E&OE....................................................................................
Thank you very much Mr President. To you and to my State and
Federal Parliamentary colleagues and fellow Liberals. It is always
a delight to address the State Council of the NSW Division. It always
a pleasure to come back to this building where I have attended many
meetings over the years and shared with you our common commitment
to the Liberal Party cause here in NSW and throughout Australia.
This week of course has been dominated by two significant events.
The first of those was the unveiling of the 1999 Federal Budget. Rarely
has a government had the opportunity to present a budget in more positive
economic circumstances. And rarely has a government earned the right
by dint of its own decision making to present a budget in such favourable
circumstances. It is not an idle boast to say that the economic condition
of this country is better than it has been since the last 1960s.
In the last year the Australian economy has out-performed any economy
in the industrialised world. Despite predictions to the contrary,
we stared-down the Asian economic downturn. When I became Prime Minister
of Australia this country was an anxious outsider knocking on the
Asian door, almost begging admission. Such was the mindset that had
been acquired under the leadership of the former government. A little
over three years on we are seen as a nation stronger, more secure,
more progressive and more willing to help with our regional friends
than ever in our history. We are seen quite properly as being fully
engaged with, and committed, to the Asian region. But we are not obsessed
about how we relate to the region any more. We no longer worry about
whether we are part of Asia, involved with Asia, enmeshed with Asia.
We are simply being ourselves in Asia.
And the ourselves we are being, if I can put it that way, is a nation
proud of the fact that we occupy a special intersection of culture,
geography and history. And those things a few years ago that were
seen almost as weaknesses for Australia in Asia, such as our stable
banking system, some people said that was a bit dull and unenterprising,
our strong rules of corporate governance, our commitment to a system
of open parliamentary democracy, all of those things are now seen
as massive strengths. And when I met the President of Indonesia, the
leader of 211 million people, our nearest neighbour, the fourth largest
nation on earth, I am greeted as the leader of a country which is
seen as strong, as positive, as a good but not uncritical friend and
ally. I said when I became Prime Minister on the 2nd of
March 1996 that I would propound and defend the values of Australia
abroad. And I've kept faith with that commitment. And when I
spoke to Dr Habibie I propounded and defended the values of Australia,
but I did so in a way that did not hector or seek to tell another
country that what worked here necessarily worked there. And this is
something we should remember in our relations with other societies.
And just as I abhor us wanting to change ourselves to please others
I don't expect others necessarily to change themselves to please
us. We have to understand that in a world of differences, philosophical,
history, cultural and ethnic, inevitably nations do not need to be
carbon copies of each other in order to cooperate in a constructive
fashion. And we have achieved in relation to East Timor, we have achieved
something that our predecessors did not do. And that was we have played
a major role in changing the policy of the Indonesian Government.
And we've changed it in a very constructive way.
So it was with an enormous pleasure that we were able to present a
budget which delivered a surplus, a budget that reported that Australia
had grown more strongly than any nation in the industrialised world
over the last 12 months. A budget that recorded that we have the lowest
interest rates in 30 years, the lowest inflation rate in 30 years,
a strong level of business investment. But it was also a budget that
was able to make important social provision. It always important to
have a balance between economic realism and social concern and social
provision.
As I said a couple of weeks ago when addressing the Australian Unlimited
Conference in Melbourne, our government is very much about liberalisation
in economic affairs, and what I described as modern conservatism in
social affairs. A concern to maintain the traditional values of Australian
society but to apply them in a modern and contemporary fashion, having
regard to the changes that have taken place in our community and our
society over the last few generations. And that social provision,
or modern conservatism, expressed itself in a number of ways. Our
renewed commitment to further reform in the area of private health
insurance. We are for a mixed system. We are for the public hospital
system, but unlike the Labor Party we believe in private health insurance.
That's why we brought in a 30 per cent rebate, something the
Labor Party should have done years ago but refused to do because of
their obsession with destroying private health insurance, despite
what their now leader says. If they had done something about private
health insurance in 1990 when their former health minister Grahame
Richardson said they should, then we would not have inherited a private
health insurance level in this country of about 32 per cent.
We've brought in life-time health cover. Life-time health cover
will provide further incentive for young and healthy people to take
out private health insurance. But there will be a 12 month grace period
until the 1st of July 2000 for people between age 30 and
age 65 to join and under the arrangement everybody over the age of
65 who joins for the first time being able to do so without penalty.
And at long last we will actually reward people who have given loyalty
to private health insurance funds over the long years. And they are
entitled to a reward.
Our social concern was displayed in relation to our commitment to
education. Quite unapologetically this budget provided for the most
generous and the most supportive provision for non-government schools
that any Federal Government in this country's history has provided
for. But it was not done in any way to disadvantage the government
schools. We believe in a simple principle in education and that is
that every Australian parent has the right to educate his or her children
according to their choice. It is a fundamental Liberal principle first
dramatically embraced by Sir Robert Menzies 36 years ago when he broke
the gridlock he broke the deadlock on State aid to independent
schools and ended almost a century of discrimination against almost
30 per cent of the Australian population. He did it in a dramatic
and generous way, he did it in a way that the Labor Party was incapable
of doing.
And what I did, and what the budget did last Tuesday night was to
carry on that tradition into new areas to provide low income parents
in both Catholic and non-Catholic schools greater support and as the
Secretary of the Christian Schools Association said in his press release
that the announcement we made delivered more justice to working class
families and enabled them to make greater choices in education than
the provision that any government in Australian history had ever made.
And this argument we get from the Labor Party that we're discriminating
against government schools totally ignores the fact that the great
providers for the government schools are their owners and that is
the State governments of Australia. On a per capita basis Federal
Governments always give more money to independent schools because
Federal Governments don't fund government schools, they're
funded by the State Governments. And this business I mean to grab
hold of a statistic and to say that because you're giving $X
a head straight out of the Federal budget to Government schools, and
X plus to independent schools that you're discriminating against
the Government schools completely ignores the fact that we give billions
of dollars in financial assistance grants each year to the State Government,
and the biggest claim made on State government budgets is in fact
education.
And under the financial agreements this year, the State of NSW for
example will receive a five per cent real increase in their financial
assistance grants. Well the average will be five per cent across the
States and as you know the Commonwealth Grants Commission has awarded
the State of NSW an increase of about $165 million under the equalisation
arrangements that have operated under our Federal/State financial
relations.
So I reject totally and completely the hogwash peddled by the teacher
unions and the Labor Party that we are discriminating against government
schools. It is our responsibility to fund independent school choice.
We are doing it in a fair and balanced way and even in the most needy
and least provided for parish Catholic school in Australia, the parent
is only being subsidised to 70 per cent of the cost of educating a
child in a government school. And to suggest in those circumstances,
and given the responsibility of State Governments that in some way
we are discriminating in favour of so-called elite private schools
in this country is nonsense. The greatest expansion in the independent
sector is not in the so-called elite schools but is in fact in the
low fee schools that are growing up as a result of the relaxation
of the new schools policy that I undertook to do before the 1996 election.
So ladies and gentlemen it was a great budget. It was deservedly well
received because it combines economic achievement with social concern.
It displayed a government that was sensitive to social need but also
a government that has its eye very clearly on economic strength and
economic rectitude. A government that recognised that we couldn't
be complacent and couldn't take for granted our economic achievement.
But above everything else, as we look back on Tuesday night, we were
able to say that today's strength was a product of yesterday's
reform. Just as tomorrow's strength will be a product of today's
reform. And that of course brings me to the issue of taxation.
You've heard me say before that I regard reforming the Australian
taxation system as the largest piece of unfinished economic business
in this country. I said that two years ago, I said it repeatedly during
the election campaign, I said it last week, and it's as true
today as it was then. And nothing that happened yesterday alters the
fact that if we want to maintain the momentum we have developed we
need to reform our taxation system in a quite fundamental way. And
that is why I committed the Government to taxation reform before the
last election. And when I took the decision that we needed taxation
reform and when our Cabinet decided we needed taxation reform, we
knew that we wouldn't get control of the Senate at the last election.
The reality is that under our present system, particularly as the
result of the changes that were made in 1984 to increase the size
of the Federal parliament, changes that the Liberal Party voted against
but as a result of that it is impossible, virtually, for either side
of politics to control the Senate in its own right. And until there's
any change in that, and I don't speculate about that, that is
going to continue to be the situation. I knew, therefore, that we
wouldn't get control of the Senate. And I calculated that if
we spelt it all out in detail before the election, if we did what
people constantly say politicians don't do and that is tell the
truth about our intentions and then set about keeping our promises,
I knew that if we didn't do that we would have no prospect of
getting the legislation through the Parliament.
So we spelt it out in total detail. We made full disclosure. We held
nothing back. We exposed ourselves to the most ferocious fear campaign.
And what we have sought to do since the election has been to keep
that promise. And I was very proud of the fact that Peter Costello
was able to hold up a document last Tuesday night, when he delivered
the budget, and it was entitled Keeping Our Promises for a Stronger
Australia.' And every single promise I made on behalf of the
Government in October of last year has been honoured in full, without
variation, in the Federal Budget. We didn't suddenly discover,
as Mr Carr did after the 1995 State election that he couldn't
rid of the toll way. We didn't suddenly discover, as Mr Keating
did after the 1993 election that having won an election campaign fighting
an indirect tax that, oh, sorry fella's, I didn't
tell you about the need to increase all the wholesale sales taxes.'
We didn't do that. We did the exact opposite. We laid it out
in total detail. We exposed ourselves to all the risks that were inherent
in laying it out in detail. And we did that because we thought that
was the right thing to do and the honest thing to do. And we also
felt that that would give us some moral authority to say to the Senate,
well, we told the people about it before the election, they
returned us to government, you have an obligation to pass it.'
And it's the operation of those forces which is at stake in the
debate that is taking place at the moment. What incentive is there
for future governments to be honest and open with the Australian people
if they can't implement what they were elected on? It would have
been a different matter if I had gone to the last election and said,
well, I believe in taxation reform, trust me,' or like
Bob Hawke in 1984, I'd said I'm going to have a meeting
or a summit. Or if I had just generally fudged and said I'm going
to cut your income tax and then after the election said, oh, look,
I sort of left the page out. And that page contains a whole lot of
indirect tax increases. We didn't do any of that. We produced
a document that contained the greatest amount of detail ever presented
to the Australian people in an election campaign about a major policy
initiative. We could not have been more open and obvious and transparent.
We could not have made fuller disclosure. Yet we face a prospect that
what we were elected on being voted down by the Australian Senate
when the legislation is presented.
Now, the Australian people, in their own way, in their own time, will
make judgements about that and they will make judgements about those
who've made a contribution to that State of affairs. And people
keep asking me what is my reaction to this or that person. Other members
of the Australian Parliament are not accountable to me, they are accountable
to the Australian people, as I am accountable to the Australian people,
as my Federal colleagues are accountable to the Australian people.
And all we are saying to the Australian people is, we want to do for
you what we said we would do for you. That is what I am saying to
the Australian people. And I would have thought in its most elementary
way parliamentary democracy in our kind of society was about keeping
faith with people. And there's a marvellous quote, I think it's
from Robert Frost, that talks about having promises to keep and miles
to walk before I sleep. We have promises to keep. As a party we want
to keep them. There are others who are stopping us from keeping those
promises.
Ladies and gentlemen, we remain committed, resolutely committed, to
reforming the Australian taxation system. We don't want to reform
the Australian taxation system because of some ideological bent. We're
not doing it because of our health. We're not doing it because
it's the next thing do and we've got bored. We're doing
it because we really believe it will strengthen the Australian economy
in years to come. I want the Treasurer of this country in 2010 to
be able to stand up and present a budget as glowing as the one that
Peter presented last Tuesday night and to turn around and say, this
is the product of the reforms that the Howard Government undertook
at the turn of the century. We do need a new tax system for a new
millenium. We owe it to ourselves not to be complacent. In a competitive,
globalised world economy your competitor is the other bloke in the
race, not your predecessor as Prime Minister 25 years earlier. It's
no good me telling the Australian people that our economy is performing
better than it did 30 years ago unless I'm able to say it continues
to outperform our competitors. And that is our challenge. We have
achieved a lot because of past reforms. We won't achieve more
in the future unless we undertake further reforms. And that is why
we need to change the Australian taxation system. And that is why
we will presevere in the campaign to change that taxation system.
My friends, that is all I want to say about the Federal political
scene. But can I say, as a longstanding member of this Division and
as a person who's attended as a delegate hundreds of State Council
meetings since I first started coming to State Council in the early
1960s, that I share the sense of disappointment that the party organisation
feels about the outcome of the State election. And I think I would
be failing in my duty as a longstanding member of the New South Wales
Division if I didn't make a couple of observations. And I will
presume to draw upon that long membership in the candor of the observations
that I will make.
Can I first of all say, little is achieved by intense recrimination
or retrospection. Little is achieved by that. Nothing is achieved
by scape-goating. Something is achieved if lessons of past mistakes
are learnt and those lessons are applied. And something is achieved
if it is recognised that if there are some fundamental structural
weaknesses to a party's approach then those structural weaknesses
should be addressed at the beginning of a term in Opposition and not
somewhere else during that term.
Could I make the observation that, and I made it publicly before and
perhaps some people may not have liked the language I used but I stand
by it, but to be credible any Opposition has to develop an alternative
policy agenda. And it has to be developed over the period it is in
Opposition. It cannot be cobbled together at the last minute. One
of our most revered New South Wales Division's sons, Sir John
Carrick, had that marvelously evocative observation that you can't
fatten a pig on market day. Some people might think it's old-fashioned,
I think it remains very relevant. And you can't fatten, you can't,
you have to, over a period of time, build. We learnt that through
our bitter cost, Federally. We went through 13 years in Opposition
Federally. And when I look back on those years I can recognise mistakes
that are still being made by others. You can't put it together
at the last minute. You've got to develop a policy brand. People
have got to know you by your political values otherwise they will
not support you and that applies to you whether you're in government
or whether you're in Opposition. Now, that is a piece of across
the board advice. It is meant very genuinely. It is not directed any
anybody or any group of people in particular. It is generally directed
towards what I saw to be a difficulty here in New South Wales.
The other observation I would make is that one of the implied understandings
or covenants, as I often call it, on which the Liberal Party was established
is that you had a parliamentary wing and you had an organisational
wing. The parliamentary wing, unlike the Labor Party, was given complete
authority to determine policy. We won elections in the 1960s on a
campaign about the faceless men who controlled the Parliamentary Labor
Party. We prided ourselves on the fact that the people in Parliament
elected by the Australian people were the people who ultimately decided
policy. And we maintain that principle zealously. I consult the organisation.
I talk to them. I listen to them. I have a very close association
with my Federal President and with the State organisations and the
Federal Director. But in the end, our Cabinet and our Parliamentary
Party decides policy.
When we decided to embrace tax reform, before I made the announcement
I had a telephone hook-up with all of the State Presidents to explain
the Parliamentary Party's decision so they knew in advance. But
we took the decision but that's the Parliamentary Party's
prerogative. The corollary to that is that the organisation has complete
control in relation to candidate selection, has complete control in
relation to all of the matters relating to the running of campaigns
and to the operation of the organisation.
Can I say, with all the best will in the world, I think those two
responsibilities have become too blended and too merged here in New
South Wales, especially at a State level. I think one of the things
we have got to do is to reassert the separate responsibilities of
the organisation and of the Parliamentary party. I think it's
one of the important tasks that the organisation has over the weeks
and months ahead.
The other two observations I would make is, and this is as somebody
who first sat on the State Executive in 1963, is that I think our
State Executive is far too big. You can't run, in my view, a
political party with an executive that big. I think you desirably
need an executive of about 20 people whose sole parliamentary representatives
are those people who are elected directly to represent the federal
and State parliamentary parties. Now, some people in this room won't
like that and I don't imagine that much notice will be taken
of it. But, quite frankly, as somebody who cares about being in government
and as somebody who has had a bit of experience of being both in and
out of government, and as somebody who loves the Liberal Party and
who's spent all of his adult life as a member of the New South
Wales Division, I do think that I've earned perhaps the right,
just on this one occasion, to say a couple of things.
And there's one other thing I want to say and that is that if
all of that advice, per chance, were taken that would be good but
there's one other thing I just feel duty bound to say and that
is that I think this Division has spent far too much time and energy
in what I can only describe as self-destructive, personality-based
factionalism. I mean, I can understand in a way, providing it doesn't
become self-destructive, a party that has factionalism based on ideology.
But for heaven's sake, when it's based on mutual self-promotion
and it shows an unwillingness to see the common enemy it becomes self-destructive.
And I say that in relation to the behaviour of both sides of the argument.
One of the great successes of the Federal Parliamentary party after
I resumed the leadership in January 1995 was the fact that it operated
as a broad church. That there was proper representation in the shadow
Cabinet and in the Cabinet, of different points of view. A recognition
that in the end if there was a majority view on a particular issue
that majority view would prevail, but not in a triumphal, winner-takes-all
sense. And I think any political party is a coalition. We are a coalition.
The Liberal Party of Australia is the trustee of both the liberal,
the classical liberal tradition of this country, as well as the conservative
tradition. We are not exclusively either a small "l" liberal
party or a conservative party. We are a mixture of both. And unless
we remember that and we keep practising that we are doomed to repeat
the mistakes, certainly that we've experienced over the last
few years here at a State level.
Well Mr President I think I've said a fair bit this morning,
and perhaps I've overdone it,