PRIME MINISTEI~
CHECK AGAIN; T DELITVRRY EMBARGOED UNTIL DELITVERY
SPEECH BY THE PRIME MINISTER
NATIONAL PRESS CLUB
WEDNESDAY, 13 MARCH 1991
Mr President:, ladies and gentlemen
This is the third time I have had the pleasure of addressing
the National Press Club in just under a year.
I hope no-one thinks I'm abusing the Club's hospitality.
Rather, the importance of these three occasions reflects the
importance of the Club itself, and the importance of the
National Press Club luncheons, as an institution in the life
of our capital and our country.
You will recall that the two previous occasions in these
twelve months were my election-eve address last March, and
my proposals for reform of Commonwealth-State relations
Towards a Closer Partnership last July.
And without pretentiousness, I believe it is entirely
appropriate to see these three addresses as a trilogy.
They have, X: believe, an underlying unity, a consistency of
purpose and a commonality of themes.
In my address to the Club before the last election and in
that speech itself I was paraphrasing remarks I had made to
you, only the previous December I said this:
' In this election I am fighting to realise a vision for
Austral~ ia an Australia with a modern, diversified,
competitive and export-oriented economy; an Australia
vigorously engaged with the world economy, and enmeshed
in part: icular with the dynamism of Asia and the
Pacific; an Australia committed to maintaining and
enhancing the quality of life, social justice and the
preservation of our natural environment; a self-reliant
Austral~ ia, not merely fitting in with the world as we
find it, but helping to shape it.'
Our whole campaign, and the policies we presented and which
the people endorsed, were designed to advance those goals
to bring that kind of Australia into reality.
My, proposals to establish a new Federal-State partnership,
which I laid before you four months later, speeded our
course towards those same goals. These processes of
negotiation between the three levels of Government in this
country are designed, as I said to you then:
' to improve our national efficiency and international
competitiveness, and to improve the delivery and
quality of the services governments provide'.
And, the purpose of my Statement yesterday was to announce a
package of substantial new measures directed, again, to that
fundamental task: improving the productive capacity of our
economy, to make it more competitive internationally.
This cannot be stated too frequently or too strongly: the
master key to unlock the gates to the kind of Australia we
seek is, in the words of that Statement, building a
competitive Australia.
The measures I announced are all directed to increasing
national competitiveness.
That's why we are reducing tariffs, reducing wholesale
taxes, pushing ahead with micro-economic reform, overhauling
the Federal system, building a clever country.
Today, I want to point to what the decisions show about my
Government's approach to its role and responsibilities.
Because this Statement is an expression of our view of the
proper role of government in Australia, during this crucial
decade. Too often, this question of the role of government is
presented and argued in simplistic black and white terms.
Some people assert that Government should never retreat one
step from interventionism that the cosy deals of all-round
protectionism of the fifties and sixties must be left
intact; that every intervention by governments in the market
must be defended; that every asset the Government has
accumulated over the decades should be retained; that every
welfare entitlement ever bestowed is sacrosanct.
Others, by contrast, insist, dogmatically, that less
Government is necessarily better Government; that every
market will work to maximum efficiency only when Government
has vacated the field; that private sector provision of
services is superior to public sector provision, by
definition; that any regulation is too much regulation.
Neither approach deals with today's realities. Neither
approach meets the demands of building a competitive
Australia.
Both approaches are totally inadequate as a basis for
leadership in meeting that challenge. And the proper role
of Government is about leadership setting the right goals
for this nation and setting the right policy framework
within which the people themselves can best achieve those
goals. We have to face the fact that, in ninety years of
Federation, Australia has accumulated huge impediments to
efficiency in the way we govern ourselves, the way we run
our economy, and the practices we have entrenched in our
places of work. Yesterday's Statement is a major step
towards removing those impediments.
The Statement must, of course, be placed in the context of
the reform already achieved a consistent continuing
process over the past eight years.
We put micro-economic reform on the political agenda of this
country, and we have stayed ahead of the game ever since.
We were the first to identify the bottlenecks and start to
clear them. We have won the co-operation of those involved
in making the reforms work, and we have set tight timetables
to achieve them.
And let me immediately meet head on the suggestion that the
Statement fails to push ahead with micro-economic reform
fast enough.
I make this simple assertion: we have achieved more microeconomic
reform in the last eight years than was achieved in
the previous: eighty.
I invite those who suggest we are moving too slowly to
consider the following list of activity underway, in this
year of 1991 alone:
on the wharves, productivity will improve by up to
per cent by the end of the year
on our ships, crew levels will be reduced to the levels
of our major trading partners
by December, we will have a second telecommunications
carrier we are already reaping the benefits of open competition
in domestic aviation
conditional on a positive outcome of the environmental
impact study, tenders will be let immediately to start
construction of the third runway at Sydney airport
the National Rail Freight Corporation will be
established on 1 July with world standard workplace
efficiencies
S we have set the basis for the introduction of uniform
charges on road users this year
S at the Second Special Premiers Conference in May and
November there will be further reform of the processes
of government
S at the May Conference, we will seek ways to increase
competition through extending the Trade Practices Act
S union amalgamations, award restructuring, and
enterprise bargaining will continue to transform the
Australian work place all without significant
industrial disruption or a wages free-for-all
S accelerated tariff reductions, lower wholesale sales
taxes and simpler depreciation provisions announced
yesterday will all improve the quality of long-term
resource allocation within Australia.
That's in this year alone. Yet we have the cry from the
conservative parties who did nothing for a generation
about the Australian infrastructure, who indeed created or
entrenched its worst inadequacies that we should go
faster.
But note this they have not made a single practical
suggestion about how to ' move faster'. And, in fact, when
questioned about this only this morning, Dr Hewson conceded,
and I quote:
' Nothing is easy in this business and there's no
substitute really for a long hard slog of structural
reform.'
But never, in their long period of office, did our opponents
dream of beginning the long hard slog themselves. In their
public rhetoric, they call for confrontation, a return to
the industrial disruption of the days before the Accord.
But behind the macho display, they concede the magnitude of
our achievement.
We find their spokesman on shipping and waterfront reform,
John Sharp, saying only last November:
' Looking at the Government's performance in
micro-economic reform of coastal shipping and the
waterfront, we find that its greatest area of success
has been in shipping... The Government should be
congratulated for that we must give credit where
credit is due, because this is a notable change.'
And for a real show of strength and firm policy direction, I
invite you to consider the recent remarks of their spokesman
for industry and commerce, Ian McLachlan. At an industry
seminar in February, he told a questioner and I quote from
The Australian:
' Your question is ' will we have the guts to do it'
( reform the waterfront). I don't know. George Bush
said, ' read my lips'. I can only say you're going to
have to either trust people or keep voting Labor.'
As I have said, part of the proper role of government is to
provide leadership. Leadership involves not only making the
correct decisions, and changing policies. It involves
promoting change in community attitudes, when those
attitudes entrench wrong policies.
This is the essence of leadership, and it is a far more
difficult and challenging role. It is harder to change
attitudes than it is to change policies.
And the whole thrust of the Statement yesterday is to
promote changed attitudes, and to reverse the pernicious and
pervasive results of Australia's traditional protectionism.
Industry will no longer be able to regard the domestic
market as its captive. There will be real incentive for
industry to improve the quality of its product and adopt new
technology. Initiative will be properly rewarded, not
penalised. The fact is, ladies and gentlemen, that behind the high
tariff walls, managers and workers practised confrontation
rather than co-operation. Ultimately, the Australian
customer paid the penalty in higher prices as tariffs were
increased to cover the widening gap between the productivity
of our protected industries and those overseas. Such
industries were incapable of competing on world markets.
But worse still, tariffs damaged our traditional, efficient
export industries. Not only do tariffs raise prices
directly they also cause workers to demand, and make tariff
protected industries relaxed about conceding higher wages,
raising the cost structure for all Australian enterprises.
In addition to this burden on our export industries, tariffs
cost ordinary Australians dearly indirectly, because we
were all living in a society poorer than it could otherwise
have been, and directly straight out of our pockets
because tariffs meant more expensive consumer goods. And as
I pointed out yesterday, tariffs are highly regressive. The
Industry Commission estimates that the burden that tariffs
impose on lowest income Australians is three times heavier
than that imposed on those with the highest incomes.
By restricting our participation in the increasingly
important trade in sophisticated manufactured goods, tariffs
constricted Australia's growth at a time when the rest of
the world, including our own region, was growing rapidly.
And beyond the hard arguments, I believe this:
If our economy were to turn back once more to the era of
insularity and introspection, when we sheltered behind high
tariff walls, then it would in the long run become as
financially bankrupt, as our society would be morally
bankrupt if we were to shelter once more behind the walls of
a White Australia policy. That is why I say that the role
of leadership, the proper role of government, is to change
attitudes as much as to change policies.
Mr President
In my Statement I made no attempt to conceal the fact that
at this time of recession the Government has deliberately
turned away from offering short-term palliatives.
This is because: first, the decisions to lift Australia out of
recession, through interest rate falls and tax
cuts, have already been taken;
second, the long term structural changes on which
we have embarked are in themselves directed to
improving, through greater competitiveness, the
prosperity of the Australian people; and
third, to the extent that the recession is causing
temporary hardship, this hardship is alleviated by
the safety net we have strengthened and widened.
It is on this third point that we can see most starkly the
contrast between this Government and the Opposition about
the proper role of government.
A political party's character is not tested when times are
good and when pay packets are full.
Because a rising tide does lift all boats and it is a
relatively simple political task to distribute the benefits
of growth.
The true test of character comes on the economic ebb tide.
That is when you see political parties in their true
colours. That is true of Australian politics today.
And what a-stark contrast it provides.
On the one hand, the Government has assiduously targeted the
resources of the public sector so that the maximum
assistance is delivered to those who need it most.
Within a massive reduction in Government spending as a
proportion of GDP since 1983, we have substantially lifted
the amount of money, in real terms, devoted across the
spectrum of social justice programs.
Through the Family Allowance Supplement, through Medicare,
through our expanded agenda of action on behalf of
Aboriginal people, we are ensuring that those in need do see
the compassiLonate face of Government.
And in yesterday's Statement, I outlined ways in which the
Government would assist those directly disadvantaged by the
tariff cuts.
Because it has been my firm conviction that where the
community is prepared to achieve changes that deliver
benefits at the expense of a few, then the community must be
prepared to share the burden of change with them.
That is why we have established labour adjustment programs
for workers in the car and TCF industries, so that
relocation, retraining and redeployment is not just a
theoretical possibility but an actual outcome of the tariff
reforms. We bring thi~ s same approach in dealing with the consequences
of recession. If the benefits are to be shared, so must
some of the burdens.
We are determined that we will emerge from this recession
with enduring gain to show for its transitory pain.
A recession can severely damage a nation's resources in the
form of its job skills. Apprentices, in particular, have
been hit badily in the past. They have been laid of f with
their training incomplete and thrown onto the dole, never
able to resume their training a permanent personal loss,
and a permanent loss to the community. That was one of the
worst aspects of previous recessions.
We cannot afford to repeat that kind of double loss. And
that is why I announced yesterday, new programs to enable
employers to retain and improve the skills of apprentices
and other workers who would otherwise be working reduced
hours or have been retrenched; and why we will spend
$ 74 million, over the next two years, to provide work
experience for people unemployed for more than six months.
Against all this, the conservative parties reveal a quite
different set of values, and the implications of their
philosophy, damaging enough to a society at any stage of the
economic cycle, are truly devastating in a society in
recession. Unemployment benefits are a lifeline for many Australians in
these difficult times. That is a sad fact.
But the Opposition alternative is to prevent unemployed
people from receiving benefits after nine months, and to
tell them to swim or sink.
The Opposition's long-standing antipathy towards Medicare,
its suggested voucher system for education, and its truly
astonishing proposals to privatise Social Security so that
welfare assistance could be channelled through the voluntary
8.
agencies all point to the contrast between us, in
attitudes to the proper role of Government.
And, on top of all this, we have their proposals to undo our
progress towards a more efficient and fair taxation system.
First, they propose a consumption tax which would give
inflation a massive shot in the arm at the very time when
Australia has the opportunity of economic recovery with low
inflation and low interest rates.
And a blatantly regressive tax at that a tax on food and
clothing which will not be fully compensated, meaning lower
living standards for working Australians.
And second, they propose a flatter income tax which would
also, by definition, impose a heavier burden on lower income
earners. In sum, their policies reveal a view about the role of
Government diametrically opposed to ours.
Where we have made a safety net, they would make a social
trap door through which they would push the most
disadvantaged Australians.
Ladies and gentlemen,
Today, I have examined aspects of my Statement as an
expression of our approach to the proper role of government.
But I repeat again what I tried to emphasise yesterday: in
the final analysis, the challenges ahead demand the
involvement of all Australians. And I really believe that
one of the best of all the great things about being an
Australian, is that none of us is automatically excluded
from participation in the task of making this an even better
place.