Subjects: Reform; Taxation reform; welfare reform, social coalition; economy, workplace relations; unemploymen
E&OE..................
Thank you very much Premier, to my parliament colleagues, Peter Costello, Robert Hill, Richard Alston, my State Parliamentary Colleagues, ladies and gentlemen.
I notice the Premier mentioned revenue flows under the GST, I've been conducting a bit of a focus group on my table and Rob Gerard tells me that you know, he is going to be contributing an enormous amount and if Rob is an example then some of the predictions made by the Premier may come true but I think we all have to wait and see. But it's a very convenient starting point for my address because the last time I was in this room speaking to an audience like this was some months ago and it was at a time I guess that a number of you and a lot of people around the Australian community wondered about how tax reform was going to go. Most of you supported it and John Olsen is right when he says there is no state in Australia which will benefit more from the abolition of wholesale sales tax than the state of South Australia because of your heavy reliance on manufacturing industry. You were very supportive of it, you were hopeful about it, and you generally saw the benefits for the country and the benefits for your state of tax reform. But like so many you wondered about perhaps the political wisdom of it and you wondered about how it was all going to go and we faced it that time, what can only be described as the most negative backward looking carping campaign of political sabotage from our opponents.
There are occasions when I am willing to give credit to the Australian Labor Party. I was never unwilling to give credit to the former government, particularly the Hawke government for one or two of the reforms that were brought in and we gave that government strong support. Financial deregulation wouldn't have been achieved without bipartisan support in this country and reform in other areas wouldn't have been achieved without bipartisan support and occasionally in political life, no matter where you are, whether you're the government or the opposition, you should be willing to put aside your partisan attitudes and you should be willing to put your hand up and say, well I think the government's right on that. Now that is what the Labor Party should have done on tax reform and I bet they now, seven weeks after its successful introduction lament very much that they didn't put the national interest ahead of selfish political interest.
Because the reality, ladies and gentlemen is that tax reform has been needed in this country for a quarter of a century at least. You in business know that. I remember a year after I was elected to Federal parliament, the then government, the Whitlam government tabled the Asprey report, that was a committee of inquiry into the Australian taxation system that recommended the introduction of a broad based indirect tax and it recommended reductions in personal income tax and that's been really the agenda for reform that has been needed in this country for the last quarter of a century.
Now we took a hell of a risk going to the last election on tax reform, but I don't regret for a day, for a day I don't regret for a moment the risk that was taken. I always believe in the end that if you campaigned fearlessly and strongly on something that you believed was right and you were willing to put it in terms of the national interest and it was seen to be fair for most of the community, that the Australian people would embrace it. And I think it has done not only great things for the Australian economy, taxation reform, but I think it's also done a lot for our sense of national self belief because part of a country's belief system is its belief in its capacity to bring about fundamental change and reform that involves transitional difficulty but is going to deliver a stronger outcome and taxation reform was very of a piece with that kind of change and that kind of reform.
It was easy to run a fear a day, it was easy to try and instill concern in some of the more vulnerable people in our community. It was easy to predict that it was going to be a burden, an unmanageable burden on the business community, it was easy to suggest the personal tax cuts were going to evaporate. But all of that fear campaign was stared down and the greatest thing of all, as far as I and my colleagues are concerned, is that the Australian people have now been given an opportunity of experiencing it and they are increasingly delivering a positive verdict because tax reform has passed what I regard as the two fold test of reform in this country. In my view you can also persuade Australians to support reform if you can meet two criteria. The first of those criteria is that it must be good for Australia. If it's not good for Australia, it doesn't really matter in a sense whether it's good for you. If it's not good for the whole country, the Australian people won't embrace it. And the second criteria is that it's good to be fundamentally fair, particularly to the more vulnerable people in our community and I believe that the Australian community has embraced our change and our reform because they have seen it to be exactly fitting those two criteria. And I think they also see it as being part of a steady pattern of change and reform that this government has undertaken over the last four and a half years. It is no accident that we were able to stare down the Asian economic downturn. We were able to do it because we had a strong economy, because we had put the budget back in to surplus, because we were seen as an attractive place for business investment, because we had a flexible exchange rate, we were seen as having strong, recently reformed rules of corporate governance and regulation and we were seen as a stable country, both economically as well as socially and politically.
There were many people who believed when the Asian economic downturn hit this part of the world, that Australia would be sucked in to the vortex. Well that didn't happen and it didn't happen because we were seen as stronger and we were seen as different and that is a direct result of many of the things that we did in the first two years that we were in government. If we put off fixing the budget deficit for a couple of years, the Asian downturn would have sucked us in. If we hadn't set about reforming our industrial relations system, the Asian downturn could well have sucked us in. And I had some evidence of this only a few weeks ago when in Perth, I opened a new export facility for a company called Kallis France, which is exporting TV dinners for the Japanese market and the executive chairman of the company was able to say to me, without any fear of contradiction, he was able to say, if it hadn't been for the workplace relations reform of the Coalition government, today wouldn't have been occurring.
There are many reforms that this government has carried out and the news that I have for you today is that the reform process has not finished. In the modern, globalised world economy, you never sit still. You all know in business that the option of just running on the spot or marking time is not really a viable option. You either keep trying to expand, or you start to go backwards.
I've had a few people say to me since tax reform came about and they've said look, slow down, take it easy, you've done enough, don't take any more risks. Well my reply to them is sorry, I'm not made that way. I don't intend to slow down, I don't intend to mark time and I don't intend to avoid taking political risks in the long term interest of Australia. I am prepared to take personal political risks, I'm not of course prepared to take risks with the future of this country and I think it's important, having achieved major areas of reform in so many areas that so far from resting on any kind of policy laurels, that what we should be doing is pressing ahead with other areas of reform.
We had an example of that only in the past few days with the delivery of the McClure report on welfare reform in this country and I've spoken here before of the collective social obligations of the government the business community of Australia. I've spoken often at the notion of a social coalition. I've spoken of mutual obligation. Mutual obligation in the welfare sector is when you say to people, we will look after you if you need help, we will not allow to go without the means of sustenance and support, but if you are able to do so, you should put something back in return for that support. Now that is a principle that has very ready acceptance throughout the Australian community and I've also encourage the business community of Australia to join us in a social coalition to deliver an improved way of helping the more vulnerable in our community.
None of us can do it on our own. You can't leave it to organisations like the Salvation army and the St. Vincent de Paul to do all of the welfare work of the country. You can't leave all of it to the government, we don't expect the business community to take our place, but if working together, all of us can build a social coalition to tackle many of societies challenges, that is a way of business returning to the community the benefits it has derived from a strong and more prosperous Australian economy.
So I see reforming Australia's welfare system and I see that blueprint from the McClure report widely supported in the Australian community. Not just by the Coalition but also by many leaders of the welfare sector. I see it as a very important blue print for intelligent, compassionate reform of the social security system over the years ahead.
Of course one of the great ironies, ladies and gentlemen, of the tax debate that we've had with the Labor Party - and you'll forgive me at a Liberal Party luncheon for mentioning the Labor Party - one of the great ironies of the debate that we've had on taxation over the last 12 months is that the greatest single guarantee of the resources that are needed for government services in the years ahead, will in fact be delivered by the Goods and Services Tax because all of the revenue from the Goods and Services Tax goes to the States of Australia. And with that one change we deal with two age old financial problems in this country.
The first of those age old financial problems hasn't really changed much since Tom Playford and Bob Menzies talked about the Murray-Darling back in 1957 and that is the States tend to blame the Commonwealth for not giving them enough money and there tends to be a bit of duck-shoving between the Commonwealth and the States regarding their responsibilities. And every Premier I've known in the time that I have been Prime Minister, and the time previously when I was Treasurer, has been part of that debate with the Commonwealth. And at long last we've found a way through tax reform of putting an end to that sort of nonsense and under the GST, after the transitional years, the States will have access to growing sources of revenue and they'll have more money for Government schools and public hospitals, and police and roads, all of those bread and butter things that are the responsibility of States to deliver in Australia.
So therefore we've not only dealt with the problem of this endless wrangle between the Commonwealth and the States over money, but we have also I believe have provided a very important financial underpinning for the delivery of services that are so important to the vulnerable people in our community.
John spoke of the visit to London a few weeks ago, to commemorate the Centenary of Federation. And that was an important event, not only historically, but it was also a very important event economically. I don't think there would have been a time before, and there won't be for many years to come, when you would have had both the Prime Minister and the Premiers of most of the States of Australia gathered at meetings attended by the leaders of all of the major financial institutions, not only in the United Kingdom, but from also other European countries. And also at other gatherings attended by the Chairman of so many British companies that have large investments in our country. And it was an opportunity to showcase in a bi-partisan way the modern strengths of the Australian economy and John is right when he says that this country is held in high repute and regard around the world.
It's not an empty idle, rhetorical boast that I make, but it's been earned over the last four and a half years because of that steady program of reform and change which has been undertaken. It's been based on a commitment to economic fundamentals. The greatest thing you can do for a person who's on welfare is to give them a job and the unemployment success of this Government over the last four and a half years, has been quite astonishing.
I had the opportunity in Federal Parliament yesterday to go through some of the unemployment statistics in some of those areas of Australia traditionally identified with high unemployment, was able to point out that some areas of Western Sydney traditionally seen as having very high levels of unemployment, have seen them fall from 20 per cent in areas to like 4, 5 and 6 per cent. We've generated almost 810,000 new jobs in the last four and a half years.
We have the lowest level of youth unemployment since 1978. We have one of the lowest levels of female unemployment over the last twenty years. It's wrong to see those good unemployment figures as merely as a product of the Olympics boom in Sydney because as John pointed out, and every Premier is entitled to point out, there has been strong jobs growth right across the nation.
So I can report to you today, ladies and gentlemen, that the Australian economy is in strong and very robust health. But it's not been achieved easily. It's not been achieved without taking a number of decisions that in their time have been unpopular and it won't be retained if we relax, it won't be retained if we indulge ourselves in the foolish notion that we can spend the next 18 months between now and the election worrying just about our political credentials and neglecting the important fact that if you deliver a strong economy, it also delivers a strong political dividend.
And I want to make it very clear to all of you today that having come thus far with a strong reform program we intend to continue to pursue it. We remain strongly committed to the full privatisation of Telstra. We remain strongly committed, if we can get the legislation through the Senate, with further industrial relations reform. We remain strongly committed to the sensible implementation in cooperation with the business community of business tax reform.
Peter made an announcement recently about the timing of the introduction of what's known as Option 2 and that was a recognition that the business community is digesting quite a lot of change at the present time and the sensible thing to do is to recognize the need to manage that change over a slightly longer period of time. Because it's not only the changes to indirect changes and the changes to the personal tax system but it's also the major change to company tax - the reduction over a two period from 36 to 30 cents in the dollar. The virtual halving of capital gains tax which amongst other things have made this country infinitely more attractive to venture capital investors from all around the world. We're very conscious of the need for those changes to be managed and absorbed by the Australian business community.
So we remain very much a Government that is strongly committed to further change and reform and strengthening of the Australian economy. We need to retain strong budget surpluses. They make an important contribution to the underlying strength of the Australian economy. They impose proper restraints on governments in relation to their expenditure plans. But they're also very important to perceptions of financial markets about the management of the Australian economy.
It is in so many ways an immensely, a privileged time to be Prime Minister of this country. Next year we will have a year long commemoration of the Centenary of the Federation of Australia. It will be an opportunity in different parts of Australia to celebrate all that we have achieved together. It's an opportunity to reflect upon the scale of the Australian achievement and that achievement of course has not only been measured in economic growth and economic strength, but it's also been measured in what this country has represented to the rest of the world. I have frequently been asked over the last few months what do I regard as some of the greatest achievements of the government in four and a half years. I've spoken in some detail of those economic achievements, but of course it is not only economic achievements of which I and my colleagues are very proud. We are very proud of the social reforms that we have presided over. We are very proud of the role that we played in bringing about a safer community in relation to gun controls and we are very proud of the way in which we have rebalanced Australia's foreign relations and how we were able to stand up for the human rights of the people of East Timor and demonstrate not only to our region but demonstrate to the rest of the world that when a challenge comes in areas related to human rights, Australia is second to none in its willingness to stand up for the rights of vulnerable communities particularly in our part of the world.
So my friends, I can, as I see myself properly doing at a gathering such as this, reporting to you on the state of the government and on the state of the nation. I don't report to you as anybody who is in anyway smug or complacent about the challenges ahead of us. I report to you a sense of achievement in relation to our reforms, particularly taxation reform. I do so in gratitude for the support that we have received from the business community. I thank John Olsen for the support that he gave to the cause of taxation reform. And I thank many people in this room who over the years have encouraged me and encouraged my colleagues to go on with the tax of taxation reform. But I also recognise that there are many challenges that lay ahead of us.
I think the Australian nation is in very good economic shape. There are some problems, there are some challenges, but the fundamentals are stronger and better than they have been for more than thirty years, and that is not an accident, it is a product of good policy and it is also a product of an effective partnership between the government and the people of Australia and you in the business community of Adelaide have played a very important role in that and I acknowledge it and I thank you for the contribution that you have made to bringing us thus far.
Thank you.