E&OE....................................................................................................
Well thank you very much to Mrs Kate Carnell, the Chief
Minister of the ACT, to Senator Margaret Reid, the President of the Senate,
Ian Macdonald my Ministerial colleague, Mr Gary Nairn, the Member for
Eden Monaro, Gary Humphries, the Deputy Chief Minister of the ACT, other
Members of Parliament, ladies and gentlemen.
Can I say how tremendously enthused I am both by the
concept of the focus on business exercise and also by the sheer scope
and support that has been demonstrated not only here tonight but also
by what has happened today and what will happen tomorrow.
I am doubly pleased because I believe Canberra and the
surrounding areas that make up Canberra and its regional location has
done the very thing that I believe that many people wanted it to do for
a long time, and that is to recognise that whilst it would always have
a very important place as the national capital and that that would largely
shape its identity so far as the rest of the Australian community was
concerned, its long-term future lay in breaking away from the notion that
it was essentially a public service city. And what has happened over the
last few years I think has vindicated the judgement of many people who
saw that as being necessary in the medium to longer term because what
the ACT, what Canberra and the surrounding regions has been able to do
in recent years is to create the image of itself, in the business community
in particular, as a good place in which to do business, as an area of
Australia having a very well educated, savvy, technologically sophisticated,
certainly in the area of information technology, something that I'll
return to in a moment, and in overall terms an area of Australia that
was increasingly going to be one in which it was attractive to do business.
Now tonight is not really an occasion for a long recitation
of statistics but I think it is important so as to underline what has
been achieved largely, but not entirely, by the many men and women in
this room, to underline the scale of the transformation of your economy
in recent times.
Australia's growth rate over the last few years
has averaged 4% and that itself is quite remarkable, at a national level
we've not had that growth rate since the 1960's. But Canberra's,
the ACT economy grew by 7% in the year to December 1999 and that is the
highest of any Australian state or territory.
No state or territory has a lower level of unemployment,
than does the ACT. At 5.3% your unemployment rate is well below the national
figure and it is also at its lowest level since June of 1990. Over the
last four years unemployment in the ACT has fallen from 8.1% to 5.3%.
And importantly, although the size of the public service has contracted
since 1996, Canberra's private sector workforce has more than grown
to compensate for this.
The private sector's share of total wage and salary
earners has grown from under 47% in 1996 to around 55% last year and that
itself represents a remarkable transformation. It is not only a function
of the undoubted contraction of the public sector in the ACT but it is
also a function of the immensely more attractive business climate which
has been created in the ACT.
Real business investment in the ACT rose by 10.7% in
the December quarter. And another indication of the strength of the ACT
economy is its massive 49% increase in dwelling unit commencements over
the last year. And median house prices in Canberra are now above their
March 1996 level.
Now that, essentially is all I want to say in relation
to state statistics but I believe that the scale of the improvement that's
occurred in the ACT, in Canberra and the surrounding regions, the scale
of that achievement is such that it is important for me in particular
to emphasise those figures because they do represent two things. They
represent, may I say, I hope, not immodestly, a reflection of the success
of the government's overall economic policy.
When you have successful national economic policies they
do have a resonance in every part of the country. And it is true that
unemployment in Australia for example is now sharply lower than what it
was four years ago. And even in those areas of our country that have the
highest level of unemployment, even in those regions such as the Hervey
Bay region of Queensland or parts of northern Tasmania or parts of the
outer suburban areas of Sydney, around Campbelltown, which have very high
levels of unemployment, even their absolute levels are now much lower
that what they were four years ago. And it is important to understand
that the economic reform program that the government has implemented,
at times as the Chief Minister was kind enough to acknowledge, not without
political challenge and political peril, that has given the Australian
economy an underlying strength which has enabled us to grow as fast, if
not faster than any industrialised nation in the world over the last three
or four years.
We do have a budget that is very strongly in balance.
We do have high levels of business investment. We do have lower levels
of unemployment. We have much lower interest rates; we have much lower
inflation. We are seen as a country which is paying off its debt and is
increasingly more competitive.
And we have ahead of us on the 1st of July
the introduction of the biggest change in Australia's taxation system
certainly since WWII and perhaps since Federation. And there is no absence
of those who would seek in the months before the 1st of July
to sow the seeds of unhappiness and discord and confusion about the new
taxation system. None of this surprises me in the least. I knew that we
would fight to achieve community acceptance first of all of the notion
of reform of the taxation system and I knew that the path to the first
of July would be strewn with stories of confusion and of chaos and of
unfairness and of undue penalty on this or that section of the Australian
community.
I see on the news tonight that the latest argument is
about the price of fuel. The price of fuel is a very sensitive issue in
a country as big as Australia. And it may be of interest to those who
are railing against government policy in this area to be reminded of one
or two salient features. The first of those salient features is that the
basic driver of fuel prices in Australia is of course the world price
of crude oil. And that world price has been on the rise over the last
few months. There are some signs of stability returning but we won't
know the outcome of that for a few days or weeks yet. That is something
over which no Australian government, Labor or Liberal, has any direct
control of any kind.
The other thing that I would remind those critics of
is that one of the distinguishing features of the tax package is that
it is going to result in sharply lower fuel prices than would otherwise
be the case in rural and regional Australia. The original scope of that
concession has been scaled back because of the attitude of the Australian
Democrats. It is not as generous as we originally wanted because it's
going to be restricted to rural and regional areas in a manner to be announced
very shortly. But it would nonetheless represent, for those areas, a very
significantly lower cost of fuel than would otherwise be the case. In
fact the price of fuel annually is going to fall by about three and a
half to four billion dollars and that will be of enormous benefit to people
doing business in rural and regional Australia.
Because, ladies and gentlemen, taxation reform is not
just about the GST, it's not just about the fact that we are replacing
a rather ramshackle wholesale tax system, that taxes some things not at
all but taxes other things at rates as high as 32 and 45% with a single
rate of tax at 10% potentially across the board barring basic food stuffs
and one or two essential services such as visiting a doctor. It's
not just about that, it's about a fundamental remaking of our taxation
system, it's about 80% of wage and salary earners paying a marginal
tax rate of no more than 30 cents in the dollar. For people in business
it means that we're going to have a corporate tax rate of 30 cents
in the dollar rather than 36 cents.
And can I say very directly to an audience which is probably made up
of proportionately more people in the service sector of the economy than
in the manufacturing sector of the economy than perhaps any other gathering
that I might address anywhere in Australia, that that particular change
is of particular benefit to people in the service sector of the economy.
We will have one of the most competitive corporate tax rates not only
in the world, but certainly in our part of the world.
It is also of course about halving capital gains tax. For self funded
retirees, if there are any here tonight, it's about a number of special
benefits including the abolition of provisional tax and the introduction
of dividend imputation credits which will ensure that people get the full
benefit and the full value of their franked dividends.
I mention these things ladies and gentlemen because you know and I know
that there is a game on at the moment and that game is called scare the
voter. And that game is about planting as much fear and engaging in as
many scare tactics as possible to try and discredit the tax system before
it comes into operation. But can I say to you that I have no intention
as Prime Minister and none of my Ministerial colleagues have any intention
of allowing that campaign to succeed. I mean this is not something we
suddenly dropped on the Australian people out of the clear blue sky, after
the last election. We did have an election, we did tell the Australian
people what we were going to do. We spelt it out in stark detail. We told
people what the rates were going to be. We told people the incidence of
the tax. We disclosed the taxation scale, we went in to more detail on
a major policy than any government since federation has gone in to and
we won that election. And we have charted that reform through the Australian
Parliament and we are now in the process of introducing it. And I pursued
the cause of taxation reform for a long time in my political career and
we are pursuing it now for one reason and one reason alone and that is
we believe it is good for Australia. That it will make the Australian
economy more competitive. It will make the economy of Canberra and the
surrounding regions more competitive.
And another great benefit, let me say of taxation reform is that it is
going to give to the States and Territories of Australia, something that
they have craved for decades and that is access to a growth tax. We have
had this annual circus as it has been called The Premier's
Conference, where the Premiers come in to Canberra, they shake their fist
at the front door of Parliament House and they say they are going to demand
a better deal for their states from the Commonwealth and then they come
out at the end of the conference and they say that once again the Commonwealth
is being mean and miserly and they are going to have to go back home and
increase taxes because the federal government won't give them enough
money. And that has gone on for years and it hasn't really mattered
who the Prime Minister has been. Whether it has been Malcom Fraser or
Bob Hawke or Paul Keating or John Howard, it hasn't really mattered
and it hasn't really mattered where the Premiers have come from or
what political party they belong to. It's gone on year after year
and Liberal Premiers have been more vigorous, Prime Ministers have been
more vigorously insulted by Liberal Premiers and I can remember some of
the choice things that Wayne Goss used to say about my immediate predecessors
when he came down here. He was no slouch at having a go at a Labor Prime
Minister. It was all part of the I suppose the charade of commonwealth
state financial relations and at the root of all of that was the fact
that the states said it was unfair because the commonwealth government
had access to all of the growth in taxation revenue.
Now we are going to change that on the 1st of July. This is
something I don't think a lot of people understand. I mean the other
day I heard Mr Carl Scully who is the Minister for Transport in NSW, trying
to justify fare increases by reference to the GST and he was saying that
NSW transport users, train riders in NSW commuters - would understand
that after the 1st of July, that every time they bought a ticket,
the GST component of that rail ticket was going to go straight into John
Howard's pocket. And I say wrong Carl Scully, every last cent of
the GST is going straight into Bob Carr's pocket and that is something
about this tax reform that a lot of people are over looking and that is
that all of the Goods and Services tax is going to the states and the
territories. And it will mean as the years go by and once you get through
the transitional phase and for a state like Queensland, and I think the
ACT does relatively well out of this as well, after a fairly short period
of time, you are going to be in a growth situation. And after a number
of years, all of the states are going to be much better off than they
would otherwise had been if the existing formula had been maintained.
And that means that all of them will be able to pour more money into basic
services, public hospitals, government schools, police, transport and
road. All of the things that governments both state and territorial do
in this country which are quite properly regard as local services.
Now my friends I perhaps digress a little in talking to you about taxation
reform, just a little. And you will understand why because I think it's
very important. I mean this is a gathering of men and women who are interested
in the economic future of Canberra and its regions. It's a gathering
of men and women who know that you can't have a good economy unless
you have a government that is willing to undertake fundamental reforms.
You have been willing to take risks. As I looked at the acceptance list
tonight, I see a vast array of large Australian companies that are displaying
a great deal of interest in this city and in the region of which it is
heart. And that reason, that interest is a direct consequence of the leadership
that I believe Kate Carnell's government here in the ACT has shown.
I think she has led a government that has been realistic. I know that
some of the decisions the federal government took after May, in the May
budget in 1996 were unpopular in the ACT, I know that and I was told that
frequently and that is fair enough because politics is about plain speaking.
And we took those decisions because we believed that in the longer term
if we got our budget back in to balance, every body would be better off
and if you look around you, you start to see the benefit of that commitment.
But it would not have been possible for Canberra to have absorbed those
changes unless there had been a willingness by the local business community
to get off its tail to use the vernacular and to attract new business
and to recognise that you have got some natural advantages such as for
example as your region is seen as probably the most attractive region
or one of the most attractive regions in Australia for developing e-commerce
because of your very sophisticated highly educated work force. The way
in which this city and this region has taken to the advantages of outsourcing.
The way in which I think you have built upon the natural advantages that
Canberra and the surrounding area has. The way in which you no longer
see this region as just being the Australian Capital Territory but its
got a broader reach than that and that is why I am delighted to see representatives
of Councils and areas in NSW surrounding the Australian Capital Territory
gathered here this evening.
And I have come along tonight for a couple of reasons. First and foremost
to make it very plain that the federal government totally supports the
goals and the aspirations of your conference. It totally supports the
goals and the aspirations of the government of the ACT in developing the
economic strengths of the area and tomorrow morning at breakfast, many
of you will have the opportunity of talking to four or five of the most
senior Ministers in the Federal Government to convey your thoughts and
to gain their insights.
The future I believe of the ACT is one of great economic strength and
great economic prosperity. Canberra, which is a beautiful city by any
measure will always occupy a very special place in the national life of
our country. There will always within the Australian community be something
of an ambivalence towards Canberra because it is the National Capital.
There is no federation in the world where from time to time for convenience
sake, people who don't live in the National Capital, choose in some
way to make unkind remarks about the National Capital. But equally the
National Capital, increasingly is seen with great pride by the people
of Australia. And I am reminded of some remarks that were made by Sir
Robert Menzies when he was Prime Minister and he spoke of a different
Canberra and he spoke of a Canberra that was viewed perhaps differently
not only by some of its residents but by the rest of the country. And
he said as the new capital would inevitably have small beginnings, it
will be looked down upon by its elder state brethren and later as it grows
as the centre of power, it will be looked at sometimes with envy but ultimately
with pride.
I remarked today when I spoke at the National War Memorial at the reopening
ceremony by the Queen. I spoke of the magnet that that memorial represented
to hundreds of thousands of Australians and that is but one example of
the attraction of this part of the world and of this city in particular
to people from other parts of Australia. And what I think is really valuable
about what is occurred here over the last few years and what your conference,
your focus on business conference represents. I think it is the coming
together of those three things which will really make Canberra and its
regions a very dynamic area of the Australian economy. And they are the
undoubted role of Canberra as the National Capital. Secondly, what flows
from that is that there will always be a very large public service component
of the life and the culture of this city. And thirdly and particularly
as represented here tonight is the commitment of so many men and women
in the business community to build upon the natural advantages of this
city and its regions.
And what is encouraging about what I see here tonight and what I know
to be the case in discussion with Mrs Carnell and with so many of my own
Ministers is the realisation that there is no longer any conflict between
the public service side and the business side. Those days are fast slipping
behind us. That each is seen as complementary to the other and if you
work together then you are going to get some very good results. So I am
delighted to be with you tonight. I want to say again that I respect very
much the leadership that Kate Carnell's government has shown. It's
not easy governing anything these days. Government is challenging. We
live in a less tribal political environment and the ebb and flow of public
opinion is freer and fuller than used to by the case. But that is part
and parcel of what public life is all about. It is very much about as
we have done with things like tax reform, committing yourself to an objective,
accepting that there is political risk, but maintaining a sense of commitment
and purpose because you know it is in the national interest and I believe
you have seen that here in the ACT and I congratulate Kate and her colleagues
for that. I thank all of you for the support that you are showing for
Canberra, for our National Capital and for the cause and I wish this conference
every success.
Thank you.
[ends]