PRIME MINISTER
SPEECH BY THE PRIME MINISTER, THE HON P. J. KEATING, MP
ECONOISIT ROUNDTABLE
CANBERRA, 24 MARCH 1994
Let me begin by thanking the Economist and everyone
associated with this conference.
It is a very useful magazine, the Economist. These days
I particularly like reading the last couple of pages
the economic indicators.
I like reading them because today they show how well this
country is doing relative to the rest of the world.
There it was on March 12 Australia leading the world in
GDP growth, and leading the world as far as the
Enonomist's forecasters were concerned.
And along with the growth, low inflation.
I thought it might be interesting to compare these
figures with those of a decade ago.
In 1983 the Economist had just started running these two
useful pages of indicators. And here in Australia we had
just floated the dollar.
In the week we floated it, 17 December 1983, the
Rconomist's indicators revealed our GDP growth for the
year was the lowest in the world. Not the highest
the lowest. Minus 3.9.
And Australia's inflation rate was not among the lowest
in the world, it was among the highest. For the year the
CPI was 9.2% the third highest. The US was 2.9%,
Germany 2.6% ' r--oday Australia's inflation rate is lower
than both those countries.
So between those two sets of figures, separated by ten
years or so, there lies a tale.
And, whatever else this conference has done, I hope it
has told that tale.
2
If your conference has stimulated thought, questioned a
few orthodoxies, opened people up to new information,
ideas and opinion it will prove useful in the short run.
It will be significant in the ing~ run if it re-shapes
thinking about Australia and its place in the world: I
think my own hope would be that the Conference has helped
perceptions of Australia catch up with the realities.
We tend to take for granted that people here and abroad
fully comprehend the massive structural and cultural
change which has occurred in Australia in the past
decade. The truth is a lot of Australians are not really aware of
what is taking place here. They are not fully aware of
what they themselves have achieved.
When you are driven by reforming zeal you tend to forgo
the luxury of reflecting on your work.
And in the 1980s as now Australia wag driven by the
need to break from the downward spiral of economic
fortune which a quarter century of conservative
government orthodoxy had got us into.
We are only now beginning to see what we have done. And
we are beginning to see it because the effects are
beginning to flow.
As that process continues, I think the dimensions of this
national transformation will increasingly become apparent
to Australians.
And I think that this awareness will itself be a fillip
to Australia's progress.
I believe there is a great story to be told about
contemporary Australia. And as Australians'
consciousness of it increases, so I believe will their
enthusiasm and sense of national purpose.
Now of course I hope to see the same consciousness about
modern Australia developing in other parts of the world.
What we have in Australia in the 1990s is the best
conjunction of growth and low inflation for 30 years.
We have a productivity culture to help us maintain that
happy circumstance.
We have an export culture that we didn't have before.
In Asia and the Pacific we have the export markets, and
increasingly the necessary structures to grow and service
them.
We have exports now representing 20 per cent of GDP. An
export base which is much more diverse than it was a
decade ago, with exports of elaborately transformed
manufactures growing at 16 per cent per annum since the
mid eighties and exports of services also growing
rapidly. Above all, we have the confidence which can only come
with success itself.
There is nothing harder to move than an orthodoxy. No
amount of arguing with it will make much difference.
The orthodoxy about Australia used to be that we could
not be a manufacturing nation and an exporter of
commodities. The truth was we could be and we now are.
The orthodoxy used to be that we couldn't develop a
cooperative productivity-based industrial culture. The
truth is we could and we have.
The orthodoxy was that we couldn't do business in Asia.
The truth is, today that is where we do most of our
business. The orthodoxy was that we could never be a truly
competitive nation. The truth is we could and today we
are. The old orthodoxy obtained as much at home as it did
abroad. Today in Australia the new reality is
progressively dislodging the old way of thinking, and
there are promising indications that the same thing is
happening abroad.
And where this is not the case, it most certainly should
be. For in addition to those fundamentals we now have firmly
in place, we have the added advantages of a skilled
workforce, massive participation rates in schools, a
strong shift to private research and development, highly
developed infrastructure, and a society and a political
system as stable as any in the world.
Now, I have no doubt that in the course of the Conference
there will have been objections raised to perceived or
real disincentives to trade and investment in Australia.
In reply let me begin by saying that we do not believe
our job is over; or that the schemes we have in place are
perfect and not in need of tuning and reforming from time
to time.
In the broad, we are pleased with what we have done.
But nothing suggests to us that we can for a moment rest
on our laurels. Everything in the modern global economy
suggests that no nation can.
So, where there are difficulties our mind is open. We
know you don't get to solve large problems by being
closed off to criticism we didn't make ourselves
competitive by closing ourselves off, we did it by
opening ourselves up.
Having said that, I should restate the Australian
Government's view that we are not about the economic
imperative transcending the social imperative.
We are not interested in Australia in creating a low-wage
low rent society.
We do not for a moment believe the nonsense put around by
some people in the 1980s and even by some people today
that our competitiveness depends on imitating the wage
regimes of developing countries.
Our objective is a high wage economy built on education
and productivity, coupled with an affordable but
sophisticated social net.
No doubt investors will see some advantages in the
developing countries, but Australia will more than match
them in skills, productivity, stability and certainty.
Similarly, if an overseas investor tells us that our
taxation system is too complicated that for example,
the fringe benefits tax or neraZin other provisions make
life difficult for them, we will look at the problem.
But we will not lose sight of the first principle, which
is that the tax system should be fair and effective.
And we might be inclined to say to such an investor:
whatever you may see yourself as losing on the little
roundabouts, you will more than make up for on the big
swing of economic and political stability, a massive
profit share, a first class universal health system,
schools, hospitals, social services which in general have
few peers in the world and with a revenue share in GDP
the lowest in the developed world.
A small public sector but an effective one.
In short, this is a good place in which to live and to
work. It should be plainly understood that Australia has
rejected the socially regressive forms of economic
rationalism in favour of structural reform allied to
inclusive social policies.
The results of this mix gave Australia one of the highest
growth rates in the OECD over the last decade, the
highest rate of employment and one of the lowest rates of
inflation.-
The model here in the nineties is a modern socialdemocratic
one.
And I might say it seems to me that if you surveyed the
successful countries of the modern era even if only
through the Economist'sa economic indicators you will
find that this model has been the successful one
everywhere. " Model" in a sense is the wrong word. Because what
characterises the philosophy is flexibility, pragmatism,
responsiveness, an absence of ideological rigidity.
It is a " model" which balances the imperative to take
bold steps and often difficult ones with the
imperative to take the people along with you.
Manifestly, it is a model not just for social and
economic justice, but for social and economic cohesion
and strength.
That is why, incidentally, the Government is determined
to see that the benefits now flowing from the recovery,
and from the great changes made in the 1980s, flow right
through the country into services, into regional
development, into the unemployed.
From the Government's point of view this has to be a
recovery that is both deep and broad.
It can be a recovery, I believe, which will complete the
transformation of Australia and set us up in the front
rank of countries in the 21st century.
That will depend on the successful completion of a number
of other tasks. First among them is the problem of the
long term unemployed.
on 28 April we will bring down a White Paper on
Employment the first since the end of the Second World
War.
With its implementation, we expect to get the bulk of the
long term unemployed back in touch with the labour
market. In doing so we will not only alleviate what is a major
human problem now, but avoid a major social problem
later.
And at the same time we will exploit an otherwise wasted
human resource and substantially increase the skill level
of our workforce.
That is a major challenge for us in the next few years
creating a more skilled and flexible workforce, and
thereby, industries which are more competitive and
responsive. So we will be investing heavily in education and
training.
We are also very much aware that this federation of
states is not always as efficient as it should be
indeed, for a long time, in many areas it has been
dreadfully inefficient.
In recent months we have taken some dramatic steps
towards creating a much more efficient and competitive
Commonwealth by creating a more cooperative one.
One more committed to common national goals.
In a real sense, what we are doing is applying to the
Commonwealth the same principles as the best companies
apply. And I would take the analogy further than the simple
mechanics of efficiency.
As companies need a sense of purpose about them, so do
countries. As companies need an unambiguous corporate
identity, so do countries.
That is why the Government has been concerned with issues
relating to our identity and nationhood.
The circumstances of our history have left us with a
residue of ambiguity and anachronism which in this decade
the Government would like to see swept away swept away
without cost to our best traditions, but with great gain
to our collective confidence and effort.
In a broadly similar vein we have set about at last
bringing in to the national mainstream the indigenous
people of Australia.
I gather one speaker at least has expressed concern about
the Mabo legislation the Government introduced last year.
This was perhaps the most complex and difficult
legislation in Australia's history, and also the most
overdue. We introduced it above all because justice
demanded that we do it.
We also did it in the knowledge that success will mean a
more cohesive country and a people with more confidence
and self-esteem.
We did it not to create uncertainty but certainty the
certainty which comes from a national system to determine
native title.
We would be only too happy to explain how the legislation
does this to Mr Masuda and any potential investors in our
mining and pastoral industries.
I would only say now that this is good and necessary
legislation and investors must recognise it as fact of
our national life.
I say to them and to our own States that the legislation
has already brought certainty and with their cooperation
it can bring even more.
The dire consequences predicted in some quarters have not
eventuated, and show no sign of doing so.
I have no doubt that in the long run the Mabo legislation
will be seen as a force for a better investment climate,
as well as a better country.
Ladies and gentlemen
On all these matters there are sceptics out there I know
and cynics, and naysayers and obscurantists of all
kinds. But their ranks are thinning.
We are very confident. As I said at the beginning there
is nothing like seeing the story unfold and recognising
your part in it to lift the spirits and firm up the
faith. If nothing else, I hope that at this gathering the
faithful have multiplied and that they will now go
forth and tell the world.
Thank you