EMBARGO: 9630PM MOND) AY 17 SEPTEMBER 1973
-SPECHBY THE PRIME MINISTER MR. E. G. WHITLAM, M. P.,
TO THE ANNUAL DINNER~ OF THE AUSTRALIA. N ELECTRICAL MANUFACTURERSt
ASSOCIATION, LAKESIDE INTERNATIONAL HOTEL, CANBERRA,
MOND~ AY 17 SEPTEMBER 1973
Your convention is the second of two conventions I have
attended in the past fortnight. Yours is an annual event; the
Constitutional Convention occurs with roughly the frequency of
Halley's Comet. The last one was 82 years ago. I notice that one
of our magazines published a photograph of me on its cover the
other day, purporting to show me in the midst of that distinguished
company in a state of unaccustomed somnolence. All I can say is
that this convention promises to be a more electrifying occasion than
that one. This is by no means my first speech to a manufacturers'
dinner. Two weeks ago I spoke to the Chamber of Manufactures in
Sydney. Next Friday I shall be speaking to the South Australian
Chamber of Manufactures, and next Monday to the Heavy Engineering
Manufacturers' Association here in this hotel.
Now whatever you may think of the Government, I can hardly
be accused, in these circumstances, of snubbing the manufacturers.
My only fear is that you will grow weary of hearing the same message
five times in succession. So let me assure you that tonight's speech
is a completely new model there's no wasteful proliferation of
speeches in qy department. My real difficulty is that two weeks from
tonight I shall be speaking yet again to the Chamber of Manufactures
in Brisbane. I shall have to tell them what I have already told
manufacturers in the southern States. You will understand, of course,
that it always takes a little longer to get our message through to
Queensland. If I may be permitted a truism, gentlemen, we live in changing
times. When I spoke earlier this year to the Metal Trades Industries
Association in Melbourne, we were about to introduce the 25% cut in
tariffs which we announced in July. When I spoke to the Chamber of
Manufactures in Sydney just over a fortnight ago, we had just brought
in our Budget. Now, as I speak to you tonight, we have just announced
a further revaluation of the dollar, a new policy by the Reserve Bank
towards Government securities and interest rates, and, more recently,
our intention to submit to the Australian people a referendum to give
the national Government power over prices. You can see the hazards
of going to too many businessmen's dinners. Basic to all our economic
measures are two clear and simple purposes, two consistent and
overriding aims to stimulate a more vigorous and competitive climate
in Australian industry, and to stem inflationary pressures in the
economy0
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Let me speak first about inflation. One thing I caution you
against and caution the Au stralian people against is a sterile
obsession with inflation such as our opponents seem determined to
foster. Inflation is not the sole issue for the Australian Government;
the be-all and end-all of economic management. Exaggerated fears may
be as damaging as inflation itself by encouraging defeatism and
timidity, be encouraging a needless, heedless rush to put up prices
against the vague possibility of competitors doing likewise. I would
hate to see the price structure become as irrational, as psychologically
vulnerable, as fickle a feature of our economic life as dare I say itthe
share market. I appeal to you to keep the whole issue of prices
in perspective, to bear in mind that Governments throughout the world
face the same problem that we do, that my Government is determined and
pledged to do all in its power to restrain inflationary pressures0
We shall do this with or without the assistance of the States, with
or without the assistance of our opponents. But we shall do it, I
believe, with the assistance and concurrence of the Australian people.
In our attack on inflation I want to stress one thing above
all: we are pledged to a program of reform and renovation of
Australian society, we were elected to carry out that program, and
we shall carry it out steadily, steadfastly as we have been doing
since last December. It is all very well for our opponents to talk
of curbing inflation. Their last and most notorious attempt to do so
was the Budget of 1971/ 72. Statesmanslike as I always am on these
occasions, I forbear to remind you who was the author of that document.
But you all remember its consequences: stagnation, a paltry growth
rate of 2 or the worst unemployment for 10 years, and, when our
predecessors left office, the highest rate of inflation for 20 years.
That was our inheritance. That was our lesson. You will all remember
how my colleagues and I, when we were in opposition, were regularly
accused by the previous Government of " calamity howling". Yet no one
hawls calamity more than they do. At least they give us calamities
worth howling about: We now have a strong demand for labour: growth
at 7% and rising; and record profits. We have combined this strong
and basically healthy economic situation with the most effective and
far reaching program of economic reform ever undertaken in this country.
We shall not, however, fight inflation with the methods of our opponents.
We shall not throw away people's jobs, we shall not resort to clumsy
stop-go economics,, we shall not renounce our commitments to the people
of this nation and especially to the poor, the children, the sick,
the migrants, the city-dwellers, the low and middle-income earners
whose interests have been neglected so shamefully for so long.
The weapons we have chosen to fight inflation are the same
weapons with which we hope to achieve more competition and greater
efficiency in Australian industry. There is one other weapon, however,
which the Australian Government lacks, and which we shall ask the
people to grant us. That is power to control prices. Our opponents
are rece-nt converts to the idea of a prices and incomes policy. Not
long ago they were saying such policies wouldn't work. For myself, I
frankly confess that I have always had reservations about the value of
price control powers reservations I have publicly acknowledged and
explained. But I have no doubt and I believe the people will have
no doubt that it is intolerable that Australia should be the only
country in the western world whose Government is denied such powers,
and which cannot use them if the need arises. Equally I have no doubt
that if such powers are to be applied, they must be immediate,
unchallenged, uniform in their application.
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The States have these powers. They have refused to exercise
them; they have refused to refer them to us, either temporarily or
permanently. They won't use them; they won't let anyone else use
them. And with their allies in the national Parliament, they propose
to campaign against the very suggestion that the people employers,
employees, housewives, businessmen, manufacturers should be allowed
to decide whether the national Government should have the powers
or not. Yet these are the Premiers, these are the parties, who
protest about inflation and whip up people's fears about it.
If I were more cynical about these matters, I might be
tempted to believe that our opponents had a vested interest in
inflation, and hoped to confound the Government and weaken its
nerve, I am sorry to disappoint them. We will not be dismayed.
We will not be deflected. We will beat inflation, and beat it with
measures that are fair, constructive and humane.
The prices referendum bill which we introduced in Parliament
today will be a test of the good faith and sincerity of our
opponents. I hear some of them say that we ought to include incomes
in the referendum. Well, of course, incomes are already fixed for
the vast majority of Australians either by negotiation or arbitratio n.
Apparently there are some people, until recently quite vociferous in
defence of the arbitration system, who now lack faith in the ability
and judgement of the Arbitration Commission. But let that pass. I
have no doubt that if the people of Australia give us power to control
prices, we can count, if necessary, on the responsible cooperation of
the trade union movement in restraining wages and incomes. I give that
assurance, Let there be no mistake about the persistence or the consistency
with which I have approached the question of power over prices. At the
opening of the Constitutional Convention just two weeks ago I first
invited the Premiers to refer to the national Parliament the powers
held by the States. I explained that the Australian Government could
seek a constitutional change by referendum, but that this would take
some months, depending upon the behaviour of the Senate. I said:
" The Parliament can obtain the power by reference, by some
or all State Parliaments. That is something which could
be done in a matter of weeks. The reference of power could
be permanent or temporary. If, however, the Governments
in the two great States of New South Wales and Victoria,
Governments which currently have a majority in both Houses
of their Parliaments, decline to introduce a Bill, then
the reference would be ineffective. I venture to say that
without New South Wales and Victoria, it would be a largely
futile exercise, while, with those two States alone referring,
it could be made effective throughout Australia."
On the following day, the Tuesday, I appealed again for a
reference of these powers. It was all too clear, however, that
nothing in the private or public responses of the Premiers of
New South Wales, Victoria or Queensland gave any room for hope that
they would do so. The position then is this:
We have had a Premiers' Conference on inflation; we have had a
Constitutional Convention. The States in this context, of course,
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I am referring to the anti-Labor States have bluntly refused to
budge or co-operate. It is fruitless to ask them again. We can
only appeal to the people. If our bill is passed this week, we can
have a referendum within two months. Ar~ d by Christmas, I assure you,
we shall have passed legislation to stabilise the growth of land
prices throughout Australia. That will be our first and most important
action if the referendum is carried.
The measures we have taken against inflation revaluation,
tariff cuts will have several important consequences. They will
help keep down the price of imports, they will increase the supply
of goods within Australia, they will reduce any artificial stimulus
to capital inflow, they will stimulate competition. I suggest that
Australian industry, because of strong domestic and world demand,
and buoyant conditions in the rural sector, is well placed to absorb
the effects of our revaluatio ns. Those industries which have special
difficulties we stand ready to assist. And of course, we are assisting
industry in much more positive and enduring ways.
Look back on our decisions and actions since last December,
and you will find our record replete with schemes and initiatives
to benefit industry. Our Budget provided an estimated outlay of
$ 145 million for assistance to industry in 1973-74, $ 34 million more
than actual expenditure in the last financial year. We have increased
assistance under the Industrial Research and Development Grant Scheme
from $ 14 million to $ 16.8 million. We are encouraging higher standards
of industrial design. We have provided $ 1.83 million for better
apprenticeship training. We are developing new manpower policies to
help industry adjust to changing needs and conditions. We are strengthening
the Australian Industry Development Corporation to enable it to
play its full part in developing local industry and keeping it in
Australian hands. We are establishing an Industries Assistance
Commission to coordinate all forms of assistance to industry and to
open up the process of assistance to full public scrutiny. We are
setting up industry panels bringing together employers, employees,
consumers and Government to advise on a whole range of industrial
problems. I do not pretend for a moment that our reforms will be painless,
or that our plans to streamline and invigorate Australian industry do
not involve quite basic structural changes and new attitudes on the part
of us all. It is precisely because I have confidence in the -strength
of indu-stry as well as its good sense and public-spiritedness
that I believe our reforms will be welcomed and understood. Let me,
however, give an example of the sort of practice my Government cannot
tolerate. You will forgive me for choosing an instance that is
uncomfortably, distressingly, close to home. I refer to an agreement
made between five Australian manufacturers for the 12 months to last
April. The agreement raised to an agreed level the minimum price of
Japanese fans exported to Australia. It was entered into after
negotiations between your own Association and the Japan Electrical
Manufacturers' Association. The Commissioner of Trade Practices
investigated the agreement and referred to it in these terms in
his 1972-73 annual report: 00./ 5
" I notified the parties that I considered the agreement
was contrary to the public interest and should not be renewed when
it expired in April 1973; the agreement had the effect of increasing
the price of Japanese fans to Australian consumers and weakening
external competition without any inquiry by the Tariff Board which
has the responsibility of recommending the level of protection to
which Australian manufacturers may be entitled against imports; in
addition the agreement aggravated a shortage in the total supply
of fans available to the Australian market which occurred in the
unusually hot summer season."
That is what the Commissioner of Trade Practices had to say,
I am glad to record the fact that although your association tdisagreed
with the Commissioner in good faith, the agreement in question was not
renewed. Now I didn't come here to give lectures or to rake over past
history, but I would be less than candid if I failed to make it clear
to you that such agreements as that will not be tolerated by my
Government. Under the restrictive practices legislation we shall
introduce, that agreement would have been illegal. Under our
legislation, consumers will not have to wait while the Commissioner
investigates and makes a report. We shall take action to prohibit
a great range of restrictive practices directly and immediately.
Mr. Chairman, I have spoken bluntly to you. I know you would
not want-from me, or my Government, anything other than straight talk
and square dealing. Let me now tell you with equal candour, with
equal conviction what my hopes are for your industry, and for all
industry. First, we want ready and open communication with you. We
want to hear from you and be involved in your problems. Next, we want
your continued prosperity. Our whole program depends upon a healthy
and prosperous business community. We want to encourage the
transformation of weak, dependant industries into vigorous and more
self-reliant ones, to help industries withstand the pressures of
national change and international competition without the need for
inordinate Government support. We want to encourage more competition,
more rational use of resources, lower prices for the consumer. We see
the growth of sound and healthy industry as basic to the growth of a
modern industrial economy.
Finally, I ask you to keep in mind your basic strength, your
real and growing prosperity0 This year your sales have risen strongly,
your exports have increased, your orders are high. It is fair to say
that, despite rising costs and other pressures, Australian industry
is in better condition today than it has ever been. What better time
to undertake with the new Government, the lasting and far-reaching
reforms that will ensure greater strength and prosperity in years to
come?