SPEECH NOTES PRIME MINISTER
FEDERATED IRONWORKERS' ASSOCIATION ( FIA)
ANNUAL NATIONAL CONFERENCE 30 MAY 1983
DELIGHTED TO ADDRESS NATIONAL CONFERENCE, LAST
ADDRESSED FTA ON 15 FEBRUARY AND SPOKE OF THREAT
TO VIABILITY OF STEEL INDUSTRY$
WILL REPORT NOW ON LABOR PARTY PROGRESS TO DATE.
BUT FIRST SOME PRELIMINARY COMMENTS ON ANOTHER ISSUE
OF CONCERN TO TH-E TRADE UNION MOVEMENT TAXATION
OF LUMP SUM SUPERANNUATION. LATER, I WILL OUTLINE
PROGRESS IN MORE GENERAL TERMS.
LUMP SUM SUPERANNUATION
GOVERNMENT HAS MOVED IN THIS AREA -AS PART OF ITS
CONCERN TO SEE THAT THE BURDEN OF THE ECONOMIC RECOVERY
PROGRAM ALSON AUSTRALIANS IN A RELATIVELY GOOD
POSITION TO BEAR IT.
a ORIGINALLY SUPERANNUATION TAX CONCESSIONS DESIGNED
TO ENCOURAGE PEOPLE TO PROVIDE FOR OWN RETIREMENT AND
REDUCE DEMAND ON GOVERNMENT PENSIONS SYSTEM, THE TAX
CONCESSIONS ON EMPLOYEES' AND EMPLOYERS' CONTRIBUTIONS
COST AaOUT $ 2 BILLION PER ANNUM. ALL AUSTRALIAN WORKERS
AND TAXPAYERS PAY FOR THIS, BUT THE BENEFITS GO TO,
ONLY 140 PER CENT OF EMPLOYEES, AND MOST OF THE BENEFITS
GO TO A MUCH SMALLER PROPORTION OF PEOPLE ON HIGH
I NCOMES.
ALTHOUGH ENORMOUSLY COSTLY, THE SUPERANNUATION
CONCESSIONS WERE NOT ACHIEVING THEIR PURPOSE.
THEY ENCOURAGED EMPLOYEES TO TAKE BENEFITS AS LUMP
SUMS, WHICH WERE OFTEN THEN INVESTED IN WAYS THAT
ALLOWED PENSION TO B3E TAKEN AS WELL.
UNDER NEW ARRANGEMENTS, LUMP SUMS ACCUMULATED BEFORE
MAY 19 WILL NOT BE TAXED. FOLLOWING CONSULTATIONS WITH
ACTU, CABINET WILL CONSIDER TODAY A METHOD OF CALCULATING
THE PROPORTION OF THE LUMP SUM THAT IS FREE OF TAX
THAT IS HIGHLY FAVOURABLE TO SUPERANNUANTSi THAT IS,
ON THE PROPORTION OF THE TOTAL YEARS OF SERVICE
REPRESENTED BY SERVICE BEFORE MAY 19 1983.
ALWAYS UNDERSTOOD THAT A NUMBER OF OTHER ISSUES WOULD
NEED TO BE SETTLED FOLLOWING CONSULTATIONS WITH UNIONS
AND LIFE OFFICES. THESE ISSUES INCLUDE PORTABILITY,
AND THE PROPORTION OF EMPLOYEES'I CONTRIBUTIONS THAT
SHOULD BE EXEMPTED.
PART OF THE NEW PACKAGE INCLUDES THE TAXATION OF LUMP
SUMS ACCUMULATED BY SERVICE AFTER MAY 19 UNDER THE OLD
ARRANGEMENTS IF LUMP SUM IS USED TO PURCHASE CONTINUING
ANNUITY OR PENSION. LAWS WILL BE CHANGED TO MAKE SUCH
ANNUITIES MORE ATTRACTIVE. THEY WILL ASSIST PREPARATION
FOR RETIREMENT BY SOME RECIPIENTS OF LUMP SUMS.
3,
OVERALL, THE MEASURE MODIFIES A BENEFIT THAT WAS NOT
BEING USED AS IT WAS INTENDED, AND WHICH WAS AVAILABLE
ONLY TO 40 PER CENT OF RELATIVELY-WELL-OFF AUSTRALIANS,
WITH THE LARGEST BENEFITS GOING TO A FEW PER CENT OF
THE MOST WELL OFF,
STEEL INDUSTRY
BASIS OF GOVERNMENT S APPROACH ABSOLUTE URGENCY
OF ADDITIONAL ASSISTANCE VERY VIABILITY OF INDUSTRY
AT STAKES
PROBLEMS FACING INDUSTRY ARE EXTREMELY COMPLICATED
UNFORTUNATELY NO EASY OR COSTLESS SOLUTIONS.
PROBLEM IS NOT JUST INCREASED STEEL IMPORTS, RATHER
OVERSEAS PRESSURES HAVE AGGRAVATED OTHER PRESSURES,
INCLUDING FROWTHE DOWNTURN IN THE DOMESTIC ECONOMY,
OVERSEAS PRESSURES DERIVE FROM A COMBINATION OF THE
EMERGENCE OF SIGNIFICANT EXCESS CAPACITY IN WORLD
STEEL INDUSTRY SINCE MID 1970' s WHICH IS LIKELY
TO PERSIST FOR SOME TIME AND THE CURRENT WORLD
RECESSION,
BUT NOTWITHSTANDING ALL THIS, LIVELIHOOD OF THOUSANDS
OF MEN AND WOMEN WORKING IN STEEL INDUSTRY AT RISK
UNLESS FEDERAL GOVERNMENT PUTS IN PLACE A WORKABLE
ASSISTANCE PACKAGE,
WHEN I ADDRESSED YOU ON F-EBRUARY 15 GAVE THE FOLLOWING
COMMITMENTS ON BEHALF OF A FUTURE LABOR GOVERNMENT:
FUNDAMENTAL COMMITMENT MAINTENANqCE OF STEEL
INDUSTRY
SET OURSELVES THE OBJECTIVE OF MAINTAINING
JOBS OF THOSE CURRENTLY EMPLOYED
ATTEMPT TO ACCELERATED FINALISATION OF IAC
REPORT PREPARATION OF A 10 YEAR DEVELOPMENT PLAN WITHIN
THE FIRST 100 DAYS.
WILL NOW REPORT ON THE PROGRESS ON THESE COMMITMENTS.
BUT FIRST A BASIC POINT ABOUT JOBS. IAM SATISFIED
ON THE BASIS OF DISCUSSIONS AND PROGRESS TO DATE
THAT THE ASSISTANCE PROGRAM WE PUT IN PLACE WILL BE
ONE THAT GI-VES THE BEST PROSPECT OF A SECURE
EMPLOYMENT FUTURE IN fHE INDUSTRY,
THIS WILL BE AT CONSIDERABLE COST TO THE REST OF THE
AUSTRALIAN PEOPLE, BUT I FEEL ENTITLED TO ASK OTHER
AUSTRALIANS TO MAKE SOME CONTRIBUTION BECAUSE OF THE
EXTREME ECONOMIC RECESSION IN THE STEEL-PRODUCING
AREAS. BUT IN RETURN, THE OTHER AUSTRALIANS, WHO
WILL BE PAYING FOR THIS ASSISTANCE, ARE ENTITLED TO
ASK FOR A FULL-SCALE EFFORT TO RAISE WORK EFFORTj
IMPROVE WORK PRACTICES AND RAISE PRODUCTIVITY IN THE
STEEL INDUSTRY.
WE HAVE NOW REACHED THE FINAL LEG OF THAT PROCESS,
AND EXPECT TO BE ABLE TO ANNOUNCE NEW ARRANGEMENTS
BY THE END OF JUNE, WHICH WILL BE PRETTY CLOSE TO
THE 100 DAYS. MY MINISTER FOR INDUSTRY AND COMMERCE
ASKED FOR THIS SLIGHT EXTENSION OF TIME, AND I THOUGHT
IT BETTER TO GET IT RIGHT IN 110 DAYS THAN TO GET IT
WRONG IN 100 DAYS.
I WOULD ALSO LIKE TO MAKE IT CLEAR THAT ANYTHING WE DO
WILL BE DIRECTED AT ASSISTANCE TO STEEL-MAKING JOBS,
AND NOT AT ASSISTING STEEL-MAKING COMPANIES AS SUCH.
ANY COMMITMENT THAT WE MAKE TO STEEL-MAKING COMPANIES
WILL BE DESIGNED TO PROTECT JOBS.
WILL BRIEFLY REVIEW DEVELOPMENTS SINCE COMING TO OFFICE.
AS YOU KNOW, SOON AFTER ELECTION MINISTER FOR INDUSTRY
AND COMMERCE INITIATED DISCUSSIONS WITH BHP AND WITH
FIA AND OTHER UNIONS INVOLVED.
HE ALSO WROTE TO CHAIRMAN OF IAC EMPHASISING THE NEED
TO EXPEDITE COMPLETION OF ITS FINAL REPORT.
STEEL INDUSTRY ADVISORY COUNCIL ( WHICH INCLUDES
MANUFACTURERS, UNIONS, USERS, IMPORTERS AND
PARLIAMENTARIANS) IS ENGAGED IN STUDIES ON THE
LONG-TERM FUTURE OF THE INDUSTRY ( INCLUDING FUTURE
DEMAND, DESIRABLE WORKFORCE LEVELS, AREAS FOR
IMPROVING COMPETITIVENESS AND ASSISTANCE OPTIONS).
-I 4-I I p-st
TRIPARTITE COMMITTEE, CHAIRED BY A REPRESENTATIVE
FROM THE DEPARTM,' ENT OF EmPLOYMENT AND INDUSTRIAL
RELATIONS, HAS BEEN ESTABLISHED TO INVESTIGATE HOW
RETRENCHMENTS MIGHT BE AVOIDED AND A VOLUNTARY
RETIREMENT SCHEME PUT IN PLACE AS AN ALTERNATIVE.
THE GOVERNMENT HAS HAD ITS DEPARTMENTAL ADVISERS
EXHAUSTIVELY EXAMINE ISSUES RAISED BY THE LAC DRAFT
REPORT WITH A VIEW TO FURNISHING ADVICE TO
MINISTERS AS SOON AS POSSIBLE AFTER LAC FINAL REPORT
IS COMPLETED,
CAN FURTHER REPORT THAT LAST WEEK THE GOVERNMENT
RECEIVED LAC's FINAL REPORT, NOT AT LIBERTY TO REVEAL
RECOMMENDATIONS IN FINAL REPORT, BUT CAN SAY ARE
HIGHLY CONTENTIOUS, THE GOVERNMENT WILL NOT BE BOUND
BY RECOMMENDATIONS, BUT WILL TREAT THE REPORT SIMPLY
AS ONE SOURCE OF ADV/ ICE TO BE CONSIDERED ALONG WITH
OTHER ADVICE,
CABINET CONSIDERS A SUB3MISSION BY MINISTER FOR
INDUSTRY AND COMMERCE ON STEEL INDUSTRY ASSISTANCE
EARLY THIS WEEK,
REPEAT THE GOVERNMENT WILL BRING TO ITS DELIBERATIONS
THE FUNDAMENTAL GOAL OF FORMULATING AN ASSISTANCE
PROGRAM WHICH OFFERS THE BEST P-ROSPECTS* FOR SECURING
JOBS IN THE STEEL INDUSTRY,
IN THE CONTEXT CAN SAY THAT ON PRESENT PLANNING
SHOULD BE ABLE TO FINALISE LONG-TERM STEEL INDUSTRY
DEVELOPMENT PLAN BY THE END OF THE NEXT MONTH. THIS
PLAN IS, OF COURSE, A KEY ELEMENT IN OUR EFFORTS TO
SECURE JOB LEVELS IN THE STEEL INDUSTRY.
ENVISAGE THAT THE PLAN WILL INCORPORATE UNDERTAKINGS
FROM BOTH BHP AND THE GOVERNMENT REGARDING PRODUCTIVITY,
TECHNOLOGY, PRICING AND SECURITY OF TENURE FOR
WORKERS AND INVOLVE A TIME FRAME AND DEGREE OF
FLEXIBILITY APPROPRIATE TO CHANGES IN INDUSTRY
CIRCUMSTANCES. THE FINAL ASSISTANCE PACKAGE THAT IS AGREED TO
WILL, OF COURSE, NEED TO HAVE PARTICULAR REGARD
TO THE DIRECT EMPLOYMENT EFFECTS IN STEEL PRODUCING
REGIONS BUT WILL ALSO NEED TO TAKE INTO ACCOUNT THE
COSTS TO THE COMMUNITY OF A BASIC RAW MATERIAL FOR
USER INDUSTRIES AND THE EMPLOYMENT IMPLICATIONS FOR
THOSE INDUSTRIES.
FUNDAMENTAL POINT JOBS SLIDE IN STEEL INDUSTRY
HAS BEEN UNMITIGATED DISASTER. REPEAT ASSISTANCE
PACKAGE THAT WE PUT IN PLACE WILL BE ONE THAT GIVES
BEST PROSPECT OF SECURING EMPLOYMENT FOR STEEL
WORKERS.
JOB CREATION POSSIBLE FURTHER C h' 1ENTS I APPROPRIATE
REGARDLESS OF THE LEVEL OF ASSISTANCE PROVIDED TO
THE INDUSTRY. THE EMPLOYMENT SITUATION IN STEEL
, PRODUCING REGIONS W'ILL STILL. REMAIN DEPRESSED,
WE CAME TO OFFICE WITH A PLEDGE TO PURSUE EXPANSIONARY
POLICIES WHICH EMPHASrSE JOBS.
OUR BASIC STRATEGY IS TO LAY THE BASIS FOR A DURABLE
ECONOMIC RECOVERY. IT IS ONLY THROUGH SUSTAINED
ECONOMIC GROWTH THAT WE CAN CREATE THE LARGE NUMBER
OF JOBS REQUIRED TO MAKE REAL INROADS INTO THE MASSIVE
UNEMPLOYMENT PROBLEM WHICH WE HAVE INHERITED,
BECAUSE OF THE IMPORTANCE WE ATTACH TO THE IMMEDIATE
CREATION OF ADDITIONAL JOBS, WE HAVE ALREADY MOVED
IN FULFILMENT OF OUR ELECTION COMMITMENT TO INTRODUCE
A MAJOR NEW JOB CREATION PROGRAMi THE COMMUNITY EMPLOYMENT
PROGRAM. AS ANNOUNCED ON 19 MAY, $ 300MILLION WILL BE MADE
AVAILABLE FOR PROJECTS UNDER THE PROGRAM IN 1983/ 84,
OUR AIM IS TO REACH A LEVEL OF ACTIVITY UNDER THE
PROGRAM WHERE WE WILL BE PROVIDING, IN A FULL YEAR, UP
TO 70,000 FULL TIME JOBS FOR AN AVERAGE DURATION OF SIX
MONTHS, MANY MORE JOBS WILL BE CREATED INDIRECTLY BY
THE INCREASED DEMAND FOR GOODS AND SERVICES AND HIGHER
INCOMES WHICH WILL RESULT.
THE PROGRAM IS DESIGNED PARTICULARLY TO BENEFIT
THE LONG TERM UNEMPLOYED, ESPECIALLY THOSE MOST
DISADVANTAGED IN THE LABOUR MARKET WHO WOULD BE
LEAST LIKELY TO BE ASSISTED BY GENERAL EMPLOYMENT
GROWTH AS ECONOMIC ACTIVITY PICKS UP,
THE MINISTER FOR EMPLOYMENT AND INDUSTRIAL RELATIONS,
MR WILLIS, IS TAKING STEPS TO ENSURE THAT, WITHIN THE
COMMUNITY EMPLOYMENT PROGRAM, SPECIAL PRIORITY IS
GIVEN TO REGIONS OF HIGH UNEMPLOYMENT SUCH AS NEWCASTLE,
WOLLONGONG AND WHYALLA.
IN ORDER TO ACCOMMODATE THE NEW EMPLOYMENT AND HOUSING
PROGRAMS ANNOUNCED ON 19 MAY, WE WERE FORCED TO MAKE
SOME SIGNIFICANT OFF-SETTING CUTS IN SOME OF THE PREVIOUS
GOVERNMENT'S PROGRAMS. NOT TO HAVE DONE THIS WOULD HAVE
PLACED INTOLERABLE BURDENS ON THE GOVERNMENT'S MONETARY
POLICY AND PUT SERIOUS PRESSURE ON INTEREST RATES, THE
EFFECT THIS WOULD HAVE HAD ON PRIVATE SECTOR SPENDING
WOULD HAVE UNDONE ALL THE BENEFITS OF THE REFLATIONARY
ASPECTS OF THE GOVERNMENT'S POLICIES.
IN MAKING CUTBACKS WE HAVE BEEN CONCERNED TO ENSURE
THAT THEY AFFECT THOSE MOST ABLE TO SHOULDER THE BURDEN,
THOSE OF US WITH JOBS MIUST EXERCISE RESTRAINT IN OUR
INCOME CLAIMS, JOB CREATICN AND INDUSTRY ASSISTANCE
PROGRAMS WILL sTMPLY BE UJSF'-r'SS IF LABOUR COSTS ARE
ALLOWED TO GET OUT OF CONTROL,
WAGE RESTRAINT IS ESSENTIAL 1F WE ARE TO MAINTAIN A
VIABLE INDUSTRIAL BASE AND CREATE MORE JOBS, BUT THE
GOVERNMENT RECOGNISES THAT WAGE RESTRAINT BY ITSELF
WOULD BE GROSSLY INEQUITABLE,
THE PRICES AND INCOMES ACCORD IS NOT JUST ABOUT WAGE
RESTRAINT, IT DEALS WITH A WHOLE RANGE OF OTHER
MEASURES NECESSARY TO IMPROVE AUSTRALIA'I S SOCIAL AND
ECONOMIC WELL-BEING, THE GOVERNMENT HAS ALREADY TAKEN
ACTION IN MANY OF THESE AREAS:
WE HAVE INTRODUCED LEGISLATION TO ESTABLISH AN
ECONOMIC PLANN. ING ADVISORY COUNCIL;
WE ARE IN THE PROCESS OF ESTABLISHING A PRICES
SURVEILLANCE AUTHORITY;
WE ARE TAKING ACTION TO RESTRAIN NON-WAGE INCOMES,
SUCH AS PROFEGSONAL FEES, DIVIDENDS AND DIRECTORS'
REMUNERATI ON;
WE HAVE INTRODUCED LEGISLATION AS PART OF OUR
POLICY TO SMASH THE TAX AV'OIDANCE INDUSTRY;
WE HAVE INTRODUCED LEGISLATION TO FACILITATE THE
AMALGAMATION OF UNIONS AND TO ABOLISH THE
INDUSTRIAL RELATIONS BUREAU;
WE HAVE REDUCED THE CEILING FOR MIGRATION FOR
1983-84 TO BETWEEN 80,000 AND 90,000, WITHIN
THIS GLOBAL FIGURE THERE WILL BE A SHIFT IN
EMPHASIS TOWARDS THE REUNION OF CLOSE FAMILY
MEMBERS OF AUSTRALIAN CITIZENS AND TO REFUGEES,
AND AWAY FROM THE RECRUITMENT OF SKILLED WORKERS
OVERSEAS; THIS GOVERNMENT IS CONCERNED ABOUT EQUITY AND
THE INTERESTS OF ORDINARY AUSTRALIANS, BUT WE
CAN ONLY SUCCEED IN OUR OBJECTIVES IF WE HAVE
THE SUPPORT OF THE COMMUNITY AT LARGE AND, IN
PARTICULAR, THE TRADE UNION MOVEMENT.