EMBARGOED UNTIL DELIVERYZ CHECK AGAINST DELIVERY
j. AUSTRALIA , l-
FOR MEDIA 27 MAY 1965
CPEECH BY THE PRIME MINISTER FOR ALP FUNCTION, REGENT HOTEL,
SYDNEY THANK YOU LIONEL. LADIES AND GENTLEMEN, FRIENDS:
IT'S GOOD TO BE BACK HERE IN SYDNEY, AND IT'S GOOD TO BE
ADDRESSING SUCH A FAMILIAR GATHERING. IT'S REFRESHING
AFTER A RIGOROUS SESSION OF PARLIAMENT TO GET OUT IN THE
WORLD AGAIN. THIS IS THE SIXTH OF THESE NEW SOUTH WALES
LABOR PARTY DINNERS THAT I HAVE ADDRESSED SINCE BECOMING
PRIME MINISTER JUST OVER TWO YEARS AGO. IT'S BECOMING
SOMETHING OF A REGULAR EVENT FOR ME.
IT'S AN ESPECIALLY PLEASING FEELING TO ATTEND THESE
FUNCTIONS, IF ONLY BECAUSE THERE ARE MANY OF YOU HERE
TONIGHT WHO ARE NOT NORMALLY -E SORT OF PEOPLE WE WOULD
EXPECT TO SEE AT LABOR PARTY GATHERINGSo I BELIEVE IT
SAYS A LOT ABOUT THE CHARACTER OF OUR GOVERNMENT THAT
ITS POLICIES DO FIND SUPPORT AMONGST PEOPLE liN AREAS
OUTSIDE THOSE TRADITIONALLY CONSIDERED THE DOMAIN OF THE
LABOR PAR'IY.
AND IT SAYS A LOT THAT SO MANY OF YOU ARE INTERESTED
ENOUGH TO TURN OUT FOR US SO REGWl,, ARLYT-;'
ERE ARE A NUMBER OF REASONS FOR THIS. NOT THE LEAST
OF THEM BELIEVE IS THE BRAND OF OUR ECONOMIC POLIC! ES,
AND THE CONSISTENC'Y WITH WHICH WE HAVE APPLIED THEM OVER
THE LAST TWO YEARS.
WE HAVE ADOPTED POLICIES AND WE HAVE STUCK BY THEM. I
BELIEVE WE HAVE BROUGHT AN ORIGINAL APPROACH TO
GOVERNME NT IN THAI' NOT ONLY HAVE WE APPLIED OUR POLICIES
CONSISTENTLY, BUT THEY HAVE BEEN BASED IN A COHERENT,
LONG-TERM STRATEGY. IHE PLAN SPELT OUT BY THE PRICES
AND INCOMES ACCORD AND ELABORATED BY THE ECONOMIC SUMMIT
IN APRIL 1983, HAS PROVIDED A FRAMEWORK AND A CERTAINTY,
AND A VEHICLE FOR HARNESSING THE CO-OPERATION OF ALL
SECTIONS OF THE COMMUNITY.
2
WE KNEW WHEN WE CAME TO OFFICE THAT THE ROAD AHEAD WAS
GOING TO BE HARD-WE CAME IN ACCEPTING THAT MAN4Y
UNPOPULAR DECISIONS HAD TO BE MADE. AND WE HAVE MADE
THEM-WE HAVE NEVER WALKED AWAY FROM THE ACTION WE
CONSIDER IS IN THE LONG TERM INTERESTS OF AUSTRALIA.
NO DOUBT THERE ARE MANY MORE DECISIONS AHEAD OF us. BUT
OUR RECORD IN TAKING THE ACTION WE BELIEVE IS IN
AUSTr'ZALIA'S LONGER TERM INTERESTS IS A SIGNIFICANr
REASON WHY WE HAVE ENJOYED AND, I BELIEVE, WE WILL
CONTINUE TO ENJOY, BROAD COMMUNITY SUPPORT FOR OUR
PROGRAMS. I DON'T HAVE TO TEIL YOU THAT GOVERNMENT IS NEVER EASY
SAILING. GOVERNMENT WITH INTEGRITY AND CONSISTENCY,
THOUGH, IS MUCH MORE DIFFICULTWHEN
WE CAME TO OFFICE, WE PROMISED THE PEOPLE OF
AUSTRALIA THREE THINGS RECONCILIATION, RECOVERY, AND
RECONSTRUCTION-WE HAVE RECONCILED AUSTRALIANS.
RECOVERY IS UNDERWAY. AND NOW WE AIRE BEGINNING THE
PHASE OF FUNDAMENTAL, LONG TERM IMPORTANCE OF
RECONSTRUCTION. THESE INVOLVE FUNDAMENTAL CHANGES TO
THE AUSTRALIAN ECONOMY.
THERE WILL ALWAYS BE ELECTORAL DANGERS IN MAJOR CHAN4GE
TO AREAS ur: ECONO0MIC AND SOCIAL POLICY-WE WERE TOLD
THERE WERE DANGERS IN THE FLOAT OF THE DOLLAR-WE WERE
TOLD THERE WERE DANGERS ABOUT FREEING UP THE FINANCIAL
SYSTEM. BUT IF YOU TAKE THE N4EXT STEP FROM THAT POINT
OF ACKNOWLEDGING THAT THERE ARE DANGERS IN4 CHANGE AND
THEN SHY AWAY FROM THEM, THEN YOU AIRE DENYING THE PROPER
ROLE AND FUNCTION OF GOVERNMENT.
THE PROPER ROLE OF GOVERNMENT IS TO PERCEIVE WHAT IS
HAPPENING IN4 THE ECONOMY, HOW IT AFFECTS THE ECONOMY,
AND HOW IT AFFECTS SOCIETY: AND IF YOU SEE THAT
SOM;.: TINIG IS OPERATING BADLY AN4D IT NEEDS CHANGE, THEN
IF YOU ARE SERIOUS ABOUT GOOD GOVERNMENT YOU WORK OUT
WHAT NEEDS TO BE DONE AND YOU DO IT-BUT THE ESSENCE OF
REFORM IS NJOT SIMPLY FORCING CHANGETHESE
CHANGES HAVE TO BE ACCEPTED, AND FOR THAT THEY
HAVE TO BE UNDERSTOOD. THEY HAVE TO BE REAL, BUT THEY
CANNOT OVERWHELM. THEY MUST BE GRADUAL AND THEY MUST BE
SEEN TO BE FAIR-FAIRNESS IS ONE REASON WHY I BELIEVE
OUR MAY ECONOMIC STATEMENT WAS SO WELL RECEIVEDGOVERNMENTS
MUST. ACKNOWLEDGE IN THE PROCESS OF CHAN4GE
AND REFORM, IN SOCIAL AND ECONOMIC TERMS THAT THERE NEED
TO BE COMPENSATING MECHAIISMS WHICH PROTECT VULNERABLE
GROUPS-
3
BUT WE REJECT COMPLETELY AND ABSOLUTELY THE PHILOSOPHY
WHICH TOO OFTEN MARKED THE STYLE OF OUR CONSERVATIVE
PREDECESSORS IN GOVERNt1E. IT. THEY WOULD LOOK AT AN ISSUE
AND SAY, " GEE, THERE'IS A DANGER THERE-PUT IT AWAY.
ITS TOO HARD-"
EVERY TIME A PROBLEM ISSUE WOULD ARISE, THE COALITION
PARTIES WOULD WORK THEIR WAY AROUND IT, ONLY TO PUT
ASIDE A LONG TERM SOLUTION IN FAVOUR OF A SOFT OPTION,
BECAUSE THAT WAS THE SAFEST WAY OUT IN THE IMMEDIATE
TERM. THAT IS AS DISHONEST AS IT IS INTELLECTUALLY
BANKRUPT. THE LIBERAI. S HAVE ALWAYS BEEN THE PARTY OF
SOFT OPTIONS, MANIPULATED BY THE PROPPED-UP AGRARIAN
FEATHERBEDDERS OF THE 1NATIONAL PARTY.
WE HAVE HEARD A LOT OVER THE LAST FEW MONTHS ABOUT THE
NEW WAVE OF " 1DRIES" I SEIZING THE COALITION PARTIES. BUTWE
HEARD THA T YEARS AGO WHEN THEY WERE IN GOVERNMENT.
THEIR ACTION JUST IN THE LAST WEEK ro WATER DOWN OUR
REFORM OF THE DAIRY INDUSTRY IS PROOF THAT THE OLD-TIME,
BLINKERED MCEWENISM STILL CONTROLS THESE PARTIES WHEN IT
COMES TO A CRUN1CH ISSUETHE
FACT IS THAT EVERY GOVERNMENT HAS ITS PROBLEMS. BUT
THE KEY TO GOOD GOVERNMENT IS NOT TO TAKE THE STOP-GAP.,
QUICK-FIX SOLUTIONS. GOVERNMEN'T MUST BE ABOUT FOLLOWING
COHERENT STRATEGIES FOR LONG-TERM SOLUTIONS HC
TRANSCEND MOMENTARY PRESSURESWE
INHERITED GOVERNMENT AT A TIME OF SIGNIFICANT
ECONOMIC INSTABILITY-OUR METHODS IN TACKLING THESE
PROBLEMS OF SPENDING, OF UNEMPLOYMENT, OF INFLATION,
OF THE WORST RECESSION SINCE THE GREAT DEPRESSION IS
PROBABLY O1NE OF THE REASONS WHY MANY-O. F YOU ARE HERE
TONI GHTOUR
SUCCESSES ARE SELF-EVIDENTIN
TWO SHORT YEARS, OUR INFLATION RATE HAS BEEN
REDUCED SUBSTANTIALLYECONOMIC GROWTH HAS BEEN-. STRONG AND A FIRM BASIS
EXISTS FOR CONTIN4UED GROWTH. AUSTRALIA'S GROWTH
DURING THE FIRST TWO FINANCIAL YEARS OF LABOR WILL
AT LEAST MATCH THAT ACHIEVED DURING THE ENTIRE
SEVEN YEARS OF THE FRASER ADMINISTRATIONBUSINESS
AND, CONSUMER SPENDING ARL EXPANDING.
REAL UNIT LABOUR COSTS HAVE FALLEN TO THE LEVELS OF
THE EARLY ' 70' s A~ ND PROFITS HAVE IMPROVED
DRAMATICALLY.
THE ACCORD HAS BROUGHT INDUSTRIAL DISPUTATION DOWN
TO VERY LOW LEVELSABOVE
ALL, OUR POLICIES HAVE BEEN CONSISTENTWHEN
WE CAME TO OFFICE, THERE WAS A REAL NEED FOR
ECONOMIC STIMULUS TO PULL THE ECONOMY OUT OF KECESSION
INTO THE INITIAL STAGES OF RECOVERY AND TO PRODUCE JOBSBUT
WE ALSO RECOGN SED THE CENTRAL ROLE IN OUR ECONOMY
OF THE PRIVATE SECTOR, AND THAT ANY LASTING AND
SUSTAINABLE RECOVERY HAD TO BE BASED ON PRIVATE SECTOR
GROWTH. WE ACKNOWLEDGED THAT FOLLOWING THE INITIAL
STIMULUS, WE HAD TO PULL BACK BY REDUCING OUR OWN
DEMANDS ON THE CAPITAL MARKET, TO ALLOW ROOM FOR THE
PRIVATE SECTOR TO TAKE OVER. WE HAVE DONE THAT. iHE
PRIVATE SECTOR IS TAKING OVER THE RECOVERYWE
FOLLOWED UP THIS YEAR'S CUT IN THE DEFICIT WITH THE
$ 1.2 BILLION CUTS ANNOUNCED IN OUR MAY 114 ECONOMIC
STATEM'ENT-WE WILL CONTINUE THE PROCESS IN THE BUDGET
IN AUGUST. OUR FISCAL POLICY IS FOLLOWING THE PATH
DESIGNATED FOR IT WHEN WE CAME TO OFFICE-IT IS A
TANGIBLE DEMONSTRATION OF THE CONSISTENCY AND COHERENCE
WHICH HAS MARKED OUR APPROACH TO GOVERNMENT OVER THE
LASI* TWC YEARS-WE HAVE NEVER LOST SIGHT OF THE FACT
THAT WHAT IS REQUIRED TO PRODUCE A SUSTAINABLE LASTING
RECOVERY IS THAT THE PRIVATE SECTOR MUST BE ASSURED OF
THIS CONSISTENCY AND COHERENCE IF IT IS TO BE RESTORED
TO ITS TRADITIONAL, MAJOR ROLE IN THE AUSTRALIAN
E CO NOM YTHAT
IS HAPPENING. AN: D THE MAINTENANCE OF TRENDS SUCH
AS TijAT iS THE REASON WHY WE HAVE OUR TRILOGY OF
COMMITMENTS-WE HAVE PLEDGED TO CURTAIL GROWTH liJ
GOVERNMENT SPENDING, TAXATION, AND TO REDUCE THE SIZE OF
THE DEFICIT-THE MAY ECON'OMIC STATEMENT IS A
SIGNIFICANT DOWN PAYMENT ON THE TRILOGY. THE TRILOGY
REPRESENTS IHE MOST RIGOROUS SET OF FISCAL DISCIPLINES
EVER IMPOSED BY AN AUSTRALIAN GOVERNMENT UPON ITSELF.
THE DISCIPLINES INVOLVED IN THESE COMMITMENTS ARE
NECESSARY IF THE GOVERNMENT IS TO ALLOW THE BUSINESS
COMMUNITY ! HE FREEDOM TO GENERAIE THE PRIVATE SECTOR
RESURGENCE WHICH WILL SET AUSTRALIA ON THE PATH TO
SUSTAINED ECONOMIC GROWTHTHERE
HAS BEENI SOME PROMINENCE GIVEN IN THE MED'IA TODAY
TO AN EXPECTED REVENUE SHORTFALL FOR COLLECT IONS FROM
PROVISIONAL TAX-PAYERS COMPARED WITH THE 19814-85 BUDGET
ESTIMATES. AS THE TREASURER SAID THIS AFTERNOON, THE
PATTERN OF THE DEFICIT AT THIS STAGE IN THE FINANCIAL
YEAR STILL APPEARS TO BE BROADLY CONSISTENT WITH BUDGET
EXPECTAT IONSAND
THE EXPERIENCE WITH PROVISIONAL 1TAX COLLECTIONS THIS
YEAR WILL NOT AFFECT THE GOVERNMENT'S TRILOGY OF BUDGET
COMMITMENTS IN 1985-8G.
BEYOND THE SHORT TO MEDIUM TERM ECONOMIC CYCLE, THE
PROSPERITY OF THE NATION DEPENDS CRITICALLY UPON4
INVESTMENT TAKING PLACE IN THE DEVELOPMENT OF PRODUCTS
AND INDUSTRIES MOST LIKELY TO EXPERIENCE LONG TERM
INCREASES I N LOCAL AND I NTERNAT IONAL DEMAND-WE AR~ E A
SMALL AND RESOURCE-RICH NATION, IN THE GEOGRAPHIC
NEIGHBOURHOOD OF WhAT ARE NOW THE WORLD'IS MOST DYNAMIC
ECONOMIES. OUR CHALLENGE AS A NATION IS TO CAPITALISE
ON THE OPPORTUNITIES WHICH OUR LOCATION AND RESOURCE
ENDOWMENTS PROVIDE. THE LABOR GOVERNMENT IS COMMITTED
TO SEEING THAT AUSTRALIA AND ITS INSTITUTIONS RISE TO
THAT CHALLENGEALRtADY THERE ARE RUNS ON THE BOARD: IMAGINATIVE
PROGRAMS ARE IN PLACE IN THE STEEL AND MOTOR VEHICLE
INDUSTRIES, DIRECTED AT STRENGTHENING THE COMPETITIVE
POSITIONS OF THOSE INDUSTRIES WHILE KEEPING THEN UPON
THE STIMUUU? OF INTERNATIONAL COMPETITION AND AVOIDING
INCREASING COSTS TO USERS OF THEIR PRODUCTS. A SIMILAR
APPROACH HAS BEEN ADOPTED TOWARDS THE PROBLEMS OF THE
DAIRY INDUSTRY.
BUT CLEARLY THE MOST IMPORTAN'T AREA IN THIS PROGRAM OFREFORMS
HAS BEEN ThK CHANGES MADE TO THE FINANCIAL
S YSTEM-.
THE FINANCIAL SYSTEM PLAYS A LEADING ROLE IN
FACILITATING THE ECONOMIC GROWTH WE AS A NATION NEEDAN
EFFICIENT FINANCIAL SYSTEM WILL DIRECT RESOURCES AT
LEASf COST TO THE MOST PRODUCTIVE AREAS OF THE ECONOMY
AND THUS ASSIST IN RAISING THE WEALTH AND LIVING
STANDARDS OF ALL AUSTRALIANSAN
INEFFICIENT FIr'ANCIAL SYSTEM, SHELTERED FROM
INlERNATIONAL COMPETITION AND -STRAITJACKETTED BY
REGULATIONI, WILL TEND TO DIRECT RESOURCES TO LOW-RISK.,
& SAFE" AREAS OF THE ECONOMY-SU. CH CONJSERVAT ISM CANNOT
PROPERLY CONTRI BUTE TO THE ADJUSTMENTS NECESSAR~ Y TO
ENSURE OUR LONG RUN PROSPERITY-
1THE IMPLEMENTAT ION OF ANY SIGNI FICANT REFORM IS A TRICKY
PROCEDURE FOR ANY GOVERNMENT, PERHAPS EVEN MORE SO FOR A
GOVERNMENT BASED ON A PARTY AS DYNAMIC AND DIVERSE AS
THE LABOR PARTY. EVEN~ I N A PARTY OF REFORM SUC( H AS OURS
CHANGE IN POLICY AND PRACTICE HAS TO BE HANDLED WITH
SENSITIVITY-BUT THIS CAN NEVER BE AN EXCUSE FOR
BEGG IN[ G OFF-GOVERNMENT HAVE TO RECOGN ISE THAT THEY ARE
GOING TO HAVE TO MAKE DECISIONS WHICH MAY NOT BE
IMMEDIATELY POPULAR.
THAT DOES NOT AEAN THAT YOU SIMPLY SAY OBSTINATELY THAT
YOC KNOW WHAT IS RJIGHT AND THEN ANNOUNCE THE DEC IS IONYOU
MUST HAVF IN GOVERNMENT A PROPER BLEND OF TOUGHNESS
AND A PREPAREDNESS TO LISTEN. YOU MUST ALWAYS TRY TO
OPEN UP AREAS OF DISCUSSION WHERE THERE ARE DIFFERING
VIEWS AND SAY AS A GOVERNMENT, " LOOK, WE'IRE NOT THE FONT
OF ALL WISDOM", AND TO LISTEN TO WHAT PEOPLE HA\ VE TO
SAY-THAT'S WHAT WE ARE DOING-SOMETIMES THIS IS
INTERPRETED AS WEAKNESS. BUT ISSUES MUST ALWAYS BE
OPENED TO THE COMMUNITY IN THE GESTATION PERIOD IF THE
ULTIMATE SOLUTION TO THEM IS TO GAIN WIDESPREAD
COMMUNITY ACCEPTANCETHE
OVERWHELMINGLY OBV'IOUS EXAMPLE AT THE MOMENT IS
TAXATION. THE TAX DEBATE HAS BEEN CONTINUING APACE FOR
MOST OF 1985. SOME MIGHT SAY THAT IT HAS BEEN RAGING
LIKE A BUSHFIRE. BUT FAR FROM THE DEBATE EXPOSING A
LACK OF LEADERSHIP ON THE GOVERNMENT'S PART, IT
REPRESENTS THE FULFILMENT OF THE PROCESSES OF OPENEbS
AND CONSULTATJON' WHICH THIS GOVERNMENT HAS MADE ITS
HALL MARK.
ONCE YOU GET AN ISSUE AS BROAD AND AS GERMANE TO THE
POLITICAL PROCESSES AS TAXATION INTO THE PUBLIC ARENA,
THEN IT IS NAIVE TO EXPECT THAT YOU ARE NOT GOING TO
HAVE A BROAD AND SIGNIFICANT DEBATE, INCLUDING W~ ITHIN
YOUR OWN PARTY.
THERE ARE MANY AND VARIED POIN~ TS OF VIEW ABOUT WHAT
SHOULD BE DONE WITH TAXATION REFOPM. WHAT IS AGREED
UPON UNIVERSALLY AT THIS STAGE IS THAT AUSTRALIA'S
TAXATION SYSTEM IS DECAY; NG AND INCREASINGLY INEFFICIENT
AND UNFAIR. ANY GOVERNMENT WHiCH IS WORTH ITS SALT, AND
WHICH HAS. CONCERN FOR THE LONG TERM IN. TERESTS OF OUR
NATION AS OPPOSED TO AN OUTLOOK BOUND FIRMLY WITHIN
THE CONFINES OF THE NEXT ELECTION MUST IMPLEMENT
SIGNIFICANT REFORM TO THE SYSTEM TO RESTORE ITS
FAIRNESS, ITS EFFICIENCY, ITY EQUITY, AND A SIMPLICITY
SO THAT EVERYONE CAN UNDERSTAND EXACTLY HOW THE TAXATION
SYSTEM AFFECTS THEM.
ANOTHER MISTAKE THAT IS MADE WITH MAJOR AND COMPLEX
ISSUES IS TO VIEW THEIR INDIVIDUAL ELEMENTS IN
ISOLATION.
COMPLEX REFORnS SUCH AS THOSE WE WILL EVENTUALLY MAKE TO
THE TAXAT ION SYSTEM CONSI1ST OF MANY ELEMENTS. ALL OF
THEM RELY UPON EACH OTHERANYONE
WHO IS GENUINE ABOUT EVALUATING THE TAX REFORM
OPTIONS OPEN TO THE GOVERNMENT CANNOT LEGITIMATELY
DISSECT EACH OPTION, SINGL. ING OUT ELEMENTS HERE AND
THERE AS ACCEPTABLE OR UNACCEPTABLE. THE ONLY WAY TAX
REFORM CAN BE JUDGED IS BY EVALUATING EACH PACKAGE OF
REFORM AS AN INTEGRATED WHOLE-YOU CAN'T SAY, ' A
CONSUMPTION TAX IS NO GOOD BECAUSE IT HAS TRADITIONJALLY
BEEN REGRESSIVE-' OR, ' A WEALTH TAX IS CRUCIAL lF THE
SYSTEM IS TO BE FAIR'. YOU MUST LOOK AT THE RANGE OF
ELEMENTS OF A PARTICULAR PACKAGETHE
TEST OF WHATEVER PACKAGE IS ADOPTED IS ITS FAiRNESS
AND EQUITY, WHETHER IT IS SIMPLE ENOUGH TO BE EASILY
UNDERSTOOD AND WHETHER IT MINIMISES THE OPPORTUNITIES
FOR AVOIDANCE WHICH EFFECTIVELY PLACE DISPROPORTIONATE
TAX BURDENS ON LOWER INCOME EARNERSTHIS
GOVERNMENT WILL NOT SPONSOR TAX REFORMS WHICH DO
NOT LEAVE THE OVERWHELMING MAJORITY OF PEOPLE BETTER
OFFOVERALL.
WHATEVER THE CURRENT PERCEPTIONS OF THE TAXATION DEBATE
IN THE COMMUNITY, YOU CAN BE SURE THAT THE RELEASE OF
THE GOVERNMENT' S WHITE PAPER EARLY NEXT MONTH, LEADING
UP TO THE TAX SUMMIT IN THE FIRST WEEK OF JULY, WILL
GIVE THE ISSUE A CLEARER DIRECTIONTHE
GOVERNMENT'S APPROACH TO THE DEPRECIATION OF THE
DOLLAR IS ALSO BASED ON A LONG TERM, OVERALL STRATEGY-.
THE DEPRECIATION IMPOSES A NEED FOR DIFFICULT
ADJUSTMENTS, FOR MORE HARD DECISIONS, BUT AT THE SAME
TIME IT CAN PROVIDE A STIMULUJS TO ECONOMIC ACTIVITY
THROUGH IMPROVED COMPETITIVENESS.
LET THERE b: NO DOUBT ABOUT IT THAT THE DEPRECIATION IS
VERY MUCH A SIGNAL THAT AUSTRALIA CANNOT CONTINUE TO
LIVE BEYOND ITS MEANS, BY BORROWING MORE AND MORE FROM
THF RiEST OF THE WORLD. THIS IS ESPECIALLY TRUE IF THOSE
BORkOW! N62 ARE USED SIMPLY TO FINANCE DOMESTIC
CONSUMPTION, RATHER THAN INVESTMENT IN AUSTRALIA'S LON~ G
TERM GROWTH POTENTiAL, AND THUS ITrS CAPACITY TO EXPORT
AND SERVICE DEBTTHE
DEPRECIATION WILL SWING DEMAND TOWARDS LOCAL
MANUFACTURERS, AND AT THE SAME TIME EXPORT EARNINGS WILL
RISE. THE RESULT IS LIKELY TO BE THE ADDITION OF AT
LEAST ONE PER CENT TO OUR ECONOMIC GROWTH RATE NEXT
FINANCIAL YEAR AND, SO LONG AS WE DO NOT DISSIPATE THE
COMPETITIVE GAIN IN A SURGE OF INFLATION, OVER TIME AN
OVER TIME A SUBSTANTIAL INCREASE IN JOBSTHE
COMPETITIVENESS GAINS SROUGHT ABOUT BY DEPRECIATION
SNOULD RESULT IN A CONTRACTION OF OUR PRESENT
UNACCEPTABLY LARGE CURRENT ACCOUNT DEFICIT. ALL
AUSTRALIANS ARE CONFRONTED WITH MAKING ADJUSTMENTS TO
ACHIEVE THIS-WITHIN THESE ADJUSTMENTS, WE MUST REDUCE
THE PROPORTION OF. PRODUCTION THAT IS USED FOR
CO0N SU MP TIO0NOTHERWISE, THE BENEFITS OF DEPRECIATION WILL SIMPLY
EVAPORATE IN AN ENDLESS SPIRAL OF DEPRECIATION AND
INFLATION-
8
THE ESSENTIAL CHALLENGE FOR POLICY IS -0 ENSURE THAT THE
COMPETITIVENESS GAINS ARE FRESERVED. THIS REeUIRES REAL
WAGES TO BE LOWER THAN W) ULD OTHERWISE H. VE BEEN
APPROPRI ATE.
WE ARE DETERMINED TO PRESERVE THE BENEFITS OF
DEPRECIATION WITHIN THE FRAMEWORK OF THE ACCORD.
You WILL HAVE NOTICED THAT THE ACTU EXECUTIVE, IN ITS
MEETING IN MELBOURNE LAST WEEK, REAFFIRMED THE PRINCIPLE
THAT WORKERS ARE ENTITLED TO PRODUCTIVITY PAY RISES, AND
THAT THESE SHOULD BE IN THE FORM OF SUPERANNUATION
I MPROVEMENTS
BUT THE EXECUTIVE ALSO MADE TWO OTHER RELEVANT POINTS
FIRST, AND I QUOTE, THAT
itIT IS CLEAR THAT NO COST INCREASES ARISING FROM
PRODUCTIViTY DISTRIBUTION ARE LIKELY DURING 1985".
SECOND, IT SHOULD INVOLVE, AND AGAIN I QUOTE,
ItPROGRESSIVE IMPLEMENTATION OF SUPERANNUATION OVER
TIME IN A MANNER WHICH SHOULD BE CONSISTENT WITH
THE ECONOMIC CIRCUMSTANCES THAT THE NATION FACES".
THE TREASURER, PAUL KEATING SOMEONE WHO IS NO STRANGER
TO ALL OF YOU HERE TONIGHT INDICATED IN THE ECONOMIC
STATErIENT. EARLIER THIS MONTH THAT THE -QUESTION OF THE
SIZE, TIMING AND PHASING OF ANY PRODUCTIVITY INCREASE
SHOULD BE DEFERRED UNTIL THE SCOPE OF THE DEPRECIATION
AND THE EXTENT OF ITS EFFECT ON THE ECONOMY BECOMES
APPARENTTHE GOVERNMENT'S POSITION ON ANY PRODUCTIVITY INCREASE
REMAINS UNCHANGED. FOLLOWING THE DEPRECIATION, THE
GOVERINMENT TAKES THE VIEW THAT THERE MUST BE A LOWER
REAL WAGE LEVEL DURING THE ADJUSTMENT PERIOD THAN WOULD
OTHERWISE HAVE APPLIED. THE OPTIONS AVAILABLE FOR
BRINGING THIS ABOUf ARE BY DISCOUNTING OR BY DELAYING
THE IMPLEMENTATION OF ANY PRODUCTIVITY INCREASE.
THE POSITION TAKEN BY THE ACTU EXECUTIVE WHICH SEEKS
SUPPORT FOR A PRINCIPLE DOES NOT IN ANY WAY PRECLUDE THE
GOVERNMENT CONIINUI1NG TO HAVE THE OPTION OF A LOWER REAL
WAGE OUTCOME THIAN MAY OTHERWISE BE WARRANTED THROUGH THE
POSITION IT TAKES ON THE SIZE, TIMING AND PHASING OF ANY
PRODUCTIVITY INCREASE.
THE GOVERNMENT' S WAGES POLICY, WI THINH THE FRAMEWORK OF
TH7 ACCORD, IS OFTEN THE TARGET OF THOSE WHO WOULD SEE
MINIMAL WAGE RIS! S, AND A DIFFERENT BASIS FOR WAGE
DETEPMIfJATION WITH A DISMANTLING OF THE PRESENT
CENTRALISED WAGES STRUCTURE-SUCH THEOPISING BETRAYS
AN IGNORANCE OF THE STRUCTURE OF OUR WAGES AND
INDUSTRIAL RELATIONS SYSTEM.
WE HAVE, FOR BETTER OR FOR WORSE, A CENTRALISED WAGES
SYSTEM BASED ON THE TIME-WORN PRINCIPLE OF COMPARATIVE
WAGE JUSTICE. OUR SYSTEM IS FAR FROM PERFECT. BUT ANY
THEORISING ABOUT POSSIBLE REFORMS TO IT HAS TO
ACKNOWLEDGE THE ENTRENCHED NATURE OF THE SYSTEM AND THE
PRINCIPLES UPON WHICH IT IS BASED. YOU CANNOT SIMPLY
WISH AWAY COMPARATIVE WAGE JUSTICE. [ NO AMOUNT OF FORMAL
DECISIONS By GOVERNMENT OR THE TRIBUNALS WILL OVERCOME
ITSO IN RECOG-NISING THOSE REALITIES, ONE MUST ALSO
RECOGNISE. THAT REAL AND EFFECTIVE CHANGES TO THE
SYSTEM, TO AFFECT ITS CURRENT OPERATION, HAVE TO BE MADE
WITHIN ITS EXISTING FRAMEWORK. ANYTHING ELSE WOULD TAKE
MANY YEARS AND IS NO SOLUTION TO CURRENT PROBLEMSTHIS
DOES NOT MEAN THAT CHANGE SHOULD NOT BE SOUGHT.
THE GOVERNMENT' S ESTABL ISHMENT OF T" F HANCOCK COuMMITTEE
WHOSE REPORT WAS TqBLED IN THE KkI~ AMENT A WEEK AGO
DEMONSTRATES THIS GOVERNMENT' S SERIOUSNESS ABOUT
REFORMING THE INDUSTRIAL SYSTEM. BUT CHANGES SUCH AS
DECENTRALISATION, FRAGMENTATION, AND SIMILAR GLIB
SOLUTIONS ARE NOT REMEDIES FOR CURRENT ILLSIT
IS FASHIONABLE TO BLAME CENTRALISATION FOR MANY OF
OUR ECONOMIC PROBLEMS. THE GOVERNMENT.-IS NOT ALONE,
HOWEVER, IN ITS BELIEF THAT SUCH A SYSTEM IS APPROPRIATE
FOR AUSTRALIA.
THE HANCOCK REPORT ITSELF LEPflS CONSIDERABLE SUPPORT.
HANCOCK SAYS, FOR EXAMPLE, THAT " MANY AND SERIOUS
UNCERTAINTIES BESET THE SUGGESTION OF A PERMANENT
ABANDONMENT OF CENTRALISED WAGE FIXATION. AT THIS
STAGE, WE DO NOT THINK THAT THE INCURRING OF THESE
UNCERTAINTIES IS WARRANTED. AND THEYF ARE POSSIBILITIES
OF THE CENTRALISED SYSTEM'IS CONTRIBUTING SIGNIFICANTLY
To AUSTRALIA'S ECONOMIC RECOVERY."
THE REPORT IS COUCHED IN CAREFUL LANGUAGE-IN SOMETHING
OF AN UNDERSTATEMENT IT SAYS THAT " PROPONENTS OF LABOUR
MARKET DEREGULATICN IN THE ROUND NEED, WE THINK, TO BE
MORE SPECIFIC, AND IT GOES ON TO SAY: " WE HAVE GRAVE
DOUBTS ABOUT ITS ( THAT IS, DEREGULATION'IS) REALISM"-
THIS IS NOT SOME QUICK-FIX REPORT NH! PPED UP IN A COUPLE
OF MONTHS TO JUSTIFY A PARlICULAP POLITICAL PCSITIONo
THIS IS A REPORT WHICH TOOK TWO YEARS TO PREPARE, WHICH
IS THE MOST THOROUGH REVIEW OF AUSTRALIA'S INDUSTRIAL
SYSTEM EVER CONDUCTED-IT IS A REPORT BY THREE OF
AUSTRALIA'S MOST RESPECTED INDUSTRIAL EXPERTS AND
PRACTITIONERS-PROFESSOR KEITH HANCOCK, GEORGE POLITES
AND CHARLIEJ FITZGIBBON HAVE A WEALTH OF SCHOOLING IN THE
INDUSTRIAL RELATIONS WOR~ LD-IN INDUSTRIAL RELATIONS,
PARTICULARLY -AND I SPEAK AS ONE WHO KNOWS A BIT ABOUT
THE SUBJECT -PRACTICAL EXPERIENCE IS THE KEY TO
UN D ER STA N D INGSUPPORT
SUCH AS THIS HELPS TO REINFORCE THE GOVERNMENT' S
VIEW THAT OUR LONGER TERM APPROACH TO ISSUES IS THE MOST
APPROPRIATE APPROACH TO TAKE. IT IS AN APPROACH BASED
IN PRINCIPLE, NOT SHORT TERM EXPEDIENTTHE
GOVERNMENT IS PREPARED TO WEATHER SHORT TERM
UNPOPULARITY FOR THE SAKE OF PRINCIPLE " IN ALL AREASTHE
GOVERNMENT'S FUNDAMENTAL GOAL, HOWEV'ER, IS A
PROSPEROUS ECONOMY, BECAUSE ONLY WITH SUCH CON'DITIONS
CAN ANY REAL PROGRESS BE MADE TOWARDS A FAIR
DISTRIBUTION OF WEALTH, RESOURCES AND OPPORTUNITIES. ! T
IS AN ASPIRATION WHICH FITS NEATLY WITH LONG TERM
STRATEGI ESYOU
KNOW US WELL ENOUGH BY NOW TO KNOW THAT THI: S
GOVERNMENT IS NOT ABOUT TO FORCE SHIFTS IN RESOURCES IN
A PEREMPTORY OR DISLOCATIVE WA~ Y-WE RECOGNISE THE
STRUCTURES AND INSTITUTIONS WHICH UNDERLY OUR ECONOMYOUR
SOCIETY-WE BELIEVE THAT THE FUNDAMENTAL REFORMS
WHICH ARENEEDED IN OUR ECONOMY WILL ONLY BE EFFECTIVE
AND PRODUCTIVE FOR EVERYONE'IS BENEFIT IF [ HEY ARE
IMPLEMENTED GRADUALLYIT
IS GRADUALISM AND COHERENCE WHICH DETERMINES HOW W!:
APPROACH REFORM. AND IT IS OUR CONCERN FOR THE WELLBEING
OF ALL SECTION4S OF AUSTRALIAN SOCIETY, FOR
FAIRNESS AND EQUITY TO ALL, WHICH SHAPES THE REFORMS
THEMSELVESOUR GOALS ARE SOCIAL AS WELL AS ECONOMIC. THEY ARE
GOALS BY WHICH ALL AUSTRALIInNS ARE EQUALLY ABLE TO TAKE
ADVANTAGE OF THE OPPORTUNITIFES OPEN TO~ THEM, TO EXPRESS
THEMSELVES AND DEVELOP TO THEIR FULL POTENTIAL.
WE WANI A SOCIETY , IN WHICH ALL OF US ARE FrwEE TO Go
ABOUT OUR BUSINESS INi OLUR OWN WAYS, BUT IN WHICH WE ALL
HAVE A COMMON CONCERN AND CARE FOR THOSE WHO, THROUGH A
VARIETY OF CIRCUMSTANCES, ARE NOT FULLY ABLE TO LOOK
AFTER THEMSELVES-