CHECK AGAINST DELIVERY EMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER
ANNUAL DINNER OF THE
AUSTRALIAN MINING INDUSTRY COUNCIL
CANBERRA 3 MAY 1989
Tomorrow you will be conducting your annual seminar under
the title ' minerals Sustaining the Future'.
It can be predicted with confidence that Australia's future
will remain reliant for many years to come on the export
earnings of our two largest and oldest industries
agriculture and mining.
After all, in 1987-88, processed and unprocessed minerals
contributed some $ 16.6 billion to our export earnings more
than 40 per cent of the total of merchandise exports. That
represents a massive contribution to Australia's wellbeing.
But if the mining industry is to continue this contribution,
many challenges must be overcome in an increasingly complex
international environment.
As one of the world's leading commodity exporters, Australia
is all too familiar with the risks of excessive reliance on
volatile commodity markets. We suffered an enormous loss of
national income some $ 11 billion because of the collapse
of world commodity prices in 1985/ 86.
It is to reduce that vulnerability that the Federal
Government has made such efforts to restructure our economy,
to diversify our exports and to increase our
competitiveness. These efforts.-must continue throughout the
1990s and beyond.
However we need also to address a more immediate threat to
our prosperity one which dramatically magnifies the perils
of our reliance on commodities. I refer to the distortion
of the international marketplace created by the scourge of
protectionism. Protectionism, wherever it occurs, acts to depress world
prices. It stifles demand and imposes substantial costs on
industries and consumers within the protecting countries.
most of the attention about the crippling effects of
protectionism, and much of the pressure for remedial action
that Australia is exerting, has focused on agriculture.
2.
Fair trading producers such as Australia successfully pushed
for agriculture to be placed on the agenda of the Uruguay
Round of GATT negotiations when it was launched in 1986.
Through the Cairns Group, Australia has made reform of
agricultural trade a major priority of foreign and trade
policy, and we recently achieved a very important
breakthrough in Geneva which opens the way for reform.
But that is not to say that other Australian export
industries have not also suffered from the reluctance of our
trading partners to break down the barriers to free
multilateral trade.
In fact, in the crucial coal industry, subsidies and other
support measures in some major economies are seriously
damaging the health of world trade.
For Australia an efficient coal producer and, with the
United States, the largest coal exporter in the world
these subsidies translate into a loss of billions of dollars
in lost export opportunities.
Reducing the massively subsidised coal production in the
European Community and Japan would inevitably open up
greater opportunities for world trade.
In 1987, hard coal production subsidised by the European
Community and Japan totalled 232 million tonnes equivalent
to about 70 per cent of world trade in hard coal.
Subsidised steaming coal production was around 175 million
tonnes about the same volume as the total of world trade
in this product.
And coal subsidies are on the increase.
In the Federal Republic of Germany, for example, annual
total subsidies paid to the coal industry rose by 70 per
cent in the four years to 1988.
These German subsidies have actually grown faster than the
income that either Australia or the US earns from coal
exports. The Japanese are winding back on uncompetitive coal
production, albeit more slowly than we had hoped.
Nonetheless, coal subsidies in Japan have about doubled over
the last four years.
The United Kingdom is also a substantial subsidiser of its
coal industry. Like Germany, Britain is a very large coal
producer with relatively minor imports. The result is
inevitable: coal prices soar for European homes and
industries. British coal prices are some 180% higher than the prices of
imported coals; in Germany the price is some 250% higher.
At the same time, European taxpayers are paying a heavy
burden to keep the subsidies going.
In the European Community, the coal sector received
subsidies totalling some $ US12 billion in 1986 equivalent
to about $ US25,000 per employee.
In other words, restructuring the coal industries in both
countries would not only have a dramatic effect on improving
the market access for efficient producers like Australia.
It would also lead to lower prices for European consumers
and would reduce the heavy subsidies burden on European
taxpayers. So we learn here the same lesson about protectionism that we
learn in agriculture. It hampers the efficient producer and
it weighs down the domestic consumer and taxpayer.
My colleague the Minister for Trade Negotiations, Michael
Duffy, has recently launched a new Australian campaign to
have coal subsidies addressed effectively in the Uruguay
Round of multilateral trade negotiations.
As we have found with agriculture, progress is certain to be
slow. But we must make the effort because the international
trading system cannot tolerate indefinitely the distortions
and unnecessary costs of Europe's self-defeating coal
policies. We must work for the dismantling of coal protectionism, both
bilaterally and in international forums such as the GATT.
Coal protection featured prominently in discussions
yesterday at the inaugural Australia/ FRG Economic
Consultations, building on my talks in Canberra with
Chancellor Kohl last year.
The issue was also discussed in the Australia/ UK Economic
Consultations in March, and I can assure you I will be
pursuing it further in my visit to both Britain and Germany
next month.
The Government has played a leading role in the Natural
Resource Base Products Negotiating Group, which in the GATT
talks covers all mining and energy products. We will
continue to work closely with industry, through, for
example, the AMIC Trade Committee and the Government's Trade
Advisory Board, in developing our negotiating priorities and
strategy in the Uruguay Round.
The Government is also promoting trade and co-operation
opportunities for the minerals industry through involvement
in a range of specialist bilateral consultative forums with
major markets and some fellow producers. The list already
includes Korea, China, Thailand and Canada, and arrangements
are in train for a new forum with Indonesia.
Ladies and gentlemen,
What we have done to increase the opportunties for the
mining industry at the international level is being
complemented here in Australia.
You will be aware that the Government is engaged in a major
program of micro-economic reform to improve the efficiency
and effectiveness of our economy.
We have already cut tariffs, floated the dollar, ended the
two airline agreement, deregulated crude oil marketing,
exposed telecommunications to greater competition and
deregulated grain transport and marketing.
Starting next week, a series of ministerial statements will
underline the Government's determination to press ahead with
this program. Together with the April Statement, with its
emphasis on award restructuring as a vital element of wages
and industry policy, those statements will lead to real
productivity improvements throughout the economy.
Perhaps of greatest interest to this audience is our
commitment to effective reform on the waterfront and in
coastal shipping.
This is an essential area of reform shirked by Governments
for decades past where the competitiveness of our
agricultural, manufacturing and mining industries can be
dramatically improved.
The interdependence of mining and coastal shipping is
particularly strong. In 1985/ 86 minerals accounted for over
per cent of total cargo carried on coastal shipping.
So the potential benefits of reform are very large and
action is essential.
As you know, the report of the Inter-State Commission,
released in April, proposes fundamental changes to the way
the waterfront is organised. My colleague Ralph Willis, the
Minister for Transport and Communications, is currently
seeking the views of key participants and the Commission's
recommendations will then be considered by Cabinet.
I am aware that AMIC has welcomed the Commission's
recommendations and I look forward to your co-operation in
implementing reform.
The Government has also received the Report of the Shipping
Reform Task Force, whose recommendations we will be
considering over the next few weeks. I confidently expect
we will be able to announce a program of reforms which will
provide for substantially more efficient and competitive
coastal shipping services.
Ladies and gentlemen,
These initiatives show our determination to help the mining
industry ' sustain the future' of Australia.
I want to focus now on an issue which is profoundly relevant
to that goal of sustaining the future in a global sense.
You have quoted in your program notes some words taken from
the recent Report of the world Commission on Environment and
Development the . commission which was so ably chaired by
the Prime Minister of Norway, Mrs Gro Harlem Brundtland.
These quoted words concentrate on the Commission's
recognition of the need to revitalise global economic
growth. So far so good. But you don't quote the words that
immediately follow which provides the all-important " but":
" But many people fear that a more rapidly growing world
economy will apply environmental pressures that are no
more sustainable than the pressures presented by growing
poverty."
Balancing those twin imperatives, the Commission reached its
" overall assessment" that " the international economy must
speed up world growth while respecting the environmental
constraints". That balanced assessment provides the basis for the
Brundtland Report's vision of a sustainable world economy.
we must not succumb to the temptation to put the environment
in one category and development in another, or to imagine
that policy dealing with one does not deal with the other.
If I can quote once more from the Report, this time from its
Foreword, " the environment is where we all live, and
development is what we all do in attempting to improve our
lot within that abode. The two are inseparable."
This Federal Government has certainly proven its credentials
as a Government that recognises the inseparability of these
two values.
We are now creating a means whereby the Australian community
can reach that balance in determining complex issues of
resource use.
Legi slation to establish the Resource Assessment Commission
was introduced into the House of Representatives this
afternoon by my colleague, the Minister for Primary
Industries and Energy, John Kerin.
The RAC will provide a new and important vehicle for
inquiring into, and reporting to the Government on, the
environmental, cultural, social, industry, economic and
other aspects of Australian resources and their uses.
It will be guided by the three policy principles I announced
last November covering the Government's management of
competing claims for resource use.
In summary, these principles are that there should be an
integrated approach to conservation and development; that we
should maximise the net benefits to the community from the
nation's resources; and that we recognise that in some cases
the interests of both conservation and development can be
accommodated while at other times choices will need to be
made. RAC inquiries will not be substitutes for Environment Impact
Statements, which will continue to apply to project
proposals. The Commission's task will be broader: to consider complex
and contentious resource use issues covering whole
industries or regions and to assess the costs and benefits
of alternative or multiple uses of resources.
The P. AC's first reference will be on forestry and timber
resources.
As John Kerin announced, the first chairman of the RAC will
be the Hon. Mr Justice Stewart, currently Chairman of the
National Crime Authority. Mr Justice Stewart has had a
distinguished career and his analytical skills, experience
in the conduct of inquiries and knowledge of government will
serve him, and the community, well in this important new
appointment. As well as advising the Government, the RAC will also
provide a means for significant public involvement. In this
way the Commission's inquiries will make a major
contribution both to informed public debate and to rational
decision making.
The mining industry has pressed for a clear and predictable
process such as this for a considerable time. I believe it
offers all interested parties a very good opportunity to
bring their views on these crucial issues to the
Government's attention.
Complementing the new Commission, the Federal Government has
also sought the States' views on how to improve the
consultative processes between the two levels of government
in both conservation and development portfolios.
We have also invited industry, union and conservation
representatives to participate in a consultative group to
provide another avenue for inputs to the Government.
I hope that through this new consultative group which I
expect will hold its first meeting early in the new
financial year it will be possible to start addressing
issues in a way which will give the general public a clearer
understanding of what concerns are unfounded, what are
problems of substance, and what measures may be necessary to
address them.
I am heartened at the way the Australian Conservation
Foundation and the National Farmers Federation have joined
forces to address Australia's soil degradation problems. I
hope the AMIC and the ACF will find the means to co-operate
in tackling mining issues.
Ladies and gentlemen,
The global view taken by the Brundtland Report attests to an
important change in the public's concern about the
environment. Much of the concern has traditionally, and very properly,
focussed on specific questions: efforts to save the
Franklin river, to protect architectural elements of the
national estate, to safeguard the future of particular
forests or alpine regions with national parks.
But increasingly we are seeing the emergence of genuinely
global environmental problems: the prospects for climatic
change caused by the Greenhouse Effect and the depletion of
the ozone layer, the possibility of the disappearance of
whole species of animals, birds and plants, the massive
consequences of industrial accidents such as Chernobyl or
the grounding of the Exxon Valdez in Alaska.
By marking this transition to an increasing adoption of a
global perspective, the Brundtland Report represents a
significant milestone. I have recently invited
Mrs Brundtland to visit Australia because I believe we would
all benefit from hearing her views at first hand.
For Australia's part, we are taking a very active part in
responding to global environmental issues, especially the
Greenhouse Effect and the depletion of the ozone layer.
We have signed the Montreal Protocol which requires
countries to reduce levels of ozone-depleting gases, backing
this up at home with the Ozone Protection Act, one of the
world's most stringent pieces of legislation controlling and
reducing the manufacture and use of chlorofluorocarbons and
halons. Australia needs to be prepared to participate fully and
constructively in what will obviously be an increasing
number of international negotiations and conferences.
In March this year I was represented at an intergovernmental
Conference in the Hague by my Foreign Minister, Gareth
Evans, who played a significant part in negotiating the
Conference resolution.
Federal Cabinet recently formulated a series of principles
to guide Australia's participation in such forums.
I point out to this audience that in formulating these
guidelines for environmental activities, we have placed
proper weight on our economic and trade interests, including
our coal exports.
We decided that in pursuing its international environment
objectives, Australia should support the concept of
sustainable development as a basis for promoting economic
activity in an environmentally sensitive manner and for
protecting and enhancing the interests of current and future
generations. This would involve a commitment to continued, positive,
national and international economic growth in order to
satisfy fully the legitimate socio-economic aspirations of
all communities.
It would also involve the need for close integration of
environment and development policies, including taking full
account of environmental and developmental costs and
benefits in assessing all aspects of economic activity.
We must recognise the need to promote and preserve our
national comparative advantages in addressing outstanding
environmental issues, and to ensure that the burden of
adjustment is carried equitably by the international
community.
An international environmental issue of direct relevance to
the Australian mining industry is the question of mineral
exploration and development in Antarctica.
Mining in-Antarctica is most unlikely to benefit the
Australian mining industry, owing to its adverse effects on
world mineral prices and correspondingly, on the
profitability of Australian mineral developments both in
Australia and overseas. Certainly, subsidised mining cannot
be in the interests of the Australian mining industry, as
AMIC itself has recognised.
My Government has fought subsidies wherever they have
arisen. The prospect of subsidised mining in the Antarctic
represents a direct threat to the unique and fragile
Antarctic environment.
We have all witnessed from the Alaskan oil spill the
appalling damage that can be done to that sort of
environment from unregulated activity. Considered
judgements have to be made about the course of action that
Australia can take which is most likely to result in the
preservation of the Antarctic environment.
The Government will be considering the issue in the
relatively near future. Our objective is clear we simply
must not imperil the unique Antarctic environment and we
will be pursuing with other relevant nations the best course
for ensuring that the Antarctic environment remains
protected. in particular it is a matter I will be taking up with French
Prime Minister Rocard and with other leaders when I am in
Europe next month.
Ladies and gentlemen,
I have discussed environmental issues at length tonight in a
forum that might not, at face value, have been the most
receptive to such a discussion.
However I did so because I want to make clear the
Government's determination to achieve a truly balanced
approach to this issue which is of such importance to us
all. I did so as well because I know that as tomorrow's seminar
attests your industry is increasingly becoming involved,
in a constructive way, with the resolution of environmental
issues. I am also conscious of the very considerable contribution
the mining industry itself has made to proper environmental
management, through its work on mine site development and
rehabilitation, and through its involvement in environment
impact assessments of all major projects.
In a broader sense too, the mining industry has played and
will continue to play a most important role in dealing with
the environmental impacts of use of our mineral resources.
The mining and petroleum industries have a good track record
of innovation in developing technologies that save energy,
control emissions and enhance the safety of workers.
The challenge of the future will come from environmental as
well as economic imperatives.
The industries that survive and prosper in the next decade
and beyond will be those that satisfactorily address both
imperatives.