AS DELIVERED
AUSTRALIA
PRIME MINISTER
FOR MEDIA FRIDAY, 27 AUGUST 1982
ADDRESS TO-NSW STATE COUNCIL
The Liberal Party has en enormous responsibility to Australia.
It is the only nationwide Party which is concerned to represent
all Australians no matter where they are, where they live,
or what they do. The strength and the experience of the Liberal
Party over the decade has meant an enormous amount to this country
and to the living standards of Australian families. The growth
in living standards, the growth in the standards of our homes
and what is in those homes has come about through the Liberal
years, throhgh the policies that we have create , d which has.
enabled the talent, the initiative of individual Australians
to be unleashed so they can build a better and a greater
continent. The importance of the NSW division to the Liberal Party to the
Federal Government in Canberra, to the strength of that
Government, to the strenigth of the private members is enormous
indeed. There had been problems since the loss of Goverbment
in this state, I know, but in recent months and the last year
or two this division has made enormous strides. I would like
to thank all of those that worked so hard in. the last two. months
to overcome one or two financial problems to get all that
behind and to enable the division to prepare for further
victories in the Federal sphere and to get rid of the worst
State Government that NSW has experienced.
A remarkable change has occurred because if I had made
that last comment three or four years ago, you I suspect
would have said, " Why am I being nasty to poor Neville Wran, isn't
he rather nice, doesn't he look good on television". Well
I think it is demonstrated that we need a little bit more
than looking good on television or being rather nice when
he is met in terms of government because he has done damage
to Australia and he has done great damage to this State. When
a Liberal Government returns to NSW it will take a long while
to put it right.
It is no secret that we live in a difficult world. The price
of our export commodities has fallen very significantly over
the last 18 months. In six of the seven major world economies
there have been reductions in industrial prod * uction through
the last year. World trade is down, world trade is down compared
to earlier occasions. We need to remember that a growing world
trade is vital to a country like Australia because so much
P NSW STATE, COUNCIL 2-
depends upon our capacity to sell to the markets of the world.
About 30% of our gross national product is dependent upon
trade and so what happens overseas is of enormous consequence
to us. But because we do live in a difficult world, having
a Liberal government is all the more important than it has
ever been.
The world recession has been worse I think than anyone
expected. There have been one or two optimistic signs
in the United States over recent weeks, but people have predicted
a world upturn so often in the last two to three years that
I am not going to join their ranks. When it actually happens,
that will be good enough. We need to understand at the moment
that in the United States their steel and motor industries
are opreating at half capacity, but unemployment in the advanced
industrial countries totals over 30 million. To indicate the
extent of this problem, if I had asked or any of you had asked
one of the world leaders ten or twelve years ago to what levels
do you think unemployment might rise in the United States or
in Europe? Will it ever get to 30 million? They would have
had an answer, no that is not possible because we know how
to run our countries better than that and we will take the
necessary remedial action. I sometimes wonder how high
unemployment is going to get in Europe. It is nearly 14% in
Britain, it is 10% in the United States, it is about 12% in
France before they will start to do some of the things which
are necessary to get world trade moving again. The fact is
that there is a problem of very significant proportions and it
affects us greatly.
It is not only a question of what has happened in the wider
world. Because of the recession overseas, they over the last
18 months have been achieving wage settlements of 5% or 6% and
in Australia last year 15 to 20% and shorter hours on top of
that. So we damaged Australian competitiveness by trying to
pay ourselves more and work less at the very time when we should
have been doing the reverse.
In this total situation we obviously had a very difficult
Budget to frame. It would have been possible to have a hair
shirt approach for some purist economists and end up with an
overall Budget surplus of about $ 1500 million, but it would have
been a very harsh Budget and it would not have taken account. of
the needs of Australians in 1982-83. The Government in framing
a Budget has got to look not only at the questions of economic
responsibility, as we : always will, but we also have to look
at the needs of Australians and Australian families and do what
we can to lighten hardship and difficulty when that . is -present
within this Australian nation.
I believe that the Budget comes out with the right balance
between economic responsibility and providing help where help
is needed, in maintaining responsible management. We have
a domestic surplus of $ 200 million, an overall Budget deficit
of about 1% and I think if the United States had an overall
Budget deficit of 1% instead of something very, very much higher
than that, I would then say the world would be coming out of
its economic problems. I think many other observers around
the world would be saying the same thing. Being able to / 3
PV NSW STATE COUNCIL-3
maintain budget deficits as low as we have and as a consquence
to maintain unemployment at significantly lower levels than
many countries overseas is one of the achievements of the present
Government. It is worth having a look for a moment at what Mr Hayden said
in response to John Howard's Budget speech. I ought to congratulate
the Melbourne Age on having_-an entirely disspassionate editorial
on the consequences. If there had been an early election call
I wonder if they would have had the same disspassionate editorial.
Mr Hayden said he was prepared to have a Budget deficit of about
$ 31 million, that he thought he had $ 1.7 billion to play with,
that he promised, as one would expect, increased spending of
many different kinds in many different ways. He also promised
what he called genuine and effective tax cuts, but the equation
that he put down just does not balance because if you try and
put the figures on it, he had a billion dollars on a job creation
program, much more on capital housing and capital works and
in the end he would have had enough left for tax cuts to
take a further quarter cent off the basic standard tax
rate or maybe make a few dollars difference to the lower
threshhold. Then he would have had a deficit of $ 4 billion
or $ 5 billion. That is about where Bill Hayden went out when he
had a deficit of about to 5% of GDP and that is what
he proposes now.
Mr Hawke was more honest because last Sunday he praised all those
countries with high deficits and made it quite plain that he
thought it was reasonable to do the same thing. That would
be the Labor Party all over again. It is not only the Liberal
Party that needs to remember this. We need to remind businesses
and people and individuals that in their free-spending, they are
squandering of resources the earnings of the Australian people.
We must make sure that the Australian people never forget that that
is the basic characteristic of the Australian Labor Party.
There are many aspects of the Budget which we in the Liberal
Pary need to sell and sell and sell again. because I think very
often over recent years we have done some things which have
been reasonable, and maybe good, but quite often people don't
understand what we have in fact done. When there is a Budget
it has many advantages to many different groups throughout
Australia, that it is encumbent on me and John Carrick and
John Holkiard and my colleagues here, but also on all of us
to see that we understand what is in the Budget so that it can
be sold to people who so directly involved in the fortunes
of the Liberal Party and of the Government. The tax cuts
this year total about $ 1 billion; there is significant
support for homebuyers and a rebate on interest; there is
significant more housing funds; the family allowances forthe
first two children have been increased by 50% bringing over the
last two Budgets the total increase of 50% for all children.
The buying power of somebody on a bit less than average
weekly earnings, a single income family with two children is
about $ 17 to $ 18 a week better off. / 4
3
NSW STATE COUNCIL 4
There is a v ery interesting and a very useful newsletter put'
out by Eric Risstrom and everyone knows of his independence.
I thought there was a beautiful sentence at the Financial Review Budget
lunch last week when I spoke about the Budget. In asking a
question Eric Risstron prefaced it by saying, " I just want to
say it is a damn good Budget". From Eric Risstron I thought
that was high praise indeed. His newsletter confirms the
figures that were in the Budget, that we have put out about
the increased buying power available to Australian families
and he refutes totally the Hayden mythology that families
are not $ 17 or $ 18 better, they are only $ 2 or $ 3 a week better off.
It is not only in that area that we have shown concern. Student
allowances are up very considerably. The secondary allowance,
to try and encourage low income families to keep the their
kids in the last two years of secondary schooling or to persuade
them to go on to some other form of training is up by 44%. There
are more funds for technical and further education, more funds
for School to Work Transition Programs to help young Australians
in a difficult period, very much larger funds in the programs
under Ian Macphee's Control to assist in the training and
placement of significantly more people through this coming year.
It will assist something like a quarter of a million people
through the year.
One of-the things that we need to watch are the statements
of our opponents who-* show no regard for the truth whatever
and if I could just offer a suggestion, the ones who say they
are always honest, always speak the truth, they are the ones
to watch all the more closely because an honest man never needed
to profess his honesty or to claim it, he took it for granted and
so did his audience. Mr Hawke said that the training programs
represent a 38% decrease in real expenditures at a time
when there is a 50% increase in the problem. He said a 38%
decrease. I had my Department do me a note on these
particular matters and my Department pointed out that there is
a 48% increase in real terms. Mr Hawke if he had done any
sums at all, would have known that full well. That shows
the measure of our concern in this particular area.
There are significant improvements for pensioners and for
pensioners with some income of their own, t~ he new tax rebate
to lighten the burden especially on pensioner groups. For
business, a little more than $ 1 billion is provided for industry assisttance
for the first time in Australia. What we have done ' is build
on the package of 19 July, when instead of having equipment
depreciated over the life of plant which might be 10, 15 or
years, it will be depreciated over 3 or 5 years, giving
Australian industry a much better opportunity to compete
on fair and equal terms with their counterparts in other
countries.. There are special advantages in this Budget for smaller businesses
and there is the housing tax relief, personal-tax cuts and
the significant stimulus for public works will also affect
businesses benefitially in a very real way. The retention
NSW STATE COUNCIL 5
allowance which all small businesses will understand has been
extended by a further 10% meeting an election commitment from
the last election to 80%. That again, provides about $ 30 million
extra over the course of a full year.
But in addition to these measures, which you in a sense might
regard as routine, or routine adjustments, important even though
they are, there are some initiatives contained within this
Budget which look very much to the future. There are some
initiatives which are visionary in terms of establishing
a fair and equal Australia and in building this nation for the
future. This Government introduced the system of family
allowances , much fairer for low income families than the sytesm
that has prevailed before, and we have built on that. We have
introduced a family income supplement to support especially
the lowest working income families throughout Australia. We
had had a situation for quite some time where people on
welfareland supported totally on welfare, with a wife and two
kids for example, would be better off than some working families
in the lowest paid jobs. Through the new system that is
being introduced by the Government, recommended by Fred Chaney,
the family income supplement, we will be able to say to all
Australians, " If you are working even in the lowest paid jobs,
you will be better off than on welfare" and I think it is
very important to be able to say that.
The Australian Bicentennary Road Development Program which will
cost about $ 2 2 billion over six years, financed by a cent on
diesel and a cent on petrol this year and 2 thereafter, will
establish a much better, road network, much better national
highways, arterial roads. It will be of assistance to
local governments, they will have additional funds to spend
and significant funds will also be available for urban arterial
roads and public transport. It will establish fairer competition
between transport and railways. It gives us something to look
forward* to, something that we can watch as the road networks
grow and improve leading to much better communications, lower
transport costs, and we all hope, much less road accidents.
The decision to change the tax laws to encourage employee share
participation schemes is something which we of our philosophy
I am sure would want to support strongly. The dividend tax
relief, so thaL there won't be double taxation of dividends for
small investors, will also complement that particular reform.
In addition to that we are pressing on with measures of tax
avoidance and tax evasion and as a mark of the success that
the Government, John Howard in particular, has had in this
area, two things ought to be noted. For the first time in
many, many years the Tax Commissioner feels it is unnecessary
to depreciate the revenue estimates on account of tax evasion.
That is a significant measure of the success of the, policies
we have in place. In addition to that, about $ 800 million
in additional revenue will be coming in this year, and a fair
amount next year, as a result of measures which we either have
in place or will be put into place. That again is a measure
of the success of the Government in these areas.
NSW STATE COUNCIL 6-
It ought to be noted that in real terms total tax is only
increasing by about or $ 80 to $ 90 million and if it was not
for the additional collection as a result of the tax avoidance
measures, there would in fact be a real reduction in taxation
revenue through 1982-83. That again indicates the extent
the tax reforms and tax changes in the income area that are
being introduced.
We should never forget that tax evasion had its genesis under
Labor. Frank Crean as a Labor Treasurer pointed to the current
scheme and said what it was doing and how bad it was, but then
neither he nor Jim Cairns nor the present Leader of the Opposition
did anything about it when they had the opportunity through
three somewhat awkward and difficult years of government. It was
the encouragement given to the promoters and all the rest as
a result of their failure to act that began the industry and
led to the situation that we have had to grapple with ever
since. John Howard has done more in this particular area than
all the other Treasurers in the whole history of Australia
and deserves the fullest and most total support for what he
is doing.
I am glad to be able to say that the Federal Executive of the
Liberal Party with all the state presidents today, unanimously
supported a very strongly worded press statement giving the
fullest possible support to the policies, the intentions, the
objectives, the deterniination of the Government. That was a
unanimous decision and I hope that put some particular views
to rest.
The Costigan Royal Commission, we should not forget, was appointed
by the Federal Government and an earlier Liberal Government
in Victoria. As a result of that Royal Commission, we over
recent days, have announced the most vigorous, far sighted and
I am sure they will be effective measures against tax evasion
and tax avoidance. A special prosecutor is going to be
established in relation to bottom of the harbour schemes,
examination of the Crown Solicitor's Office by the Law Council
of NSW and a number of other matters. We are pursuing our
, responsibility with very great and extensive vigour.
There is another aspect of these reports which the press has
largely ignored. Maybe they are suggesting that those aspects
are not important, that they do not merit attention. I would
like to read one or two things which Mr Costigan has to say
about the Painters and Dockers' Union. -" In Victoria the Union
is under the control of hardened criminals. There has been
some 15 murders that took place between ' 70 and ' 79. The two
worst years were 1971 when three murders took place and 1979
when four took place. Federal Secretary Gordon told the
Sweeney Royal Commission we catch and kill our own." I think
that is a sentence which is difficult for Australians to comprehend.
It is the kind of statement that you might have thought was
believable in relation to the mafia in what used to happen
in Chicago in the 1920s. and'we have hadthe view that kind of
thing does not happen in Australia, but the cold blooded meaning
P~
NSW STATE COUNCIL -7-
of the words, "' we catch and kill our own", is the philosophy
of that union as Mr Costigan so aptly described. Their answer
he says to any interference with their activities is not to use
the processes of the law, but rather threats, violence and
intimidation. He says no community can tolerate a group within
it that regards the taking of a man's life as permissible
provided he belongs to that group." He goes on, " in this way
the Painters and Dockers have assumed for themselves a position
outside the law and have maintained that position by violence."
That in summary is the kind of conclusion that Mr Costigan
comes to. It indicates the nature of criminality within that
union and that is a grave and serious challenge for the
Victorian police. It is a grave and serious challenge for the
Victorian Government. I suggested to Mr Cain that he should
pursue those matters with the same vigour as we are considering
in relation to tax avoidance and tax evasion and I would like
to see some evidence that he is prepared to do so.
I think it is worth noting that the Painters and Dockers'
Union in three or four states and certainly in Victoria is
affiliated with the Australian Labor Party. That means
representatives of that union go along to the state conference
and participate in the making of Labor policy. That means that
union has a direct impact through the state conference, on their
state executive and through them on their Federal policies.
Senator Georges confessed that he was a member of that
particular union. I can only say that if there were a body
with that kind of record affiliated with any part of the Liberal
Party, I woul dhave asked, requested, demanded that the
affiliation be cancelled forthwith on the basis of the kind of
evidence has put forward. I wonder if the Australian Labor
Party will have, the same concern for its affiliates as indeed
it ought to have.
I think it is worthwhile perhaps saying something for a moment
about the Liberal Party because a lot has been written in the
press about what people said in Western Australia. However
much John Howard or I or other members of the Government might
condemn tax evasion and tax avoidance, I think it is a great
pity that there is anyone, and I do not know if there is, if
there is anyone with any connection with this Party that has
any relationship with those particular practices because this
is a Party that governs for average Australians. It is not
a Party that governs for those with large fortunes. Those
who practice bottom of the harbour schemes, tax evasion of a
kind that has come to notice in recent years corrupts this
society even more than the unions such as the Builders
Labourers' Federation with their activities because they
destroy the faith of average Australians in the system of which
they are a part. They'destroy the faith of average Australians
in the sense of fairness and justice in the country which they
love and hold dear. We are the custodians of that faith. We
in the Liberal Party are the custodians of that justice and we
have to see that there is justice and fairness for ail Australians
and we also have to see that people who have profited by the
-NSW STATE COUNCIL-8
illicit and proper practice of these schemes, pay the taxes
that are due to the Commonwealth. I said that at a Financial
Review lunch and I think there was far, far more support
than not last Friday. The people who have benefited from
bottom of the harbour schemes are in fact in receipt of
stolen funds. Maybe you want to say stolen from the generality
of taxpayers or stolen from the Commonwealth makes not much
difference. That happens to be the fact of the matter and
we in the Liberal Party need to have a very clear view
of what it is all about and the damage that that does in the
basis of this society.
I have not any doubt that in future years, the Liberal Party
in terms of keeping with its basic philosophies, in terms
of governing as it will always claim and & s it always has in
the widest interest of the great body of Australians wherever
they may be, will be judged by the effectiveness with which
we grapple, deal with and eradicate this particular problem
from the body of Australian society.
If the present Budget is to be remembered for any particular
thing, one could have said for support for families, for its
tax cuts, for its innovations in welfare, but if it is to be
remembered for any particular thing, I would like to suggest
that there is one other that is more important. I believe
the Budget establishes, the basis for working to together, for
Australians recognisin~ g that there are basic and severe
problems within this society, but if we in the Federal Government
are going to say it is all Mr Wran's fault, or it is all Mr Cain's
fault, or all the unions' fault, then you leave divisions within
the society and make it harder for Australians to work together
and the real point of the present situation is that unless we
do work together, states and Commonwealth, unions and management
then we won't overcome the difficulties we face, there will
be more problems, greater hardship and more unemployed.
I believe one of the great wishes, yearnings through the body
politic at the present time is to see people in position of
authority whether it is in government or in unions or in management
exhibiting not only a desire but a capacity to work together
in the interests of all Australianc.
I think you would have seen some of the statements by Mr Dolan
in relation to the Budget, and I don't want to encroach into
Ian Macphee' s area, except to make just one point. The newspapers
all picked up the critical things he had to say about the Budget
and they are affiliated with the Labor Party. I suppose they had
to say some critical things. But in that critical statement there
was still one sentence of great significance and tax cuts
and the social welfare changes announced in the Budget create
the conditions for wage restraint in 1982-83. That was the
kind of statement that we wanted to hear and sometimes it is
necessary to cut through the froth and the bubble to try and
get down to the substance of what is happening. I believe
that Ian will be able to achieve wage restraint with the
relationships he has established and with the basis of the
Budget to work upon. but certainly it is going be vastly
important to Australia and for the success of this country in
the coming period to achieve that. 8
NSW STATE COUNCIL
I believe that it is only the Liberal Party that can establish
the circumstances in which all Australians can work together
and again, that emphasises the responsibility we have to all
Australians. The Liberal responsibility to NSW and to
Australia is great indeed. Together we can build a better,
a greater and a more just society. Working together we can
build a better life for all Australians and working toqether
we can, in what later might appear to be a relatively short
time or perhaps a bad dream for a few months or a year or so,
get through this difficult period ahead of us much, much
better than under any other circumstances.
I would like to thank you all for being here tonight, but in
particular I would like to thank you all for the magnificent
support that you have given the Federal Government over the
years and for the magnificent team that you have sent to join
in the Federal Government in Canberra. 9