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TRANSCRIPT OF THZ PRIME~ MINISTER, THE HON P J KEATINGt MP
BEST PRACTICZ DEMONSTRATION PROORAH
SHERATON TOWERS, MELBOURNE 24 AUGUST1992
E OE PROOF COPY
PM: 046 would say that when we have a wall attended mid
morning meeting where award for best practice, with
benchmarking against the world's boat, It is sometbing
which Australian business is pleasad to be in. Because
if there is, I think, any demonstration of the maturity
and coming of age of the now Australian economy, it is
gatherings ouch as this and evonts such as this.
It wasn't that many years ago when worse practice was
rewarded. if you are actually slick at getting into
Canberra, twisting Its arm up its back, getting more
border protection, 8 bit more Bubsidies, bounties, if
you are in the worse preatice program you're regarded as
one of the good slick people around town. Well now of
course those people are discredited and they left us an
industrial museum and it has fallen to the lot of the
new managers of Australia to give us something better.
One of the interesting thi~ ngs in all this is that when
comoanies -do well in Australia and they reach the
lgCal end point of their market share, where they are
only squabbling over half per cents and costing
themselves a lot to do it, the obvious thing to do is to
go and do what you do well somewhere else, go and grab
someone's market share, but not where you are running
against the outer edges of your own possibilities in 8
domestic market like Australia. This has happened of
course, when we removed exchange controls that whole
sort of pent-up, propensity, buoyancy, willingness on
the part of Australian business to get out there and
find other markets where they could do well occurred.
And of course our overeas investment went from about $ 4
billion in 1983 to around $ 65 to $ 70 billion today,
which is * a very large proportion of our international
debt. And It is through the operation of these
companies abroad that people and companies are importing
best practice back into Australia from the international
companies which they bought and operated around the
world. And so, you have got companies automatically
banch-marking between themselves and their foraign
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subsidiary as to the sort of practice which is being
undertaken, and the of fioiency levels which are the
standards of those businesses, and of course making both
the better for having been together by doing the things
that Australia does best abroad anid doing some of the
things which are done beet abroad and having them
brought back into Australia.
I mean it is all part of growing up. It is all part of
getting out of the cort of crazy restrigtions we had
upon us where you couldn't invest -abroad without some
clerk in the Reserve bank giving you a tick, and of
course most people never bothered. or in the sort of
regulated economy we had, where there was really not the
prem~ ium on eff ici-ency because of people drawing down the
economic red from protection and the other natural
protections which come from the non-traded goods sector
of the economy.
We have decided that we want to be in the leading edge
of the world and not in the rear edge. And that means
that we have to smarten ourselves up acroas the board
with our investment, our research and technology, our
Industrial relations practices, our work practices, our
management practices, our best practices. And so the
beat practice program is, as John said, I think a novel
way, a way in which we require companies who are
involved in it to demonstrate to other companies what
they have been able to do. So it is not just something
in which they have excelled privately, and it remains a
private matter for them, but where they are tharing with
others their success, and their innovation, and their
ingenuity and their willingness to make Australia better
and smarter.
This is, I think, a good program and therefore, it's
part of the fact that to become an international
economic society one hag got to do all these comipl. ex
things. They are not going to be done with single
policies, big bangs or consumption taxes or anything
also, they are going to be done the hard way. That is,
reforming industrial relations quletly, slowly,
sensibly, your management practicP, the way the
business operates, getting down costs, all the things
that go, all the smart things, the complex things which
go into that word efficiency and productivity.
We are going to be 4 more productive country, we are
already. But that word in itaelf implies fewer people
producing a given level of output. And if we don't want
a permanent pool of unemployment in this country we have
got to continue to expand output, so that we take more
people up for that given level of employment to each
unit of output and that means the whole climate has got
to be one which is cast towards beat practice and where
all the bits and pieces ofjjnvestmen, be it the
inflation rate, the interest rate, the taxc eystem, : 131
depreciation, wages, profits. The rest has got to flow
naturally, as it has.
We have come long way already, in the early 1990e
there were very few manufacturing businesses which one
could speak of as being world claas busineesee. This is
not true today. Fortunately, the success of the whole
change, thet is the whole change, the external
orientation of Australia has changed all that. And the
Government itself likes to think it is pretty good ot
best practice to. We benchmark ourselvee against other
Governments around the world. We are, bar a decimal
point, the lowest taxed Country in the OECD. Japan is
below us by a decimal point. We have got one of the
lowest level of outlays to GDP of the OECD countries,
our public sectOr is one of smallest yet it delve
services of a very high standard. So, in terms of the
macro measures best practice this Government has taken,
beat practice on international Government scale on, as
seriously as I know many of you have on a commercial
scale. And we are continuing to make tremiendous changes
in the sort of regulatory regimes for which we ore
responsible, which will help invest practice to in
things like aviation, telecommunications, where we are
awfully good In the world league, banking and finance,
and in things like industrial relations, enterprise
bargaining, where we have really presided now over a
revolution in wage fixation in the last decade, where we
have seen more wage flexibility than perhaps any
comparable country, where the profit share in high, and
whether inflation unit labour costs are low, where
inflation is low, and now we are having this big shift
to enterprise agreements, enterprise bargaining, where
we have now got twice as many people in Australia
working under enterprise agreements, as for instance,
there are in New Zealand under employment contracts,
which we hear so much about, there are twice * s many
Australians working under enterprise agreements all
ready, and just last week Peter Cook and I have opened
discussions with the ACTU in a wa @ e effj. where now 2/ 3
to 3/ 4 of all Australians will have their wages adjusted
under enterprise bargaining and not under a centralised
wacqe fixina system, not under a national wage ease.
These are all I think significant things in this whole
quest for best practice and the same with training, retraining,
skilling, and we saw recently at the youth
meeting the announcement I was able to make of an
agreement with the Commonwealth and the States to put
together a new national vocational education system. I
mean it won't be too many years before we are up there
with best practices, as we already nra, with best
practice in relation to the tertiary sector, the
proportion of our kids going into tertiary institutionfs.
So, whether it be in shipping where we have achieved
crew levels comparable with other OECD countries, or in
the waterfront where we have Just doubled productivity,
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or In electricity where we ate now starting to create a
market for the first time by separating power generation
from distribution, or in railways where we are
developing a flew national freight highway, rail highway,
under an enterprise agreement. Again, where best
practica is going to be the focus. So, we have taken it
on and of course no more particularly than in the public
service, Peter ( Cook),, started nagotitationB a week or
two ago with the Public Service Union in relation to an
enterprise agreem~ ent, industrial agreement, enterprise
bargaining in the public service where we are seeking to
yield productivity gains, further productivity gains
from our own employees, in our own service. Just as you
are, those of you In the beat practice program in your
own companies.
So, this is in a sense this day isn't just another
manifestation, but an important manilfestation, of people
reaching for those high points, those pinnacles of
achievement which must be the norm for an economy in a
country that wants to do wel. l, that wants to employ its
people, want@ to have rising living standards, not
declining living standards, risling wages not declining
wages, rising profits not declining profits, all these
things one must do and we all know one must do to be in
the international league, and climb that international
league table of efficiency. So, I congratulate all
those associated with the program, from John Down who
has chaired it, and to those companies who have been
Interested enough to apply, and who have signed the
contractual arrangements with the Commonwealth to
demonatrate their best practice and who have received
Commonwealth financial assistance In so doing. But are
whom, on nearly all occasions, the companies themselves
spent much greater level of funding then that which is
paid to them by the Commonwealth.
I congratulate you, all of you, for being in it, for
trying. This Is what Australia must be about. This is
how the clever country becomes more clever, how we
become a smart sooiety doing the clever things well.
Thank you very much.
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