.71
. INDUS' Y~
SPEECH TO THE C01. n), RATION OF A1JSTRAL@. r.~ NDS
It is a great pleastire for me to he able to addresa the CAT
at the conclusion of its Third Natiomal rorum, 7hr is.
great value in the ice--ers of.. i i~ ti'private sector
Coming torgether -to di-scuss our-economy arid where it is going,
As the leaders of Aust-ralian industries your views and your decisionis
017 are of gr: eat importance to all Australians.
joiht I woul. d ike to talk toyuaorth irpnct of the
global-recc-ession on Autralia, and the state of our. ecn1.
I want to say something cAb ou t the damage wce sornetiniez do to
ourselves whenl we do riot wrork, together well enougqh ana spena
too mutch time arg~ uingc about different dir, tions pr ways of
doing thiricis. It is illore important than ever that we recognise
as Australians that our interests are not in~ Conf lict but
cornplementarY, Trmore imvportant than ever for us to pul. l together
ini bujilaing Australia tip.
Since 1979/ 80, when the major econon, es of the vorld were hit
by consi~ ckrable increases in oil prices, the global. econoimy
has slipped into a rnewd recession whic0h a s turned out to
be far worse than anyone anticipated. As a xesult, we now live___
in a very different econoii world from aniythinig we have Rnow,, n
in recent years.
0 Industrial production in six of the seven major world economies
has either fallen or stagnated in the UHarch quarter. In
the United' States, the motor vehicle industry is operating at
about half of its capacity. Th~ e steel industry is equally
depressed, and even allowing for some irm-, rovezient,-in Miay,
-prvat-hosin--saft 1were only about half what they were
four year;: ago&. In 1981, world trade declined in value for
the first time in more than 20 years, real interes. t rates
: 7 ill the United States and Europe have reached historically
high levels and they are-iemainlng high. At present sme
milTI73-on people are without jobs in the OECD count. ries, a
terrible reflection of the global downturn, and it is predicted
that it will go to 32 million ini the firot half of 1983.
The world-recesl-on has helpted to bri-uig down; j overseas inf lation'
rates. The American inif ltion1 rate is iiow -running at about
* 6 to 7% where it was over 14% just two years agor,> while thfE,
av er a 1: A, 1 o fo0r t~ C' 2D c 0* an1t aS as ~ o e i F
expactecl to odccline in the secc'n.-half of 1932 to 7.5% from
10.6Z. in the second hafof 1SC" J. Evt n with ic-, war intrnat6ionial
inflation raethe progtiosis for the global economy is very
mtixed. We havea heard for the Last year that economic recovery
will stavt in 2i%: months' time. I suppoze if someone says
that often enough they are bound -eventually to be right.
The in its most recent surkrey, estimate3 that incdustrialised
econ& e % A11 crwa an averaUe anrnial rate of 21-2 in the-s. econd___
half of 1982 following a fall of half a par cent in the firot
half of this year, Tshat is hardly encouraging as a sign of
recovelry,. esteCCially when they are also forecasting toit;
xinploymenrt will increase by another 2 million. The survey
estimates that inflation rates will drop only rnodestly, that realintere-
st rzaes will remai. Ti high.
In the face! olf these difficulties many of the inaustelalised
countries have reSortea. to Lpro~ eco oii sonetimes i-n the
form of hiqjher tariffs, sonetirm er, so-called-voluntary reistrainlts,-
n-od in very lar-g-part, in the for. m of nor-tariff barriers.
InI an att-e~ t' to retiin sh-ares ini e; pDrt rmarkets, some countries
have also resorted -to s-ubsiaisingj evports. 17ha best example
ofl-this is t -he I-EC which is S& 46isiv7 heavrily its exports
Of many' agricultural
We lhave alwiays known that. A. stralia as a tradincj nat ion could
* not-re-! t~ in unmfjecte d inrlefinitely by a world dow; nturn and
the reccssi a is no,, hitt4 n Auralia hai.* e. Dt is worth
co-ncsi srirj vary chrefully how the world recession has
affected u Over the last fey; years we have become Xised to
relative e(, onomnic success: for staveral year6 we have had a
hiciher growtLh rate than the OECD) avelracJ; we have had a lower
rate of 5ltinthar, the, 0, zca Etvirage; empoyrent gr~ ev by
ovelr 375,000 in~ the treyears3 to -the end of 19801; and Oujr
ulnerm? 1poynent. rate, although too high, was .1ower than tXhe 0"" CD
average in 1981. t0ow w,, e m~ ust recognise that it is much harder
for us to zetain recorde.
All. of you will be aware of how irnportant expor:. Trar~ ets aro
to A~ ustralian industry, the value of our trade is e:; uivalent
to about 30% of our gross domqstic product. The reality of the--
worl econonic situation is that Axistralia's expoort marketzs
hav,, e fallen badly, Between 1979/ 80 an~ d 1.981/ 82 iron and
rsteel pric-as, in constant terms, have fallen from, $ 211 to
$ 163 per tonne, alumzinium prices have fallen from $ 1410 to
$ 1072 per: tonne, copper from .$ 1955 to $ 1231 per tonne, beef
from $ 2267 to $ 1609 per tonne and wheat : from.. $ 147 to 133 per
tonne. In these areas, Atustralia is. prodiicing for the world,
so there is no way prices will pick lip ( mntil world trade pic%. s-__
upP expTort. war'. Iete have beenn one of the factors which
har. siunificantly affected inves tment in Australia. The
growth'in business investrnent, which reached a' 30 year record
jxust a year ago, has v. irtually c-eased, and while invest! ie-nt
remainis at a high level it has done so because a substantial
number of projects previoitsly started have yet to be brought t~ o
world econonic con clition's rcL'mnain stagnant.
T he-higi level of internationial interest rates has also hit
irnve . anid more cen rtill tmd,-' enin the ecailorny as bOusiisS,
hi b hebc)-rowed heavily to invest now iind them& sTveg cucn
b*~ ee : a11". 1' 1 markets and higher co; sts ai, 6 Lorrowin, H~ igh
iteet rates are ailso cakisini eiffculties for homne owrners
* adYou,--, paeople whqo want to btuy their first home, and our
U_ 8.1 P.-Pack -9a was dosiqned to q ivc' these di-5-f4eiult-e---
~\ Mr3tralia is b vict-im, of hiqhitraici1itrs
rat-We cnot artificia. iIly bring cin oron interest
za.. eB wilhU. ta fectiritj quiite dramratica' 1ly investrment in
A our balance of paypients, and ul1timately inflation.
SA-i ~~ V Otnly world econonio conlitions whichn are responsible
b-th current difficulties in the~ Australian econo: my. We
hJIv -4ifot baer halping ourselves as well as wqe might bave, Ri fsing9
~ C~ i ~ cotshave pushed ourx inflation rste above thet OECD
X' average. : In the 12 months to the ond of Ma~ rch Aistrali's
~.. aion rate was two percentage points above the OECD average.
~~ 52! IiaPlant cause of all this is the higjher wages we have been.
' pjy-cg urselvas at a timne when our income as a nation has been
damnage to our comptitivs ca-iS 1 by h34L'-ag
set' a'mnts has been cmon by ruch more mo erat e settlements
ov~ xeaswhera 5 an~ d 61 InureaseF have riot beens uncom-mnoni
d JcTT=~ jT r of between 15 and 20'-in ? AU8tralia when
' 4or' : ing hours are takena into zAccount. The corporate
proit-shae n nn-frmproduct has now fallen to
4~ apre 5Etd levels experienced in the mid3 1970s.
rtthi3 lza-gro'und 0o. world rcsonand high ti 1
It is not 8urprisinq that activity levels are
be*~ n au~ d bnaistraiia, that employmn. ent ( jrowth has dirziniMshed,
' aatda bUre-mployment ir, risinn. -This was re~ tdin the Mlarch
q~ attñ Xza -couwt hich indic ted that non-farm prodfuct
W fad fallexi in each of the last-two qluarters.
In he fco -these aifficulti~ es there are a number of things
SW-oari : do.' d a n um qar of things we must avoid. We inust avoid
~ cnn. icpoicie licl, dpestroy i11cCntixve, w-hich create
ncst~~ iY, whioh Make it more difiicult, to build up
. A us t ralia, ! nd which will discourage investmenit and halt
ve i~ nt projects.
ow. cLdon't want. toU~ aKie thisr. a party political speech, butyu
iovdbe well advised to ren( I the m~ all print of the econormic
~ po _ 3i~-t O which Labor has committed itself at its national
conerene. Take uranium mrining. Labor's aaeW pranlun-policy.
U~~. du-p by Mx Hayaen saying last Sunu.: ay that any
ugesti-ons that Labor hag abanidoiied * its opposition to uranium
~ñ irg. is.~" travesty of the facts". -ne w" our policy
-:, 6, Lqiivocally Supports the objective of an end to the uraniuz
id'try".. Nowhere does the exi~ ys-tian-qh contracts
bb eworke d out.
' I7
-4
~ eLabor the industry will bec, cjo ; edj aoncj b! Efore thIO~ jF
1nmtracta have baell iu7lfiliec. lh can ch Ulenqa tM r ' TorLkn's
teht at Lalbcr s tlraniuil; po3 ic%. ' puts rt seria rizsk . h-
: T3t:! ntia3. ior at leas t $ 3 1: illion of I IVestntiSuh
-'-Astrali. ay -the creation of at least a5,000 new jobs".
poiY would dastroy thc P. ;, traliian uranium inustry.
In *~ t-9deb~ te On t1he uranliuii indugtry the Deputy Premier of
T59 freel. y atdmittccd that Labor's urniu policy a~ nd its; ot~ her
-rooic policiep, wculc1ud c'm intornationa". confidanca inl
wft-Lali _ Cakse lie sa'iCi that L_-ibcwls policies would lose u
Ou tile ')' rating4, and he sted that thcy ouglit to, and
ul't 3, f a Labor Goveri~ mayit to %. worry about that t-hen it
i't cle Peirve to bs. in govcrrimc.-nt".
Te-the Oap. tsl gains ta>: issue. W~ hat the new policy co:,. mitE;
L~ abor to its strejiyt -niny Scctif-t 267k of the Inco.. AmenLmn
~ t Ut wl" aire: riot, told how. Fenjator. 1 ; Ias, Laos
-AdoAtorney Chne: nl I)~ said he has a secret -aft " of
S~ rttei & ctiion 26A which %-, ill do ths job whi h we % q nt
to*-do' Mil we zire entitled to' believe it will be a
ct. ab ai: telh Labor is also c! ommitted to a
~-oice zgbut Won't. Say whlat will be. When asked to
b f i c,_ b o ut the tax, thtu shac Prea ; Urc: r, "' Lr Willis, has,
Sa--that those xteswouad be dIiSCUSSCe With businleS if
,. they g6t into Governinipnt.
T bo bs indicated it would g~ et rid of state taxes on m~ ininc
CO~ boa lrva( iKveff sient it-hhee leox; strsen To-( f: troev enue wisthxe -t ct he rreirs oukrce sutahXl
Bjt q1:': e--1 t rzen or m'r CO'Connor t-o q-ve up a state tax
' to a -o'qtinhtsr ocluction of a co,-r,, onw-c lth tax what is
-ikey i that the mniningr indu su 2 pwh
taxes.
~ Laoisr cr ttea to a prices and incol1e clc n ~ sca
w gA-44, itevc-r that nm-ry imlan: it irnas all thincp> to all maen.
Soa ievpeidc es znd incme pflcis av b Wtri--d agaiji
JrId-agtin inl various countries~ since the war, they have n ave r
qo~ dj. becauge they do not, aress tbe real causeas of
coromon~ l~ ise Rather than pursve these sors o oles
~~~ hwould estroy C) ur eoD. norny;
t~ n we Trust mi nirdse the ir.), act. onl PAustralia of adverpe
or ecortvrnIO co-aditions: wc-vm~ st. be prepared to takec
ad~ atge of the international recovery %, hen it doe-co-me
r . ad-we nuet p: lay our Dart in trying to promote a sustainable
ord.' ep~ onmic recovery.
U ~ o nid~ tion i-prnzseep ait-hee foerf feaici t ironft irwrnoarltdio necaol normecioc veprryo bliet msw iolnl b7eutai
. v1ta thit we pursue policics w-hich siteAsral--seooi
S4 tU. tion1. jand we rn-ust do everyihing we! canl to inake sure
Lhat-all Australians play their part in the economnic d:: velop-ent
t. h-ei~ r country. it is agjainst thlis bac,-c., round that the
Gov-r.'~ ntcurrently hasude conc: ideration three reports
f othe 1AC on gcrneral reductions 16n-taiffs, oil export
xnodrtives, an on assistance to inclustry through the ! 3ludg-eL.
-In JA-41 ~ decisions on thjeFe reports3, the covPejrnIrent Yil b
-looking to pxrovide a stable br) tis fo~ r lon,--term planningj by
V. 4 dIn. jstry# without jpu,, ttjing the-E; 1or; t-termn vilI~ e Aust-ralia's
V irdstftea at rick.
-ehave sqtait ee luite Clearly th A, ill c'> ariring a. spacts of
UTht. o irustr, ar not 1ook,, inU to ; Leduca
~ n 1e~~ lof assistan e,_ but r. the r to ensuare that it-is
qivb& n in a waew wnl) ch best Suits i'idu ; tryls needs, zn& I in a
bt s4i~ pr~~ e itiiy-and cspeci ally infveitir.-entin
v ' At rali a I ilidt :, t1r, 1 this wziy, gjovernment cant help
-tusrty'-o keep buildinjA .' al r
in'~ in th e dife4 nt andl diffic-uli. conditions Au'ralid nlow
-eioftnee ed to nvoi d cornpoundirq industry s
o rob. e. ns, whether thjrougqh our Ctc,-c:-sions on. the reports.
tth-ro0, ug9h1 -o0,1r Btdcjat.-A4-the s-a i industry itsei f
-doos what it can t1-o ir-; w-rove its intrrn. atiorsal
itself r st acL firmly to restrain wage and other cost
zs -an~ Jd 110-expect cfroVc, ran,. m ht to ne-reCCESV
c . nusr ' tfelf inuct dto what. it cr-i to orsate
a œ z rAbl~ industria~ l relations czliratc~, aiid not exptct
~ o~-rn rt to ( Io the job on their ea.
ruul... g the v,. e--saqa across to al AustralianTSUta toif~
l v y w~ ki; g toethr, not aqz-inl , t eachl oth1r tha
s. 0 M, t-i alizls rmist u ac thtt' have co,-, Dlpe-, hn z~ y
~ C8~ 1V ~ qC e ac tie J'nr are clearly
Anto uncer-minc our c) re~ iecs
Overt~ 1s-w-ots-nurber oi'tlings have been clone to
a s. t r a ia up. The national wage crase deci! Fion in M'ay
a ~ cqrItion b-y thE Arbitration Co7,: ission tat further
a~ g r I zesa ill uiidrmine ouar adte -lio~ y1 . zipartite
ran . e Canbe : r a a~ s w e 6e th 6 1eC GoexrMent, the
_ kTv' 3 ndxyur' o2rgani-ation shiow-ed that there is a ba * is
. f *~ op-rtinhi~ e the T! Ia-Cr eCOnoMic groups.
*# jeK-, ouracged by th establ.) rpir~ t Oork -1~ o
iJ:, rty , hich %-; ill -try to0 rE. ach aq c~ it:,,, emet on a co;-1zo) n S tatema n) t
m -o-u o acj case eirinc in August.
A-a we days ag; o a. task force wi th representatives of tha
ACIU; th-s acoing riaritimo unions, and the Australian shipowner-S,
S a~-iOa basced an the Crawfordl Y, P-rt desiqned( to
uztHa relation~ s procedures in the _ Obipp) ing indu try,
ajnd to * allo; a Anst-ralian ships to cormpate on similar term:> with
Izg-caxrier6 of -Australia'a major tradi ng partners. This
IXeot wbioh v-, 11 now be considezred by the Governnment. in the
ontext provides an example of what can -b
wuhn. o~ ns maageent and governments are willing to co-operate-,
w411ig to WiorkJ-together.
Th~ o-onwa. th* GovermeI,: nt is also worki-ici with the governmen~ ts
6 QAeean a n 6. and NOWq on the diii'icultie-c of the coalt ir austr3
4' rben 1rcau~ t ~ porllts. These prolews are no-a too> serious
.3 ia r t apprtioning bla-me. lWe riust s it dow~ n toge-he: r and
: zo; n6 solutions. By worhing together in this way, we
I be a'bl a -to rnkiirr~ se iprit Of thea
illesr ht-i~ Wwc e will regain our
= Moetitive' position in the world, and that we are well placcd
to ke advarttage of the global iccovery when it finally coM-_: s.
6-
d s otgo. i1 t o 1) cc as v to caid imtrn'aoc Ia~ rnLi
rZ I t c1 " 1 sensE o1n th~ a of lactiont neaded to achieve'. wodlll
xe overy. Whent 1 was rac~ ently in the U-iitcd Statese, Japari
3nd S6) t Ycze 04r IC-L-o. nc i t j outliYle lcies ' A~ ich
tbh CG) ve-msnt believes -Ie to. c b-given careful consideration
t, internaiona) i cc urnit%' . ce that ther sh ou be
an intet-ation3. freeze on 3-~ rascr-eos that the
A: r ; 1 ti On a cor 1 ni ty sol-+--4t& r a steaed';' reduction
Jn ) 1Se of prc'ec" tOn, andI t1hat ex~ port inccen-tives anmd
.', siSd~ y hrre b pha-cci O,_ it.
Ob/ icx3l\ no couintry could adrmt. thes. e pfo-csais alonAe, ahd
oenrrthas cnphsised thotI it has no iinteltion of
t~ r9' ~ haerm~ lty norwoud i healp in solving
tL1* 1 Ovrl -robaap co . inge country to do so. uIbeev
thti~ out. r~ acjhptc-, d Hies-proposa} s tocjether, they wol
z ovid -Teal impatus for regener-ating glc t1--
b tni'~ d~ n nhtor. They could help enormously in
us Lac!; to the. situition of the 1950s and 1960s
t " whenf tzd ar~ i a rna -or engine of ccorooic gjrow; th, years
whrh the volui-,, of w; orl c trcde exac~ at all annual
ate of 8~ 1 vovidlinq, increastd eriploCym:! nt, and
ir to qrowthi rat-s wh. ci ci u. oLl rcal ar c~ e ery
Ye--t ar. or leSs.
Cu ee~ vd ~ oddal of international suppor t,
cC livcl tay ant ec) ind effectlva consid.: ratio,
GC" I'T hin5. stez'> ric . li~ in ill'Wt~ h. c o-light
0~ terna-,-icmal an' i do;, nectic ecconomric di ficul ties then,
Sth irt ve ciivn dc ovirselve~ s, andt muLst do. By
viif
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