PRIME MINISTER
CHECK AGAINST DELITVERY EMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER
ANNUAL DINNER OF THE
AUSTRALIAN MINING INDUSTRY COUNCIL
CANBERRA 3 MAY 1990
This is my seventh address to the annual dinner of the
Australian Mining Industry Council. The first, delivered
just two months after coming to office, focussed on domestic
economic conditions and mining taxation policy. The second,
third and fourth addresses from 1984 to 1986 dealt with
the international trading cycle and the progressively
gloomier prospects for world mineral prices.
In 1987 signs of a recovery in mineral prices began to
emerge and I introduced a further consideration into my
speech to you: the relationship between mining and the
environment. I did not appear in 1988. I have had the records checked,
and I did receive an invitation so my 1987 speecH must not
have gone down too badly.
I have been able to ascertain that on the night of May
1988 I was toiling away in a meeting of the Government's
Structural Adjustment Committee. That series of SAC
meetings and meetings of the Expenditure Review Committee
culminated in the 1988 May Statement a statement which
announced the most far reaching micro-economic reforms ever
undertaken by an Australian Government. These included
sweeping tariff reductions, business tax reforms and a range
of other reforms in telecommunications, primary industry,
grain handling and government business enterprises.
So you can see I was heavily pre-occupied on May 5, 1988.
Last year the Governm * ent delivered an Economic Statement in
April.-I . wasable to.. attend-the -AMIC-. dinner and more than
half of my address was devoted to the concept of
ecologically sustainable development.
So what can we learn from this brief review of my addresses
to AMIC?
First, my strike rate in attending AMIC dinners is 87.5 per
cent.
Second, arising from the first lesson, we obviously have
found each other's company congenial, the food is always
good and I suspect but I do not know that the wine, too,
is of high quality.
And third, the issues confronting AMIC and the Government in
earlier years in spite of substantial progress made
remain important issues of today: the international trading
system as it affects commodity prices, and micro-economic
reform and its implications for the minerals industries.
Yet the newer issue of the environment is coming to overlay
these more conventional concerns.
That is not to say that AMIC and the Government should pay
less attention to global economic conditions, the
international trading system, and economic management and
micro-economic reform at home. To the contrary. These are
of paramount importance to the viability of the Australian
mining industries and to the health of the Australian
economy. And here let me reaffirm, in the face of some possible
doubts, that my Government recognises the indispensable
contribution of the Australian mining industries to the
nation's economic prosperity: most particularly, its
contribution to easing the current account deficit.
But recognition and applause are not, of themselves, enough
just as the continuation of past practices by some mining
industries would not constitute an adequate response to
today's demands for high environmental standards. " And let
me say that, judging from its discussions with members of my
Government, AMIC is responsive to the higher environmental
standards nowadays expected of the mining industries. I
readily acknowledge that and am greatly encouraged by it.
For economic development in Australia and in particular,
mineral development, is sustainable in the long term only if
it is ecologically sustainable.
You may be aware that one of the major commitments of my
Government is to formulate strategies which give practical
effect to the concept of ecologically sustainable
development. This is not, of course, a new concept. It underpins many
eRisting government policies and programs. But it now needs
. to be applied . systematically . across all our industry
sectors: agriculture, mining, forestry, fisheries, energy
and manufacturing.
A discussion paper on the concept of sustainable development
is now being finalised by a Government Interdepartmental
Committee, for consideration by the special new Cabinet
sub-committee on sustainable development.
When finalised, the discussion paper will be circulated
within the community for comment.
Once that initial process is completed I envisage that
working groups comprising representatives of industry,
unions and the conservation movement will identify and
propose solutions to the most pressing problems in each
major industry sector. I have also invited the State and
Territory Governments to be involved.
We must move our renewable resource industries towards
sustainable yields from forests, from the soils, from the
oceans. The utilisation of our non-renewable resources needs to
satisfy different criteria. They must be used more
efficiently and recycled to the extent that is feasible.
Industries must find ways to use energy, water and materials
more efficiently and meet appropriate standards of
environmental protection.
Recently there has been some revival of support for negative
economic growth as a way of protecting the environment. But
a world experiencing negative growth would be a world in
which poverty was even more endemic and therefore a world
which would be even more prone to ecological and other
disasters. So I categorically reject the negative growth thesis as a
solution to environmental degradation.
But if we are to achieve sustainable development, several
conditions need to be met.
First, it is essential for governments to get the economic
and environmental policy frameworks right.
Second, people in industry and the consuming public need to
be well informed about environmental issues and be given the
right price signals.
And third, environmental values need to be built into
economic decisions at all levels in the community.
My Government has already taken steps to ensure a better
integration of environmental considerations in its own
economic decision making. The Environment Minister is a
member of the Structural Adjustment Committee of Cabinet,
adfd environmental impacts are addressed in Cabinet
submissions. The newly established special Cabinet sub-committee on
sustainable development will oversee the Commonwealth's part
in formulating the sustainable development strategy. You
will appreciate that that is a very high level committee
reflecting a very serious determination on our part to
ensure reason, balance and consistency in our consideration
of resource development issues. We believe in growth, we
believe in the environment; we are determined to have both.
Rational, well-informed decisions require good information
and analytical bases. Over the last two years my Government
has progressively increased funding for resource and
environmental data bases and information systems. And in
establishing the Resource Assessment Commission we have set
up a major, open inquiry mechanism.
The Government has also made more funds available for public
education, because without adequate information consumers
will not be able to make environmentally sound choices. A
good deal more still remains to be done in this area.
The new Minister for the Environment, Ros Kelly, has
signalled her interest in environmental programs in schools
and a closer linking with science education.
It is necessarily the responsibility of governments at
both the Commonwealth and State levels to set the basic
framework for sustainable development. Governments must set
acceptable standards, and do what they can to ensure the
standards are met. They must also try to ensure that market
prices, which are the key to the way we all use resources,
better reflect the environmental costs of our actions and
the environmental values of the community.
The root cause of much environmental degradation has been
market failure. Many environmental resources, like the
atmosphere and our rivers and oceans, are overused and
abused because they are free or underpriced.
We would therefore expect the working groups to look closely
at the full range of regulatory and market-based mechanisms
to see which current measures are encouraging or impeding
our reaching the environmental standards we want, and to
propose a new mix of measures that better and more
effectively meet our environmental goals.
The achievement of sustainable development will require
changes in various industry practices. There is also an
expectation that industry will make a continuing effort to
develop and implement new, cleaner, more efficient
technologies. I was pleased to see the recent statement by the Business
Council of Australia acknowledging that industry has a duty
to observe high standards, though I do not believe that
industry self-regulation will be enough in itself to achieve
them. Fundamental shifts in attitude and behaviour are required.
I invite the mining industries to join with us in designing
the mix of measures that will ensure that these changes
occur.
Ladies and gentlemen,
In the past, sustainable development for the minerals sector
has focussed on concerns about the rate of resource
depletion and the availability of mineral resources for
future development. Today, sustainable development is
concerned with other and much wider matters, including
access to land for exploration and development, resource
taxation, and the implementation of environmental
assessment, protection and rehabilitation policies.
Appropriate access to land for mineral exploration and
development has been at the top of the industry's agenda for
some time. Clearly there are going to be continuing
differences of view on this issue between the industry,
conservation and many community groups.
For its part, the Government has already laid down a number
of guiding principles for the resolution of land use
conflicts. But I readily acknowledge that the mining industries are
entitled to a greater degree of certainty in relation to
access to potential mineral deposits than they have received
to date.
This does not mean open slather. High conservation areas
will remain closed to mining.
And where access is contemplated by government, the' normal
EIS processes will apply.
But through the participation of all parties in the mining
industry working group on sustainable development, I hope
that we can achieve together guaranteed protection for high
conservation areas, greater assuredness of access for the
mining industries to lower conservation areas, more
consistent and transparent approval procedures for major
resource projects, and the adoption of high environmental
standards in the development of mineral deposits.
I am confident we can achieve these ambitious goals if we
have the full co-operation of AMIC and the mining
industries, together with the conservation movement and
other interest groups.
An equally.. important area. of industry concern is the
question of the level of resource taxation. Over the last
year this concern has centred on the Government's review of
petroleum taxation. Nevertheless, it is a crucial issue to
all our natural resource based industries.
The Government strongly believes that the community is
entitled to an appropriate return in exchange for the right
to exploit a community owned resource.
At the same time the Government fully appreciates the need
to provide companies with sufficient financial incentives to
explore and develop these valuable resources.
Inevitably the structure and level of this taxation will be
the subject of some disagreement. In this context I hope
that the present Industry Commission inquiry into mining and
mineral processing will provide some further analysis of the
various options. The draft report is due to be released
next month and could provide a valuable input for the
sustainable development working group's discussions.
In this context, you will be aware that I recently announced
that the Government will be reviewing the current taxation
policies as they relate to minesite rehabilitation and the
removal of offshore oil and gas platforms.
Ladies and gentlemen,
0 In my Environment Statement last year I made a commitment
that Australia would play its part in reducing global
greenhouse gas emissions, both domestically and
internationally. The first phase of the Government's investigations into
reducing emissions domestically was the preparation of a
discussion paper prepared by a special working group of
Commonwealth departments.
This is an issue fundamental to Australian industry's
competitiveness, particularly in the minerals sector. We
are all aware of the spotlight that has been turned on coal,
and on carbon dioxide emissions more generally. I would
urge you all to respond to what we have proposed in the
discussion paper, either directly or through AMIC.
We will continue to work with other countries in developing
solutions to the global problems arising from the greenhouse
effect, as well as funding our own greenhouse research
program. Australia is working hard, especially within the
Intergovernmental Panel on Climate Change, to develop an
international framework convention on climate change that
will bind all countries to a program of reducing greenhouse
gas emissions and taking other measures to ameliorate or
rdspond to the greenhouse effect.
As I indicated in my Environment Statement, it may be that
the sensible global strategy is for some energy-intensive
activities to be relocated to efficient energy-producing
countries such as Australia. Total world greenhouse gas
emissions could be lowered in the process so long as
industry in Australia is prepared to collaborate with
government in raising energy efficiency to yield a lower
level of greenhouse gas emissions for a given level of
production.
Ladies and gentlemen,
Our desire to meet the environmental challenges facing
Australia, while sustaining economic growth, is another
reason why the vigorous pursuit of microeconomic reform is
an imperative for my Government.
Continuing the Government's already strong performance on
microeconomic reform is crucial to the economy as a whole
but it will also contribute a great deal to the competitive
position of the Australian mining industries. Lower
protection and greater competition will improve the
performance of those feeder industries which supply the
goods and services on which the mining industries rely.
And a more efficient allocation of resources between sectors
will assist the mining industry as it vies with other
industries for vital land, labour and capital.
In February this year I outlined ten central elements of my
Government's ambitious but achievable fourth term
microeconomic policy agenda. Further reforms in the fields
of aviation, telecommunications, industry, shipping,
electricity generation, railways and the labour market are
all of critical importance to Australia's economic future.
Reforms of particular relevance to the mining industry are
those affecting the transport sector. In rail, my
Government's pursuit of a national rail freight initiative
will be a priority. Already several reviews are underway,
including a feasibility study on a national rail freight
organisation and the Industry Commission inquiry into the
efficiency of the rail sector.
We recognise mining's dependence on an efficient rail system
and will be looking towards making that sector much more
effective and responsive to customer needs. I trust that
all State Governments will work with us in that task:
without their co-operation little can be achieved.
Shipping reforms already set in place will progressively put
operating costs and manning levels of Australian flag
shipping on a par with those of our major trading partners.
The program for waterfront reform will be pursued vigorously
and we expect that the major enterprise agreements will be
c6ncluded this year.
Obviously the mining industries are also set to benefit from
the Government's broader reform agenda which will tackle
inefficiencies throughout the economy.
Ladies and gentlemen,
On the international front, I want to report to you briefly
on progress in the GATT Uruguay Round.
After a lengthy stalemate, there has been recent progress in
the negotiations on natural resource based products in the
Round. Agreement on procedures in February has opened the
way for substantive negotiations to begin. In addition,
after considerable pressure from Australia and others, the
European Community has agreed to negotiate on a key product,
coal, in the Round.
Our challenge now is to tackle subsidies and other measures
that seriously distort trade, notably in coal but also in
other natural resource based products. These trade
distortions also contribute to major problems of land and
atmospheric degradation.
We are working to build support for our efforts to secure
comprehensive reform of the trade in coal. But while we
have taken a couple of steps forward, we recognise the most
difficult stages lie ahead.
Ladies and gentlemen,
This is a very important time for the Government, the mining
industries and the nation. It is a time for accelerated
reform to make our economy more competitive, more flexible
and more resilient.
It is a time when our industries must achieve environmental
sustainability while at the same time raising their
productivity and increasing their contribution to
Australia's current account.
These are not easily achievable ambitions either for
government or for AMIC.
But through your co-operation in the sustainable development
working groups and through the normal channels open to you
for making your views known to my Government, I invite you
to join with us in achieving together our very important
our very ambitious goals.
In meeting these challenges I am confident that AMIC and its
members will come to enjoy under my Government an
increasingly predictable and coherent framework of policies
and processes a framework which will allow the mining
industries to invest with greater confidence in the
environmentally sustainable development of this country's
great mineral resources.