-6 1-L)
PRIME MINISTER FEBRUARY 1980
ADDRESS TO U. K. AND AUSTRALIAN BUSINESSMIEN, LONDON
I am sorry time is quite as tight as it is, because of schedules
that have to be kept later in the day. I welcome very much the
opportunity to be with you and if I can speak for just a moment
or two, I will be happy to try and answer any of your questions about
Australia or how we see the next few years developing.
But first, I think I would like to say that we all, as I believe,
understand that the world has changed over the last 4 or 5 weeks or
perhaps, more accurately, our perceptions of it have changed and
the Russian movement into Afghanistan and the opportunities that that
will open up creates a new and more dangerous and more difficult
environment than we hoped we had. I do not know that it really means
there is any changed policy on the part of the Soviet Union. I think
it is just another particular application of long, continuing
policies, but it does mean that we have to look again at our own
perceptions of detente and the way our relationship with the Soviet
Union should develop and I think it also means that we have to look
to our own defences and our own arrangements.
There have been strong reactions from the British Government,
which Australia certainly supports, and-a strong and courageous lead
from the United States, which also, as I believe, needs the strongest
possible support from independently-minded nations around the world.
And what we do need is a collective will and a collective
determination, and it might be a somewhat gloomy view, but the time
we are living in at the moment if one wants to make comparisons
might be equivalent to 1935 or 1936, and then it would have been
possible to do certain things which would have prevented later
events. It was not possible to take those actions in 1938 or 1939,
because neither BritCain nor France then had the power that was
necessary. And so, a collective will, led by the United States but
supported by major countries in Europe, as we would believe from
Australia, is of enormous importance at the present time.
We have got no presumptuous view of what a nation of 14 million
people can do in this kind of situation, but we are nevertheless
determined to do what Australia can and 7e will be increasing our own
defences. We will be undertaking greater military activities in the
Indian ocean in cooperation with the United States. There will be
closer liaison with South-East Asia, and additional actions in the
Pacific, doing what we can to look after our own particular region.
But what this new environment emphasizes, I think, more than ever
before is that we all need strong and vigorous economies, and if we
were worried about the fight against inflation and the dangers posed
by high inflation, then we need to worry doubly now, because you
cannot have the kind of economy and the kind of strength that is
necessary to meet the political and strategic challenge which will / 2
lie in front of us, not for 6 months, for 12 months, for 5 years, but
maybe for 10 years or 20 years then we need an economy that is
vigorous and strong, with inflation low, and with a determination
within a nation to look after its own affairs and to protect its own.
And in that environment, the fight against inflation remains, so far
as Australia is concerned, a number one economic priority, and if we
have to spend additional sums on defence, it will not be at the
expense of increased deficits, it will not be at the expense of
letting our money supply run out, it will not be at the expense of
allowing inflation to run away from us in a way which would not
otherwise be the case. Unless we do that, I think we run the risks of
losing some of the gains in our economy over the last 4 or 5 years
where, as many of you will I hope know and understand from your own
context of Australia, there has been significant success in the fight
against inflation not as much as we had hoped, not as much as we
would have wanted, but nevertheless, by world standards, we are
increasingly competitive. Manufacturing exports are rising and
getting into markets in many different places, and we intend that
that will continue.
We want to promote profitability,, and businesses of all kinds in
Australia, I think, are more profitable than they have been for a
very long while. We want to encourage investment, and last year there
was a record for overseas investment a record and a higher figure
in real terms than there had been for 10 or more years.
As a result of what we have been doing, there is an increased
competitiveness, the best, I think, again for 10 years. The balance
of payments is much stronger. For a number of reasons, the strength
of mineral and resource industries and the great rural industries of
Australia, are doing much better than they have for a long while.
They have come together, the major industries, profitably, for the
first time, maybe, for 15 years. It is, not often that all our major
industries are having a good year at one time, but when that does
happen in Australia it adds enormously to the strength of our own
balance of payments.
But it is not only those things. our manufactured exports are
going to play a growing role in absolute if not in relative terms,
and I think that in itself is an indication of the competitiveness
of the Australian economy.
In the 1980' s I think there are going to be great and growing
opportunities and while what is happening in oil-producing countries
is of great concern to all of us, in a perverse kind of way there are
some advantages in that for Australia, because while we are not
self-sufficient in oil, we have a surplus of other forms of energy
and it enables the bringing together in processing of Australia's
natural resources minerals with electricity based on coal which
gives us, as we believe, a significant competitive advantage.
This is already happening in the aluminium, alumina, industry with
4 billion dollars' worth of investment going ahead at the present
time. That would not have happened, obviously, without the bauxite in
Australia. It would not have happened without abundant supplies of
electricity based on coal in either Queensland, New South Wales or
Victoria. And we would expect that more of this would happen as oil
prices rise and as the natural force of economics and freight costs
will make more processing in Australia, rather than merely carting
the raw materials away, increasingly effective. Government policy is
designed to promote and encourage this kind of development. We have
over the last 18 months, started new policies in cooperation with / 3
States to make sure that the basic governmental infrastructure
is available, so that it will not impede or hold up major resource
developments, and whether it is a need to shift vast quantities of
coal, a need for the development of ports or roads or internal
transport, we want to make quite certain that there is all
encouragement for the great projects which await the capital and
entrepreneurial skills in the development of Australian resources.
Where, about 3 years ago, we could see ahead of us something like 6
billion dollars' worth of investment in mining and manufacturing,
over the last 2 years something over 6 billion dollars has in fact
taken place, but now the prospective list of firmly committed
projects or projects in the final stages of decision-making, stands
between 16 and 17 billion dollars, which I think indicates the
increased tempo of resource and industrial development in Australia.
Some of the consequences of what has happened: I think there is a
wider range of industries which are internationally competitive. It
is not just the raw material, quarrying industries, but extending
also into advanced manufacturing and aluminium. The economy is more
diversified, I think, than it has been before, with rural products,
metals, minerals, manufactures and service and financing industries
all playing a role. And really, as a result of that, as I believe, we
enter this decade with a more strongly-based economy than Australia
might have had in the past. And perhaps because of this, there is
some greater insulation from the swings and changes that can happen
in other countries. I think if we had asked our treasury officials
in, say, July or August of this year, and if we had known in asking
the question what was going to happen to Britain and British interest
rates, to the United States and United States Interest rates, and
say, " what is going to be the imp~ act on Australia?" I
believe they would have looked slightly horrified at interest rates
of the kind that are seen here and in the United States and indicated
a much greater impact on the Austrdlian. economy than in fact has been
the case. The impact on the Australian economy has been minimal.
Certainly, there have been pressures, but we have been able to meet
those pressures by and large with minimum adjustments within
Australia and I think that more than anything else might be a mark of
the strength of the Australian economy, because if we had been
subject to those same pressures 3 years ago or 10 years ago, I have
not got the slightest doubt that the adverse effects on Australia
would have been very much graver.
I do not think there is any need for me to say, amongst this
group, that we welcome foreign investment and welcome overseas
investment more welcome if it is in partnership with our own, but
that is not an absolutely necessary criterion for development and
activity within Australia.
We see ourselves working in partnership with people from many
other countries arid especially f~ rom the United Kingdom, with a
longstanding, traditional relationship, which so far as I and my
Government are concerned we would want to see enhanced and fostered,
not just in our time but for a very long while to come. We also
believe, with the energy problems that face the advanced industrial
world in particular, that there is an increasing role for Australia
because of our possession of coal and minerals and that that will
help over a period of time probably to strengthen links with
countries such as the United Kingdom on the one hand and with Japan
and other countries of Europe also.
Gentlemen, thank you for joining us today. I am sorry that time
is short, but I welcome the opportunity to be with you.
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