f CHECK AGAINST DELIVERY EMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER
ANNUAL DINNER OF THE
AUSTRALIAN MINING INDUSTRY COUNCIL
CANBERRA 2 MAY 1991
It is a pleasure once more to address AMIC's annual
dinner the eighth occasion on which I have done so
since becoming Prime Minister.
These occasions give me a chance both to brief AMIC on
the major policy~ developments that have occurred in the
previous twelve months and to comment on issues that will
affect your industry and the Australian economy over the
coming year.
Tonight I want to focus my remarks on two issues of very
great significance to the Australian economy and to the
mining industry in particular: the dual imperatives for
Australia to increase its competitiveness and to
integrate our economic development with proper
conservation of our environment.
The choice facing the nation is, as I am sure you
understand, ( quite clear.
If we are to have a modern, prosperous economy and
maintain and improve the quality of life for ourselves
and our children, then we need to build a more
competitive Australia, and to achieve ecologically
sustainable development.
On 12 March delivered to Parliament the Statement
' Building a Competitive Australia'. The statement marked
another important milestone in the economic development
of this country, and provided answers to fundamental
questions about the future of the Australian economy.
The substant: a1 package of measures which I announced was
directed at the basic task of improving our productive
capacity and our international competitiveness.
I
2.
Virtually for as long as Australian industry has existed,
it has been " assisted" by tariffs. " Assistance",
however, as any high school economics student can tell
you, is a misnomer. Tariffs encourage industry to
concentrate on the smaller domestic market rather than
the challenge of international trade they remove the
incentive to develop new technologies and new work and
management skills they have damaged our efficient
export industries, such as mining and agriculture, by
forcing up the-price of inputs in short, instead of
assisting industry, tariffs have retarded it, to the cost
of us all.
The Government's decision to press on with tariff
reductions was a clear signal that the days of national
economic introspection, protected from the challenges of
the outside world, are well and truly over.
The extent of the turn-around we are achieving can be
dramatically measured. By the end of the decade, the
average nominal rate of assistance to the manufacturing
sector will have been brought down from 13 per cent to 3
per cent and the average effective rate from 22 per cent
to 5 per cent.
By lowering the costs of your manufactured inputs, this
measure alone is calculated to increase output in the
mining industry by up to 5 per cent.
And as you know, a number of the other measures I
announced in the March Statement will also benefit the
mining industry. These include the broadening of
wholesale tax exemptions, the provision of tax
deductibility for capital expenses incurred in the
preparation of environmental impact statements, the
introduction of a more favourable depreciation regime,
and the decision to extend duty free entry to mineral
processing equipment not made in Australia. I am pleased
to note that all these changes were welcomed by AMIC.
I should stress that the March Statement's emphasis on
increasing Australian competitiveness was only one
further instalment in the Government's long running
endeavour towards this goal. In particular, it must be
placed in the context of our continuing micro-economic
reform agenda.
I have said before that I am happy for our record on
micro reform to be compared to that of any other
government in Australia's history. We are making, and
are continuing to make, substantial progress in improving
the efficiency of our transport and communications
systems, our taxation system, our workplaces and our
union structures.
As the Federal Government, we are doing, and will
continue to do, what is within the ambit of our power to
do, to move -the process of micro-reform along as quickly
as it can be moved.
But clearly many areas of micro reform requiring
attention do not lie solely in the province of the
Commonwealth Government. Through the Special Premiers'
Conference process we are making historic progress in
ensuring that: all levels of government are cooperating to
improve the efficiency of the public sector as a whole.
No one doubts the size of the task before us, and it is
clear that the massive transformation necessary to
achieve our economic goals is only partially completed.
Nevertheless, it is the case that many of the fundamental
reforms requiLred are well under way.
In this context let me report to you on the outcome of
the negotiat:. ons on the waterfront that I completed only
this morning with the relevant union and employer
organisations. I have been involved with the chequered course of the
waterfront rEform program at various times since last
November, whenever Senator Bob Collins as Minister
responsible felt that I could contribute.
Following thet National Wage Case decision late last
month, the cause of waterfront reform was clearly in
jeopardy. Senator Collins, Senator Cook and I took the
view that a circuit-breaker was required. Both parties
to the waterfront reform process also clearly felt that
such a step was appropriate, and so last week I called
the first of what proved to be an exhausting but
ultimately successful series of meetings.
The elements of that outcome were released today, and in
summary they involve:
continuation of the reform process with an
important role for the Industrial Relations
Commission acceleration of the reform process, by
comparison with any alternative course
an incentive for both parties to co-operate for
the: early delivery of company-based employment;
an award structure suitable to this; and a
base for enterprise bargaining
a means of ensuring that waterfront reform
benefits not only the companies involved
through major productivity gains and those
leaving the industry through generous
redundancy arrangements but also those
remaining in the industry who will, after all,
be working significantly smarter for
themselves, for their companies and for this
country and a reaffirmation of the role of the
Waterfront Industry Reform Authority which was
also involved in these discussions.
I think an indication of the unique success of this
agreement is that it has received support from Conaust
often a stern critic of the pace of reform and from the
unions who are, after all, good judges of their
members' interests. This is a win-win result that surely
puts the lie to those who would abandon the path of
negotiation in favour of harebrained schemes for
confrontation. I know AMIC's interest in waterfront reform is longstanding,
and I respect the consistency of your views.
But I cannot support what has been coyly described as
" more prescriptive alternatives"
The fact is, for users of the waterfront, this negotiated
agreement will yield clear benefits: swifter passage of
essential inputs across the waterfront; and eventually,
I am convinced, lower real rates as companies strive to
obtain greater market share in a newly competitive
atmosphere on the Australian waterfront.
Let me add this final point, because it needs to be well
understood. Competitiveness is not a static concept, so
micro-economic reform will be literally a never ending
process. What it takes to be competitive in 1991 will
not be the same as is required in the year 2000. The
important lesson Australia needs to learn is the habit of
change, so that we can constantly adapt to the constantly
changing circumstances of the world to which our future
is so closely linked.
I am happy for our record on micro reform to be compared
to that of any other Government in Australia's history.
Ladies and Gentlemen,
All these efforts are dedicated to making Australian
industry more competitive. Your industry, I know, has
long been world-competitive. But I referred at the
outset to the dual imperative facing Australia becoming
competitive and putting our economy on a footing that is
ecologically sustainable.
John Kerin and I have spoken at some length at previous
AMIC functions about the need for an integrated approach
to conservation and development. It is a concept with
which no-one disagrees though there is, of course,
always room for discussion about the emphasis that should
be given to its component parts.
Active public debate on sustainable development is in
this regard not only necessary, but also a healthy sign
that organisations are taking the subject seriously.
Last year the Government released a Paper on Ecologically
Sustainable Development as a stimulus for discussion on
this issue. Since then, nine sectoral working groups
have been established to help translate the concept of
ecologically sustainable development into individual
sectoral strategies. The working groups are to complete
their reports by October for consideration at the
November Special Premiers' Conference.
I am encouraged by the progress being made by the ESD
Working Groups, given the complexity of the issues and
the often conflicting interests involved. I am also
confident that the outcome of the process will provide a
sound basis for the Government to make decisions on
future processes and the implementation of appropriate
strategies.
Let me again place on record the Government's
appreciation of the involvement of AMIC in the ESD
process. We have' not forgotten that the mining industry
was one of the first sections of the community to embrace
the concept of sustainable development and to call for
its wider consideration, and your experience and insight
make for a valuable industry contribution to the whole
process.
Your early and general recognition of the importance of
environmental considerations is widely respected and
appreciated. I understand -that the mining working group has been
tackling a raln1ge of difficult issues that have been of
long standing concern to your industry. Naturally there
may be areas w. here agreement will not be reached in the
time allowed, and this will need to be reflected in the
final report. However, I hope that there will be
considerable agreement on many key issues.
Ladies and Gentlemien,
As part of the March Statement, I announced that the
Government had dedided to provide resource security for
major new wood processing projects, involving investment
of $ 100 million or more and which are directed to export
or import rep'lacement. As you know, this decision
aroused a good deal of interest from industry and
conservation organisations alike.
I know there have been suggestions, including from your
industry, tha-: the concept of resource security could be
extended to o-: her industries, notably mining. I want to
use this opportunity to tell you that the Government's
view is that his would not be appropriate and will not
happen.
Let me explain the background to the forestry resource
security issue.
In reaching its decision, the Government was conscious
that the forestry industry has a number of distinctive
characteristics. Forests have multiple functions and
values. They provide timber for wood production; they
have important roles in protecting water catchments and
providing habitats for wildlife; they serve as recreation
areas for public enjoyment. It goes almost without
saying that they occupy very large areas of land.
These various unique characteristics need to be carefully
weighed in any development decision. And indeed, the
resource security decision in no way reduces the
Government's commitment to proper environmental, heritage
and other safeguards.
Eligible projects will be subject to a comprehensive
integrated assessment process. Existing environmental,
heritage and Aboriginal legislation will be fully
applied, up front, so that the project proponent will
have the security of knowing that once the assessment is
completed and approved, no action will be taken down the
track to remove part of their resource except in
specified exceptional circumstances.
So the Government's commitment to the proper protection
of forests remains firm. But we recognised that in
part due to this consistent commitment to proper
safeguards there had been a reduction in the forest
resources allocated to existing operations in the
industry. This situation put the forest industry in a unique
position, and it was on this basis that the industry
claimed that a crisis of confidence existed in the
industry and that future investment was dependent on the
Commonwealth providing resource security legislation. In
view of the importance of having major value-added
projects come forward, and the general economic
circumstances Australia faces, this was clearly a problem
which the Government had to address.
At the same time we obtained legal advice that resource
security legislation was the only way the Commonwealth
could provide a binding undertaking of the kind sought to
get major wood processing projects started. Given these
circumstances, the Commonwealth decided to give an
undertaking that it was prepared to introduce such
legislation on a case by case basis.
I stress that this difficult decision was made only in
response to a unique set of circumstances. As such,
there can be no application of the concept of this
legislation to other industries.
Having said that, I do recognise the need for a greater
degree of certainty in relation to access and approval
processes for the mining industry.
The division of responsibilities between the different
levels of government has long been a concern of industry.
It can lead to duplication or inconsistent approaches,
with resulting uncertainties, inefficiencies and higher
costs to both industry and the community generally. It
can also result in inadequate protection of the
environment. With this in mind, the Special Premiers' Conference last
year agreed that a more cooperative approach to the
environment should be pursued. This is being done
through negotiation of an Intergovernmental Agreement on
the Environment. The agreement will include provisions
for the streamlining of environmental assessment and
other approval processes which will facilitate greater
certainty of Government and business decision making.
It is planned that drafting of the Agreement will be
completed in time for consideration at the November
Special Premiers' Conference.
Ladies and Gentlemen,
The Resource Assessment Commission Report on the Future
Use of Resources of the Kakadu Conservation Zone was
received by the Government today and will be released
publicly next: week. The fact that this will be the first
report completed by the Commission since its
establishment in 1989 has given it additional prominence.
I know that both the mining industry and the conservation
movement see the Government's final decision on the
Kakadu Conservation Zone as something of a litmus test.
Industry executives have indicated that a ' no mining'
decision could have a substantial impact on investor
confidence in mining and could result in mineral
exploration activity moving overseas. On the other hand,
conservationists and Aboriginal groups see our
forthcoming decision as another test of the Government's
bona fides on the issues of importance to them.
It is of course, inappropriate and, in any case
premature, fcr me to speculate on what the Government's
final decisicn might be. However, I would like briefly
to address scme of the underlying concerns, and in doing
so to show that whatever our ultimate decision on this
issue, it in no way can be construed as a litmus test for
other issues.
The mining industry in general was critical of the
original decision to have the Resource Assessment
Commission inquire into this issue. It has been argued
that this particular reference was too project-specific,
and fell outside the stated purpose of the RAC.
No one would be naive enough to deny that this particular
issue has been a difficult one for the Government. it
involves an extraordinary range of very complex and
sensitive resource, environmental and Aboriginal issues.
The Kakadu Conservation Zone covers an area, including
Coronation Hill, that has great mineral potential and
could produce very significant export income for
Australia. Part of the area is also a registered sacred
site and is currently subject to an Aboriginal land claim
as well as an application under the Aboriginal and Torres
Strait Islander ( Heritage Protection) Act. The area is
also environmentally significant, surrounded by a
National Park and located in the catchment of the South
Alligator river that feeds important wetlands in the
Kakadu World Heritage Area.
These factors were sufficiently complex to warrant very
careful examination by an independent body that could
study the competing claims as well as provide any further
relevant information to enable us to make an informed
decision. The Resource Assessment Commission was an entirely
appropriate organisation to carry out this task. We
specifically established it to inquire into complex
conservation-development issues. The fact that this
inquiry covered only a relatively small area of land does
not mean that the issues are any less complex. I have no
doubt that Justice Stewart would agree with this view.
So the Kakadu Conservation Zone is truly a special case,
involving a combination of complex and sensitive issues
which would only rarely occur in most mining projects.
Irrespective of the final outcome, any claims that the
Government's decision will set policy parameters for
future mining projects in this country are simply not
supported by the facts.
The Kakadu decision will have no implications for the
overwhelming majority of mining projects in this country.
These will continue to be subject to normal environmental
and other approval processes.
I acknowledge that resolution of the Kakadu matter has
taken substantially longer than we originally envisaged.
Now that the RAC report has been completed, the
Government will be moving to make a final decision
without undue delay. We wish to avoid any further
uncertainty about the future of the Conservation Zone and
the Coronation Hill project.
In view of the very extensive consultative process that
we have pursued, it is not the Government's intention to
seek further public comments on the final report.
Nevertheless, Ministers will be consulting with key
interest groups to ascertain their reactions to the
report. In the final analysis the Government will weigh
the different considerations and take a decision which we
judge to be in the long term interests of the community
as a whole.
I expect the Government's final decision will be made by
early next month.
Ladies and Gentlemen,
In concluding, I want to assure you that the Government
does recognise the vital contribution that the mining
industry makes to Australia's economy. We are striving
to provide a framework conducive to your continued
success in the future.
We will continue the task of reshaping our society and
economy through tackling the tough issues of structural
reform and the equally tough issue of dragging Australian
attitude into the 21st century.
As the Prime Minister, I give you my unqualified
commitment that my Government will continue to build a
competitive and an ecologically sustainable economic base
for our nation.
Present and future generations expect no less of us than
this. I am sure that the mining industry will continue to play
its important role in meeting these challenges and
building that future.