EMBARGOED UNTIL DELIVERY CHECK AGAINST DELIVERY
SPEECH BY THE PRIME MINISTER
VICTORIAN ALP FUNDRAISER
MELBOURNE 2 MAY 1987
Mr Premi. er,
Nancye Cain,
Members of the Victorian Cabinet,
Federal Cabinet colleagues,
Ladies and gentlemen.
It is encouraging to see such a large and distinguished
audience of Melbourne's business leaders and decision makers
here. tonight.
Many of you I know would not Include yourselves among the
traditional supporters of the Labor Party.
But on an occasion such as this, the partisan differences
which may separate us are less important than the
fundamental concerns which bring us together.
For tonight we meet on common ground. We meet with a common
concern for the future of Australia and a common acceptance
of the truth that only economic growth can guarantee that
future. I
Throughout my entire public life as trade union leader,
Opposition MP and Prime Minister it has been my most
deeply held conviction that the key to Australia's future
lies with consultation and co-operation.
That co-operative approach is not just a preferable
alternative to confrontation. It is in fact a necessary
element of any credible strategy to solve our economic
problems. To put it another way: we have a shared destiny in this
nation and that gives us a shared responsibility to work
together.
That was the thrust of my campaign message when I was first
elected to the Prime Ministership in 1983.
Ar-
And my message to you tonight is that in 1987 that
conviction is more relevant, not less, than it was in 1983.
For the nation faces a major economic challenge the need
to restructure our economy so as to ensure we have the
capacity to provide Jobs and income and security for our
children and for their children.
In the four years since we came to office I am proud that my
Governmen" t has fulfilled and more than fulfilled the chief
responsibility of a political party in office: to formulate
and implenert the relevant and feasible policies required
for economaic progress.
For too long, Australia had been content to derive wealth
from the export of wheat and wool and minerals.
Manufacturers were content to shelter behind protectionist
walls serving the small domestic market.
we had too little appreciation of the pressures and
opportunities of competition in the world's markets.
we failed to capitalise on our enormous potential to produce
manufactu 7ed goods and services for export to our region and
to the world.
it has been the responsibility of my Government and it has
been our achievement to shift the nation away from those
shortcomings towards a more realistic awareness of the
challenge we face.
That challenge is economic restructuring the need to build
a stronger and more diverse export base. only this week
John Cain, along with Bob Fordham, Rob Jolley and Steve
Crabb, announced a major new effort by the Victorian
Government to advance this task.
The focus of the Victorian Government's efforts is just
where it should be on trying to boost the export potential
of the state.
I don't want to take up time this evening by commenting on
specific initiatives within that package.
But I do want to state that the goal-of the Victorian
initiative to double Victoria's exports of manufactured
goods and services over the next five years is entirely
compatible with the efforts of the Federal Government to
restructure the economy. I congratulate the Victorian
Government for that.
in addition to that initiative, we are seeing other pieces
of evidence that businesses, trade unions and the whole
community are striving to meet the challenge of economic
restructuring.
Let me review that evidence briefly with you now.
Latest estimates of the 1986-87 current account deficit are
of he order of $ 1 billion less than the Budget forecast of
$ 14 billion.
Moreover net exports are expected to contribute
substantially more to growth than the 14 percentage points
forecast at Budget time.
Particularly pleasing has been the strong performance of
manufacturing exports up 30 per cent so far this financial
year. Tourism has also increased markedly. The net foreign
deficit on travel has fallen 49 per cent.
The net services deficit, which covers freight and insurance
in addition to travel, has fallen by 21 per cent.
Weaker than forecast consumption growth a desirable
development in present circumstances has also greatly
assisted this turnaround in the current account.
Interpretation of the trend in the current account is likely
to become mo:: e difficult over coming months as the seasonal
increase in the deficit begins to inflate the monthly
statistics.
But the underlying improvement in the current account is now
well established and is expected to continue in 1987-88.
As we predicted in the last Budget, the slowing in the
economy than evident was short lived. The December quarter
saw a return to strong growth with an increase of 1.1 per
cent in the Gross Domestic Product.
In the twelve months to March employment has grown by 2.1
per cent. This means a further 147,500 jobs, and it brings
the total number of jobs created under my Government to
760,000.
More than any other statistic, the robustness of employment
growth this year demonstrates the underlying strength of the
economy and the success of the Government's economic
policies. But I don't want to weigh you down this evening with a lot
of statistics. The important point is what lies behind
those figures namely, a new and absolutely vital set of
attitudes which now pervades the nation.
There is a dramatically increasing awareness of the need to
export and, more generally, to make and market products of
quality. There is an awareness of the need for continued wage
restraint. I
There is an awareness of the need to re-examine past ways of
doing things and an awareness of the need to address our
industrial issues constructively.
Through the Australian Made campaign, there is a growing
awareness of the need to support domestic rather than
imported goods though let me add there is still room for
more Australian companies to adopt the green and gold
kangaroo symbol to identify their products as
Australian-made.
Taking all these into consideration, we enter the crucial
next stage in our strategy of reconstruction with cautious
optimism that the economic future is brighter than the
months and years we have just passed through.
Building on this achievement is a task for all of us
business, government, trade unions and the wider community.
There should be no doubting the Federal Government's
determination that the process of restructuring continues
and that the gains we have already made are preserved and
multiplied. Since we came to office we have exercised a restraint in our
own expenditure which is unparalleled among comparable
nations.
When we came to office, we inherited a prospective deficit
of 5 per cent of GDP. We have now wound that figure back to
only 1.5 per cent of GDP.
Meeting as we are in the lead-up to the May Statement, let
me remind this audience that we are not about to relax our
efforts. The May Statement, and the Premiers' Conference and Loan
Council which iill follow, are absolutely crucial stages in
the Government's continuing economic strategy.
I do not want to go into details now about the decisions we
have made. But I can say, as I have said on a number of
occasions, that our approach will be tough. We will not be
abandoning our commitment to fairness in expenditure
restraint but we are determined to reduce both the Budget
deficit and the total Public Sector Borrowing Requirement as
a share of GDP.
Spending cuts in the May Statement will be spread across a
number of portfolios. The Commonwealth is looking closely
at its asset holdings to effect rationalisations where
prudent, but the major focus of our attention is on general
recurrent outlays.
There will, for example, be further measures to weed out
welfare cheats and ensure that social security benefits go
only to those who are entitled to them. _ II_
Indeed, a more wide ranging examination of welfare outlays
has been necessary, producing some measures which, in
earlier times, may not have been contemplated.
But we will not be wielding the knife indiscriminately.
We will be seeking, as we have sought in the past, to
implement durable, structural reforms which achieve budget
savings bu~ t which also bring about more effective and fairer
delivery of Government services.
The collao~ o in our terms of trade since the end of 1984 has
stripped come $ 9 billion dollars from our national economic
capacity. To distribute a loss of this magnitude equitably
and to maintain employment growth has been no easy task.
But we have faced this task with firm resolve and we are
succeeding. Ladies and cSentlemen,
I began thiG evening by stating that I did not want to make
a partisan speech and I will not.
But I think I would be remiss if I failed to offer you some
views abo~ zt the extraordinary events we have seen in the
Federal Pcrliament in the last week.
From ono point of view it has been an entertaining couple of
days as we observe hour by hour the ever-changing line-up of
faces oppoaiite us and listen hour by hour to the clash of
ambitions among their many would-be and have-been leaders.
But I have to state honestly, as Prime Minister of a country
which still faces a serious economic challenge, that the
chronic shortcomings of the Opposition are disturbing.
Their basic failure has been their incapacity to develop
workable and relevant economic policies a failure of
profound dimensions since the area of economic management
has been the area of our greatest success.
The community is simply incapable of getting answers to its
legitimate questions about where the alternative Government
stands on the central issues in the national economic debate
such as taxes, spending cuts and industrial relations.
As you can imagine this disarray provided an enormous
temptation to go to the voters early. It would certCainly
have been a successful political move.
But I made the decision not to call an early election
because to do so would have been inconsistent with our
long-term strategy to restructure the economy so as to
promote our best chances of prosperity.
That strategy means we must take the hard decisions to
restructure the economy. We are taking them.
6.
It means we muut act with fairness and compassion. We are
doing that.
It means we muct continue to provide strong and stable
Government, for all Australians. We will continue to do
that. Our strategy, finally, means we must govern for the
long-term future even at the expense of copping some
short-term flakl for unpopular decisions along the way. And
that is what we are doing.
We have a clear vision of how Australia must advance if we
are to reach our goal of a more prosperous future.
Every decision we take is a step towards our goal:
S a restructured and a more secure Australia;
S an Australia with more people working in more productive
jobs and creating more wealth for the nation;
an Australia with living standards on the way back up
again. an Australia steadily and constructively working our way
through our problems
S an Australia more capable of standing on its own two
feet.