N. S. W. CHAMBER OF MANUFACTURES ANNUAL Dli'INER
SYDNEY, NSW -AUGUST 1970
รต ! ech by the Prime Minister, Mr. 12ohn Gorton
Mr. President and Gentlemen:
Sir, the Budget will be presented in less than two wee.' s, and so I think it
would be as well for me to start this address with a disclaimer. Because anything a
Minister or a Prime Minister says at such a time is liable to analysis and dissection
and distortion by the gentlemen of the Press: I wish to make it clear right now that
this will not be a profitable exercise because anything I say to you tonight in general
terms is not to be translated into specifics by way of guessing at what the Budget might
contain. And those gentlemen whose speculation is sometimes inclined to be high, wide
and handsome, would do better to wait patiently a few more days when they can have the
satisfaction of commenting on facts instead of on suppositions. And that is the disclaimer
I want to make right at the start.
It is a difficult thing to talk to you tonight so close to the Budget because it IS
so close to the Budget.
Sir, having said that, I thank you tor your welcome here tonight, and I am
glad to be here because it gives me the opportunity to express my respect and I do
have that respect for the manufacturing industry which employs some 28% of the
Australian work force directly and a further 20% 7 of the Australian work force indirectly
in servicing the needs of manufacturing industry. Those industriec which have raised
the value of the output from factories in Australia from about 030 million just
before the Second World War, to $ 17, 000 million today a very signif icant increase
as you will agree. Industries which have raised their contribution to our export income from
$ 198 million or 11% of total exports ten years ago to $ 782 million or 19. 7% of total
exports today again a very significant contribution, showing that manufacturing
industry along with minerals and rural industry has become one of the big three
contributing to Australia's growth and wealth. This is something, I think, of which
you can all, looking back on the sixties, looking back on the plans you have made,
now looking at the fruition of those plans, be proud. But that is in the past.
As we look ahead, what do we see? We see great problems to be overcome
in our rural industries, many of which are beset by falling world prices and harassed
at the moment by the ravages of drought, yet industries which ha ve managed in the
year just past to increase export earnings by some $ 200 million over the year before.
But on other fronts, we see great opportunities for new growth and for
greater economic strength. Our overseas balances are healthy and they should become
even healthier as the output of minerals increases, as it undoubtedly will, and as the
value of that output for export is further increased by the processing within Australia
which will take place so that we will be exporting ingots instead o! earth.
And our balances will im prove further as import replacement grows, as it
will, for example, in oil ( which I was delighted to see the " Financial Review" agreed
was going to be sold in Australia at a price at least as good as it could be bought from
abroad and possibly better. Now this again will increase our surplus of exports
over imports. Other contributions will be the application of new and vigorous management
techniques which is up to you gentlemen in secondary industry, by the extension
of the amount industry spends on research, which is up to you gentlemen in secondary
industry, because the Government in Australia provides a greater proportion of the
amount spent on research in industry than does the government inI any other country;
by the increased use of automation these will all increase the value of output per
man hour. Added to that the measures already taken by the Government will, I believe,
retain in Australian ownership a greater proportion of that expanding industry and
therefore retain inside Australia a greater degree of the profits ofL that expanding
industry. So the barometer of future progress and of future economic growth stands
really at " set fair"', subject to what I now have to say. Because wihat I have said only
means that great growth and great progress can be made,, it does riot necessarily
mean it will be made. It can be slowed, or even halted should we find inflation growin g
faster than that of the countries with which we trade and to which we must sell at
world prices. And in particular the significant growth and contribuition of secondary
industry to cur exports could be badly affected if this happened.
Sir, in Australia governments can take action on thiS front, but in Australia
decisions of the Arbitration Court have an enormous effect on the economny generally,
no matter what a government does. If wages are increased without regard to increased
overall production, then there will be benefit for none, and ultimately detriment for all.
We could be priced out of the export markets we have won. The demands of the
community for more sclools, more hospitals, more roads, more defence and more
public development may not be met. And the increased wages to the individual will
not in the end buy more to take home. They will indeed be fool's gold.
And as a by-product, the rural industries and the fixed income-earners will
be the greatest sufferers in the community, and the threat of that happening is the
only zhreat which I can see to our achieving that growth and that progress of which I spoke
and which is within our grasp.
Now if we are to achieve the destiny which is ours to attain, there is a heavy
responsibility not only on government, but also on trade union leaders and on the
Arbitration Court to see that industry is not called upon to pay in wages sums which
represent more than the value of what industry can produce. AnLd, conversely, if the
overall growth of industries, which is possible, occurs, if the value of production per
man-hour increases, as it can under good management, there will be a corresponding
responsibility then on trade union leaders, on the Arbitration Court, and on
employers to see that that overall increase results in increased rewards for the labour
force in Australia. / 3
We are, as a government, aware of both these facts, and because we are
aware of th-em, we propose to intervene in the oil industry case shortly to come before
the Arbitration Court. And there we propose to argue that it would be disastrous for
Australia if the principles previously accepted were reversed, and if it was thQught
that an tndustry which was profitable or a company which was profitable should, because
it was profitable, be called upon to pay more than industry generally could pay to
those who worked for it.
For if this were to be accepted in the case of those industries which are,
for one reason or another, fully profitable, then what would happen to those industries
such as the railways, the electricity supplies, the industries run by governments which
almost by definition are not profitable, or the industries run by some sections of
private enterprise which are sometimes not as profitable'
There would be no incentive for labour to serve in theSe industries, and
either they would be starved of labour or the community as a whole would have to make
up to an unprofitable industry wage standards which a proffitable industry alone could
meet and that in turn would lead to the inflation which is the only threat I see to the
progress of this country.
Sir, if we can achieve in this nation, with good faith and with commonsense
on all sides, an agreement that only when productivity increases can wages be increased,
then there is a real prospect of increasing prosperity for the individual and for
manufacturing industry. And there will be an increasing capacity for governments to
provide those public services and amenities which the nation requires and which
governments can only supply if industry provides the wealth for governments to tax
in order to supply those services:
I am sure that this can best be attained by and through the arbitration
and conciliation system as we have it today. I believe we should reject 1 0se talk of
finding something better than that system which we have had for so long, of going into
collective bargaining, of picking off one industry after another, or one section of
industry after another by industrial blackmail. And I believe, too, that nothing in the
long run would be more damaging to the cause of organised labour and to the stability
of industry and commerce in Australia than to reject or replace an arbitration system
which, if it Is to be fully effective, must have the ultimate capacity to apply teeth in its
judgments. An Arbitration Court, acting impartially, seen to be independent in its
judgments, seen to be uninfluenced by either trade union leaders or: employers'
representatives, and acting only on what it sees to be the merits of a case after that
case has been presented in the Court, is niot perfect, but it is the bast method of
ensuring fairness that has yet been devised. And provided it act.-on all those criteria
I have set out, it is the best method of attaining the confidence both of employers and
of labour. Sir, by the end of this year, the Liberal,/ Country Party Coalition will have
beet, in office twenty-one years, and in any other audience but this, at that stage there
would have been a call of " too long": They have been years of solid progress in / 4
government, in government enter i-rises and in private enterprises, and much of what I
said at the beginning of this speech of the achievements of industry in Australia, has
been made possible by the climate created in that time by those governments.
Our population in that time has passed from 8 million to 13 million.. Our
labour force is fully employed. Our economic base has been broadening tremendously.
Our export trade is expanding. Our living standards, including our care for the aged,
the ill and the needy, have been improved. We. grow stronger in defence, and we have
honoured our international obligations in three conflicts KLorea, Malaya and Vietnam.
We have a new understanding of our regional involvement through our M4ole Australian
community. We see our destiny as being shaped by the course of events in South-East
Asia and the Pacific, and we are actively sharing in many activities kh ich will determine
how straight and true that course will be and where it will lead us as an ultimate goal.
All this you have achieved we have achieved. And in all this we are still
concerned, as jointly we make our way through these exciting 1970' s, and all this in
a sense depends on government action. But in turn that governme-nt action depends on
the wealth pi1oduced by all the enterprises in Australia. The main elements of growth,
the numbers in the work force and what they produce are strong, thianks to immigration
and to improving technology and other factors. And this has giver:. us, in the non-farm
factor, and average growth in the area in, which you are concerned, gentlemen, an
average growth of more than 6 per cent at constant prices in recent years.
I think our immigration programme has been a great success. I think
without it we would be a poorer country, very hard pressed for labour, limited in our
expansion and inhibited in our planning. We have to reme-mber that while that programme
is costly arid initially inflationary because the new immigrant calls for more from the
community, narticularly if he has a family, than he can initially -provide to the
community, yet that increasing work force is made up of people who have not been reared
and educated at our expense, but at the expense of the countries from which they come.
And that is an off setting value to us of millions of dollars for a start.
We have recently decided, as you know, to have a comprehensive review
made of all aspects of our immigration programme to see how best it will fit our
changing needs in terms of economic growth and social and cultural diversification. But
I want to say to you tonight that is not in any way to question the n~ eed for continuing
immigration. We must continue to have a high intake in the seventies, no matter what
bank brings out a statement querying the value of it.
But I think it is sensible to take a loo~ k in depth at the progress and the
results of the scheme since it began soon after the end of World V'a r 11, to learn
whether and how we can improve the contribution which migrants make, to learn
whether and how vie can retain in this country a greater number of the migrants who
come here, and to learn whether and how we can reduce the initial inflationary costs
as the migrants come. And this is the sole objective of this examination. 0
In the years ahead, we face great changes, arid some them indeed will be
of considerable magnitude to this nation if Britain, for example, goes into the Common
Market. But we can take up a continuing challenge to become increasingly strong
industrially, to extend the extraction of the raw wealth from our coil into integrated
industries which embrace processing and manufacturing, and to reconstruct some of
those industries on an econompic basis which, at the moment may riot be fully economically
viable. We must manufacture more of the things we now imrn. t. We must export
more of the things we now make in Australia. I do appeal to you not to rest upon your
laurels, not to say because in the last year we have increased our exports of manufactured
products so much, not to say because we are now contributing nearly 20 per cent of
exports, tb-erefore we should do no more. Thbis is not so. For every individual in this
room, there is an opportunity to improve and increase the exports from manufacturing
industries we now have. To do it either directly, or by joint ventures in other countries,
so that raw materials go from Australia, manufacturing is done abroad, but Australians
are part of the manufacturing done abroad and draw their profits from it, for that is
export too. This is something you must do in this decade of the seventies, and I believe
you are headed that way, but I believe that this and progress inside our own country
can only occur if we keep the free enterprise system Intact and if vie maim am the climate
that has led to the growth in the last twenty years. For the upward trend is twenty years
old, and the concept of government working with industry, of the -public sector and the
private sector living together, and of one not trying to destroy the other has, I think,
been the foundation of the progress we have made and cari be the orly foundation if we
are to makL-e progress in the future.
There are a r~ umber of pitfalls about one I mentioned. But another is the
concept described as socialism. What is socialism? It is. not social action by a government
because if it were, then it would be wrong for a government to provide toads or
dams or irrigation services or electricity services or any of the multitudinous things
governments provide without question. It is not governmental partnership with private
enteiprise because if it was then it would be wrong for the governnlent to have provided
the millions of dollars that it has provided to help private enterprise develop and
secondary industry develop.
But what it is and where it is wrong is when it seeks to say, as it did years
ago to some people " You must not engage in banking. You must not engage in some
field of enterprise because the Government will not allow you to do so. That is
clearly wrong. It is wrong, I think, when it seeks to place limitations on proper
rewards for hard work or new inventions or the proper running of an industry, and price
control that great panacea of socialism is in fact, when you boil it down, seeking to
provide profit control no matter whether the person making the profits is making a
cheaper good and selling it cheaper, but making profits as a result of it. That is wrong. / 6
And its intrusion into planning is also wrong.
Treasury Bulletin called " The Australian Economy 1970",
in this paper says this. It speaks of the chances we have,
some of the difficulties we face, and it says I have here before me a
and the very last sentence
the opportunities we have,
" This is a problem for Government policy, but within
the framework of such policy, the outcome will be
determined by judgments formed, decisions made and
initiatives taken at innumerable points throughout
the economy."
And that is private enterprise, and that is what we must retain the chance for
judgments to be made, for decisions to be made, for initiatives to be taken Mi thout
instructions or control from governments on those who have to take those decisions.
That is a definition of private enterprise. That we propose to defend. I believe that by
defending it you will have the greatest opportunities to advance the interests of this
nation and I am sure that you will take advantage of those opportunities and of the
climate we propose to provide in the future as you have in the past.
That is why I propose the toast
Australian Industry.