STRONG UNITED STATES ECONOMY IS OBVIOUSLY NECESSARY FOR A STRONG
WORLD ECONOMY.
IT IS OF GREAT IMPORTANCE THAT THE WELCOME STRENGTHENING OF THE
UNITED STATES ECONOMY SHOULD REPRESENT THE BEGINNING OF WORLDWIDE
ECONOMIC RESURGENCE. I HAVE TWO KINDS OF DOUBTS ABOUT WHETHER THIS
EXTENSION OF RECOVERY WILL OCCUR. FIRST, IN PRESENT CIRCUMSTANCES,
J E ADDITIONAL PRESSURES IN FINANCIAL MARKETS ASSOCIATED WITH THE
1 0
' RESURGENCE OF PRIVATE INVES7MENT IN THE COURSE OF ECONOMIC RECOvER,
COULD ABORT RECOVERY AT A REL ATIVLY EARLY STAGE. SECOND, THE
PROLIFERATION OF BARRIERS TO INTERNATIONAL TRADE THROUGH THE. RECENT
RECESSION, IN CONTRAVENTION OF TH SPIRIT OF THE LIBERAL MULTILATERAL
1RADING SYSTEM, COULD PREVENT STRONG EXPANSION IN MAJOR INDUSTRIAL
COUNTRIES FROM BEING REFLECTED FULLY IN EXPANSION OF INTERNATIONAL
TRADE. THE FIRST OF THESE THREATS REI& IES TO THE LARGE STRUCTURAL BUDGET
DEFICITS IN MANY COUNTRIES. IF THESE DEFICITS PRESIST THROUGH A
PERIOD OF INTERNATIONAL. RECOVERY, IT IS INEVITARLE THAT THE NECESSARY
INCREASES IN PRIVATE INVESTMENT WI1 BE REFLECTED IN HIGHER INTEREST
RATES. ALL COUNTRIES HAVE A RESPONSIBILITY IN Ti1S REGARD: IT IS
UNREASONABLE TO EXPECT THE UNITED STATFS ALONE TO CARRY T4E
RESPONSIBILITY FOR MAINTAINING STARIILITY IN THE INTERNATIONAL
FINANCIAL SYSTEM.
ON THE SECOND THREAT TO THE EXIENSION OF THE INTERNATIONAL
RECOVERY, I AM HEARTENED AT LEAST BY THE INCREASING REALISATION, AS
PRESIDENT REAGAN TOLD ME ON MONDAY FOLLOWING HIS OWN PARTICIPATION IN
THE WILLIAMSBURG MEETING, OF HOW MUCH IS AT STAKE FOR WORLD
DEVELOPMENT IN THE SPREAD OF PROTECTIONISM. BUT RECESSION AND
PROTECTION HAVE FED ON EACH OTHER IN RECENT YEARS TO SUCH AN EXTENT,
IN AUSTRALIA AS MUCH AS ELSEWHERE, THAT IT WILL RE NO EASY MATTER TO
RESTORE CONDITIONS UNDER WHICH WORI. D RECOVERY AND TRADE EXPANSION
WILl BE MUTUALLY REINFORCING.
THE INTERNATIONAL COMMUNITY WILL NEED TO LOOK MORE
CLOSELY AT THE PROLIFERATION-THRO16H THE 1970' S OF * EXCEPTIONS'
TO THE GENERAL GOAL OF L'IBERAL TRADE. WE WILL ALSO HAVE
TO BE CAREFUL THAT ATTEMPTS TO UNRAVEL THE PAST DISTORTIONS,
IN A PEACEMEAL FASHION, DO NOT GIVE RISE TO NEW PROBLEMS
ARISING OUT OF PRESSURES WITHIN BILATERAL TRADING RELATIONSHIPS
BETWEEN LARGE COUNTRIES.
AUSTRALIA AND ITS REPIDLY GROWING NEIGHBOURS IN NORTHEAST AND
SOUTHEAST ASIA WONDER ABOUT A LIBERAL TRADING SYSTEM UNDER WHICH THE
PRODUCTS OF THEIR OWN MOST PRODUCTIVE INDUSTRIES IN ONE CASE, FOOD,
IN THE OTHER, TEXTILES ARE TREATVD AS ' EXCEPTIONS'. FOR OUR PART,
WE ARE GRATEFUL FOR THE SUPPORT THAT THE UNITED STATES HAD GIVEN US
ON FOOD TRADE ISSUES IN THE MAIN INTERNATIONAL FORUMS, BUT THE
' EXCEPTIONS' REMAIN, I THINK THAT YOU WOULD UNDERSTAND THAT THERE IS
SOME CYNICISM ON THAT SCORE IN AUSTRALIA, AND ELSEWHERE IN THE
WESTERN PACIFIC REGION.
THE SECOND TYPE OF PROBLEM FACED BY AUSTRALIA AND ITS DEVELOPING
COUNTRY NEIGHBOURS IN THE WESTERN PACIFIC HAS BEEN EVIDENT IN THE
BILATERAL TRADE CONFRONTATIONS BETWEEN THE UNITED STATES, JAPAN, AND
THE EUROPEAN COMMUNITIES. WE ARE NATURALLY CONCERNED THAT THE
RESOLUTION OF THESE CONFLICTS SHOULD NOT INVOLVE DEALS WHICH
INCIDENTALLY DAMAGE OUR OWN INTERESTS. SIMILAR PROBLEMS COULD ARISE
FROM ATTEMPTS BY THE LARGE INDUSTRIAL COUNTRIES TO DEAL IN AN AD H4OC
FASHION WITH THE TRADE PROBLEMS OF THOSE DEVELOPING COUNTRIES WITH
THE MOST ACUTE DEBT PROBLEMS.
AS I EXPLAINED IN WASHINGTON YESTERDAY, AND IN THE INTRODUCTION
TO THIS ADDRESS, AUSTRALIA HAS A PARTICULAR INTEREST IN THE ECONOMIC
AND POLITICAL LIFE OF THE ASIA-PACIFIC REGION. WE WOULD SUGGEST
THAT THE UNITED STATES, TOO, HAS MUCH TO GAIN BY TAKING FULL ACCOUNT
' OF THE TRADING INTERESTS OF COUNTRIES IN THIS REGION. NOWHERE IN THE
; WORLD IS THERE A FIRMER BASE OF COMMITMENT TO THE EXPANSION OF
INTERNATIONAL TRADE
AUSTRALIA IS CONSCIOUS 0F, ITS SUBSTANIIAL RESPONSIBILITIES
STHE GROWING ECONOMIC PARTNERSHIP THAT HAS EMERGED IN THE
PAC IF IC.
WE REMAIN A STRATEGIC SHEET-ANCHOR IN JAPAN'S RAW
MATERIAL PROCUREMENTS. WE ARE AN INCREASINGLY IMPQRTANT. SUPPLIER OF
RAW MATERIALS, FOODSTUFFS, AND MANUFACTURES TO ALL THE NEWLY
INDUSTRIALISING COUNTRIES OF THE WESTERN PACIFIC.
THE UNITED STATES RELAIIONSHIP WITH JAPAN IS HUGE AND IMPORTANT
IN ITS OWN RIGHT. BUT UINITED) STATE-S DEALINGS WITH JAPAN ON ECONOMIC
AND OTHER MATTERS ARE OF PARTICuLAR~ INTEREST TO AUSTRALIA AND OTHER
COUNTRIES IN ITS REGION. IN THE NORMAL COURSE OF EVENTS, COMPARATIVE
DIFFERENCES LEAD AUSTRALIA TO HAVE A TRADE SURPLUS WITH JAPAN,
JAPAN WITH THE UNITED STATES AND THEL UNITED STATES WITH AUSTRALIA.
IN SUCH CIRCUMSTANCES, BILATERAL. TRADING DEALS CAN CORRODE OUR
COLLECTIVE INTERESTS AND RESPONSIULIIIES.
TO BE SPECIFIC, WE IN AUSTRALIA HAVE A DEEP INTEREST IN ENSURING,
FOR EXAMPLE, THAT TH4E ACCESS THE UNITED STATES GAINS TO THE
REGULATED AGRICULTURAL MARKET IN JAPAN IS CONSISTENT WITH THE
PRINCIPLES OF A MOST FAVOURED NATION TRADING SYSTEM. OUR OTHER
NORTHEAST ASIAN AND SOUTHEAST ASIAN PARTNERS IN THE PACIFIC HAVE
SIMILAR INTEREST IN OTHE R AREAS 0OF TRADE.
THE STRENGTH AND THE SIGNIFICANCE Of" AUSTRALIA'S RELATIONSHIP
WITH JAPAN IN THE WESTERN-PACIFIC MAY BE SOMET. IMES UNDERESTIMATED.
AT TH4IS TIME, WHEN WE FACE LARGE PROBLEMS AND CHOICES IN THE
DIRECTION OF THE WORLD ECONOMY, IT IS IMPORTANT NOT TO NEGLECT
BROADER REGIONAL AND INTERNATIONAL INTERESTS AND COMMITMENTS IN OUR
BILATERAL DEALINGS.
THESE CONCERNS IN THE PACIFIC ARE CENTRAL TO THE BROADLY
BASED INTEREST IN AUSTRALIA IN EXPLORING THE IDEA OF CLOSER
ECONOMIC CO-OPERATION IN THE PACIFIC.
AUSTRALIANS UNDERSTAND WELL THAT THERE WAS NO WAY THAT THE
POSTWAR TRADING AND INTERNATIONAL ECONOMIC SYSTEM, WITH ALL ITS
BENEFITS TO INDIVIDUAL COUNTRIES LIKE AUSTRALIA, JAPAN, THE STATES OF
EUROPE, AND THE NEWLY INDUSTRIALISING COUNTRIES, COULD HAVE EVOLVED
WITHOUT UNITED STATES LEADERSHIP.
LEADERSHIP, IN THIS CONTEXT, MEANT CARRYI NG THE PRIME
BURDEN, INITIALLY IN TERMS OF AID F-OR RECONSTRUCTION AND DEVELOPMENT
BUT MORE IMPORTANTLY IN TERMS OF THE COST OF TRADE ADJUSTMENT AND
ECONOMIC LIBERALISATION, TO DELIVER THE POSTWAR RULES OF TRADE.
NO SINGLE COUNTRY CAN CARRY THAT BURDEN ALONE TODAY. THERE IS A
CLOSE ANALOGY HERE TO THE PROBLEM IN FINANCIAL MARKETS TO WHICH I
REFERRED EARLIER.
THE POINT IS THAT THE UNITED STATES AND AUSTRALIA NEED TO WORK
IOGET14ER MORE CLOSELY WITH OUR OTHER PACIFIC PARTNERS TO ENSURE T1HAT
OUR ACTIONS ARE CONSISTENT WITH MAKING OUR PRINCIPLES EFFECTIVE IN
THE PACIFIC AND GLOBAL ARENAS.
YESTERDAY AT THE-NATIONAL PRESS CLUB I CONFIRMED AUSTRALIA'S
COMMITMENT TO THE ANZUS STRATEGIC ALLIANCE. IN CONCLUSION TODAY I
WISH TO CONFIRM
STHTIAV7TiE SS: Y STEMT HEW E LIARBOEUE RR APLLC OAMYMMUIILNTTGIM. LEOANUTTRE RTFAOUL L LA NTROPATADHREET R AAASN DL LAI PAASNYOCMUEER NCTELS E DO FS YBYST THEET MH. EF IUNNAWIINTTCEHIIDAN LI
1 2-
AID THAT IS NECESSARY FOR DEVELOPMLNT AND POLITICAL STABILITY IN THE
NEW NATIONS OF. THE SOUTHWEST PACIFIC: AS A RELIABLE SOURCE OF FOOD
AND RAW MATERIALS TO THE RAPIDLY EXPANDING ECONOMIES OF NORTHEAST AND
SOUTHESTr ASIA: INCREASINGLY AS A SOURCE OF MANUFACTURES AND SERVICES
BASED ON THE SKILLS OF THE AUSTRAL. IAN PEOPLE: AND AS A NATION
COMMITTED TO ACHIEVING ITS ECONOMIC GOALS THROUGH CLOSE CO--OPERATION
WITH ITS NEIGHBOURS IN THE PACIFIC AND WITH THE WIDER INTERNATIONAL
COMMUNITY. THE PATH4 TO ECONOMIC RECOVERY WILL BE A LONG ONE, EVEN FOR THE
UNITED STATES, WHICH HAS MADE SUCH A GOOD BEGINNING. IT IS OUR HOPE
THAT THE WORLDS'S RE-COMMITMENT TO THE GOALS OF THE LIBERAL POSTWAR
INTERNATIONAL TRADE AND PAYMENTS SYSTEM WILL ALLOW THE EXTENSION OF
THE UNITED STATES RECOVERY INTO TH REST OF THE WORLD, AND THE
REINFORCEMENT OF THE UNITED STATES RECOVERY ITSELF.
THE PATH WILL BE LONGER FOR AUSTRALIA, WHERE ECONOMIC ACTIVITY
AND EMPLOYMENT WERE STILL FALLING 1RAPIDLY WHEN WE T00OK OFFICE THREE
MONTHS AGO. BUT WITH OUR SEARCH FOR COMMUNITY CONSENSUS ON ECONOMIC
POLICIES, AND WITH OUR APPROACH TO WAGES, FISCAL, MONETARY AND
EXTERNAL POLICIES, WE ARE CONFIDENI THAT THE RESTORATION OF GROWTWiTH
LOW INFLATION IN AUSTRALIA HAS BEGUN. WE LOOK FORWARD TO TRADE
WITH AND INVESTMENT -FROM THE UNITED STATES PLAYING AN IMPORTANT PART
IN THAT RECOVERY, JUST AS THEY HAVE IN EARLIER PERIODS OF POST-WAR
PROSPERITY. AT THE NATIONAL PRESS CLUB IN WASHINGTON YESTERDAY,
IN SPEAKING ON AUSTRALIA'S FOREIGN * POLICY, I EMPHASISED THAT MY
GOVERNMENT'S RELATIONSHIP WITH THE UNITED STATES WOULD ACCURATELY
REFLECT THE CLEAR VIEW-OF THE PEOPLE OF AUSTRALIA, AS TO THE
FUNDAMENTAL IMPORTANCE OF. THAT-RELA-IIONSHIP. OURS IS A-RELATIONSHIP
WHICH. GOES FAR BEYOND THE DEFENCE, STRATEGIC AND SECURITY CONCERNS,
FORMALISED IN THE ANZUS TREATY. TU( ADE AND INVESTMENT FORM A
SIGNIFICANT PART OF THE TOTAL RELAIIONSHIP. AND I AM ABSOLUTELY
CONFIDENT THAT UNDER MY NEW GOVERNME: NT, THAT PART OF THE RELATIONSHIP
WILL CONTINUE TO GROW AND FLOURISH, TO THE MUTUAL ADVANTAGE OF BOTH
OUR GREAT COUNTRIES, FOR MANY YEARS TO COME.
-P TRANSCR-IPT: -, bUESTIONS AND'ANSWERS, FOREIGN POLICY
ASSOCIATION. LUNCH,.:-PLAZA HOTELi NFW YORK, 16 JUNE 1983
E AND 0 E -PROOF ONLY
QUESTION: YOU ENTIONED THE ANZUS ALLIANCE. PERHAPS YOUACAN
EXPTRANSCRIPT: UESTIONS AND ANSWERS, FOREIG N POLICYHERN
. ASSOCIATION LUNCH,. PLAZA HOTEL, NE-W YORK, 16 JUNE 1983
E AND 0 E PROOF ONLY
QUESTION: YOU MENTIONED THE ANZUS ALLIANCE. PERHAPS YOU
CAN EXPAND A LITTLE BIT ON FOREIfGN POLICY IN THE SOUTHERN
PACIFIC REGION, THE EXTENT TO WHICH YOUR GOVERNMENT PERCEIVES
THE SOVIET THREAT AS BEING DIFFEREFNT FROM OUR GOVERNMENT AND
SECURITY MATTERS IN THAT AREA?
PRIME MINISTER: THANK YOU MR CHAIRMAN. I WILL ANSWER THAT
VERY PROAD QUESTION AS BRIEFLY AS I POSSIBLY CAN. LET ME
SAY FOUNDATIONALLY IN ANSWERING IHAT QUESTION THAT WE REGARD
THE RELATIONSHIP, SECURITY AND DFFENCE RELATIONSHIP, BETWEEN
OUR TWO COUNTRIES EMBODIED IN THF-ANZUS TREATY, AS I SAY,
FUNDAMENTAL TO OUR POSITION. WE HAVE A SHARED PERCEPTION OF
THE GLOBAL SECURITY THREATS TO US ALL. WE CO-OPERATE
EFFECTIVELY AND CONTINUOUSLY WITH YOUR COUNTRY UNDER THE
AEGIS OF THE ANZUS TREATY. IF YOU WANT TO LOOK AT THE
PARTICULAR AREAS IN OUR REGION Of-IMMEDIATE CONCERN AND WITH
WHICH WE ARE CO-OPERATING WITH YOU, I GUESS THAT THE ONE .,' HICH
IS MOST OBVIOUS AT THE MOMENT IS IN INDO-CHINA. AND MAY I
SAY IN RESPECT OF THAT ISSUE THAI WE SHARE THE VIEW
OF THE UNITED STATES, INDEED OF IHE ASEAN COUNTRIES, AS
TO THE ESSENTIAL ELEMENTS OF A RF-SOLUTION TO THE PROBLEMS IN
THAT TRAGIC COUNTRY KAIPUCHEA. AND THEY ARE, OF COURSE,
THAT THERE SHOULD BE A WITHDRAWAl OF VIETNAMESE. TROOPS
FROM THAT COUNTRY AND A CREATION OF CONDITIONS WHERE THE PEOPLE
OF THAT COUNTRY WILL HAVE THE OPPORTUNITY FREELY TO EXPRESS
THEIR WILL AS TO THE FORM OF GOV-FRNMENT WHICH THEY DESIRE
TO HAVE. I WOULD SAY TO YOU LAD) FS AND GENTLEMEN ./ 2
2-
THAT WE BELIEVE, AND IT HAS BECOMF CLEAR TO US SINCE WE'VE
COME INTO OFFICE, THAT WE PERHAPS ARE IN THE ALMOST UNIQUE
POSITION TO PLAY A ROLE IN ACCELf-RATING THE ACHIEVEMENT OF
THOSE BASIC CONDITIONS BECAUSE* WF-HAVE A WARM, CONSTRUCTIVE
RELATION4SHIP WITH THE FI VE COUNTRIES THAT COMPRISE ASEAN. WE
HAVE, AS YOU KNOW, A VERY CLOSE RFLATIONSHIP WITH THE PEOPLES
REPUBLIC OF CHINA. OF COURSE, NO COUNTRY HAS A CLOSER RELATIONSHIP
WE BELIEVE WITH THE UNITED STATES. AND WE DO HAVE A CAPACITY
AS WELL TO TALK TO HANOI. AND) THE-REFORE WE ARE NOT GOING TO
DO ANYTHING PRECIPITATE IN TERMS OF SOME SUGGESTED RESUMPTION
OF AID TO VIETNAM WHICH WOULD DENIGRATE FROM OUR CAPACITY TO
EXERCISE THAT UNIQUE OPPORTUNITY. AND I'M PLEASED TO SAY
TO YOU THAT AS RECENTLY AS LESS THAN A FORTNIGHT AGO, WHEN I
WAS IN INDONESIA TALKING TO MOCHIAR, THE FOREIGN MINISTER OF
INDONESIA, THAT HE CONVEYED TO US THAT AFTER THE ASEAN MINISTERS
MEETING WHICH IS TAKING PLACE IN A FEW DAYS IN [ BANGKOK, IT IS
THEIR BELIEF THAT OUT OF THOSE DISCUSSIONS THERE MAY BE THE
BEGINNING OF THE OPENING UP OF POSSIBILITIES OF FURTHER
DISCUSSIONS WITH HANOI AND THAT 1HEY MAY ASK OUR FOREIGN
MINISTER, MR HAYDEN, TO TAKE A MF-SSAGE FROM THE ASEAN
COUNTRIES TO HANOI. WE ARE EXTRAORDINARILY PLEASED THAT WE
MAY BE ABLE TO PLAY THAT ROLE. YOU WILL UNDERSTAND THAT WE HAVE
A TOTAL SHARING OF PERCEPTIONS ANOUT THE DANGERS THAT EXIST,
NOT MERELY FOR THE TRAGIC PEOPLE OF KAMPUCHEA, BUT THE DANGERS
THAT ARE INVOLVED IN THAT TOTAL Ri-LIANCE OF VIETNAM UPON THE
SOVIET UNION, A RELIANCE WHICH WAS REFLECTED IN AN INFLOW
TO VIETNAM FROM THE SOVIET UNION OF ASSISTANCE TO THE ORDER
OF ABOUT DOLLARS 3 MILLION A DAY. WE WITNESSED THE EXPANSION
OF THE FACILITIES OF THE SOVIET IONION IN CAM RANH BAY WHICH
ARE NOT ONLY INTRINSICALLY DANGEROUS, BUT WHICH PROVIDE A
PLATFORM OF PROJECTION FOR THE SOVIET INTO AREAS OF
IMPORTANCE TO YOUR COUNTRY AND To OURS. AND SO ITS IN OUR
INTERESTS, ITS IN THE INTERESTS OF-VIETNAM, ITS IN THE
INTERESTS OF ASEAN COUNTRIES, ITS IN THE INTERESTS OF THE
UNITED STATES THAT WE ALL CAN DO WHAT WE CAN THATS POSSIBLE
TO GET VIETMAN BACK INTO THE COMMUNITY OF NATIONS AND TO BRING
AN END TO THAT ALMOST TOTAL RELIANCE THAT IT HAS UPON THE
SOVIET UNION. WE ARE NOT GOING TO PURSUE THAT PATH IN A
WAY WHICH PREJUDICES THE PERCEPTIONS OF INTERESTS OF THE
ASEAN COUNTRIES, THE PEOPLES REPUBLIC OF CHINA OR THIS
GREAT COUNTRY. WE ARE COMMITTED MR PRESIDENT, LADIES AND
GENTLEMEN THEREFORE, 1-O TRY AND TAKE ADVANTAGE OF' THOSE
OPPORTUNITIES THAT WE HAVE TO ACCF-LERATE THE OPENING UP OF
THOSE DISCUSSIONS SO THAT OUR SHARED OBJECTIVES AND
PERCEPTIONS IN THAT COUNTRY CAN 81-ACHIEVED.
QUESTION: IF WE COULD MOVE FOR ONE FINAL QUESTION TO DOMESTIC
MATTERS. THERE CERTAINLY IS A DIF-FERENCE OF VIEW AND
PERCEPTION ABOUT THE ROLE OF PERSONAL INCOME TAXES IN 1IE
/ 3
3-
VARIOUS ECONOMIES OF THE WORLD, IHE EXTENT TO WHICH THEY
REPRESENT A DE-INCENTIVE. COULD YOU COMMENT ON YOUR VIEWS
ON THAT.
PRIME MINISTER: I GUESS WE ARE AI L AT ONE IN SAYING THAT
WE'D LIKE LESS OF THEM AND I HAD INDICATED IN THE PREELECTION
CAMPAIGN THAT WE WOULD AITEMPT TO MOVE TO SOME
REDUCTION IN INCOME TAXES. THAI 1S NOT GOING TO BE POSSIBLE.
I THINK THE OBJECTIVES THAT GOVERNMENT HAS TO HAVE IN MIND
WHEN IT MAKES ITS FISCAL DECISIONS ARE THESE: WHAT SORT OF
ENVIRONMENT CAN YOU CREATE WHICH IS MOST LIKELY TO ENSURE
THAT THOSE FORCES WHICH CREATE AcIIVITY AND CREATE JOBS ARE
GOING* TO BEST BE ABLE TO FLOURISH. WITHIN THOSE CIRCUMSTANCES
AND I SPEAK NOW ABOUT flY COUNTRY, I'M NOT COMING HERE TO THIS
GREAT COUNTRY AND PRESUMING TO Tf-I L THIS ADMINISTRATION HOW
TO CONDUCT ITS AFFAIRS, BUT RELATING TO MY OWN WE BELIEVE
THAT WE HAVE TO CONDUCT A FISCAL POLICY AND CREATE A FISCAL
STANCE WHICH IS LEAST LIKELY TO CREATE UNACCEPTABLE UPWARD
PRESSURES ON INTEREST RATES. IT WOULD PE NICE TO CUT TAXES
AS I'D HOPED BEFORE THE ELECTION THAT WE COULD. BUT IF I
WERE TO DO THAT WE WOULD BE VERY I IKELY TO CREATE A SITUATION
OF AN INCREASED BUDGET DEFICIT WHICH WOULD MEAN THAT IN TERMS
OF THE COMBINED DEMANDS OF THE PlJILIC SECTOR BORROWING
REQUIREMENT, TOGETHER WITH THE HOPE FOR EXPANSION OF THE PRIVATE
SECTOR, THAT THERE WOULD BE INTOI FRABLE INCREASES IN INTEREST
RATES. SO WE ARE NOT GOING TO BF CUTTING INCOME TAXES IN THE
IMMEDIATE FUTURE BECAUSE WE BELIEVE THAT AFTER ALL PEOPLE'S
INTERESTS, WHAT THEY ARE CONCERN-I) ABOUT, AS IF THEY GET A
REDUCTION IN INCOME TAXES THEY ARf-GOING TO BE BETTER OFF.
NOW THEY'RE GOING TO BE BETTER OFF IF WE HAVE AN ENVIRONMENT
IN WHICH THERE ARE LOWER INTERES1 RATES, IN WHICH THERE ARE
HIGHER LEVELS OF ACTIVITY AND IN WHICH THERE ARE MORE JODS
FOR THEM AND THEIR CHILDREN. SO IN THAT CONTEXT, MR CHAIRMAN,
I GIVE YOU THE MESSAGE THAI THERF'S NO IMMEDIATE PROSPECT
OF A REDUCTION OF PERSONAL INCOMF TAX RATES IN OUR
COUNTRY. BECAUSE WE BELIEVE THAI TO DO THAT WOULD BE TO AVOID
THE ACHIEVEMENT OF THE MAJOR OBJFCTIVE THAT IS THE
CREATION OF AN ECONIMIC ENVIRONMFNT WITHIN WHICH THE TOTAL
ECONOMIC CAKE IS MORE LIKELY TO 6ROW. WE RECOGNISE THAT THE
PRIVATE SECTOR, WHICH EMPLOYS 75 PER CENT OF OUR PEOPLE,
HAS GOT TO HAVE THE OPPORTUNITY OF GOING TO THE CAPITAL
MARKETS AT RELATIVELY ACCEPTABLE INTEREST RATES TO BRIN6' ABOUT
THAT CONDITION. SO PERHAPS ITS NOT AN IMMEDIATELY HAPPY
MESSAGE FOR THE ACTUAL AND POTENI TAL INCOME TAX PAYERS IN
MY COUNTRY. BUT I CAN ASSURE THFM, AND THIS IS WHAT
POLITICS IS ALTIMATELY ALL ABOUT AND THAT IS MAVING SURE 1HAI
YOU HAVE THE RIGHT PERSPECTIVE, iHAT YOU DON'T hAVE DECISIONS
IN TERMS OF IMMEDIATE PERCEPTIONS OF SELF-INTEREST, BUT THAT YOU
GET THE LONGER TERM PERSPECTIVE. AND I HAVE NO DOUBT THAT IF
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WE ATTEMPT TO TAKE THAT LONGER TVRM PERSPECTIVE THEN IT 4OULD
BE COUNTER PRODUCTIVE TO HOVE TO A REDUCTION OF INCOME TAX
RATES. ONCE WE GET THE ECONOMY MOVING AS WE WILL THEN I
HOPE BEFORE THE END OF OUR FIRST TERM 6F GOVERNMENi WE MAY
BE ABLE TO GIVE SOME RELIEF IN THAT RESPECi.
QUESTION: ANOTHER AREA YOU DIDN'T COVER IN YOUR SPEECH
IMMIGRATION IN AUSTRALIA YOUR PARTY'S VIEW ON THE ROLE OF
IMMIGRATION AND DEVELOPMENT OF THi COUNTRY.
PRIME MINISTER: YOU'VE GOT TO ANSWER THAT QUESTION IN TERMS
OF IT BEING MY PARTY IN GOVERNMENT IN THE WAR AND POST-WAR
PERIOD WHICH INITIATED THE GREATFF-T IMMIGRATION PROGRAM IN
RECORDED HUMAN HISTORY. WE WERE AT THE END OF THE WAR A
COUNTRY OF 7 MILLION PEOPLE, NOW 15 MILLION. THAT HAS
TRANSFORMED US NOT ONLY IN ABSOLUlTE TERMS BUT IT HAS CHANGED
THE DEMOGRAPHY AND THE ETHNIC COMPOSITION OF OUR COUNTRY AND
HAS ENORMOUSLY ENRICHED US ECONOMICALLY AND CULTURALLY AND IN
SO MANY OTHER WAYS. THERE IS AN ARGUMENT THAT WE SHOULD JUST
OPEN-ENDEDLY PURSUE HIGHER AND HIGHER IMMIGRATION PROGRAMS.
WE DON'T BELIEVE THAT THAT'S CORRFCT. WE BELIEVE THAT WITH
UNEMPLOYMENT IN OFFICIAL TERMS OF OVER 10 PER CENT IT DOESN'T
MAKE SENSE 70 HAVE A LARGE EXPANIU-D IMMIGRATION PROGRAM. SO
WE HAVE SLIGHTLY CUT IT BACK AT IHE MOMENT. THATS NOT GOING
TO HAVE SIGNIFICANT IMPACT IN THF AREA OF OUR COMMITMENT TO
REFUGEES. YOU WOULD KNOW THAT NFXT TO YOUR OWN COUNTRY THERE
IS NO COUNTRY IN THE WORLD WHICH HASTAKEN PROPORTIONATELY
A HIGHER NUMBER OF REFUGEES IN RFCENT YEARS. WE ARE SUBSTANTIALLY
GOING TO ADHERE TO THAT. BUT WE NELIEVE THAT WHAT WE'VE GOT
TO DO IS TO GET OUR ECONOMY MOVINGi IN A WAY THAT WILL ENABLE
US WITH CONFIDENCE AND WITHOUT THEF POSSIBILITY OF A SOCIAL
CORROSION THAT MAY OCCUR WHEN UNFMPLOYED PEOPLE
SEE MORE COMING TO CREATE THE CONIUITIONS WITHIN WHICH WE'LL
BE ABLE TO MOVE TO A MORE SUBSTANiIAL INCREASE IN IMMIGRATION.
AND LET ME, OF COURSE, MAKE THE P() INT THAT OUR GOVERNMENT
REMAINS TOTALLY COMMITTED TO THE PROPOSITION THAT THAT
IMMIGRATION SHOULD BE ON THE BASIS IRRESPECTIVE OF
COLOUR OR CREED, BUT IN TERMS OF IHE NEEDS OF PEOPLE WHO WISH
TO COME TO OUR COUNTRY AND OF THF ECONOMIC REQUIREMENIS AND THE
LABOUR REQUIREMENTS OF AUSTRALIA.
ENDS.