9.
-jl , AUSTXALIA~ñ
PRWME MINISTER
EMBARGOED UNTIL DELIVERY CHECK AGAINST DELIVERY
INAUGURAL RUBY HUTCHISON MEMORIAL ADDRESS
NATIONAL PRESS CLUB
CANBERRA 13 MARCH 1987
Ladies and Gentlemen
Let me first say a few words about the remarkable
contribution to Australian society made by-Ruby Hutchison:
feminist, Labor Party activist, and pioneer of the
Australian consumer movement.
Ruby Hutchison was the first woman elected to the
Legislative Council of the Western Australian Parliament.
She was appointed, at the age of 65, to the W. A. Trades and
Industries Protection Council. I might add that it was my
uncle, Bert Hawke, the then Premier of Western Australia,
who made this appointment, which did so much to m~ ake Ruby
Hutchison the forceful advocate she was for consumer rights.
Like all activists, Ruby Hutchison recognised the
fundamental fact that it is difficult for individuals acting
alone to be effective. Consumers, she realised, needed
information about their prospective purchases but this
information did not come easily or cheaply to individuals in
a busy world full of complex choices.
Ruby Hutchi~ on foresaw that if consumers banded together
they could gain the necessary information and thus operate
more effectively. It was this insight which provided the
impetus for her establishment of the Australian Consumers'
Association in 1959.
I am pleased to see that Ruby Hutchison's daughter, Ivy-May
Sheahan, who also played a major role in ACA's early days,
is in the audience today.
Today, ACA and its ' Choice, magazine remain Australia's main
source of factual, reliable and readable product information
for consumers.
Ruby Hutchison, founder of the Australian consumer movement,
died in December 1974 at the age of 82. Her legacy is the
strong and active consumer movement which is represented
here today on World Consumer Rights Day an international
concept which I know she would have embraced with
enthusiasm.
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Thanks in par-t to the work of Ruby Hutchison and other
consumer activists, governments have increasingly seen their
responsibilities to their citizens as encompassing a degree
of responsibility to them as consumers in the marketplace.
This has been true of Australian governments particularly
of State and! Federal Labor Governments. In particular, my
Government has amended the Trade Practices Act to make it
probably the single most comprehensive piece of legislation
designed to ensure fairness and efficiency in the
marketplacz. It now includes provisions for the recall of unsafe
products, for representative actions to be taken on behalf
of consumers, and for giving consumers the right to take
action over unconscionable conduct in transactions. Our
amendments have prompted the introduction of uniform fair
trading legislation at the State level.
we have also appointed consumer representatives to the Trade
Practices Comimission, the National Standards Commission and
the Economic Planning and Advisory Council, and extended
consumer representation on the National Health and Medical
Research Council.
However, I stress that this Government is not attracted to
unnecessary regulation.
We have set uip a Business Regulation Review Unit to assess
the costs and benefits of regulations including, where
appropriate, those borne by consumers.
Federal and State Governments last year agreed to uniform
food legislation, which it is estimated will save the food
processing industry, and ultimately the consumer, at least
million a year.
In financial markets, our policies of deregulation have
helped consumers by opening the economy to foreign banks and
reducing the restrictions on the financial system.
In short, our general preference for deregulation is based
on our belief that if competitive market forces can be
successfully unleashed, they will operate to restrain price
increases.
This shift in government response from regulation to
deregulation in defence of consumer interests is a
significant change in the environment in which the consumer
movement now operates.
This change has special relevance in the very different
economic situation Australia faces today.
The Australian community must understand that the nation is
playing in a new and very different ball park. The
assumptions and attitudes which shaped our approach to
national issues in the past have to be re-examined.
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The plight we are in is clear. A dramatic turnabout in our
terms of trade has slashed our national income . by some $ 6
billion he equivalent of $ 1500 for every Australian
family -presenting us with pressing and immediate demands
for restraint throughout the Australian community.
wage earners have led the community in accepting the hard
discipline of unprecedented restraint over the past four
years. Real wages have fallen despite the solid economic
recovery which has occurred.
The reward for the nation has been the creation of three
quarters of a million jobs the fastest employment growth
in Australia's history and most significantly continued
strong employment growth despite the slow growth in economic
activity in the past year. Industrial disputation has been
more than halved, and the economy has become more
internationally competitive than it has been for at least
two decades.
Neither wage earners nor the economy as a whole can afford
to fritter away those gains and those still to be made
through excessive wage claims now.
The recent decision in the National Wage Case has pro vided
workers with prospective wage increases consistent with
creating both a workable industrial system and rates of pay
increases which the economy can afford.
Moreover the new two tier arrangements provide scope not
only for scme flexibility in wage setting, but also offer a
unique opportunity for firms and workers to set about
re-organising work patterns to achieve more satisfying jobs
and higher productivity. And it is only through higher
productivity that Australia can sustain higher living
standards.
These new arrangements deserve the support of everyone if
they are to operate without excessive disputation.
Moreover, Australia's future prosperity demands the
strongest possible commitment to " no extra claims".
Given this restraint by wage earners, executive salaries
must also be restrained. There is evidence, however, that
salaries in certain sectors have been moving ahead rapidly.
Business must not puncture the spirit of community
restraint. It must take its responsibilities to the
community more seriously.
The Federal Labor Government fully accepts its
responsibilities in exercising restraint. We have already
said that on 14 May a range of new spending cuts will be
announced, as an instalment on this year's Budget.
This will continue the most demanding Commonwealth budgetary
discipline in the post-war period, a discipline which has
enabled us to reduce the budget deficit as a proportion of
GDP from the 5 per, cent we inherited to around 1 2 per cent
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this finan~ cial year. we will continue within the limits of
fiscal responsibility to do everything within our power to
restrict the growth of Commonwealth taxes and charges, and
those of our authorities.
To be more concrete, the Commonwealth pledges that it will
generally restrict the increase in our excises which would
otherwise have occurred at the next two half-yearly
indexation adjustments to a total of around 6 per cent.
It must be appreciated that in regard to the ultimate price
of refined petroleum and related products, excise is by no
means the sole determinant of price fluctuation. overseas
prices, for example, are a major factor. Our application of
the above general commitment in this area therefore will
need to take such factors into account in the context of our
general budgetary responsibilities.
I note that in any event Australia Post and Telecom are
already monitored by the Prices Surveillance Authority.
At the Premiers' Conference on 25 May we will be asking the
States to play their part to restrain both outlays and
charges. on an occasion such as this, it is particularly relevant to
discuss in some detail the restraint which must be exercised
in the setting of prices.
Consistent with our overall approach, it will be obvious
that we are not attracted to the concept of direct control
of prices. The fair operation of market forces, we believe,
will usually produce the best outcome.
But, at this time, business needs to be doubly sensitive of
their obligations to Australia.
Accordingly, the following guidelines should apply.
Price increases should generally be limited to increases in
unit costs. Only cost increases that are unavoidable should
be passed on in prices. At a time when a concerted national
effort to restrain costs is required, profit margins should
not be increased.
Exceptions should be strictly limited to special cases, such
as to avoid~ losses or unduly low levels of profitability, or
to permit essential new investment to proceed.
By accepting these guidelines, business can do its part to
revive the spirit of co-operation and mutual acceptance of
restraint which typified the events following our election
in 1983.
Let me remind you of the words of the communique issued by
the participants at the National Economic Summit in April
1983.
I
The Summit declared: " If restraint is to be exercised then
such restraint should be exercised universally".
That declaration still carries its full force. Business
must be prepared to match the very substantial restraint
which workers have exercised over the past four years.
The measures I am about to announce reflect the importance
the Government attaches to the task of securing maximum
price restraint.
The Government's initiative on prices and consumer affairs
comprises fcur main elements: enlargement of the Price
Watch network, expansion of the task of the Prices
Surveillance Authority, establishment of a new Bureau of
Consumer Affairs, and assignment of a minister to spearhead
these new efforts to achieve the lowest possible prices and
better consumer protection.
Last October the Federal Parliamentary Labor Party
established a Prices Task Force under the chairmanship of
George Gear, the Member for Canning, to oversee the
operation of community-based Price Watch Committees. Thirty
such Committees have been established to date, modelled on
George's Canning Price watch, which has been operating
successfully for four years.
Each month, the Price Watch volunteers check the prices of a
representative basket of items in their local supermarkets,
gathering information which serves two valuable purposes for
consumers. First, it identifies the supermarkets in the
area which offer the best prices. This helps the shopper's
dollar go further. Second, the publication of comparative
price information enhances competition among retailers.
Price Watch Committees have been so successful that we are
now proposing a broader community approach, involving in the
first instance the participation of pensioner groups and
consumer organisations. Accordingly, I have invited the
Australian Federation of Consumer Organisations and the
Australian Pensioners' Federation to participate in an
extension of Price Watch Committees across Australia. We
would be happy to see Members and Senators of all Parties
involved in this process.
The Price Watch network is to be overseen by the
broadly-based National Consumer Affairs Advisory Council. I
take this opportunity to thank the previous Council and its
chairman, Professor David Harland, for their work since the
Council was established in 1977 and to welcome the new
Council and its chairman, Justice Paul Stein.
I want to reiterate that the Price Watch network offers
everyone a chance to make a direct and positive contribution
to protecting their interests. Rather than signing up a new
army of public servants to walk around stores with pencils
and forms we will be relying on volunteers to work with the
Government, helping themselves and us to combat consumer
rip-of fs
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The Government will make available modest computing
services, to condense and analyse the data collected by the
local Price watches. The results will be sent back to the
Price Watch Committees for use in the local community.
Price Watch Committees will also be encouraged to report
cases of suspected excessive prices to the Prices
Surveillance Authority for investigation.
The second chief element of the initiative I am announcing
today is a significant expansion of the work of the Prices
Surveillance Authority.
The PSA will, first, arrange for retailers operating on a
national basis to report regularly to the Authority on their
gross profit margins.
Already, the Coles/ Myer Group has made such arrangements
with the Authority which cover all its department, discount
and supermarket stores. The PSA will be approaching other
retailers to make similar arrangements. This will enable
the Authority to monitor margins over the bulk of the retail
trade, allow. ing it to seek explanations if margins appear to
be growing inappropriately.
The PSA will, second, undertake an expanded program of
public inquiries into areas which have shown above-average
price ri6so. These inquiries, to be conducted during 1987,
will cover two major classes of consumer goods: clothing,
and toile-tries and non-prescription pharmaceuticals. other
inquiries are planned for biscuits and, of particular
importance to the rural community, heavy duty tyres.
Details of these inquiries will be announced by the PSA.
They will provide an opportunity to expose the pricing
policies of business in less competitive markets and to
enable commiunity groups to express their concern in cases
where market forces alone are not so effective.
In addition to the proposed public inquiry into clothing
prices, the PSA will monitor movements in clothing and
fcotwear prices using data collected for the CPI to examine
the reasons for any very large increases. The results will
be published in the PSA's bulletin, ' Price News'. This will
complement the PSA's comments in relation to food and
grocery price movements, which have helped to improve
consumer understanding of the reasons for price movements.
The PSA will examine each quarter any aberrant movements in
other components of the CPI. The PSA will be required to
recommend whether specific action is justified in any of
these cases, including for example, the extension of formal
surveillance procedures.
The Government will consider appropriate means of exposing
any blatant profiteering detected by the PSA.
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We will also be moving to establish a new National
Consultative Committee of Commonwealth and State pricing
officials. TPhis new body will be headed by the Chairman of
the PSA and will meet regularly to discuss trends in prices,
to co-ordinate price surveillance activities and to identify
problem are'as.
The third chief element of today's initiative is the
establishment of a Bureau of Consumer Affairs to give new
drive to the protection of the interests of Australian
consumers. Currently, consumer related tasks are performed
in a number of different departments. These will be
amalgamated into a single body, the new Bureau, which is to
be located within the Attorney-General's Department.
Thn Bureau will be responsible for:
all of the present functions of the office of Consumer
Affairs; Commonwealth policy, including legislative aspects, in
relation to domestic food and beverage standards,
recalls and consumer product safety;
Commonwoolth policy in relation to packaging and
labelling;
product safety and product information functions of the
Trade Practices Commission under Division 1A of Part V
of the Trade Practices Act.
In respect of its product safety and product information
responsibilities, the Bureau will monitor and enforce
compliance with standards and develop new standards, as well
as initiating mandatory product recalls if required.
The new body will considerably streamline the various
government, services directed at protecting the consumer. It
will provide both consumers and business with a single
agency which will help consumers while avoiding the creation
of cumbersome new regulation. This will complement the
Trade Practices Commission's role in combatting unfair and
misleading practices in the market place.
I should strlOSS that while extra staff will be made
available to the Bureau so it can fulfill its new role, the
number ot public servants overal. will not be increased as a
consequence. The final eJ. ament of today's initiative is the assignment of
a minister to supervise these new arrangements.
I have decided that Mr Barry Jones, the Minister for
Science, should take on this vital task. Barry Jones is to
be appointed minister Assisting the Treasurer on Prices and
Minister Asz1ting the Attorney-General on Consumer Affairs.
This will giv. e him direct political and public
responsibility for the issues covered by the Prices
Surveillance Authority and the new Bureau of Consumer
Affairs.
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In effect, Barry will be the Prices minister, charged with
the oversight of the measures I have just announced, to
renew the fight for the lowest possible prices and ensure a
fair go for ccnsumers.
Finally, the Government has had discussions with the
Automotive -ndustry Authority in respect of an increasing
concern about motor vehicle prices.
As a result the Authority intends to advise the industry
that it will publicise price increases on a quarterly basis
during 1987. moreover it will tell the motor vehicle
producers tl-at, consistent with its obligation to monitor
prices closely, it will advise the minister if it considers
that motor vehicle price increases are unreasonable.
In such circumstances the Authority would recommend that the
Minister use his power to reduce the amount that can be
claimed for local content. This would have a substantial
adverse impact on the motor vehicle producer's
profitability. I make the pcint that the Authority has the Government's
full support in this proposed response.
Together, these initiatives demonstrate one thing clearly:
we are determ~ ined to help protect consumers from excessive
price increases3 and unfair trading practices.
As I said at the beginning the Government believes that,
ideally, market forces should be left to produce the lowest
possible price structure.
However let ma state explicitly that if the Government were
to form the judgement that the game is not being played
fairly, then course we would have no option but to
consider the use of our existing constitutional powers in
this area.
I have written to al,. the State Premiers and the Chief
Minister describing this initiative and seeking their
co-operation. As for the Premiers of the four Labor States,
I have discussed our proposal with them and can report that
they agree with and support the course we have adopted.
Let me make a further comment about the Labor Premiers.
Barrie Unsworth, John Cain, Brian Burke, John Bannon, and I
govern in historically unprecedented times for the Labor
Party. Never before have so many Labor governments been elected and
re-elected to cffice in Canberra and the State capitals.
This fact has offered and continues to offer, unprecedented
opportunities for co-ordination and consistency of economic
management across almost the entire spectrum of our
Federation a Federation which has too frequently in the
past been a vehicle for cut-throat rivalries.
I 9
Of course none of the five Labor Governments currently in
office today is about to sacrifice its prime responsibility
to its own constituents. Each government has developed, and
will continue to develop, its own solutions to its own
problems. But let me make this very clear: on the issue of prices,
all the Labor Governments are moving in the same direction.
As we have seen this week, and as the initiative I am
announcing today further proves, Labor Governments are all
agreed on the necessity, in an era of overall wage
restraint, to keep price rises, including Government fees
and charges, to the minimum.
Ruby Hutchison lived in an era now long gone. But I do not
think it does violence to her achievement or to her legacy
to suggest that were she alive she would have two responses
to the demands of the current era.
She would of course be delighted to see the strength and
breadth of the Australian consumer movement which she
launched and she would I believe endorse the efforts which
our Governments are taking to manage this period of economic
reform by a fair sharing of the burden of restraint.