PRIMEIN ISTE
FOR MEDIA EMBARGOED UNTIL DELIVERY
INAUGURAL FRANK FORDE MEMORIAL ADDRESS
DELIVERED BY THE PRIME MINISTER, BOB HAWKE AC MP
ROCKHAMPTON, 25 JUNE 1985
REFORM THE NEVER-ENDING CHALLENGE
It is a great honour to be asked to deliver the
inaugural Frank Forde Memorial Address, and a pleasure
to be able to do so here in this city of Rockhampton,
with which Frank Forde was so closely connected
throughout his long career.
Although this is the occasion of the first Memorial
Address, it is also a continuation of the series of
addresses begun in Frank Forde's lifetime in 1973.
one of the enduring sources of the strength of the
Australian Labor Party lies in its sense of continuity.
It is a Party which always looks to the future, yet
always draws strength from its past.
And these lectures themselves provide a very pleasing
and satisfying example of that sense of continuity.
They were established on the initiative of Keith Wright,
then Member for Rockhampton in the Queensland
Legislative Assembly, as a tribute to the man who had
entered the Queensland Parliament as Member for
Rockhampton in 1917. They hiTve been continued on the
initiative of Keith Wright as the Member for Capricornia
in the House of Representatives, as a tribute to the man
who represented Capricornia in the Federal Parliament
from 1922 until 1946.
The inaugural address to honour the man who had been
briefly Prime Minister of Australia in 1945, was
delivered by the Prime Minister of Australia, Gough
Whitlam, in 1973.
I had the honour to deliver the next in the series in
1975 as National President of the Party and President of
the ACTU.
The first official task which I had to undertake in the
House of Representatives as Prime Minister of Australia
was to move a condolence motion placing on record the
House's appreciation of Frank Forde's long and
meritorious public service.
He had been born at Mitchell in July 1890 at the very
time of the tumultuous events here in Queensland which
gave birth to the Labor Party. Barely a month after his
death, on 28 January 1983 at the age of 92, the
Australian Labor Party was once again called to the
leadership of this nation by the people of Australia.
Now the honour falls to me, as Prime Minister, to
inaugurate the Frank Forde memorial address.
And so I say, in recalling these facts, that these
addresses themselves, in honouring one man and one life
of long service to the Party, to Queensland and to
Australia, express our sense of continuity and also
honour the service of the countless thousands upon
thousands, men and women, who have served, sustained,
and strengthened the Australian Labor Party and the
Australian Labor movement, now for nearly a century.
Because this is the inaugural memorial address, it is
appropriate that I should set out, briefly, the
principal facts of Frank Forde's long career.
Frank Forde was born at Mitchell in Queensland on 18
July 1890... After completing his education at the
Christian Brothers College in Toowoomba, he joined the
then Postmaster-General's Department.
It was at that time that he first joined the Australian
Labor Party. In 1917, he was elected to the Queensland
Legislative Assembly where he remained until 1922 when
he decided to enter Federal politics. He was elected to
the House of Representatives as member for Capricornia,
a seat which he was to retain -successfully until 1946.
During the time of the Scullin Government, Frank Forde
first achieved ministerial rank, first as
Assistant Minister for TZrade and Customs, from October
1929 until February 1931, and later as Minister for
Trade and Customs from February 1931 until January 1932.
During his time he also served as Acting Minister for
Transport.
After the defeat of the Scullin Government, he was
elected Deputy Leader of the Federal Parliamentary Labor
Party. In 1935, he was defeated in the contest for the
leadership by only one vote. The man who became leader
was John Curtin. From then, to the day of Curtin's death
in July 1945, Frank Forde remained Curtin's loyal
deputy. He was Deputy Prime Minister from October 1941
and Minister for the Army throughout the war.
After the sudden death of John Curtin in July 1945,
Frank Forde briefly became Prime Minister. When Ben
Chifley was elected as Leader of the Australian Labor
Party, Frank Forde continued as his deputy and Minister
for the Army.
In 1945 he was a member of the Australian delegation to
the conference which established the United Nations.
Surprisingly, in 1946 he was defeated at the general
election. Frank Forde's contributions and talents were
not lost to the country when he lost his seat at the
1946 election. He was appointed to the position of High
Commissioner to Canada, a post which he filled with
considerable distinction until 1953. In 1955, at a
time of great turbulence in the Australian Labor Party,
Frank Forde re-entered politics when he was elected to
the Queensland Parliament after a 33-year absence. He
was beaten in the closely contested State election in
1957.
The great years of achievement remain of course, the war
years, as Minister for the Army and Curtin's Deputy.
As Minister for the Army, Forde was deeply involved in
the higher direction of the war.
But it can never be emphasised too strongly that all the
members of the Curtin Cabinet, whatever their immediate
ministerial responsibilities, were involved in planning
for the peace.
As soon as the immediate crisis with its threat of
invasion had passed, and it was certain that victory,
however hard, however long, ibuld be won, the work of
post-war reconstruction began.
It is essential to understand this to appreciate fully
the achievements of the Curtin Government.
It was not only S great war government, it was a
government of reform and reconstruct ion.
Curtin and his colleagues deeply believed that just as
the nation's resources had been fully mobilised for war,
so they could be mobilised for peace.
And Curtin believed that, given leadership, the
Australian people would respond to the challenge of
rebuilding the post-war society, as they had so
splendidly to the supreme crisis of war.
We can now see that World War II acted as a catalyst
for change enormous change in Australia.
Australian society and the Australian economy were
fundamentally reshaped in the years between 1942 and
1949. The governments of Curtin and Chifley accepted the
Federal government's overriding responsibility for the
management of the Australian economy, set the goal of
full employment, vastly expanded the manufacturing and
heavy industry base, transformed the social security
system, established the post-war immigration scheme,
reformed the banking system, accepted, for the first
time, a share of Commonwealth responsibility for
education, health, housing, power and transport in
short, established the framework of modern Australia.
One reform of immense significance was introduced as a
direct response to the urgency of the war effort.
That was the establishment of the uniform tax system in
1943.
As I have said, the war was the catalyst which shaped
modern Australia.
But the important thing to understand about the Curtin
and Chifley Governments is that they were determined to
react positively and constructively to the challenges
and opportunities offered by the conditions the war had
created. The war was the crucible for change. Vast changes were
inevitable. But it was the Curtin and Chifley
Governments which forged the shape of change.
They were not prepared to stand aside while without
structure or direction change overtook the Australian
people. They would not allow change to overwhelm a
nation unprepared -and ill-equipped to cope with change
or to meet the tremendous challenges of the immediate
post-war years.
Both those governments believed that it was the proper
role of the national government to accept responsibility
for change, to identify great problems before they got
out of control and to take the tough decisions to
rectify them.
In short, they believed in leadership.
And it was post-war reconstruction, initiated by Curtin
and implemented by Chifley, which laid the foundations
for Australia's growth and progress for the next quarter
of a century.
In March 1983, Labor was once again called on by the
people of Australia in a time of crisis and in a time of
great change.
Our urgent and immediate task was to achieve economic
recovery.
But like the Curtin and Chifley Governments, we have
never accep'%-ed that our only responsibility was to solve
the immediate crisis.
And while I have never pretended to compare, in scale
and scope, the crisis faced by the Curtin/ Forde
Government, there is this parallel: unless the efforts
and sacrifices of the Australian people and Australian
governments to overcome both crises were used -to secure
positive and permanent change and reform, then those
efforts and sacrifices would have been, indeed, in vain.
That was the approach of the Curtin Government. It is
our approach now.
If as a government and a nation we do not use the new
strength and vigour we have achieved together in the
economy, to equip Australia to meet the challenges and
adjust to the changes over the long years ahead, then we
would be as recreant to our responsibilities as our
predecessors were.
The approach we have adopted can be summarised in the
words I used in the Policy Speech I delivered on behalf
of the Party last November. I. said:
We offer a continuing, coherent program a firm
ordering of priorities to build a prosperous,
fair and caring society; -a strong and dynamic
nation harnessing to the full the talents of our
people to meet even' more effectively the
challenges ati8 opportunities of an increasingly
complex world and an increasingly competitive
Western Pacific region, in which our destiny
has placed us forever; and a nation in which,
as we strive to meet those challenges and to
reach those goals, all Australians, whatever
their background, can truly feel that they are
involved, that each has a part to play, in the
real life and growth of a great nation.
In our first term, the emphasis was on achieving
recovery through reconciliation. Now in our second term
the task is to sustain the recovery without inflation
and to achieve the structural reforms needed to maintain
the conditions for growth.
For too long Australians tended to assume that with our
abundance of resources, growth would come naturally,
without real effort, and that the world would readily'
buy our surplus production.
And the result was that, in the halcyon days,
opportunities were squandered to place our growth and
the maintenance of our standards on an even firmer
footing.
Now, that growth has once again been achieved and this
time by the efforts, restraint and responsibility of the
whole community we must ensure we do not make that
mistake again.
The structure of Australian industry is constantly
changing. In the past that change has occurred
haphazardly, often destructively for both those who
employ and those who are employed, and all too often
without any real concern for the economic and social
implications for the community.
We are therefore committed to encouraging, with the cooperation-
of business, trade unions and relevant levels
of Government, the orderly restructuring of Australian
industry. We want to see an industrial structure which
is competitive, export-oriented and capable of providing
increased, secure and satisfying employment.
We have demonstrated that this can be done in the steel
industry which was facing extinction when we came to
office. And we have shown it can be done in the motor
vehicle industry.
If we are to maximise our own economic growth we must
increasingly, as I have often put it, mesh our economy
into the rapidly expanding economies of North-east and
South-east Asia and the Pacific. Our policies will
continue increasingly toobe directed towards ensuring
that we contribute to and benefit from the growth of
these countries, not only in agricultural and mineral
products but through a range of processed and
manufactured goods and services, applying the best
technology available.
We must, as a government, as a nation, continue to work
systematically on long-term structural reforms designed
to raise the capacity for sustained growth: in trade;
in education; in the effective use of technology; in
business deregulation; in manufacturing and rural
industry, transport and other key economic sectors; and
in taxation reform.
All these reforms involve difficult decisions. Many of
them involve radical changes in conventional attitudes
which have become entrenched over the years.
But a government which shrank from the task of making
those decisions and seeking to change entrenched
attitudes would be unworthy of the great responsibility
entrusted to it by thxe people of Australia.
True, there is always an alternative. There is always
the soft option. There is always the temptation to
settle for drift, decay and decline the conservative
approach so admirably summed up by Sir William McMahon
as Prime Minister in 1972, when he announced: " We have
made the decision to make no decision"
That was the approach of our predecessors throughout
their seven years. More than anything else, it was
their lack of political courage in office which led to
the accumulation of the massive distortions and
inequalities,' not only in the tax system, but throughout
the society and the'economy.
So often they knew the right thing to do. They knew the
urgeht, necessary thing to do. They knew the action
that should be taken in the best interests of the nation
and the people. They knew what to do to give Australia
a more competitive banking system. They did not have
the courage to do i't Similarly, their nerve failed
them when it came to the deregulation of the financial
system and the floating of the dollar. They knew what
should be done. They lacked the political courage to
act. And in no instance wa their lack of courage and will so
manifest as in their approach to Australia's tax system.
It was under their regime that tax avoidance and evasion
became a national scandal and an indelible disgrace to
the coalition which' let it happen. When they had thrown
the national economy into its worst crisis for fifty
years, the tax avoidance industry was the fastestgrowing
industry tin Australia, as Commissioner Costigan
said in his interim report in December 1981.
Indeed, by then, wi'th economic growth at zero, it was
the only growth industry in Australia.
7-
And to understand fully the urgency of the reform we are
now tackling, it is necessary to put it squarely in the
context of the legacy of those seven years of wasted
opportunities and abdication of responsibility to the
people of Australia.
We have now embarked upon a great national debate on tax
reform. The starting point for any rational debate must
be an understanding of the consequences of doing
nothing, the consequences for the millions of ordinary
Australian taxpayers the middle and lower income
earners who are bearing the brunt of the massively
increased reliance on personal income tax under the
existin. g system.
Let us understand clearly the dimension of the problem.
Today thirty-nine percent of full-time earners in the
workforce are paying income tax at the forty-six cents
marginal rate. Without significant reform, that number
will be far in excess of fifty percent within three
years. There would be three million out of the five and
a half million full-time earners paying the forty-six
cents marginal rate. That is, we are approaching the
situation where for more than half the workforce, every
extra dollar in the pay packet will be eroded by half.
Thirty years ago, the upper income earners those above
the present-day equivalent of $ 35,000 paid more than
half the personal income tax collected in Australia.
Now, those in the upper income range. account for only
twenty percent.
And what-has happened, of course, is not only that
average earners are being pushed into the higher
marginal tax brackets, but as PAYE taxpayers, they are
bearing the burden of the tax avoidance devices
available only to the wealthier sections of the
community. And these are some of the factors influencing our
preference, as a Government, for a broadening of the
tax base.
We are convinced that only in that way would we be able
to ensure that tax is paid accordingly to capacity to
pay. The fact is, that as the system is now operating in
Australia, the direct tax system has ceased to be
genuinely progressive. It is just not achieving the
purposes of equity and justice or efficiency which have
been the reasons for Labor's traditional preference.
We have now to look at the reality. We have to look at
the totality of the sy~ tem. And the reality is that
the chief losers from the system as it is now operating
in its totality are the ordinary working men and women
the great Labor Party Was formed to protect and advance.
But beyond our special'responsibilities as a Labor
Party, there are our wider responsibilities, as a Labor
Government, to all the people of Australia.
We derive those responsibilities from the mandate twice
given to us by the people.
And the clearest part of the renewed mandate conferred
on 1 December 1984 related to our commitment to tax
reform. The commitment was specific. We were specific as to the
means we would use. we were specific about the ends,
about our objectives. We were specific about the
process we would adopt in pursuance of those objectives.
I know of no clearer mandate ever given by the
Australian people. I know of no clearer commitment made
by an Australian government.
It is necessary to emphasise this fact, because there
have been attempts by our opponents and by some
commentators who should know better to suggest that
the road to the national summit on tax reform began with
some half-hearted, half-baked campaign promise made on
the run.
It is very simple to explode such a myth. All that is
necessaryis to refer to the Policy Speech.
In that speech our covenant with the people I set
the priorities for a second term.
I said that after the maintenance of strong, economic
and employment growth with low inflation, our major
priority at home for our second term was:
A genuine reform of the -Australian tax system
to promote growth and to ensure that the benefits
of that growth are fairly shared and bring
lasting relief on personal income taxes to the
millions of ordinary Australian taxpayers.
And then, in the -detailed section on tax reform the
core of our domestic program I said:
The second major challenge for our next term
of office is reform and a complete overhaul of
our tax system. That will be of fundamental
importance to the task of national
reconstruction.
And I said:
A thoroughgoing review and reform of the
entire tax system will be central to all our
tasks in our second term.
I set out the nine principles on which our reform would
be based: First, ther must be no increase in the overall tax
burden, as measured by the share of Commonwealth
Government revenue in gross domestic product.
Second, any reform must continue the process
already begun by this Government, and provide
further major cuts in personal income tax.
Third, -taxation changes must contribute to
smashing tax avoidance and evasion which remain
as features of the tax system which the
Government inherited.
Fourth, any reform must lead to a simpler system
which therefore all Australians can understand
more easily, and which therefore makes tax
avoidance and evasion more difficult.
Fifth, any reform package must result in a
tax system which is fairer, so. that Australians
are only required to pay tax according to their
capacity to pay, and the overall system must
be progressive.
Sixth, any tax reform must not disadvantage
recipients of welfare benefits, and should
reduce or remove " poverty traps"
Seventh, if any reform package which includes
changes in indirect taxes is contemplated, it
must be acceptable to the-various groups in
the Australian community whose response will
determine whether we can maintain moderation in
wage movements.
Eighth, any reform ~ must provide the best possible
climate for i~ fvestment, growth and employment in
Australia. Ninth, any reform package must have widespread
community support, including support at a
widely representative national tax summit of
economic organisations and community groups.
So it can be seen that we sought the clearest possible
mandate for tax reform. We received the mandate we
sought. We accept the responsibility conferred on us by
the people.
To do otherwise to attempt to shift or shelve our
responsibilities would be to turn our backs on all we
stand for as a Government and a Party. But it would be
more than that; in a very real sense, we would be
turning our backs on the people of Australia.
And no Labor Government which is true to the traditions
of the governments of which Frank Forde was a leading
member can ever do that.
The process of tax reform which was given its mandate by
the re-election of the Labor Government more than six
months ago will reach a crucial stage with next week's
national summnit.
The specific purposes of this conference are of course
very different from those at the national summit of
April 1983 which so successfully laid the foundations
for national reconciliation and national recovery.
one great difference is this:
The Economic Summit was called to bring Australians
together in the fight against the worst economic crisis
for fifty years.
The full extent of the crisis was plain to every
Australian. It was a tangible part of the daily
experience of us all. Our predecessors were able to
conceal the growing inequities and inefficiencies of the
tax system, in a way it was impossible to conceal the
damage wrought by their economic policies before 1983.
By comparison, next week's summit is called to deal with
a crisis which has not yet fully developed. Anticipation
and prevention of crisis is oftEen the most difficult and
challenging task of statesmanship. The threatened
breakdown in the Australian tax system can be prevented
only if we have the courage and confidence to act now.
So in the very nature of'things, the task for next'
week's summit fdr the Government, the participants,
and ultimately, for the people is far more complex
than the task of the 1983 Summit.
But the great factor both Summits have in common, is
that their success ultimately depends upon the
intelligence, maturity, common sense and if you like,
the enlightened self-interest of the Australian
people. In the final analysis, it was the people of Australia
who made the 1983 summit work. And so it must be in
1985. It was, in John Curtin's phrase, " the inherent
qualities of the Australian people" which enabled the
Government of which Frank Forde was so distinguished a
member, to take Australia triumphantly through its
supreme crisis. I for one, will never be prepared to
concede that those inherent qualities are any less
evident, any less capable of responding to
leadership, than they were forty years ago.
And that is why without in any way discounting the
difficulties and complexities of the task ahead I am
confident of a final outcome which will prove of
enduring benefit to the people of Australia.