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PRIME MINISTER
ADDRESS BY THE PRIME MINISTER THE HON P J KEATING MP,
COLLINGWOOD FOOTBALL CLUB POST-BUDGET LUNCHEON,
MELBOURNE, 24 AUGUST 1992
E OE PROOF COPY
Thanks very much Allan ( McAlister), distinguished members of the Collingwood
Club, supporters, ladies and gentlemen.
Well I was at 4,539 not so long ago, that's where I started, he told mc no ones good
enough to hold number one in Collingwood so I've advanced from 4,539 to 101; 1
regard that as a real complement indeed. Thanks very much Al and can I say that it
is nice to be associated with Melbourne again and to be sharing the table, not just
with Allan by with my colleague and friend, the Premier Joan Kirner.
Ladies and gentlemen, Allan just mentioned Tony saying now he knows what it's
like to be a beetle, I spend my time these days between football clubs; Canterbury-
Bankstown in Sydney and Collingwood in Melbourne and I was up in Cantcrbury-
Bankstown last week launching a biography of another tough little player, captain
Terry Lamb, captain of the Canterbury-Bankstown side and at the end of the
biography, the biographer who wrote the book said put a question to him, he said
how would you like to be remembered? He's a little short guy about 5" 5 and he
said tough as nails he said, how would you like to be remembered Terry? He said
tall. And they said you're a streaky, long lank, what were you doing in rugby
league? I said I was on the wing, they said well why didn't you continuc in the
league? I said well I wanted to do something tougher, so I joined the ALP. And
here I am.
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And that's why I suppose I like the organisations which have a great sense of
tradition and particularly in the clubs who involve their players and also involve
their supporters. And whether it's Collingwood or Hawthorn or Canterbury-
Bankstown or St George the thing that's common about those sorts of club is it's the
old values of the community, the family and the club that holds the show together
where the players are part of it, where the supporters are considered, Allan was just
talking about the 40,000 at Vic Park on Grand Final night where everybody has a
piece of it and where the values go on from year to year and are held down. I mean
even though football clubs are apolitical in Victoria, it's well known in the dark
recesses of Collingwood's history it's had associations with Labor figures and to
have a Labor Prime Minister again associated again keeps that traditional value
their, that old link which has been there.
But despite the values the community and the family and the links with the players
and the traditions, the clubs can also be dynamic and modem and innovative and
we can see that with an old club winning the flag with one of the best
managements of any club in the AFL which is innovative as Allan says, he carries
the weight, they cross the four million mark because Collingwood's past the one
million, they fund the clubs 350,000 or something to the other clubs. They can be
innovative and modern and strong and still be traditional. So they're held together
by tradition and strong values and the same can be said of successful countries.
That is at the end of the decade of the ' 80s, the decade which finished off
monetarism and finished off communism, where we had those two competing
ideologies dead in the water, in the case of one after 70 years and the case of the
other after about 15 or
What we've seen emerge as a successful model, world wide around the world are
the social democracies and just a couple of weeks ago I had a breakfast with
Michel Rocard who was a former President of France and the likely contender for
the French presidency from the Left of politics after Mitterrand. a moderate person
from the Social Democratic Party of France and he was talking about the success
today, the complexities of running a modern society and the clear role for
Government that there has to be in government being involved in making a society
tick, no eschewing a role for government suggesting that there's some sort of pure
market approach where private initiative and private reward is all that needs to be
there to make a society to tick. But one where there's a happy mix between
efficient economies and at the same time a comprehensive social policy married to
it and this is the role of the Social Democratic Parties which are now I think,
becoming clear in a way the model in this sort of post-monetarist, post-communist
era and where people arc brought in and are made to become part or \\ wihai
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happening in the nation where it works at its best where we're not wasting talent
and where we can see people really feel as though they are part of the whole thing.
I think rather than to speak about the Budg~ et directly and I will in some respects, I
just thought I'd address these values, that is that ideology today is a luxury. The
difficult thing in any society today is gctting that economic growth, getting the
employment and at the same time distributing the wealth. We've always
distributed the wealth in western societies through employment, by and large
through employment. But we're coming to a period where as we are now an
external ly orientated country the focus is on eroductivi1X and it's on efficiency and
that means producing more output for fewer people. A given level of output is
produced by a smaller workforce and if that doesn't mean a pcrmanenft pool of
unemployment, it must mean more output because if we are going to be producing
a greater lcvel of output with fewer peoplc, how are we then to take the people up?
How are we to hold a society together, to not develop for the first time in our
history an underclass of people who are not wanted by society. How do we keep
them in? And the answer is by just growing the thing faster. But how do you grow
it faster and not have wages spill over into inflation, demand spill ovcr into
imports, all the other problems which come with high growth and these are the
complex things that we have to deal with.
This morning I had the pleasure of presenting the -Best -Practice Awards which
were recommended by a Committee set up under a Commonwcalth program
chaired by the Managing Director of BHIP and in there we saw a stack of
companies Toyota, Du Pont, BlIP ct cetera presented with awards for introducing
best practice into divisions, into their companies in general, in divisions of their
companies. And you could see these people all wading through how to produce
and efficient business, how to gct the right investment in the right place, how to
reduce your costs, how to improve the management structure, how to make it
leaner, more efficient, how to get hetter work practices, how to relate to the
employees. Nearly cvcry company that was there had the shop steward or the
union person from the division reprcsented with them today and you can sce that
co-operation moving, the efficicncies growing as thosc companies, many of which
now actually have divisions around thc world, are bringing best practice from their
overseas subsidiarics back into Australia to benchmark against for the way in
which their Australian division operate% or the companies that are wvell and now the
international leadcrs. We've got a couple there today who are international leaders;
one a maker of spectacle optics which is actually the world leader so who does it
benchmark against but itself? But all this sort of quest for efficiency which is what
it has to be about for a country trying to build a new position for itself in the world
as a tradcr of manufactures and a trader of services, the Sheraton Hotel for instance
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was presented the same because they are trading a service and in their hotels they
picked up a Best Practice Award.
So it's a case of trying to do these things so societal advance in the era of mi -cro
processing, robotics, where so much which was done formcrly by people are now
done -by machinesis going to be complex and it's going to be difficult and there's
going to be no one simple solution. Yet the notion that some ideology whether it
be Adam Smith or whoever, or survival of the fittest, or the market knows best or
some simple solution where government is assured and where we are not together
working as a society as the club works, to the players and to the supporters as we
work to the players in our businesses, to the workers or to the customers or
however it might be, if we're not running as a whole wc are not going to make it.
We're not going to be able to do this by some resort to ideology or some simple
view. We need in this country more output. That means more investment. -How do you
get more investment if you're not competitive? What's the key ingredient in
competitiveness? Basically the inflation rate. How do you keep it? Basically by
co-operation, consensus and agreement. You can't keep it by a draconian money
bank with a flame thrower burning business off the pavement, you can only keep a
low inflation rate by agreement, you can't do it basically by regarding the
workforce as enemies of the management and if that's the view, we certainly won't
make it. If the inflation rate is low, the interest rates will be low, and we've now
got bill rates in this country at 5 and 3/ 4 per cent, that's not all flowed through for
those who borrow, but as time goes by, as those margins come down it will, but
we've already seen lower reductions in rates and we can now go through with
lower interest rates. The same in that investment equation for more out put is
depreciation, you've got to have a tax system that works, a depreciation schedule
which is competitive with the rest in the world. Profits have to be good to spur
investment. How do we get a high profit share good enough to refire investment?
Answer: by national agreement about the division of national income. What
proportion of national income goes to profits? What proportion goes to labour?
And just last week I opencd ncgotiations up with the ACTU where for the first time
in our history, nearly three quarters of all wage settlements in this country in the
coming twelve months will be done by enterprise bargaining, by enterprise
agreements and not by a national wage case where we're seeing another leap in our
maturity so that we can negotiate and bargain our way through. But underlying
that, in the end result is a profit share which is high enough to kick investment over
again. And then of course, we can't do all these things if we don't have the savings. So
what are we going to do0? Be out with the savings bowl in the 1990s when China,
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the old Soviet states, India, South America rejoin the world economy and look for
savings to invest in their industries, because no matter how competitive we are, no
matter how low our inflation rate, no matter how great our expectations, if we don't
have the savings we won't be able to develop as quickly as we might otherwiise and
we'ye now put into place through occupational superannuation a savings pool
which will stand Australia in great stead through the 1990s, so that can happen.
And the same with rcsearch and developmcnt, and with education. We're not going
to be able to produce more output and run the current account deficit down and
pick up more employment in an economy where only 3 kids in 10 complete
secondary school. That's as it was in 1983, that's now 7 in 10 this year, it will 9 in
In a few years from now and by now not only reforming tertiary education, but
by now recently reformed technical and further education, a role in the which the
Premier played a leading role producing a new national training authority to do for
vocational education what we've been able to do for tcrtiary education, picking up
the advantage of those higher participation rates will actually produce the kind of
educated workforce that you must have to produce the output in the goads we want
to produce in.
We want to play in the international division of labour which brings wealth to
Australia and that means selling product innovation, it essentially means selling
our brains. We don't want to be playing in the international division of labour in
the countries nearby, I don't want to see Australians compete with Indonesians, in
cities like Surabaya where the wage per week for a scmi-skilled process worker is
$ 7ust a week operating state of the art equipment. We can't compete in those
products and to try and push Australian living standards down to try and make it
compete is the wrong way to go. The thing to do is sell the product they can't make
and that's the product which has the natural advantage of our education system,
because even though we wish these countries well in their development it will take
them 50 years, even if they wish to try to catch up to us in education, research and
development, scientific application, applied research and the sort of things we are
capable of doing.
So it's going to be complex, so today when you see the Du Pont's and the BHP's
and the Toyota's and I was at Ford a couple of weeks ago, climbing up those
efficiency levcls and producing products which are bcnchmarked and proccsses
which arc benchmarkcd around the world, it's all part of an inflation, interest rates
depreciation, profit, savings,_ R& D education equation; it doesn't happen with some
ideology, it's not going to happen with a consumption tax and our opponents are
saying put in a consumption tax,-all that-will hc solved. That is we go from a
simple change from taxing income to expenditure, all of a suddcn thc inflation,
interest rate, depreciation, profits, savings, R& D education equation changes
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overnight. Well of course it doesn't and we're now on the way to actually make
those changes.
I think many Australians forget how far we've come. In 1983 GiDP in this country
was $ 200 billion, this year it will be $ 430 billion. In 1983 there were 6 million
people employed in the Australian workforce, this year it's 7.6 million, it's over
per cent larger than it was in 1983. We often hear people telling us about New
Zealand and how we should adopt their policies. In 1983 when I became
Treasurer, and compared to now the workforce of New Zealand is actually smaller
than it was in 1983. There are fewer people employed in New Zealand today than
there were in 1983. In Australia there's 26 per cent more people employed than
there was in 1983. We had more growth in the Australian economy in the 1980s
than there is total product in the New Zealand economy, that is we had more
growth in our economy than there is total product in that economy across the
Tasman. That's not to belittle them, it's just to make the point don't deprecate what
we've done, people should not deprecate the great successes that we've had and the
same in manufacturing, it's doubled. Manufacturing exports have tripled, exports
of elaborately transformed manufactures have tripled, manufacturing exports this
year are greater than rural exports or mining exports for the first time in our
history. Services have tripled since 1985.
These arc great changes, all important changes in those milestones along the way
of moving along. Now, we believe in this country you can't produce the sort of
society that gives you those sorts of outcomes where there's access to cducation,
whcre you're producing a workforce which is educated to a high standard, where
there are opportunities for employment, where there is high profits, where there is a
decent basis of our productive wealth without having a safety net in there. That is,
decent social policies as well, access to hospitalisation and medical care, as a right.
Not if you can pay for it, as a right. Acccss to education, If you are a kid from a
poor family but you have got it upstairs and you want to do something with
yourself, you get the right. You don't get the right only if your parents can afford
$ 20,000 a year to pay for a fee paying place in the university.
These arc the sort of policies which will crush off the consensus, that view where
the players and the supportcrs have a role in running the club. Because I think if
the players and supporters think that it is only for the club executives, and for the
Captain and the Coach, and the rest of them arc on the outer then what will happen
is that club will diminish very quickly. And the club of Australia will diminish
very quickly if that h ard-hearted-view -that therc is no place to look after people, a
view which was expressed by my colleague, the Opposition leader, thc other night.
When I said a week ago we have got to lean down and pull thosc who arc weak and
poor behind us, hc said if you lean down you will go back with them, you will end
t700" ON'L70: tT Z6SfluVsz 131
up mediocre like they are. That's not the view that will hold Australia together.
What will hold Australia together is saying we have an egalitarian spirit in this
country, a spirit of fairniess, a spirit of sharing. Not everyone is going to be equal,
but there is a place for everybody. You can put a roof over your head. If you are
sick you get looked after. If you have got kids they go to school, and opportunities
are going to be there for you.
John Hewso n promised us in his Budget reply the other night, a Hong Kong tax
system. But what he didn't tell us is what you get with it, it is a Hofng K-ong social
security system, a Hong Kong housing system, a Hong Kong health system and the
rest. That's not to deprecate Hong Kong, we should admire the success that colony
has had in changing itself to become one of the tigers in the world.-But the fact is,
I don't want to see people on Australian unemployment benefits on $ 32.00 a week.
I don't want to see Australian pensioners on $ 50.00 a week, as they are in Hong
Kong. And by the way, Hong Kong doesn't have a consumption tax, it's kicking
along without one, I don't want to sec that happen to Australians.
We are, bar a decimal point, the lowest taxed country in the OECD. There is only
a decimal point that separates Australia from Japan as the lowest taxed country in
the OECD. We have now got one of the smallest public sectors in the world, but
one of the best. A rcally efficient public sector that looks after people and so this is
the way I believe that we have got to keep thc social wage together, if you want the
high profit share, you want the low inflation rate, the better levels of productivity,
the social wage has got to be there. Medicare, aged care, child care, occupational
superannuation, access to education, these are all part of the fabric of thc place we
as Australia. And to get that fabric and teat it, and rip it, will produce a social
reaction the likes of which we have not experienced.
And the great gains of the ' 80s, and coming from a closed l ittle frightened economy
to an open aggressive thing that is out in the world trading, that must trade on its
inflation rate, its exchange rate, its competitiveness, its tax system, its profit share
-all of that is put a risk if people take thc view that survival of the fittest, if you are
not a millionaire you arc a layabout, and if the system is not for you a few crumbs
fall of the table, that's for the others. If that's the view then I don't think there is
very much left.
Now, in the Budget we put in a couple of important changes. We spent another
billion over the course of the year onigbs-Now, John HeIwson says they are
ntot-real jobs, -they are jobs that have come -off the public sector. But at atime whcn
privatc investment is down, as it is in the State of Victoria, and where thc Budget
deficit is now $ 13.4 billion, Dr H-ewson is advocating that we should cut it back by
$ 7 billion, 2 per ccrit of GDP. You just imagine what that would do to this State.
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What it would do to the recove. y2 it would kill it stone dead to take $ 7 billion out
of those natural stabilising in the Budget. That is, the payment on unemployrpncpt
benefits, the general Commonwealth spending, the loss receipts, and'the spending
on labour market programs. This year those lahour market programs will take 400,
000 people through them. 400, 000 unemployed Australians will get training, and
or a job as a result of those programs. And why wouldn't we take those people who
have been unemployed for six or nine months, get them the training and give them
the job experience, and the Job Start support, wvage subsidy provided to them so
they can go and get that work experience and then go on to keep that job? Why
wouldn't we do it? Why wouldn't we do it when the national economic condition
demands we should do it?
Also we made a substantial change to Medicare. We are going to spend $ 2.6
billion over six years on Medicare to make it easier for public patients to have
access to public hospitals. So that elective surgery, but important elective surgery,
particularly for the elderly like hip replacements and things which are not acute,
but which are vital, but are in a sense elective, can be catered for without long
waiting lists and so that Medicare is working bettcr. Medicare is running at 8 per
cent of-D . it is one of thc most cost efficient health systems in the world. The
American system is running at over twelve per eent of GDP. In thc United States if
you arrive at a hospital door without your blue cross card in your pocket they turn
you away. Even it you have got a cardiac condition, or whatever it might be, if you
don't have the card, out.
That's not Australia, that's not what we are used to. And that's not what we are
going to have.
So, we havc got a big change in there which will mean that Medicare is a universal
system that gives you medical consultations, 85 per cent rebate, no cost if it is a
hulk billing doctor, and better access through the public hospitals of Australia for
public patients. And also utilising the privatc hospital system better, and also a
program in there to look after waiting lists and bctter distribute the demand for
services betwecn hospital by a computer booking systemn and the rest. As well as
that we have got an incecase for pensioners, singles and married, $ 6.00 and 10.00
a fortnight. We have offered fringe benefits to all pensioners, including part
pensioners, which is a mile stone change in the Budget, rent assistance, improving
rent assistance by better targeting it which will affect 70, 000 people who are often
not well off, who are basically in thc lower income orders who are sitting in there,
in our social security system, and who can deal with that support.
Now thcse arc the sorts of things the Budget has cast I think exactly right for the
time, exactly right for the time. That is, we have got the deficit out at a time where
11/ 80' d VOO'ON VOV :. 131
private spending is down, wc are trying to inject activity, and all the One Nation
spending is starting to come through. Two wecks ago we ordered 3 million tonnes
of rail steel to build that railway line between Melbourne and Adelaide. We
ordered a million concrete sle~ epers, we have announced a $ 2 billion road program,
$ 400 million then last year and Australia is starting to move again. We had 1.6 per
cent economic growth for the year to June and we are forecasting 3 for this current
financial year ending the 30 June 1993, so the economy is starting to move along
again. In fact, we are now moving faster then Western Europe and the United
States. I mean, I think a lot of people don't understand this is a very large, worldwide
recession we arc experiencing, and a colleague of mine came back from the
United States last week and said, in Australia it is not to be compared with the
atmospherics of the United States in the business community and the community in
general. And in Britain, for instance this year, we finished the year to Junc with
1.6 per cent growth, they finished the year to June with -1.5 per cent growth.
T'here economy contracted by 1.5 per cent over the year to June. So, we are
starting to grow and we have got it going.
Now, we had this debate the other wcek, we said that our starting point, we are
proving tax cuts in 1994-94 and 1995-96, but because the receipts fell away this
year our starting point deficit out there is around the order of $ 5 to $ 6 billion, and
we said we will introduce some compliance measures to improve the starting point
deficit if needs be, if in the end as forecasts the starting point is weaker. Dr
Hewson ran round saying Labor has got secret taxes, these wcre taxes which we
revealed in the Budget paper. Nothing secret about them, but were revealed in the
Budget papers. But of course what he didn't say was this, that the income tax of
Australia is $ 49 billion, the revenue for the income tax system is $ 49 billion. He
wants to introduce a consumption tax at $ 27 billion, it is over half the income tax.
It might be 15 per cent on all goods and services, but it is actually 50 per cent plus
of the current income tax. None of that consumption tax revenue is going to be
paid for, is going to pay for the tax cuts. It is spent wholly on the abolition of
payroll tax and cutting cxcise on petrol, and paying for the lost customs duty which
somes from zero tariffs, and abolishing the wholesale sales tax. None of it goes to
tax cuts. He has got tax cuts in there worth $ 13 billion that have got to be paid for
by cuts in Government spending. So, he is going to cut into, into a Budget of
around $ 110 billion, he is going to cut $ 13 billion out of outlays and that is all
going to happen basically in the welfare area, in the social security and health area.
So, wc are going to hop into all of that to give people tip the top end a tax cut and
try and hold the show together, and at the same time his starting point is exactly the
same starting point we are starting with. That is, wcrc he to win the next election,
and we think that is an unlikely prospect, not withstanding our relative positions at
thc moment, the starting point in 1994-95, 1995-96 is still going to bc as we have
it. That is, ahout 1 1/ 4 per ccnt of GDP and deficit. So, not only has he got to find
t00O0N tO: VT7 z& 6nu~ sz 131
$ 13 billion for tax cuts, but he has also got to find a couple of billion as we have to
find it out there to start with the same strength in fiscal policy from when the tax
cuts are paid. So, hc has got a sort of $ 12 to $ 15 billion Budget cutting task on his
hands which to date has sort of been hushed up in the media, but once that big
consumption tax hits the economy, the inflation rate, the interest rates, and they
start then ripping away at Medicare he is going to abolish that he said, basically
let the Doctors sct there common fee and charge what they like and you can all
privately insure yourselves which will cost you $ 20.00 to $ 30.00 a week at least to
do that when he starts ripping away at money in the education system, and things
like child care and age care, home and community care, the hostel program,
nursing homes, they all get hopped into and we then wheel out the survival of the
fittest ideology and say this is the way forward, people then turn around and say,
listen mate that was a way forward in 1979 when Thatcher was becoming Prime
Minister; that was the way forward before monctarism was discredited in Europe;
that was the way forward before the social values of social democracies around the
world re-established themselves in the late ' 80s and early 1990s.
So that's what I think all this is about. We have introduced a Budget which is about
right for the economy at this time, letting the shock absorber of the Budget take
some of the strain of the economy, until the economy picks up. Still making those
social changes, national training authority, building the rail highway, f& Xing up the
airline system, creating a proper market for electricity down the East Coast of
Australia by separating power generation from distribution. Repairing Medicare,
getting that strength in there into the public hospital access. Getting those higher
participation rates coming through in schools. These are the social advances we in
the Labor Party continue with, because we want you in the business community to
feel as those you are playing for a club whcre everybody matters: where the
players matter, and where the supporters matter, and whether it be the employers or
the employees, whoever it is, they have all got a role in Australia; that this is a
society where we have a role. So, those values of egalitarianism, as I mentioned at
the start, the family valucs, the traditions of the club are important traditions, and
nonc of us in the political system put them asunder without putting society as we
know it, and the mores as we know them, at risk. And that's why this Budget is
very much a traditional Labor Budget. Very much in the groove, very much about
doing the right things now for Australia. And I just hate to think of the State of
Victoria with a federal Budget with $ 6 to $ 7 or $ 8 billion cut out of it. Watching
their recovery then plummet back into a recession and see the then secondary wave
of damage go through the place, and the secondary wave of despair and gloom.
We're getting out of it, the thing to do now is to come out of it, and don't belicve
that there are simple ideological solutions for the complex task of building a new
industrial socicty for ourselves. We can do it, but wc will only do it the hard way.
And that's all those changes we were talking about at the Best Practice Program
this morning. All those efficiencies things, getting the workforce to work better,
bettcr management, better barmonisation, making it all come together. So, that's
what the Budget is about, it is a scrious attempt, I would like to say to you by
serious people, about seeing Australia through a difficult transition into a very
bright 1990s. A low inflationary environment, with low interest rates, high level
investment, a banking system which has learned its lessons about asset prices and
inflation, a stock of savings, and living in the fastest growing part of the world the
Asia Pacific, with a society all committed to the one goals. So, in the big club, the
club that matters most, Australia, in the Premiership we are after is for the high
income shares around the world in the Asia-Pacific. And not scrabbling down
there in the prelims after a low income share scrabbling with someone else about
the sort of goods we shouldn't bc producing anymore. T7hat's the Australia we want
to produce in, that's why the Budget is simply part of that wholc ethos of playing to
the traditions, the well establishcd traditions of this country.
Thank you
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