PRIME MINISTER
EMBARGOED AGAINST DELIVERY
SPEECH BY THE PRIME MINISTER THE HON P J KEATING, MP
ALP BUSINESS LUNCHEON, GREAT HALL NATIONAL GALLERY MELBOURNE
12.3OPM, WEDNESDAY 11 MARCH 1992
Ladies and gentlemen,
Your experience over the years has probably led you to
expect today the familiar post-Budget urge. The old gee-up
speech, in which I tell you what the Budget means and why
it's good for you, and urge you to get out there and do what
you do best.
This time is different.
Today I want to thank you. I want to thank you for your
contribution to the Government's Economic Statement the
commitment to this country that you displayed, your
willingness to offer constructive ideas.
It was a much better Statement for it.
And I want to thank you for your endorsement of it because
the general response from business has been terrific.
That's very important for everyone' s confidence.
I think there is a general opinion now that there is only
one way to go and that is towards growth and recovery.
There is most certainly a . general conviction that we have to
create jobs.
And we have to start doing that now.
Of course the Economic Statement was not a Budget speech
it was much bigger than a Budget.
It ranged very widely across the Australian economy and
society. But its target was very specifically Recovery.
We called it: One Nation with that in mind.
When, after all the discussions, we looked at the measures
we'd come up with the measures we decided would do most to
bring on recovery, we realised that there was a very strong
theme running through them.
And the more we thought about it the more we realised it was
no accident.
We realised that almost every significant measure was
calculated to give us greater strength by harnessing more
efficiently our human and material resources.
I
One Nation aims to close the gaps on a vast continent
where population centres and markets are separated by
great distances
where our political evolution has frequently been out
of tune with our economic development and potential
where, at least until very recently, our industrial
culture has contained its own great distances
and where, if we are to emerge from this recession
stronger than ever and make the great leap into the twenty
first century, at this moment in our history we need all the
social and economic cohesion we can muster.
We called it One Nation because its aim is to forge
partnerships, create efficient cooperative workplaces,
involve more people in the life of the nation and include
them in the : recovery, educate more people and link our
cities and hinterland and ports by the greatest one-off
overhaul of infrastructure for generations.
I believe it is the combination of elements which makes the
Statement strong it is not just an economic package, it
has a certain chemistry to it.
It calls up the resources of our people as well as our
economic. resources. It addresses our weaknesses and calls
up our strengths and one of those strengths, I believe, is
our passion for this country.
In tough times, in historic times as these are, that belief
in our country is very important. A sense of purpose is
very important.
That's why Dr Hewson is so wrong about what he describes as
the nationalist diversion.
He is wrong to think I intend it as a diversion.
He is wrong to think that it could only be a diversion.
He is certainly wrong to think that calling on Australians
to take whole-hearted pride in themselves and their country
is the action of a scoundrel.
Dr Hewson's problem is that he can only follow the textbook,
only obey the ideological reflexes there is no heartbeat
in either of them.
Ladies and gentlemen,
One Nation is a four year strategy designed to get things
moving. To produce jobs and reduce unemployment.
And to do so in a manner that contributes to a stronger,
more productive economy for the 1990s.
It stimulates business investment and provides a more
efficient and reliable transport system.
It encourages large projects and small business enterprise
alike. It further opens the economy to competition, while providing
enterprises with the ability to respond to the challenges of
competition by encouraging improved work practices.
It improves skills and career prospects, while providing
greater incentives for individuals to take on added
responsibility. And it does this while reinforcing a low inflation culture.
While producing a fairer Australia.
In total, One Nation is a comprehensive and integrated
strategy that will provide the platform for a stronger
Australia, an Australia better able to grow in an
increasingly competitive world.
RECOVERY Our first task is to generate growth.
The high level of unemployment is bringing great hardship to
many families.
We have to bring it down.
And we can bring it down.
Australia is much better placed now than it has been coming
out of earlier recessions.
Inflation is low, profits are high for this stage of the
cycle, and the benefits of past structural reforms are
coming through.
In addition, our, sound underlying Budget position allows us
to provide a fiscal boost now.
We have not stood back and left the economy solely to market
forces as the Opposition would have us do.
Their prescription to get us out of this recession is to
wait and hope.
Instead we have a sensible program of spending and tax
incentives amounting to 1/ 2 per cent of GDP over the next
year to get us moving again.
Coming on top of the stimulus of lower interest rates, the
cyclical unwinding of the budget surplus, and a turnaround
in farm product,, this should see GDP grow by around 4 3/ 4
per cent in : L992-93.
A MORE PRODUCTIVE ECONOMY
Lifting employment and restoring confidence is the immediate
priority. The strength of One Nation is that it does this at the same
time as providing the foundations for a sustained lift in
Australia's productive capacity.
Such a lift in capacity will only be achieved with a private
sector able to respond to today's challenges.
The Government can and will help.
We will provide appropriate incentives, skills and the
infrastructure to support enterprise.
We will not prop up inefficiencies, but we will help
adjustments and direct our limited resources to the areas
where they can be of most use.
Equally, we will not be relying on the hope that market
forces alone will deliver the goods.
It is the Opposition's policy to withdraw from the problem.
Ours is to engage it.
The boost from the Budget will help the recovery get
underway, but as the private sector picks up, we will wind
the Budget back and bring it into surplus by 1995-96.
We will not give away the sound underlying structure of the
Budget we have worked so hard to achieve.
Nor will we let the gains on inflation slip.
Our agreement with the union movement will keep wages
growth, on average, at a rate consistent with keeping our
inflation rate comparable to that of our major trading
partners. This is the key to achieving a low inflation culture.
To making the 1990s a low inflation decade.
Economic recovery, a sensible fiscal policy, and low
inflation will provide the basic environment for renewed
private sector enterprise.
One Nation does this and much more.
I
It will improve the structural or micro elements of the
economy that are so important to private sector decisionmaking.
We need: workplaces that are responsive to change;
a skilled and motivated labour force;
a reliable and efficient infrastructure;
an appropriate tax regime; and
a competitive environment where the best are
rewarded.
One Nation addresses each of these factors.
WORKPLACE REFORM
Ladies and gentlemen,
We all know that inflexible workplaces have harmed
performance in the past.
To deliver lasting change in industrial relations we need
employers, unions and government working together.
In this we have made quite remarkable progress. A
centrepiece of Labor's strategy is working.
The Opposition claims that Industrial Relations reform is
also a centrepiece of their strategy.
Yet curiously they devote just three quarters of a page to
it in Fightback.
And what they say there is ill-defined and potentially very
damaging. Predictably it is about confrontation, strengthening the
Trade Practices Act and providing no support for the weak.
It is all very familiar to those who remember the early
1980s.
Confrontation and inflation.
For on top of the GST slug, the Opposition industrial
relations policy will be very inflationary.
What we need a wages policy that will entrench a ' Low
inflation culture and reform the workplace is increasingly
what we have.
More than 40 enterprise agreements have been ratified by the
Industrial Relations Commission since the implementation of
the enterprise bargaining principle last October.
This process will accelerate and we will help it by amending
the certified agreements provisions of the 1988 Industrial
Relations Act to make them more conducive for parties to
negotiate at the~ workplace.
ASKILLED WORKFORCEFlexible
workplaces with a skilled workforce will make the
1990s a more prosperous decade.
We have already done a lot in this regard.
School retention rates have almost doubled since 1983.
The number of Commonwealth funded places at universities
will have increased by 50 per cent by 1994.
These dramatic changes will now be matched in technical and
vocational training.
With an extra $ 720 million of Commonwealth money over the
next three years, and by working with the States, we will
create thousands more places and lift the quality of
vocational education.
One Nation also directs more resources to improving
training, both for those entering the workforce for the
first time and for those currently unemployed:
* we have substantially raised the incentives for emplo
yers to take on apprentices and trainees.
we have increased funds for JOBSTART and JOBSKILL, two
programs that are well targetted to assist long-term
unemployed back into employment.
I NFRASTRUCTURE
For business to compete effectively in Australia and the
world, we need reliable and efficient transport.
We have built up the National Highway System in recent
years, and now, with One Nation we will set aside $ 600
million to upgrade roads over the next two years.
We will thus create jobs quickly, and create a better system
in our cities and on the long hauls between Adelaide,
Melbourne, Sydney and Brisbane.
Strategic investments to straighten rail lines and
strengthen br7idges, and to provide more passing loops, will
see rail transit times reduced and made more reliable 12
hours, reliably, between Melbourne and Sydney by 1994.
We will final~ ly have a standard gauge line connecting our
capital citiE& s from Brisbane to Perth.
Here in Melbourne we will put $ 20 million into upgrading the
terminal at South Dynon and a further $ 5 million connecting
South.. Dynon to. Swanston and Appleton Docks.
The end result will be a rail system able to compete with
road, and a rLetwork of competitive capital city ports.
We are very much aware that upgrading the infrastructure in.
rail will only produce the necessary improvements with
better work practices.
Accordingly, our spending is conditional on commitments by
unions to a Greenfields enterprise agreement with the
National Rai~ l Corporation.
A COMPETITIVE ENVIRONMENT
For the money spent on public investment projects to yield
the maximum benefits, not only are flexible workplaces
required, bu~ t a competitive environment.
Management must perform; the best will be well rewarded.
Labor's reforms over the past 9 years have opened Australia
up to greater competition.
For example, our exporters of manufactured goods have made
remarkable inroads into overseas markets, with manufactured
exports increasing at an annual rate of 10.5 per cent since
1982-83.
They have increased by over 20 per cent in the past two
years. We will continue to integrate the economy into the
international economy with phased reductions in tariffs.
We have exposed other sectors, such as telecommunications
and banking, to competition at home.
One Nation takes this process further.
It introduces revolutionary change to aviation, and the
transmission of electricity.
Among other measures to make the banking sector more
responsive to change, additional foreign bank licenses will
be permitted, subject to prudential standards.
SMALL BUSINESS
This government places a very high value on the small
business sector.'
Small-businesses employ, more.. than 2 million Australians, or
nearly half of the workforce in the private sector.
They are a powerful source of employment, of innovation, and
of rising living standards.
Small business is often the way in which Australians can
improve their lives, and improve their country at the same
time. In our One Nation program, we have taken concrete steps to
strengthen small business not with handouts, but with real
incentives to grow, to innovate, to export and to create
jobs.
We have: substantially increased the capital gains tax relief
for small and growing businesses, to increase capital
mobility and flexibility in the sector.
granted. a three month extension for 1991/ 92 company tax
payments for small business.
tripled the funding to $ 12 million for helping small
businesses ' into export markets through our " Export
Access" program.
provided for the establishment of Pooled Development
Funds which will be able to channel equity capital into
businesses with assets of less than $ 30 million.
In addition, small business, like all business, will benefit
from the other measures in One Nation such as a more skilled
workforce and the new depreciation rules.
All these measures will help small business perform.
We are about helping business succeed, not adding burdens as
the Opposition proposes.
Dr Hewson's new tax will create more than 800,000 tax
collection points.
Business people can forget their Sunday afternoons with his
consumption tax-Sundays will be spent doing the books.
It is a small business nightmare, but an accountant's dream.
No wonder six large accountancy firms are funding Mr
Hewson's GST planning and co-ordination office in Sydney!
A FAIRER AUSTRALIA
Ladies and gentlemen, a healthy efficient economy is a means
to an end that end is a good society.
One Nation builds on our very proud record on social
justice.
Fundamental to making Australia a fairer society is to
create jobs and reduce unemployment.
We did this in 1983 and we will do it again.
Despite the recent declines in employment, we have created
an additional 1 1/ 2 million jobs since 1983.
This has allowed many new entrants, especially women, to
establish themselves in the workforce.
Indeed, female employment has risen by more than 900,000
over this period.
The measures: introduced in One Nation will see strong
employment growth restored.
Over 800,000 new jobs will be created over the next 4 years.
One Nation also will help many of those jobs go to the longterm
unemployed who currently are facing particular
hardship. The successes we had in the ' 80s in lifting employment and
investment and bringing down inflation were achieved in
large part through restraint by the bulk of full-time wage
and salary earners.
Their wage increases were responsible while many of the
benefits flowing from tax cuts were largely directed at
lower incomes.
As a result, many workers are now facing undesirably high
tax rates on. their additional earnings.
One Nation will ensure that the great bulk of workers will
face a maximum marginal rate of 30 per cent.
Those on incomes below $ 20,700 face a marginal tax rate of
cents in the dollar, a rate that was 30 cents when we
came to office.
In addition, for many on low incomes, Government support is
very important.
Labor has targetted social security and welfare spending
effectively so that those in genuine need are now receiving
much more substantial support.
One Nation will preserve these gains and in some areas
extend them.
i
Ladies and gentlemen
I could conclude by saying a great many things about Dr
Hewson's Fightback package, but today I shall mention just
one curious and salutary point.
In it he says that he will privatise Australia's ports.
This is very curious.
The Commonwealth of Australia does not own any ports
except ports in the Antarctic, the jetty on Cocos Island,
the port on Christmas Island and the defence jetty at Jervis
Bay. Is this the one he means? Will he also privatise the navy?
Will all shipping on Lake Burley Griffin be sold to
privateers? I mention this because it is an example of our opponents'
ideological blinkers, the obsessive and rigid nature of
their thinking.
Nothing not even facts or common sense will get in Dr
Hewson's way.
You will find significant differences in One Nation. Not
just significant policy differences.
*-like we will upgrade infrastructure but they think
that' s irresponsible.
-we will expand TAFE but they think that's irresponsible
too. Etcetera etcetera., whatever does not fit with
Fightback is per se irresponsible.
But you will see more than these differences. You will see
a fundamental philosophical difference.
One addresses social and business reality, the other
addresses an. ideology.
One is a living and breathing program for Australia, the
other says cur future can be best determined by a sterile
exercise in accountancy.
One recognises people as significant factors in recovery, as
significant.. f actors in an-economy.-the other does not.
One does not want a Recovery.
We do.
Thank you.