ATLAS COPCO OPENING OF NEW PLANT
BLACKTOWN N. S. W.
Speech by the Prime Minister, Mr. William McMahon
Ladies and Gentlemen: 11Otbr97
Thank you Sir-Ian for referring to my friendship with
Dr. Wallenberg. I know him primarily as a very distinguished member
of the banking community, and a financier of international repute.
And I also know him but in a lesser way as an industrialist. So
I looked forward, when I was invited here, to being able to renew
my acquaintance with him. And I hope at the same time, to be able
to try and get his impressions of what is happening in the international
O maobnoevet arayll , m arwkheetns , w e whcaenn wheo pec anf orh opteh e foArm erai craena lisgunrcmheanrtg eo f onp ariimtpioerst, s and
to be removed. I
But that meeting will be delayed. I hope it's in the not
too distant future that I'll be able to meet him again.
And Sir Ian, if I can . thank you particularly when you
referred to compression, compressed air and similar matters, that
you did it in an industrial context, and not in the context in front
of my colleagues of compressed air in the Federal Parliament. I
can assure you, we're grateful that this subject wasn't raised
with all the implications it has for my colleagues on the other side
of the House and for myself.
But having said all that, may I join with you Sir Ian, in
hoping that in the not too distant future we will be able to get a
resolution of world parities in the international money markets.
Because I believe that while it doesn't interfere with us to any
great extent at the moment, nonetheless, it does interfere with the
free flow of world trade, and consequently if it proceeds over a
very long period of time, it must effect us. It effects us indirectly
because it will effect the trade of the developing countries and
for that matter, all the developed countries as well.
And I can add to that that I do hope this surcharge that has
been imposed is also removed in double-quick time, because of the
impact that it can have, and the reaction that is likely to be-caused
in other countries if it is not taken off very quickly. The Americans,
we know, have a major problem a very big one because their
balance of payments deficit is a huge one. But other countries are,
I am sure, looking at it in a realistic way. We want all countries to be
able to play their part in trying to come to a speedy resolution for
all of us. But now, Sir, may I turn to the substance of what I wanted
to say to you here today. And the first point that I want to mention
is that we do welcome our friends from Sweden and , their new enterprise.
This enterprise Atlas Copco brings with it a very famous Sviedish
name. It is associated with the name of Wallenberg and that name is
very well known in this country of ours. / 2
Now I'm sure of this. That because of the management
techniques that are so well-known to your Corporation, because
of the new type of product it is now introducing, that it will
be a great asset to this country. And one I can assure you
that as an Acting Treasurer and as a Prime Minister, we welcome.
Now the second reason why I want to welcome you here
is a pleasant one. You mentioned the word growth. We like to
use three different phrases together, or three different words
together growth, progress and prosperity. 7,
And I believe that not only do we ensure growth in
the material sense as a result of the establishment of these new
sections of your factory, but it will also add to our progress
in this community, and I think to the prosperity of many, many
sections of our people as well. Because a new plant does mean
progress, and a new plant does give a demonstration from overseas,
and capital is a very sensitive thing and usually works in
those places where it can get the best and the most stable return.
But it also demonstrates the confidence of your own people, and
the management of your own people in Sweden in the future
prosperity of this country.
There is another reason too and I'll have to come
back to what both you and Sir Ian said a few moments ago -and
this does give me the opportunity for a little propaganda -that
whilst at the moment we have a very satisfactory trade balance
and we've got a very happy balance of payments surplus at the
moment too, nonetheless, we do want to be able to ensure, that
over a long period, we can not only have trade surplusses, but
the problem of balance of payments difficulties will be banished
for all time. Now I think you know Sir, that so far as our direct trade
with Sweden is concerned, we export to you only a little less than
one sixth of what you export to us. And so consequently we've
always looked forward with a great deal of pleasure to the day
when industries could be established here that could in some way,
rectify to a moderate extent the difference in the balance of
payments between the two countries.
Naturally I a4leased to be able to say in your
presence, and in the presence of Sir Ian as well, that last year
our trade increased by something of the order of thirty per cent.
So we can look forward in the days to come in an improvement in
the balance. But what is much more important to us is that you are
engaging in new activities and that those activities will in
the future permit us together to improve the export trade.
And again if I can refer to Sir Ian in a very favourable
way. On the last two-occasions when I've had the pleasure of
meeting him in Canberra, he's advised me of' the kind ofa. ctivities
that he is engaged in. And he gave me an insight at least into
one industry, that was exclusively oriented towards the export
markets. I believe Sir, that your Corporation is oriented to
export markets as well.
Now when I heard of these ideas and these new enterprises, I
couldn't help but think of the words " taking coals to Newcastle". It's
not so many generations ago when nobody thought it was within the bounds
of contemplation that anyone could shift coals to Newcastle. But we in
this country seem to be developing the facilties to move all sorts of
commodities to all sorts of hitherto unexpected places. We export quite
a lot of spaghetti to Italy. We send a lot of our flowers to Holland.
And I am pleased to be able to state, that as a result of some discussions
I have had in Melbournewithin the course of the last few weeks that
we are now sending knives and forks to Sheffield.
So you can see, Sir, that we are getting heavily engaged in
international trade and we are doing so in a very sensible way..
But today I don't want to refer principally to these matters of
trade. To an audience as distinguished as this, and one heavily involved
S in the problem of industrial management and productivity, I want to
Vmention three matters that I regard to be of crucial importance to us
ones that have to be solved.
The first one involves this Corporation in the same way as
it involves every other corporation manufacturing goods in AustralhV
And the problem that we face today is this. That now for a little
more than a year, probably approaching a period of about two years,
we have had wild-cat strikes, unpredictable wild-cat strikes of a size,
of a dimension that I believe are cutting back our prospects for
production in the future. And they are most certainly reducing our
productivity and therefore the very basis on which we are able to get
a reduction of costs and one of the instruments through which we can
effect inflation. Now many of them, and I want to emphasise these
words, are strikes that are purely based upon domestic political
Srequirements that have no association whatsoever with the idea that they
can win greater pay packets and more purchasing power for the people
who might be employed in the industry involved.
They're certainly helping prices to go up. Looked at in the
other way, they're not helping us to keep prices down. And I repeat it
again, because it is of basic importance to us : It is one of the
greatest impediments that we have to keeping inflationary forces under
restraint. And equally too, because of the difficulties it creates, the
uncertainties it creates in the minds of so many people, I think it
is preventing domestic demand from increasing at a moderate pace and
in a way in which I can assure you we would like it to increase at the
moment. But coming back to this problem of political and other industrial
wild-cat strikes the point that I want to make here today is that last
year the working man lost $ 31 million because of industrial disputes.
That is three times more than they lost in 1967. It's an appalling record
and it's an appalling record against the backgroun ' d that average earnings,
and if you like average wages, are increasing at an unprecedented pace.
Now my worry, and it's one of the biggest worries, is that it's
left-wing and communist controlled unions, that are, I believe, probably
responsible for more of the strikes than from any other section of
the community-. / 4
But I also want to emphasise that I do not believe that the
great majority of working men want these strikes to continue. They
want to get on with the job. They want prices to be fairly stable.
They want to be able to look after their families. And consequently
it must be our responsibility as the Government to try and ensure that
it is the wish of the working man that prevails and not the wish of
their left-wing supporters.
And the second point I want to mention concerns what is funadmental
to industrial success. And that is our system of arbitration. Now this
is a system that most of you know has stood us in very good stead ever
since the arbitration system was established. As a member of a Cabinet,
who for eight years was responsible for the Department of Labour and
National Service, I can assure you that I developed a respect for the
system of arbitration. I know the advantages that it can bring. And
it must be our responsibility as a Government to try and strengthen that
system, and not permit others to destroy it, or weaken it. We must
ensure that objective if it is practical.
The arbitration system has served Australians remarkably well.
._ Ihats banished sweated labour into the recesses of history. It brought
W a degree of equality in payment-for work performed that could not be
brought by any other system. There is one regret that I have at the
moment, and it is a very deep regret. It is the way in which under the
present system of settlement of industrial disputes the rewards
are not going within a fair degree of equality to all workers, but are
going into the hands of those where the industrial might and strength
is the greatest and where they can use the greatest muscle in order
to wring rewards out of employers.
But I don't for one moment think that this is the end of the
problem. I can assure you that we are doing all in our power now, to be
able to contemplate first of all, and finally to be able to bring
reforms to Parliament in order to strengthen arbitration and to look at
the whole system of industrial strength to see what advantage we can
obtain from it.
* And whenlI look at this I want to assure you that the system of
sanctions must remain as an essential element in the arbitral machinery.
And they must apply, not only to the employee or to the trade unionist,
but as you know as well as I do, they have to apply to the employer as
well. Now I can't stress too strongly how fundamental the preservation
of the arbitration system is to industrial peace and stability. I want
to assiire you that we will do all in our power to sustain arbitration.
We will not permit it to be destroyed.
So I must urge you not to sell it short. Don't drop it because
you've nothing better to put in its place. Don't nege it, or don't
please I ask you, let it fail by lack of use.
The final point I want to put to you, and this is one, 1-believe,
Sir, will appeal to you. That is the problem of productivity. All of
us, I think, understand this problem of productivity and inflation. But
the moment there is any increase in average incomes or earnings that is
greater than the increase in producitivity, then naturally enough you
do get an inflationary pressure. Something of the order of 6 or 7 per cen.
today that is the difference between the growth in productivity
and'-'-he growth in average earnings.
Now what we want to attempt to do, although it is a very difficult
objective, is to try and reduce the gap to the maximum extent that we
can do. Not that we believe it is a tolerable alternative, because we
don't think we can. But what we want to do is to reduce the gap so
that we get a degree of inflation that is acceptable and one that
can be readily absorbed in the international community.
The next point that I want to make to you about productivity is
this It doesn't necessarily mean more work. It doesn't-necessarily
mean more work. It doesn't necessarily mean that you work harder. It
has, Mr. Johnsson, as you so clearly implied, meant that you have to
work with a greater degree of efficiency. And it is for this, and for
other reasons why we welcome your Corporation coming here. Because we
do feel from what we have heard and what I have seen, that you would
introduce efficiency into the management of this plant.
Now Mr. Chairman, I haven't had a good look around this
factory. I regret to say I have to go to Canberra quite soon. But from
what I have read, particularly from the little pamphlet that was sent
to me a few days ago, I can assure you that I recognise the degree of
efficiency that you show.
I know of the management and labour skills that you have in
this factory in Blacktown.
I believe the manufacturing industries of Australia are making
a magnificent contribution to our growing industrial greatness. They
are providing resourceful and skilful service, and they are doing much
to strengthen our self-reliance as a nation. This new plant today adds
to their number and their diversity.