Jd
PRIME MINISTER
CHECK AGAINST DELIVERY EMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER
BUSINESS COUNCIL OF AUSTRALIA
SYDNEY 11 OCTOBER 1988
Australia's growing enmeshment with the world economy
requires that change becomes increasingly accepted as part
of virtually every aspect of our life.
Particularly in the management of economic affairs at the
national, industry and workplace levels, relentless change
and constant challenge are not merely speculations to be
conjured with, or minor obstacles to be overcome, but facts
that demand our active and unwavering engagement.
It is my proud claim that in responding to the challenges of
our changing economic world, the Government I have the honor
of leading has displayed both breadth of vision and
consistency of purpose.
In March 1983, we inherited an economy undergoing the worst
recession in 50 years; but we reversed that recession. In
1985/ 86 we faced a collapse in our terms of trade; but our
policies allowed us to endure that collapse while
maintaining employment growth, and to begin the sweeping
task of economic reconstruction.
We inherited a community where the dice were loaded against
the underprivileged; but through unprecedented tax and
welfare reform we have pursued a social justice strategy
which is making Australia a fairer society.
At the same time as we faced the challenge of reforming the
macro-economy, and at the same time as we pursued these
social justice goals, we have also engaged in a systematic
and comprehensive program of micro-economic reform and it
is this which I wish to address today.
I ask you to recall the inefficiencies of the economy we
inherited in 1983: an over-valued and unresponsive exchange
rate, an ossified financial system, an over-protected and
inward-looking manufacturing sector, an excess of burdensome
industry regulation, government business enterprises
hamstrung by their guidelines and unresponsive to their
2596
customers, a wages system which perpetuated inflationary
pressures, a government sector consuming far too much of the
nation's savings, an inefficient transport system, an
industrial relations system locked into expensive and futile
confrontation, an education system failing to meet the needs
of our most potentially productive workers.
My Government has progressively addressed all of these
problems. without being exhaustive, we floated the dollar,
deregulated the financial system, cut tariffs, introduced a
new era of industrial harmony, and introduced sensible
co-operation through a series of industry plans.
We did so because micro-economic reform is not some arcane
technical exercise. while macroeconomic policy protects the
economic ' base', micro reform will determine the future
quality of life and standard of living of every Australian.
The purpose is to shape an economy which promises durable
improvements in the day-to-day lives of Australians more
Jobs, greater growth, fewer people dependent on welfare and
an economy able to afford adequate assistance for the truly
needy. in other words, micro reform serves, very
profoundly, human needs.
But as we entered the 1987 Federal election campaign we
recognised much still remained to be done.
So when we sought a new mandate from the Australian people
we identified micro reform as one of our chief priorities.
In a speech I delivered in the last week of the 1987
election campaign in Ballarat I identified a detailed agenda
for micro-economic reform in our Third Term.
Today I want to mention, only briefly, what we have achieved
because an audience such as this is well aware of those
achievements. More importantly, now that we are essentially
midway through our Third Term I want to explain how we are
going to maintain the momentum for reform.
In Ballarat I promised to initiate significant workplace
reforms through amalgamation of trade unions and through
tackling outmoded work and management practices. Progress
is underway in each of these areas.
But the most fundamental reform is yet to come.
The Chairman of the Business Council's Industrial Relations
Committee, Mr Ian Webber, said recently that business should
approach award restructuring as perhaps the biggest
responsibility and opportunity that it had faced in the
industrial relations arena.
I welcome and endorse that judgement. As I said on Sunday
in the Boyer Lecture, when the history of this period is
written perhaps nothing will be seen as more significant
than the fundamental restructuring of the industrial award
system that is now underway. 25g17
The Daw
In the critically important Metal Trades Award, the 350 odd bus
classifications that represent the accumulated ossification defl
of some 60 years will by mid next year be replaced by eight, cons
And what happens in Metal Trades will establish a pattern
for other areas. In sm
init
Award structures in Australia have often reinforced narrow infr
categorisation of skills and occupational classifications.
They have contained provisions limiting the age and number I ma
of apprentices. They have given rise to demarcation tack
problems and have often failed to provide real incentives
for skills formation or career development. I al
me d
The potent'ial benefits of reform are immense both for rela
employers and employees. impo
For employers, they include more flexible use of labour, As w
lower turnover rates, and easier technological change. the s
For employees, there is the promi . se of more varied and qa
fulfilling work and greater opportunities for career Our
development and employee involvement, of a
ream
The Government is determined to give this reform process our ma mu
strongest support, particularly through the Industrial inte
Relations Bill, the Government's workplace Reform Program, ship,
and a major survey of workplace industrial relations. Effi
Award restructuring requires complementary reform to to i
education and training systems. carg, for
This year's Budget provided for a massive 40,000 additional
higher education places by 1991, with priority to be given TheI
to disciplines most relevant to Australia's needs. on c-
Au ti
Our reforms of higher education have attracted their share that,
of criticism, much of it founded on emotion and self on i,
interest rather than the sort of objective analysis one
would hope for from this area. The Government is Wh i 1' 1
determined, however, to press on. We are determined to lift Count
the quality, relevance and efficiency of the higher prom.
education sector. WeS tatee swtrok int rewnithhe te th capcit ofMy 0'
WeS tatee swtrok int rewnithhe te th capcit offorI
Australia's schools. Federal and State Education Ministers hove'
are looking, for example, at the potential for a national acknt
approach to assessment, and more co-operative work on a
common curriculum with an early focus on the key areas of Wa te)
mathematics and technology education. comp,
Another vital element is to raise significantly industry's The:
commitment to the national training effort. While we esta)
recognise that there are many enlightened employers, too
often training has been regarded as a cost to be avoided. I wol
the
now,
The Minister for Employment, Education and Training, John
Dawkins, will shortly be consulting representatives of
business on a wide range of options to remedy this
deficiency. I encourage your active involvement in those
consultations. In my Ballarat speech I highlighted our determination to
initiate sweeping reform of the nation's transport
infrastructure. I said we would terminate the two airlines agreement and
tackle grain handling: we have done so.
I also promised improved performance on the waterfront. Let
me devote special attention today to this vital area and the
related issue of coastal shipping. Together they represent
important items on our current reform agenda.
As we consider the reports we have recently received on
these issues, we are determined not to shirk the challenges.
Equally, we won't be rushed into ill-considered decisions.
Our basic approach in this time of adjustment has been that
of an equitable sharing of the burden. I can think of no
reasonable argument why employers and unions in our
manufacturing and export sectors must adjust to
international trading conditions while stevedoring and
shipping remain shielded.
Efficient coastal shipping is vital, particularly if we are
to increase the Australian flag share of our international
cargo above its current 4 per cent and maximise the scope
for further domestic raw material processing.
The Business Council recently published its valuable report
on coastal shipping. it is refreshing to see a critique of
Australian coastal shipping that acknowledges the right of
that industry to exist, provided of course that it can stand
on its own two feet.
while I do not agree with everything in the Business
Council's plan, I do reaffirm the Government's commitment to
promoting competitive coastal shipping.
My Government will face the need to find effective solutions
for the benefit of all Australians. This will involve,
however, listening very closely to those involved and
acknowledging progress already made.
waterfront reform is necessary to make Australia truly
competitive and export oriented.
The Inter-state Commission's recent preliminary report
establishes the basic agenda.
I would encourage all of you to look at what you can offer
the ISC's final hearings process. if you do not respond
now, you will not be able to query the final result. 99
From the Commonwealth's perspective, there are two basic Inl re
areas which must be addressed. we need an appropriatewet
incentive structure and competition amongst stevedoring thate
companies to encourage a greater level of productivity. And ta
we need a positive attitude from port authorities, both inMyG
reducing the costs they impose on exporters and importers, Mevio
and in encouraging a competitive use of port infrastructure. reuie
On stevedoring, the ISC sees benefit in moving towardsWeh
company employment, that is, individual companies having Wesda
basic responsibility for their employees and costs, id
providing both the incentive to keep . costs down and adequate We do
means to'do so. revie
The Government certainly accepts that initiatives to
facilitate a more productive employer/ employee relationship Irev
are highly desirable, and should be a major focus of the natur
report. naur
In this context, it is important that the views of the consu
relevant unions and the employers of waterfront labour are If re
given due consideration. This is a sensitive area for thesereu
parties. I acknowledge that. Nevertheless, we expect the rdi',
Interstate Commission to take the interests of all cnsi
Australians into account. agrec
Port authorities are the principal Government bodies on the Subse
waterfront. While there have, very recently, been incli
significant statements by port authorities on the need for
them to encourage greater competition on the waterfront,
there have been few specific initiatives. Requc ReguJ
State Governments need to ensure that the ports do not be me
burden users with outdated work practices, nor charge for submi
costs which are unjustifiable. As ti
I call therefore upon State Governments not only to respond ea
to the ISC report, but to offer a firm statement of requf
objectives for port authorities which puts users, and the consi
costs imposed upon them, first. What greater role has a app r
port authority than to facilitate Australia's trade? The
The Commonwealth's recent reforms to its own business spec
enterprises provide a lead. The
It was my Government that put the waterfront on the reform al
agenda: we are committed to seeing it through. regu.
Another element of the micro agenda I highlighted in Alth(
Ballarat was the steady elimination of unnecessary business sign.
regulation. Corp(
in " New Strategies for Regulatory Reform", which the-bus i
Business Council prepared earlier in the year, you put more
forward specific proposals to reduce the overall regulatory
burden. many aspects of these proposals have already been
incorporated in our conduct of Commonwealth Government
business.
2600
In relation to the review of existing regulation, however,
we think your suggestion for a request and response
procedure is timely and tonight I am pleased to announce
that Cabinet has decided to adopt such a mechanism.
My Government has put a good deal of effort into selecting
review targets where we think reform has been most urgently
required.
We have never believed that Government has a monopoly of
wisdom. We do, however, want to avoid the cost of poorly focussed
reviews. I have in mind, therefore, that requests for regulation
review must describe the body of regulation at issue and the
nature of the problem; they must cost the regulatory burden;
suggest possible solutions; and indicate the extent of
consultation on and support for the proposed review.
If requests were supported by such information from a
requesting company, union, business association or
individual, the Government would be prepared to guarantee a
considered response within two months, and if a review were
agreed, to specify its nature and timetable.
Subsequent reviews could be conducted by a range of bodies,
including the Industries Assistance Commission.
Requests in the first instance will go to the Business
Regulation Review Unit, but decisions to proceed or not will
be made by Cabinet's Structural Adjustment Committee on
submission from the relevant Minister.
As the Minister for Industry, Technology and Commerce,
Senator John Button, explains in a press release today, this
request/ response procedure will be implemented following
consultation with business and consumer organisations on
appropriate guidelines.
The Government is also pushing ahead with a series of
specific reforms in central areas of regulation.
The Attorney-General, Lionel Bowen, has introduced to the
Parliament bills which aim to introduce national law to
regulate companies and securities markets in place of the
many State and Territory laws presently operating.
Although the national law is based on the existing law, some
significant reform is envisaged, particularly the Close
Corporations Bill which responds to direct requests from the
business community by providing a significantly simpler and
more flexible corporate framework for small business. 2G01
I invite you all to take a close interest in these reform
bills. Only a national approach can facilitate the
efficient companies and securities regulation that Australia
needs, and I am pleased with the support given to this
proposal by the Business Council.
In broadcasting, we are reviewing the regulation of pay
television.
We are also reviewing the adequacy of the much-amended
Broadcasting Act, and its significant impact on business and
consumers. Again to-refer back to our election pledges, I promised in
Ballarat that we would deregulate crude oil marketing.
You all know we delivered on that promise.
Today I want to announce a further related reform.
Following our decision on crude oil, the Government has now
reviewed our liquefied petroleum gas ( LPG) policies.
We have decided to terminate the existing administered
pricing formula and instead from 1 February 1989 give the
Prices Surveillance Authority ( PSA) responsibility for
determining maximum wholesale prices for LPG.
This will bring LPG pricing into line with other major
petroleum products. The PSA will be able to adopt a more
flexible approach to price setting and be more responsive to
changing market conditions.
Export controls on LPG will be reviewed after 18 months. In
the meantime export controls will be available strictly as a
reserve power, safeguarding domestic supply until the new
pricing arrangements are well established.
These changes are described in more detail in a press
release issued by the Minister for Resources, Senator Peter
Cook. Ladies and Gentlemen
All of the activity I have outlined tonight builds on the
pledges I made to the Australian people during the election
campaign last year.
They all show that much hard work remains ahead of us over
the rest of our third term. We will not shirk it.
And my list is not yet complete.
For example, in Ballarat, I promised steps to increase
significantly the size of Australia's hi-tech computer and
communications industry. The partnership scheme introduced
by John Button puts us well on the way to building a strong
export base in this vital area.
2602
We are now reviewing the assistance arrangements for the
telecommunications industry, which has long been sheltered
by complex and costly forms of protection.
In Ballarat I promised new efforts to refine our research
and development skills another essential contribution to
economic growth and competitiveness which Australia must
improve if it is to survive.
The Government has worked hard to provide incentives through
tax credits and through the GIRD program to lift private
investment in R& D.
Today we are taking another step: my colleague the Minister
for Science, Barry Jones, will announce the details of a
senior officials group which is being established to make
recommendations on the most effective ways to strengthen
research and development in science and technology. The
group is to provide a preliminary report to the Structural
Adjustment Committee by the end of November.
We will be seeking the support of the business community and
others in raising Australia's R& D effort.
Ladies and Gentlemen
As I foreshadowed in Ballarat, the Government has also taken
steps to boost tourism, to ensure spin-offs for domestic
Industry from the current defence modernisation program, to
assist Australian firms tap new export markets, in
particular through further enmeshment of our economy with
the dynamic Asia/ Pacific region, and to further the growth
of value-added processing industries within Australia.
But today I do not want merely to advance a list of
achievements or tasks for the future as sweeping as they
are, and as proud of them as I am.
Because what is perhaps as important as the substance of
reform is the method of achieving it.
AS I said over the weekend in the Boyer Lecture, the ready,
almost welcoming, acceptance of the 30 per-cent reduction in
protection in the May Statement provided a dramatic contrast
to the critical and negative reception accorded the 25 per
cent tariff cut in 1973.
The main reason for this change of attitude has been our
approach to the task of reform.
This approach has involved two important principles : a
concentration on ends rather than simply means, and a
commitment to genuine consultation with those affected by
proposed change.
What is the aim of micro reform? It is to increase
productivity. 2603
The goal in not deregulation as such though it may be a
helpful meani-towards the goal. Our political opponents
fail to appreciate that fact. In opposition they espouse
deregulation as a desirable goal in itself, although as you
well know, in Government they did nothing of relevance in
this area.
Nowhere is this better seen than in their calls for ' labour
market reform',. Our workplace and education and training
reforms will achieve more change than they could ever
deliver. In micro reform, results can never be immediate. r
Institutions and attitudes change slowly. Public debate
will be dominated by the vocal complaints of the minority
who are adve-rsely affected, rather than by the vast majority
of consumers and taxpayers who are incrementally advantaged.
All this suggests, and underlines, the need for proper
consultation and a willingness to ease the burdens on those
facing change.
Through consultation we have been able to explain to those
affected that advantaging one industry by imposing costs on
others must eventually impoverish the economy as a whole.
From the point of view of the Government, micro reform has
from time to time meant incurring the wrath of some
constituents. But, in spite of this, our record shows plainly that we are
capable of pursuing essential reform in a way that no
government has done in 40 years.
And ultimately, I believe that a Government widely seen to
be acting strongly in the interests of all Australians will
thereby ensure its longevity.
Ladies and Gentlemen,
I have this afternoon highlighted nine areas of reform: the
workplace, education and training, coastal shipping, the
waterfront, a request/ response regulation reform mechanism,
broadcasting, companies law, telecommunications industries
and science policy.
The Government has commissioned major studies from the IAC
which will form the basis of future work even beyond that.
Reports are expected in the third quarter of 1989 on
Government charges, and trade in services and tourism; and
we have recently announced an inquiry into food processing
which will include all aspects of regulatory arrangements
and impediments to food processing, packaging and
distribution.
2G04
If all this reinforces in your mind and through you, in
the minds of the Australian people that we have a long way
to go with the reform task we set ourselves, then that is
precisely my intention.
And if all this reinforces in your mind, as well, our
resolve to complete our task of reform, than that too is my
intention. In our task I call on the assistance of State governments in
making the necessary hard decisions. All levels of
government, not just the Commonwealth, have a role to play.
In that task also, in closing, I seek your assistance as
leaders of key industries you are well placed to understand
the significance of the reforms we have in train, and well
placed too to foster public comprehension of, and support
for, them. 2605