E&OE..................
Later this year, the Australian electorate will face a stark and important choice.
It will be a choice in three key areas - that of competence, philosophy and the capacity to respond to future challenges and I want to discuss each with you today.
A CHOICE OF COMPETENCE
You have heard me speak many times about good and competent government. The comparison between this government and our political opponents is clear.
We are a government that has secured Australia's economic future by driving interest rates to their lowest level in a generation, repaid more than $50 billion in Labor debt, reformed Australia's taxation and industrial relations systems, created 817,000 new jobs and lifted productivity growth to a level amongst the fastest in the developed world.
We are a government that has secured Australia's future in other ways - by directing record spending to the environment, by promoting greater choice and better standards in schools, by rewarding Australians for taking responsibility for protecting their own family's health, by making our Defence forces strong and self-reliant. We have protected the vulnerable, strengthening the social security safety net.
We are a government that has never shirked the hard decisions needed in Australia's long term interest and we've provided good economic management and pursued the strategic long term objectives vital for this nation's future. Australia is now heading in the right direction.
In contrast, the Opposition has a well-deserved reputation for economic mismanagement and an instinctive tendency towards a tax and spend approach. It's a political party that hopes to surf into office without presenting a concrete or cohesive alternative. It's a party influenced not by mainstream interests, but by the constant pressure of interest groups, particularly trade unions.
Our record needs stating again, and we will do so in a document to be released in the coming days. I commend it to you - it is a record not just of the Government's achievements, but also the distance Australia itself has travelled over recent years.
Shortly before my trip to the United States I will deliver a major foreign policy address that will cover the government's achievements and future priorities in this area.
A CHOICE OF PHILOSOPHY
There will also be a choice between the two fundamentally different philosophies which underpin the major parties.
From their inception, the Coalition parties have championed the virtues of self reliance and independence, of balancing a person's rights with their responsibilities and allowing individuals and communities the freedom to make their own decisions.
Take every significant government policy area - from work for the dole to greater choice in education, from encouraging the take-up of private health insurance to industrial relations reform, from Natural Heritage Trust funding to practical reconciliation - and you will see a distinct philosophical basis for each of those decisions.
A major political battle ground of coming months will be industrial relations. Our differences are profound. A Beazley Labor government will hand back control of industrial relations to the organised trade union movement, despite the growing indifference of Australian workers towards trade union membership.
Fewer than one in five Australians now belong to a trade union.
Do the million or more Australian small businesses really want a federal Labor government added to five state Labor governments with all the massive increase in trade union power and union interference in their businesses which that development would bring?
The tax discussion of recent weeks has also highlighted the clear philosophical and policy differences between us.
It's drawn attention to our emphatic commitment to return tax revenue to the people whenever possible - to our recognition that individuals should be allowed to choose how best to spend their own money. In recent years, we have delivered strongly both on that commitment and, given the remarkable growth of the economy, invested in areas of pressing social and national need.
Let me underline the magnitude of the personal tax cuts delivered through the new tax system by a comparison with the recent tax cuts given by President Bush and seen as critical to the future wellbeing of the US economy.
As a proportion of our gross domestic product, the personal income tax cuts under the new tax system in Australia total about 1.7 per cent - significantly above the American cuts which correspond to about 0.7 per cent of their GDP.
Now, 80% of Australian workers pay no more than thirty cents in the dollar in income tax.
Notwithstanding these achievements, further reductions in income tax must be on the agenda. It is inherently part of how we view the relationship between government and the people. It's a fundamental aspect of our political philosophy. Lower taxation encourages enterprise and initiative. It promotes choice and creates new opportunities.
That is why, as surpluses become available, they will be returned to the Australian people through lower personal income tax.
Mr Beazley has also made it plain what his views are. In one response, he has revealed that Labor's priority is to spend more rather than tax less.
Let me quote him exactly. When asked if Australians are paying too much income tax, he replied "No, I don't believe so and I will say that with vigour".
Well, I can say with equal vigour, drawing on 27 years in public life, that when a politician says that, he's really saying he'll put up income tax.
And he'd have to - it is impossible, simultaneously, to roll back the GST, maintain the surplus, spend more money and not take it away from the states. It is impossible to do that unless you increase income tax. That is the only way you can do it.
For our part, we'll continue to be a government committed to practical outcomes and offering choice and opportunity to individual Australians.
We've given the working men and women of Australia the practical benefits of higher wages, lower interest rates, more jobs and better opportunities for their sons and daughters.
And in the last regard, I'm especially proud of the stunning results we achieved in rebuilding the apprenticeship system left wrecked by Labor - increasing the number of positions from only 135,000 around the country in 1995 to an impressive 300,000 this year, in both traditional and new industries such as retailing, tourism and telecommunications.
Nearly a third of these positions now go to women - up from just 16 per cent when we took office.
Almost a third of all positions are in regional areas.
Five times as many indigenous Australians and five times as many Australians with disabilities are enthusiastically taking up the challenges offered to them.
And over nine out of ten apprentices have unsubsidised jobs within three months of finishing their training.
FUTURE CHALLENGES
The third choice is that of responsiveness to future challenges. Today's address allows me to identify some of those challenges and the way in which we have already begun to respond to them.
But before I do, I'd remind everyone that much of the detail of our third term agenda has already been released.
Defence, innovation, environmental repair and welfare reform form central planks in our third term agenda. All four were the subject of long public consultation and evaluation - and hard decisions on priorities and resource allocation. All have been released - all have been widely acclaimed - all will demand great attention from the Government as they're successfully implemented.
THE CHANGING AUSTRALIAN SOCIETY
First among the future challenges is the need for an ongoing response to a change of historic proportions within our society - the ageing of our population.
The fact is that two thirds of all people who have ever lived beyond age 65 are alive today. Australia is no different from most other developed countries in facing an unprecedented ageing of its population. In just over a decade, the rate of growth in the over 65 group will reach 4 per cent contrasting with an overall population growth rate predicted to be well under 1 per cent.
Put another way, by the time today's toddlers are starting their own families, the ratio of working age Australians to retired Australians would have fallen from more than five to one as it is today to under three to one.
This development demands many responses.
Most critically, it requires a future revenue base that will not only grow with the economy so that we can fund the services needed by an ageing population but also in a way which does not impose an incentive-sapping burden on working age Australians through ever increasing income tax.
That is one of the major reasons why we introduced a goods and services tax.
That is why its maintenance - unimpaired - is essential to our economic and social future.
History will judge that the government's introduction of the goods and services tax will have done more to prepare our economy for the demands of an ageing population than any other single tool of public policy.
Had we not taken steps to reform Australia's taxation system my remarks to you today could well have been focussed on the extent to which income taxes would need to rise if we were to adequately fund essential services over the years ahead.
We recognised the shortcomings of Australia's old indirect tax base - with its over-reliance on an outdated wholesale tax system and its lack of reach into the growing services sector of the economy.
We understood that unless there was change the retirement of baby boomers in coming years meant that an ever increasing tax burden would fall on Australian workers through higher rates of personal income tax.
Those people who argue that the GST should be rolled back must be held accountable - they are, in effect, arguing to consign our children to ever higher rates of personal income tax.
Access Economics has found that without the GST, there would have been a substantial shortfall in Australia's indirect tax take in a generation's time, equivalent in today's dollars to more than $11 billion.
Without a broad based goods and services tax, this gap alone would have all but wiped out the total value of the personal tax cuts delivered last year.
The first step in ensuring the long term viability of the health system and its ability to cope with the demands of an ageing population has been taken by our promotion of choice in health care and greater usage of the private system. The health reforms have enabled millions more Australians to take more responsibility for their own health and medical care and, in doing so, eased the growing pressure arising from an over-reliance on the public system.
Our vastly stronger fiscal position has increased our capacity not only to support but also reinforce the social security safety net via the pension system which is so crucial for retired Australians.
The massive repayment of Labor's debt has provided $4 billion a year in interest savings which can now be invested into areas of social need.
The absence of the government from financial markets has helped lower interest rates. The earlier repayment of mortgages which this has facilitated will allow Australians to boost their capacity to save more and build up their assets for retirement.
We will also encourage the wider spread of employee share ownership which builds on the reduction of capital gains tax and encourages asset acquisition. This will also foster a more balanced approach to retirement planning.
Superannuation is at the heart of the retirement plans of millions of Australians. Governments must always ensure that it operates simply and as far as possible in a fair and efficient manner.
Pursuit of this goal must be balanced against the need to avoid endless changes which have been an often unwelcome feature of the operation of the system over the last 20 years.
The impact of our changing demographics will accelerate in the next few years.
A continuation of the more balanced immigration programme, fostered by this government, with its much greater emphasis on skills, will be part of our response to the challenge of an ageing population.
The proposition, however, that the impact of an ageing population on our economy can be reversed by a sharply increased migrant intake over the next few years is not supported by critical analysis.
For social as well as economic reasons, our response must include greater use of the skills and experience of the increasing number of Australians over 55 - Australia's 'gold collar' workers. Expert opinion agrees that even if only 10 per cent of people aged between 55 and 70 choose to remain in the workforce, on either a full-time or part-time basis, it would have a significant effect upon our national per capita productivity.
For this to happen labour markets will need to be sufficiently flexible to suit their needs and respond to the choices they wish to make.
In recent years, we have driven industrial relations reforms to promote this kind of flexibility and choice in the labour market. In coming years, I intend to explore every opportunity to bring about even greater cultural change within the Australian workplace.
In contrast, the ALP's stated aim to return to a highly prescriptive, regulated labour market would diminish the capacity of older individual Australian workers to choose when they wish to retire, the hours they wish to work and the specific rewards they want to receive. And it would diminish the capacity of Australian business and industry to maintain the level of success and productivity so evident in recent years and that would leave all Australians worse off.
Australia' changing demographics is a matter of the highest national importance, economically and socially. It presents challenges but also opportunities.
Utilising older Australians' talent and wisdom in a whole range of community activity, in schools and as business mentors; greater support for those wishing to remain in their own homes and communities as they age; addressing service gaps in regional Australia; using Australia's world class medical research capabilities to combat diseases associated with ageing and greater support for carers are all exciting areas that the Government can be actively engaged in.
BALANCE BETWEEN WORK AND FAMILY
Intertwined with this need for a workforce structurally equipped to meet the future is the issue of the quality of working lives - quality expressed by the balance between work and family.
We all know the importance that individuals place on their family and social relationships and I, for one, do not aspire to an Australia where our growing wealth has been built at the expense of our families and communities.
The key to ensuring this does not happen is choice - the greater choice of individuals in respect to their working conditions, the ability to leave the workforce but re-enter it later on, the means for a parent to remain at home caring for children themselves if that is their wish, and in areas such as the provision of more sophisticated and flexible childcare arrangements.
The return of more than $2 billion a year to over 2 million families in family tax benefits and $12 billion a year in income tax cuts to them and others in the general community has been a great step forward.
As importantly, we'll continue to pursue an industrial relations model that entrenches an individual's right to negotiate for conditions that suit his or her own circumstances and needs - whilst of course ensuring proper standards are protected.
In this area also, a crucial start has been made. Hundreds of thousands of individual work place agreements and certified agreements have been negotiated. Agreements that Labor has vowed to tear up should they come to office, forcing these workers back to either unregistered common law contracts, collective agreements negotiated by union bosses or more lowly paid awards.
It's estimated that three quarters of all workplace agreements and certified agreements contain at least one family friendly provision. Provisions that include flexible start and finish times to coincide with school hours, purchasing additional leave to spend more time with children, carers' and paternity leave, job share arrangements, the ability to work from home, community service leave and structured career breaks.
It is glaringly obvious that centralised wage structures are simply too slow to respond to modern workplace needs - both from the employer and employees' perspective. By relying on precedent, they're invariably suited to the needs of the majority and by entrenching standardisation, they diminish individual choice.
We are back to the clear philosophical difference between the two major parties. One standing for self reliance, individual choice, reward for effort and the maintenance of a safety net, the other championing centralised decision making and a one size fits all approach.
A future Coalition government will remain committed to pursuing greater flexibility in the workplace. Offering choices to workers does not have to compromise the productivity of Australian business. In fact, balanced lives will contribute best to Australia's industries in the 21st century.
Expanding child care choice has been a high priority of the government with more than 150,000 funded childcare places created since we won office. Initiatives within the Stronger Families and Communities package have targeted those who traditionally had difficulty accessing childcare such as shift-workers, families with sick children and Australians in regional areas. Last financial year, this government allocated close to $1.4 billion to supporting the childcare system and the latest CPI figures show that cost of child care has dropped by nearly 9 per cent since last July.
In short, supporting the needs of working families and ensuring a balance between their responsibilities will require a whole of government response. In a third term, we can make great progress in promoting choice and opportunity within the workplace whilst strengthening families and the communities in which they live.
SUSTAINABILITY
Balance and quality are not just goals for our society, for our working and family lives but also vitally important to our environment. Australia's current and future success is the combination of its people's talent and the land's health and capacity to sustain a prosperous population - both must be nurtured.
Australia has already played a vital role in devising effective global responses. At home it is essential that continue to pursue domestic sustainability and that is the third area of challenge of which I speak today.
Environmental issues should never be dealt with as separate from the profitability and sustainability of our industries and the quality of life we enjoy and hope to pass on to our children. The reality is sustainability is an expression that increasingly denotes the inter-related health and wellbeing of both the environment and the economy.
A whole of government response is vital - the success to date and ongoing potential of both the Natural Heritage Trust, renewed in the budget by a further $1 billion commitment, and the Action Plan on Salinity have convinced me of that. I've found that there is great cause for optimism - both in regard to the ability of new technologies to solve once intractable problems and the willingness of communities and impassioned individuals to become involved.
The technological and scientific advances being made would have been unimaginable even a decade ago and increasingly profitable businesses and industries will be marked by their efficient use of scarce natural resources. Australia already has a dynamic and vibrant environmental industry sector, ready to provide solutions, not simply identify challenges. The success of this sector, over coming years, will have enormous implications for Australia, both in its local application and because of its export potential.
There is every reason to believe that these advances can also reinvigorate some of our regional areas and potentially open up vast new opportunities for settlement and industrial development. For instance, new salt and drought resistant crops have the potential to revolutionise agriculture.
We have a long term commitment to regional areas and recognise that, in many ways, those communities have been more practically aware of the consequences of land and water degradation than many others. As the stewards of vast tracts of the Australian landscape, they'll also play a critical part in the environmental repair so desperately needed.
Gains in areas such as biodiversity and energy must be made, but at the heart of this agenda in the time ahead will be water.
Salinity and water quality issues are seriously affecting the sustainability of Australia's agricultural production, the conservation of biological diversity and the viability of our infrastructure and regional communities.
In a dry continent like our own, with an economy that derives $28.5 billion in export income each year from the land, with the drinking water of millions of Australians potentially affected in years to come - there is no more pressing issue than tackling water quality and salinity issues.
Governments must come to grips with issues such as river health and efficiency of river irrigation system. In many cases, water related issues are as pressing in the cities as they are in regional Australia.
Importantly, co-operative effort between governments at all levels, industry sectors and local communities, pulling together, will be needed to fast-track the behavioural and structural changes required for the future.
This is already the essence of our approach. The Natural Heritage Trust gives resources and accountability directly to local communities to fix local problems and this emphasis on community ownership is also the foundation of our Action Plan on Salinity.
In the process the property rights of individual Australians must be fully respected. The right to compensation must be included in our policy prescriptions.
CONCLUSION
Ladies and Gentlemen, at the last election I argued for policies that would leave Australia a better country, that would make Australia a stronger country, that would give Australia a capacity to compete more effectively in the outside world.
And we've delivered. Whatever the self serving doomsayers may say, Australia enters the twenty first century more secure, more prosperous, more respected, with its people possessing greater potential than ever before in its history. This nation is clearly heading in the right direction.
The major policy announcements in recent months, in defence, in innovation, in welfare, and in environmental repair will be pursued with the vigour and determination for which this government is well known. Their successful implementation coupled with the safeguarding of low interest rates, low inflation, high productivity growth and the repayment of Labor's debt will be key features of our third term in office.
Australia is widely admired for its openness, its cohesion, its sense of fairness, its competitive spirit and its economic strength.
Much has changed for the better over the last five years. We are a stronger, more respected nation. We will work hard to keep it that way.
As in the past, the key to Australia's future is the spirit and attitude of its people. With choice, incentive, opportunity and a fair go, there is nothing they cannot aspire to achieve.