CHECK AGAINST DELIVERY SPEECH BY THE
TO THE ADELAIDE CHAMBER
ADELAIDE 8 EMBARGOED UNTIL DELIVERY
PRIME MINISTER
OF COMMERCE ANNUAL DINNER
NOVEMBER 1985
I AM VERY GLAD TO BE HERE THIS EVENING. I WAS LAST IN THIS
SPLENDID CITY JUST FIVE DAYS AGO WHEN ALONG WITH TENS OF
THOUSANDS OF OTHER AUSTRALIANS I HAD THE GREAT PLEASURE OF
ATTENDING THE INAUGURAL AUSTRALIAN FORMULA 1 GRAND PRIX.
RIGHT AT THE OUTSET, I WANT TO CONGRATULATE JOHN BANNON'S
GOVERNMENT AND THE PEOPLE OF ADELAIDE ON THE OUTSTANDING
SUCCESS OF THAT EVENT.
THE GRAND PRIX CAPTURED THE IMAGINATION OF AUSTRALIANS. IT
DEMONSTRATED ENTREPRENEURIAL FLAIR AND CONSIDERABLE
ORGANISATIONAL ABILITY. THE SUCCESSFUL STAGING OF THE GRAND
PRIX WAS A FINE EXAMPLE OF WHAT AUSTRALIANS ARE CAPABLE OF
ACHIEVING. THE LAST OCCASION ON WHICH I ADDRESSED YOUR CHAMBER WAS IN
1979.
ON THAT OCCASION AUSTRALIA HAD ENDURED NOT QUITE HALF OF THE
PREVIOUS GOVERNMENT'S TERM OF OFFICE. BUT ALREADY WE HAD
EXPERIENCED THREE YEARS OF THE CONSEQUENCES OF THE
FIGHT-INFLATION-FIRST-STRATEGY, THREE YEARS OF RISING
UNEMPLOYMENT, DEPRESSED DOMESTIC ACTIVITY, LOW PROFITABILITY
AND STUBBORNLY HIGH INFLATION. AND WE HAD YET TO EXPERIENCE
THE MOST SEVERE DOWNTURN IN EMPLOYMENT SINCE THE DEPRESSION
OF THE 19301S. UNFORTUNATELY, THOSE 3 YEARS BECAME 7 1/ 2
YEARS OF A FAILED STRATEGY. A U J,
W
SINCE THIS GOVERNMENT CAME TO OFFICE IN MARCH 1983, WE HAVE
CONSISTENTLY APPLIED AN ARTICULATED ECONOMIC STRATEGY WHICH
HAS LIFTED THE ECONOMY OUT OF RECESSION AND ON TO A STABLE
LONG-TERM GROWTH PATH.
IT WAS AND IS A STRATEGY RADICALLY DIFFERENT FROM
POLICIES PREVIOUSLY ADOPTED, WHICH RELIED ON FIGHTING
INFLATION THROUGH CONTRACTIONARY MONETARY AND FISCAL
POLICIES. THOSE POLICIES REAPED AN INEVITABLY HEAVY TOLL IN
UNEMPLOYMENT AND HUMAN MISERY A TOLL NO AUSTRALIAN
GOVERNMENT COULD EVER TOLERATE WITH EQUANIMITY.
OURS IS A STRATEGY UNDERPINNED BY THE PRICES AND INCOMES
ACCORD BETWEEN THE GOVERNMENT AND THE TRADE UNION MOVEMENT.
IT IS, A-STRATEGY WHICH IS BASED ON CONSULTATION AND
CO-OPERATION BETWEEN THE MAJOR GROUPS WITHIN THE ECONOMY.
IT IS A STRATEGY SOUNDLY BASED ON RESPONSIBLE MONETARY AND
FISCAL POLICY, BUT WHICH IMPROVES THE EFFECTIVENESS OF THOSE
CONVENTIONAL POLICY INSTRUMENTS BY ACHIEVING A SUBSTANTIAL
DEGREE OF INCOME AND INFLATION RESTRAINT UNDER THE ACCORD.
IT IS MOREOVER, A POLICY WHICH RECOGNISES THE NEED TO
INSTITUTE MANAGED STRUCTURAL CHANGE IN AUSTRALIA'S
INDUSTRIAL STRUCTURE CHANGE DESIGNED TO EQUIP AUSTRALIA TO
COMPETE IN THE HARSH INTERNATIONAL ECONOMY OF THE LATE
1980' S AND BEYOND.
AND IT IS A STRATEGY WHICH HAS CLEARLY WORKED.
ITS SUCCESS CAN BE SEEN IN THE DRAMATIC FALL IN THE REAL
UNIT COSTS OF EMPLOYING LABOUR, WHICH HAS OCCURRED OVER THE
PAST TWO AND A HALF YEARS, AND IN THE CORRESPONDING SHARP
INCREASES IN THE LEVELS OF ECONOMIC ACTIVITY, EMPLOYMENT AND
BUSINESS PROFITS.
BUT DESPITE THE SUCCESS OF THAT STRATEGY IN TERMS OF MOST
ECONOMIC INDICATORS AND AUSTRALIA'S RELATIVE ECONOMIC
PERFORMANCE, IT HAS TO BE CONCEDED THE MARKETS, AND
PARTICULARLY THE FOREIGN EXCHANGE MARKETS HAVE HAVE NOT
ALWAYS SHARED THAT JUDGEMENT UNREASONABLY IN THE
GOVERNMENT'S VIEW.
I SHOULD PERHAPS MAKE SOME REFERENCE HERE TO DEVELOPMENTS IN
THE MONEY AND FOREIGN EXCHANGE MARKETS DURING THE PAST WEEK
IF FOR NO OTHER REASON THAN THAT YOU WILL BE EXPECTING ME
TO SAY SOMETHING.
PAUL KEATING AND I HAVE, OF COURSE, CONSULTED ON THESE
DEVELOPMENTS. WE HAD EXTENSIVE DISCUSSIONS YESTERDAY ON THE
TREASURER'S RETURN FROM OVERSEAS WHEN, INTER ALIA, WE
REVIEWED THE APPROPRIATENESS OF THE GOVERNMENT'S OVERALL
ECONOMIC STRATEGY. LET ME MAKE CLEAR THE GOVERNMENT'S
ATTITUDE AND RESPONSE TO THESE DEVELOPMENTS.
FIRST, THIS GOVERNMENT IS ABOUT GETTING THE FUNDAMENTALS
RIGHT. IN THE END THAT IS WHAT WILL DETERMINE OUR ABILITY
TO PROSPER IN A COMPETITIVE WORLD. WE REMAIN OF THE VIEW
THAT THE GOVERNMENT'S BROAD ECONOMIC STRATEGY WHICH IS NOW
IN PLACE IS GEARED TO GETTING THE FUNDAMENTALS RIGHT AND TO
KEEPING THE ECONOMY GROWING AT A RATE WHICH IS BOTH
SUSTAINABLE AND CONDUCIVE TO FURTHER LOWERING THE RATE OF
UNEMPLOYMENT IN THIS COUNTRY.
SECONDLY, THE AUSTRALIAN EXCHANGE RATE IS FLOATING. THE
COMMON EXPERIENCE IS THAT FLOATING RATES ARE VOLATILE.
EVEN THE ECONOMIC STATISTICS WHICH DEALERS WATCH MOST
CLOSELY ARE VOLATILE.
EXCHANGE MARKETS REACT TO VIEWS ON A DAILY BASIS. REACTIONS
IN THE REAL ECONOMY HOWEVER FOR EXAMPLE Ib~ IMPORTS,
EXPORTS, PROFITS, ACTIVITY, EMPLOYMENT, INFLATION AND SO ON
REQUIRE MUCH MORE TIME TO COME THROUGH.
WE HAD ALWPYS EXPECTED AND HAVE CONSISTENTLY PREDICTED
THAT SOME OF THE ECONOMIC INDICATORS SUCH AS THE CURRENT
ACCOUNT DEFICIT OR THE CPI WOULD CERTAINLY APPEAR TO GET
WORSE BEFORE THE SOUGHT AFTER IMPROVEMENTS ARE ACHIEVED.
AND THAT, INDEED, IS HOW EVENTS HAVE UNFOLDED.
THE RESERVE BANK WILL CONTINUE TO OPERATE IN MARKETS IN A
WAY TO HELP IRON OUT THE INEVITABLE FLUCTUATIONS. BUT THE
IMPORTANT POINT IS THAT GOVERNMENTS CANNOT REASSESS THEIR
BROAD POLICY STANCE ON A DAILY OR. WEEKLY BASIS IN THE LIGHT
OF EXCHANGE RATE CHANGES.
RATHER, THE GOVERNMENT MUST HAVE REGARD TO THE INTERESTS OF
ALL AUSTRALIANS OVER THE SHORT AND MEDIUM TERM. IT
THEREFORE ADOPTS A QUITE DIFFERENT PERSPECTIVE FROM THE
OFTEN NARROW AND SHORT TERM PERSPECTIVE OF MANY PARTICIPANTS
IN MONEY AND FOREIGN EXCHANGE MARKETS.
THIRDLY, ALL THAT HAVING BEEN SAID, IT REMAINS TRUE THAT THE
EXCHANGE RATE IS AN INDICATOR WHICH HAS TO BE GIVEN DUE
WEIGHT IN THE SETTING OF MONETARY POLICY. AND, AS WAS THE
CASE EARLIER IN THE YEAR, THE SHARP DECLINE IN THE
AUSTRALIAN DOLLAR DURING THE PAST WEEK HAS RESULTED IN A
FURTHER FIRMING IN FINANCIAL CONTITIONS AND MONETARY POLICY,
WITH MOST INTEREST RATES RISING 2 1 PERCENTAGE POINT.
WE HAVE TO ACKNOWLEDGE THAT HIGHER INTEREST RATES HAVE TO BE
LIVED WITH FOR A TIME.
AGAINST THAT BACKGROUND I WISH, TONIGHT, TO DISCUSS BRIEFLY
SOME OF THE ONGER TERM PROCESSES OF ECONOMIC ADJUSTMENT
WHICH WE HAVE SET IN TRAIN.
THE SEPTEMBER QUARTER CPI ILLUSTRATES A CASE IN POINT. THE
OUTCOME, AT 2.2 PER CENT, WAS CERTAINLY FAR REMOVED FROM THE
ALARMIST FORECASTS OF SOME OF THE PESSIMISTS OF A FEW MONTHS
AGO. BUT, EVEN SO, THAT RESULT HAS NOTCHED THE ANNUAL RATE
OF INFLATION UP TO 7.6 PER CENT, A RATE WHICH IS OFTEN
COMPARED UNFAVOURABLY WITH THAT OF OUR TRADING PARTNERS.
IT IS IMPORTANT TO KEEP THAT UNDENIABLE FACT IN SOME
PERSPECTIVE. THE MAJOR FACTOR IN THE APPARENT ACCELERATION
OF INFLATION OVER THE PAST THREE QUARTERS HAS BEEN THE
IMPACT OF THE DEPRECIATION OF EARLIER THIS YEAR ON THE
PRICES OF TRADED GOODS.
IT SHOULD HARDLY COME AS ANY SURPRISE THAT SUCH PRICE
INCREASES HAVE OCCURRED. AFTER ALL, AS I HAVE FREQUENTLY
SAID PREVIOUSLY, IF THE DOMESTIC PRICES OF IMPORTS AND
EXPORTABLE COMMODITIES DO NOT INCREASE, THERE IS NO
MECHANISM BY WHICH DEPRECIATIONWCAN RESULT IN HIGHER
PRODUCTION DOMESTICALLY AND A GREATER MARKET SHARE AT HOME
AND ABROAD FOR THESE GOODS. THERE WOULD BE NO MECHANISM FOR
ACHIEVING THE NECESSARY IMPROVEMENT IN OUR COMPETITIVENESS
AND THE CONSEQUENT REDUCTION IN THE CURRENT ACCOUNT DEFICIT.
THE TASK WHICH ECONOMIC POLICY AND ESPECIALLY THE ACCORD
IS ADDRESSING IS TO ENSURE THAT THAT NECESSARY INCREASE IN
PRICES DOES NOT BECOME BUILT INTO OUR UNDERLYING COST
STRUCTURE, AND THUS SUBSTANTIALLY ERODE OUR COMPETITIVE
GAINS. THE NEW ACCORD PROVIDES SUBSTANTIAL MECHANISMS TO
CONTAIN THOSE DESTRUCTIVE PRESSURES. AND THE ACCORD IS
SUPPORTED BY MONETARY POLICY.
MONETARY POLICY WAS FIRMED EARLIER THIS YEAR AT A TIME WHEN
THE EXCHANGE RATE WAS OVERLY WEAK AND HAS BEEN KEPT FIRM
EVER SINCE. AS A CONSEQUENCE AUSTRALIA HAS EXPERIENCED A
PROLONGED PERIOD IN WHICH BOTH SHORT TERM AND LONG TERM
NOMINAL AND REAL INTEREST RATES HAVE SUBSTANTIALLY EXCEEDED
THOSE, OF SAY, THE UNITED STATES, THE UNITED KINGDOM, JAPAN
AND GERMANY.
OF COURSE, MONETARY POLICY IS NOT GUIDED SOLELY BY THE
EXCHANGE RATE. AS THE TREASURER AND GOVERNOR OF THE RESERVE
BANK HAVE SET OUT ON A NUMBER OF OCCASIONS, THE CONDUCT OF
MONETARY POLICY HAS BEEN GUIDED BY REFERENCE TO THE COMPLETE
RANGE OF FINANCIAL INDICATORS AND ECONOMIC DEVELOPMENTS.
IT IS OUR ASSESSMENT OF THE OVERALL PERFORMANCE OF THE
ECONOMY THAT HAS LED TO THE MAINTENANCE OF VERY FIRM
MONETARY POLICY THROUGHOUT 1985. THAT WILL CONTINUE SO LONG
AS IT IS APPROPRIATE.
THOUGH INTEREST RATES HAVE INCREASED IN SEVERAL STAGES SINCE
EARLY THIS YEAR, IN AUSTRALIA, IT IS ONLY RECENTLY THAT THE
FIRST SIGNS HAVE BEGUN TO EMERGE THAT THE DEMAND FOR CREDIT
MAY HAVE BEGUN TO SLOW. THOSE SIGNS ARE AS YET TENTATIVE
AND SUCH SLOWING AS IS EXPECTED IS, OF COURSE, A FACTOR
UNDERLYING THE SLOWING IN DOMESTIC DEMAND WHICH WE FORECAST
DURING THIS FINANCIAL YEAR.
THAT UNAVOIDABLE LAG HAS GREATLY COMPLICATED THE TASK OF
INTERPRETING THE STANCE OF MONETARY POLICY ESPECIALLY FOR
THOSE NOT CLOSE TO THE AUSTRALIAN FINANCIAL SCENE.
AND THAT TASK HAS BEEN FURTHER COMPLICATED BY THE EFFECTS OF
THE SUBSTANTIAL DEREGULATION WHICH THE FINANCIAL SYSTEM HAS
UNDERGONE. AUSTRALIA'S EXPERIENCE IN THIS AREA IS AKIN TO
THAT OF A NUMBER OF COUNTRIES, INCLUDING THE UNITED STATES,
THE UNITED KINGDOM AND CANADA.
BUT LET NO ONE BE FOOLED BY THESE COMPLICATIONS.
THE GOVERNMENT IS DETERMINED TO PURSUE THE MONETARY POLICY
REQUIRED TO KEEP THE AUSTRALIAN ECONOMY MOVING ON THE PATH
OF LONG TERM GROWTH. WE RECOGNISE THAT AN ESCALATION OF
INFLATION OVER AND ABOVE THAT REQUIRED TEMPORARILY TO PERMIT
DEPRECIATION TO BECOME EFFECTIVE WOULD BE DETRIMENTAL TO
AUSTRALIA REMAINING ON THAT PATH AND MONETARY POLICY
REFLECTS THAT RECOGNITION.
IN CONJUNCTION WITH THE WELL PROVEN MECHANISMS OF THE
ACCORD, POLICY IS THUS SET TO PRODUCE FINANCIAL CONDITIONS
WHICH WILL PERMIT THE LARGEST FEASIBLE IMPROVEMENT IN OUR
COMPETITIVENESS WHICH CAN BE OBTAINED.
IN TIME, THAT IMPROVEMENT IN OUR COMPETITIVENESS WILL BEGIN
TO REDUCE THE CURRENT ACCOUNT DEFICIT AS A PROPORTION OF
GDP. DOMESTIC PRODUCTION WILL ALSO BEGIN TO GROW AT A
SOMEWHAT FASTER PACE THAN DOMESTIC DEMAND, PROVIDING A
SOURCE OF CONTINUED ECONOMIC EXPANSION EVEN AS THE GROWTH OF
DOMESTIC DEMAND RECEDES FROM THE STRONG PACE OF 1985.
IN THAT CONTEXT THE SLOWING OF DOMESTIC DEMAND COULD OF
ITSELF BE EXPECTED TO REDUCE THE RATIO OF THE CURRENT
ACCOUNT DEFICIT TO GDP. THE LAGGED IMPROVEMENT IN THE
MARKET SHARE OF AUSTRALIA PRODUCERS WILL ALSO TEND TO REDUCE
THAT RATIO.
BUT AS THE BUDGET PAPERS AND STATEMENTS BY THE TREASURER AND
MYSELF HAVE INDICATED, THE REDUCTION IN THE CURRENT ACCOUNT
WILL COME THROUGH IN THE LATTER PART OF THE FINANCIAL YEAR.
NOBODY, THEREFORE, SHOULD HAVE BEEN SURPRISED TO SEE ONLY
SLOW PROGRESS IN OBTAINING SOME IMPROVEMENT IN THE CURRENT
ACCOUNT OVER THE EARLY MONTHS OF THE ADJUSTMENT CYCLE. THE
GOVERNMENT HAD TAKEN MARKETS INTO OUR CONFIDENCE WELL IN
ADVANCE. THE CURRENT ACCOUNT DEFICIT COULD AMOUNT TO ABOUT 5 PER CENT
OF GDP IN THE RECENTLY COMPLETED SEPTEMBER QUARTER, A RESULT
WHICH WAS INFLATED BY BOTH THE CELEBRATED J-CURVE EFFECT ON
NOMINAL VALUES AND THE SEASONAL PATTERN OF TRADE
TRANSACTIONS. THERE IS EXPECTED TO BE A MARKED DECLINE IN
THAT PROPORTION PERHAPS AS MUCH AS 1 PERCENTAGE POINT
OVER THE COURSE OF 1985-86. IF EVEN THE GAINS IN
COMPETITIVENESS OBTAINED IN THE FIRST HALF OF 1985 CAN BE
SUSTAINED AND IT IS THE CLEAR INTENTION OF POLICY THAT
THEY SHOULD BE THERE IS EVERY PROSPECT OF A SIGNIFICANT
FURTHER REDUCTION IN LATER QUARTERS.
CURRENT ACCOUNT ADJUSTMENT WILL, WITH A FURTHER DELAY,
RESULT IN AN EASING IN OUR INDEBTEDNESS TO FOREIGNERS, AS A
SHARE OF GDP.
AUSTRALIA'S DEBT OVERSEAS HAS RISEN SHARPLY IN RECENT YEARS.
THIS REFLECTS MAINLY THE CURRENT ACCOUNT IMBALANCES WHICH
WERE THE BY-PRODUCT OF OUR EARLIER LACK OF COMPETITIVENESS,
AND THE DETERIORATION IN THE TERMS ON WHICH OUR COMMODITY
EXPORTS EXCHANGE FOR IMPORTS ON WORLD MARKETS.
MOST RECENTLY, HOWEVER, DEPRECIATION HAS ITSELF ADDED
SUBSTANTIALLY TO THE $ A VALUE OF OUR FOREIGN OBLIGATIONS, IN
AN ADJUSTMENT WHICH IS ANALOGOUS TO THE 3-CURVE ON THE TRADE
ACCOUNT. ONCE MORE, IT IS IMPORTANT TO PLACE THIS DEVELOPMENT IN SOME
PERSPECTIVE. AUSTRALIA HAS TRADITIONALLY BEEN A NET
BORROWER ABROAD. ACCESS TO FOREIGN CAPITAL ( AND THE
ASSOCIATED EXPERTISE) HAS ENABLED AN EXPANSION OF NATIONAL
WEALTH WHICH COULD NOT OTHERWISE HAVE BEEN GENERATED USING
ONLY OUR OWN FINANCIAL RESOURCES.
THE REAL QUESTION THUS IS WHETHER OUR DEBT BURDEN IS
SUSTAINABLE. RECENT WORK BY THE OFFICE OF EPAC INDICATES
CLEARLY THAT, CONTRARY TO SOME CLAIMS, WHEN THE STATISTICS
ARE ADJUSTED TO PLACE THEM ON A COMPARABLE BASIS, AUSTRALIA
IS NOT IN ANY SENSE ONE OF THE mPROBLEM" DEBTORS.
DEPRECIATION -AND OUR POLICY RESPONSE, BASED PARTICULARLY
ON THE ACCORD -PROVIDES A BASIS FOR ENSURING THAT
AUSTRALIA'S OBLIGATIONS ABROAD CAN BE SERVICED WITHOUT
EITHER MASSIVE DISRUPTION TO THE ECONOMY OR INTOLERABLE
FUTURE STRAIN ON THE EXCHANGE RATE. WITHOUT-THE ACCORD THAT
ADJUSTMENT COULD ONLY HAVE BEEN ACCOMPLISHED AFTER A SHARP
CONTRACTION OF THE DOMESTIC ECONOMY WHICH WOULD BE COSTLY IN
BOTH ECONOMIC AND SOCIAL TERMS.
BUT OUR STRATEGY FOR SUSTAINED ECONOMIC PERFORMANCE, IS FAR
BROADER THAN I HAVE TIME TO DETAIL HERE TONIGHT.
IT INCLUDES A FISCAL POLICY WHICH RECOGNISES THE NEED TO
CURB THE GROWTH OF PUBLIC SECTOR EXPENDITURE AS THE ENGINE
OF PRIVATE SECTOR GROWTH BEGINS-TO FIRE ON ALL CYLINDERS.
IN JUST THREE BUDGETS WE HAVE MORE THAN HALVED OUR INHERITED
BUDGET DEFICIT AS A PROPORTION OF GDP AND REDUCED THE TOTAL
PUBLIC SECTOR BORROWING REQUIREMENT BY 2.7 PER CENT OF GDP.
IT INCLUDES TRADE POLICIES WHICH SEEK TO EXPAND AUSTRALIA'S
OPPORTUNITIES TO EXPORT. IN RECOGNITION OF THE REMARKABLE
GROWTH POTENTIAL OF OUR REGION, THESE IN TURN INCLUDE
STRATEGIES TO IDENTIFY THE SCOPE AND NATURE OF POTENTIAL
EXPORT OPPORTUNITIES FOR AUSTRALIAN INDUSTRY IN THE REGION,
WITH PARTICULAR EMPHASIS ON CHINA AND JAPAN, UNDER THE CHINA
ACTION PLAN AND THE JAPANESE MARKET STRATEGY RESPECTIVELY.
IT INCLUDES ALSO INDUSTRY POLICIES WHICH SEEK TO FOSTER
EFFICIENT, FLEXIBLE, INNOVATIVE, FORWARD LOOKING,
EXPORT-ORIENTED ENTERPRISES.
AND IT INCLUDES POLICIES FOR EDUCATION AND TRAINING,
PARTICULARLY FOR OUR YOUNG PEOPLE, DESIGNED TO IMPROVE
AUSTRALIA'S SKILLS BASE AND ENHANCE THE LIFE CHANCES OF OUR
YOUNG PEOPLE.
A PARTICULAR FEATURE OF THIS GOVERNMENT IS OUR COMMITMENT TO
REMOVING REGULATORY IMPEDIMENTS TO DEVELOPMENT AND GROWTH.
THE FLOATING OF THE THE REMOVAL OF VIRTUALLY ALL
EXCHANGE CONTROLS, AND THE SUBSTANTIAL DEREGULATION OF THE
BANKING SECTOR HAVE BEEN NOTABLE ACHIEVEMENTS IN ENCOURAGING
INNOVATION AND COMPETITION. THEY HAVE ALSO ESTABLISHED OUR
CREDENTIALS IN THIS AREA, IN STARK CONTRAST TO THE EMPTY
DRUMBEATING OF THE PREVIOUS GOVERNMENT.
ONLY LAST WEEK I ANNOUNCED ON BEHALF OF THE GOVERNMENT
SEVERAL INITIATIVES RELATING TO BUSINESS DEREGULATION.
THESE INCLUDED SUBSTANTIAL DEREGULATORY INITIATIVES IN
RESPECT OF FOREIGN INVESTMENT POLICY AND EXPORT CONTROLS ON
SOME MINERALS. IN ADDITION I SPECIFIED OUR PRIORITIES FOR
FURTHER REFORMS, WHICH FOCUS PARTICULARLY IN AREAS WHERE
INCONSISTENT ADMINISTRATION OR INAPPROPRIATE REGULATIONS
HAVE RESULTED IN EXCESSIVE COSTS TO BUSINESS.
MANY OF THESE INITIATIVES WILL REQUIRE THE CO-OPERATION OF
STATE GOVERNMENTS TO BE SUCCESSFUL. IN THIS REGARD SOUTH
AUSTRALIA HAS BEEN TO THE FOREFRONT, FOR EXAMPLE IN THE
AREAS OF STATE PURCHASING PREFERENCES, AND MODEL NATIONAL
FOOD LAWS AND BUILDING CODES.
THE GOVERNM4ENT RECOGNISES THAT INDIVIDUAL SECTORS OF
INDUSTRY HAVE THEIR OWN PARTICULAR NEEDS AND OPPORTUNITIES.
THE GOVERNMENT, THEREFORE, HAS DEVELOPED A CASE-BY-CASE
APPROACH TO INDUSTRY DEVELOPMENT WHICH HAS RESULTED IN A
NUMBER OF INNOVATIVE SECTORAL PLANS BEING IMPLEMENTED.
THESE PLANS HAVE BEEN DEVELOPED IN CLOSE CONSULTATION WITH
EMPLOYERS, EMPLOYEES AND GOVERNMENT. THEY HAVE RECEIVED
SUBSTANTIAL SUPPORT FROM THE PARTIES, AND ARE PROVING TO BE
REMARKABLY SUCCESSFUL.
HERE IN SOUTH AUSTRALIA TWO MAJOR M4ANUFACTURING ACTIVITIES,
PASSENGER MOTOR VEHICLES AND STEEL, ARE BENEFITING FROM OUR
SECTORAL PLANS. SINCE THE INTRODUCTION OF THE STEEL PLAN,
THE INDUSTRY HAS WITNESSED A DRAMATIC TURNAROUND IN ITS
PROFITABILITY AND INTERNATIONAL COMPETITIVENESS, WHILE THE
PASSENGER MOTOR VEHICLE INDUSTRY RECENTLY HAS UNDERGONE A
SUBSTANTIAL BOOM IN SALES.
BOTH PLANS FOR THESE INDUSTRIES ARE CONSISTENT WITH OUR
GENERAL APPROACH TO PROMOTE LONG OVERDUE STRUCTURAL CHANGE
AT A PACE WHICH IS CONSISTENT WITH ACHIEVING REAL AND
PERMANENT PROGRESS. WE NOT ONLY HAVE A VISION OF WHERE
AUSTRALIA NEEDS TO HEAD TO SECURE ITS FUTURE, WE HAVE A
BROAD STRATEGY WHICH IS CAPABLE OF GETTING US THERE.
LADIES AND GENTLEMEN, SOUTH AUSTRALIA, WITH ITS STRONG
INDUSTRIAL BASE, IS WELL PLACED TO TAKE ADVANTAGE OF THESE
OPPORTUNITIES. I AM PLEASED TO NOTE THAT SOUTH AUSTRALIAN
MANUFACTURERS ARE REPORTING STRONG INVESTMENT EXPECTATIONS
FOR 1985-86, WELL IN EXCESS OF THE NATIONAL AVERAGE. THE
IMPACT OF THE DEVALUATION OF THE AUSTRALIAN DOLLAR EARLIER
THIS YEAR SHOULD ADD ADDITIONAL IMPETUS TO THESE
DEVELOPMENTS.
UNDER THIS GOVERNMENT THE BUSINESS COMMUNITY KNOWS WHERE IT
STANDS. BUSINESS CAN BE CONFIDENT ABOUT OUR MANAGEMENT OF
THE ECONOMY IN THE SHORT TERM. IT CAN ALSO BE CONFIDENT WE
ARE ADDRESSING THE ISSUES VITAL FOR MEDIUM AND LONG TERM
GROWTH. BUSINESS KNOWS WHAT OUR POLICIES ARE AND WHERE
WE'RE GOING. AND IT CAN PLAN FOR THE FUTURE CONFIDENTLY
WITH THAT KNOWLEDGE. I BELIEVE THAT IS A VERY SIGNIFICANT
ACHIEVEMENT. WE CAN ALL BE JUSTLY PROUD THAT THE POLICIES WHICH COMPRISE
THIS COMPREHENSIVE ECONOMIC STRATEGY ARE CLEARLY WORKING FOR
AUSTRALIA WORKING, NOT LEAST, FOR THE BENEFIT OF FOR SOUTH
AUSTRALIANS. ALONE AMONG THE MAJOR OECD COUNTRIES, AUSTRALIA'S LEVEL OF
UNEMPLOYMENT IS EXPECTED TO FALL THROUGHOUT 1985-86. THAT
WILL ADD TO THE FALL OF WELL OVER 2 PERCENTAGE POINTS IN THE
UNEMPLOYMENT RATE WHICH HAS BEEN ACHIEVED SO FAR UNDER THE
POLICIES OF THIS GOVERNMENT.
OF COURSE THIS HAS A COUNTERPART IN THE HUGE EXPANSION IN
JOBS WHICH HAS OCCURRED. IT HAS BEEN SO GREAT AN EXPANSION,
THAT WE ARE NOW ON THE VERGE OF ACHIEVING 500,000 NEW JOBS,
IN ADVANCE OF OUR THREE-YEAR TIMETABLE JOBS, I WOULD ADD,
WHICH OVERWHELMINGLY ( 88 PER CENT ON THE LATEST FIGURES)
HAVE BEEN CREATED IN THE PRIVATE SECTOR.
BUT EVEN MORE IMPORTANT THAN THE SUCCESS WHICH HAS ALREADY
BEEN ACHIEVED IS THE CAREFUL PROGRESS WHICH HAS BEEN M4ADE TO
ENSURE AUSTRALIA'S PROSPERITY IN THE LONG TERM.
LIKE THE SUCCESSFUL GRAND PRIX DRIVERS LAST WEEKEND, WE
APPRECIATE THE DIFFERENCE BETWEEN THE SHORT SIGHTEDNESS OF
THE FLASHY QUICK DASH AND THE WELL PACED, WELL PLANNED
PROFESSIONAL RACE. THE DASH ACHIEVES FLEETING FAME AT THE
EXPENSE OF EXCESSIVE CONSUMPTION OF FUEL AND TYRES OR THE
RISK OF COLLISION. IT STANDS IN SHARP CONTRAST TO A MORE
SUSTAINABLE PACE WHICH RESPECTS SUCH LOGISTICAL AND OTHER
CONSTRAINTS BUT IS CONSISTENT, NONETHELESS, WITH TOP
PERFORMANCE. AND IT IS THAT LATTER DETERMINED, BUT
MEASURED, APPROACH WHICH WE HAVE INSTITUTED FOR AUSTRALIA.
I AM SURE HE WOULD NOT MIND MY SAYING THAT JOHN BANNON'S
GOVERNMENT HAS PLACED SOUTH AUSTRALIA IN A FINE POSITION TO
PARTICIPATE TO THE FULL IN ECONOMIC RECOVERY. AND I WISH TO
ACKNOWLEDGE TONIGHT, THE FINE JOB WHICH HE AND HIS TEAM HAVE
DONE. EMPLOYMENT IN SOUTH AUSTRALIA HAS GROWN 3 PER CENT OVER THE
PAST YEAR, A PACE WHICH HAS BEEN FAST ENOUGH TO PERMIT SOUTH
AUSTRALIA, ALONE AMONG THE STATES, TO STEADILY REDUCE ITS
UNEMPLOYMENT RATE TO PRE-RECESSION LEVELS.
MOREOVER THIS STATE'S INDUSTRIAL RELATIONS RECORD IS THE
ENVY OF THE NATION. WITH SOME 8.6 PER CENT OF THE NATION'S
WORKFORCE, SOUTH AUSTRALIA ACCOUNTS FOR ONLY 1.7 PER CENT OF
THE DAYS LOST THROUGH STRIKE ACTION.
THOUGH HIS GOVERNMENT, TOO, INHERITED A PARLOUS FINANCIAL
POSITION, JOHN BANNON'S GOVERNMENT HAS PURSUED RESPONSIBLE
FINANCIAL MANAGEMENT POLICIES IN ASSOCIATION WITH
IMAGINATIVE POLICIES TO STIMULATE THE ECONOMY.
IT IS CONSISTENT WITH THE FORWARD LOOKING THINKING OF JOHN'S
TEAM THAT ADELAIDE IS TO ACQUIRE WHAT I CONFIDENTLY EXPECT
WILL BE AUSTRALIA'S FINEST CASINO, A CONVENTION CENTRE AND
AN INTERNATIONAL HOTEL. VALUED AT $ 180 MILLION, THIS
REDEVELOPMENT OF THE ADELAIDE RAILWAY STATION PRECINCT IS
THE LARGEST SINGLE CONSTRUCTION PROJECT IN THE HISTORY OF
THE CITY OF ADELAIDE.
AND IT IS ALSO A CREDIT TO HIS TEAM'S FORWARD LOOKING
APPROACH THAT THEY HAVE INITIATED THE DEVELOPMENT OF
TECHNOLOGY PARK ADELAIDE. I UNDERSTAND THAT MAJOR
INTERNATIONAL COMPANIES SUCH AS BRITISH AEROSPACE ARE COMING
TO THE PARK TO ESTABLISH NATIONAL HEADQUARTERS. TECHNOLOGY
PARK ADELAIDE IS A CLEAR LEADER WITHIN AUSTRALIA AS A
LOCATION FOR HI-TECH DEVELOPMENT, WHICH IN TURN BODES WELL
FOR THE FUTURE PROSPERITY BOTH OF THIS STATE AND AUSTRALIA
AS A WHOLE.
I WAS PLEASED THAT THE BANNON GOVERNMENT TOOK ADVANTAGE OF
MOVES AT THE NATIONAL LEVEL TO DEREGULATE BANKING AND SET
YOUR SIGHTS ON ENSURING THAT A MAJOR OVERSEAS BANK WOULD
ESTABLISH HEADQUARTERS IN ADELAIDE. THE ANNOUNCEMENT THAT
STANDARD CHARTERED WOULD RECEIVE A LICENCE AND SET UP ITS
OPERATIONS IN THE STATE WAS A CULMINATION OF THESE EFFORTS.
BUT JOHN BANNON'S GOVERNMENT HAS NOT ONLY DELIVERED ECONOMIC
SUCCESS. IT HAS NOTABLE ACHIEVEMENTS IN WELFARE SERVICES,
THE ARTS, EDUCATION, LAW AND JUSTICE. THESE ARE
ACHIEVEMENTS WHICH PLACE THIS BANNON GOVERNMENT IN THE VERY
BEST TRADITION OF THE AUSTRALIAN LABOR PARTY.
LADIES AND GENTLEMEN, BOTH FEDERALLY AND IN SOUTH AUSTRALIA
WE IN THE AUSTRALIAN LABOR PARTY ARE WORKING TO CREATE A
BETTER, MORE CARING, MORE TOLERANT, MORE DIVERSE AND MORE
REALISTIC AUSTRALIA. IT IS A MORE COHESIVE, WEALTHIER AND
ENRICHED AUSTRALIA AN AUSTRALIA IN WHICH YOUR STATE
GOVERNMENT, LED BY JOHN BANNON, HAS PLAYED A CRUCIAL ROLE
A STATE GOVERNMENT IN WHICH YOU CAN JUSTLY BE PROUD.
A