CHECK AGAINST DELIVERY EMBARGOED AGAINST DELIVERY
SPEECH BY THE PRIME MINISTER
CEDA SILVER JUBLILEE COMMEMORATIVE DINNER
" AUSTRALIA'S POLICIES FOR CONTINUING ECONOMIC GROWTH"
SYDNEY 4 DECEMBER 1985
TONIGHT WE CELEBRATE 25 YEARS OF SUSTAINED ACHIEVEMENT BY
THE COMMITTEE FOR THE ECONOMIC DEVELOPMENT OF AUSTRALIA.
DURING THESE TWENTY FIVE YEARS CEDA HAS CONTRIBUTED
SIGNIFICANTLY AND CONSTRUCTIVELY TO THE PUBLIC DEBATE OF
ECONOMIC POLICY IN THIS COUNTRY.
IF HE WERE ALIVE TODAY, I HAVE NO DOUBT THAT SIR DOUGLAS
COPLAND, A DISTINGUISHED AUSTRALIAN ECONOMIST AND FOUNDER OF
CEDA, WOULD TAKE GREAT PRIDE IN THE SERVICE WHICH CEDA HAS
DONE FOR THIS COUNTRY.
SIR DOUGLAS, WITH WHOM I HAD THE HONOUR OF WORKING IN MY
CAPACITY AS ACTU ADVOCATE IN THE EARLY 1960' S, ARGUED
FORCEFULLY IN FAVOUR OF THE INVOLVEMENT OF THE COMMUNITY IN
THE FORMATION OF PUBLIC POLICY A SENTIMENT WHICH, AS YOU
KNOW, I STRONGLY SHARE.
IN MANY RESPECTS CEDA'S TWENTY-FIVE YEARS HAVE SEEN QUITE
MARKED CHANGES IN AUSTRALIA'S ECONOMIC AND SOCIAL
ENVIRONMENT. IN 1960, FOR EXAMPLE, THE COMMUNICATIONS REVOLUTION HAD NOT
BEGUN FUNDAMENTALLY TO CHANGE OUR SOCIETY. THE TELEVISION
INDUSTRY IN AUSTRALIA WAS IN ITS INFANCY AND COMPUTERS
FILLED ROOMS, NOT BRIEFCASES.
THE POST-WAR BABY BOOMERS ( WHICH MOST OF US HERE EITHER
CONTRIBUTED TO OR ARE A PRODUCT OF) WERE JUST STARTING TO
ENTER HIGH SCHOOLS. THEIR IMPACT ON THE WORKFORCE, FASHION
AND SOCIAL MORES WAS STILL SOME YEARS HENCE.
MOREOVER, RELATIVELY FEW WOMEN COUNTED THEMSELVES IN THE
FULL-TIME PAID WORKFORCE.
IN THE WORLD OF FINANCE, THE FORCES IMPINGING UPON THE
INTERNATIONAL FINANCIAL SYSTEM WERE SUFFICIENTLY TRANQUIL
THAT EXCHANGE RATES WERE FIXED; AND THE DOMESTIC FINANCIAL
SYSTEM WAS DOMINATED BY BANKS AND FIXED INTEREST RATES.
AND EVEN AFTER POST-WAR RECONSTRUCTION AND THE ATTEMPTED
MODERNISATION OF AUSTRALIAN INDUSTRY, BEHIND A VERITABLE
WALL OF PROTECTION AGRICULTURAL PRODUCTS STILL ACCOUNTED
FOR THE LARGEST SHARE OF OUR EXPORTS. THE MINING INDUSTRY
WAS YET TO EXPERIENCE THE RAPID EXPANSION THAT OCCURRED
LATER IN THE DECADE.
OVER THE LATTER PART OF THE FIFTIES THE GEOGRAPHICAL PATTERN
OF OUR TRADE HAD BEGUN TO SWING AWAY FROM EUROPE TOWARDS
JAPAN AND SOUTH AND SOUTH-EAST ASIA BUT MOST OF THAT
REORIENTATION WAS STILL TO COME.
FINALLY, THROUGH THE COURSE OF THE 19601S AND 1970' S
AGRICULTURAL AND TECHNOLOGICAL REVOLUTIONS SPREAD STEAD ' ILY
BEYOND THE SHORES OF THE INDUSTRIALISED COUNTRIES. AS A
RESULT, AS TIME PASSED, MORE AND MORE OF OUR NEAR-NEIGHBOURS
BEGAN TO COMPETE EFFECTIVELY WITH US IN OUR TRADITIONAL
MARKETS. IN MANY RESPECTS THESE DEVELOPMENTS VERY MUCH PROVIDE THE
BACKDROP TO THE CHALLENGES WHICH NOW FACE'AUSTRALIA. THESE
INCLUDE THE CHALLENGE TO CREATE LONG-TERM AND PRODUCTIVE
JOBS, NOT ONLY TO EMPLOY THE EXPANDING WORKFORCE, BUT ALSO
TO REDUCE PROGRESSIVELY THE LEVEL OF UNEMPLOYMENT WHICH WE
INHERITED; THE CHALLENGE TO KEEP OUR INDUSTRIAL STRUCTURE
RELEVANT TO THE NEEDS OF WORLD TRADE AND STEADY GROWTH; AND
THE CHALLENGE TO ADJUST TO THE VOLATILITY OF MOVEMENTS IN
INTEREST RATES AND THE EXCHANGE RATE UNDER A FLOATING DOLLAR
AND FINANCIAL DEREGULATION.
THESE FUNDAMENTAL CHALLENGES PROVIDE'THE PRIMARY FOCUS OF
THE GOVERNMENT'S ECONOMIC STRATEGY.
IT IS IMPORTANT, IN MY VIEW, FOR US AS A COMMUNITY TO ACCEPT
THAT THE PACE OF AUSTRALIA'S ECONOMIC GROWTH AT LEAST
UNTIL VERY RECENTLY HAS BEEN POOR BY W0I9LD STANDARDS; AND
CERTAINLY POOR COMPARED WITH OUR POTENTIAL. IN PARTICULAR
THE SEVENTIES BECAME THE ERA OF STAGFLATION AND RISING
UNEMPLOYMENT. WE CAN LOOK BACK AND SEE MISSED OPPORTUNITIES. WE CAN ALSO
SEE A PERIOD IN WHICH THE FOUNDATIONS FOR SUSTAINED GROWTH
WERE WEAKENED IN SOME IMPORTANT RESPECTS.
THE LABOR GOVERNMENT CAME TO OFFICE IN 1983 WITH A
COMMITMENT To INAUGURATE A NEW ERA OF RECONCILIATION IN AND
RECONSTRUCTION OF THE AUSTRALIAN ECONOMY.
WE MOVED QUICKLY AND PURPOSEFULLY TO INITIATE ECONOMIC
RECOVERY AND TO SHORE UP THE FOUNDATIONS OF OUR ECONOMIC
PERFORMANCE SO THAT OUR IMPROVED ECONOMIC GROWTH COULD BE
PRESERVED. I WISH, TONIGHT, TO LOOK BRIEFLY AT SOME OF THESE
FOUNDATIONS AND ASSESS WHERE WE STAND.
LET ME START WITH PEOPLE.
3.
IN A VERY FUNDAMENTAL SENSE, AUSTRALIA'S FUTURE RESTS WITH
OUR PEOPLE, ESPECIALLY OUR YOUNG PEOPLE. YET, IN THE PAST,
DESPITE DEVOTING MASSIVE PUBLIC RESOURCES TO THE FUNDING OF
EDUCATION, TOO LITTLE HAD BEEN ACHIEVED TO DEVELOP MOST
EFFECTIVELY THE POTENTIAL OF THE YOUNG.
COMPARED TO COUNTRIES LIKE THE USA, WEST GERMANY AND JAPAN,
FAR TOO FEW OF OUR YOUNG PEOPLE FINISH EVEN SECONDARY
EDUCATION, AND FEWER STILL PROGRESS TO THE TERTIARY LEVEL.
THE PRESENT GOVERNMENT HAS BEGUN TO ADDRESS THIS CHALLENGE.
WE HAVE MADE A SUBSTANTIAL FINANCIAL COMMITMENT THAT WILL
PRO VIDE AN ASSURED FINANCIAL BASIS FOR THE GROWTH OF OUR
GOVERNMENT AND NON-GOVERNMENT SCHOOLS FOR THE REMAINDER OF
THE DECADE. BUT WE ARE EQUALLY CONCERNED ABOUT IMPROVING
THE QUALITY OF OUR EDUCATION.
DRAWING ON THE RECOMMENDATIONS OF THE KARMEL REPORT WE ARE
AT PRESENT SEEKING THE COOPERATION OF THE STATES TO UPGRADE
THE QUALITY OF EDUCATION OFFERED BY AUSTRALIAN SCHOOLS.
OUR AIM IS THAT RESOURCES SHOULD BE DIRECTED IN SUCH A WAY
AS TO ENSURE THAT SCHOOLS OFFER COURSES WHICH PROVIDE THE
SKILLS NEEDED BY A MODERN DYNAMIC AND FLEXIBLE WORKFORCE.
WE HAVE A SERIES OF PHASED IMPROVEMENTS IN STUDENT
ALLOWANCES IN TRAIN WHICH, OVER TIME, WILL HELP TO REMOVE
ANY EXISTING FINANCIAL INDUCEMENT TO OPT OUT OF EDUCATION
AND INTO AN INITIATIVE-DESTROYING EXISTENCE ON UNEMPLOYMENT
BENEFIT. IN ADDITION WE HAVE INITIATED A PROGRAM OF STRUCTURED
ON-AND-OFF-THE-JOB TRAINING, TARGETTED ESPECIALLY ON YOUNG
PEOPLE WHO LEAVE EDUCATION BEFORE COMPLETING SECONDARY
SCHOOL. THIS IS A RADICAL NEW CHOICE FOR'YOUNG PEOPLE. IT
REPRESENTS A NEW APPROACH TO YOUTH TRAINING WHICH, IN TIME,
WILL PROVIDE SIGNIFICANT OPPORTUNITIES TO IMPROVE THE
LONGER-TERM JOB PROSPECTS OF THE YOUNG UNEMPLOYED.
FURTHERMORE, THE GOVERNMENT WILL BE PROVIDING 85,000
ADDITIONAL TAFE PLACES OVER THE CURRENT TRIENNIUM TO MEET
THE GROWING NEEDS OF STUDENTS.
OF COURSE IT IS ONE THING TO HAVE WELL TRAINED PEOPLE, IT IS
ANOTHER TO USE THEM MOST EFFECTIVELY.
ESSENTIALLY THAT TASK IS ONE FOR MANAGEMENT TO PROVIDE
PROPER CAPITAL TO WORK WITH; TO DEVELOP INITIATIVE AND
FLAIR; AND TO RECOGNISE AND FOSTER TALENT.
BUT GOVERNMENT ALSO HAS A ROLE TO ENSURE THAT THE WORKFORCE
IS MOBILE ENOUGH TO BE ABLE TO SHIFT BETWEEN EMPLOYERS,
INDUSTRIES OR OCCUPATIONS AS THE NEED ARISES.
THE NEED TO DEVELOP A MORE MOBILE WORKFORCE IS A MAJOR
RATIONALE FOR THE EMPHASIS WHICH THE GOVERNMENT HAS PLACED
ON IMPROVING VOCATIONAL PREPARATION IN SCHOOLS AND ON OUR
TRAINEESHIP INITIATIVE FOR YOUNG SCHOOL LEAVERS. BUT THIS
IS COMPLEMENTED BY AN. ADDITIONAL EMPHASIS ON PROGRAMS TO
RETRAIN WORKERS WHO HAVE BEEN OUT OF WORK FOR EXTENDED
PERIODS. IN THE LAST BUDGET WE ANNOUNCED THE INTRODUCTION FROM THE
BEGINNING OF 1986 OF A NEW INTEGRATED WAGE SUBSIDY PROGRAM.
THIS NEW PROGRAM WILL CONSOLIDATE AND RATIONALISE LABOUR
MARKET PROGRAMS THAT SEEK TO MAINTAIN AND IMPROVE OUR SKILLS
BASE. ENHANCED LABOUR-MARKET MOBILITY IS ALSO ONE OF THE POORLY
UNDERSTOOD BENEFITS OF OUR APPROACH TO OCCUPATIONAL
SUPERANNUATION. THE GOVERNMENT'S AGREEMENT WITH THE ACTU TO PROGRESS THE
SPREAD OF OCCUPATIONAL SUPERANNUATION TO THAT HALF OF THE
WORKFORCE NOT NOW COVERED AND IN PARTICULAR To IMPROVE THE
PORTABILITY OF SUPERANNUATION BENEFITS WILL HELP TO REMOVE
ONE OF THE POTENTIAL BARRIERS TO MOVEMENT BETWEEN JOBS OF
MANY EXPERIENCED WORKERS. PREVIOUSLY SOM4E WORKERS COULD
HAVE BEEN DISCOURAGED FROM CHANGING JOBS BECAUSE OF THE LOSS
OF RETIREMENT BENEFITS WHICH WOULD HAVE RESULTED.
LET ME COMMENT BRIEFLY ON SOME ASPECTS OF THE GOVERNMENT'S
APPROACH TO SUPERANNUATION AND ITS LINK WITH THE ACTU'S
PRODUCTIVITY BASED WAGES CLAIM.
FIRST, THE GOVERNMENT'S AGREEMENT WITH THE ACTU CANNOT AND
DOES NOT USURP THE PREROGATIVE OF THE CONCILIATION AND
ARBITRATION COMMISSION TO DETERMINE, IN THE LAST ANALYSIS,
THE SIZE, TIMING AND NATURE OF ANY DIRECT SHARING BY LABOUR
IN IMPROVED PRODUCTIVITY.
RATHER THE GOVERNMENT SUPPORTS THE LEGITIMACY OF THE ACTU'S
CLAIM TO SHARE IN THE BENEFITS FLOWING FROM THE IMPROVED
PRODUCTIVITY IN THE ECONOMY, AND FOR THIS TO BE AVAILABLE IN
THE FORM OF SUPERANNUATION. BUT, HAVING SAID THAT, OUR
SUPPORT IS ALSO FOR A PAYMENT PACKAGE WHICH RECOGNISES THE
OVERRIDING NEEDS OF GENERAL ECONOMIC POLICY FOR MODERATION
IN WAGE INCREASES AND INFLATION.
SECOND, THERE IS NO SENSE IN WHICH THE CONDITIONS ATTACHING
TO OCCUPATIONAL SUPERANNUATION WILL BE FOISTED UPON THE
BUSINESS SECTOR WITHOUT ADEQUATE CONSULTATION.
DRAFT GUIDELINES TO ENSURE THAT SUPERANNUATION IS GENUINE
AND NOT SIMPLY DEFERRED PAY ARE BEING PREPARED AND WILL BE
RELEASED SHORTLY BY THE GOVERNMENT. BUT THEY WILL NOT BE
FINALISED UNTIL THE GOVERNMENT HAS HAD THE OPPORTUNITY TO
LISTEN TO THE VIEWS OF THE BUSINESS SECTOR AND OTHERS IN THE
COMMUNITY. THE TREASURER WILL BE MEETING WITH BUSINESS
REPRESENTATIVES ON THIS SUBJECT NEXT WEEK.
FINALLY, LET ME REITERATE THAT THE GOVERNMENT'S POSITION ON
INDUSTRIAL DISPUTATION IN SUPPORT OF SUPERANNUATION CLAIMS
IS THAT SUCH INDUSTRIAL ACTION IS UNNECESSARY IN TERMS OF
OUR AGREEMENT WITH THE ACTU, AND AS I ANNOUNCED TO THE CAI
LAST WEEK WE WILL NOT SUPPORT IT.
IF I MAY RETURN TO MY MAIN THEME, ANY BUSINESS KNOWS THAT IT
MUST OFFER RELEVANT PRODUCTS IF IT IS TO SURVIVE AND TO
EXPAND. THE AUSTRALIAN ECONOMY IS NO DIFFERENT.
AS I SAID EARLIER IN MY ADDRESS THE PRODUCT MIX OF OUR
EXPORTS HAS CHANGED SIGNIFICANTLY OVER THE PAST TWENTY FIVE
YEARS. THE SHARE OF AGRICULTURAL PRODUCTS IN TOTAL EXPORTS
IS NOW ABOUT HALF THE EARLY 19601S, WITH VIRTUALLY ALL OF
THE DIFFERENCE TAKEN UP IN HIGHER EXPORTS OF MINERALS AND
METALS. THE SO-CALLED RESOURCES BOOM OF THE EARLY 1980' S ADDED
SUBSTANTIALLY TO OUR EXPORT CAPACITY, AND THE MINING SECTOR
HAS CONTRIBUTED IMPORTANTLY TO THE 10 PER CENT GROWTH IN THE
VOLUME OF EXPORTS OVER THE YEAR TO THE SEPTEMBER QUARTER.
BUT IN MANY WAYS THE GROWTH SPURT ASSOCIATED WITH THE
RESOURCES BOOM SIMPLY POSTPONED THE FUNDAMENTAL ADJUSTMENTS
REQUIRED IN AUSTRALIA'S TRADING STRATEGY,
FOR MUCH OF THE POST-WAR PERIOD AUSTRALIA HAS RECEIVED POOR
RETURNS ON ITS EXPORTS.
SO POOR, INDEED, THAT THE VOLUME OF EXPORTS WHICH WE NEED TO
SELL IN ORDER TO BUY A QUANTITY OF IMPORTS HAS RISEN SLOWLY
BUT STEADILY THROUGH TIME.
THIS HAS BEEN A MAJOR FACTOR IN PUTTING PERIODIC UPWARD
PRESSURE ON OUR CURRENT ACCOUNT DEFICIT OR, AT TIMES,
DOWNWARD PRESSURE ON OUR EXCHANGE RATE.
MOST RECENTLY THAT-GENERAL TREND HAS BEEN EXACERBATED BY THE
CONJUNCTION OF A NUMBER OF INFLUENCES ON WORLD MARKETS.
MODERN PRODUCTION PROCESSES ARE NOW FAR MORE ECONOMICAL IN
THEIR USE OF SOME OF OUR MAJOR EXPORTS, AND CLOSELY RELATED
PRODUCTS SUCH AS OIL. THE NATURE OF GOODS DEMANDED IN OUR
TRADITIONAL MARKETS IS ALSO CHANGING WITH THE WEALTHIER
COUNTRIES PREFERRING A RICHER DIET OF SERVICES AND HIGH-TECH
PRODUCTS THAN WAS PREVIOUSLY THE CASE. WE HAVE ALSO
SUFFERED FROM REDUCED ACCESS TO SOME MARKETS, ESPECIALLY FOR
AGRICULTURAL PRODUCTS. IN ADDITION OTHER COUNTRIES,
INCLUDING SOME HEAVILY IN DEBT, HAVE ALSO EXPANDED THE
VOLUME WHICH THEY SUPPLY TO THE MARKET, WHICH HAS FURTHER
DEPRESSED PRICES.
AS A RESULT THE DIVIDEND FROM THE SO-CALLED RESOURCES BOOM
FOR AUSTRALIA'S CURRENT ACCOUNT WAS VERY MUCH LESS, AT THE
EXCHANGE RATE RULING IN 1984-85, THAN HAD BEEN EXPECTED.
WHILE OUR PRICES IN WORLD TRADE SEEM LIKELY TO REMAIN
DEPRESSED FOR A TIME, WE CANNOT COUNT ON A NEW RESOURCES
BOOM TO ADD NEW LIFE TO OUR EXPORTS. BECAUSE WE ARE AMONG
THE MOST EFFICIENT SUPPLIERS IN THE WORLD OF OUR TRADITIONAL
EXPORTS AGRICULTURAL COMMODITIES, MINERALS AND METALS
THESE WILL REMAIN THE MAINSTAY OF OUR EXPORT EFFORT. BUT,
FOR THE LATE 1980' S AND INTO THE 1990' S WE WILL NEED TO DO
MORE THAN IN THE PAST. IN OTHER AREAS PARTICULARLY IN THE
AREAS OF A SUBSTANTIALLY TRANSFORMED MANUFACTURING SECTOR
AND THE SERVICES SECTOR.
THE SPREAD OF ADVANCED TECHNOLOGY TO OUR NEAR NEIGHBOURS HAS
ADDED A NEW DIMENSION TO THIS ADJUSTMENT PROCESS. IT WILL
BE NECESSARY TO CHOOSE OUR AREAS OF SPECIALISATION CAREFULLY
AND, AS A NATION, TO TARGET OUR EFFORT WHERE AUSTRALIAN
PRODUCERS CAN CARVE OUT A NICHE IN THE WORLD# S M4ARKET FOR
NEW OR BETTER PRODUCTS AND SERVICES.
THAT IS A LARGE TASK. BUT NOT ONE, I BELIEVE, WHICH IS
BEYOND US._-
FOR A START THE DEPRECIATION OF THE $ A OVER THE PAST YEAR
HAS IMPROVED THE COMPETITIVENESS OF AUSTRALIAN INDUSTRY BY
ABOUT 20 PER CENT.
AUSTRALIAN FIRMS SHOULD NOW FIND IT VERY MUCH EASIER TO
COMPETE ON PRICE AGAINST IMPORTS OR AGAINST FOREIGN
SUPPLIERS ON EXPORT MARKETS.
THIS IS THE MAJOR REASON WHY THE GOVERNMENT EXPECTS THE
CURRENT ACCOUNT DEFICIT TO IMPROVE OVER THE COURSE OF
1985-86 AND 1986-87.
IT IS SIMPLY INCONCEIVABLE THAT EXISTING PROFITABLE
AUSTRALIAN CONCERNS WOULD NOT BE ABLE TO TAKE ADVANTAGE OF
SO LARGE A SHIFT IN PRICES IN THEIR FAVOUR TO SELL AT THE
EXPENSE OF FOREIGN SUPPLIERS.
BUT THERE IS MORE TO THE GOVERNMENT'S CONFIDENCE THAN THAT
FACTOR ALONE.
OUR WHOLE APPROACH TO ECONOMIC POLICY IS DESIGNED TO CREATE
THE RIGHT ENVIRONMENT FOR BUSINESSES TO DIVERSIFY INTO NEW
AREAS AND EXPAND EXISTING PROFITABLE LINES.
MONETARY POLICY, FISCAL POLICY AND THE ACCORD ARE ABOUT
CREATING CERTAINTY FOR BUSINESS: CERTAINTY THAT GROWTH WILL
BE M4AINTAINED WITHOUT AVOIDABLE INFLATION OR BALANCE OF
PAYMENTS CRISES; CERTAINTY THAT BUSINESS PROFITABILITY,
HAVING NOW BEEN SO CONVINCINGLY* RESTORED TO THE LEVELS OF
TO 20 YEARS AGO, WILL NOT BE PLUNDERED BY AN UNTHINKING
RESORT TO MASSIVE INDUSTRIAL DISLOCATION OR AN UNREASONABLE
ACCELERATION OF WAGE CLAIMS; CERTAINTY THAT THE SIZE OF THE
PUBLIC SECTOR WILL BE RESTRAINED AS PRIVATE ACTIVITY
EXPANDS; CERTAINTY THAT WE AS A LABOR GOVERNMENT HAVE SOUGHT
AND ACHIEVED A MUTUAL UNDERSTANDING AMONGST ALL THE MAJOR
ECONOMIC INTEREST GROUPS ABOUT THE TASK AHEAD, AN ENDURING
UNDERSTANDING BUILT ON CONSULTATION AND CONSENSUS.
THAT COOPERATIVE APPROACH EXTENDS ALSO TO INDUSTRY POLICY.
IT HAS PERMITTED AN UNPRECEDENTED SET OF AGREEMENTS TO BE
CONCLUDED IN THE STEEL INDUSTRY. ALTHOUGH THERE WERE SOME
WHO SAID THAT IT COULD NEVER BE DONE, THESE AGREEMENTS
INCLUDED MEASURES TO RAISE PRODUCTIVITY AND HAVE BEEN A
MAJOR FACTOR IN THE CURRENT ABILITY OF OUR MAJOR STEEL
PRODUCER TO RESPOND TO MARKET OPPORTUNITIES AND CAPTURE
SALES WHICH IN OTHER PERIODS WOULD HAVE GONE BEGGING.
THE MOTOR VEHICLE PLAN IS ANOTHER EXAMPLE OF OUR POSITIVE
APPROACH TO INDUSTRY POLICY.
FURTHER, THE GOVERNMENT HAS TAKEN A NUMBER OF INITIAL STEPS
TO REDUCE THE REGULATORY BURDEN ON INDUSTRY, AND WILL
CONTINUE TO LOOK AT FURTHER POSSIBLE STEPS. IN THIS REGARD I
HAVE RECENTLY ANNOUNCED A NUMBER OF INITIATIVES IN THE AREAS
OF FOREIGN INVESTMENT POLICY AND EXPORT CONTROLS, AND LAID
OUT AN AGENDA FOR FURTHER REFORM.
I EXPECT THAT THE GOVERNMENT WILL BE RELEASING IN THE NEW
YEAR A DRAFT SET OF GUIDELINES TO GOVERN THE OPERATIONS OF
COMMONWEALTH STATUTORY AUTHORITIES. THESE GUIDELINES WILL
BE INTENDED TO PROMOTE THE MORE EFFICIENT AND MORE EFFECTIVE
PROVISION OF SERVICES BY THE PUBLIC SECTOR.
THE REASON FOR OUR INTEREST IN THIS MATTER IS THAT THE
SECTORS OF THE ECONOMY ARE INTERCONNECTED AND MUTUALLY
DEPENDENT. JUST LIKE ANY FOOD PREPARATION, ECONOMIC RESULTS CAN ONLY BE
AS GOOD AS THE RAW MATERIALS THAT GO INTO PRODUCING THEM AND
THE SKILL WITH WHICH THESE ARE COMBINED.
AN INEFFICIENT PUBLIC SECTOR CAN UNQUESTIONABLY DRAG ON THE
GROWTH PERFORMANCE OF THE ECONOMY MORE BROADLY.
SO, WHILE WE RECOGNISE THAT CERTAIN GOODS AND SERVICES ARE
MOST EXPEDITIOUSLY PROVIDED IN THE PUBLIC SECTOR, WE ALSO
RECOGNISE THE NEED TO ENSURE THAT GOODS AND SERVICES ARE
DELIVERED EFFICIENTLY.
IN THE SAME WAY, AS A COMMUNITY WE SHOULD CONTINUE TO LOOK
AT WAYS TO IMPROVE THE EFFICIENCY OF OUR PRIVATE SECTOR.
FOR GENERATIONS, IN THE DISCUSSION OF INDUSTRY POLICY AND
APPROPRIATE INDUSTRIAL STRUCTURES IN THIS COUNTRY,
PARTICULARLY IN THE CONTEXT OF NEEDING TO CONTAIN THE GROWTH
OF OUR CURRENT ACCOUNT DEFICIT, THE REGULATORS INSTINCTIVELY
TURNED TO THE GREAT BOOK OF PROTECTION.
COMPETITION TOO STIFF FROM ABROAD? SLAP ON A TARRIFF.
STILL NOT GOOD ENOUGH TO MEET THEIR PRICE? GO FOR A QUOTA
OR TARIFF QUOTA.
NOT ANY LONGER.
WE MUST RECOGNISE THAT CONSUMERS PAY A HIGH PRICE
EQUIVALENT IN THE CASE OF MANUFACTURING, IN 1982-83, TO A
TAX OF $ 11.2 BILLION ACCORDING TO THE IAC FOR THE
PRIVILEGE OF BUYING AUSTRALIAN WHEN FOREIGNERS CAN PRODUCE
SIGNIFICANTLY MORE CHEAPLY.
DOWNSTREAM USERS OF HIGHLY PROTECTED PRODUCTS BEAR THE
ADDITIONAL COSTS OF RAW MATERIALS, WHICH REDUCES THEIR
ABILITY TO COMPETE IN WORLD MARKETS. AS A GENERAL
PRINCIPLE, THE PREFERENCE OF THIS GOVERNMENT IS TO REDUCE
PROTECTION, OVER TIME, AT A PACE DESIGNED TO MINIMIZE
ECONOMIC AND SOCIAL DISRUPTION, STARTING WITH THE MOST
HIGHLY PROTECTED. INDEED WE ARE PROGRESSIVELY IMPLEMENTING
POSITIVE EXPORT-ORIENTED INDUSTRY POLICIES.
ONE OF THE MORE INTERESTING FINDINGS OF SOME WORK PREPARED
BY THE OFFICE OF EPAC HAS BEEN THE TENDENCY OVER TIME FOR
INVESTMENT TO BE CONCENTRATED RELATIVELY MORE HEAVILY IN
LESS PROTECTED SECTORS OF THE AUSTRALIAN ECONOMY.
SUCH AN INVESTMENT ORIENTATION IS TO BE ENCOURAGED.
ONE NOTAB3LE CHARACTERISTIC OF ANY DEPRECIATION OF THE $ A IS
THAT IT IS NON-DISCRIMINATORY ALL PRODUCERS BECOME MORE
COMPETITIVE WITH IMPORTS, IRRESPECTIVE OF THE LEVEL OF
PROTECTION ALREADY ENJOYED.
THE NEED TO PURSUE POLICIES WHICH PRESERVE THIS BENEFIT TO
DOMESTIC SUPPLIERS GENERALLY IS ONE OF THE MAJOR DRIVING
FORCES BEHIND OUR GENERAL MACRO-ECONOMIC STRATEGY.
BUT THE MORE INVESTMENT IS ATTRACTED TO HIGHLY PROTECTED
AREAS THE HARDER BECOMES THE TASK IF, SUBSEQUENTLY, IT IS
DECIDED TO SEEK TO DIVERT RESOURCES TO MORE OUTWARD-ORIENTED
INDUSTRIES BY REDUCING DOMESTIC PROTECTION IN SOME CASES.
LADIES AND GENTLEMEN, THERE ARE THREE OTHER FACTORS BEARING
ON OUR ECONOMIC PERFORMANCE WHICH I WOULD LIKE TO DISCUSS
BRIEFLY PROCESSES, MARKETING AND FINANCE.
BY " PROCESSES", OF COURSE, I-MEAN TECHNOLOGY. AND THERE IS
A WHOLE RANGE TO CHOOSE FROM HI TECH, NEW TECH AND MORE
EFFICIENT OLD TECH ALMOST MORE " TECHS-, INDEED, THAN THE
NSW EDUCATION SYSTEM USED TO HAVE.
BUT, WHATEVER IT IS. CALLED, THE MEANING IS CLEAR: NEW
PRODUCTS; NEW WAYS OF TRANSFORMING RAW MATERIALS OR
PROVIDING SERVICES; OR THE MORE RAPID SPREAD OF EXISTING
KNOW HOW SO AS TO CAPTURE NEW MARKETS, TO PRODUCE THINGS
MORE CHEAPLY OR, TO USE A CLICHE, TO " BUILD THE BETTER MOUSE
TRAP". AUSTRALIA HAS SOME IMPORTANT ADVANTAGES IN RESEARCH AND
DEVELOPMENT ACTIVITY. THE EDUCATION SYSTEM PRODUCES CAPABLE
RESEARCH WORKERS. THE COST OF R D IN AUSTRALIA IS NOT
HIGH. IT IS PERHAPS SURPRISING, THEREFORE, THAT WHILE GOVERNMENT
FUNDING IS COMMENSURATE WITH OTHER DEVELOPED COUNTRIES,
INDUSTRY FUNDING AND PERFORMANCE OF R D IS SMALL.
BUT THE GOVERNMENT RECOGNISES THE MAGNITUDE OF THE TASK OF
IMPROVING THIS EQUATION.
FOR FIVE YEARS FROM I JULY THIS YEAR WE WILL PROVIDE A TAX
DEDUCTION FOR 150 PER CENT OF EXPENDITURE ON APPLIED
9.
RESEARCH WITHIN AUSTRALIA. AND WE ARE DETERMINED TO IMPROVE
THE COORDINATION OF EFFORT BETWEEN THE PRIVATE SECTOR AND
PUBLIC BODIES SUCH AS CSIRO AND THE UNIVERSITIES.
AS REGARDS MARKETING, AUSTRALIA'S OFFICIAL MARKETING EFFORT
OVERSEAS HAS BEEN RADICALLY OVERHAULED IN RECENT TIMES. WE
ARE IN THE PROCESS OF ESTABLISHING THE AUSTRALIAN TRADE
COMMISSION A ONE-STOP SHOP FOR ADVICE AND OTHER GOVERNMENT
SERVICES TO EXPORTERS.
FURTHER WE HAVE AN ACTIVE TRADE POLICY SEEKING BOTH
LIBERALISATION OF THE GLOBAL TRADING ENVIRONMENT IN AREAS OF
INTEREST TO AUSTRALIA, AND INCREASED EMPHASIS IN RESPECT ON
BILATERAL TRADING OPPORTUNITIES. THESE INCLUDE,
PARTICULARLY, OPPORTUNITIES TO DEVELOP SPECIAL RELATIONSHIPS
WITH MAJOR COUNTRIES IN OUR OWN REGION.
FINALLY, IN RESPECT OF MY LAST POINT, FINANCE, THERE SHOULD
BE NO NEED FOR ME TO REMIND THIS AUDIENCE OF THE
TRANSFORMATION WHICH THE FINANCIAL SECTOR HAS ALREADY
UNDERGONE, THE FULL RAMIFICATIONS OF WHICH WILL BE YEARS IN
COMING.
AUSTRALIA NEEDS AN EFFICIENT FINANCIAL SECTOR CAPABLE OF
ENSUING THAT ADEQUATE RESOURCES ARE AVAILABLE AS CHEAPLY AS
POSSIBLE TO THE EFFICIENT ENTERPRISES OF TOMORROW. OUR
POLICIES TO PROMOTE COMPETITION IN BANKING AND MORE
GENERALLY HAVE PRECISELY THAT END IN VIEW.
LADIES AND GENTLEMEN, AS I SAID EARLIER, THE TWENTY THREE
YEARS TO 1983 FOR ALL THEIR ACKNOWLEDGED ACHIEVEMENTS
HAVE BEEN SOMETHING OF A DISAPPOINTMENT.
WE NOW HAVE THE POLICIES IN PLACE TO ENSURE THAT AUSTRALIA'S
PERFORMANCE IN THE NEXT TWENTY FIVE YEARS WILL BE FAR
BETTER. HAPPILY, LONGEVITY RUNS IN MY FAMILY.. UNLIKE MY FATHER, I
DO NOT EXPECT TO SEE A SECOND HALLEYS COMMET. BUT I DO LOOK
FORWARD TO AN INVITATION TO ADDRESS YOU, THOUGH POSSIBLY NOT
AS PRIME MINISTER, AT YOUR GOLDEN JUBILEE TO REPORT ON HOW
WELL THE FOUNDATIONS FOR GROWTH WERE LAID IN THE TERM OF
THIS GOVERNMENT.