CHECK AGAINST DELIVERY EMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER
ANNUAL DINNER, METAL TRADES INDUSTRY ASSOCIATION
CANBERRA 22 OCTOBER 1990
It is always a pleasure to address the Metal Trades Industry
Association -and particularly so when its Annual Conference
has adopted as its central theme such a critically important
topic. Australia's " brainpower imperative" means many things.
It means we value intellectual skills; it means we are
committed to learning and to training in our schools and
universities and in our offices and factories; it means we
are working for the future with research and development; it
means we are seeking to fulfill the creative potential of
our minds so that the inventions of our imagining can become
the instruments of our daily life; and it means applying our
knowledge so that the products of our mind can become the
objects of international trade for the betterment of our
national economy.
It means we turn the lucky country into a country that is
clever as well.
During the last election campaign, when I used that phrase,
" the clever country", I did so proud of the Government's
achievements and excited by the plans we had for the
forthcoming term of Government.
As you know, since the election we have pushed ahead with
creating a new network of Cooperative Research Centres,
linking universities, the CSIRO and other research groups in
an unprecedented way, to focus the talents of our best
researchers on projects that will stretch the horizons of
our knowledge and enlarge the capacities of our economy.
Already the program is showing dividends, through the
greatly enhanced interaction between research institutions.
There is a sense of willingness and determination in the
science and technology community to pull together in the
interests of Australia's future.
At the same time, the Prime Minister's Science Council that
I have established is well underway. The Council meets
again next week to consider important topics related to
adding value to raw materials and to capture more
effectively the benefits of research in manufacturing
industry.
Professor David Craig, the President of Australia's most
prestigious scientific body, the Australian Academy of
Science, recently praised my Government's " strong and
manifest backing for science and technology" and that is
praise indeed for the nation as a whole, since it will be
the nation as a whole that will stand to gain from these
initiatives. So when I used that phrase " the clever country", I was aware
of what the Federal Government could do and would do in this
critical area.
What I perhaps underestimated was the way in which the
phrase would be picked up by the community at large in the
media, in the professions, in business and enter the
lexicon as a new yardstick of national self-assessment.
What we have seen since the election, and it has been very
welcome, has; been not just a burgeoning of the use of that
phrase, " clever country", but with it, an ever greater
commitment, throughout the community, to doing what is
necessary to build such a country.
So it is within that broad context that I express my
congratulations to the MTIA for this conference on the
" brainpower imperative".
You are demonstrating that the commitment to value-adding,
which is the prime focus of your work as individual
manufacturers, is in fact part of your deeper commitment to
a process of adding value to the quality of Australian life
itself.
My friends,
That commitment is of course not surprising coming from the
MTIA which is, as I have had the opportunity to say in the
past, one of the foremost industry participants in the great
transformation that is sweeping the Australian economy.
From being one of the staunchest advocates of protectionism
you have become one of the most far-sighted and active
agents in the creation of a more competitive,
internationally-oriented Australian economy.
You haven't Just paid lip service to the goal of a vigorous
manufacturing sector; you have been out there building it.
I have always valued and appreciated the close and
constructive links between the MTIA and the Federal
Government links that date back to the earliest days of
the Accord and the Economic Summit.
A few weeks ago we met once more, and, seated in the Cabinet
Room, your representatives gave me and my colleagues the
benefit of your views about the national economy and its
prospects for the future.
There's no secret that it was a pretty frank discussion;
some of your people have been doing it tough, and that's
what you were there to tell me.
But what I believe was apparent to those of you engaged in
those private talks was that I have never underestimated the
depth or the: breadth of the problems being experienced in
parts of the economy.
I have never tried to hide from the fact that the prevailing
economic conditions, and the strategy that the Government
has followed to remedy those conditions, have caused some
hurt and not just for metal trades employers but other
businesses too, along with home owners, farmers and others
throughout the Australian community.
I recognise that. How could I not? I probably travel around
Australia, and meet more Australians, and listen to more
individual views about the nation and the economy, than any
other person.
It's one of the most enjoyable privileges of this job and
one of the great sources of learning for me.
As far as I am concerned, the views I get from individual
Australians, as well as from groups such as the MTIA, form a
vitally important supplement to my regular Canberra diet,
which at times tends towards a pretty desiccated menu of
economic analysis.
You only need to glance at the Financial Review today to see
what I mean. It reports " a quiet battle" allegedly being
waged among the Government's advisers about how to run
monetary policy.
This debate might seem extraordinarily remote, and even
somewhat callous, to anyone who lives in that vast place
known in Canberra as " the real world" that is, the rest of
Australia. It is surely cold comfort to those who are struggling and
making sacrifices to be told that the extent of their future
hardship depends on the outcome of some arcane debate among
nameless officials.
I make the point, without commenting on the accuracy or
otherwise of the story, that there are, of course, always
differences of opinion among advisers and public servants;
that's their job, and I'd be concerned only if they were in
unanimous agreement.
But my job as Prime Minister and the job of my Cabinet
colleagues is different: we have the responsibility to
decide, and to do so according to what we believe are the
best interests of the people of Australia.
That is why the time you spent in meeting with us a few
weeks ago was well spent.
Your representations, along with those of others, forcefully
underlined the picture we were getting from the official
statistics about the impact of high interest rates.
So we moved a week ago to bring interest rates down by
another percentage point. It was the fifth easing of
monetary policy since the start of the year, with results
now flowing through to businesses and home borrowers.
The dollar has moved down substantially as a result, with
further benefit to Australian exporters.
But no one pretends that this is the end of the matter.
Economic revitalisation is a job for the stayers; this
Government is in it for the long haul.
So we will keep the pressure on, with wages and fiscal
policy and with unrelenting efforts to improve the
efficiency of the economy, so that Australia does emerge as
a more competitive and productive place.
The interest rate cut was just another instalment a
significant instalment, certainly in the continuing
economic strategy we are pursuing.
It's a strategy that I know is vital to the interests of
your members. It is a strategy designed to reduce the
current account deficit, and with it the growth in our
foreign debt as a proportion of GDP, and to bring our
inflation more into line with our trading partners.
It is astonishing to read that the Business Council of
Australia declared over the weekend that there is no
strategy to our economic policy " no policy framework the
business community can believe in".
If the average Australian were asked his or her opinion, it
would probably be that there is too much strategy too
tight a focus on the long-term goals at the expense of more
immediate, but of course counter-productive, targets like
lower interest rates.
If the average trade unionist were asked, we would probably
hear a similar analysis: too long a view at the expense of
short-term wage increases.
The point is, this Government has formulated and implemented
an economic strategy that is wholly unprecedented in
Australian history in its determined rejection of the
false logic of protectionism, its embrace of long-term
structural ripform, and its responsible macro-economic
management. Some have suggested that our strategy is leading to a
serious recession. Let me draw here, as I have in
Parliament, the differences between conditions in 1990 and
conditions in 1982/ 83.
In 1982-83, GDP fell by 2% over four consecutive
quarters; today we have yet to see two consecutive
negative quarters
in 1982-83, employment fell by 2.6% over five
consecutive quarters; today quarterly employment
growth remains positive
in 1982-83, private business investment fell by
today the fall in private investment is
forecast to be much less.
Underlying those differences are these structural
differences: in 1982-83, the recession had been sparked by a
wages explosion; today wages growth is moderate
and controlled
in. 1982-83, the 90 day bank bill rate peaked at
22%; this time the peak was a little over 18% and
has eased by around 5 percentage points since
in. 1982-83, the public sector borrowing
requirement was 5.7% of GDP; today it is zero,
with the public sector making no net call on
private savings.
So with double-digit inflation and double-digit
unemployment, 1982-83 was the worst recession in 50 years.
We will see nothing like that this time around. Indeed, the
shape of the recovery that will emerge as we enter 1991 and
1992 was foreshadowed in our Budget documents.
My comments to you are not a best-guess prediction by some
arms-length economic commentator, but a soundly-based
estimate by the leader of the Government that has designed
and pursued an economic strategy to achieve just that
result. That is another difference from 1982-83 that the statistics
do not reveal.
6.
The Fraser-Howard Government presided over an economy that
was pitching downhill, informed only by the philosophy of
Mr Micawber that is, by the hope that something would turn
up. This Government can look to a recovery fuelled by the easing
in monetary policy, and the personal tax cuts and wage
increases of Accord Mark VI. Inventory and housing cycles
will recover. Recent falls in the dollar, if sustained, will
help exporters and manufacturers. Employment growth can be
expected to resume under the Accord.
So the main concern to manufacturers like yourselves can
take centre stage again: diversifying and improving our
competitiveness so that the products of your expertise and
your investment can get on to the markets of the world and
win new buyers there.
My friends, let me turn finally to industrial relations.
I have noted with interest Dr Uhlenbruch's speech of this
morning, and in particular your concerns about enterprise
negotiations and overaward versus award payments. I am also
aware of course of the claim by relevant unions in your
industry for an across the board 4 percent productivity
payment. It is clear that these issues raise concerns for the
Government that go well beyond their impact on the metal
trades itself. Indeed they go to the heart of the Accord
Mark VI and the future viability and effectiveness of the
overall wages system.
The Government is determined to ensure that
the stability achieved under the current approach of
developing consistent minimum rates between awards be
maintained enterprise negotiations play an important role in
accelerating the implementation of restructured awards
into individual enterprises
the 7 per cent wage target for 1990-91 is achieved.
I want you to know that Federal Cabinet discussed this issue
this afternoon; you should know that the Government is
determined to ensure that the principles I have just
outlined are given effect.
Indeed it is necessary that such principles be recognised by
all parties to national negotiations as we move to a wider
consensus based approach to discussions about future wagefixing
and industrial relations systems within Australia.
I I
The Government does not see enterprise bargaining operating
in a totally unfettered way. That would be simply a re-run
of the disasters of the early 1980s.
Enterprise bargaining should operate under guidelines
established : by the Industrial Relations Commission
including the requirement that the increases be paid for
achive improvements in productivity and profitability;
results not Promises.
In our view, incorporating the increases from enterprise
bargaining into industry awards will only exacerbate the
flow-on problems highlighted by Dr Uhlenbruch. It will take
us back to the days of leap-frogging and of interminable
wage rounds days well known to you in the metal industry.
It would also set back the introduction of the flexibility
that we have all been seeking in the wage system.
We do not ignore the concerns of employers faced with
disputes about enterprise-specific increases. But we are
confident that a solution can be found under the auspices of
the Commission by developing guidelines that do not reflect
the money outcomes in minimum rates awards.
Options could include production bonuses and performancerelated
pay that do not affect the regular award rate and
would not therefore generate inconsistencies or encourage
leap-frogging. If the parties so desire such options could
be included in the award.
Ladies and gentlemen
I close as I began. Let me express my appreciation to the
MTIA for extending its hospitality to me this evening and,
more importantly, for extending to me and my Government the
benefits of your constructive advice throughout the year. I
look forward. to your continued active involvement in the
resolution of the key economic issues we face as a nation in
the year ahead.