CHECK AGAINS: T DELIVERY EMBARGOED UNTIL. nELIVERY
SPEECH BY THE PRIME MINISTER
ADDRESS TO THE COMMITTEE FOR THE
ECONOMIC DEVELOPMENT OF AUSTRALIA'S CONFERENCE
AN AUSTRALIA THAT WORKS A VISION FOR THE FUTURE
SYDNEY 1 MAY 1991
Distinguished Guests
Ladies and Gentlemen
Australia has never lacked writers and poets whose words
could conjure up visions of the future of this nation and
its people.
I do not mean merely the evocation of our physical
landscape, like Banjo Paterson's " vision splendid of the
sunlit plains extended".
I mean visions of the nation itself of how its people
should act to secure their best future.
Henry Lawson cast the nation's future as a choice between
'' the old dead tree and the young tree green"' words taken
up by Manning Clark as the title of the last volume of his
History of Australia.
At this Conference, our vision is somewhat less poetic, but
certainly more relevant to the management of the complex and
diverse society that we have become the deceptively modestc
goal of ' an Australia that works'.
The danger for those who seek to articulate a vision for the
future of their nation is obvious: they run the risk of
being accused of substituting empty rhetoric about long-term
goals for hard analysis and prescription about immediate
problems. But it is only by identifying valid long-term goals that we
can possibly make the right decisions about those more
immediate problems.
Nowhere does that general truth have more particular
validity than in the case of economic management of the
affairs of a nation.
The constantly changing circumstances in which a national
economy operates; its inherently conflicting interest
groups; and the often discordant chorus of commentators,
make the task of consistent and effective short-term
management difficult. A vision of the long-term future is a
necessity as-a guide, and as a model against which
progress can be measured.
And let me be quite explicit I am speaking directly from
my personal experience as Prime Minister. When my
Government embarked on our program of profound and
comprehensive reform reform of institutions of the economy
and reform of attitudes about the economy we recognised
that change could be painful. And so it has proven. We
recognised that sacrifices could be necessary. And they
have been.
We could not have undertaken this program of reform, and we
could not have required those painful costs, unless we had
articulated, realistically portrayed, and adequately
detailed our vtision of the kind of Australia that we are
seeking to build.
And right from the start, through the National Economic
Summit, and through a consensual approach to our decision
making, we sought to involve the community as a whole in
this task.
Because, let me stress, the task of formulating and
articulating a vision for the nation is not a task for
Government alone. It certainly must not become the preserve
of the mandarins of the bureaucracy, or of the self-styled
experts representing vested interests, or of the theorists
of academia.
A vision is not some arcane formula cooked up by specialist
elites; it is and must be a real and comprehensible program
developed for and by the nation as a whole.
That said, let me once more sketch what I as Prime Minister
see as the long-term outcomes of the reform process on which
we have embarked which is to say, the elements of my
vision for the future of Australia.
Just as importantly to your purposes, I want to draw lines
into the future, linking the Australia of today with this
vision we are striving to attain, and showing what more we
must do if we are not to be thwarted in our ambition to
reach our goal.
The first element of this vision for Australia is for a
modern, prosperous, growing economy, shaken out of its old
complacencies an Australia that draws on its comparative
advantages to improve its standard of living an Australia
increasingly able to earn its way in the world through its
creativity and ingenuity an Australia that makes full,
efficient and effective use of its human and natural
resources tc achieve sustainable growth.
It is only in such an Australia that opportunities can be
provided for all Australians to maintain and enhance their
standards of living.
So the second element relates quantity of output to quality
of life. Our Australia of the future must be a democratic
society with the deepest attachment to the rule of law. It
must be a just society, that values all its members and
provides opportunities for them all to contribute to, and
benefit from, national life. The material resources
generated through growth must be available, through fair
taxation and through the provision of education, health care
and support for the needy, for the advancement of all.
This Australia will be a multicultural society by
demographic fact; it must also be multicultural in practice,
through the mutual respect of all its citizens, and the
unity of their commitment to our national identity.
And it will be an Australia that has got the balance right
between the necessity for continued economic growth and the
necessity for protection of our environmental heritage an
economy that has identified the concept and implemented the
reality of ecologically sustainable development.
The third element of this vision of Australia concerns the
attitudes we bring to our relationship with our region and
to the rest of the world.
I see a self-reliant and confident Australia forging its own
place in the world an Australia that through its
traditional bilateral alliances and friendships, and through
multilateral means, is capable of forcefully pursuing its
own interests in a challenging world environment an
Australia prepared to challenge the folly of trade
protectionism an Australia prepared to contribute to the
maintenance and spread of peace and stability an
Australia, in short, that does not merely fit in with the
world order as we find it, but that helps to shape it.
These are broadly stated goals that, as such, command almost
universal respect throughout the Australian community.
It is on the question of how to attain these goals that we
hear the emerging voices of pessimists, who seem to believe
the challenge is simply too great for us.
They say that Australia cannot hope to survive, let alone
compete, in a dynamic Asia-Pacific region or in a global
economy dominated by superpowers in North America, Europe,
and North Asita. For them Australia is too firmly rooted in
its past to m~ ake the change to the flexibility, the
diversity, arid the competitiveness that the future demands.
The paradox of course is that those who believe we cannot
escape our past urge us to return to it through the failed
policies of selective industry protection, managed exchange
rates, and confrontationist industrial relations. They want
us to burden ourselves once more with the introspective and
short-sighted policies of expedience that for most of the
post-war years simply erected and entrenched the problems
that we are now dismantling and remedying.
I am essentially an optimist. I know Australians pretty well
and I know from first hand in the Cabinet room and out in
the community the changes that Australians are undertaking
and the determination with which they are doing so. I put
great faith in the resilient capacity of our democratic
system to contain and resolve the inevitable tensions
generated in periods of rapid change and uncertainty.
But I hasten to qualify this optimism with a healthy dose of
realism. The inherited problems facing this nation in the
early 1980s were huge; they have not by any means all been
solved. We are still predominantly a commodity producer, like
we were 140 years ago, influenced now as then by the
continuing cycles of international boom and bust.
S We are still a Federation of separate sovereignties,
victims of the economic and administrative
inefficiencies we inherited from those who drew
colonial boundaries over our continent.
S We still, too many of us, see ourselves as perched
uneasily on the edge of Asia, in it but not of it; we
are not yet capable of maximising in the region our
strengths as a prosperous, well educated and free
society.
These are deep-seated shortcomings in our national
development, and we should not be shy in admitting them or
reluctant to concede the need for redoubled efforts to
remedy them.
But equally, it would be niggardly, and plain wrong, to
claim that nothing has been attempted or that nothing has
been achieved.
I don't want this address to become a partisan list of
Government achievements. But I do want to talk, and with
pride, of the profound and far-reaching changes that I
detect have taken place in the community as a whole over
recent years.
These changes can be categorised under three broad headings.
Australia is becoming a more competitive society, a more
cooperative community, and a more outward-looking nation.
Each of these changes is related to the broad elements of
the vision for Australia I outlined at the outset. In other
words, we are making real progress towards those goals; we
are taking with us into the future more of the
characteristics that we will need to build the kind of
society we want.
A More Competitive Australia
Perhaps the best indication of our emerging maturity as a
nation, and the clearest demonstration that we are shaking
of f the inefficiencies of the past, is our historic
transformation away from industry protection.
There was no better symbol of Australia's traditional
preference for isolation over international enmneshment than
the tariff; and there is no better proof of our growing
preparedness to take on the challenges of the modern,
interdependent, global economy than our determination to
bury the tariff.
This Government has deliberately and determinedly set about
pulling down the tariff walls. The change can be
dramatically measured. By the end of the decade, we will
have slashed the average nominal rate of assistance to the
manufacturing sector from the 13% that prevailed in 1983 to
and the average effective rate of assistance from 22% to
Turning the -tide of protectionism marks the start of a new
chapter in the economic history of this country. Australian
industry will no longer be able to regard the domestic
market as its captive and the world market as beyond its
reach. Export orientation will increasingly enter the
strategies ofE even moderately sized Australian firms. New
incentives will be generated to improve product quality and
to adopt new technology. Managers and workers will no
longer be able to shirk the challenge of international best
practice. For our efficient export industries, this means lower input
prices; for Australian families, cheaper consumer goods.
Ultimately, for the Australian economy as a whole, there
will be a new capacity to compete on world markets.
At the same t: ime as we are dismantling the barriers to
competitiveness that stand at the borders of Australia, we
are also eliminating the barriers that exist within
Australia. Microeconomic reform has gone from being an arcane and
irrelevant term to one at the top of the political reform
agenda. Thai: hasn't happened by accident; it has come about
because Australians have realised that it is intimately
related to the quest for higher productivity and efficiency.
Our transport. and communication systems, our taxation
system, our work practices and industrial relations had for
many decades acted as impediments to the easy flow of goods
and services and to the proper development of our individual
talents. The last few years have seen the start of
revolutionary change in each of these fields change that
must and will continue if we are to build the Australia of
our vision.
This of course will cause discomfort, and some pain, to
individuals and organisations who are jolted out of their
traditional ways. That is the nature of micro-economic
reform: the gains are diffused throughout the society, while
the costs must.-be borne in the first instance by those
immediately affected.
The labour market adjustment programs that we have
instituted to help workers displaced through tariff
reductions show that the community can, as it should,
provide transition assistance to those affected.
But the prOcess of adjustment itself is necessary and
inevitable.
Australia cannot afford to retain islands of cosseted
inefficiency in the sea of increasing national
competitiveness whether those islands be an overmanned
wharf, an inefficzient government enterprise or an
expensively protected manufacturer.
A third landmark on the path to a more competitive Australia
is the emerging proof that, after several lost opportunities
during previous decades, Australia is at last set to get low
inflation.
Most forecasters are now predicting inflation close to zero
for the March quarter, and less than 5% during the next few
years. A lower inflation regime will reduce uncertainty and improve
our economic efficiency in general. It will improve the
functioning of the price system, lower interest rates and
induce better saving and investment decisions. It will
reduce the remaining distortions in the tax system, enhance
the quality of information available for business decisions
and allow a more equitable income distribution.
And for the first time in years we can now expect a low
inflation recovery associated with the necessary improvement
in the current account.
In other words, lower inflation inflation more in line
with the levels of our trading partners makes an essential
contribution to the emergence of a greater competitiveness.
Underpinning this competitiveness is perhaps the most
profound sea-change of them all the greater mobilisation
of our human resources. I mean not just the skills of our
elite intellectual community but the talents of managers and
workers in factories and offices throughout the nation.
As I said in the March Statement, this mobilisation does not
necessarily mean working harder. But it does mean working
smarter wcirking more effectively, using new materials, new
production technologies and new management methods. It
means being a clever country providing the right
incentives for our children to complete secondary schooling
and ensuring adequate arrangements to meet their demand for
tertiary education; encouraging our best scientific minds to
focus on expanding the frontiers of knowledge and on
enhancing economic competitiveness and productivity; and
striving to adopt the best working and management practices.
A More Coonprative_ Australia
Australia has always been a society dedicated to the spirit
of cooperation. We are, after all, a " Common wealth" and
the very purpose of cooperation is to enhance the shared
prosperity of all those who participate in it.
But in recent years we have seen new and significant
manifestations of this characteristic.
One hallmark of a cooperative community is the quality of
its social justice programs. Today, assistance to the needy
is more plentiful in real terms and better targeted on those
most in need, while the dramatic expansion of child care
services, the creation of comprehensive health insurance and
the spread of superannuation ensure that social justice
remains relevant' to changing social needs.
A second hallmark of a cooperative community is its ability
to overcome internal impediments to efficiency.
It is astonishing to think that by 1992 there will be fewer
real barriers between the member nations of the European
Community than there will be between the Australian States.
Our 17 million people will form a more fragmented market
than the 340 millions of the EC.
So the task of improving the efficiency and competitiveness
of the public sector, and improving the delivery and quality
of services governments provide is an urgent and a vital
one. That is why I launched the special Premiers' Conference
process which, last October, took up the challenge and
initiated a review of intergovernmental arrangements in an
unparalleled spirit of co-operation.
A third hallmark ' of a cooperative community is its ability
to work together to achieve common goals.
Nowhere is this co-operation more vital than in the labour
market. Much of the change I have described and
foreshadowed has the workplace as its focus. Here, where
wealth is created, we must see real change if the nation is
to equip itself to fulfil the wider aspects of the vision I
have described.
This essential truth was recognised by this Government from
the time of the Economic Summit, which we convened on
assuming office, and in the forging and nurturing of our key
relationships with employers and the trade union movement.
These relationships have reached their most developed form
in the Accord, reflecting not only the close historical and
political association between the Labor Government and the
trade union movement, but also the cohesive structure of the
ACTU that enables them to negotiate and to deliver on
undertakings given.
The instrumental role the Accord has had in the Government's
macroeconomic policy is well known most clearly perhaps in
underpinning the change in the profit share that facilitated
the resurgence of investment.
But its role in promoting deeper and more permanent
structural change has received less attention. The
reduction in industrial disputes by around 60% is one
indicator of the Accord's effectiveness in this role. We
are also seeing union rationalisation and award
restructuring, moving us out of the nineteenth century era
of craft based unionism, and a new willingness to negotiate
industrial agreements to facilitate greenfield projects.
These changes, fundamental as they are, represent but one
stage in what must be a continuing process. A commitment to
further increasing labour market flexibility is integral to
Accord VI. But let me point out that, contrary to
assertions commonly heard, our industrial relations system,
at its present stage of evolution, is entirely capable of
accommodating innovative agreements between employers and
workers. And we have seen such agreements put in place,
including in large and traditional industries like steel and
chemicals, that have yielded very significant improvements
in productivity.
In mentioning these let me acknowledge and pay tribute to
the contribution by management to this progress. As I noted
a few moments ago, this Government has from its earliest
days sought to consult and involve employers in developing
policy strategies. It is certainly our intention that this
should continue. Indeed, integral to our vision for the
future is the creation of a closer, more productive
relationship based on mutual interest between unions,
employers and government.
Ladies and gentlemen, the difficulties of achieving change
are as real and stark in the area of industrial relations as
anywhere else in the economy. Traditional structures are
reinforced by a complex web of traditional attitudes;
together, they constitute a real barrier to change. Our
history of protecting industries from competition has
hindered the development of the skills required, on both
sides of the labour market, to cope with the more flexible
environment we all acknowledge is desperately needed.
The tensions, uncertainties and fears this creates have been
graphically displayed in the lively debate that has followed
the latest National Wage Case decision.
I do not impugn the motives either of the Commission in
bringing down the decision or of those who have commented on
it since. The Government's fundamental position is clear:
reform and restructuring must proceed. I want to see the
attention and energies of all parties focussed on achieving
this vitally essential objective.
There can be no doubt that the process of waterfront reform,
with which I have been intimately concerned in recent days,
certainly exemplifies the difficulties of achieving change.
But change must be achieved and will be achieved. And, as
my responsible Minister, Senator Bob Collins, will testify,
the waterfront reform process graphically illustrates the
fundamental truth that it will only be achieved through
hard, grinding negotiation not by high flown but empty
rhetoric about confrontation on the waterfront.
A More Outward-looking Aus_-tralia
Most of the dramatic changes I have described so far have
affected Australia's domestic framework. But each of them
also has a direct and vital impact in fostering a more
outward orientation of the Australian nation.
Indeed, the simplest way of describing the diverse range of
economic reforms we have undertaken so far is to say they
have ' internationalised' the Australian economy.
Deregulation, the fostering of domestic competition, the
effective management of fiscal, wages and monetary policy,
have made us more open and exposed to the challenges and
opportunities of the international marketplace, and more
competitive in taking them up.
At the same time, tariff reductions have given us a wholly
new credibility in taking on the agricultural protectionists
in the Uruguay Round of GATT.
Australia has diligently pursued over the last four years
our essential interests in the Uruguay Round attempting to
ensure our farmers get fair and equal access to world
markets, and to protect the global system from corrupt,
trade distorting policies.
It was very imuch in pursuit of these interests that we
established -the Cairns Group so that nations with similar
interests could speak with a collectively louder and more
influential -voice.
The revolutionary changes taking place in global economic
life are nowhere more visible than here on the Pacific Rim.
This region generates one third of the world's trade and
more than half its economic output. It contains the world's
fastest growing economies.
Our domestic economic reforms have made us more capable of
participating as a full partner in these developments
while our foreign policy has underlined our willingness and
ability to strengthen the productive framework of our
region. I am very happy to see the steady progress made by the Asia
Pacific Economic Cooperation process established following
my proposal in January 1989.
APEC is evolving into a major regional economic forum for
discussion of developments in the world trading system,
including the post-Uruguay Round environment, and practical
co-operation through the development of work projects.
Australia must be realistic about its capacity to influence
global events. But middle power diplomacy can be a force
for change and good, as our efforts have shown on Cambodia,
southern Africa, chemical weapons and culminating only
this week on the prevention of mining in Antarctica.
We will continue to use our good offices to influence and
shape a future that reflects Australia's interests. In
particular, we must continue to assert and to defend the
principle that the long-term security of individual nations
will be best advanced through collective security.
The Gulf crisis, a watershed in modern world history,
defined once and for all the end of the Cold War which had
held the world frozen for forty-five years. It demonstrated
the capacity for collective action in defence of collective
security. It precipitated a resurgence in support for the
role and mechanisms of the United Nations.
Australia was in the forefront of the action to defend the
principles of collective security, and I am proud of our
role in the crisis.
Ladies and Gentlemen,
There is one final manifestation of this outward looking
perspective to which I wish to refer this evening:
Australia's rapidly growing tourism industry.
Over the last decade, Australia's tourism industry has
witnessed unprecedented growth and development to become one
of our biggest export-earners. It accounts for over 5 per
cent of GDP and employs nearly half a million people.
Tourism's decentralised character also assists the
diversification of Australia's non-urban economic base.
While these past achievements deserve praise there is no
room for complacency. The challenge for the tourism
industry is to deliver an internationally desirable and
competitive product.
To this end, I congratulate CEDA on its publication of
" Tourism in Australia", and I am happy to launch it now. It
represents a timely and objective examination of the
strengths and weaknesses of the industry and the
opportunities and risks facing it.
Insights such as this, together with forward looking
strategies being developed by the industry itself, provide
an understanding of what is required to develop Australia's
almost limitless tourism potential.
Ladies and gentlemen,
I have spoken at length tonight in response to your
invitation to examine these difficult and important issues.
I congratulate you on the ambitious nature of this
conference and I wish you well in your discussions.
In closing I stress this vital point.
National goals are not like the goals on a football field.
They are not fixed targets; we all know that the only
constant fact these days is the fact of constant change.
Adjustment to change the process of reform is not
something that we can expect will have some clearly defined
end point in a more stable and more predictable future.
Reform, adaptation, flexibility, dynamism these will be
continuing needs; they must become enduring characteristics
of our daily life as a national economy.
I trust conferences such as this will play a successful role
in educating Australians and in winning their informed
involvement in the continuing challenge of reform.