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4AU S A Li
PRIME MINISTER
OPENING OF DOW CHEMICAL ( AUSTRALIA) INSTALLATION -ALTONA
16 NOVEMBER 1984
IAM VERY HAPPY TO BE ABLE 10 JOIN YOU T ODAY AT THE OPENING OF
THIS NEW INSTALLATION AT THE Dow CHEMICAL PLANT IN ALTONA,
THIS $ 15 MILLION PLANT REPRESENTS A MAJOR INVESTMENT IN OUR ECONOMY
AND UNDERSCORES Dow CHEMICAL'S ROLE AS ONE OF THE PIONEERS IN THE
FORMATION OF THE ALTONA PETROCHEMICA~ L COMPLEX.:
IAM PLEASED THAT Dow CHEMICAL HAS COMMITTED ITS RESOURCES TO
THIS PROJECT AND ITAKE IT AS A CLEAR DEMONSTRATION OF THE
CONFIDENCE AND CONVICTION OF YOUR COMPANY IN THE FUTURE OF
OUR ECONOMY.
FROM THE OUTSET, THIS GOVERNMENT HAS BEEN ACUTELY AWARE OF
THE NE , ED TO FOSTER AVJ ENVIRONMENT IN WHICH THE AUSTRALIAN
BUSINESS COMMUNITY CAN FLOURISH,
IT IS A SIMPLE FACT THAT AROUND THREE-QUARTERS OF AUSTRALIAN
WORKERS ARE EMPLOYED BY THE PRIVATE SECTOR. IF WE ARE TO
ACHIEVE A SUSTAINED RETURN TO ECONOMIC GROWTH AT RATES THAT WILL MEET
OUR OBJECTIVE OF REDUCING AND EVENTUALLY ELIMINATING UNEMPLOYMENT,*
THEN IT IS OBVIOUS THAT THE PRIVATE SECTOR MUST PLAY THE MAJOR
ROLE IN PROVIDING NEW JOBS. s .2/ s.
THE GOVERNMENT RECOGNISES THAT A RETURN TO HIGH LEVELS
OF INVESTMENT IS A KEY REQUIREMENT TO THIS PROCESS WE
ALSO RECOGNISE THAT FOR BUSINESS TO INVEST, IT MUST BE
PROFITABLE FOR BUSINESS TO DO SO,
THE GOVERNMENT IS COMMITTED TO A VIGOROUS, PROFITABLE
BUSINESS SECTOR. WE HAVE MADE A VITAL CONTRIBUTION THROUGH
POLICIES THAT HAVE SUPPORTED ECONOMIC RECOVERY, AND THAT
HAVE INJECTED A GREATER DEGREE OF CERTAINTY AND
PREDICTABILITY INTO THE BUSINESS ENVIRONMENT,
PRIOR TO THE GOVERNMENT'S COMING TO OFFICE, THE. oAUSTRALIAN
ECONOMY HAD BEEN . SHRINKING, THE ANEMPHLAODY MREINSTEN
TO A LEVEL NOT: SEEN SINCE THE GREAT DEPRESSION, THE SHARE
OF PROFITS IN THE NATIONAL INCOME WAS AT AN HISTORICALLY
LOW LEVEL, AND OUR RATE OF INFLATION WAS AROUND TWICE THAT
OF OUR TRADING PARTNERS.
THIS GOVERNMENT BROUGHT WITH IT TO OFFICE A RATIONAL AND
COHERENT STRATEGY THAT, WITH THE SUPPORT AND UNDERSTANDING
OF THE COMMUNITY, HAS BEEN APPLIED TO THE NATIONIS PROBLEMS,
SINCE THE GOVERNMENT CAME TO OFFICE THERE HAS BEEN A DRAMATIC
TURNAROUND IN OUR ECONOMY. THAT TURNAROUND HAS BEEN DUE ABOVE
ALL ELSE TO THIS GOVERNMENT'S ECONOMIC POLICIES. THESE
POLICIES HAVE LAUNCHED AUSTRALIA ON THE PATH OF ECONOMIC
RECOVERY,
THE FACTS SPEAK FOR THEMSELVES. REAL GROSS DOMESTIC PRODUCT
ROSE BY 10 PER CENT DURING THE LAST FINANCIAL YEAR AND THE
INCREASE WAS BROADLY BASED. SOME 267,000 NEW JOBS HAVE
BEEN CREATED AND THE UNEMPLOYMENT RATE HAS FALLEN FROM 10.2
PER CENT IN APRIL 1983 TO 8.6 PER CENT IN OCTOBER 1984.
ANNUAL INFLATION, AFTER ALLOWING FOR THE IMPACT OF MEDICARE,
HAS FALLEN To 6,1 PER CENT AND OVER THE NEXT YEAR WILL BE LESS
THAN FIVE PER CENT. THIS IS LESS THAN HALF THE RATE INHERITED
BY THE GOVERNMENT, AND VIRTUALLY ELIMINATES THE GAP BETWEEN
OUR INFLATION RATE AND THAT OF OUR TRADING PARTNERS.
OUR PRICES AND INCOMES POLICY, BASED SgUARELY. ON THE ACCORD,
HAS ALSO SUCCESSFULLY REDUCED T . HE INCIDENCE OF'INDUSTRIAL
DISPUTATION AND HAS PROVIDED AN ENVIRONMENT OF CERTAINTY
AND PREDICTABILITY FOR THE WAGE FIXATION PROCESS A CRUCIAL
FACTOR IN FORWARD . PLANNING FOR BUSINESS.
THERE HAS BEEN VIRTUALLY TOTAL COMPLIANCE WITH THE
PRINCIPLES OF WAGE FIXATION DETERMINED BY THE ARBITRATION
COMMISSION AND SUPPORTED BY THE GOVERNMENT. THE GOVERNMENT
AND THE ACTU ARE COMMITTED TO ENSURING THAT THIS COMPLIANCE
CONTINUES6 AND AS A RESULT OF THE GOVERNMENT' S PRICES AND
INCOMES POLICY, IN CONJUNCTION WITH THE WAGE FIXING PRINCIPLESi
THERE WILL BE NO INDEXATION INCREASES IN AWARD WAGES BETWEEN
APRIL 1984 AND APRIL 1985. / 41.
CONSEQUENTLY DURING THIS FINANCIAL YEAR WE EXPECT AWARD
WAGES TO GROW BY ONLY ABOUT 2 PER CENT. THAT COMPARES
WITH ANNUAL AWARD WAGE GROWTH OF OVER 15 PER CENT AS A RESULT
OF THE 1981-82 WAGES EXPLOSION CAUSED BY THE MISGUIDED
POLICIES OF OUR PREDECESSORS. AND. WE HAVE ACHIEVED THIS'
VAST IMPROVEMENT WITHOUT THE INDUS-TRIAL DISRUPTION AND
CHAOS THAT IS INEVITABLY GENERATED BY THE CONFRONTATIONIST
APPROACH OF* OUR OPPONENTS.
THIS DRAMATICALLY ALTERED WAGES AND INFLATION -OUTLOOK IS
A FOUNDATION FOR CONTINUED ECONOMIC GROWTH. BUSINESS CAN NOW
PLAN AHtAD WITH CONFIDENCE, CAN INVEST,' IN NEW. PRLOJECTS -SUCH
AS THIS MARVELLOUS ONE AND CAN CREA'TE MORE ANDl MORE NEW
JOBS FOR AUSTRALIANS YOUNG AND OLD. THIS COUNTRY IS BEGINNING
A NEW ERA OF ECONOMIC PROSPERITY. WE ARE DETERMINED THAT THIS
OPPORTUNITY FOR LONG-TERM PROSPERITY AND GROWTH WILL NOT
ONCE AGAIN BE SQUANDERED,
THE FRUITS OF THE SUCCESS OF THE GOVERNMENT'S POLICIES HAVE
BEEN PAR1fLY REFLECTED IN THE DRAMATIC REDUCTION IN THE REAL
COST TO BUSINESS OF EMPLOYING LABOUR IN CLUDING MOST
ON-COSTS AM~ IN THE~ RECOVERY OF THE SHARE OF COMPANY INCOME
IN THE NATIONAL INCOME TO LEVELS LAST SEEN IN THE LATE 1960' s
AND EARLY 1970' s. IN SHORT, WE HAVE RESTORED ADEQUATE LEVELS
OF PROFITABILITY IN THE BUSINESS SECTOR, AN ESSENTIAL
PRECONDITION FOR BUSINESS INVESTMENT.
THE GOVERNMENT HAS ALSO TAKEN SPECIFIC ACTIONS IN THE LAST
BUDGET TO ENCOURAGE BUSINESS INVESTMENT, INCLUDING:
THE INTRODUCTION OF COMPANY GROUP TAXATION;
LIFTING THE DEPRECIATION RATE FOR COMMERCIAL
BUILDINGS FROM 2.5 PER CENT PER ANNUM TO
4 PER CENT PER ANNUMj AND
AN EXTENSION BY ONE YEAR OF THE TIME FOR THE
ELIGIBILITY OF PLANT ORDERED BEFORE 1 JULY 1985
UNDER THE TERMS OF THE INVESTMENT ALLOWANCE.
SINCE THIS GOVERNMENT CAME TO OFFICE, THERE HAS ALSO BEEN A
MARKED FALL IN INTEREST RATES, THIS ONCE AGAIN REFLECTS THE
SUCCESS OF OUR POLICIES AND UNDERPINS LOWER INFLATIONARY
EXPECTATIONS IN THE COMMUNITY.
THE GOVERNMENT RECOG NISES THE UNQUESTIONABLE IMPORTANCE OF
THE COST OF BORROWING TO BUSINESS INVESTMENT DECISIONS. IN
OUR LAST BUDGET WE ACTED FIRMLY TO REDUCE THE PRESSURES ON
FINANCIAL MARKETS BY REDUCING THE PUBLIC SECTOR BORROWING
REQUIREMENT. LOOKING AHEAD, WE HAVE PROMISED TO ENSURE THAT
THE BUDGET DEFICIT WILL DECLINE AS A PERCENTAGE OF THE GDP,
IN LINE WITH OUR GENERAL APPROACH TO ECONOMIC MANAGEMENT, WE
WILL ENSURE THAT THE DECLINE IN THE DEFICIT IS MORE RAPID WHE1N
PRIVATE INVESTMENT IS GROWING STRONGLY. REINFORCING THIS PLEDGE
WE HAVE ALSO PROMISED THAT GOVERNMENT SPENDING WILL GROW AT A
LOWER RATE THAN GDP. 16.
THESE PLEDGES, COMBINED WITH OUR UNDERTAKING T0 RES'TRAIN
GOVERNMENT TAX RECEIPTS TO-A PERCENTAGE OF THE: GDP NO
HIGHER THAN THE CURRENT LEVEL, PROVIDE, I SUGGEST, THE
BEST POSSIBLE BASIS UPON WHICH INVESTORS CAN CONTINUE TO
COMMIT THEMSELVES WITH CONFIDENCE.
RECENT INFORMATION ON BUSINESS INVESTMENTo INDEED, CONFIRMS
THE GOVERNMENT'S SUCCESS IN STIMULATING INVESTMENT. THE
NATIONAL ACCOUNTS SHOW THAT REAL BUSINESS INVESTMENT ROSE
IN EACH OF THE MARCH AND JUNE QUARTERS OF 1984 AFTER EIGHT
SUCCESSIVE QUARTERS OF DECLINE*
IN ADDITION, SURVEYS OF INVESTMENT I hTENT I ON ;_ ND ICATE TH4AT
BUSINESS INVESTMENT IS SET TO RISE FURTHER IN 1984-854 THERE
IS EVERY INDICATION THAT THIS MOMENTUM WILL BE CARRIED FORWARD
INTO EVEN STRONGER PRIVATE INVESTMENT GROWTH IN 1985-86,
THESE ARE INDEED ENCOURAGING SIGNS THAT THE FOUNDATIONS FOR
SUSTAINED RATES OF NON-INFLATIONARY ECONOMIC GROWTH ARE WELL
IN PLACE AND THAT BUSINESS IS INCREASINGLY CONFIDENT ABOUT
THE ECONOMIC OUTLOOK.
THIS GROWTH IN CONFIDENCE IS PART OF THE NEW WORLD-WIDE
CONFIDENCE IN AUSTRALIA AND ITS FUTURE. THIS, AS I SAID THE
OTHER DAY; IS ITSELF A REFLECTION OF OUR NEW SELF-CONFIDENCE,
OUR CONFIDENCE IN OURSELVES AND IN OUR OWN FUTURE. IT IS
ON THIS BASIS THAT THE LABOR GOVERNMENT AIMS TO BUILD AN
EVEN BETTER, FAIRER AUSTRALIA.