OPENING SPEECH BY THE PRIME MINISTER,
THE HON. EgG. WHITLAM, M. P.,
AT THE PREMIERS' CONFERENCE, CANBERRAV
ON 7 JUNE 1974
IT IS NEARLY TWELVE MONTHS SINCE WE LAST MET IN THIS
CHAMBER. IT HAS BEEN A MOMENTOUS PERIOD. OVERSHADOWING THE
PAST TWO MONTHS HAS BEEN THE ELECTION. BUT THAT IS NOW BEHIND
US, THE PEOPLE HAVE RETURNED MY PARTY TO OFFICE AND WE ARE NOW
GETTING ON WITH THE BUSINESS OF GOVERNMENT,
THE GOVERNMENT IS COMMITTED TO THE PROGRAMS OF SOCIAL
PROGRESS WHICH IT HAS GOT UNDER WAY SINCE DECEMBER 1972. THOSE
PROGRAMS HAVE GREATLY EXPANDED THE OPPORTUNITIES AVAILABLE TO
AUSTRALIANS, BOTH AS INDIVIDUALS AND AS MEMBERS OF COMMUNITIES.
MANY OF THEM, OF COURSE, INVOLVE THE CO-OPERATION OF THE STATES
AND THEIR INSTRUMENTALITIES. IN MY OPENING SPEECH AT THIS CONFERENCE LAST YEAR I SET
DOWN CLEARLY AND UNEQUIVOCALLY THE BROAD LINES WE WOULD FOLLOW
IN OUR RELATIONS WITH THE STATES.
THE STARTING POINT WAS SIMPLY THIS: WE BELIEVE THAT
THE TOTAL AMOUNTS OF ASSISTANCE PROVIDED TO THE STATES IN THE PAST
HAVE, IN TERMS OF THE TASKS LAID UPON THEM, BEEN INADEQUATE. THE
RESULT HAS BEEN AN ACCUMULATION OF SERIOUS DEFICIENCIES ACROSS A
WIDE RANGE OF FUNCTIONS OF CRUCIAL IMPORTANCE IN THE WELL-BEING OF
OUR COMMUNITY: OVERCROWDED AND INSUFFICIENTLY STAFFED SCHOOLS,
AN INEQUITABLE DISTRIBUTION OF HEALTH SERVICES, HOPELESSLY
INADEQUATE AND UNCO-ORDINATED SYSTEMS OF URBAN PUBLIC TRANSPORT,
A HUGE BACKLOG OF UNSEWERED HOUSING, AN OVERCROWDING OF
POPULATION IN OUR MAIN CITIES, AND SO ON. / 2
THE AUSTRALIAN GOVERNMENT HAS TAKEN A LARGE NUMBER
OF IMPORTANT INITIATIVES DESIGNED TO TACKLE THESE DEFICIENCIES'.
BROADLY, IT HAS MOVED ON TWO FRONTS. FIRST, IT HAS ESTABLISHED
NEW INSTITUTIONS AND NEW MECHANISMS FOR ASSESSING, ON A NATIONAL
BASIS BUT IN FULL CO-OPERATION WITH THE STATES AND THEIR
AUTHORITIES, NEEDS AND PRIORITIES IN EACH OF THE MAIN AREAS OF
CONCERN* THE SCHOOLS COMMISSION, THE HOSPITALS AND HEALTH
SERVICES COMMISSION, THE DEPARTMENT OF URBAN AND REGIONAL
DEVELOPMENT AND THE EXPANDED GRANTS COMMISSION ARE SOME OF THE
MAIN EXAMPLES OF MANY THAT COULD BE CITED.
SECONDLY, THE GOVERNMENT HAS, ON THE BASIS OF THESE
EXPERT ASSESSMENTS, BEGUN TO PROVIDE LARGE AMOUNTS OF FUNDS TO
THE STATES. IN RESPECT OF TWO AREAS TERTIARY EDUCATION AND
PUBLIC HOUSING WE ASSUMED FULL FINANCIAL RESPONSIBILITY AND
MADE APPROPRIATE ADJUSTMENTS TO THE LEVELS OF GENERAL PURPOSE
FUNDS MADE AVAILABLE TO THE STATES. IN OTHER AREAS, WE
UNDERTOOK NEW OR EXPANDED PROGRAMS OF SPECIFIC PURPOSE
ASSISTANCE DESIGNED TO ADD TO EXISTING STATE PROVISIONS IN THE
AREAS CONCERNED AND SO TO ACCELERATE IMPROVEMENTS IN STANDARDS.
THE OPPORTUNITIES FOR A BETTER AND FULLER LIFE WHICH
THESE PROGRAMS PROMISE ARE BECOMING INCREASINGLY EVIDENT AS TIME
GOES BY. WE WILL GO ON WITH THEM. THERE IS, HOWEVER, A NEED
FOR ALL OF US NOT TO TRY TO PUSH AHEAD SO FAST THAT THE ECONOMY
IS UNABLE TO MEET OUR DEMANDS.
I SAY THAT BECAUSE THE ECONOMY IS CURRENTLY
THREATENED BY A SERIOUS INFLATION. THAT INFLATION MUST BE
CURBED. THE GOVERNMENT IS DETERMINED TO CURB I1% 9 o 93
WE HAVE, IN THE PAST EIGHTEEN MONTHS, TAKEN MAJOR STEPS
TO CHECK INFLATION. WE HAVE SET AN EXCHANGE RATE FOR THE
AUSTRALIAN DOLLAR APPROPRIATE TO OUR CIRCUMSTANCES'. WE PUT A
STOP TO THE EXCESSIVE INFLOW OF MONEY FROM OVERSEAS'. WE CUT
TARIFFS SHARPLY ACROSS-THE-BOARD, WE INCREASED TAXES BY OVER
$ 600 MILLION, ON A FULL-YEAR BASIS, IN OUR FIRST BUDGET.
THROUGH THESE AN]) OTHER MEANS WE STEADILY DRAINED OFF THE
EXCESSIVE LIQUIDITY PRESENT IN THE ECONOMY WHEN WE FIRST TOOK
OFFICE. IN DOING SO, WE HAD TO ACCEPT MUCH HIGHER INTEREST
RATES THAN MY PARTY FINDS PALATABLE. MANY OF THESE STEPS HAVE
BEEN CRITICISED BY THE VERY PEOPLE WHO COMPLAIN MOST LOUDLY ABOUT
INFLATION., I NOTICE, HOWEVER, THAT NEARLY ALL THE PROFESSIONAL
ECONOMISTS WHO HAVE COMMENTED ON OUR POLICIES HAVE SAID THEY
WERE RIGHT AND COURAGEOUS,
IN MY PRESS CONFERENCE ON 7 MAY IN SYDNEY I SAID
" WE ARE PREPARED TO STRENGTHEN ALL THE STEPS
WE HAVE ALREADY TAKEN AND TO TAKE ANY OTHER STEPS
WHICH OUR ECONOMIC ADVISERS BELIEVE NECESSARY TO
DEFEAT INFLATION,"
I MEANT THAT. AND I TRUST THAT NOW, IN THE LIGHT OF THE
ELECTION CAMPAIGN, IT IS COMMON GROUND THAT INFLATION MUST BE
DEFEATED'. IF THERE IS ONE THING THE CAMPAIGN HAS MADE CLEAR,
IT IS THAT*. THERE ARE NO EASY WAYS OF CURBING INFLATION. NOR CAN
IT BE CURBED BY PUSHING ALL OF THE BURDEN OF DOING SO ONTO A
PARTICULAR GROUI'. A DOLLAR SPENT BY THE PRIVATE SECTOR ADDS
AS MUCH TO INFLATIONARY PRESSURES AS A DOLLAR SPENT BY THE PUBLIC
SECTOR. A DOLLAR SPENT BY A STATE GOVERNMENT. ADDS AS MUCH TO
INFLATIONARY PRESSURES AS A DOLLAR SPENT BY THE AUSTRALIAN
GOVERNMEN' 1. 4
THE AUSTRALIAN GOVERNMENT IS CURRENTLY SEEKING TO
RESTRAIN PRIVATE SECTOR SPENDING BY KEEPING MONEY TIGHT, IT
IS SEEKING TO ENCOURAGE SAVING AND) DISCOURAGE SPENDING BY
INCR~ EASING THE ATTRACTIVENESS OF FINANCIAL ASSETS. HENCE THE
RISE IN YIELDS ON GOVERNMENT SECURITIES THAT IS OCCURING IN THE
MARKET*' WE ARE FOLLOWING SUCH A MONETARY POLICY, NOT BECAUSE
WE LIKE ITS CONSEQUENCES IN TERMS OF FINANCIAL STRINGENCY AN)
HIGHER INTEREST RATES, BUT BECAUSE WE HAVE TO IF THERE IS TO BE
A CURB ON EXCESSIVE PRIVATE SPENDIN'
THIS MEETING, OF COURSE, IS CONCERNED WITH GOVERNMENT
SPENDING., THAT TOO MUST PLAY ITS PART IN ANY POLICY OF RESTRAINT.
IT GOES AGAINST THE GRAIN FOR ME TO SAY THAT BUT ALL
OF US HERE MUST ACCEPT THE REALITIES. INFLATION MUST BE CHECKED,.
AND IT MUST BE CHECKED DECISIVELY*
I KNOW I AM PREACHING TO THE CONVERTED BUT LET ME SAY
A LITTLE ABOUT THE ECONOMIC SITUATION AND OUTLOOK.
THE CONSUMER PRICE INDEX ROSE BY 13#. 6 PER CENT IN THE
YEAR TO THE MARCH QUARTER. ITS RATE OF INCREASE WAS REDUCED IN
THE MARCH QUARTER BUT THE FUTURE FOR PRICES REMAINS OMINOUS
PRICES ARE BEING PUSHED ALONG BY A COMBINATION OF
EXCESSIVE DEMAND AND EXCESSIVE COST INCREASE, INCREASINGLYj
PEOPLE ARE ADJUSTING THEIR SPENDING BEHAVIOUR TO INFLATION,
MAKING THE PROBLEM SELF-PERPETUATING.
OVER THE PAST YEAR TOTAL SPENDING, IN REAL TERMS, ROSE
BY 10 PER CENT. MUCH OF THAT INCREASE WAS SATISFIEDv NOT FROM
OUR OWN PRODUCTION, BUT BY A VERY LARGE RISE IN IMPORTS', WE
WANTED THAT TO HAPPEN, AND IT HAS'. EVEN SO, DEMAND HAS
OUTSTRIPPED SUPPLIES SHORTAGES OF BASIC MATERIALS AND EVEN OF
SOME CONSUMER GOODS ARE WIDESPREAD. INDUSTRY IS OPERATING AT
FULL CAPACITY, SUBJECT ONLY TO CONSTRAINTS IMPOSED BY LABOUR AND
MATERIAL SHORTAGES AND, IN SOME CASES, INDUSTRIAL DISPUTES'*
CREDIT AVAILABILITY RAS NOT SO FAR BEEN A MAJOR CONSTRAINT
MONETARY TIGHTNESS IS AT PRESENT CHIEFLY SERVING TO LIMIT THE
DEGREE TO WHICH PEOPLE AND FIRMS BID AGAINST ONE ANOTHER FOR
ALREADY SCARCE RESOURCES'*'
CONSUMER SPENDING IS BOOMING. PRIVATE INVESTMENT
ALSO IS MOVING UP STRONGLY* ALTHOUGH THE SUPPLY OF HOUSING
FINANCE HAS COME DOWN FROM THE EXTRAORDINARY HEIGHTS OF A
YEAR AGO, THE HOUSING INDUSTRY IS STILL VERY MUCH UND) ER STRAINt
IN THE RECENT MARCH QUARTER, FOR EXAMPLE, THE INDUSTRY COMMENCED
MORE DWELLINGS, IN SEASONALLY ADJUSTED TERMS, THAN IT HAS EVER
BEEN ABLE TO COMPLETE IN A QUARTER. s AT THE END OF MARCH,
THERE WERE 100,000 DWELLINGS UNDER CONSTRUCTIOM' SOME 30 PER CENT
MORE THAN A YEAR EARLIER. IT IS THESE PRESSURES THAT HAVE
CAUSED HOUSE PRICES TO RISE SO EXORBITANTLY AND PREVENTED
MONEYS APPROPRIATED FOR WELFARE HOUSING FROM BEING PUT TO
EFFECTIVE USE*' ALTHOUGH, IN-THE YEAR TO THE. MARCH QUARTER,'
MORE DWELLINGS IN TOTAL WERE COMPLETED THAN IN ANY PREVIOUS
COMPARABLE PERIOD, THERE WERE FEWER COMPLETED IN THE PUBLIC
SECTOR THAN IN ANY OF THE PAST 15 YEARS'.
THE PUBLIC SECTOR TOO IS TRYING TO INCREASE ITS
SPENDING FASTER THAN THE AVAILABILITY OF RESOURCES WILL PERMIV.
TIS IS ESPECIALLY TRUE OF CAPITAL EXPENDITURES, WHERE SUPPLY
CONSTRAINTS ARE PREVENTING BUDGETED FUNDS FROM BEING SPENT AND
TENDER PRICES WHERE TENDERS CAN BE OBTAINED ARE BEING DRIVEN
UP EVEN MORE THAN COST MOVEMENTS WOULD NECESSITATE. o
OUR POLICIES WILL BE DIRECTED TO BRINGING DEMAND BACK
TO AN APPROPRIATE LEVEL, WITHOUT THAT THERE CAN BE NO HOPE OF
CHECKING THE ACCELERATING TREND IN MONEY INCOMES, INFLATIONARY
EXPECTATIONS, SPURRED ON BY THE RAPID CLIMB IN PRICES, ARE
LEADING TO PRESSURE FOR VERY LARGE WAGE INCREASES AND TO0
EMPLOYERS PAYING THEM IN THE EXPECTATION THAT INFLATION WILL
CONTINUE AND THAT THEY CAN THEREFORE BE PASSED ON AGAIN IN PRICES.
WE ALL OF US MUST BREAK THOSE INFLATIONARY EXPECTATIONSO;
WE MUST SHOW THAT THOSE WHO BANK ON DOUBLE-FIGURE INFLATION
CONTINUING WILL BE PROVED WRONG AND SEE THAT THEY FIND THE
LESSON AN EXPENSIVE ONE. IT HAS FOR SOME TIME BEEN EASY TO
BORROW MONEY, INVEST IN REAL ASSETS SUCH AS PROPERTY, AND
EMERGE WITH A HANDSOME PROFIT ARISING NOT FROM PRODUCTIVE
EFFORT BUT FROM INFLATION". WHEN, AS WE WILL, WE HEAR OF
SOME SUCH VENTURES GOING BADLY WRONG IN THE PERIOD AHEAD,
WE WILL KNOW THAT THE RISK ELEMENT HAS BEEN RE-INTRODUCED
INTO SUCH FORMS OF INVESTMENT.
OF COURSE, THE GOVERNMENT'S PRESENT POLICIES WILL
STEADILY BRING DEMAND BACK INTO LINE. THEY WILL GRADUALLY
SLOW THE INCREASE IN PRIVATE SPENDING AS TIME GOES BY.
BUT THAT WILL NOT BREAK THE PRESENT SPIRAL. AVERAGE
EARNINGS SEEM TO HAVE RISEN 16-17 PER CENT IN 1973-74 AND
IF PRESENT TRENDS WERE TO CONTINUE THEY WOULD BE LIKELY TO
RISE BY MORE THAN 20 PER CENT IN 1974-75. MOREOVER, WITH
PRICES RISING AT THE RATE THEY ARE, DEMANDS FOR NEW WAGE
INCREASES ARE BEING MADE LITERALLY WITHIN MONTHS OF THE LAST
DEMANY. THE SPIRAL MUST BE BROKEN'. THE PRICES JUSTIFICATION
TRIBUNAL, WHICH WE PROPOSE TO STRENGTHEN, CAN ONLY DO SO MUCHf.
IF THE SITUATION IS ALLOWED TO DRIFT, WE ARE LIKELY
TO END WITH THE WORST OF ALL WORLDS OUTPUT WILL SLOW, BUT
COST AND PRICE LEVELS WILL GO ON RISING, THE GROWTH OF
IMPORTS WILL EXERT A DAMPENING INFLUENCE: BUT THAT FACTOR
CANNOT BE CALLED UPON FOR EVEW.
I HAVE ON SEVERAL OCCASIONS ADVOCATED A REFERENCE OF
POWER OVER PRICES FROM THE STATES TO THE AUSTRALIAN GOVERNMENT.
SOME OF YOU, I REALISE, HAVE EXPRESSED DOUBTS OR MISGIVINGS ABOUT
THE IMPLICATIONS OF ANY TEMPORARY REFERENCE OF SUCH A POWER'.
o../ 7
I DO FEEL, HOW EVE R, THAT THERE ARE ASPECTS OF THIS POWER
CURRENTLY VESTED IN THE STATES W9HICH ARE NOT BEING
EFFECTIVELY USED IN MOST STATES IN THE FIGHT AGAINST
INFLATION. THE MOST OBVIOUS EXAMPLE IS THE RAPID
ESCALATION OF LAND PRICES WHICH IN 1973 WERE OF THE ORDER
OF 30 PER CENT AND 40 PER CENT IN THE MAJOR STATE CAPITALS**
OUR CONCLUSION THEREFORE IS THAT VIGOROUS AND
DECISIVE ACTION IS NEEDED NOW AND IN THE MONTHS AHEAD,
INCLUDING IN THE BUDGET, TO TURN BACK INFLATION.
IN THIS, EVERYONE WILL HAVE TO PLAY A PART,
THAT INCLUDES GOVERNME~ NTS.* THE AUSTRALIAN GOVERNMENT WILL
DO WHAT IT HAS TO DO, BOTH IN THE AREAS OF SPENDING AND
COST-PUSH INFLATION. I MENTION HERE IN RELATION TO THE
LATTER THAT I HAVE ALREADY SET UP AN INTERDEPARTMENTAL
COMMITTEE, UNDER THE CHAIRMANSHIP OF MY OWN DEPARTMENT,
AND INCLUDING THE DEPARTMENTS OF THE TREASURY AND LABOUR,
TO PREPARE A REPORT FOR THE CONSIDERATION OF MINISTERS ON
THE VERY IMPORTANT CONFERENCE CALLED BY MR JUSTICE MOORE
TO CONSIDER METHODS OF WAGE FIXATION,
TODAY, HOWEYVER, WE ARE CONSIDERING ISSUES
RELATING TO GOVERNM4ENT SPENDING. AS I HAVE SAID,
GOVERNMENT SPENDING IS NOT MORE INFLATIONARY THAN PRIVATE
SPENDING, AS SOME OF OUR WILDER CRITICS SEEM TO ALLEGE.
BUT NEITHER IS IT LESS INFLATIONARY, IN ORDER TO HELP
BREAK INFLATIONARY EXPECTATIONS, WE MUST NOW SLOW THE RATE
OF INCREASE IN GOVERNMENT SPENDING. SOME PHASING DOWN
OR DEFERMENT OF SOME EXPENDITURE PLANS MUST OCCUR.' / 8
AS REGARDS EXPENDITURE PROGRAMS WHICH ARE WHOLLY OUR
OWN RESPONSIBILITY, THE GOVERNMENT WILL BE LOOKING CLOSELY AT
ALL SUCH PROGRAMS AS IT PROCEEDS WITH PREPARATION FOR ITS
1974-75 BUDGET. WE ARE ANXIOUS TO SEE THAT THERE IS CONTINUED
SUBSTANTIAL PROGRESS WITH THlE PROGRAMS WE HAVE BEEN IMPLEMENTING,
ESPECIALLY IN SUCH VITALLY IMPORTANT FIELDS AS EDUCATION AND
lEALTW.* AT THE SAME TIME, WE RECOGNISE THAT IT WILL NOT BE
FEASIBLE, IN THE CIRCUMSTANCES,-T0 ACHIEVE IN THE COMING
FINANCIAL YEAR THE RATES OF PROGRESS WITH ALL THESE PROGRAMS TO
WHICH EARLIER PLANNING AND EXPECTATIONS HAVE BEEN PITCHED.
WITH A NUMBER OF THM, WE WILL HAVE TO ACCEPT A SLOWER RATE OF
IMPLEMENTATION THAN WE HAD BEEN HOPING FOR. AS PART OF THE
BATTLE TO CONTAIN INFLATION WE WILL BE FOLLOWING A POLICY OF
RESTRAINT IN OUR OWN SPENDING. WE WILL ALSO BE LOOKING TO
THOSE OF OUR BUSINESS ENTERPRISES WHICH ARE NOT PAYING THEIR OWN
WAY TH1AT IS, WHOSE LOSSES ARE BEING IMPOSED ON THE TAXPAYER
TO LIFT THEIR CHARGES'. USERS MUST PAY MORE OF THE COSTS INVOLVEDM
FOR THE MOST PART, THE AUSTRALIAN GOVERNMENT'S
DECISIONS REGARDING EXENDITURE IN THE COMING YEAR ON PROGRAMS'
WHICH ARE WHOLLY ITS RESPONSIBILITY MUST NECESSARILY AWAIT THE
1974-75 BUDGET. BUT I ANNOUNCE NOW CERTAIN DECISIONS WHICH
ILLUSTRATE, BY WAY OF EXAMPLE, WHAT OUR APPROACH WILL BE.
THE POST OFFICE WE INTEND TO KEEP THE BUDGET ALLOCATION FOR THE POST
OFFICE IN 1974/ 75 TO NOT MORE THAN THE ACTUAL AMOUNT ALLOCATED
IN 1973/ 74. THIS WILL MEAN TWO THINGS'. FIRST, THE POST
OFFICE'S CAPITAL PROGRAM WILL HAVE TO BE REDUCED BELOW THE LEVEL
THAT'HAD BEEN INDICATED BY THE POST OFFICE'S FORWARD PLANNING'
SECOND, EVEN TO FINANCE SUCH A REDUCED PROGRAM IT WILL BE
NECESSARY FOR THE POST OFFICE TO RAISE SUBSTANTIAL
ADDITIONAL REVENUE BY WAY OF INCREASED CHARGES. THE
TELECOMMUNICATIONS SERVICE IS AT PRESENT OPERATING AT VERY
MARGINAL RATES OF PROFITABILITY, AND THE POSTAL SERVICE IS
PRESENTLY RUNNING AT A LOSS WHICH WOULD BE OVER $ 70 MILLION
IN 1974/ 75. POSTAL AND TELECOMMUNICATIONS CHARGES WILL
HAVE TO BE INCREASED SO THAT AS A GENERAL RULE THE PRICES
PAID BY USERS OF THE SERVICES WILL MORE TRULY REFLECT
COMMERCIAL COSTS. ONE EFFECT OF THIS WILL BE TO REDUCE
DEMAND FOR NEW TELEPHONE SERVICES, WHICH IS AT PRESENT
INFLATED BY THE LOW PRICES BEING CHARGED RELATIVE TO THE
COST OF PROVIDING THE SERVICES'.
TO ILLUSTRATE THE SIGNIFICANCE OF WHAT I HAVE
SAID, I POINT OUT THAT ADVANCES TO THE POST OFFICE REPRESENT
THE LARGES~ T SINGLE ITEM OF AUSTRALIAN GOVERNMENT EXPENDITURE
ON ECONOMIC SERVICES. ADVANCES TO THE POST OFFICE IN 1973/ 74
WILL AMOUNT TO $ 385 MILLION OUT OF A TOTAL EXPENDITURE ON ALL
FORMS OF TRANSPORT AND COMMUNICATIONS OF ABOUT $ 860 MILLION.
AS I HAVE-INDICATED, IT WILL BE NECESSARY FOR THE
POST OFFICE TO RAISE SUBSTANTIAL ADDITIONAL REVENUE BY WAY OF
INCREASEr CHARGES. THIS IS ENTIRELY CONSISTENT WITH ONE OF
THE FINDINGS OF THE COMMISSION OF INQUIRY INTO THE AUSTRALIAN
POST OFFICE ( THE VERNON COMMISSION) NAMELY, THAT AN
OBJECTIVE IN SETTING CHARGES FOR POSTAL AND TELECOMMUNICATIONS
SERVICES SHOULD BE TO RECOUP FROM USERS THE COST OF THE
SERVICES AND ALSO TO PROVIDE, TOGETHER WITH OTHER FUNDS
GENERATED INTERNALLY SUCH AS DEPRECIATION AND PROVISIONS,
AMOUNTS EQUAL TO 50 PERCENT OF CAPITAL EXPENDITURE IN EACH
YEARO 00/ 10
1O.
CAPITAL WORKS AND OTHER CAPITrAL EXPENDITURE:
WE INTEND TO APPLY MOST STRINGENT RESTRAINTS ON
CAPITAL WORKS AND OTHER CAPITAL EXPENDITURE IN 1974-75 BY
AUSTRALIAN GOVERNMENT DEPARTMENTS AND AUTHORITIES. THE
APPLICATION OF THESE RESTRAINTS WILL EXTEND TO PROJECTS IN
THE AUSTRALIAN CAPITAL TERRITORY AND THE NORTHERN TERRITORY,
WITH DUE RECOGNITION TO THE GOVERNMENT'S PRIORITIES IN THE
HEALTH AND EDUCATION AREAS. TILE FIELD Is A COMPLEX ONE AND WE
SHALL HAVE TO SORT OUT OUR PRIORITIES IN THE TIME AHEAD. AS
ONE SPECIFIC EXAMPLE, HOWEVER, I MENTION THAT IN THE CASE OF
CIVIL AVIATION CAPITAL WORKS WE SHALL IN 1974-75 HOLD ACTUAL
EXPENDITURE TO. NOT MORE THAN THE LEVEL OF EXPENDITURE. IN
1973-74. TO THAT END WE WILL BE TAKING ACTION TO SLOW DOWN
THE RATE OF DEVELOPMENT OF NEW AIRPORT WORKS. IN ADDITION, THE
CAPITAL WORKS PROGRAMS FOR CIVIL AVIATION IN THE YEAR 1974-75
WILL BE FRAMED ON THE BASIS OF THE GOVERNMENT'S DECISION TO
BE RECOVERING BY THE END OF FIVE YEARS 80 PER CENT OF THE
COST OF AIRPORT AND AIRWAY FACILITIES FROM THE USERS OF THOSE
FACILITIES. ACHIEVING THIS POLICY OBJECTIVE IS INVOLVING
MEETINGS WITH ALL SECTORS OF THE-AVIATION INDUSTRY, THE
MOST RECENT OF WHICH WAS HELD LAST WEEK. I ALSO ANNOUNCE
THAT WE SHALL LIMIT EXPENDITURE IN 1974-75 ON THE OPERATION
OF AIRPORT AND AIRWAY FACILITIES TO THE SAME REAL LEVEL AS
IN 1973-74.
PETROLEUM PRODUCTS PRICES SUBSIDY SCHEME:
THIS SCHEME AT PRESENT OPERATES TO KEEP THE
WHOLESALE PRICES OF PETROLEUM PRODUCTS IN AREAS OUTSIDE
THE CAPITAL CITIES TO WITHIN 5 CENTS PER GALLON OF CAPITAL
CITY PRICES. THE SCHEME WOULD COST ABOUT $ 28 MILLION IN
1974-75. THE COOMBS TASK FORCE SUGGESTED THAT THE SUBSIDY
BE ABOLISHED, AND WE WOULD CERTAINLY HAVE BEEN ADOPTING THAT
SUGGESTION IN THE COMING BUDGET. WE SHALL IN FACT NOW ADOPT
IT WITHOUT FURTHER DELAY, WITH EFFECT FROM 1 AUGUST 1974.
AUSTRALIAN PUBLIC SERVICE:
IN 1974-75 WE INTEND TO APPLY A CEILING INCREASE
OF 2.6 PER CENT ON THE GROWTH OF FULL-TIME STAFF EMPLOYED
UNDER THE PUBLIC SERVICE ACT. AFTER ALLOWANCE FOR AN
INCREASE IN THE NUMBER OF STAFF EXPECTED TO BE ON VARIOUS
FORMS OF LEAVE, THE CEILING INCREASE IN 1974-75 ON TOTAL
OPERATIVE STAFF EMPLOYED UNDER THE PUBLIC SERVICE ACT
WILL BE 1 PER CENT.
THESE STAFF CEILINGS DO NOT OF COURSE TAKE INTO
ACCOUNT ANY TRANSFER OF GOVERNMENT EMPLOYEES INTO OR OUT
OF THE AUSTRALIAN PUBLIC SERVICE.
THE FIGURE OF 2.6 PER CENT COMPARES WITH AN
AVERAGE COMPOUND GROWTH RATE FOR THE PERIOD JUNE 1962 TO
JUNE 1972 -THE LAST TEN YEARS OF LIBERAL-COUNTRY PARTY
GOVERNMENT -FOR FULL-TIME STAFF EMPLOYED UNDER THE PUBLIC
SERVICE ACT OF 3.87 PER CENT. / 12
12.
THE STRINGENT RESTRAINT ON THE GROWTH OF STAFF
NUMBERS IN THE AUSTRALIAN PUBLIC SERVICE WILL BE REFLECTED
NOT ONLY IN SALARY COSTS, BUT ALSO IN NON-SALARY DEPARTMENTAL
ADMINISTRATIVE COSTS.
A SIMILAR LEVEL OF RESTRAINT WILL BE APPLIED TO
STAFF NUMBERS EMPLOYED BY AUTHORITIES THAT DO NOT COME
UNDER THE PUBLIC SERVICE ACT.
DEFENCE PROGRAM: IN THE DEFENCE FIELD, FURTHER ECONOMIES WILL BE
ACHIEVED IN CIVILIAN MANPOWER. AS ANNOUNCED IN AUGUST 1973,
A MAJOR REDUCTION IN CIVILIAN MANPOWER IS BEING MADE IN THE
DEPARTMENTS OF DEFENCE AND SUPPLY DURING THE CURRENT YEAR
1973/ 74. THIS LARGE SAVING IS BEING ACHIEVED MAINLY By
ECONOMIES, AND THROUGH IMPROVED MANAGEMENT. IT HAS ALLOWED
RE-ALLOCATION OF AVAILABLE FUNDS TO HIGHER DEFENCE PRIORITIES
INCLUDING ESSENTIAL NEW FACILITIES AND EQUIPMENTS. PLANS
FOR THE 1974/ 75 BUDGET AS PREVIOUSLY ANNOUNCED IN DECEMBER
1973 ENVISAGE A FURTH-ER REDUCTION IN CIVILIAN EMPLOYMENT IN
THE DEFENCE DEPARTMENT OF ABOUT 1500, EVEN THOUGH
LEGISLATION TO IMPLEMENT THE DEFENCE RE-ORGANISATION HAS BEEN
DELAYED BY THE PROROGUING OF PARL. IAMENT.
IN THE MUNITIONS FACTORIES, THE REDUCED SCALE OF
PRODUCTION NOW NECESSARY FOR DEFENCE PURPOSES WILL ALLOW THE
RELEASE TO TI'E CIVILIAN WORKFORCE OF A SUBSTANTIAL NUMBER OF
WORKERS INCLUDING MANY WITH SKILLS SCARCE IN THE PRESENT TIGHT
EMPLOYMENT SITUATION. THIS SURPLUS OF LABOUR OVER THAT ./ 13
13.
ESSENTIAL TO PROVIDE THE SERVICES' REQUIREMENTS FOR MUNITIONS
IS NOT A NEW SITUATION BUT IS ONE WHICH SHOULD HAVE BEEN FACED
LONG AGO BY THE PREVIOUS COALITION GOVERNMENT. A SIMILAR BUT
MUCH LESS SEVERE SITUATION APPLIES IN THE R D ESTABLISHMENTS
AND TlIERE MAY BE A SMALL RESIDUAL PROBLEM IN THE SHORT TERM
AT WILLIAMSTOWN NAVAL DOCKYARD.
ANY REDUCTIONS IN AUSTRALIAN GOVERNMENT EMPLOYMENT
WILL BE MADE AS FAR AS PRACTICAL BY NOT REPLACING THE NORMAL
WASTAGE OF PERSONNEL. RETRENCHMENTS WILL, HOWEVER, BECOME
NECESSARY IN CERTAIN AREAS FOR ONE THING TO KEEP THE RIGHT
SORT OF BALANCE IN EMPLOYMENT. WHERE DISMISSALS BECOME
NECESSARY THE GOVERNMENT WILL ENSURE THAT STEPS ARE TAKEN
TO HELP THE INDIVIDUAL CONCERNED TO MOVE INTO OTH-ER
EMPLOYMENT, INCLUDING SOME FINANCIAL ASSISTANCE AND
RETRAINING WHERE NECESSARY. I MIGHT ADD THAT THE GOVERNMENT
NOW HAS, FOR CONSIDERATION, A REPORT OF AN INTERDEPARTMENTAL
COMMITTEE, SETTING OUT GUIDELINES FOR ASSISTANCE FOR AUSTRALIAN
GOVERNMENT EMPLOYEES WHO BECOME REDUNDANT AN]) WOULD MAKE ITS
DECISION ON THE PROVISIONS OF THIS REPORT BEFORE DISMISSALS
TPKE PLACE. A REVIEW OF THE ARMY'S REQUIREMENTS FOR LIGHT
OBSERVATION HELICOPTERS HAS BEEN COMPLETED AND THE PRODUCTION
PROGRAM WILL BE REDUCED FROM 75 TO 56 MILITARY AIRCRAFT.
AS A CONSEQUENCE PROPOSED ASSOCIATED PRODUCTION OF 116
HELICOPTERS WILL NOT NOW BE UNDERTAKEN. THE OVERALL SAVING
IN THE PROJECT WILL BE ABOUT $ 12 MILLION OVER THE NEXT FIVE / 14
14.
YEARS. CONSEQUENTIAL EFFECTS ON EMPLOYMENT AT COMMONWEALTH
AIRCRAFT CORPORATION WILL BE EXAMINED IN THE CONTEXT OF AN
OVERALL RATIONALISATION OF THE AIRCRAFT INDUSTRY.
I EMP111ASISE THAT THE FOREGOING ARE ONLY EXAMPLES
AND DO NOT CONSTITUTE A COMPREHIENSIVE LIST OF DECISIONS.
THAT MUST AWAIT THE PREPARATION OF THE 1974/ 75 BUDGET.
BUT TI-E EXAMPLES I HAVE GIVEN ARE, I BELIEVE, SUFFICIENT TO
DEMONSTRATE THE STRINGENCY OF THE APPROACH THE AUSTRALIAN
GOVERNMENT WILL BE TAKING AT THAT TIME.
AS REGARDS EXENDITUJRE PROPOSALS INVOLVING NEW
OR ADDITIONAL SPECIFIC PURPOSE PAYMENTS BY THE AUSTRALIAN
GOVERNMENT TO THE STATES, WE WILL ALSO NEED TO APPLY STRICT
TESTS, BOTH AS TO HOW THE PROPOSALS MEASURE UP IN TERMS OF
NATIONAL INTERESTS AND AS TO TIMING, BEFORE WE CAN
CONTEMPLATE COMMITTING OURSELVES TO THEM.
I CAN, HOXEVrP., AT THIS POINT INDICATE OUR
PROPOSALS WITH RESPECT TO ROADS AND WELFARE HOUSING.
NO DOUBT YOU HAVE ALL SEEN THE BUREAU OF ROADS'
RECENT REPORT ON " ROADS IN AUSTRALIA". THIS RECOMMENDS
THlE PROVISION OF AUSTRALIAN GOVERMIENT ASSISTANCE FOR ROADS
OVER THE NEXT FIVE YEARS.
WE HAVE DECIDED HOWEVER TO RESTRICT THE PERIOD
OF THE NEXT ROAD ASSISTANCE LEGISLATION TO THREE ' YEARS.
OVER THE NEXT 18 MONTHS WE SHALL BE WORKING TO RATIONALISE
OUR SEPARATE ROAD AND URBAN TRANSPORT ASSISTANCE INTO A
CLOSELY CO-ORDINATED) AND INTEGRATED SET OF ARRANGEMENTS.
AN IMPORTANT STEP IN THIS REGARD IS THE ACTION WE HAVE
ALREADY TAKEN TO COMBINE THE AUSTRALIAN GOVERNMENT'S MAJOR
TRANSPORT RESPONSIBILITIES UNDER ONE MINISTER AND WITHIN ONE
DEPARTMENT. THIS WILL FACILITATE EFFICIENT ALLOCATION OF
RESOURCES, BOTH BETWEEN THE VARIOUS TRANSPORT MODES AND
BETWEEN TRANSPORT AND OTHER AREAS OF INVESTMENT, AND WE
CAN NOW PROCEED MORE CERTAINLY TOWARDS THAT OBJECTIVE. MY
GOVERNMENT HOPES TO LEGISLATE BY THE END OF 1975 FOR A NEW
APPROACH TO TRANSPORT ASSISTANCE FOR THE STATES TO COMMENCE
IN JULY 1977. A PRINCIPAL AIM IN OUR INTENTION TO
LEGISLATE FOR THE 1977 TO 1980 PERIOD 18 MONTHS BEFORE ITS
COMMENCEMENT IS TO ASSIST YOU WITH YOUR FORWARD PLANNING.
IN THE MEANTIME, THE NEW ROADS ASSISTANCE LEGISLATION
WILL BE INTRODUCED IN THE FIRST SESSION OF THE NEW PARLIAMENT
AND WILL APPROPRIATE A TOTAL OF $ 1,120 MILLION AUSTRALIAN
GOVERNMENT ASSISTANCE OVER THE NEXT THREE YEARS FOR ROADS
IN THE STATES. THIS IS LESS THAN THE AMOUNT OF $ 1,345 MILLION
THE BUREAU OF ROADS RECOMMENDED FOR THIS PERIOD; BUT THE
BUREAU'S REPORT MUST BE LOOKED AT IN A TOTAL ECONOMIC
CONTEXT AND IN THE LIGHT OF ALL OUR PRIORITIES RATHER THAN
IN TERMS OF ROADS OR TRANSPORT IN ISOLATION. THE $ 1,120
MILLION WILL BE MADE UP OF $ 348 MILLION FOR 1974-75,
$ 367 MILLION FOR 1975-76 AND $ 405 MILLION FOR 1976-77.
IN MY ELECTION POLICY SPEECH I ANNOUNCED THAT THE
AUSTRALIAN GOVERNMENT HAD DECIDED TO PRESS AHEAD WITH THE
CONSTRUCTION OF A NATIONAL ROADS SYSTEM IN THOSE AREAS WHICH / 16
FALL WITHIN ITS OWN CONSTITUTIONAL RESPONSIBILITIES AND
THAT, IN PARTICULAR, IT WOULD IN FUTURE TAKE RESPONSIBILITY
FOR THE WHOLE COST OF CONSTRUCTING AND MAINTAINING THE
PRINCIPAL ROAD BETWEEN STATE CAPITALS AND OF EXPORT ROADS
TO AIRPORTS AND SEAPORTS. OUT OF THE TOTAL OF S1,120
MILLION PREVIOUSLY MENTIONED, WE WILL ALLOCATE A SUM OF
1400 MILLION OVER THE NEXT THREE YEARS TO EMBARK ON THIS
MAJOR NEW INITIATIVE.
FULL DETAILS OF THE PROPOSED NEW PROGRAM OF
ASSISTANCE FOR ROADS WILL BE CONVEYED TO YOU SHORTLY.
IN DETERMINING THE OVERALL AMOUNT THAT WE-WOULD
BE ABLE TO MAKE AVAILABLE FOR ROADS WE HAVE, AS I INDICATED,
HAD TO TAKE INTO CONSIDERATION OTHER TRANSPORT PROGRAMS,
PARTICULARLY IN THE URBAN AREAS. WE SEE IMPROVED PUBLIC
TRANSPORT AS ESSENTIAL FOR IMPROVEMENT OF THE LOT OF OUR
CITY DWELLERS, AND WE PROPOSE TO PRESS ON WITH THE URBAN
PUBLIC TRANSPORT PROGRAMS WE HAVE INITIATED. THE
TREASURER STATED IN HIS BUDlGET SPEECH LAST YEAR THAT IT
COULD BE EXPECTED THAT OUR OUTLAYS IN THIS FIELD WILL
INCREASE RAPIDLY IN 1974-75 AND BEYOND AS THIS MAJOR NEW
CAPITAL WORKS PROGRAM GETS UNDER WAY. THAT PROSPECT STILL
HOLDS. WE ALSO SEE THlE RAILWAYS AS HAVING A VITAL ROLE IN
OUR ECONOMY, BUT THEY MUST BE MODERNISED AND MADE MORE
EFFICIENT. SO WE ALSO INTEND TO PRESS AHEAD WITH OUR
RAILWAY PROGRAMS. IN THIS REGARD, I RECALL THAT ONLY
RECENTLY I SIGNED AGREEMENTS WITH THE PREMIER OF SOUTH @ 17
16.
17.
AUSTRALIA FOR THE NEW STANDARD GAUGE RAILWAY LINE TO ALICE
SPRINGS AND ADELAIDE.
THE GOVERNMENT IS DETERMINED TO ENSURE THAT LESS
PRIVILEGED FAMILIES IN OUR SOCIETY ARE NOT DENIED THE CHLANCE
TO LIVE IN ADEQUATE HOMES, AN) THAT MANY MORE LOW-INCOME
FAMILIES ARE GIVEN THE OPPORTUNITY TO BUY HOMES OF THEIR
OWN. OUR PRESENT POLICIES ARE DIRECTED TO BRINGING ABOUT A
MORE BALANCED SITUATION IN THE HOUSING INDUSTRY AS A WHOLE.
THEY ARE DESIGNED BOTH TO EASE THE PRESSURE ON RESOURCES
AND THE CONSEQUENTIAL BIDDING UP OF COSTS AND PRICES IN
THE INDUSTRY AND TO MAKE ROOM FOR A MORE REASONABLE LEVEL
OF DWELLING CONSTRUCTION BY THE PUBLIC SECTOR. NOT ALL
THE STATES WERE ABLE, IN 1973-74, TO EFFECTIVELY USE THE
$ 218.5 MILLION ADVANCED TO THEM UNDER THE 1973 HOUSING
AGREEMENT. AS A RESULT, SOME MONEYS PROVIDED UNDER THE
AGREEMENT WERE NOT USED AT ALL AND WILL THEREFORE REMAIN
AVAILABLE F~ OR USE IN 1974-75.
SOME FUNDS WERE ALSO USED, IN 1973-74, AS IN
PREVIOUS YEARS, TO PURCHASE LAND FOR FUTURE USE BY STATE
HOUSING AUTHORITIES. IN THE YEAR AHEAD, HOWEVER, WE THINK
THAT ADVANTAGE SHOULD BE TAKEN OF THE EASIER CONDITIONS
LIKELY TO DEVELOP TO SWITCH THE BALANCE OF ACTIVITY FROM
LAND PURCHASE TOWARDS INCREASED BUILDING. AS PART OF THE
BATTLE AGAINST INFLATION MY GOVERNMENT HAS MADE AVAILABLE AND
IS OFFERING FUNDS TO YOU TO SET UP LAND COMMISSIONS TO
REDUCE LAND PRICES BY MAKING LAND AVAILABLE AT COST. WHILE
18.
WE HAVE RECOGNISED THAT MONEY FOR WELFARE HOUSING SHOULD BE
MADE AVAILABLE THROUGH THE HOUSING AGREEMENT AT AN INTEREST
RATE OF ONLY 4 PER CENT, IT WOULD NOT BE APPROPRIATE FOR
THIS MONEY TO BE USED FOR THE PURCHASE AND DEVELOPM4ENT
OF LARGE ESTATES FOR SALE TO PEOPLE WHO WOULD NOT
QUALIFY UNDER THE MEANS TEST FOR WELFARE HOUSING. WE
LOOK FORWARD IN THE FUTURE TO THE STATE HOUSING AUTHORITIES
OBTAINING MOST, IF NOT ALL, OF THEIR LAND REQUIREMENTS
THROUGH THE LAND COMMISSIONS.
IN THE CIRCUMSTANCES WE ARE PROPOSING TO MAKE
ADVANCES OF $ 235 MILLION UNDER THE AGREEMENT IN 1974-75
IN ADDITION TO THE AMOUNT CARRIED FORWARD FROM 1973-74.
THIS WILL, IN FACT, MEAN A SUBSTANTIAL INCREASE IN THE
FUNDS AVAILABLE TO THE STATES FOR EXPENDITURE ON WELFARE
HOUSING. HOWEVER, IN VIEW OF THE LIMITATIONS WHICH THE
HOUSING AGREEMENT PROVIDES IN RESPECT OF THE FUNDS FOR
THE HOME BUILDERS ACCOUNT, IT IS PROPOSED TO DISCUSS WITH
TPE STATES AN AMENDMENT TO THE AGREEMENT WHICH WOULD
PERMIT A HIGHER PROPORTION OF AVAILABLE FUNDS TO BE
ALLOCATED TO THE HOME BUILDERS ACCOUNT WHEN CIRCUMSTANCES
WARRANT. WE THUS LOOK FORWARD IN 1974-75 TO THE COMPLETION
OF CONSIDERABLY MORE DWELLINGS IN THE PUBLIC SECTOR THAN IN
1973-74. BUT I SHOULD ALSO SAY THAT, IN THE LIGHT OF
DEVELOPMENTS IN THE INDUSTRY AS A WHOLE AS THE YEAR UNFOLDS,
INCLUDING THE AVAILABILITY OF RESOURCES FOR HOUSING CONSTRUCTION
AND THE ABILITY OF THE STATES TO PUT FURTHER FUNDS TO PRODUCTIVE
USE IN WELFARE HOUSING, WE STAND READY TO CONSULT FURTHER
WITH THE STATES ON THE PROVISION OF ADDITIONAL ADVANCES. / 19
19.
THE STATE GOVERNMENTS MUST ALSO PLAY THEIR PARTS
IN BEATING INFLATION. MANY OF THE PREMIERS UNDERTOOK,
DURING THE ELECTION CAMPAIGN, TO CO-OPERATE WITH AN L-CP
GOVERNMENT, HAD THAT BEEN RETURNED, IN THE FIGHT AGAINST
INFLATION. THE FIGHT IS ON AND I HOPE THAT THE FULL
CO-OPERATION AND UNDERSTANDING OF THE STATE GOVERNN4ENTS
FOR EXAMPLE, IN THE CONTROL OF LAND PRICES WILL BE
FORTHCOMING. IN 1973-74 TOTAL PAYMENTS TO THE STATES GREW
RAPIDLY. TAKING ALL FORMS OF PAYMENTS TO THE STATES
TOGETHER WITH THE STATE GOVERNMENTS' LOAN COUNCIL PROGRAMS,
THE INCREASE IS ESTIMATED AT OVER 20 PER CENT. EVEN
ALLOWING FOR THE EFFECTS OF INCREASES IN COSTS, THIS
REPRESENTS A VERY SUBSTANTIAL INCREASE.
THE CRUCIAL QUESTION, OF COURSE, IS THIS:
TO WHAT EXTENT HAVE THESE LARGE INCREASES IN FUNDS BEEN
TRANSLATED INTO REAL IMPROVEMENTS IN THE STANDARDS OF
STATE-PROVIDED SERVICES AND FACILITIES? IT SEEMS THAT,
PARTICULARLY IN THE FIELDS OF HOUSING AND CONSTRUCTION,
RESOURCES HAVE BEEN OVERSTRETCHED AND INFLATION HAS EATEN
HEAVILY INTO THE MONEY SUMS AVAILABLE. BECAUSE OF
SHORTAGES OF'LABOUR AND MATERIALS IN THESE AREAS, THE STATES
AND THEIR AUTHORITIES HAVE IN SOME CASES BEEN UNABLE TO USE
ALL THE FUNDS AVAILABLE TO THEM.
THE PRESENT REVENUE ASSISTANCE ARRANGEMENTS
BETWEEN THE AUSTRALIAN AND STATE GOVERNMENTS WERE
ORIGINALLY SETTLED IN JUNE 19) 70 AND WERE INTENDED TO APPLY
OVER THE FIVE YEARS 1970-71 TO 1974-75. MY GOVERNMENT
ACCEPTS THE OBLIGATION TO REVIEW THE ARRANGEMENTS BEFORE
THE END OF 1974-75 WITH A VIEW TO DETERMINING WHAT CHANGES
IN THEM, IF ANY, SHOULD APPLY FROM 1975-76.
IN THE LIGHT OF WHAT I HAVE SAID ABOUT ACTION
PROPOSED IN THE AUSTRALIAN GOVERNMENT'S EXPENDITURE PROGRAMS,
WE HAVE GIVEN CLOSE ATTENTION TO WHAT WE CONSIDER IS BOTH
APPROPRIATE AN]) FEASIBLE BY WAY OF ADDITIONAL REVENUE
ASSISTANCE, AND SUPPORT FOR BORROWING PROGRAMS, FOR STATE
GOVERNMENTS. ON THE REVENUE SIDE, I SHOULD FIRST EXPRESS
OUR APPRECIATION OF THE MATERIAL YOU HAVE ALL PROVIDED ON
YOUR FINANCIAL POSITIONS THIS YEAR, AND YOUR PROSPECTIVE
BUDGETARY POSITIONS IN 1974-75.
ALREADY, BOTH AS A RESULT OF THE OPERATION OF
THE FINANCIAL ASSISTANCE GRANTS FORMULA AND OF THE SPECIAL
FINANCIAL ASSISTANCE WHICH WE AGREED TO PROVIDE TO THE
STATES THIS YEAR, TOTAL FINANCIAL ASSISTANCE GRANTS IN
1973-74 ARE ESTIMATED TO SHOW AN INCREASE ON 1972-73 OF
$ 208 ' MILLION. WE HAVE CONCLUDED THAT THERE IS NO CASE
FOR ANY ADDITIONAL REVENUE ASSISTANCE THIS YEAR. WHILE
MOST STATES APPEAR LIKELY TO INCUR BUDGET DEFICITS THIS
YEAR, THE EXTENT OF THESE APPEARS TO US TO BE MANAGEABLE
GIVEN THE OVERALL ACCUMULATED POSITIONS ON REVENUE AND
./ 21
21.
LOAN ACCOUNTS COMBINED AS AT 30 JUNE NEXT.
FOR 1974-75, THE OUTLOOK, AS PRESENTLY REVEALED
BY THE INFORMATION PROVIDED, IS FOR SUBSTANTIAL DEFICITS IN
THE ABSENCE OF ANY NEW TAXES OR CHARGES, AND BEFORE ALLOWING
FOR WAGE INCREASES THAT CANNOT BE FORESEEN BUT WHICH WILL
OCCUR THROUGH THE YEAR. IT IS HIGHLY RELEVANT THAT A
MAJOR ELEMENT IN THE PRESENT AND PROSPECTIVE BUDGETARY
POSITIONS OF THE STATES IS TO BE FOUND IN THE LOSSES
BEING MADE BY THEIR BUSINESS UNDERTAKINGS PARTICULARLY
THEIR RAILWAYS. HOWEVER THAT MAY BE, WE ARE LOOKING TO
THE STATES TO CLOSE THOSE GAPS FROM THEIR OWN RESOURCES.
THOSE RESOURCES, OF COURSE, INCLUDE VERY
SUBSTANTIAL INCREASES IN THE GENERAL REVENUE GRANTS-PROVIDED
UNDER THE FORMULA. EVEN SO, WE REALISE THAT THE CLOSING
OF THE STATES' PROSPECTIVE REVENUE GAPS WILL NOT BE EASY.
NOR HAVE MANY OF THE DECISIONS WE HAVE HAD TO TAKE DURING
THE PAST EIGHTEEN MONTHS BEEN EASY. DECISIONS TO
TERMINATE THE SUPERPHOSPHATE BOUNTY, TO PHASE OUT THE
SUBSIDY ON THE PRODUCTION OF DAIRY PRODUCTS, TO
TERMINATE THE INVESTMENT ALLOWANCES, TO REDUCE TARIFFS, TO
REVALUE THE CURRENCY NONE OF THESE DECISIONS WAS EASY.
WE TOOK THEM BECAUSE THE PREVIOUSLY PREVAILING SITUATION
IN EACH CASE REPRESENTED A DISTORTION OF THE ECONOMY AWAY
FROM THE PUBLIC INTEREST GENERALLY AND TOWARDS A SECTIONAL
INTEREST. WE ACTED IN THE PUBLIC INTEREST; AND WE LOOK
22.
TO THE STATE GOVERNMENTS TO DO LIKEWISE WITHIN THEIR OWN
DOMAINS. FOR EXAMPLE, A MOMENT AGO, I REFERRED TO THE
LOSSES OF STATE RAILWAYS. LET ME ADD A FEW WORDS.
UNDER OUR URBAN PUBLIC TRANSPORT PROGRAM-AND
IN OTHER WAYS, WE WILL BE ENDEAVOURING TO HELP IMPROVE
AUSTRALIA' S RAILWAYS. WE HOPE YOU WILL COMPLEMENT OUR
EFFORTS BY LOOKING CAREFULLY AT THE OPERATING PROCEDURES
AND EXPENSES OF YOUR RAILWAYS. WE WOULD BE PREPARED TO
PROVIDE FUNDS FOR SUCH INVESTIGATIONS THROUGH OUR
PROPOSED TRANSPORT RESEARCH AND DEVELOPMENT PROGRAMS.
AT THE PRESENT TIME THE STATE RAILWAY SYSTEMS
ARE INEFFICIENT, OUTDATED AND FACING ENORMOUS DEFICITS.
THIS IS WHY I OFFERED TO ACCEPT RESPONSIBILITY FOR THE
RAILWAYS OF ANY STATE THAT WAS PREPARED TO TRANSFER
THEM. THAT OFFER STILL STANDS AND WE WOULD HOPE THAT IN
THE INTERESTS OF EFFICIENT TRANSPORT THROUGHOUT AUSTRALIA
THE GOVERNMENTS OF VICTORIA AND QUEENSLAND WILL
RECONSIDER THEIR DECISIONS NOT TO DISCUSS THIS MATTER
WITH US. I HAVE SEEN RECENT NEWSPAPER REPORTS OF STATEMENTS
BY MR MORRIS, N. S. W. MINISTER FOR TRANSPORT, THAT HIS
RAILWAY SYSTEM WILL HAVE A DEFICIT THIS YEAR OF
$ 126 MILLION. TO OVERCOME THIS PROBLEM HE INDICATED IT
WOULD BE NECESSARY TO ATTRACT MORE BUSINESS AND SEVERELY
RATIONALISE RAIL OPERATIONS WHICH ARE NOT SOCIALLY OR / 23
23.
ECONOMICALLY VIA. BLE AT T~ lE SA. ME TIME MR MORRIS
PLEDGED THAT THIS WOULD NOT INVOLVE THE SACKING OR
RETRENCHMENT OF STAFF. I B3ELIEVE THIS IS A STEP IN THE
RIGHT DIRECTION. RAILWAY DEFICITS OF THIS MAGNITUDE ARE
UNACCEPTABLE AT ANY TIME BUT MORE PARTICULARLY SO IN THE
PRESENT CLIMATE.
WHAT I HAVE SAID EARLIER BOILS DOWN TO SAYING THAT,
WHILE WE DO NOT INTEND TO PROVIDE ANY ASSISTANCE OVER AND
ABOVE THAT ALREADY COMMITTED, WE ARE STANDING BY OUR
PRESENT COMMITMENTS. ONE OF THESE PRESENT COMMITMENTS BY WHICH WE
STAND IS TO HELP ALLEVIATE THE EFFECTS OF NATURAL
DISASTERS. THESE CAN THROW UNEXPECTED FINANCIAL BURDENS
ON THE STATES AND THEIR AUTHORITIES. I WROTE TO THE
PREMIERS EARLIER THIS YEAR SETTING OUT OUR POLICY IN THIS
AREA. I REAFFIRM THAT POLICY. IT PROVIDES VERY REAL
PROTECTION FOR THE STATES AGAINST WHAT COULD OTHERWISE
BE INTOLERABLE FINANCIAL BURDENS FOR THEM. IN ILLUSTRATION
OF THIS, I POINT OUT THAT WE HAVE LEGISLATED FOR PAYMENT
OF UP TO $ 71.5 MILLI-ON TO QUEENSLAND AND NEW SOUTH WALES
FOR RELIEF AND RESTORATION MEASURES FOLLOWING THE FLOODS
IN THOSE STATES EARLIER THIS YEAR, AND HAVE ALREADY
PROVIDED SOME $ 20 MILLION OF THIS. THIS ASSISTANCE IS,
OF COURSE, IN ADDITION TO THE QUITE LARGE COSTS OF MAKING
AVAILABLE MEMBERS OF THE ARMED SERVICES AND THE CIVIL
DEFENCE ORGANISATION AND THEIR EQUIPMENT FOR EMERGENCY / 24
24.
RESCUE AND RELIEF OPERATIONS.
I MENTIONED EARLIER THE ADJUSTMENTS WHICH WE
MADE TO GENERAL PURPOSE FUNDS PROVIDED TO THE STATES IN
1973-74 TO OFFSET THE COSTS TO THE AUSTRALIAN GOVERNMENT'S
BUDGET AND THE GAINS TO THE STATES' BUDGETS, RESULTING
FROM OUR NEW OR EXPANDED COMMITMENTS IN THE FIELDS OF
WELFARE HOUSING AND TERTIARY EDUCATION. THESE ADJUSTMENTS
WERE MADE IN PURSUANCE OF A GENERAL PRINCIPLE WHICH
MIGHT, IN SHORTHAND TERMS, BE REFERRED TO AS THE
" OFFSETS PRINCIPLE". AND WHICH I OUTLINED IN MY OPENING
SPEECH AT THE PREMIERS' CONFERENCE LAST YEAR. THE
AUSTRALIAN GOVERNMENT IS FIRMLY COMMITTED TO THIS PRINCIPLE
AND WILL PURSUE ITS APPLICATION WHEREVER APPROPRIATE. I
HAVE INFORMED PREMIERS OF OUR INTENTION TO DO SO IN
RESPECT OF INITIATIVES WE ARE TAKING IN THE FIELDS OF
ABORIGINAL AFFAIRS AND ASSISTANCE FOR DESERTED WIVES, AND
I EXPECT THAT FURTHER CASES COULD ARISE AS WE DEVELOP OUR
POLICIES IN OTHER AREAS.
IN CONSIDERING THE SIZE OF THE LOAN COUNCIL
BORROWING PROGRAMS* WE COULD SUPPORT, WE HAVE BEEN VERY
CONSCIOUS THAT MANY OF THE PROJECTS BOTH THOSE ALREADY
UNDER WAY AND NEW PROJECTS PROPOSED WHICH THE BORROWING
PROGRAMS SUBMITTED BY THE STATES AND THEIR AUTHORITIES
WOULD COVER WOULD BE VERY DESIRABLE. INDEED, PROGRESS
WITH MANY OF THEM IS A NECESSARY INGREDIENT FOR
ACHIEVEMENT OF OUR OBJECTIVES IN SUCH VITALLY IMPORTANT
AREAS AS EDUCATION, HEALTH, URBAN PUBLIC TRANSPORTATION
AND URBAN AND REGIONAL DEVELOPMENT GENERALLY. WE WILL
BE PROVIDING SUBSTANTIALLY INCREASED FUNDS IN THE COMING
FINANCIAL YEAR, BY WAY OF SPECIFIC PURPOSE PAYMENTS,
UNDER THE NEW PROGRAMS WE HAVE INITIATED IN THESE AREAS,
AND WE WILL BE AIMING TO PRESS AHEAD WITH THESE IN
CO-OPERATION WITH THE STATES.
WE HAVE ALL RECOGNISED THAT CERTAIN ITEMS
NAVE AN INDISPUTABLE PRIORITY AND URGENCY. NONE OF USCAN
DOUBT THAT IT IS ONE OF OUR MOST PRESSING OBLIGATIONS
TO INCREASE THE SUPPLY OF SERVICE) LAND FOR PROSPECTIVE
HOME BUILDERS. THE PRICE OF LAND FOR RESIDENTIAL
BUILDING MUST BE REDUCED. THERE . IS NO DISPUTE THAT A
SUSTAINED COLLABORATIVE EFFORT IS REQUIRED TO ELIMINATE
THE SEWERAGE BACKLOG IN OUR MtkJOR CITIES AND TOWNS. IT
IS SURELY NOT A MATTER.-OF DE--ATE THIAT OUR INADEQUATE
PUBLIC TRANSPORT'SYSTEMS NEED IMM1EDIATE IMPROVEMENT.
ON ALL OF THESE MATTERS THE OBJECTIVES OF OUR
RESPECTIVE GOVERNMENTS ARE EVIDENTLY IN HARMONY. OUR
MUTUAL ASSESSMENT OF PRIORITIES SHOULD BE REFLECTED IN
THlE WIAY W4E SPEND THE FUNDS AVAILABLE. WHERE WE HAVE
PROVIDED ADDITIONAL FUNDS TO OVERCOME A BACKLOG SITUATION,
SUCH AS EXISTS WITH RESPECT TO SEWERAGE AND URBAN PUBLIC
TRANSPORT, THEN I AM SURE THAT YOU WILL WANT TO MAINTAIN
YOUR OWN EFFORT IN THESE FIELDS.
AGAINST TIHAT BACKGROUND, WE ARE PREPARED TO
SUPPORT SOME INCREASE IN BOTHY GOVERNMENT AND " LARGER AUTNORITY" ./ 26
26.
BORROWINGS. IN BRIEF. OUR PROPOSAL FOR THE-BORROWING
PROGRAMS FOR STATE WORKS AND THE " LARGER" SEMI.-GOVERNMENTAL
BORROWING PROGRAMS IS THAT THE " BASIC" PROGRAMS BE INCREASED
IN 1974-75 BY 10 PER CENT. IN THE CASE OF THE BORROWING
PROGRAMS FOR STATE WORKS, THIS WOULD BE BEFORE TAKING
ACCOUNT OF THE OFFSETS FOR TERTIARY EDUCATION. IN
ADDITION, WE ARE PREPARED TO SUPPORT SPECIAL TEMPORARY
ALLOCATIONS FOR QUEENSLAND, IN 130TH THE GOVERNMENTAL
AND SEMI-GO'TEP. NENT AREAS, FOR FLOOD RESTORATION WORK,
AND ALSO CERTAIN ADDITIONS TO THE " LARGER" AUTHORITIES
PROGRAMS FOR NEW SOUTH WALES AND WESTERN AUSTRALIA A
PERMANENT ADDITION FOR NEW SOUTH WALES AND A SPECIAL
TEMPORARY ADDITION FOR WESTERN AUSTRALIA.
IN FIGURE TERMS, THIS MEANS THAT WE WILL
SUPPORT, SUBJECT TO THE USUAL CONDITIONS, A
STATE GOVERNMENT PROGRAM OF ' 935 MILLION. THIS CONSISTS
OF A " BASIC" PROGRAM OF i, 925 MILLION, WHICH IS AN
INCREASE OF 10 PER CENT BEFORE TAKING ACCOUNT OF THE
OFFSETS FOR TERTIARY EDUCATION, PLUS A SPECIAL TEMPORARY
ALLOCATION FOR QUEENSLAND OF APPROXIMATELY $ 10 MILLION
FOR FLOOD RESTORATION WORK.
THE " LARGER" AUTHORITIES PROGRAM OF $ 636 MILLION
WHICH WE PROPOSE CONSISTS OF A " BASIC" PROGRAM OF
$ 610.5 MILLION AN INCREASE OF 10 PER CENT PLUS A
PERMANENT ADDITION OF $ 10 MILLION FOR NEW SOUTH WALES AND
SPECIAL TEMPORARY ADDITIONS OF $ 9.6 MILLION FOR QUEENSLAND / 27
27.
AND $ 6 MILLION FOR WESTERN AUSTRALIA
IN ADDITION sTATES HAVE SUBMITTED
AN ESTIMATED " SMALLER" AUTHORITIES BORROWING REQUIREMENT
OF $ 162 MILLION, COMPARED WITH ESTIMATED ACTUAL RAISINGS
THIS YEAR OF ' 0143 MILLION; IN LINE WITH PAST PRACTICE,
NO OVERALL LIMIT lS PROPOSED FOR THESE BORROWINGS.
DETAILS WILL BE CONVEYED IN THE LOAN COUNCIL
MEETINGS. WHAT I HAVE SAID ABOUT ALL THESE PROGRAMS,
WHETHER OURS OR THE STATES, HAS BEEN AGAINST THE SETTING
THAT I MENTIONED EARLY IN MY STATEMENT THAT GOVERNMENT
SPENDING MUST PLAY ITS PART IN THE POLICY OF RESTRAINT.
I HAVE NO DOUBT THAT THIS WILL BE ACKNOWLEDGED BY THE
PREMIERS AS IT IS BY US.
HAVING SAID THAT, I WANT TO TURN FINALLY TO
WHAT I SAID IN CONCLUDING MY OPENING ADDRESS TO THE
PREMIERS' CONFERENCE LAST YEAR.
I EXPRESSED THE HOPE THEN " THAT THIS WILL BE
-BOTH THE LAST OF THE OLD-STYLE PREMIERS' CONFERENCE AND
THE FIRST OF A NEW TYPE".
I SAID THEN, AND STILL BELIEVE, THAT OUR EXISTING
STRUCTURES ARE INADEQUATE FOR " TRULY CONSTRUCTIVE, TRULY
CO-OPERATIVE FEDERALISM".
DURING THE PAST 12 MONTHS WE HAVE-WRITTEN TO EACH
OTHER IN GREATER DEPTH AND BREADTH THAN, I BELIEVE IT WOULD
./ 28
28.
BE TRUE TO SAY, PRIME MINISTERS AND PREMIERS HAVE DONE AT
ANY TIME SINCE FEDERATION. OUR OFFICERS HAVE MET ON
MANY OCCASIONS AND SO ALSO HAVE OUR MITNISTERIAL COLLEAGUES.
THERE ARE MANY AREAS WHERE WE HAVE FOUND
DlFFERENCES, BUT THERE ARE MANY MORE IN WHICH WE HAVE
QUICKLY BEEN ABLE TO REACH AGREEMENT. AND I PAY TRIBUTE
TO ALL OF YOU FOR WHAT YOU HAVE DONE IN HELPING US IN
THE NEW OUTREACHES OF GOVERNMENT TO SERVE THE PEOPLE
THROUGH COMMITTEES AND COMMISSIONS OF INQUIRY ANI THE
LIKE. I LOOK TO CONTINUING CLOSE CONTACT AND
CO-OPERATION BETWEEN US. SUCH CONTACT AND CO-OPERATION
EXTENDSACROSS THE FIELDS OF HEALTH, EDUCATION, HOUSING,
TRANSPORT, LAND, THE ENVIRONMENT AND URBAN IMPROVEMENT
AS WELL AS THE IMPORTANT AREAS OF MINING AND OF ABORIGINAL
DEVELOPMENT. IF WE ARE TO MAKE PROGRESS TOWARDS A COW-ION
UNDERSTANDING AND ATTITUDES TOWARDS NATIONAL PRIORITIES,
IT WILL BE NECESSARY FOR US TO MAINTAIN REGULAR CONTACT.
I LOOK TO CONSULTATION EITHER AMONG OURSELVES OR, WITH
OUR AGREEMENT, AMONG THOSE OF OUR COLLEAGUES WHO ARE
CARRYING THE MAIN RESPONSIBILITY, OR AT OFFICER LEVEL.
ONE PARTICULAR AREA I HAVE IN MIND IS THE
WELFARE AND ENVIRONMENT OF THOSE WHO LIVE IN OUR CITIES,
AND PARTICULARLY OUR GREAT CAPITALS. WE WILL BE PROPOSING
THAT MINISTERS AND OFFICIALS DEVOTE THEIR ENERGIES DURING
THE REST OF THIS YEAR TO A RENEWED CO-OPERATIVE ATTEMPT
/ 29
29.
AT CLARIFYING ISSUES ON WHICH CO-OPERATIVE ACTION IS
ESSENTIAL AND ADVISING APPROPRIATE PROGRAMS.
LET US DEMONSTRATE TO THE PEOPLE WHOM WE ALL
SERVE THAT WE CAN TRANSCEND THE DIFFERENCES WHICH
SEPARATE US AND SEEK TOGETHER A COMMON BASIS FOR ACTION
ON ISSUES THAT AFFECT EVERY CITIZEN.