FOR MEDIA MONDAY, 25 OCTOBER 1982
ADDRESS TO MTIA DINNER
Mr President, Sir John Moore, my colleagues, ladies and
gentlemen. Mr President, when you were speaking earlier,
you mentioned the foundings of thi5; Association in 1073.
You indicated that the Association had then been formaed
to fight for various things, including a certain measure
of protection that might not be much of an industrial base
in Australia. Obviously the Association has had a very
significant role to play, but wh you said reminded me of
an argument that my grandfather had with David Syme in the
early years of federation. My grandfather was a Senator,
and you wouldn't have liked this, but he was a free trader
in the old fashion sense of the term. David Syme had been
a free trader but he became converted with total and
absolute protection. He took it upon himself with a
religious zeal to convert Senator Fraser to the Same
philosophy. They started off a long correspondence which
I have most of at home. It started off, My Dear Simon
and My Dear David. A month or two on, Dear Simon and Dear
David there were all sorts of arguments in the letters,
not just that address. A little later, Dear Fraser, Dear
Syme. Then the last letter, From Syme to Fraser. It said,
Fraser, because of your intransigen. ice, your name will never
again appear in the correspondence column of hhe Me3bourne
Age. Well, what's new I might say? But that wasn't the end
of the story. You got advertising rates for a lot, Jot less
in those days and apparently on a miserable Senator's salary
in 1904, the last letter went, Syme, you're wrong. Here's the
first page advertisement that I have taken out covering a
half a page in the Melbourne Age tomorrow morning. For three
years, whatever the old bloke wanted published in the Melbourne
Age he paid for. Quite literally.
Ladies and gentlemen, metal trades industries make an
enormous contribution to this economy. You should never need
telling, advising or reminding of the importance of your
industry. Over 47% of the manufacturing workforce, over
49% of manufacturing wages and salary, 44% of the turnover
in manufacturing is in the industries that you represent.
Quite obviously the competitiveness, the profitability,
the capacity to sell what you are producing, the profitability
of your industries is of vast concern not only to yourselves and
your own employees, but to the well-being of Australia and
right across the country. / 2
M-T2I -
Therefore, I hope that you would never believe any government
has any doubt about the ir. portance of these industries. You
know over recent times that the leaders of the industry, the
Association has been in discussions with my government on many
occasions. We meet informally and frequently and exchange views
about what ought to be done. Obviously there is not always
agreement, but often there is a fair measure of agreement
about the sorts of things that are important.
Wage decisions have been critical to this industry, and your
decisions, the wage decisions affecting these industries
are critical to the Australian economy because so often
they are I was going to use that -awful word ' pace setters'
but you probably wouldn't want me to do that -so often they
establish the guidelines which are followed by other industry
in other places and it is that that makes them important.
But your industries have been affected not only by somecircumstances
in Australia by a world economic downturn
which has gone on longer and in a severer fashio-n than
anything many of us can remember. It is the first major
world recession since the end of ti-e World War. That indicates
its seriousness and importance.
It is important I think, no matt~ er how difficult things
might be in Australia sometimes, to recal. what is happening
overseas. I don't know how many people read the-fron-t page
of the Sydney Morning Herald which related
the employment position in many countries. I think in nearly
every case,. Australia is a good deal better off.* I
In the United Kingdom, it is 14%, the United States it is
There are 32 million unemployed in the OECD countries
alone and they are expecting that that unemployment is goinqf
to rise significantly over the year ahead and nobody really
has all that much confidence that it is going to start falling.
after that.-
Industrial production has been stagnant or h-as fal~ len in themajor
world economaies, the major na tions, and trade has
declined for the first time in over 20 years. It is
worth noting that when this economy was growing very strongly
and'the major world economies were moving forward at rates -of
between 4 and 6 percent a year, that was at a time when -the
value of world trade was growing by about 8 percent a year.
Trade has been the engine of growth, progress and prosperity
In most of the years since the last World War.
Quite clearly, the current circumstances are having a very
unpleasant and difficult impact on Australia. Many things
arc hitting Australia hard. We are the world's 15th largest
trading nation even though on a population base, we are
much smaller than that. Clearly, when our commodity prices
are down by 30 or 40 or in some cases, 50 percent, or where
there are harder quantative restrictions against our exports,
that is obviously going to come back on employment in Australia
and on the kind of standard of life that Australia can sustain.
Clearly, therefore, what happens overseas, the time and the
manner in which the world climbs; out of the current recession
is of enormous importance to us and of great consequence to
all Australians.
MTIA
MT~ 3A
But there is still cons iderable strength in this economy, and
sometimes I think we don't pay sufficient attention to it.
Investment is down this year and will be running at a lower
rate at the end of the year than at the beginning, but overall,
investment in Australia is probably a good deal. stronger than
in many other countries, and there * are other strengths, some
of which I will mention a little l~ ater-.
on top of all this of course, we have gjot one or-two hm
grown problems. I don't know if there is any premier around
or whether Mr Bjelke Petersen can break the drought. This
unfortunately is not a power well, the constitution
certainly didn't place it with -Federal Governments or
Prime Ministers. -The Queensland Premier did lead the
State of Queensland in prayer for r-ain on one occasion,
but* I think he had had a very good look at the weather
map before he did so. I have been watching the weather
maps very, very closely for the last nine months, and I.
haven't seen one weather map that would make it worthwhile
taking the risk, even if Joh was along side nie in the same
church. But the drought might well end up being the worst since the
1930s and in terms of its extent, it could end up by being
even worse than that. It is obviously one that has, signi fi cant
impact across Australia. What happcns in Australia's rural
areas is often understated in terms of its wider impact.
The early stages of drought or rural recess ion aren't4 felt
all that much in the major capital cities and industries,
but it is felt quite soon in the smraller country towns
than in the-larger provincial cities. As orders stop coming
through, it then has a significant impact in the major capitals.
As the drought goes on, it is not only for the rest of this
year, but through next year that its impact is like). y to be
felt, and felt severely. That of course on top of the world
recession, just compounds the difficulty.
But if we couldn't have helped. the drought, there are other
things where we have damaged ourselves, where we certainly
could have done something about it. Through last year, there
seemed, to be a madness around with wage increascs of 15 to
percent, pressures for shorLer hours-which were in soe
cases, successful. All of this has compounded and made more
difficult the competitive base of Australian industry. Coming
at a time when the world recession was deepening, and perhaps for. the
first time starting to bite in Australia, coming at a time
when overseas countries were -achieving wage settlements of
five or six percent, what happened through . last year was
madness indeed. On top of that of course, there were industrial
disputes which were the worst since 1974. Maybe the only good
that has come out of that situation is that industrial
disputation is now less than it has been for 12, 13, 14 years.
If it stays that way then we have learnt that lesson at
7 percent unemployment whereas in the United Kingdom they
learnt it at about 12 percent unemployment. I suppose that makes
us a little more sensible. ./ 4
MTIA
25.10.82
The consequences of what happened last year and of one or two
other things, is partly seen by the September quarter Consumer
Price Index which I believe is very discomforting and must
be disturbing to all of us-an increase of 3 It is difficult
to draw precise comparisons with earlier years because it is
the second quarter of a new series and a number of things have
been done differently. It is perfectly plain the wage decisions
of last year and the first part of this year have started
to flow through in a very significant way. In addition
to that State taxes and charges which have gone up more this
year than perhaps in any other equivalent period, will have
a special significance. Gas, electricity, petrol taxes and
transport fares, hospital charges are all included in these
figures. In addition to that there has been a drawing forward
in the counting some of the increases from the Federal Budget
which normally would have been included in the December
quarter figures a little later orn.
So there has been a bunching of a number of factors in the September
quarter which has given this very uncomfortable result.
Part of it is not surprising when clectricity goes up in
NSW 42% over the last 12 months, hospital charges in my own
State by over 37% from lJuly, and I think some hospital charges
by about 60% over the 12 months, public transport charges by
and a number of other things where increases have been
dramatic and draconian. I am only glad to know that at the
last Premiers' Conference we had the foresight to say to all
the Premiers, " However much money you want to borrow for your
electricity authorities, you do it. The controls for the
Loan Council have not been effective in relation to those authorities
anyway, so for electricity, borrow what you want and be
responsible for it". If we had not done that I have not the
slightest doubt that I would har. e been personally responsible for
all the increases in electricity charges that have gone on over
the last 3 or 4 months.. That alibi was taken away by that
particular decision.
The wages and hours decisions of last year would have had a
very particular impact because that is seen in the services crponent.
of the CPI which has gone up by something approaching
in the year to September. Clearly, manufacturers would have
absorbed some of the earlier increases when they felt they
were able to, but profits have been squeezed over the last
year as I suspect everyone in this room knows very well.
They fell by 4 in real terms in the last financial year
and I do not suppose that leaves very much room to absorb
further and additional costs.
The September unemployment figure of a little over 7.3% is just
as disturbing as the Consumer Price Index figure which I
have just been talking about. That level of unemployment I
suspect is an inevitable consequence of what happened through
last year when you couple that with the world recession. Indeed
one of the things that Australians are going to need to do is
to work together harder than ever before to make sure that
we can maintain employment levels that are significantly
better than the employment levels in a large number of major
industrial countries in the northern hemisphere.
MTIA4
25.10.82
Being lower than many overseas countries is little comfort.
It is not of any comfort to the particular people who are
unemployed. because if there is a man or a woman who wants to
work and cannot, then for that particular person, it is just
as much a human tragedy as it is for every one of one. hundred
thousand. It is like a bushfire. If it is a small one it
does not get much sympathy. If a bushfire burns out half a
State, it gets an enormous amount of sympathy, but for the
person who is entirely burnt out in one small fire, it is just
as bad, just as much a tragedy, as if they were part of a much
larger configuration. In relation to unemployment is a little
bit the same. Our consciences get moved when the numbers are
ve-ry great, but for the individuals concerned, the John Smith
or whoever it may be who is affected, we need to think about
individuals more than about the large numbers.
I suspect, and I wish it were otherwise, that the trend in
employment can only really be reversed if wages are held back,
if real wages fall over a period pexhaps because there has
been too big an increase. We have been paying ourselves too
much. Our income as a nation has fallen over the last year
or. 18 months and we just have to recognise the facts of life.
One of the easiest things in the world will be for the trade
union movement to press for higher and higher wages over
the period ahead of us, but if they do so they will know that
those wages are going to be paid for not only by employers
some of whom will go broke in the process, but by a larger
number . of unemployed Australians. That I think is too high
a price to pay.
The problems we face are being understood by many
more than before, but we must recognise the need to help ourselves.
We cannot go and cry to the world and say save us. We are
regarded by-everyone as one of the wealthier nations of the
world. There are some people who think we do not always work.
as hard as we should and on some occasions 1 suspect that that
view is right, but Australians have acapacity to work as
hard and well and efficiently as any people on earth and it is
time we did it in working together to get out of these present
difficulties. The fact that industrial disputes are indeed the lowest for
a very significant period, for well over a decade, that the
July 1982 days lost through disputes are less than half those lost
through July 1981, I think they are encouraging signs. The
Tripartite Conference that was held with the ACTU, employergroups,
including representatives of MTIA shortly before the
Budget was announced, . was a constructive and useful discussion.
I believe that the Government listened very closely to what
was put by this Association, by other representatives and by
the union movement. At the same time, I believe when we
brought down our Budget, we showed that we had done a great
deal to introduce a Budget that would encourage, make possible,
make it reasonable, to argue for wage restraint as a means
for working our way out of presen difficulties.
Since those discussions we have had some more responsible
wage decisions. There have been one or two odd tribunals
affecting politicians and academic salaries, ht more significant
decisions-affecting the public services of the Commonwealth and
a number of States. There have been some private sector / 6
MTIA5
decisions that have been even lower than the 6% or 7% which has
become fairly cacrn in the public services. All of that is a vast improvement
over last year, but the decisions are still perhaps too high.
We need to know that the faster we can get back to a proper
level of relativities, the faster we will be able to get
out way out of the problems that are around us and the sooner
will Australian industry be fully competitive again and able
to hold its own fully within Australia and establish itself
in markets outside.
Of course it is here that the metal industries'case is critical.
It does so often provide the guideline for other industries.
Wage adjustments have obviously got to reflect the strength
and the'weaknesses of a particular industries and the circumstances
of any particular period and the metal industry, as I think
are most others, are in real difficulties at the moment. I
would not have thought anyone could expect significant increases
If it can be recognised that the freeze advocated by
MTIA is the best possible thing for everyone in the industry,
then I have not the slightest doubt that a great service will
be done, not only through. MTIA's own members;, but also to their
employees and to all other industries who might be able to
follow their example. We do need low wage increases. to protect
the jobs of Australians and to prevent the dole list getting
as long as it is in many other countries around the world.
The Government is obviously concerned as imany other people are
at this situation of the difficulties of unemployed Australians,
but there is not any magic wand. There is no quick solution.
We have to recognise the nature of the problem and work our
way out of it. Job creation schemes as such we have always
believed are not the answerand it seems to me there is nothing
new in the whole argument because Abraham Lincoln said quite
a while ago, you cannot help the wage earner by putting down
the wage payer. That just about says it all.
The Government's policies have tried in this last period to
make it reasonable to argue for and to expect wage restraint.
We have had to balance a number of factors in bringing down the
Budget., the question of.: responsibility, and balance that against
the need to assist people who might be in difficulty. I have
got little doubt that if we had had a pure economist's hair
Sshirt Budget with an overall surplus of billion or something
like that, it. would be possible to do more for interest rates
quicker, more to knockinflation quicker, but also the numbers
of unemployed would have been significantly greater. Therefore,
the Budget in the end was a compromise as any document of that
kind has to be.
Tax cuts of about a $ 1 billion this year, housing rebates,
increases in family allowances have all been designed to
establish the circumstance where families could be protected
even if wages did not move much through this year. In addition
to that, capital works by the Commonwealth and by the statutory
authorities of the Commonwealth, increased very significantly
this year compared to earlier years. Welfare housing was
up about 27%, Ralph Hunt's new Bicentennial Road Development
Program in getting underway is going to add significantly
to the workforce in many different parts of Australia. As we
approach that bicentennial year we will have a road network
which I think few Australians have even dreamt of in the past,
but which we are in effect going to build as a result of that
decision. 7
MTIA 7 25.10.82
There were other things designed specifically to assist business
an increased retention allowance, tax relief on dividend
income saying something which I think is very important in
terms of principle even if the initial start is a relatively
modest one, and changes to encourage employee share participation
schemes, again a modest start, but one which I think says
something important in terms of principle and in terms of
philosophy. It is-worth noting that a single income family on say $ 300
a week, paying off an average size home loan of $ 20,000 to $ 25,000
and with two dependent children will be $ 18 or $ 19 a week better
off as a result of our Budget. I suppose that is the equivalent
of $ 25 or $ 26 if that person has to get it from you as
employers. One of the differences being, that if they had to
get it from you as employers, some of you might cease being
employers in the present circumstances.. I think it is worth
contrasting that with what happened in the Victorian Budget
for example where on Eric Risstrom's figures, the cost of that
Budget for every Victorian family was $ 12 a week. So we
we give $ 18 a week to each family or families on $ 300 a week
and it gets taken away by increased taxes and charges in
Victoria. One Budget working in one direction and one in
exactly the opposite direction. The Victorian Budget and
for that matter the NSW Budget will have hit families and
employees. Tn my own State the Government's spending is up 24%.
That almost makes Mr Whitlam modest because his first Budget
was only up 20%, and his second Budget was up 46%, so I do
not know what John Cain's second Budget will be up in terms
of expenditure. Victorian taxes overall went up by a little
over 30%, or the rates went up by
It is not only a job for the Commonwealth Government. I thinz
it would be much better if there could be a clearer view in
relation to these matters involving the Commonwealth and the
States because what I have just indicated shows that a Commonwealth
Budget can be driving in one direction, establishing the
circumstances where wage restraint or even no changes in wages
is a reasonable thing to ask for,. and have that undermined by
State governments' budgets which run very much in the opposite
direction. Even though there are many problems, there are some positive
signs. I do not want to overplay them because I think the
signs are equivocal, but the fact that interest rates are down
in the United States and there have been some falls in Australia,
that inflation has come down markedly in the United States,
Here the bond rate is down over 3% since early August and
some private sector rates have also started to fall. These
are encouraging signs, but it is going to be activity that
counts in the event, and in the United States there is not yet
much sign of increased activity. I am not going to predict
when that comes. There are enough people in the business of
prediction and we will be able to see it and measure it when
it does occur. 8
MTIA 8 25.10.82
World recovery needs substantial economic growth and I believe
very strongly that international action is needed to withdraw
the kind of growth that we saw through the ' 50s and the
and I suppose the early part of the 1970s. The Australian
trade initiative which will be debated at GATT is designed
to be one way of helping to re-establish growth. But let
me just emphasise here we are not in the business of making
unilateral decisions. If there can be multilateral decisions
in which many countries are participating with consequential
advantages for Australia, then that_ is something that we could
participate in. But we are not in the business of opening up
our markets for the dubious pleasure of some time in the
future getting better access to other peoples' markets overseas.
I do not want anyone to suggest that we are.
I think there is growing support: for the matters that we have
discussed, but what we have put runs very much counter
to the increasing moves to protectionism that have come out
of Europe . and the northern hemisphere over the last 12 months.
But if the increasing moves for protection continue, well then
the future for Europe is going to be a grim one indeed because
they will not work their way out of problems. With increasing
protection, maybe they won't work their way out of problems
even by maintaining the. present levels of protection that
Europe now has, levels of protection which I believe over all
are very much greater than we have in Australia.
There is also a role for action by the private sector, difficult
as it is. We hope there can be investment in new technologies.
There will obviously be rationalisation in the pursuit of
greater efficiency. I hope very much that the depreciation
provisions which were announced on 19 July can be seen as a
positive contribution to encouraging industry to take advantage
of opportunities that might be open as occasion arises. Because
even if-there are difficulties, even if there are problems,
there are always going to be opportunities for some industries
to move ahead. There are always going to be opportunities
for some new investment. Those depreciation allowances and
depreciation on income producing buildings which is being
introduced for the first time I hope will be useful and
constructive in enabling industry to compete on more equal
terms with its counterparts in other countries.
There is obviously a great deal ahead of us, there is a great
deal for us to do. Mr President you said something about the
supercharged political atmosphere around this capital or
Parliament House, I do not think it is particularly supercharged.
I think people just need to get on with the job that they
are paid to do and go about it. If there was less of a rumour
mill operating, it would also be a much better and a much
healthier place.
You might be interested to know that last Wednesday in spite of
all the significant problems that are before the Parliament,
and all the significant legislation which the Government has
25.10.82
introduced, all questions but one came to me from one side of
the House and all but one of the questions on Wednesday that
came to me were throwing mud at John Reid. I think there are
better things for the Parliament to be doing than trying to
slander somebody who has demonstrated his innocence in the clearest
way possible, from the highest authority in the land, from the
Chief Commissioner of Taxation. That just shows the way the
Parliament can be diverted. I cannot stop the kinds of questions;
that come to me from anyone in the Parliament. You respond
to them as best you can. Do not let. anyone think that the
Government is diverted just because. Question Time is wasted
in a thoroughly base and useless way.
We do need to recognise the. strengths that we have in Australia,
the initiative of Australians, the capacity of people to work
together, We need to recognise that while there are many count) ies
that only have these things and can work their way through it,
in addition we have vast supplies of raw materials, we are a
great food producer, a great apparel fibre producer and
we have raw materials of nearly every kind. It is up to us
to make something of this for our children and to make something
of all of this for Australia's sake. However difficult it might
appear to be, we know quite well we are so much better off than
people in almost any other country you can name.
It is not often that we have things like the Cormmonwealth Ganmcr
which sparked a sense of pride and nationalism in this country
of a kind that has seldom been seen. I think everyone
was enormously proud of what all of those young athletes did,
but not only the athletes, the people organising the Games
and who put it all together. If you had been, as I had,
in Montreal to speak t-o some of our own athletes at the
Olympic Games only a few short years before, or at Edmonton
where we had also been wiped out by the Canadians and the
English.-I say the English because the English are seven
countries in the Commonwealth Games. They have Scotland, England,
Wales, the Isle of Man, Guernsey and all the rest as you will
have noticed -I think that is only so they get more votes;
We were wiped out in Montreal, and wiped out in Edmonton, but
our. sports organisations, working together with the Government,
said this is not going to happen again. What is needed is
training and opportunities in competition at the highest
possible international level. The result was a morale amongst
our competitors and amongst the sports organisations which
Was certainly second to none. It was wonderful to see and it
was wonderful to be there while it was all happening. I think
they have set some kind of example to the whole country. We should
see that this is where we were when Montreal and Edmonton
happened, but that. Australia got it together
during the period of those Commonwealth Games. We must make
sure that it stays there. It is in our hands. We can work
together and achieve it. If we are going to. pull ourselves
apart by arguing with each other, whether it is Government
or Opposition, or whether it is management and labour, then
we won't. I think we owe our children something better than
some of the arguments that have gone on in the past.
MTIA9