E&OE.............................................................................................
Well, thank you very much Martin, to John Olsen, the Premier
of South Australia, to Cory Bernardi, recently elected as the new
President of the South Australian Division, and I extend my warm
congratulations to you and I look forward to a continuation of the
very close cooperation between the federal parliamentary party and
the organisation here in South Australia. I would, as this is his
last State Council Meeting as President, I would like to record
my thanks and gratitude to Martin Cameron for the leadership he
has given to the Division over the last three years. I have found
him an excellent President to work with, I thank him for the leadership
that he has given and I thank him for the cooperation that he has
extended to the federal parliamentary party.
Can I also say, on a personal note, how very sorry
I am in one sense, but of course completely understanding in another,
of Ian McLachlan's decision not to recontest the seat of Barker
at the next federal election. Ian has been a good friend. He has
been an outstanding Defence Minister, he has been a great leader
of rural Australia and he has made a very find contribution as a
senior Cabinet Minister from South Australia. And I want at the
beginning of my address to this annual meeting to record the thanks
of his colleagues for the contribution that he has made to public
life in this country.
South Australia has made an immense contribution
to national politics over the years. But its contribution to the
higher councils of the Government has never been greater than it
has been since the Coalition was elected in March of 1996. The third-most
senior Liberal in Australia, Robert Hill, the Leader of the Government
in the Senate, other Cabinet Ministers and Ministers make up a very
powerful team. And on top of that, there is a record federal parliamentary
representation from South Australia and I want to, in their own
ways, thank each of the South Australian Ministers for their contribution.
Alexander Downer's contribution as Foreign Minister has, I
believe particularly over the last 12 months been characterised
by a high degree of personal commitment, integrity and professionalism.
To see and witness, as I did a few weeks ago, the ease and familiarity
and the obvious mutually reposed confidences that he shares with
the most powerful woman, politically in the world, Madeleine Albright,
was a reminder to me of the immensely professional and praiseworthy
job that he is doing on behalf of our country as Foreign Minister.
We have in Nick Minchin somebody who had probably
one of the most difficult jobs in the country in recent months and
he has had day to day stewardship of the Native Title legislation
and played a very major role in bringing that very, very difficult
issue to a very, very positive conclusion.
Robert's leadership in the Senate has been
quite outstanding in very difficult circumstances. It is difficult
sometimes to convey to our own supporters, let alone the general
public, the sense of frustration one sometimes experiences when
you have got a 44 seat majority in the House of Representatives,
but you don't control the Senate. And people say, well that's
your problem, don't come and talk to me about it, just fix
it. And it's largely left to Robert to fix it. And he normally
does, and he fixes it very, very well. And I thank him very, very
warmly.
And, of course, there's the Skase chaser too.
She is doing an absolutely tremendous job and I want to thank Amanda
for the very committed and dedicated contribution that she has made.
And, of course, Neil Andrew, as the Chief Government
Whip, Trish Worth as a Parliamentary Secretary, and to all of my
colleagues from South Australia, I am very grateful, and I have
taken and few moments to mention them because we do have a very
talented group of men and women in the federal Parliament from South
Australia. And I don't incidentally think there is a state
in Australia on our side of politics that has a higher representation
of women in the federal Parliament than does the state of South
Australia.
So at every score you have a lot to be proud of,
and a lot to be thankful for so far as the quality of your representation
is concerned. And to all of my South Australian colleagues I send
my thanks and gratitude for the loyalty and support you have given
in popular and less popular times over the last two and a bit years.
In the past few days, of course, the news been
has dominated by the release of the Government's plan to reform
Australia's taxation system. And the real breadth and scope
of this plan is only understood if it is seen as a continuum of
what the Government has sought to do since it was elected in 1996.
It is not some one-off aberration. It is not some kind of odd, disconnected
tax revolution. Rather, it is the next logical, sensible thing that
we must do to make Australia stronger and more competitive as we
move into the 21st century.
It must be seen as all of a piece with the other
things that we have done. We inherited a budget deficit of $10.5
billion and that was Mr Beazley's deficit as much as anybody
else's. And he should never, ever be allowed to forget it.
And in the space of just two years, 12 months ahead of schedule,
we have converted that into a surplus of $2.7 billion. And that
really is a remarkable achievement, and it has given us a sense
of strength and independence and vitality and a capacity to look
the rest of the world in the eye that simply wouldn't have
been there if we had left that unattended.
And we have delivered the lowest interest rates
this country has experienced for 30 years - both in the housing
area and in the small business area. I went to a gathering in the
western suburbs of Sydney and couple of weeks ago and it was attended
by some of the most successful businessmen of Italian and Lebanese
and Greek descent who had come to this country after the War and
have made a massive contribution to post War Australia. And they
said to me with immense enthusiasm and pride, and all of them were
in the building and construction industry, and they said that we
haven't had interest rates like this since we first started
in business. Please don't do anything to alter it. And I said,
well that's simple - just vote Liberal at the next election.
But the impact of those lower interest rates are
enormously important, not only to people who are paying off a home,
but also to people in small business. And we have generated over
300,000 new jobs in just over two years. We have reformed Australia's
industrial relations system, and we have done that without ushering
in an era of industrial disputes and strikes. Remember we were told
before the last election that there would be riots, there would
be blood on the streets, there would be national disputes and stoppages.
In fact, we have had the best industrial record since 1913, the
year before World War I started. We have ushered in not only industrial
relations reform, we have also given an unprecedented era of industrial
relations peace. And we have also undertaken one of the most successful
privatisation campaigns that any government has undertaken. And
we remain committed to an intelligent continuation of that programme
because the long history in this country is that governments are
normally not terribly flash when they try to run commercial undertakings.
And there is a wealth of experience here in this state, in Victoria,
in Western Australia, and at a federal level to underwrite and to
validate that proposition.
So what we are doing in relation to the tax system,
is to continue the process of building and strengthening the Australian
economy. And it is because Asia has gone bad that we need to reform
the tax system. The fact that Asia has gone bad is not a reason
not to reform the tax system. That couldn't be more wrong.
It is when you have faced difficulty abroad that the need for further
reform is even more essential. What was unveiled on Thursday is
not just the biggest personal income tax reduction and restructuring
in thirty years, it's not just a fundamental reform of Australia's
ramshackle, old fashioned, indirect tax system, it's not just
the greatest reform in Commonwealth/State financial relations since
before World War II, it's not just an enormous boost to rural
Australia, to the Australian bush, and it's not just of particular
benefit to a manufacturing State as South Australia. It's more
than all of those things.
It represents a plan and a vision for the way in
which this country should operate economically into the 21st
century. And the big contrast that will now exist in Australian
politics is between the Coalition that has a plan and a vision for
Australia into the 21st century and the Labor Party who
simply says no to everything and others who blame everybody else
for their own difficulties.
And that is a very stark contrast. I have always
believed in politics, Mr President, that the best way to beat other
people politically is to offer the Australian public something better.
And when I spoke to the Western Australian Division of the Party
three weeks ago at their annual conference I said then that what
we had to do was to offer the Australian public something better
than our political opponents, whether they are our conventional
political opponents in the Australian Labor Party or they are our
opponents in the minor parties that are now touting for support
within the Australian community.
When you look at our record, you see that we have
offered better performance and better achievements in so many of
those areas and now with our tax plan, we are offering to the Australian
people a sense of direction and hope and guidance and encouragement
as we go into the next century.
More than ever, Australia must trade well if it
is to do well in a world beset with a lot of competition. This tax
plan will reduce the cost of Australian exports by four thousand
five hundred million dollars a year. This tax plan will take ten
thousand million dollars of costs annually off the production of
goods in Australia. It represents the biggest-single cost reduction
for Australian business any government has ever offered because
the great virtue of this plan is that it will reduce the input costs
of the manufacture of goods in this country and by being able to
sell them abroad free of a goods and services tax, our exporters
will be more competitive than they have ever been before. By reforming
the indirect tax system, and let me stress again, that the goods
and services tax will completely replace the wholesale sales tax
and on top of that, nine other State and Territory taxes including
the financial institutions duty and the bank account debits tax.
It will also remove State taxes on share transactions
and let me dwell for a moment on the enormous implications of that
decision and the removal of the financial institutions duty and
the bank account debits tax on the attractiveness of Australia as
a financial centre in the Asia Pacific region.
We have now completed the check list to make this
country the most attractive location as a financial centre anywhere
in the Asia Pacific region. We have now removed the financial institutions
duty, bank account debits tax, stamp duty on shares, we have a stable
political system, we have one of the most well regulated and prudentially
supervised banking systems in the world not just in the Asia
Pacific region we have the lowest inflation in the western
world, we have a high level of business investment, we have a legal
system that has world respect and world repute, and we speak the
English language.
Now you put all of those things together and you
can't get a better location for financial activity anywhere
in the region and probably anywhere in the world, and in
an age of borderless capital movements and of seamless capital transactions,
that is a marvellous asset for our country to have. And we will
be able to go around the world, particularly our region and say
to companies, you come and set up your headquarters in Australia
and you choose from any number of attractive capital city locations
to establish your financial headquarters.
One of the fascinating things about this tax plan
is that as the days go by we find new nuggets which make it attractive
and this is the first time I've specifically drawn attention
to what it will do to make Australia an attractive financial centre.
I've been too busy dealing with other aspects of it over the
last 48 hours such as the fact that 81 percent of Australians
under this plan will have full tax deductibility of their private
health insurance premiums and that we're going to abolish provisional
tax, which I think will get a mildly positive reception in the bush
and a mildly positive reception from a lot of self-funded retirees,
and we're also going to bring in something that sounds terribly
complicated but those who get the benefit of it know exactly what
it is and that is fully refundable imputation credits.. That means
that if you've got some shares and your tax rate is lower than
the tax paid at the company level of 36 per cent, now you lose the
difference. Under our plan you'll get the difference paid to
you from a cheque from the tax office.
It is a plan that is a comprehensive response to
Australia's taxation weaknesses and it will help lay the basis
of a stronger and better Australian economy into the next century.
And it is, of course, particularly good for South
Australia. If ever there was a State that depended quite heavily
on manufacturing industry, it's South Australia. And in government
we haven't forgotten the needs of South Australian manufacturing.
We had them uppermost in our mind when we took the decision on the
motor vehicle manufacturing industry and the decision we took on
that issue was not only right for Australia, it was particularly
right for South Australia.
I also take the opportunity of observing that the
new taxation arrangements we propose in relation to the wine industry
substantially correspond with the views that were put to us by the
Premier, John Olsen, and by the leadership of the wine industry
here in South Australia. Not surprisingly, the benefits for the
bush, for country Australians, have bulked very large in the tax
package. The changes we are making in relation to fuel taxes will
reduce by $3.5 billion fuel costs throughout our country. And that
will be of tremendous benefit to rural Australians because of the
heavy component of fuel in their business costs. But let me remind
you of something perhaps other business men and women in non rural
areas don't understand and that is because of the changes we
have made to the taxation of fuel, every litre of fuel used by somebody
to run their business will after the introduction of this plan be
seven cents a litre cheaper than what it is now. Because what we
are doing is bringing the level of excise down to the extent necessary
to accommodate the introduction of the GST so that there will be
no increase in the price of fuel at the pump for any consumer. And
because the GST is fully rebatable that means that every business
operator, forget about whether you are in the bush or in the city,
every business operator will find that their fuel for business purposes
is seven cents a litre cheaper than what it is at present.
And of course the price at the pump for the ordinary
Australian motorist will not go up at all. And in the context of
what we have done for the bush, can I particularly thank and record
the contribution of South Australian rural members, people like
Neil Andrew and Alan Ferguson and Barry Wakelin who have worked
so very hard to make certain that this package contains a proper
recognition of the interests of country Australia. Because we've
sought to make it a balanced package in every sense of the word.
Not only balanced in the way in which it addresses the inadequacies
of the present system and the way in which it looks after the interests
of different family groupings in Australia but also balanced in
the sense that it looks after the interests of country people as
well as people who live in the big cities of Australia.
Ladies and gentlemen, it does represent an historic
change in the way in which our taxation system will operate. It
represents the effort of a Government that is prepared to have a
go to solve Australia's problems. We are not a Government that
spends its time endlessly debating the theory of something. We are
not a Government that spends its time indulging in issue politics
or personality politics. We are a Government that from day one has
sought to find solutions to Australia's problems. We inherited
a financial mess and we have fixed it despite the obstruction of
the Senate and the hostility of the Labor Party and sections of
the media. We found an inadequate industrial relations system and
we fixed that. We found an interest rate structure that was shutting
young people out of buying their first home and we have fixed that.
We have generated 300,000 new jobs, there is still more to be done
on that front, but we are heading in the right direction.
But everyone in Australia knows, including Mr Beazley
and Mr Evans that we can't go on forever with our present taxation
system. In a couple of weeks time Mr Beazley is going to stand up
and say, he has a plan. He is going to stand up and say, I couldn't
find one in 13 years, but two weeks after the Liberals have produced
theirs I have found a plan.
That's a great punch line. I mean, somebody
who was at the senior levels of government for 13 years. I mean,
he boasts about the fact that he has been a Minister longer than
I was. All he is doing by that statement is reminding people of
his inaction over 13 years. I mean Mr Beazley in 1985 supported
the Keating 12.5 per cent consumption tax because he knew then,
in a moment of Ministerial honesty, he knew then that it was the
right thing to try and reform the system. But when Bob Hawke and
Bill Kelty and Simon Crean pulled the rug under Keating's feet
at the tax summit in 1985, Beazley obediently fell into line with
Hawke and said, oh no, it's a terrible idea.
He knows, as we all know, that your supreme responsibility
when you hold political power in this country is to use it for the
good of your nation, and not for your own personal, political advantage.
I know there are risks involved in unveiling a sweeping tax plan
before an election. We all know that. But what is the point of holding
office, what is the point of being Prime Minister unless you are
prepared to use the authority of your office to do something that
is good for the long term future of Australia.
So when Mr Beazley stand up in two or three weeks
time and says, look you can have some goodies but you don't
have to have any reform, deep down he won't believe it either,
because he has been around long enough and he has seen enough of
it at the top to know, that if you are really serious about taxation
reform in this country, you have got to grab hold of the whole system
and give it a proper shake and replace it with one that is fundamentally
more efficient and fundamentally fairer. And one that reduces the
costs of manufacturing, the costs of producing things in this country.
We are a great trading nation. We face a very hostile
world environment. Asia is very difficult. It is economically ugly
in many respects. And we have examples, look at Japan, eight or
nine years ago. Japan knew it had to fix its banking system. And
because it hasn't fixed its banking system, it is now regarded
with concern by other countries that previously saw it as indisputably
the second most powerful economy in the world. In a globalised world
economy you cannot sit forever on your hands and ignore the need
for economic reform, you don't have that option because the
rest of the world will find you out. And Mr Beazley and his friends
had 13 years to fix the Australian taxation system, and they left
it in a real mess when we came to power.
Now we've had the courage and the guts and
the vision to do something about it and we have done it in an integrated
fashion. We have done it in a way that is fair. We will end forever
with this new scheme the unseemly annual spectacle of Prime Ministers
and Treasurers and Premiers never being able to agree. And of all
the things that I have experienced in public life, there is nothing
in a sense more debilitating than those mindless arguments we have
every year. And we are all to blame and we therefore have a collective
responsibility to do something about it. Now we have talked about
it for years. But this Government is the first federal Government
to invite the states in, back into the Federation financially. And
that's what we are doing. The states have been shut out of
the Federation for years financially. And now we are inviting them
back in. And this is a historical reinvigorating and remaking of
the Australian Federation.
And it is fitting that we should do so on the eve
on the Centenary of the Australian Federation. We will celebrate
that centenary on the 1st of January 2001. Six months
earlier on the very eve of that we will implement a plan that will
financially reinvigorate the Federation in a way that has been badly
needed since the onset of uniform taxation during the War in 1942.
There are many things about this plan that give
to me and to my colleagues an immense sense of conviction and excitement.
We are doing something that is really important and is really good
for our country. And that is the greatest thing about this plan.
That particular description of the plan and what it represents is
far more important than the individual bits of it. It is a plan
for the 21st century; it is a plan that invests great
faith in the Australian people. And it is a plan that will deliver
to all Australians a better and a more secure and a more prosperous
future. Thank you.
[ENDS]
Questions
and Answers Session