PRIME MINISTER
CHECK AGAIN; T EL. TIERY EMBARGOE UNILDELIVERY
SPEECH BY THE PRIME MINISTER
24TH ANNUAL CONFERENCE OF THE
INTERNATIONAL IRON AND STEEL INSTITUTE
SYDNEY 9 OCTOBER 1990
Eleven years have elapsed since the International Iron and
Steel Institute last met in Sydney.
On that occasion this distinguished Conference was addressed
by my predecessor, Prime Minister Malcolm Fraser.
It is my hope indeed, it is my very firm belief that
this audience will have noted the huge changes that have
been wrought: in Australia over the intervening years
economic, so~ cial and attitudinal.
These changes have created in Australia a more competitive
and more productive economy, and a more outward-looking and
more cooperative society.
It has been nothing short of a dramatic process of national
revitalisation.
Nowhere is t~ his more clear than in the way the Australian
steel industry has been turned around from a basket case in
1983 to a profitable, internationally competitive and
increasingly productive economic player.
One of the important contributions Australia can make to the
future of the world steel industry is the lesson that we
learned, as a medium-sized producer of steel in a small
domestic market, here during the 1980s.
In particular, the lesson of consensus the diligent search
for ways of harnessing the interests of Government, trade
unions and employers to advance the common good is, I
believe, an instructive Australian lesson that deserves more
widespread international recognition.
on many occasions, I have praised the commitment shown by
BHP and the steel unions to making a success of the Steel
Plan that the Government created in 1983. It is a pleasure
to do so once again, in talking to this international
audience that truly knows what it takes to succeed in this
competitive industry.
I want to speak to you more generally this evening about the
turnaround in the Australian economy since the early 1980s,
of which the steel industry provides but one example, albeit
an eloquent one.
As my friend and colleague, the Deputy Prime Minister Paul
Keating told you yesterday, this Government has changed
Australia in ways that were inconceivable before we came to
office in 1983.
We have floated the dollar, abolished exchange controls,
deregulated the finance industry and removed most
restrictions on foreign investment. We have dramatically
by one third slashed tariffs on what was once a heavily
protected manufacturing sector. And we have transformed a
prospective $ 9 billion deficit in our budget to a healthy
surplus.
Would that they could do that in the United States and not
by raising taxes but by doing it the hard way, as we have
done, by reducing outlays. At the same time as we achieve
our fourth successive budget surplus, we are also seeing
revenue as a proportion of GDP declining for the fourth
successive year, to only 25.5 per cent in 1990-91.
We are tackling in decisive ways the inherited
inefficiencies of our micro-economy, with reforms of
telecommunications, civil aviation, land transport and
waterfront, and with a new initiative, in co-operation with
the State Premiers, to make our ninety-year old Federal
structure of Government more up to date and efficient.
We are improving our education system and expanding the
resources we devote to research and development. We want, as
I have said repeatedly to Australian audiences, to be the
clever country, not merely the lucky country.
The exercise of wage restraint by unions has cut real unit
labour costs by more than 10 per cent since 1982-83.
It has brought about the creation of 1.6 million new jobs
a rate of employment growth nearly double the OECD average.
At the same time, the resulting lift in the profit share,
along with a more efficient taxation system including a
cut in company tax and the elimination of double taxation of
dividends has created an investment boom virtually without
parallel in modern Australian history.
Again, it is a uniquely Australian achievement different
sides working together through consensus and, where
necessary, shared sacrifice, to improve the national good.
Only the Prices and Incomes Accord between the trade union
movement and the Government could have achieved the
necessary wage restraint that triggered this process.
By the same token, only under the Accord could improvements
in the social wage for example, our reintroduction of
universal system of health insurance, Medicare have been
delivered to help compensate for that wage restraint.
Perhaps most fundamental of all the changes we have wrought
in Australia has been the change of Australian attitudes.
For much of the post-war era, Australian manufacturers
basically shirked the challenge of international
competition. Governments acquiesced in this saga of lost
opportunities by erecting high tariff walls behind which the
manufacturing sector could shelter, servicing the small
domestic market but ignoring the wider regional and world
markets. The problem was not that Australians could not mount
effective international competition; we did it every day
with our high quality commodity exports.
Our agricultural sector was and remains one of the world's
most efficient a point to which I shall return.
The problem was that we chose the easier option of reaping
the profits of our God-given resources rather than
complementing that with the harder work of creating new
export industries with our hands and our minds.
That basic indisposition was reinforced by a failure to
harness what was potentially a world-class intellectual base
to the task of applied research.
At the same time, our fragmented, craft-based, increasingly
antiquated industrial relations structure was hampering
progress. I can tell you, as a former trade union leader,
that the " us-versus-them" philosophy was deeply entrenched
throughout the Australian economy.
Short term perspectives, measured by the relative gains and
losses of employers and employees in wage bargaining,
heavily outweighed long-term perspectives of what was
actually good for the nation.
In the same way, the confrontationist nature of our
industrial relations structures all too often allowed
disputes to turn into strikes especially when, as often
happened, short-sighted Governments poured fuel on the fire.
To take all these factors together, Australian attitudes
throughout the long post war decades, and especially for
much of the 1970s, could be summed up as the complacent
belief that the world owed us a living and would keep on
buying our commodities to support our high standards of
living. The truth was very different.
The world doesn't owe us a living.
And increasingly, since we came to office in 1983 and in
particular since the nation's terms of trade collapsed in
the mid-1980s under the weight of our over-reliance on
commodities that truth is being appreciated, understood
and acted upon throughout the Australian community.
The magnitude of the challenge facing Australia is at last
being recognised.
That is what has underpinned all the other reforms that I
have outlined, and what has, indeed, made them possible.
For it would not have been possible to impose this kind of
change from above; it has taken the maturity of the
community, its willingness to abandon old habits, its
preparedness to work harder and work smarter, that has made
these reforms possible.
Let me give one detailed example of this.
It used to be the case that our trading partners, with some
justification, expressed concern over the effect of
Australia's industrial relations on our reliability as an
exporter. But such concerns are now simply out of date.
Under the Accord process, industrial disputes have been cut
by nearly 60 per cent; our strike record now compares very
favourably with that of other OECD nations.
At the same time, we are undertaking a fundamental
restructuring of unions and of industrial awards.
The truth is that these days the trade union movement is a
positive factor, not a negative one, in encouraging economic
growth and competitiveness in Australia.
When that truth is better appreciated by our trading
partners we will see further real gains in our economic
relationships. My friends
In recent days, we have seen Germany united and the British
agree to enter the European Monetary System on the one
hand, an exemplar of the complex task of integrating Eastern
and Western Europe and on the other, a significant step
forward in the continuing process of European economic
union.
These developments will present considerable opportunities
to Australian investors and enterprises. And if Europe
plays the leadership role which it should if it avoids the
temptation of becoming self-satisfied, complacent, and
narrow-minded in its pursuit of short-term economic gain
if it harnesses its growing power to a constructive and
united international role then the immense changes taking
place in Europe can be greatly to the benefit of the world
at large.
But it is on our own Asia-Pacific region, the most
economically dynamic in the world, that I wish to address
the rest of my remarks this evening.
As a nation, Australia has been aware for many years of the
critical economic importance to us of the Asia-Pacific
region.
Anyone involved in the Japanese steel industry would
appreciate its reliance, over several decades, on imports of
Australian coal.
But it is only in recent years indeed, I make the claim,
it is only under this Government that Australia has
effectively projected itself as, and has started to be seen
as, a truly active, respected and positive partner in the
region. Indeed, as I said this afternoon in the Federal Parliament,
Australia today stands at a high point of its constructive
influence in the region.
Our contribution to the creation of the framework, recently
embraced by * the UN Security Council, for advancing the
restoration of peace in Cambodia, and our seminal role in
the establishment of APEC, the new forum for Asia-Pacific
Economic Cooperation all attest to that.
APEC is a tangible expression both of the dynamism of the
Asia-Pacific region, and of the region's commitment to see
what more can be done to enhance that dynamism and
prosperity. Eight of Australia's top 10 export markets in 1989-90 are in
the Asia-Pacific region.
APEC members plus the so-called ' three Chinas' the PRC,
Taiwan and Hong Kong take 68 per cent of Australia's
exports and provide 66 per cent of our imports.
So Australia today is as good an example of regional
interdependence as any economy in the region.
The basis of our trade has always been commodities, and we
will remain an efficient and prolific commodities exporter.
But it is the point of everything that I have said this
evening that Australia now looks to a greater
diversification of our trade with the region.
There is much scope for further manufactured exports,
including from the steel industry, and continued expansion
of regional exports by Australia's service industries such
as tourism, education, the law.
In short, we look to the comprehensive enmeshment of our
economy with that of the region.
It is important that this process not be seen solely as an
economic one.
One of the features of policy making under this Government
has been our capacity to integrate domestic economic
initiatives with international diplomacy.
For instance, we have ensured that Australia speaks with a
loud and clear voice on the great question of trade
liberalisation a question of profound importance for the
Asia-Pacific region and for the world.
And we speak with a credible voice.
Having undertaken significant tariff reform within our own
economy having demonstrated our own political commitment
to a cause that is of fundamental importance to us all we
have been able to play a prominent role in the Uruguay Round
of Multilateral Trade Negotiations.
We established the Cairns Group of nations dedicated to the
liberalisation of agricultural trading rules under GATT.
Throughout the vitally important Uruguay Round, Australia
and its colleagues in the Cairns Group have been able to
exert continuous pressure on those nations particularly
the European Community and Japan who distort global
agricultural markets with their own massive domestic
subsidies.
As I said earlier, Australian agricultural producers are
among the most efficient in the world, and they are
justifiably outraged when those nations that lack our
efficiency threaten, by their inefficiency, the very basis
of world trade on which we all depend.
My friends,
I am saying none of this merely to pat Australia on the
back, or to pretend that we do not still have a long way to
go down the path of economic reform.
7.
My message to this influential group is more challenging. It
is a message to the international community and to our
trading partners in particular to recognise the magnitude
of the changes that have been wrought in this country over
recent years, and to recognise that the process of change
within Australia continues. We will not turn back.
Indeed, let me say it bluntly: it is time our trading
partners brought their attitudes about Australia into line
with the contemporary reality of what is happening in this
country. There is a dramatic turnaround taking place here. We can now
say to the world that we are ready and re-equipped in both
our institutions and our attitudes to be a fully competitive
player and partner in the exciting economic challenges that
await us.