29 September 1999
Subjects: Taxation reform, business tax, economy, Asian economic downturn, foreign policy, multinational peacekeeping force, East Timor, political parties
E&OE……………………………………………………………………………………….
Well, thank you very much, Brian. I certainly remember coming to this function just under a year ago. It was just after we’d been re-elected. In fact, next Sunday is the first anniversary of the second Howard Government. And it’s an opportunity tonight for me to thank all of the members of the ACT Division and particularly to you, Brian, as President; to John Ryan, the Director, and all the other hard working members; to my Parliamentary colleagues, both State and Federal and, most particularly, Margaret Reid, as President of the Senate; to Kate Carnell, the Chief Minister, who’s had a pretty tough and challenging year at various stages but has come through very, very effectively and is still very much in control here in the Territory. But it’s an opportunity to reflect for a moment on what we have done over the last year. And it is important, as Brian says, in this game of politics never to sell yourself short but it’s also very important never to get carried away with yourself either. And I’ll deal with that issue a little later in my remarks.
But the last year has been probably the year of greatest achievement in many respects of the three-and-a-half years that the Government has been in office. We have seen, on the domestic scene, we have witnessed the passage and now the implementation of the biggest and best change to the Australian taxation system certainly since World War II. We took our political lives in our hands, I suppose, and we took an enormous risk to run at the last election with comprehensive taxation reform. But it was the right thing to do because all of us knew that sooner or later this country needed taxation reform and, in the end, the Australian public was willing to support a government that had the courage to argue the cause of taxation reform. It looked, at one stage, as though all of that was going to come to naught when Brian Harradine said, ‘I cannot’ and he didn’t. But then we sat down and negotiated with the Australian Democrats and I want to say that I found Senator Lees and honourable and decent person with whom to deal. I don’t agree with her on a lot of things and she doesn’t agree with me on a lot of things either. And I don’t suggest for a moment that the Coalition and the Democrats are going to see eye-to-eye on every issue. But I do think there’s a message from the Australian people in their reaction to the understanding we reached with the Australian Democrats. And that message is that they approved of it because they elect governments in this country to do things. They don’t elect governments to conduct long, philosophical debates in public about who is right and who is wrong. Australians are ‘can do’ people. Australians look for achievement. They look for governments that are willing to press ahead towards a goal and if there’s some compromise, not too much compromise, involved along the way, well they’re prepared to embrace that.
So we had tax reform implemented. And that, of course, has only been the half of it because in the last few weeks Peter Costello has released the Ralph Report and in the wake of the Ralph Report all of the changes to the business taxation system. And those changes have been very widely applauded, particularly by small business men and women and by farmers, by investors, by many people like yourselves who believe that life is about occasionally taking a risk, accumulating some capital and not having it taxed at a confiscatory rate. And that is one of the reasons why we were determined to make some changes to the capital gains tax system. And if we can get these changes to capital gains tax through the Parliament, and I believe we will, then we will have one of the most competitive capital gains tax regimes in the world. And this country will be a very attractive place for small investors. We now have the second highest share owning proportion of our population of any nation in the world. We’re second only to the United States as the second great share owning democracy in the world. And that is a truly remarkable achievement.
But underlying all of these changes, of course, is the self-evident fact that our economy now is as healthy, indeed, healthier than it has been at any time in the last 30 years - our rate of growth, our low level of inflation, our low level of interest rates, our significantly lower rate of unemployment. Brian mentioned how low the unemployment rate here is in the ACT. I even saw stories in the press earlier this week of how unemployment has fallen in such difficult areas for unemployment as the Western Suburbs of Sydney. We have the lowest number of young people looking for work since 1978. Our unemployment rate is at an almost 10-year low and we’ve generated more than 500,000 jobs since we were elected in March of 1996.
Now, all of those things are solid, undeniable achievements. And they are the things, they are the bread and butter things that governments are expected to deliver. And I’m very proud of the fact that Australia has been able to weather the Asian economic crisis in better shape than just about anybody predicted. And I guess when I spoke to you a year ago I would have talked about the achievement of winning the election. I would have listed some of the Government’s economic achievements. I would have talked about the budget surplus. But I probably would have said that perhaps the Asian economic downturn is going to catch up with us and things mightn’t be so easy over the following 12 months. But in reality that didn’t turn out to be the case. And we have stared down the worst downturn in the Asian economies since World War II. And we’ve done it fundamentally because we got our domestic house in order.
And one of the reasons why we are being able to act with confidence and skill and be listened to as we argued to assemble a peacekeeping force to go into East Timor, one of the reasons that we were able to do that is that we were talking from a position of economic strength. And when you go into the forums of the world and the councils of the world and you talk to other countries and you talk as the leader of the one of the strongest economies in the world you are listened to with more respect. That’s a fact of life. You’re not listened to because of your individual personality or because of your pretty face or anything like that. You’re listened to because essentially you carry with you the assets of the nation that you lead. And the assets of the Australian nation at the present time are very strong and durable assets. They are the assets of a free country, of one of the oldest democracies in the world, although we are a young country by any measure, a country that has links with Europe and North America, as well as with Asia, and a nation that upholds the principles of individual liberty and individual freedom as fiercely as any nation on this earth. But on top of that, we have the asset of a very strong economy. And we’re able to say to the rest of the world, and particularly to our friends in the region, that we were able to stare down the Asian economic downturn. And it will forever be to the credit of this country and to the policies that were implemented that gave us that strength, that we were able to work our way through that Asian downturn. It had some effect on us but nothing like the effect and the impact that people imagined. But naturally and inevitably our thoughts over the last two months have been almost totally consumed by what has happened in East Timor. It is without doubt the biggest foreign policy and national security challenge this country has had for more than three decades. At present we have just on 3,100 personnel in the ADF deployed in East Timor. It’s the largest overseas deployment Australia has made since the Vietnam War.
For the first time in our history we have the lead role in a major military involvement of a peacekeeping kind in another part of the world. If it hadn’t been for the energy and the commitment of Australia that peacekeeping force may not have come about. But it is not an easy situation for Australia because the deployment of those troops on the soil of a country or a territory which is still part of Indonesia has inevitably raised tensions between Australia and the Republic of Indonesia. And it’s idle to pretend otherwise. It was natural that as we argued for the introduction of a peacekeeping force, and although that peacekeeping force was introduced with the consent and the support of the Indonesian Government, it was inevitable that tensions were going to rise.
But it’s very important that we look to the medium and the longer term. Our commitment to an independent East Timor is unambiguous and unqualified. They have a right to be an independent country. They voted in a clean open ballot by a margin of 80% to 20%. A majority that mere mortals such as myself in a sense dream of, 80% to 20%. I mean, really, 80% to 20%. You can’t have it any stronger and more emphatic than that. And for the rest of the world to have turned its back on that would have been something that I don’t think the Australian public would have sat easily with. And that is why we were determined to see that they were going to achieve what they so richly deserved. And as a people they are a poor country. They have clearly suffered much and there’s an enormous amount of compassion and sympathy within the Australian community for them. And because it was in our national interest and because it was the right thing to do Australia made the commitment that we did. And we now have 3,100 young men and women of Australia representing this country, going into that territory in the name of Australia, in the name of all us whatever our political views are, upholding the things that we as a nation believe in.
But we should keep in mind the importance of our relationship with Indonesia. We seek friendship with Indonesia. We have done a lot to help Indonesia. We have been a friend of Indonesia’s over the years. We helped Indonesia achieve her own independence. Many have forgotten that. We were a friend of Indonesia’s as recently as a few months ago in getting valuable assistance to her as she was struck by the Asian economic downturn. We have valuable economic links with Indonesia. There are many Australians who are taught the Indonesian languages in the schools and universities of this country. And I’m sure that there are many people in Indonesia who see value in an ongoing relationship between Australia and this country. And it does represent a delicate balancing act. On the one hand we must work at all times to take the opportunities that are available to redevelop our relationship with Indonesia, but it has to be on the understanding that what we are doing in East Timor is not only right, it is not only in our national interest, but it is occurring under the supervision of the United Nations and it is also occurring with the acquiescence of the Indonesian Government.
We would never have gone there in the first place had it not been for the fact that the United Nations sanctioned it and the Indonesian Government agreed. It seems weeks ago now, but I can still remember the days leading up to the decision of the Security Council to establish a peacekeeping force, arguing with people on talkback radio about the ill wisdom of Australia taking any unilateral action. We have not acted unilaterally. We have acted under the authority of the United Nations, we have acted in concert with our friends and neighbours not only in the ASEAN region but including nations as far afield and Britain and the United States, both of which have made very valuable contributions to the United Nations peacekeeping force in East Timor. But at all times I said that there were two conditions for Australian involvement. One of them was the sanction of the United Nations, and the other was the acquiescence of the Indonesian Government. Otherwise we would have been involved in an act of war and there was no way that the Government was going to even remotely contemplate that.
So far from an operational point of view the exercise has gone extremely well. And I know that all Australians are immensely proud of what is being done in their name in cooperation with others in East Timor. And no more impressive Australian you would find than Major-General Cosgrove. But all such operations carry an enormous amount of risk, and I’ve spoken to many serving and now retired soldiers who share with me an ongoing concern and apprehension about what can happen in a situation. It is dangerous, it is fraught with a lot of difficulty and none of us who care, and I know that’s everyone, about the safety of our forces will rest easily until their mission is completed and all of them are safely returned in tact to their homeland.
So it has been a very difficult and challenging exercise. And I would not have been able to achieve what I believe Australia has to its great credit achieved, without the help of Alexander Downer and John Moore, the two Ministers principally responsible for helping me. And also the assistance of the officers of my own department and the Department of Foreign Affairs, and the Department of Defence, and most particularly of course all of those people responsible for leading our defence force. And very importantly of all of course the men and women of the defence force who I had the opportunity with my wife and the Leader of the Opposition, and the leader of the Australian Democrats of saying farewell to, when just before they departed in both Townsville and Darwin last weekend.
So it has been without doubt the most challenging foreign policy issue this country has faced for a long time. And inevitably when something like this occurs the cast and the stance of a nation’s foreign policy is never quite the same again. I think for 30 years there have been certain notions about the conduct of our foreign policy, that at the very least have been put under the spotlight and some question marks have been raised about that stance of policy by the events of the past few weeks. And it will take time for the full ramifications of that to become known and to be understood and absorbed. But I think it is clear to recognise that this country in the end has always got to act out of a sense of its own national interest.
In a way there’s no such thing as a whole string of special relationships between Australia and the nations of either the region or the rest of the world. And you build a relationship with a country on mutual self-interest. You don’t build it on the personal rapport between two leaders. That’s a rather deluded notion. You build it on those things that you have in common. And what you ought to concentrate on in your relationship with any nation are those things that you have in common rather than those things that might push or drive you apart. And I think it’s also important when you look at the stance of our foreign policy to remember that no matter how convinced the politicians and the advisers may be of the wisdom of a policy. You cannot, for a long period of time, sustain a foreign policy attitude about a nation or a region unless you have the support of the people. You can’t pursue a foreign policy at variance for a long period of time any way with what the general population of a democracy wants. And it’s important that all governments, my Government, any future government, perhaps communicate more directly and more openly with the Australian people, the aims and objectives of our foreign policy. And I think perhaps in the past, and this is not a criticism necessarily of Labor governments but it’s an observation perhaps of all governments, that there’s been a tendency to pursue some foreign policy goals without understanding the need to communicate more fully to the Australian people the reasons behind them, the desirability for them and precisely the goals and the objectives that are being sought.
I guess the other thing that I wanted to say is very much of political character because this is a political dinner and this is a political gathering and I lead a political party and we all have political objectives. And one of those political objectives is remaining in office. Not remaining in office at all costs but remaining in office because we think on balance we do a better job than our opponents. And you’ve often heard me speak in the past, I think, of how I see Australian politics now as being a lot less tribal than it used to be. You don’t have quite as many people who automatically vote Liberal because mum and dad vote Liberal or automatically vote Labor because mum and dad vote Labor.
The differences between the political parties are not quite as acute now. People don’t feel quite so compassionate about their political differences. I don’t as frequently hear people say I think the Government is doing a terrible job but I could never vote Labor. I mean, I hope I don’t hear them saying that. But I think you know what I mean. I can remember years ago that I would run into Labor voters who would say ‘gee I think the Labor Party is doing a terrible job but I could never vote for you lot, I have a philosophical objection to you’.
Now, there are still people like that on both sides but there are fewer of them now than there were 30 years ago. There are fewer of those people now than 30 years ago but what that all means, of course, is that elections are less predictable. Now, there’s no point in beating about the bush, we are all surprised at the result in Victoria, the closeness of it. And there’ll be a lot of analysis that will go on for months and it ought to go on for months to try and work out why it was that happened.
And I hope that Jeff Kennett still emerges as Premier and stays as Premier because whatever you say he has done a fantastic job and he has changed the face of that State in the seven years that he has been Premier. I mean, visiting Melbourne I have got to say to you under the Kirner, the last years of the Kirner Government was like going to a family funeral, it was very depressing. There was a sense of gloom and despondency and Jeff Kennett has turned all that around in seven years yet he hangs by a thread. Now, we have to try and understand why. Different people will have different theories and I think what it drives home to all of us is that it’s a very John Donne. Every election is an island. Each election is quite different from the one that went before it. Just because we won the last election it doesn’t mean we are going to win the next election. And you can have a huge popularity rating and you can still lose.
Wayne Goss entered the 1995 State election with an approval rating of 65 per cent and within six months of the election he was gone. Kennett entered the Victorian election with a very high approval rating. You know the outcome. Hawke entered the 1984 election with an astronomical approval rating. People talked about him having a majority of 60 seats and he copped a swing against him and was greatly humbled by it and he stayed in office for a number of years afterwards.
But the point I simply make to all of you as practising, supporting Liberals is that you can never take the electorate for granted now, it is a lot more volatile. The electorate is interested in governments and leaders who do the job in an unostentatious fashion, achieve results and go onto the next bit. People are interested in outcomes. People are interested in governments that set their goals and do their work in a consistent and predictable fashion but never, ever taking the electorate for granted.
And I well remember, as Margaret Reid will be, the first party room I addressed meeting as Prime Minister in 1996 after the March election of that year and we had a majority of 44 and the air was, sort of, full of euphoria and we thought we were terrific. And I said to them, the very first piece of advice I gave that party room was, it’s terrific now but don’t assume it’s going to last. Within the passage of a year or two we will have done a lot of things people don’t like because they will be necessary and some of the euphoria you now feel will have totally disappeared.
And if ever you give the impression to the electorate that you are taking them for granted, that you believe you are there by divine right or that you are terrific the Australian public in its typical capacity to bring people down to size will exact vengeance. I have never forgotten that. Australians are by nature a somewhat sceptical people. That’s part of the Celtic deposit of our make up. We are sceptical. We get a little bit suspicious of people who get too carried away with themselves and it’s very, very healthy, I might say, a very healthy part of our national character.
And I can well remember having a discussion with President Clinton when he was here in 1996 about the similarities about Australians and Americans and we both agreed there were many but we also agreed we had a number of dissimilarities. And I proffered the view that I thought Australians were somewhat more sceptical as a people than perhaps the Americans and some others were. And I think we as politicians and political practitioners should always keep that in mind.
Australians are deeply democratic people but they are also deeply sceptical on occasions and they do tend to run a critical yardstick over those of us who become a little too preoccupied with the inevitability of any success that might come our way, if I can put it that way. And I think it’s tremendously important that we remember that. It’s a message I convey to all of my colleagues. It’s a message that gets conveyed regularly to me at home on occasions and I think that’s a very, very healthy state in which to live.
But finally, can I say to you, thank you for a wonderful year. I have often said in the past that what I have achieved in public life has been almost totally by courtesy of the Liberal Party. I owe the Liberal Party the fact that I am in Federal Parliament. I owe the Liberal Party naturally the leadership of it and the Prime Ministership of this country. And I am very grateful for what the rank and file of the party has done for me and I am very grateful in particular for what the rank and file of the party has done here in the ACT. I thank you for it and it’s a great delight again to be with you.
[ends]