EM' 9.
.41 USRLI
PRIME MINISTER
EMBARGO: AGAINST DELIVERY ( 8. l15PM)
SPEECH BY THE PRIME MINISTER, THE HON P. J. KEATING MP
CEDA SYMPOSI4UM, MELBOURNE, 3 AUGUST 1992
Ladies and Gentlemen, many of you here tonight will have
heard me go through my paces as Treasurer many times.
I can still do a passingly good imitation of a Treasurer
when I'm asked.
But these days I prefer to leave that thankless task to
John Dawkins.
Tonight I thought I might stand back a bit and outline
what we see as great possibilities for Australia in the
future. I want to talk about the philosophy_ of the Government,
our ideas and priorities.
I'm told there's a rumour going round that the government
is run by fanatics, pointy-heads and zealots.
Those who have observed us over the years as you have
will know this is a long way from the truth.
These people do exist, it is true but they are not our
people. And, contrary to another related rumour, we have never
been of the New Right view that the way to economic
success is through a mixture of rationalisation and hope
and only a hope that new competitive industries will
miraculously rise to replace the old inefficient ones.
We are wiser than that. We take the view that there is a
role for government to clear the decks for business
to create a market and sometimes where appropriate do
business with business.
We believe in competitiveness. It has been the linchpin,
the guiding philosophy a'nd the one great goal since
we came to office nearly a decade ago. And it remains so.
You and we both know that an economically competitive
Australia is the only Australia which can survive as a
healthy social democracy into the twenty-first century. 955
As a Labor Party whose primary commitment is always to a
healthy social democracy, we have taken the business of
competitiveness more seriously perhaps than the
conservative parties were ever able to.
Indeed it is an irony that it took a Labor Government to
give Australia and open market economy.
For us economic policy is the servant of a greater goal
which is prosperous society, but, more than that, a fair
and just society.
I think that is why we took up the task of restructuring,
renovating and radically reforming the
Australian economy when the Opposition, over seven years,
had failed to.
For us, nothing we wanted to do could be done without it.
We could not think of social reform without facing the
fact of economic reform.
You should remember that, I think as all Australians
should: strange as it may have seemed at the time to both
Labor and conservative observers, we grabbed the
initiative on these changes for the same reason that
Labor has alw~ ays grabbed the initiative they were
necessary to realising our traditional ambitions for
Australia. I say you should remember it because there is an
immutable lesson there that is, if you want to see the
necessary change in this country, Labor is your best, if
not your only, bet.
We have a much bigger incentive. Change is our reason for
being. Change is our business.
Our opponents might do a bit of this and a bit of thatthey
will do some slashing and some burning and you can
be fairly sure that they'll do a lot of hoping.
But you can't be sure they'll follow through.
And they won't take the country with them.
What they will do is alienate a lot of people and a lot
of important organisations.
They'll raise the temperature of industrial relations,
for instance.
Some of you might not like trade unions.
Some of you might not like environmentalists either.
That I do not share that view is not the point.
q 7,1
The point is that, if you weigh the record, you'll see
that it's better to come to terms with them, better to
show a bit of subtlety, a bit of give and take, a bit of
understanding, than to trigger guerilla warfare across
the country.
Not just a bit better fundamentally better, more
profitable and productive.
The consensus approach has accelerated reform, and not as
our opponents assert, retarded it. Many of the things
that have been achieved would never have been achieved by
their confrontationist methods.
The fundamental improvements in our industrial relations
system. which have seen strikes reducd-to thir lowest'
levelfor 30 years, wages at competitive levels, a decade
of growth and now inflation reduced to an historic low,
simply would not have been achieved by the policies of
our opponents.
Rancour is not a creative condition. We've got a lot of
it out of the system out of the most important
relationship in the economy, the workplace relationship.
And, as you know, we're still pushing towards a more
rational, effective and competitive workplace.
To take just a couple of examples:
in shiping, in the last three years crew sizes have
fallen by a quarter, to equal the average crewing
for OECD ships visiting Australia. As a result ship
owners have spent nearly $ 2 billion on 28 new ships
about a third of the fleet.
on the waterfront, by October this year the
stevedoring workforce will be half of what it was
three years ago. Our reforms have doubled the
number of containers handled per man.
I said on the night we delivered the One Nation statement
that our reforms to industrial relations have been the
most constructive step we have taken in this country
since the war: that a nation cannot be strong if at the
very point where wealth is created the people are locked
in conflict; that modern industry has to be a
cooperative process.
I say it again, in part to remind you of the government's
philosophy and achievement, but more importantly to
remind you of Augtralia'Ls achievement.
I mean the degree of the change and it's a continuing
change should not be underestimated. It should give
all of us confidence. -957
For there ha be remarkable change in Australia in the
past ten years. Australians have recognised necessity
and adapted. They've proved both their willingness and
their capacity.
I believe we should recognise this as an important
factor in the nation's favour.
At the same time I think we should recognise that there
are costs~ for people in this process social and
psychological costs and they must never be left out of
the economic equation.
That's why I say it's important to take the country with
US. It's why I say that it is always a government's
responsibility to play a role, and those who still argue
that the market, unfettered and alone, should determine
national outcomes do not understand good government, good
economics or what is good for people.
Ladies and gentlemen
We take an eclectic view, not an ideological one.
We have not gone willy-nilly into industry plans, but
where we have thought it sensible to intervene we h~ ave
intervened.
Where we think our responsibility stops at getting the
business and industrial environment right, we will stop
there.
Which leads me to another rumour presently doing the
rounds. Don't believe this one either.
If people ask what good the great reforms of the last
decade have done, tell them heaps.
When we opened up the Australian economy with a. floating
dollar, open financial markets and and phased dbwn
industry protection, we were aiming at making Australian
industry more internationally competitive.
And today it is.
When we set out to replace conflict with cooperation in
industrial relations, to restore profit share, encourage
workplace bargaining, and dramatically reform the
waterfront, aviation and telecommunications industries,
we were determined to give our industries a chance.
Today they have a chance.
o~ o
When we put foreign policy to the service of Australia's
trade, with thei-amal-ja-mat ion of the Foreign Af fairs and
Trade departments, when we created Austrade and this year
expanded it, took the initiative in tihe formation of the
Cairns Group and APEC, we sought to integrate Australia
with the fastest drowing economic region of the world.
Today we are integrated as never before.
Don't believe the claims that it hasn't worked.
Both our service exports and our manufactured exports
have tripled over the last decade.
Last year, for the first time, we exported more
manufactured products than rural products.
A decade ago we imported more goods and services than we
exported. Today we export more than we import.
A decade ago we did not have a tourist industry
deserving of the name. In the eighties it was our
fastest growing industry. In the first four months of
this year, foreign arrivals were nearly twenty per cent
higher than in the first four months of last year.
A decade ago, as we came out of recession, we had double
digit inflation. Today we have entrenched our
competitive advantage with one of the lowest inflation
rates in the industrial world.
I'm inclined to think this is not well enough known.
I'd also venture that the fact that Australian
manufacturing has grown by 10 per cent since we came to
office is -not' well known.
People who talk and write about Australian manufacturing
as if it were without hope should look at the evidence.
So should those who want to tear the place apart in
search of what they think will be economic progress.
Look more closely at the evidence. Look at the growth in
Elaborately Transformed Manufactures, for instance.
We're all aware there is still a lot more distance to be
travelled, but it does not hurt to remind ourselves that
we are on the right path and that we've already come a
long way.
Elaborately Transformed Manufactures, of course, are
generally characterised by high levels of value adding.
They include motor vehicles and motor vehicle parts,
computers, scientific equipment, industrial machinery,
telecommunications equipment. 959
Australian exports of ETMs have recorded the fastest
growth of any export category since 1981.
Exports of minerals in that period increased by 104 per
cent. Rural products increased by 38 per cent. ETMs
increased by 211 per cent.
In 1981 ETM exports were worth 2.1 billion dollars. Last
year they were worth $ 10.1 billion.
Motor vehicle exports increased from $ 20 million to S414
million. Motor vehicle engines increased from $ 28 million to $ 351
million. Office machines and computers increased from $ 19 million
to $ 415 million.
Telecommunications equipment increased from $ 27 million
to $ 226 million.
Industrial machinery increased from $ 235 million to $ 799
million. Asia was the fastest growing market: between 1981-1988
averiage annual growth rates of 30 per cent or more to'
Korea, Taiwan Japan: between 1988-91 growth of 40 per
cent or more to Thailand and Indonesia while maintaining
strong rates of growth in the North Asian countries.
That's to name a few.
Significantly, ETMs have sustained their export
performance through the recession: indeed, in most of the
cases quoted, the greater part of the increase has been
recorded in the last two or three years.
The performance can be put down to a number of factors:
our increased competitiveness is obviously one of them.
The much more competitive environment which the opening
of our economy has created has been complemented by the
adoption of international best practices in many
companies. Those who say there is no light on the horizon should
look at Toyota in Melbourne, or Email in Orange,
Henderson's Automotive in Adelaide, ICI at Yarwun in
Queensland and more than 120 other companies whose
radically overhauled workplace arrangements have been
ratified by the Industrial Relations Commission and who
are now enjoying improved productivity and
competitiveness. 960
Our increased concentration on Asian markets is plainly
another reason for the improvement. That is where the
greatest growth has been in North Asia, and in the last
three years, in South-east Asia.
And, while a few people are making a lot of noise about
foreign investment in Australia there is no doubt that
our export performance has benefited from the increased
integration of Australian manufacturing into world
productions processes which companies like Toyota, Ford,
IBM, Mitsubishi and Erricson have brought to this
country. As I said, we take the view that what is best left to the
market place should be left to the market place but,
equally, where government can play a role it should.
It's not the simple position to take. It involves
judgements difficult judgements which can prove both
socially and politically costly.
It's a position which requires skill and subtlety.
To my mind it is simply part of a government's
responsibility. But it is also logical.
We could demonstrate the logic in any number of ways
but one of them is that a sizeable part of the growth in
exports of elaborately transformed manufactures is coming
from areas of the economy and where the Government has
shown an interest.
We will continue to phase down tariffs which have
rendered Australian industry so uncompetitive, but we
will not leave good viable industries to fail for want of
a fair chance.
We believe Australia should have a sugar industry, so
while we have reduced tariffs, there will be no further
reductions without consultation with the industry.
We believe in a motor vehicle industry, so we are
reducing tariffs, but not to zero.
And we believe in textile clothing and footwear
industries, so we have established a Textile Clothing
Development Agency to help the TCF industries make the
adjustments which must be made if they are to have a
future. For workforce and industry adjustments we have provided
$ 250 million in assistance.
Government action through the Parnerspfor Development
Progran has played a subs tanti1al role 7in the g rowth of
' the Computer industry whose exports alone have more
than quadrupled in the last four years. 961
It is estimated that the 21 participating companies in
the Partnerships Programs will generate over 400 million
dollars on Research and Development and produce exports
worth b[ li-on by -1997.
It's projected that the* Factor F _ Pro ram will have
generated 1.13 billion diollars in pharmaceutical exports
between 1988/ 89 and 1993\ 94. By 2000 it is expected
that, through Factor F programs, exports will be in the
vicinity of 2 billion dollars per year.
Just two weeks ago my colleagues the Minister for
Industry, Technology and Commerce, Senator Button, and
the Minister for Industry and Commerce, Mr Crean,
announced a $ 12.7 million 4 year program to encourage
greater efficiencies in food production, more cooperation
between producers, processors and marketers, and a
sharper focus on international markets.
This is a great country for food for growing it and
processing it. All kinds of food.
We can grow the kind of food that the people of Asia
traditionally eat.
We can also grow food that, as the region changes, the
people of Asia will increasingly eat.
Food processing is an industry with enormous potential
for Australia 7 billion dollars' worth, we estimate, by
the end of the decade.
Without doubt, there are more industrial opportunities
in the construction industry for instance. And in the
tourism and finance industries.
We are looking for others.
We want the Industry Commission to find the impediments
to industries * which should be doing better than they are.
We are getting moving on those programs for
infrastructure development we announced in One Nation.
The 2 billion dollar road works which are about to begin.
The beginnings of construction of the national rail
highway. If you want to understand our philosophy One Nation is
the place to look.
You will see there, beside the great capital works which
will serve industry well into the next century, programs
and initiatives designed to further improve the
environment for free enterprise
-accelerated depreciation
9 G2
the development allowance
special arrangements to encourage private sector
participation in infrastructure developments
All of which have given us a business tax system
competitive with the best in the OECD.
You will also see in One Nation a commitment to training,
and the reform of the training system, which just a
fortnight ago was realised in the creation of the
Australian National Training Authority and the Young
Australians Plan for Employment and Training.
We haven't stopped with One Nation. Ninety two years
after Federation, in March next year we will create a
national market for goods and occupations under an
agreement in which all the States and the Federal
government recognise each others standards and
regulations.
After March 1993, if it can be sold in one state it can
be sold in any other. If your occupation is recognised
in one state it will be recognised in all states.
All these programs are aimed at building a successful
industrial nation for the twenty first century.
It is for that reason that we are prepared to support
industries with a future.
It is for the same reason, of course, that we have
introduced the Superannuation Guarantee Charge we will
need savings.
They will give ordinary Australians a chance. They will
give business a chance and Australia a chance.
It is necessary change as necessary as those changes we
made to internationalise and open up the economy in the
1980s. And as necessary to our ambitions for a great
Australian social democracy.
I said earlier that there were costs associated with the
radical changes Australia has undergone in the last
decade. I believe good government demands that we take account of
them. While most of the current high level of unemployment is
due to the downturn in the economy some is a consequence
of restructuring.
But we cannot cry success while we have such high levels
of unemplomment. 963
In the coming budget we will be doing what we can to
create jo; bs, extend the reach of training and retraining,
and soften the blow for those who have dropped
out of the work-force.
We will do everything we can to attack unemployment.
But we do not believe that an assault on the living
standards and security of those in work constitutes a
sensible or proper approach.
We don't believe this any more than we believe that an
inflationar-y consumption tax, cutting award wages, or a
return to an adversarial industrial relations culture,
constitutes a useful approach to unemployment.
We don't think that a policy of putting up prices through
a consumption tax and cutting wages is the answer to our
problems. I don't think untrained men or women whose jobs have
disappeared should alone bear the burden of structural
change or the burden of recession.
I think the nation should share it.
If we all want our industries to be efficient, and we all
know that this means jobs will be shed, then we all have'
a responsibility to the unemployed and their families.
Caring for them is as much a part of the process of restructuring
as anything else we have done.
We saw at the meeting on youth unemployment how willing
Australians are to take on this sort of responsibility
Australian trade unions, governments, communities, and
business. But of course everything we do to ease the pain ot:
unemployment, every effort we make to reverse the trend,
must occur within the context of economic growth.
And it seems to me that here again we need a national
effort. We need it from those same groups who were so
enthusiastically represented at the meeting on youth.
We need leadership, ideas and commitment from the private
sector. We have the lowest interest rates and the lowest
inflation in a generation.
We have radically transformed the taxation sys tem, added
incentives and removed impediments to busiiness.
964
We have the fastest growing economic region in the world
at our doorstep.
With our vast natural resources, our climate and
environment, our standards of education, our experience,
our incentive surely we can find a profitiable future
in the region.
Last week I was in Queensland.
In Innisfail I visited the Northern Iron and Brass
Foundry. Not a big plant, but expertly managed, clear
goals, very keen on training I presented a dozen or
more awards to their apprentices. They supply local
industry and they export to Asia and the Pacific.
I went to the South Johnstone Sugar Mill. Expertly
managed, the right technology, clear goals, keen on
training. They're exporting.
I went to Townsville and officially launched the harbour
devlopment there funded by One Nation. It's a harbour
for exporting.
I went to Gladstone where nearly 20 million tonnes of
coal was exported last year 60 per cent of it to Asia.
And, among other things, nearly 180,000 tonnnes of
aluminium all of it to Asia.
I went to Yarwun nearby, where ICI have built a chemical
plant to supply local industry state of the art in both
technology and management.
Gladstone was a town of 6000 people a few years ago.
It's now 23,000. It's built on exporting. It's future
is substantially Asia.
Recently I read of how a decade ago Australian winemakers
had made a thorough re-assessment of their industry a
" technological re-assessment". They knew they had a good
product. They knew that Australia had a future in wine.
They now have expertise second to none in the world.
They're growing the right grapes, making the right wines.
And they're exporting. In May they sold as much wine
overseas as they sold in twelve months a few years ago.
Last year they sold 100 million bottles, for S234 million
in income. With the export drive they plan they expect to
raise that figure to Sl billion.
And every time they sell a bottle of course they do more
than earn income they project the name Australia in the
world, as a country which makes things. Very good
things. 9
As taste changes in Asia the winemakers can expect to
increase sales there.
Today's announcement by Cadburiy that they will be
investing $ 28 million in Tasmania makes the point.
They're investing the money because the M~ arket for
chocolate is growing in Asia.
These seem to me to offer glimpses of Australia's future
string them together for a moment and you see a clear
horizon. In each of these recent cases the common threads appear
there has been earnest investment in the right products,
technology, the right management, the right training, the
right marketing.
The truth is, if we invest in what we have here, if we
invest in ourselves, there can be no doubt about the
future of Australia.
There are very good reasons why business should now
respond. Very good reasons in particular why the bankseven
allowing for the burns they received in the boomshould
now be lending.
You can be sure we will go on looking for ways to
encourage the growth we need.
Where we can remove obstacles we will remove them.
In the last few months we have managed to make some break
throughs in things like aviation, pay television, and
technical and vocational training.
Where we can, we are prepared to break through log jams
in industrial development.
And where we can inspire or engineer a national effort
such as that which emerged from the meeting on youth we
will also do this.
Because it has become increasingly clear to me i. n-the
past few months there are vital intangibles in this
recovery, which go under such names as spirit, and hope
and purpose.
As modern business people you will understand their
importance.
As Australians I believe you will want to join the
Government in attempting to deliver them to the nation.