PRIME MINISTER 1 JULY, 1980
ADDRESS TO PUBLIC FUNCTIO'N
BR00131. WESTERN AUSTR--ALIA
Thank you very much indeed for that welcome. I am glad that
you have said the things you have about your owm concerns,
because one of the very real values to me in coming to the
north west of Western Australia and spending the best part
of a week in the northern and western part of the Kalgoorlie
electorate, is to hear what people have to say and to know
what you are concerned about. Therefore, it gives me an idea
in the way in which Government policies can perhaps be modified
to meet those concerns where we believe it is fair and proper.
It is always a very welcome thing-when Tamie and myself get
out of Canberra and get to some of the more distant parts
of Australia. It is part of the job as Prime Minister that we
both enjoy best. I certainly do.
I would like to make a comment or two about the things that
you mentioned-if I could. Also, maybe about a couple of other
things. I agree with you that it is a very long while since zone
allowances have been reviewed. But also I want to tell the
story about how we have been told by our own legal advisers
that we could not adjust the zone allowance because the allowance
in any case is unconstitutional; and if you made the adjustment
to it, it would be challenged. Therefore, you should not do
anythingy. You should just leave it alone. But then having been
told that, I wanted to put that as a reason in any correspondence
to people who had written to me, to people whio had spoken to
me on the subject, as to why the Governmiient had not been able
to act. Because we had certainly not acted in these matters
on the basis of policy, but on the basis of what had been the
advise that we had been given. But then I was also told that
it would be : very u-nwise to tell anyone that that was the reason
why we could not act. Even though it was the real reason we
should not say so. Well, that being so, so far as I am concerned,
that-particular reason just does riot exist. We are looking at
the zone allowances in relation to the next Budget and doing it
in a very realistic way.
-2
If you say you are looking at something, that is not a promise.
You will have to listen in to John Howard on 19 August to see
what we do or do not do. But what I am saying is-that that so-called
legal reason for not adjusting the zone allowances has been washed
right out of our hair. We will be looking at it. If decisions are
taken, a good deal of the ' credit will go to Mick Cotter who has
been arguing very strongly about the zone allowance, about the need
for an adjustment.
One of the best decisions because it is a firm decision that we
have taken is to put up that satellite. It is going to take some
time. The planning is going ahead. It is going to take a few
years before it becomes operative. But we are doing it because
we are conscious of the sense of isolation, the sense of remoteness
and the difficulties with telephones, telecommunications and also
the inability in a number of areas to get other forms of
conmunication television and what have you. When that satellite
is operational, it basically is going to mean that people in
Australia, wherever they are, whether it is the country towns or
whether it is in the north west Kununurra or Derby or Broome
they are going to get the same kinds of communications that are
available to people in Perth and in-capital cities. That, in a
sense, should help to build feeling and understanding of the
community in Australia of a kind that maybe has not been possible
because of remoteness and distance and isolation, and the difficulty
of communication. The fact that the satellite planning is going ahead
and it will be proceeded with as rapidly as we can, but it is a
major project that will take time. That is not a reason for not
trying to improve communications meanwhile. In a number of areas
television will be available from October onwards through the north
west of Western Australia.-the ABC station.. . The start was made.
then progressively over a fair number of areas. Mick, what is the
starting date here? October. The starting date here is October.
Also, Mick Cotter has put in a special plea for upgrading the
telephone system because of the problems and breakdowns, which I
have been told about wherever I go. Unfortunately well, I will take
it as though it had hap'pened differently but, unfortunately the
telephonists along the route had not been told to give me the
0proper treatment and whenever a ' phone call for me had been booked
I had been connected through whether it was to Sir Charles Court
or whoever else very quickly and very clearly on a wonderful line
that did not break down. That is the only sign of lack of organisation
that 1 have noticed over the last two or three days. With the
normal sort of competent Western Australian organisation I would
have expected that at least I would find it very difficult, if not
impossible to make any kind of telephone calls at all. But in spite
of that, I am prepared to accept the overwhelming body of evidence
which has been presented to me, that in a number of areas improvements
are needed.
Again I cannot promise what we can get Telecom to do, but I know
Mick Cotter has been arguing the case for quite some time, and I also
will look into it with Tony Staley, the Minister in charge. as soon as
I get back to Canberra.
-3
The question of domestic air fares' is a difficult one. I can
understand how important it is and also how expensive it is.
Because there is no easy solution, we have established a special
air fares inquiry to examine the basis of domestic air fares which
might provide a means of giving some kind of solution to the problems
of distance and to the kind of problems that you get out in
Western Australia and also in some other places. Tasmania has
special problems because they have no land communication and
depend very' greatly on air. So it is not only the problems of
remoteness on the mainland, of Australia, there are other+ matters
that also need looking at.
I took out comparisons in domestic air fares they are of course
more expensive than international ones, as everyone knowsto
see what the position was in the United States or within Europe
which really is one system in a sense in an air fare sense one
country.", The internal Australian fares are basically a bit cheaper
than in the United States, and a very great deal cheaper or if you
like less expensive than in Europe. That does not mean we sit back
* and say there is nothing we can do lout it. The matter has to be
examined. Ralph Hunt is re-negotiating the two-airline agreement
now. We want to try and loosen it up, establish more competition, and
try and get better services that way. That is one way. How far we
can in fact loosen the two-airline agreement to make more competition
has yet to be determined. But we have given Ralph Hunt some we
have determined guidelines for discussion with the two airlines.
The very fact that TAA is going to bring in one form of new aircraft
the European Airbus and that Ansett are going a different route,
they are going to get 737s which is a very good aircraft, and then a
Boeing Airbus the very fact that they will have different aircraft
for the first time for a long while, carrying different numbers of
passengers and aircraft having different characteristics, will meanI
that they will be running different schedules at different times,
different frequencies, and that in itself 1 think is going to be of
some advantage to the travelling public. The problem of costs of
air fares to you is a very real one. We will be looking closely at
the report of the air fares inquiry when that is available to us.
There are other matters which briefly, I would like to touch on.
Our fuel pricing policy is one which affects people in remote areas,
and is not a policy that we as a Government liked having, to introduce.
As a farmer, it is not a policy whose effects I like. I am sure that
is the same for a great many people right around Australia. But we
introduced the policy because we are quite certain in our minds, that
it is right for Australia. While we have about 65% self-sufficiency
in petrol, if there were no exploration and no development,' no
development of alternative forms or sources of energy, that
self-sufficiency will run doi~ m very, very quickly as we get to the
latter part of the 1980s. When that happens, we would be forced to+
go if we did not have some alternative forced to go onto the
international market with spot prices much, much higher than the
prices that we now pay, much higher than the benchmark world parity
price which is the Saudi Arabia price; where prices may be
40% or even 50% higher than that. We would in a sense, be
beggars for fuel. The price all of us would have to pay then, would
be much higher than the kind of prices paid now. / 4
Quite apart from that, it would be~ a very selfish policy for us
in our time and our generation, to use up all the Bass Strait
resources and to use it up cheaply, and not make allowance and plan
for Australia in the years ahead. It would be a policy for ourselves
and it would be a policy against the best interests-of our kids
and the future of this country. I think that would be a very
selfish way to approach. our present problemns. But the policy is not
only leading to some reduction in the use of petrol, Esso and BHP
have commnitted themselves to $ 1,200 million worth of exploration
and development over the next three or four years as a result of
the policy. That will lead to greater reserves, greater development.
I think even more important than that, the vast shale oil
reserves in Queensland are now likely to be developed, and our hope
and objective is that the Rundle shale oil deposit the first of
them: that is, an agreement between the-Rundle partners and Esso
should come on stream about the time the Bass Strait reserves start
to run down. On the present pricing policies, we are told that
the development of fuel oil shale will be profitable. It is going
to cost several billion dollars. -I am told this may be as much
as two or three times the total capital cost of the N~ orth West Shelf;
and that is going to be about $ 4,000 billion. The capital needed,
the funds needed, to convert shale to oil in the quantities that
will be required for Australia's purposes are huge ones indeed. It
just will not happen if those who invest their funds are not going
to get a profit out of it. As a result of our policies, it now looks
as though that Rundle project will go ahead. If that is so, that
will just be the first of a number of shale oil developments leading
to Australia's self-sufficiency and self-reliance in the years ahead.
Beyond that of course, to try and make the policy less unpalatable
in the distant parts of the country, we have a freight equalisation
policy, which this coming year will cost about $ 130 million. That
does subsidise the cost of freight movement to within half a cent
or a bit less a litre. Other things being equal, that should mean
that the price in places outside of Perth is not going to be more
than a couple of cents a gallon in the old terminology above
the capital city price. But that is not the way it is, because
retail margins-which we found in effect vary with good reason,
0 sometimes, but that is within the province of the States. do vary
greatly in different places, and also I an afraid the wholesale price
of petrol also varies in deliveries ' in different areas. These
matters are being looked at, but what will come out of that examination
at the moment I cannot predict. The freight equalisation policy does
reduce the cost in-remote country areas very considerably: less than
it would otherwise be. The extent of it can be judged by its total
cost of about $ 120 $ 125 million in this coming financial year.
Mr. Shire President, you mentioned problems of defence. We are giving
much greater attention to matters in the Indian Ocean. We co-operate
in surveillance in the Indian Ocean with the United States. We have
offered them access to our ownm facilities in Cockburn Sound, and to
our air bases if they should need them for their own foi'ces to assist
in-their own deployments. I know they have had teams out here
examining the Cockburn Sound naval base and were very impressed by the.
facilities. What kind of result, they come to I am not able to judge
at the moment, but they were impressed. The additional costs they
would have to provide to those facilities for their use was a good
deal less than I think they had anticipated. That is a very real
possibility. We are home porting, by 1983; our own ships.
They are base ported there now, but their families are still at
other places. When they are ho-, e ported, that means their families
will be based also at Cockburn Sound. Then, genuinely, we will be
meeting our~ obligations for a two-ocean navy.
We are looking at-a location for another patrol home base and
that is going to be very important somewhere off this north w., est
coastline. The new air base at Derby is -going to start construction
this coming yrear. It will cost just short of about $ 50 million.
It W~ ill be a very major facility. This morning we went out to look
at the area w-here it is going, to be built, and we are very glad to
have the full co-operation of the W . estern Australian Government in
matters in relation to that, so that construction can start as
soon as possible. it will be a major airfield, capable of taking,
any kind of aircraft, capable of mounting any kind of military
operation or exercise that might be necessary.
As a result of changes over the last year or two in particular, we
are pursuing an upgraded defence effort. Weare also going to, over the
next 12 months, increase the size of the reserve Army forces, the
citizen forces, from 22,000 to about 30,000 throughout the whole
country. We will be looking for the co-operation of all employers
and the young men in Australia in enabling us to meet that objective,
because we think these things are important for the future of the
country. The last thing, and I think the most important. There is a feeling
of optimism throughout Australia. I can see an enormous feeling of
optimism in Western Australia, very much as a result of the policies
and energies and initiative of Sir Charles Court, who is truly a
great Premier who has worked for this State over such a long period.
But also I believe, because we have now got a general economic
position in Australia that is a much healthier position. Our rate
of inflation, while too high, is less than half that of the United
Kingdom, about 5 percentage points less than the United States, and
despite inflationary pressures that have affected us and every
country in the world over the past couple of years, the increase in
Sthe rate of inflation in Australia has been much less than nearly
Wevery other industrialised country; much less than Japan and Germanythe
increase less than Japan and Germany, which have traditionally,
over all this difficult period, managed their economies well. That
of course mneans that our exports are more como,, etitive. Our -manufactured
exports are growing rapidly. Our farmers are able to do better. NI" ore
people are encouraged to invest in the great mining and mineral
processes of this State and of other parts of the Commonwealth.
Because we do have significant reserves of energy, not petrol, but coal
and natural gas, and because we can produce electricity cheaper than
many countries, we are attracting to Australia more investment from
overseas, mnore processing. There is $ 4 billion in aluminium processing
being invested right at this moment in nearly every State. That is
just an example of what I believe will be happening as we go through
the decade of the 1980s.
-6-
For the rural industry, we have negotiated better markets. I
do not think we will ever again see the kind of situation where
we lost our market in Europe in one year and then totally lost our
market in beef in Japan the next, without any protest really from
the Government of the day. The Japanese market has now built up
again to a good level and is growing. In Europe, even there the
door has opened a little, and the markets in the United States
have security and are guaranteed, which they have not had in the
past. That'access which we have negotiated for over the last two
or three years is of vast importance to the beef industry in very
large parts of Australia. Rural industries, providing we get the
seasons and the rain that is necessary, i think are entitled to
look to a reasonable position over the coming period.
000---