aAUSI HAl IA
SPEECH BY PRIME MINISTER MiR HAWKE AT SINGAPORE/ AUSTRALIA
BUSINESS COUNCIL BREAKFAST, 13 FEBRUARY, 1984
MR CHAIRMAN, LADIES AND GENTLEMEN,
I WAS VERY PLEASED TO ACCEPT YOUR INVITATXON TO JOIN YOU HERE
TODAY DURING THIS MY FIRST VISIT TO SINGAPORE AS AUSTRAI. IA'S PRIME
MINISIER. I AM, HOW.; EVER, NO STRANGER TO SINGAPORE LIKE MANY BEFORE
ME I HAVe BEEN DEEPLY IMPRESEED BY SINGAPORE'S RECORD OF ACHIEVEMENT.
LEE KUAN YEW'S SINGAPORE DEMONSTRATES ALL THE QUALITIES OF A
ROBUST, INDEPENDENT SOCIETY., HERE THERE IS A STRONG ENTERPRENEURIAL
TRA, ITION GROUNDED IN A WELL-DEVELOPED WORK ETHIC. HERE THERE IS
ALSO A DYNAMIC AND SUCCESSFUL ECONOMIC MANAGEMENT WHICH, THROUGH THE
PRIORITY IT HAS GIVEN TO EDUCATION, LEARNING-AND SKILLS ACQUISITION,
HAS ESTABLISHED A PARTICULAR CAPACITY TO ADAPT IN THE FACE OF
CHANGING CIRCUMSTANCES.
SINGAPORE'S SUCCESS STEMS DIRECTLY FROM ITS ANTICIPATING THE
DIRECTIONS OF ECONOMIC CHANGE . AND DEVELOPING AND ADAPTING STRATEGIES
TO MEET THEM. SINGAPORE, IN SHORT, HAS SECURED ALL THE ADVANTAGES OF
A FLEXIBLE, FAR-SIGHTED APPROACH TO DEVELOPMENT.
IN DOING SO IT HAS MADE ITSELF INTO AN IMPORTANT FCCUS OF
ECONOMIC ACTIVITY WITHIN THE REGION.
THIS GIVES SINGAPORE A PARTICULAR IMPORTANCE 1' 0 AUSTRALIA AND IS
REFLECTED IN THE HEAVY CONCENTRATION OF AUSI'RALIAN COMMERCIAL AND
BANKING INTERESTS IN THIS COUNTRY. IT ALSO HELPS EXPLAIN WHY A VERY
SIGNIFICANT PART OF AUSTRALIA'S TOTAL TRADE WITH ASEAN IS WITH
SINGAPORE. ACCORDINGLY MY GOVERNMENT'S INTEREST IN SEEING AUSTRALIA'S
ECONOMIC DEVELOPMENT ENMESHED MORE CLOSELY WITH THAT OF THE
ASIA/ PACIFIC REGION FINDS A PARTICULAR POINT HERE IN SINGAPORE.
HERE AS MUCH AS ANYWHERE WE SEE A DEDICATED INTEREST ON THE PART
OF BOTH AUSTRALIANS AND SINGAPOREAN IN MAXIISING THE BENEFITS TO BE
DERIVED FROM TH4E PROGRESSIVE DEVELOPMENT OF CLOSER ECONOMIC RELATIONS
BETWEEN OUR TWO COUNTRIES.
ANY ASSESSMENT OF THE POTENTIAL OF TH4IS INVOLVEMENT WITH EACH
OTHER, MUST BEGIN WITH4 AN APPRECIATION OF CONiEMPORARY ECONOMIC
CONDITIONS AND LONG-TERM PROSPECTS IN OUR TWO COUNTRIES. LET ME
CONCENTRATE MY IMMEDIATE REMARKS ON THE AUSTRALIAN SITUATION.
MY GOVERNMENT, ON COMING TO OFFICE lN MARCH LAST YEAR, HAD TO
DEAL WITH A SHARI), DEEP RECESSION: EMPLOYMENT HAD DECLINED
DISASITROULSY AND UNEMPLOYMENT RISEN. INFLATION STOOD AT TWICE THE
RATE OF MOST MAJOR OECD COUNTRIES.
WE GAVE TOP PRIORITY TO TURNING THIS SITUATION AROUND AND IN
VERY CONSIDERABLE MEASURE -HAVE SUCCEEDED.
BY THE SEPTEMBER QUARTER LAST YEAR, HELPED BY THE BREAKING OF
THE DROUGHT, SIGNS OF A STRONG RECOVLRY W4ERE EMERGING.
REAL GROWTH IN THAT QUARTER WAS OVER 4 PER CENT.
A WIDE RANGE OF INDICATORS, SUCH AS IN HOUSING AND THE kETAIL
TRADE FOR EXAMPLE, POINT TO STRONG GROWTH SINCE THEN.
BETWEEN APRIL AND THE END OF JANUARY THIS YEAR JOBS EXPANDED BY
OVER 2 PER CENT BY 134,000 NEW JOBS) AND SEASONALLY ADJUSTED
UNEMPLOYMENT FELL FROM 10. 3 PER CENT TO 9. 5 PER CENT. TH4ESE FIGURES I
MIGHT NOTE INCLUDE DISAPPOINTIN4G RESULTS FOR JANUARY BUT ARE
NEVERTHELESS STILL VERY MUCH STRONGER THAN W AS ANTICIPATED BY ALL
OBSERVERS AT THE TIME WE BROUGHT DOWN THE BUDGET IN BUDGET IN AUGUST
LAST YEAR. INFLATION IN THE SAVE PERIOD W4AS BROUGHT DOWN FROM OVER 11
PER CENT TO 8.6 PER CENT.
LOOKING AHEAD WE EXPECT REAL GDP GROWTH OF AROUND 8 PER CENT IN
THE COURSE OF THE CURRENT FINANCIAL YEAR ( JUNE QUARTER ON JUNE
QUARTER) AND CON4TINUED STRON GROWTH INTO 1934-85.
CRUCIAL TO THE MAINTENANCE OF THIS RECOVERY INTO THE MEDIUM AND
LONGER TERM WILL BE CONTINUED INCOMES RESIRAJNT. LAST YEAR
AUSTRALIAN WORKERS RECEIVED A WAGE INCREASE OF 4.3 PER CENT, THIS
YEAR THE INCREASES ARE NOT LIKELY TO BE SIGNIFICANTLY GREATER.
RESTRAINT OF THIS KIND HAS BEEN ACHIEVED WITHIN THE FRAM4EWORK OF
THE PRICES AND INCOMES-ACCORD AGREED BETHEEN THE AUSTRALIAN LABOR
PARTY AND THE AUSTRALIA N COUNCIL OF TRADE UNIONS AND PUT INTO EFFECT
BY MY GOVERNMENT.
AT THE HEART OF THE ACCORD HAS BEEN THE SEARC: H FOR COMMUNITY
CONSENSUS AND A MORE CO-OPERATIVE. LESS COMBATIVE MEANS OF
DETERMINING WAGE AND INCOME LEVELS.
THIS APPROACH LAY BEHIND OUR COVENING OF THE N4ATIONAL ECONOMIC
SUMMIT CONFERENCE W4E HELD LAST APRIL, JUST A MONTH AFTER MY
GOVERNMENT TOOK OFFICE.
THERE, REPRESENTATIVES OF FEDERAL, STATE AND LOCAL GOVERNMENTS,
ALL MEM1BERS OF THE EXECUTIVE OF THE AUSTRALIAN~ COUNCIL OF TRADE
UNIONS AND 35 AUSTRALIAN BUSINESS LEADERS LENT THEIR SUPPORZT TO A
STRATEGY FOR RECOVERY WHICH HAS SINCE THEN SERVED) AS A USEFUL GUIDE
TO GOVERNMENT POLICY.
THAT POLICY W4AS ENUNCIATED THROUGH THE 17 MAY ECONOMIC STATEMENT
AND IN OUR BUDGET OF AUGUST' LAST YEAR. WE HAVE COMBINED EXPANSIONA Y
FISCAL P(' LIc-IES WITH FIRM O~ UT NOT TIGH4T MONETARY POLICIES. THIS IS
ALLOWING STRONG GRCWTH BUT IS NOT FUELING INFLATION. IMPORTANTLY 14E
HAVE FINANCED THE DEFICIT SUCCESSFULLY AT THE SAMI: TIME AS SEEING
INTEREST RATES FALL BELOW4 THE LEVELS WHICH PREVAILED AT THE TIME OF
THE BUDGET. BUT IT IS NOT SIMPLY-IN THE STYLE AND RESULTS OF ITS APPROACH TO
ECONOMIC MANAGEMENT THAT MY GOVERNMENT HAS BEEN SUCCESSFUL.
W4E HAVE ALSO RE-ESTABLISHED A CLIMATE OF CONFIDENCE AND
STABILITY WITHIN AUSTRALIA.
THIS FINDS VISIBLE EXPRESSION IN THE MARKED IMPROVEMENT WHICH
HAS OCCURRED IN AUSTRALIA'S INDUSTRIAL RELATIONS.
IN THE TWELVE MONTHS TO OCTOBER LAST YEAR, THE NUMBER OF WORKING
DAYS LOST THROUGH IN4DUSTRIAL DISPUTES WAS THE LOWEST FOR FIFTEEN
YEARS ( DOI-N TO 0.2 DAYS PER WORKER PER YEAR) AND LESS THAN HALF THAT
FOR THE YEAR ENDED OCTOBER 1982. IN THE MA~ RITIME INDUSTRY A SECTOR
OF PARTICULAR INTEREST TO SINGAPORE THE NUMBER OF DAYS LOST IN THE
PERIOD DROPPED 57 PER CENT.
IT HAS BEEN A PARTICULAR PRIORITY OF MY GOVERNMENT T) SECURE THE
ESTABLISHMENT OF AN ORDERLY AND STABLE INDUSTRIAL RELATIONS SYSTEM
CONSISTENT WITH OUR CONSTITUTIONAL PRACTICES IN AUSTRALIA. TH4E
PRICES AND INCOMES ACCORD, THE ACTIVE SUPPORT WE HAVE GIVEN TO
CREATION OF TRIPARTITE CONSULATIVE ORGANS AT INDUSTRY LEVEL, AND TI4E
THOROUGH REVIEW AND RATIO NALISATI ON OF THE INDUSTRIAL RELATIONS
MACHINERY WE HAVE INITIATED HAVE ALL CONTRIBUTED TO THIS RESULT.
IN SHORT, AUSTRALIA TODAY IS PUTTING BEHIND IT THE UNPRODUCTIVE,
DIVISIVE AND CONFRONTATIONAL STYLES OF THE PAST AND I1N THEIR STEAD
ESTABLISHING APPROACHES W4HICH EMPHASISE THE BENEFITS OF CONSULTATIVE
AND CO-OPERATIVE ACTION.
OUR IMMEDIATE TASK YAS GOVERNMENT WAS TO TURN THE AUSTRALIAN
ECONOMY AROUND. AT EVERY POINT WE HAVE DIRECTED ATTENTION NOT MERELY
TO THE IMMEDIATE ISSUES BUT TO THE MEDIUM AND LONGER-TERM
C0ONSIDRATIONS NECESSARY TO PROMOTING AND SUSTAINING GORWTH. THE
PERSPECTIVES WE HAVE BROUGHT TO BEAR HAVE GIVEN AS MUCH W4EIGHT TO
LONGER-TERti REQUIREMENTS AS TO SHORT-TERM IMPERATIVES.
WE HAVE CONTINUED TO GIVE APPROPRIATE ATTENTION TO THE NEED TO
COMPLEMENT AUSTRALIA'S HIGHT RATE OF DOMESTIC SAVINGS BY INVESTEMNT
FROM ABROAD.
THE MAIN ELEMENTS OF THE POLICIES ON FOREIGN INVESTMENT, WHICH
HAVE HAD BROAD BIPARTISAN SUPPORT SINCE THEY WERE INTRODUCED IN THE
LAST YEAR OF THE WHITLAII GOVERNM1ENT IN 1975, HAVE BEEN REAFFIRMED.
WE HAVE MADE CLEAR THAT WE WELCOME PRODUCTIVE FOREIGN INVESTMENT
WHERE IT PROVIDES ADEQUATE OPPORTUNITIES FOR AUSTRALIANS TO
PARTICIPATE IN4 THE ENSUING DEVELOPMENT.
IN4DEED WE ATTACH SOME IMPORTANCE TO SINGAPORE'S RECENT EMERGENCE
AS A MAJOR SOURCE OF FOREIGN INVESTMENT IN ENTERPRISES I14 AISTRALIA
IN 1081/ 832 IT RAN4KED THIRD BEHIND TH4E UNITED) KINGDOM AND THE UNITED
STATES.
WE REGARD THIS AS BEING PARTICULARLY RELEVANT TO THE QUALITY OF
FUITURE RELATIONS BETWEEN OUR TWO COUNTRIES. THAT IT IS BEING M TCHED
bY AN EXPAN4DING AUSTRALIAN PRESENCE ON THE GROUN4D HERE IN SINGAPORE
REFLECTS A H4EALTHY DEGREE OF RECIPROCITY lN THE RELATIONSHIP AND
SUGGESTS THAT IN BOTH OUR COUNTRIES A VERY SOLID BASIS EXITS FOR THE
CONTINUED DEVELOPMENT OF VERY CLOSE ECONOMIC RELATIONS BETWEEN US.
BUSINESSMEN IN SINGAPORE WILL BE WELL AWARE OF THE BENEFITS THAT
A DYNAMIC, INTERNATIONALLY-ORIENTED FINANCIAL SECTOR CAN MAKE TO
ECONOMIC DEVELOPMENT BOTH DIRECTLY, AS AN I14PORTANT INDUSTRY
EMPLOYING LARGE NUMBERS OF PEOPLE, AND INDIRECTLY, THROUGH THE
STIMULUS IT CAN PROVIDE TO EXPANSION OF OTHER INDUSTRIES.
WE IN AUSTRALIA HAVE BEEN EXAMINING OPTIONS FOR FINANCIAL
REFORM. WE TOOK A SUBSTANTIAL STEP LAST DECEMBER WHEN W4E FLOATED THE
AUSTRALIAN DOLLAR AND REMOVED A WIDE RANGE OF LONGSTANDING EXCHANGE
CONTROLS. THE REMO%! AL OF THESE EXCHANGE CON4TROLS IN ITSELF HAS IN4CREASED
THE POTENTIAL INVOLVEMENT OF AUSTRALIAN ENTERPRISES IN INTERNATIONAL
TRANSACTIONS. THE GOVERNMENT HAS BEFORE IT AS PRESENT THE REPORT OF A
COMMITTEE, THE MARTIN COMMITTEE, WHICH WAS ASKED TO PROVIDE ADVICE ON
THE MERITS OF FURTHER DEREGULATION AND INTERNATIONALISATION OF THE
FINANCIAL SECTOR IN AUSTRALIA.
AMONG OTHER THINGSt THE COMMITEE, WHOSE REPORT WILL BE RELEASE
LATER TH4IS MONTH, RECOMMENDS THE ADMISSION INTO AUSTRALIA OF A
LIMITED NUMBER OF FOREIGN BANKS. I EXPECT THIS MATTER TO BE ADDRESSED
BY MY CABINET IN THE NEXT MONTH OR SO.
THE ADMISSION OF FOREIGN BANKS INTO AUSTRALIA WOUL. D INCREASE OUR
INVOLVEMENT IN INTERN4ATIONAL FINANCIAL BUSINESS. BUT IF WE TAKE THIS
STEP, WE WILL STILL NEED TO CONSIDER WHETHER TO MOVE IN ANOTHER AREA
AS WEILL, TO FACILITATION OF OFF-SHORE BANKING IN AUSTRALIA. THERE
HAVE, AS YOUi KNOW, BEEN EXPRESSIONS OF INTEREST FOR SUCH A
POSSIBILITY BY TWO AUSTRALIAN STATES. THERE W4OULD BE ADVANTAGES IN
THE INCREASED ECONOMIC ACTIVITY, EMPLOYMENT AND WORKFORCE SKILLS TH4AT
WOULD COM1E W4ITH THE DEVELOPMENT OF OFFSH4ORE BANKING. BUT THERE W4OULD
BE COSTS ASSOCIATED WITH THE PROVISION OF THE TAXATION INCENTIVES
THAT WOULD BE NECESSARY TO PROVIDE A MAJOR IMPETUS TO GROWTH IN THIS
INDUSTRY. THESE AND OTHER CONSIDERATIONS WILL NEED TO BE CAREFULLY
WEIGH4ED IN ANY DECISION ON THESE ISSUES.
WHATEVER THE DECISION TAKEN, THE COURSE W4E HAVE EMBARKED ON IS
ONE WHICH HILL SEE AS I HAVE SAI1D MANY TIMES BEPORE IN AUSTRALIA
CONTINUED FINANCIAL DEREGULATION WHERE REGULATION SERVES HO CLEAR
PURPOSE IN4 PROMOTING ECONOMIC EFFICIENCY OR SOCIAL EQUITY. IT IS My
GOVERNMENT' S VIEW THAT A MORE DYNAMIC, EFFICIENT AND OUTWARD-LOOKING
AUSTRALIAN FINANCIAL SECTOR WOULD INTERACT WITH THIS GREAT CENTRE IN
A W4AY THAT WAS BENEFICIAL TO THEM BOTH.
MR CHAIRMAN, TH': TREND IS TOWARDS SIGNIFICANTLY CLOSER
AUSTRALT. AN ' OVERALL INVOLVEMENT IN REGIONAL ECONOMIC ACTIVITY. THE
ALREADY SUBSTANTIAl-TRPDE RLLATIONSHIP AUSTRALIA ENJOYS WITH JAPAN IS
TO BE BROADENED THROUGH A DETERMINED EFFORT AT DIVE RSIFI CATIO01 INTO
NEW PRODUCTS AND SERVICES. THE RAPIDLY GROWING TRADE WE HAVE W1ITH
CHINA MAY ALSO BE TRANSFORMED, DEPENDING ON THE RESULTS OF A JOINT
STUDY INITIATED BY PREMIER ZHAO ZIYANG AND MYSELF ON TkC PROSPECTS
FOR INTEGRATING MORE CLOSELY OUR IRON AN4D STEEL. INDUSTRIES.
IN SINGAPORE TOO, WE ARE SEEKING CLOSER INTEGRATION OF OUR TWO
ECONOMIES. THE TRADE AND INDUSTRY POLICIES MY GOVERNMENT IS DEVELOPING
SHOULD REINFORCE AUSTRALIA'S CAPACITY TO SECURE MORE FULLY THE
BENEFITS ASSOCIATED W4ITH THE DYNAMISM OF T141S REGION'S ECONOMIC
A CTI VI TY.
THOSE POLICIES, AND INDEED THE CONTINUED DYNAMISM OF OUR REGION;
DEPEND ON TH4E MAINTENANCE OF AN OPEN INTERNATIONAL TRADING SYSTEM.
CALLS SUCH AS THOSE DY PRIME MINISIER NAKASONE AND SPECIAL TRADE
REPRESENTATIVE BROCK FOR A NEW ROUND OF MULTILATERAL TRADE
NEGOTIATIONS ARE BOTH TIMELY AND APT. I THINK IT IS IMPORTANT HOWEVER
THAT EVERY EFFORT NOW BE MADE TO ENSURE SUCH A ROUND C* GNTRIBUTES NOT
ONLY TO GLOBAL TRADE EXPANSION GENERALLY BUT ALSO TO CONDITIONS
CONDUCIVE TO EVEN STRONGER ECONOMIC AND TRADING ACTIVITY BY COUNTRIES
OF THIS REGIUN. IF THIS IS TO HAPPEN A NEW TRADE ROUND WILL HAVE TO
ADDRESS A NUMBER OF AREAS PREVIOUSLY PUT ASIDE AS EXCEPTIONS TO TH4E
GENERAL TRADING RULES. SUBSIDIES AND NON-TARIFF BARRIERS TO TRADE,
FOR EXAMPLE, S1HOULD BE ADDRESSED EFFECTIVELY.
TO HELP ACHIEVE THIS RESULT I SUGGEST LAST NOVEMBER IN BANGKOK
THAT COUNTRIES OF THIS REGION SHOULD CONSIDER CAREFULLY HOW THEY
MIGHT BEST SECURE ATTENTION TO THEIR INTERESTS IN SUCH A ROUND.
SINCE THEN I HAVE BEEN VERY ENCOURAGED B3Y THE SUPPORT W4ITHIN THIS
REGIONAL FOR SUCH AN APPROACH. PRIME MINISTER NAKASONE AND PRESIDENT
CHUN LENT THIS SUGGESTION THEIR EXPLICIT SUPPOF. T AND PREMIER ZHAODESPITE
CHINA'S NOT BEING A MEMBER OF G. A. T. T. INDICATED CHINA'S
INTEREST IN BEING IDENTIFIED WITH THE APPROACH I' HAVE PROPOSED.
BEFORE LEAVING AUSTRALIA I ALSO RECEIVED FROM PRIME MINISTER LEE
KUWAN YEW A. LETTER SUGGESTING THAT W4E SHOULD WORK TOGETHER TO THITS
END. THIS WAS ESPECIALLY WELCOME. I INTEND FOLLOWING IT UP WITH4 HIM
LATER TODAY.
PROGRESS THROUGH4 A MULTILATERAL ROUND W4ILL NECESSARILY BE SLOW.
RESULTS HOWEVER ARE THAT IS NEEDED AND, AS THEY ARE ACHIEVED, I
AM SURE THE WORLD IJILL BE A BETTER PLACE FOR THEM.
IN THIS REGARD I LOOK FORWARD PARTICULARLY TO AUSTRALIA AND
SINGAPORE BUILDING ON OUR LONG-STANDING CLOSE AND PRODUCTIVE
RELATIONSHIP, TO OUR MUTUAL ADVANTAGE, AND TO THE ADVAN4TAGE OF THE
WIDE REGION OF WHICH WE ARE PART.