CHECK AGAINST DELIVERY EMBARGOED UNTIL 10 A. M.
3 U T ALlI 30 JUNE 1983
JUNE 1983 PRIMVE MINISTER
PREMIERS AND MINISTERS
I WELCOME YOU ALL TO THIS THE FIRST PREMIERS' CONFERENCE
THAT I HAVE HAD THE PLEASURE AND PRIVILEGE OF ATTENDING THE
PLEASURE IS IN NO WAY DIMINISHED BY FINDING MYSELF IN THE CHAIR.
IN PARTICULAR, I EXTEND A WELCOME ON YOUR BEHALF TO THE
NEW PREMIER OF WESTERN AUSTRALIA, BRIAN BURKE, WHO, I AM SURE,
WILL SEE MANY CONFERENCES IN THE FUTURE. HE FOLLOWS A LONG
LINE OF WORTHY REPRESENTATIVES FROM THE WEST INCLUDING ONE
ESPECIALLY FAMILIAR TO ME-BERTHAWKE AND,. OF COURSE, MORE
RECENTLY SIR CHARLES COURT.
IN THE UNAVOIDABLE ABSENCE OF MRWRAN WE WELCOME
MR : FERGUSON.
ALSO, THIS IS THE FIRST. CONFERENCE THAT THE TREASURER AND
. MY OTHER MINISTERIAL COLLEAGUES HAVE ATTENDED AND WE
WELCOME THEM
FOR THE REST, I UNDERSTAND THAT YOU ARE ALL EXPERIENCED
IN THIS ARENA BUT I AM SURE YOU WILL PLAY FAIR WITH THE
NEW COMERS,
IT IS, OF COURSE, NOT MY FIRST MEETING WITH YOU IN THIS CHAMBER.
S . THAT DATES BACK TO APRIL DURING THE HISTORIC ECONOMIC SUMMIT.
BEFORE CONTINUING ON THAT LINE. HOWEVER, THERE ARE SOME
PROCEDURAL MATTERS WHICH WE SHOULD CLARIFY. I AM
SUGGESTING THAT THE CONFERENCE BE OPEN TO THE PRESS DURING
THE STATEMENT I AM ABOUT TO MAKE AND DURING YOUR RESPONSES,
WE EXPECT THAT THESE MAY BE OF SOME SUBSTANCE SINCE WE HAVE
TAKEN THE UNUSUAL, BUT VERY DESIRABLE, STEP OF GIVING TO
YOU IN ADVANCE LAST NIGHT IN FACT THE COMMONWEALTH'S
VIEW ON THE PRESENT ECONOMIC SITUATION.
FOLLOWING YOUR RESPONSES I WILL INVITE THE ' TREASURER
TO SUM -UP. FOR THE COMMONWEALTH DEALING WITH THE ECONOMY.
AT THAT POINT, I SUGGEST WE SHOULD GO INTO LOAN COUNCIL
WHICH WILL, AS'USUAL,. BEA MEETING IN PRIVATE,
IS THAT AGREED?
BOT'TH E. TREASURER AND MYSELF WOULD PROPOSE TO ADDRESS
THE ECONOMIC AND FINANCIAL SITUATION IN GENERAL TERMS,
LEAVING SPECIFIC: ISSUES TO BE RAISED LATER IN THE
PRIVATE MEETING. I ASSUME THAT ALL OF US WILL PROCEED
ON THAT BASIS,
3.
AS THIS PREMIERS' CONFERENCE AND LOAN COUNCIL IS
THE FIRST SINCE WE TOOK OFFICE, WE DO WISH IT TO BE A
SUCCESS, PARTICULARLY IN TERMS OF MAKING AN
IMPORTANT CONTRIBUTION TO RECOVERY IN THE ECONOMY.
SMY GOVERNMENT SEES THE REACHING OF BROAD UNDERSTANDING
BETWEEN THE COMMONWEALTH AND THE STATES AS BEING
IMPORTANT TO NATIONAL. ECONOMIC RECOVERY. AS I SAID
IN MY ADDRESS TO THE NATIONAL PRESS CLUB ON MONDAY:
" FOR OUR PART, WE ARE APPROACHING THAT
CONFERENCE WITH A DETERMINATION TO MAKE IT,
NOT:: AS -, IT HAS BEEN. FOR . SO MANY YEARS, AN
OCCASION FOR CONFRONTATION AND CONFLICT, . BUT
SFQORiGENUINE CO-OPERATION AND CONSTRUCTIVENESS
STO'iTHE MUTUAL . BENEFIT OF THE NATION AND THE
STATES WHICH CONSTITUTE THE NATION".
STHIS WAS THE SPIRIT OF THE NATIONAL ECONOMIC. SUMMIT
CONFERENCE:-A., SPIRIT THAT WILL BE CARRIED ON BEYOND
THIS PREMIERS CONFERENCE IN THE. PARTICIPATION OF
ALL PREMIERS ON A ROTATING BASIS IN THE DELIBERATIONS
OF THE. ECONOMIC/ PLANNING ADVISORY COUNCIL.
I'M SURE ALL OF US HAVE THE SAME BASIC OBJECTIVES
AND ASPIRATIONS FOR THE AUSTRALIAN ECONOMY. WE ALL
WANT TO SEE A STRONG RECOVERY IN ACTIVITY AND EMPLOYMENT,
-WE WOULD ALL WISH TO SEE A RESTORATION OF ECONOMIC
GROWTH TO RATES, AROUND 5 PERCENT, WHICH WILL GO
FURTHER THAN JUST HALTING THE VERY SHARP RISE IN
UNEMPLOYMENT WHICH OCCURRED IN THIS RECESSION, AND
ACTUALLY BEGIN TO PRODUCE APPRECIABLE FALLS IN
UNEMPLOYMENT OVER TIME.
WHAT EVERY ONE OF US WANTS, IN SHORT, IS A SUSTAINED
ECONOMIC RECOVERY STRENGTHENING IN 1983-84 AND BEYOND,
NOT A " FLASH IN THE PAN" RECOVERY.
THAT MEANS THAT WHILE WE AS GOVERNMENTS CAN
. THROUGH PROVIDING! FISCAL STIMULUS TO THE
ECONOMY:-PLAY A MAJOR ROLE IN ARRESTING THE
DECLINE OF THE ECONOMY, AND CAN BE INSTRUMENTAL
IN BRINGING ABOUT A.: TURNAROUND INTO RECOVERY, WE
MUST THEN BEGIN TO EASE BACK AS RECOVERY SPREADS
TO THE PRIVATE SECTOR.
WE CANNOT HAVE SUSTAINED GROWTH AGAIN WITHOUT A
MAJOR CONTRIBUTION FROM A HEALTHY PRIVATE SECTOR.
ANOTHER KEY TO THE SUSTAINABILITY OF THIS RECOVERY WILL
BE THE EXTENT TO WHICH WE AS AUSTRALIANS CAN, THROUGH
MUTUAL RESTRAINT IN INCOME CLAIMS, AVOID A SURGE IN
INFLATION SUCH AS THOSE WHICH HAVE ABORTED RECOVERIES
IN THE PAST, 5
MY GOVERNMENT'S EMPHASIS ON A CO-OPERATIVE APPROACH
TO PRICES AND INCOMES POLICY HAS OPENED THE WAY TO
SUCCESSFUL APPLICATION OF SUBSTANTIAL FISCAL STIMULUS
THIS YEAR, BUT CLEARLY WE WOULD BE RASH, TO SAY THE
LEAST. IF THROUGH EXCESSIVE AND EXCESSIVELY PROLONGED
APPLICATION OF STIMULUS, WE PUT TOO MUCH STRAIN ON
THAT POLICY IN ITS FIRST REAL TEST.
THAT SAID, FISCAL STIMULUS PROVIDED BY THE
COMMONWEALTH,. IS ALREADY MAKING A MAJOR CONTRIBUTION
TO RECOVERY. . WE INTEND TO PROVIDE FURTHER STIMULUS IN
1983-84.
WE RECOGNISE. THAT MANY OF THE STATES HAVE EXPERIENCED
DIFFICULT BUDGETARY SITUATIONS DURING THE PAST YEARI
WITH THE RECESSION AND, IN THE EASTERN STATES, THE
VERY SEVERE DROUGHT..
THE DROUGHT ALONE PLACED A BURDEN. ON GOVERNMENT
FINANCES AT ALL LEVELS OF POSSIBLY SEVERAL
HUNDRED MILLION DOLLARS. / 6
1
WE RECOGNISE TOO THAT MANY STATES ARE FACING ANOTHER
DIFFICULT YEAR IN 1983/ 84, EVEN THOUGH AND MY
GOVERNMENT IS NOT CLAIMING THE CREDIT FOR THIS
THE DROUGHT HAS NOW BROKEN AND THE PROSPECT IS
NOW FOR QUITE A GOOD SEASON IN THE RURAL SECTOR
THERE SHOULD ALSO BE A MODERATE RECOVERY IN THE
NON-FARM SECTOR.
WE RECOGNISE THAT IT WILL TAKE SOME TIME BEFORE
IMPROVEMENT IN THE ECONOMY FLOWS THROUGH TO MAKING
A REAL IMPROVEMENT œ N: BUDGETARY POSITIONS. I
MUST SAY THAT THIS IS PARTICULARLY THE CASE AT THE
COMMONWEALTH LEVEL WHERE'MAJOR.. COMPONENTS OF OUR
TAX BASE RESPOND TO IMPROVED BUSINESS ACTIVITY ONLY
AFTER VERY. LONG DELAYS.
THE COMPANY TAX IS APRIME EXAMPLE, THE TIME DELAY
BETWEEN IMPROVED COMPANY PROFITS AND THE ADDITIONAL
TAX ACTUALLY BEING RECEIVED BY THE COMMONWEALTH
AVERAGING MORE THAN 18 MONTHS.
I DON T WANT TO FORESHADOW WHAT THE TREASURER HAS
TO SAY EXCEPT TO MAKE. THE POINTS THAT
WE MUST ALL OF-US ACCEPT THAT THERE ARE REAL
LIMITS ON THE FINANCIAL RESOURCES AVAILABLE
TO US; AND
-IF WE WANT THIS ECONOMIC RECOVERY TO LEAD TO
SUSTAINED AND HEALTHY GROWTH IN THE PRIVATE
SECTOR, WE MUST NOT GO BEYOND THOSE LIMITS AND
PLACE EXCESSIVE PRESSURE ON FINANCIAL AND
OTHER MARKETS.
WITHIN THAT CONTEXT WE DO RECOGNISE THE IMPORTANT
ROLE THE STATES HAVE TO PLAY IN BRINGING ABOUT
RECOVERY INDEED WE HAVE PLACED A GREAT DEAL OF
IMPORTANCE ALREADY ON THAT ROLE IN OUR MAJOR JOB
CREATING-INITIATIVES ANNOUNCED IN THE TREASURER'S
MAY STATEMENT.
THE COMMUNITY EMPLOYMENT PROGRAM MARSHALLS COMMONWEALTH
. AND STATE RESOURCES CO-OPERATIVELYI WITHTHE STATES
PLAYING A KEY ROLE IN ENSURING THE : EFFECTIVENESS OF
THE PROGRAM IN CREATING JOBS.
THE GOVERNMENT WILL BE. PROVIDING $ 300 MILLION FOR
PROJECTS UNDER THE COMMUNITY EMPLOYMENT PROGRAM
IN 1983/ 84. TOGETHER WITH: THE-FURTHER $ 100 MILLION
BEIING ALLOCATED FOR CONTINUATION OF THE WAGE PAUSE
PROGRAM, THIS REPRESENTS A VERY SIGNIFICANT INCREASE
OVER THE FUNDS MADE AVAILABLE FOR EMPLOYMENT
CREATION IN 1982/ 83 ($ 100M) S.
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8.
-APART FROM THE $ 50 MILLION BEING RESERVED FOR
COMMONWEALTH INITIATED PROJECTS, THESE FUNDS ARE
BEING ALLOCATED BETWEEN THE STATES AND THE
TERRITORIES PRINCIPALLY ON A POPULATION BASIS.
AGAIN, IN THE GOVERNMENT'S MAJOR INITIATIVES IN THE
HOUSING AREA, WE HAVE GIVEN STRONG SUPPORT TO THE
STATE ROLE IN THE PUBLIC HOUSING AREA PARTICULARLY
DIRECT COMMONWEALTH FUNDING FOR PUBLIC HOUSING
WILL BE. INCREASED FROM $ 333 MILLION IN 1982/ 83
TO $ 500 MILLION IN 1983/ 84, AN INCREASE OF
150 PERCENT.
S. DESPITE THE LIMITS IMPOSED BY THE COMMONWEALTH'S OWN
: BUDGETARY POSITION, WE HAVE ALSO RECOGNISED THE NEED
TO CONTINUE PROVIDING ADEQUATE FUNDS FOR STATE
S.. ACTIVITIES GENERALLY.
TOTAL RECURRENT PAYMENTS TO THE STATES . INCLUDING
REVENUE SHARING GRANTS UNDER THE PRESENT FORMULAE,
OTHER GENERAL REVENUE AND SPECIFIC PURPOSE RECURRENT
PAYMENTS ( BUT EXCLUDING PAYMENTS FOR NATURAL DISASTER
RELIEF, FODDER SUBSIDIES, AND SPECIAL BUDGETARY
ASSISTANCE FOR BUSHFIRES AND. MEDICINE), ARE
ESTIMATED TO RISE BY OVER 11 PERCENT IN 1983-84.
S. 19/ 1
9,
THIS REPRESENTS A RISE OF ABOUT 4 PERCENT IN REAL
TERMS AND COVERS THE BULK OF COMMONWEALTH PAYMENTS
TO THE STATES. WHILE THE INCREASE IN MONEY TERMS
IS LESS THAN LAST YEARj IN REAL TERMS THERE WILL
BE A SIGNIFICANTLY LARGER INCREASE,
SPECIFIC PURPOSE CAPITAL PAYMENTS, EXCLUDING PAYMENTS
FOR NATURAL DISASTER RELIEF, ARE ESTIMATED TO
RISE BY OVER 20.5 PERCENT IN 1983-84, A RISE OF ABOUT
13 PERCENT IN REAL TERMS.
THIS FOLLOWS A STRONG RISE IN TOTAL CAPITAL.
S.: PAYMENTS TO THE STATES IN 1982-83 OF 22.3 PERCENT
S. AND A MASSIVE RISE OF 80.6 PERCENT IN 1982-83 IN
THE BORROWING PROGRAMS OF THE LARGE STATE SEMI-
. GOVERNMENT AUTHORITIES.
THE FUNDS THEREFORE BEING MADE AVAILABLE TO THE STATES
THROUGH RECURRENT AND SPECIFIC PURPOSE CAPITAL PAYMENTS
WILL BE RISING STRONGLY IN REAL TERMS IN 1983-84, EVEN
THOUGH COMMONWEALTH RECEIPTS ( ON THE BASIS OF THE FORWARD
ESTIMATES) ARE EXPECTED TO SHOW A SIGNIFICANT DECLINE IN
REAL TERMS.
I
WE ARE CONCERNED TODAY WITH THE ADDITIONAL AMOUNTS TO BE
MADE AVAILABLE TO THE STATES, IN PARTICULAR THROUGH THE
STATE GOVERNMENT PROGRAM AND FOR BORROWING BY SEMIGOVERNMENT
AUTHORITIES, IN CONSIDERING THOSE AMOUNTS
WE . NEED TO BEAR IN MIND THE STRONG RISES IN REAL TERMS
INVOLVED IN RECURRENT AND SPECIFIC PURPOSE CAPITAL
PAYMENTS AS I HAVE JUST OUTLINED.
BUT WITHIN LIMITS ON OVERALL PUBLIC SECTOR FINANCIAL
RESOURCES WHICH ARE CONSISTENT WITH SUSTAINABLE
RECOVERY WE INTEND TO BE REASONABLE. AND SUPPORTIVE
OF STATE EFFORTS TO PROVIDE SERVICES. AND TO GIVE
SUPPORT TO THE ECONOMY IN THEIR AREAS.
THIS GOVERNMENT'S APPROACH TO THIS CONFERENCE WILL
NOT BE ONE OF TAKE IT OR LEAVE IT.
AS I HAVE INDICATED, OUR APPROACH WILL BE THE SAME
AS WE TOOK TO THE NATIONAL ECONOMIC. SUMMIT CONFERENCE.
WE ALL NEED TO APPROACH THESE DISCUSSIONS IN A
FRANK AND CONSTRUCTIVE SPIRIT, RECOGNISING EACH
OTHER'S PROBLEMS AND CONSTRAINTS,
FOR OUR PARTj WE WILL BE DOING OUR BEST TO ENSURE THAT
THESE DISCUSSIONS COME TO A RESULT WHICH WE CAN ALL
ACCEPT IS A REASONABLE AND ACCEPTABLE BALANCE GIVEN
THE CONSIDERATIONS WHICH WE MUST TAKE INTO ACCOUNT. 11/.
11.
SOME OF YOU HAVE ALREADY INDICATED PUBLICLY YOUR
STATE'S POSITION IN RESPECT OF SOME OF THE MATTERS
WE WILL HAVE UNDER DISCUSSION HERE. I AM SURE THAT
A CLOSE READING OF THE TREASURER'S STATEMENT SPELLING
OUT THE DETAIL OF THE COMMONWEALTH'S PROPOSAL WILL
GIVE SOME CAUSE FOR REFLECTION ON WHAT HAS ALREADY
BEEN SAID.
WHAT I DO HOPE WE HAVE SEEN AN END OF IS THE SORT OF
EXTRAVAGANT COMMENT, WHICH WHILE PERHAPS HEADLINE
CATCHING, DOES VERY LITTLE FOR THE. CONFERENCE AS A
WHOLE AND FOR THE CALM, DISPASSIONATE CONSIDERATION
OF A SERIOUS PROBLEM.
EACH OF YOU IN TURN I NOW ' INVITE TO MAKE A PRESENTATION
ON THE SITUATION AS SEEN FROM YOUR STATE.
SAFTER THAT . AS THE LAST ITEM BEFORE THE MORNING TEA
BREAK, THE TREASURER WILL RESPOND TO YOUR PRESENTATIONS
ON THE ECONOMY, SPEAKING TO HIS MORE EXTENSIVE ECONOMIC
STATEMENT, COPIES OF WHICH YOU RECEIVED LAST NIGHT.
AFTER MORNING TEA, I PROPOSE WE RESUME IN LOAN COUNCIL.