SPEECH BY THE PRIME MINISTER, MR. E. G. WHITLAM, M. P..
AT THE M. T. I. A. SEMINAR HELD IN MELBOURNE ON
THURSDAY, 21 JUNE. 1973
In accepting your invitation, I must say I had some
reservations about your promotional brochure.
It says: " If you open this folder, you are in for
a shock." Well, nobody resists that sort of come-on; so I did
open it. And what do I find?
A splendid likeness and the words " Keynote E. G. Whitlam,
Prime Minister of Australia."
And indeed, it is not made quite clear in your promotion
whether the Seminar is to discuss future shock according to
Professor Toffler or under the Whitlam Government.
I know that my colleagues and I have, from time to time,
been reported as saying or doing things which may have surprised
you or even shocked you. I think it was inevitable, after 23
years, that this would be so; and, of course we Labor men crude,
rough, unpolished as we are do not have that finesse and elegance
and suavity that you natural~ ly came to expect from our predecessors,
the men born to rule. So you will have to bear with us if at times
we seem to fall short of those sophisticated standards of former
days. You will pardon me, however, if I say that I find it just
a little frustrating to discover that plain speaking from an
Australian Prime Minister is so often resented. Is there a
country in the world where straightforward statements are so
often regarded as arrogant or indiscreet or even, as I find in
the Age this week, egocentric? I would have thought it just a
matter of stating the truth when asked. Indeed, I think our
problem in Australia is not so much one of future shock, but
recovering from past bromides.
So I do see it as part of my duties to administer from
time to time a little shock treatment; of course I shall be
careful to see it doesn't become aversion therapy.
Today, however, I am going to do the responsible, the
discreet, the Prime Ministerial thing: I am going to give
reassurance; and I give it on three counts.
I see Professor Toffler outlines his thesis in these
words:
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" When diversity converges with transience and
novelty, we rocket the society towards an
historical crisis of adaptation. We create an
environment so ephemeral, unfamiliar and complex
as to threaten millions with adaptive breakdown.
This breakdown is future shock."
I suppose some of you might think that that is a description
of the Australian Government. I concede the " diversity" and the
" novelty". I concede that some people in Australia some of
them not a million miles from the Opposition benches are being
" rocketed into a crisis of adaptation" and I concede the " unfamiliar"
and the " complex" aspects of our Government. You will not be so
very surprised if I do not concede " transience" or " ephemerality".
And quite seriously, it is folly for business or for any section
of our Australian community, or for that matter, anybody abroad,
to regard the decision of the people on 2 December as some sort
of aberration, a temporary departure from the normalcy of stodgy
conservatism. To do so is to ignore some of the very great and
deep forces which have been at work in our society, not just for
the last six months, not just for the six weeks or the six months
before the elections, but for years and years.
The collapse of the Liberal Australian Government was
fundamentally a result of its failure over a very long period,
to respond to, or even to perceive, those changes at work.
The result of 2 December was not merely a change in Government,
but a real change in the direction of will and purpose in the
Australian community. Whatever the electoral fortunes of the
Labor Government may be, there is nothing transient, nothng
ephemeral in the forces which brought it to power. This is
something we all have to live with. A wise businessman, a prudent
investor, a competent manager, will recognise this as a fact of
life for many years to come and will plan accordingly. Paradoxically,
the forces and pressure for change will be the most stable, certain
element in Australian political and economic life in the foreseeable
future. I hope you are stably reassured.
Secondly, I want to reassure you that ours is a highly
predictable Government. I confess it makes me quite impatient
when I hear that business is uneasy or uncertain about our
intentions. I venture to say, in all seriousness, that no
administration in modern democratic history has entered office
with its intentions so precisely and specifically spelt out
and spelt out over so long a period. Let me illustrate: When I
had to conduct campaigns as Leader of the Opposition, in 1967,
Senate, in 1969, House of Representatives, in 1970, Senate,
and in 1972, House of Representativest I gave short shrift to
candidates or campaign officials or even advertising agencies
who complained that they did not know the policy until the night
of the policy speech. It was all there well before. It was in
the platform of the party. The priorities to be given to the
platform and the fleshing out of the bare bones of the platform
were contained in speech after speech my principal colleagues
and I had made in Parliament and around this country for months
and years before any of those elections* In the whole of that
period when I led the Opposition it was well known who were the
men who would hold the chief ministries.
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Any competent person could have written the essentials of the
1972 program upon which we were elected anybody who had read
what we had been saying for the last six years; and anybody who
can read that policy speech knows what this Government has been
about, throughout the last six months. If anyone has been
surprised, I can only take it that there is still an element
of surprise in the fact that an elected Government will actually
do what it said it would do.
We shall continue until the next elections, the steady,
progressive implementation of that program; after the next
elections, we shall proceed with the same deliberate speed
to implement the program for which we shall seek a mandate at
those elections. But in the broad and in the detail of those
160 specific undertakings which were deemed to be so excessive
and extravagant at the time if you want to know what the
Government is doing and what it will do read the policy speech.
It is true, we have just begun the process of framing
the Budget and there must necessarily be an area of doubt about
the provisions of this Budget as with any Budget. Has there
ever been a time when this has not been so? Speculation upon
the Budget surely did not begin with the election of a Labor
Government! It is in the nature of the system whereby the annual
Budget is regarded as the Goenmn' key economic and social
document. We are moving to change that. The Treasurer and I have
long put the view that the system of annual budgets worked against
effective long term planning and efficient short term economic
manipulation. The Budget has to bear an impossible burden if it
is made to perform a myriad of functions including the setting
out of national econo'mic and social goals. Accordingly, very
soon after achieving office, we decided to quicken the development
of a fully pledged program of forward estimates of Australian
expenditures. This decision is designed to affect significantly
in the future, the efficient allocation of resoures in the public
sector, The preparation of the forward estimates will mean that
the implications of Government programs can be examined over a
much longer time-span than the traditbnal annual budgetary period
permitted in the past. Further, we haveestablished a committee
of ministers to examine and analyse the information ofl expenditure
trends revealed in the estimates. The work of this committee
will considerably enhance our ability to guide expenditures towards
the areas of highest priority and will assist the Government in
more clearly defining our objectives and national goals. We shall
have a better idea of what we are about; so will everybody.
Nevertheless, we have a Budget to produce in August.
This week we have had some of the traditional pre-Budget talks
with industry. Whatever the Budget contains and it appears
that even the most rudimentary reference or common sense statement
by any of my ministers about the inevitable difficulties in
framing Labor's first Budget for 24 years will be deemed to indicate
a split or a crisis the Budget will be a fundamental financial
expression of the goals we set out in our program last year for
the elections. The Budget is not the be-all and end-all of that
program; it is a crucial element in achieving it.
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It is true that the economy is in a very different phase
from that existing at the time of the elections. The pattern
of the Budget must be determined in the light of the state of
the economy at the time of its preparation and must be based on
reasonable expectations of the way in which the economy will develop.
The remarkable fact about the present economic situation
is the dramatic and healthy change which has taken place in it
over the last six months. In the months before the election even
the previous Government was so concerned about the continued
slackness in the economy that it introduced special expansionist
measures despite the fact that its own budget had only just been
approved by Parliament. As late as December an independent professional
economic institute within the University of Melbourne was
reporting that the economy was still operating substantially below
capacity and seemed likely to continue to do so for months ahead.
There can be no doubt that the major task of economic
management facing the Government and the community generally is
to restrain the rising pressure of expenditure on resources and
to prevent inflationary rises in prices and in costs.
The task which faces the Cabinet is to produce a Budget
which will finance the Government's own essential programs and
also provide for the necessary restraint on rising levels of
private as well as public expenditure. The Government accepts
this responsibility and will come to the task of its preparation
ready to consider any form of fiscal action likely to contribute
to an effective performance of the task. But the great thrust
of the Budget must be to implement our clearly stated program
and goals. So the second reassurance I give you is about the basic
predictability of this Government.
The third reassurance I give you is that we fully
recognise the interdependence of a Labor Government and private
business. I acknowledgedin my policy speech that we could not
expect that our social program could be financed without a
significantly increased growth rate. Australia had been stumbling
along with a paltry growth rate of 3 per cent or so. I said
then that we would need to achieve a growth rate of 6 to 7 per
cent if our program were to be implemented without vastly increased
taxation. We shall probably achieve a rate higher than 7 per cent
this year. We can only achieve such a rate if all sectors of the
community, not least the private sector, is prosperous, efficient
and fully employed. You need a prosperous economy. So does
the Government. I know very well I cannot achieve a moiety of
what I want to achieve for the people of this country decent
schools, decent hospitals, decent cities, decent provision for
the sick, the aged and the handicapped without your prosperity
if you like, without your taxes.
I said in the policy speech and the Governor-General
himself was gracious enough to repeat it in the speech from
the throne that We would establish consultative planning
machinery by which all sectors of industry, employers and
employees, would co-operate with us in the planning of the
economy and the promotion of the great goals of our society.
We shall faithfully abide by that undertaking. I understand
there are complaints in the business community about difficulties
in communication with the new ministers. I acknowledge things
have changed a little since December. No longer the midnight
telephone call from the influential address in Canberra or
even more influential address at Surfers Paradise. ( The Postmaster-
General is distinctly irked at the loss in his revenues.
Frank Crean is delighted at the savings. You see the difficulty
I have in getting unity in my Cabinet.) I know that over the
years, certain convenient and immediate lines of communication
did develop between leaders of industry and leading ministers.
I understand and I don't quibble at it, but you cannot really
be surprised that there has been some slight change. Let. me,
however, put this to you: were you really on such a good thing?
Did this allegedly comfortable relationship ever really help
you in the long term planning of your industry or your company?
Is it not a fact that, towards the end, our predecessors had
such a lack of any coherent or comprehensive policy that aJll
the consultation, all the private dinners and all the telephone
calls, left you none the wiser and certainly none -the richer?
Ido want communication with industry. I want it and
so do my ministers, every bit as much with private industry
as with the trade union movement. We want it on an open, regular,
constructive and in significant areas, institutionalised
basis. It is in this context that I wish to speak to you about
some of the basic structural reforms which we have implemented
or are about to create. Fundamental to the future of the
Australian economy is the question of national industrial policy.
This is not simply a matter of deciding that it is desirable
to have economic growth or economic development. It is worth
emphasising that the two are not necessarily the same. We know
it well in Australia. During the last generation we have
experienced a remarkable phase of economic development, yet it
has not been accompanied by a particularly creditable economic
growth. So when I speak of industrial policy, I am referring
to the problems of the relative rates of growth of all industry
primary, secondary and tertiary industry and to the various
industries within those sectors.
The disparity between our rate of development and our
rate of growth makes it quite clear that very serious distortions
in the productive capacity of Australian industry have arisen and
it is equally clear that the tariff system is centrally relevant
to this distortion. You know that quite early in the life of the
Government we asked Sir John Crawford to report on the establishment
of a Commission to replace the Tariff Board. His report is now
at hand this week. I should now say that he suggests a name
other than that of the " Protection Commission" which was the
term used in the policy speech and the Governor-General's speech.
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The M. T. I. A's own submission for which I thank and compliment
you suggested a similar change. If I refer here to the
Protection Commission, you will understand that it is without
prejudice to any decision of Cabinet on Sir John Crawford's
recommendation. The essential elements of my request to Sir
John were to make recommendations on a Commission which would be
able to conduct examinations independent of the pressures of day
to day politics and, above all, open to public scrutiny.
This kind of approach has, of course, typified the
work of the Tariff Board in recent years. Subject to the
limitations of staff and the restrictions of policy imposed
upon it by the form of some of the references to it, the Tariff
Board has had to deal with many of the problems of an industrial
policy. Unfortunately, it has suffered from two major inadequacies;
and it is these inadequacies that we hope the Protection Commission
will overcome. The first of them has been the limitation of scope.
We believe it is essential that any decision, whether of
commission or omission, should take full notice of its
implications for employment and existing investments, and that
when major adjustment is necessary as a consequence of such
decisions, the employment and other adjustments involved in
other words, the reallocation of labour and capital should
take place in such a way as to avoid the traumas and hardships
which structural adjustments have involved in the past,
The second major limitation of the Tariff Board has been
the blinkers which have been foisted upon it in the past. With
few exceptions, only the problems of manufacturing industry have
been referred to the Board. We intend to change that and have
levels of protection of both agriculture and secondary industry
decided by the same body. Again non-tariff forms of assistance
have been generally decided in widely different ways ways
which often have been unco-ordinated and at variance with one
another. We have set up with a Secretariat in my Department
a standing inter-departmental committee responsible for
advising on all assistance to industries. This will make for
more coherent and consistent decision making.
Again, one might point out that never has the Tariff
Board, or any other independent statutory authority, been asked
to report upon the prospects for a new industry or the question
of which of Australia's existing or embryonic industries offer
prospects of viability without assistance of an open-ended kind
from the taxpayer.
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In this context, it might be worth emphasising that
in pointing out this deficiency I am not proposing that any
body or any Governmental authority in Australia should set
itself up to select which industries should be allowed to exist
and which should be put out of business.
But it is the responsibility of the Government to decide
what is the national advantage in terms of particular industries,
when any kind of official patronage, that is, the taxpayers'
money is involved.
Now there are some implications of this that I am sure
will be music to your ears. I know how dedicated you all are,
how determined you all are, to uphold the principle of free
enterprise and open competition. I know how much you will
welcome every decision which will promote competition. The
Protection Commission should help to this end.
In expanding and building upon the role of the Tariff
Board through the new Commission, whatever the final form of
it may be, the Government intends to lay the basis for an
industrial policy for Australia, in which the emphasis will be
upon change and dynamic adjustment.
It is not a pretty sight in a country like Australia,
so rich in natural resources and with such a potentiality for
growth, to see the instant ossification which sets in in so
many enterprises and indeed whole industries. As soon as an
industry has come into existence, too often it considers that
its very existence entitles it to a certificate of immortality
and changelessness, to be guaranteed a safe and easy life by
way of Government subsidy and protection through tariffs or,
even worse, permanent quantitive controls on imports.
When the Great Depression struck the world, the retreat
behind tariff barriers on a worldwide scale was understandable,
even if not always wise. Jobs and livelihoods for millions of
people were at stake, and the threat of economic warfare by
dumping led to the practice of economic warfare by tariffs.
Nevertheless, it cannot be repeated too often that at
a time of full employment and labour shortages, as will be the
case soon, no serious threat to jobs is involved in prodding
industry into greater resilience and adaptability to change by
exposing it to a more competitive climate. It becomes for
Government much more a social problem than an employment problem.
When in some cases, in the interests of economic growth,
it becomes necessary to encourage job changes, the duty of the
Government is to act on the side of the change, not resist it,
and to facilitate the transfer of employees into expanding
industries and out of uneconomic and contracting industries.
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The Government is studying the problems of adjustment
assistance for structural change, in its industrial, manpower
retraining and social security aspects. We shall never allow
change to be bought at the cost of human hardship. Neither shall
we build unnecessary rigidities into the Australian economy
merely in order to enable people, whether they be employers or
employees, to continue in a particular industry just because
they are used to it and don't want to learn anything new. This
can only lead to stagnation and the sacrifice of economic growth,
not in the name of something rational like preservation of the
environment but in the name of sluggishness and conservatism.
Australia should be able to pride herself upon a vigorous
and independent approach to her role in the international economic
community. She will be able to do so only if we develop an
industrial policy which is directed towards adaptation, and strive
to overcome the inbuilt resistance of vested interests to any
structural changes in the domestic economy.
Like most countries of the world today, Australia has
encountered serious inflationary problems. There can be no doubt
that inflation is a disruptive influence on the economy and
society, and it is in the interests of all that it should be
held in check. If prices continue to rise sharply in the erratic
and unpredictable ways that have characterised recent experience,
no-one in Government, in business, or in private life can plan
confidently for the future. This problem has led to extreme
measures being taken in some countries, in particdlar the United
Kingdom and the United States.
The Australian Government is determined to contain
inflationary pressures. It will not be easy. We are aware
of the need to manage economic affairs prudently to avoid too
great a strain on Australia's resources. We intend to do so
with the co-operation of business and the public at large.
For this reason, we have established a Prices Justification
Tribunal which will have the task of enquiring into and reporting
upon the prices charged and any price rises proposed by large
companies. Its reports will state whether, in the opinion of
the Tribunal, this or that price or price rise is justified.
We confidently expect that the companies concerned will abide
by the Tribunal's judgements in these matters and, as the Tribunal
will provide a forum for discussion of these matters in public
hearings, we believe that its operations will have the force of
public opinion behind them. It is therefore of the utmost
importance that business should recognise its own best interests
and the best interests of Australia in co-operating with the
Tribunal in all respects.
Further, we are determined to step up the long term
growth of productivity in Australia by a variety of measures.
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First, we intend to stimulate both internal and external
competition and at the same time to improve the competitiveness
of Australian industry. Existing Australian legislation in the
restrictive trade practices field is of limited effectiveness.
Even our predecessois recognised that. We propose to deal with
restrictive trade practices by directly prohibiting them instead
of leaving them to be restrained separately after time-consuming
enquiries, as is the case with most practices at present.
The Government has done a great deal of preparatory
work in formulating new and stronger legislation along these
lines. I do not see stronger restrictive trade practices
legislation as something for industry to fear. Obviously,
there will be adjustments to be made. But as the influence
of this legislation spreads we can expect a sharper, more
competitive spirit to emerge in the economy, with industry
quicker to respond to changes in the market and in the available
techniques of production and distribution, and quicker to respond
to new opportunities in general. This must be to the benefit
of everyone. Secondly, we hope to move towards more outward looking
trade and development strategies adopted by such other small
rich industrial economies as Sweden, Denmark and Norway, economies
which have increased the real average living standards of
their population considerably faster than we have, and at the
same time, looked after their sick and poor much better than we
have. There is need to recognise that increasingly our
manufacturing industries should become more oriented to
international markets. However, no wholesale upheaval of the
Australian industrial structure will result from our policies.
Rather any alterations to existing policies, or the introduction
of new ones, will be gradual. The Government is aware that its
policies will involve some changes ofemphasis and of direction.
It recognises the need to ease the transition by providing as
much notice to industry as possible to plan for changes of
direction and where possible to give industry time to adjust
to new circumstances. Thirdly, we aim to increase the adaptability of the
Australian economy to changing technology and to changing
economic conditions both at home and abroad. Action has
already been set in train by the ministers for Secondary Industry,
Labour and Social Security and to develop a comprehensive and
co-ordinated set of policy measures on
Labour training and re-training;
Relocation of industries and workforces;
Adjustment assistance to industries affected;
Effective social security and welfare measures to
protect individuals and their families involved.
Currently a high level governmental mission is overseas
studying relevant experience in other countries. Such a program
will enable the Government, in co-operation with industry and
the trade unions, to accelerate the movement towards a more
viable and profitable industrial structure.
The long term structural changes which need to be made
to achieve a lift in the real income growth of the community
may require Government assistance in many areas to ensure that
the associated human and economic problems of change are at
least minimised and, where possible, avoided.
Finally, it is particularly appropriate that I should
mention at a seminar under the auspices of the the
question of industrial relations. The great breakthrough
towards industrial sanity in Australia came when the M. T. I. A.
recognised that the prosperity of both employers and employees
rested upon industrial co-operation, not industrial confrontation.
Your members know full well the futility of the provocation of
the penal clauses. Your members will know the advantages to
yourselves of union amalgamation. You must find it as ludicrous as
I do that a majority in the Senate should seek to thwart our
mandate on two such matters one of them, at least, " inoperative"
if no-one finds it offensive or interfering for me to use that
word. It gives me a great deal of pleasure to commend the efforts
your Association has made in recent years to bring about a better
industrial climate by replacing the idea of confrontation in
industrial relations with co-operation. In future years, I
believe that the writers on industrial relations will regard the
1971 metal trades negotiations and agreement as a major initiative
in the development of a more satisfactory system of industrial
relations. I congratulate the M. T. I. A. on the initiatives it took
to reach agreement with the metal trades unions for an agreement
covering this important industry, an example of bargaining with
the assistance of the Commission without any industrial stoppages.
I believe that this will be regarded as an outstanding
example of the way industrial relations in Australia can and should
be conducted. In all these matters in economic management, in tariff
policy, in industrial relations, in social engineering we are
seeking new machinery, better structures, mom public processes,
to achieve our program for change.
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Returning to the brochure promoting this seminar,
reference is made to the " sickness that comes from too much
change in too short a time". I cannot accept the proposition
that it is the change which causes the sickness. It is the
failure to prepare for change and to plan for change. Change
itself is inevitable. I do not fear it. Where we have failed
so often in the past is in failing to anticipate it, and failing
to develop modern and contemporary institutions to deal with it.
It is the duty of a Government devoted to change in an era of
change to develop those structures and institutions. This is
what we are doing. We know our creations can only be truly
effective if they are based on co-operation and open dealings
with the public. Co-operation, open dealing, contemporary
institutions for planning and achieving clearly stated national
goals those, I believe, are the best antidotes against future
shock.