0,
PRIME MINISTER
CHE~ CK AaATNRT flFLTVFRY PMflARa( 0RD UNTTL. DETVrgy
SPEECH BY THE PRIME MINISTER
CONFEDERATION OF AUSTRALIAN INDUSTRY
ANNUAL DINNER
CANBERRA 8 NOVEMBER 1990
Congratulations on your impeccable sense of timing.
This annual dinner brings the members of the CAI to Canberra
in the midst of an unusually intense period of policy
activity. Indeed, as I told my ministers in the Cabinet Roam on
Monday, the Federal Government is engaged in our most
concentrated burst of policy reform since 1983.
Consider this list of reforms currently under way:
the Special Premiers Conference last week brought
together the parties to Australia's Federal compact in
a unprecedently constructive and positive approach to
making our system of Government work more efficiently;
the Special Conference of the Labor Party has opened
the way for the introduction of competition into the
vital telecommunications industry;
the Two Airlines agreement has at last run its course:
a new, more competitive, structure for domestic
aviation is being put in its place:
land transport, the waterfront, coastal shipping are
all seeing fundamental reforms that will improve
productivity and efficiency;
policies are being developed that will see a workable
and sensible approach to ecologically sustainable
development;
In a major statement in Parliament this afternoon I
announced the latest developments in the Government's
continuing task of micro-economic reform.
3 106) i
Tonight I will touch, on many of these issues particularly
ones in which the CAI has expressed special interest, such
as the Special Premiers' Conference.
But at the outset I want to integrate this diverse range of
activity and put it in its proper perspective the
perspective provided by more than seven and a half years of
Government, in which we have consistently followed a
strategy directed at improving the quality of. li4fe for all
Australians. w
Our strategy has seen consistent pursuit of these goals:
sustained and sustainable economic growth;
continuing employment growth;
controlled and equitable wage growth;
increased efficiency and international orientation of
the economy aiLming at a transition to a competitive
world class economy fully enmeshed in the dynamism of
the Asia-Pacific region;
a fairer society created through radical welfare
reform, with tho emphasis on better services for
families and for the aged and sick; but all of this
within the context of unprecedented financial
responsibility and restraint;
a clever country in which intellectual skills are
prized and harnessed to the broader needs of the
community; an environment safeguarded for future generations
through policies~ of ecologically sustainable
development.
This is not the place to take you through the chapter and
verse of our reform program since 1983.
But I do point, with pride, to the consistency with which we
have pursued those comprehensive but intensely complementary
goals over the past seven years.
The Accord which delivered wage restraint and social wage
increases in 1983 is still providing, in. 1990, an effective
mechanism for wage fixation, as well as for the vital
processes of award restructuring and union amalgamation. And
let me add how pleased I am to note the significant measure
of tripartite consensus that is emerging over the future
shape of the wage system, through the conferences held under
the auspices of the Industrial Relations Commission. The
CAI has played a key rcole in that process. This is a very
significant achievement which needs to be cemented into
place in the forthcomiLng National Wage Case. 3107
The National Economic Summit, that brought the key economic
players together around the same negotiating table in 1983,
is echoed in 1990 with the Special Premiers' Conference
bringing together the leaders from our three levels of
government in a determined effort to span jurisdictional and
partisan differences with the common objective of improving
the system of federal administration.
Our floating of the dollar and deregulation of the financial
system in 1983 began an unparalleled sequence of
microeconomic reforms that -w as my statement in Parliament
showed today is continuing to reinvigorate key sectors of
the economy.
Before 1983, Australians endured almost three consecutive
d8endes of conservative rule. They were decades
in which the essential tasks of economic restructuring
and micro-economic reform were neglected;
in which the challenges of a rapidly changing
international environment were shirked in favour of the
introversion of tariff protection;
in which the hard tasks of introducing fairness and
efficiency into our taxation and social welfare systems
were swept under the carpet;
in which fiscal discipline was a forgotten art as
budget deficit piled on budget deficit;
in which industrial confrontation between employers and
employees was ' allowed to obscure their underlying
commonality of interest.
In 1L983, this Government was confronted with the urgent need
to : remedy those accumulated symptoms of neglect and of
abrogated leadership.
We have had to cram 40 years of reform into ten.
And deliberately and progressively, we are putting Australia
back on the rails.
We have created a rate of employment growth twice the OECD
average.
We have turned a Commonwealth budget deficit of $ 9 billion
into a surplus of almost that size, reducing the public
sector's call on the nation's savings by around $ 28 billion
at today's prices.
We have slashed the nominal rate of assistance to the
manufacturing sector from 13 to 10 per cent, and the
effective rate from 22 to 17 per cent.
Industrial disputes have fallen by some 60 per cent.
3108
4.
For the future, our macro-economic management must continue
to focus on reducing the current account deficit as a
proportion of the GDP to the point where our debt to GDP
ratio stabilises, and on reducing our inflation rate to that
of our major trading partners.
It was to achieve these goals that we have, in recent times
had to rein in demand, which had been placing~ unsustainable
pressure on our current account.
The tight fiscal, wages and monetary policies that we
employed for this purpose have of course imposed hardships
on the community.
But there has never been any doubt that had we not taken
these firm measures, the rest of the world would, in effect,
have taken them for us resulting in a much greater degree
of dislocation and pain throughout the community.
It is now clear that we have achieved our immediate aim of
slowing demand and that the benefits are flowing as
yesterday's CPI figure dramatically showed. Accordingly we
have been able to ease monetary policy, with five separate
reductions this year in professional interest rates now
feeding through to smaller businesses and home-owners.
This, combined with. scheduled tax cuts and wage increases,
and cyclical developments in the economy, should see
activity pick up through 1991 as the Budget forecast.
That is the fundamentally sound position in which Australia
now stands.
But there can be nc question of changing the basic direction
of policy or of slackening the pace of reformn. We cannot
afford to slip backwards. We will not do so.
Ladies and gentlemen,
That is the broad context within which I want you to
understand the Government's determination to proceed with
the current round of micro-economic reforms.
Let me speak tonight of two specific areas: the Special
Premiers Conference and today's Parliamentary Statement.
Quite simply, I believe the Premiers Conference introduced a
new, commonsense, constructive dimension into Commonwealth-
State relations.
Through direct negotiations unemcunbered by the suspicions
that are the traditional ingredient of such meetings, the
Premiers, Chief Ministers and I reached agreement on a range
of matters directed to the more effective delivery of a wide
range of services to the citizens of Australia and enhancing
the contribution of government to economic efficiency. 3109
In substance and in atmosphere, the Conference was a very
significant breakthrough.
ThE3 CAI's submission, which I was very pleased to receive in
tho lead-up to the Conference, identified four key areas
requiring greater cooperation and rationalisation: the
environment; packaging and labelling; food; and economic
infrastructure, particularly communication, transport and
energy. I am happy to be able to report significant achievements in
each of those areas.
As you are aware, the Government is committed to the concept
of ecologically sustainable development a greater
integration of economic and environmental goals in all our
major industry sectors. The development of an
Intergovernmental Agreement on the Environment, on which
Governments across Australia are now committed to working,
wi: ll help facilitate:
a co-operative national approach to the environment;
a better definition of the roles of the respective
Governments; a reduction in the number of disputes between
Governments on environmental issues;
greater certainty of Government and business decisionmaking;
and, not least,
better protection of the environment.
I am aware of your~ concern about the need for greater
consistency in environmental regulatory processes. As you
know, a lot of work is being done in this area at the moment
to identify the problems and suggest ways of overcoming
them, and your sponsorship of the Bureau of Industry
Economics' work in this area is a positive contribution.
On your second point, we will receive a report on packaging
and labelling requirements at the next Special Premiers'
Conference scheduled for May 1991. The report will be based
on the principles and framework we agreed on at the
Conference for rationalising regulation in brief, each
State will recognise each other's standards in cases where
national uniformity is not deemed to be essential for
economic efficiency.
In your third area, one of the major reforms announced at
the Conference was the support by the States and Territories
for a system of uniform food standards regulated by a
National Food Authority.
131.10(
It is on your fourth point, infrastructure, that there has
been the moat dramatic progress, both at the Premiers
Conference and through the decisions of the Federal
Government I announced in Parliament today.
The Premiers, Chief Ministers and I were able to
achieve a degree of progress in the critiq* l area of
land transport that had, in earlier and leisser forums,
proved impossiLble.
We signed a Heads of Agreement to establish a National
Rail Freight Corporation, which will involve new
investment, new industrial relations standards and new
rail management.
On road transport, we agreed to pursue the introduction
of national uniform operating regulations and driver
licensing, nationally consistent road user charges and
clearer definition of responsibilities for funding and
managing elements of the road system between different
levels of Government.
The next Premiers' Conference in May. 1991 will consider
a report on the scope for further extensions to the
interstate electricity network.
Australia'sa telecommunications industry is being
dramatically re-shaped, with potentially limitless
benefits: new investment, new jobs, new exports, and
for consumers, cheaper services and greater choice.
Domestic aviat~ ion has been at last liberated from the
dead hand of t~ he Two-Airlines Agreement, opening the
door to new services and lower prices.
Real progress has been made on the waterfront with
entrenched inefficiencies giving way to leaner
practices that: without massive industrial disruptions
promise productivity gains of up to 60 per cent.
That is only a thumb-nail sketch of what I have described as
the most active pe17iod of micro-economic reform this country
has seen.
I have repeatedly challenged the Opposition parties to point
to a period of more profound and more rapid micro-economic
reform, across a broader front. That challenge of course
remains unanswered; because for 31 of the 34 years before we
came to Office Aust~ ralia was governed by a conservative
Coalition that was consistently incapable of the hard work
and far-sighted vietion necessary for successful reform.
Ladies and Gentlemen 3.111
7.
It's all too easy in discussing micro-economic reform to get
overwhelmed by the technicalities or to be simply confused
by the jargon. In fact the quality of the debate about, for
example, telecommunications reform has been very high indeed
at least on the Government side.
But behind all the technicalities of interconnect fees,
duopolies and the resale of telecommunications capacity,
there lies a simple truth.
Telecommunications reform is ultimately about new
investment, new jobs, cheaper services, and new exports. It
is; about improving the way in which Australian households
and Australian businesses get access to that most
fundamental of modern day instruments, the telephone and
the ever expanding range of other new communications
technologies. It is about making sure Australia can play a part in the
explosion of demand for telecommunications equipment in our
immediate Asia-Pacific region. As I said in Parliament
today, the nations of the Asia-Pacific region have half the
world's population but only 17 per cent of its 500 million
telephones. Dy the end of this century, that 500 million is
expected to double.
The reforms we are making are designed to ensure that
Australia can compete effectively in this extraordinary
growth. In other words, what we are after in telecommunications
reform is the same goal we pursue with every other policy
endeavour to equip our economy so that it can deliver to
its citizens the. quality of life to which they justifiably
aspire. And let me stress this vital point.
I~ f you believed what you read in the newspaper, you might
conclude that micro-economic reform is limited to a couple
of industries and a handful of employers.
Nothing could be further from the truth.
' The battles of micro-economic reform are taking place across
it broad front indeed, across the broadest possible front:
the entire economy.
Lt is a process that ultimately involves everyone.
This is more eloquent than all the statistics, and certainly
mnore comprehensible than all the jargon.
Last Friday in Melbourne I opened a new campus of the
Western Institute which will form part of the Victorian
University of Technology, the first University to be sited
in the western suburbs of Melbourne.
3112
8.
Immediately afterwards, I opened the South Pacific Truck
Tyre plant at Somerton a plant which is scaling new
heights in productivity, thanks to massive capital
investment and positive industrial relations that have
abolished restrictive work practices and created more
efficient patterns of work. Productivity at this plant is
realistically expected to be the best of any tyre plant
anywhere in the world, and so it gives Australia another
competitive edge in export markets.
New universities offering educational opportunities where
they have never been offered before, and new factories
setting world standards for productivity this is microeconomic
reform.
Such examples are the hard evidence out in the community
that fundamental change is taking place; they are the heart
and soul of the dynamic process of economic reconstruction
currently underway in Australia; they are the proof positive
that Australia can, increasingly, engage our region, and the
world, on new and more competitive terms.
I promise you, and I promise the people of Australia who are
the ultimate beneficiaries of this commitment, that my
Government will carry through these plans to their
completion. 311.3