FOR PRESS 24 OCTOBER 1977
OPENING OF ENTERPRISE WEEK, SYDNEY
At the outset, I want to congratulate Enterprise Australia on the
way it has set about its task of promoting the cause of free
enterprise in this country. Too often a vital cause is neglected
and gradually eroded because people take it fo~ r granted.
The overwhelming advantages to all Australians of our free
enterprise system are too vital to be left unsaid.
The entire community benefits from an efficient and prosperous
private sector. It provides the means of achieving a real increase
in our wealth, in our standards of living, in job opportunities,
and in-our capacity-to-help those in need. The profits made
by private industry provide new investment and create new jobs.
They directly benefit vast numbers of people, not only the
hundreds of thousands of Australian shareholders, but the millions
of insurance and superannuation policy holders whose funds are
invested in public company securities. And of course, company
taxes raised from business profits provide much of the resources
for government to satisfy the community's needs in social welfare,
education, defence, communications, and other essential areas.
But Australians' commitment to free enterprise is not founded
simply o ' n the fact that it is the most efficient economic system
available, or the most efficient provider of the resources
required to produce a better life for all Australians, though
it is both of these. There is a consensus of support for Tree
enterprise because it is the most democratic system. It confers
on the individual maximum freedom of choice; it allows the
individual maximum opportunity to innovate, to strike out on
his own, to try out his own schemes and dreams; it makes
the individual consumer the ultimate arbiter of taste, the
ultimate allocator of resources.
A socialist would, of course, take a contrary view. To him the
allocation of resources must be determined not by ordinary Australian
through the free market, but by the bureaucracy in accordance
with some allegedly all-knowing national plan. A blueprint
for just such a system is not hard to find it is contained
in the new economic planning policy adopted by the Labor Party
at their Perth Conference last June. ./ 2
Let me read to you a few extracts from that policy.
" Market forces alone will not create the environment necessary
to achieve our objectives."
" Labor will initiate national planning to relate the performance
of both the public and private sectors to the goals of society,.
and to give direction to the allocation of resources between
various sectors in the economy."
" The priorities andtargets of the various plans will be determined
by Government..."
" A Department ( will be) created with the responsibility to
coordinate preparation and monitoring of plans.".
" Labor will set the overall objectives Government will intervene
where necessary to reach national objectives."
" Public enterprise is particularly to be established or extended
in the fields of banking, consumer affairs,-insurance, finance,
marketing, housing, stevedoring, transport and in areas of
social monopoly."
I believe these words speak for themselves. What Labor offers
is a vast bureaucracy armed with vast powers to impose controls
on the daily lives of us all. The contrast with free enterprise
could not be clearer or more stark.
Labor's policy was sponsored by the Shadow Treasurer.
It is a policy binding on all Labor Members of Parliament; it is
a policy which I believe will be rejected out of hand by all
Australians who value their freedom, who want an economy that
produces more of what people want rather than what Governments
think they want.
The Commonwealth Government does have a vital role to play in
providing individuals and business with strong incentives to work,
to invest and to innovate. Government too has a most important
guiding, managing-role, and it must actively protect the
disadvantaged and those such as small business or the consumerwho
in some circumstances are in an unequal bargaining position.
What is vital is that the Government does not intervene to the
point where individuals and business are placed in shackles.
Yet this was precisely the position when we came to office.
The burden was so great that individuals were losing the
incentive to work, and to innovate. The economy had been so
mismanaged that inflation and interest rates were up, profits
and investment were down. In 1974/ 75 there was actually a fall
in real national product. .3
The extent of these failures of Government meant that there
could be no speedy and painless solution. We did not promise
an overnight recovery. What we did say we could dowas to
play our proper part as Government in creating the conditions
under which the private sector could revive and recovery its
momentum. In less than two years so as to restore the basic
incentive to work and to give people greater freedom to make their
own spending decision we have made substantial cuts in
personal income tax and reformed the rate scale.
This year alone tax indexation and the reforms in the last Budget
save individuals $ 1371 million in tax, next year the total will
be $ 1857 million. We have encouraged businesses to invest
by introducing the investment allowance, and allowed companies
to introduce in part a form of inflation accounting for stocks
when calculating tax.
For the mining and petroleum industries we have restored the
incentive for development and exploration. Company profits
have recovered up 23 percent in 1976/ 77. In response to
the improving outlook, business investment plans have grown
greatly. Over the next 3 years $ 5000 million ( in 1976/ 77 prices)
is expected to be spent on large manufacturing and mining projects
in addition to normal basic investment within those industries.
Production -has-responded in 1976/ 77, gross non-farm product
went up 3.7 percent. In its own area of spending, the
Government has imposed the most rigorous restraint. The marked
reduction in the deficit we have achieved was necessary to
provide the scope for the tax cuts I have mentioned.
It was also an essential step in maintaining firm control over
the rate of growth of money.
There has been no more important part of the Government's.
strategy than the defeat of inflation. We are well on the way to
achieving that objective too. In 1975 inflation was 16-17 percent.
So far this year, inflation has been running at an annual rate
of just over 9 percent and it is falling. The 2 percent
increase in the CPI announced last week was the lowest
for 5 years, apart from the quarter Medibank was introduced..
For the first time in 4 years the rate of increase in the CPI
has been held below 2.5 percent in each of three successive
quarters. There could hardly be clearer confirmation of the
success of the Government's general economic strategy than this
result in turning around the inflationary spiral.
It shows the benefit to be obtained from firm control of
Government spending, from sensible monetary policies, and from
wage restraint.
This steady decline in inflationary expectations will strengthen
our economy in many ways. Our export and manufacturing industries
will be in a stronger competitive position. The gains from
devaluation of last year which are now evident in our trading
figures have not been dissipated in higher inflation as our
critics said would happen). We can expect a consolidation in our L_
4.
external trade balance. Besiness and consumers will continue
to gain in confidence, and the downward movement in interest
rates will, gather momentum, assisting inVettment generally, and
small business and-the building industry in particular.
We cannot. af ford to relax. We are determined to keep inflation.
moving further downwards. The full benefits of this strategy
will become increasingly apparent as time goes on. The
continuing health-of the private sector ultimately depends,
not on government,, but on the men and women who work in it.
IEt is imperative that there be the maximum possible co-operation
and harmony between everyone involved in any one enterprise.
it is not. enoogh that the management strive for higher performance,~
productivity and profits this must be the goal of every employee.
Such a concerted and united effort can only be achieved when there
is complete communication through all levels of a company'sa
structure when management takes the trouble to explain to
everyone on the payroll where their business is heading and
why. Such commwunication has not always been present in Australian
business, and I particularly welcome Enterprise Australia's
campaigni to get companies to report regularly n~ ot only to their
shareholders but to their staff too.
Mr. Chairman,-never was it so necessary to restate and reaffirm
our commitment to our free enterprise system. There are serious
limitations in the ability of any government to produce a betterlife
for its citizens. Free enterpr * ise places the ultimate
choices, the ultimoate responsibilities, where they rightly
belong with each individual Australian.
There is another matter which places ultimate responsibility on
every individual Australian, and it is a matter which seems to have
bemused our political opponenrts and the press over the past
several-weeks. It is the subject of an election-I have always
made it plain that this country needs stability in government.
over our period in office we have pxovided that. As the
constitution.' now stands, if both the Senate and the House
of Representatives elections are to be held at the end of the
different terms of both Houses, we will end up with a half Senate
election in May and a general election just seven months later in
the following December. That is, two elections virtually in
twelve months from now. Over 60% of Australians voted at the
recent referendum to alter this situation. But despite the
majority of Australians in favour of the proposition it did not
get the-necessary support in the majority of States.
The Government has been concerned to reduce the number of elections,
and therefore we have been looking at the options open to us to
make sure that the next Senate and House of Representatives
elections are held at the same time. The first possibility of
doing this would be in December. The second would be around
April or May; over the last couple of days as part of the
continuing process of consultation with my Ministerial colleagues
there have been discussions about the best course for Australia.
our principal concern is to maintain the thrust of our economic
policies which are so clearly working to the advantage of all
Australians. / We believe
A
We believe Australia should not be bedevilled by two Federal
elections in the next twelve months, which does point us,
therefore, towards December or April/ may for a simultaneous
election. Some commentators and political opponents have ' attributed to
me, firm and committed views in relation to this. In this
matter I have not expressed a finrm view to anyone or at any time.
But'the matter must be determ~ ined shortly as it will be.
Our judgemnent will be based on what we believe to be in the
best interests of Australia to sustain the present economic
recovery, and to maintain the impetus of our very necessary
economic programmes.
Ladies and gentlemen, I have great pleasure in declaring
Enterprise Week open.