Well thank you Colin for those very warm words of welcome, State President Danielle Blain, former Premiers Sir Charles and Richard Court, my Federal ministerial colleagues and my other Federal and State parliamentary colleagues, my fellow Liberals.
It is a great pleasure to be again addressing this State conference of the parties in Western Australia. It is always a delight to come to this State, it is always a reminder to me of the enormous energy and vibrancy of Western Australia and the people of this State and I have now had four days with you starting in Karratha and then going to Port Hedland and spending the last two or three days here in Perth. Western Australia as always is very important not only to the nation but also very important to us politically and this election will be no different in many respects and the importance of Western Australia to the outcome of the next Federal election will be arguably greater than on a number of earlier occasions. And before talking about some of the issues can I take this opportunity to thank all of my Western Australian parliamentary colleagues for the tremendous role that they have played as part of a great Federal parliamentary team.
In particular I would like to pay tribute to two of my colleagues from Western Australia who will not be recontesting the next election. I want to thank Daryl Williams who has served as a Minister from the time the government was elected in March of 1996. He served as Attorney-General and he brought to that post a fine legal mind and a high level of objectivity and integrity and more recently he grappled with the maze of the communications' portfolio, a portfolio where you don't really come into contact with people who have strong views about things, but rather is one of those portfolios where you have the opportunity of dealing with very detailed and sometimes archaic policy. But Daryl you have been a great servant of the government and I warmly thank you for your contribution. And although she won't be affected directly if there is the normal pattern of the House of Representatives and a half Senate election Sue Knowles has indicated that she won't be recontesting and I do want to thank Sue. She has been a member of the Senate of from Western Australia and a great advocate for Western Australia, a tremendous worker in the Senate and somebody who has played a very very active role in the Party organisation before she entered Federal Parliament and has been a great and loyal Liberal and a very fine colleague. She did a wonderful job in organising that magnificent gathering in Stirling yesterday morning that had 700 people turn out at the great morning tea and I would warmly thank you Sue for the contribution that you have made to our great Party.
Although we have every reason as a government to be very proud of what we have achieved over the last eight and a half years and I and my colleagues will not be reluctant to talk about what we have achieved over the last eight and half years, this election when it takes place will be about Australia's future. It will not be about Australia's past. It will be about which of the two parties, which of the two leaders is better able to understand and interpret and represent the hopes and the aspirations of twenty million Australians as we move forward into the 21st century.
It will be about which side of politics and which leader is better able to continue the two things that are fundamental to the realisation of the broader social and other goals that we have for our nation and that is a continuation of the extraordinary economic strengths that this country has had over the past decade and also a continuation of the respect in which Australia is held around the world, the strength that Australia has in the councils of the world and the security and the defendability of our nation.
We can have all the goals and dreams in the world but if we don't have those two underpinnings, if we don't have a strong economy and a secure well defended nation we cannot achieve and realise our other hopes and other dreams.
So as we look to the future and as we advocate to the Australian people our better capacity to guide Australia into the future we must keep in mind those two great underpinnings of our future hopes and aspirations. And as I think of the future of the Australian economy I think of ways in which we can make it even stronger. I think of ways in which we can further broaden its horizons, how we can win new markets, how we can win new jobs and win new investments. And that inevitably brings me to one of the great economic debates right at the moment and that is the fate of the trade agreement negotiated by my Government with the government of the United States. The hour, the moment of decision for my political opponent and for the Party he leads has arrived. He can dither and prevaricate no longer. He must make a decision. He must take the decision he should have taken in the national interest five months ago and if he wants some advice and I don't expect him to take it from me, I ask him to take a moment over this weekend and look at an ABC program. Now I don't always advise people to look at ABC programs and sometimes do but there was a great program last night. When I got back from a wonderful dinner that Danielle hosted I turned on Lateline and I saw the Queensland Premier being interviewed and if ever a person delivered from the Labor Party a powerful endorsement of the Free Trade Agreement, it was delivered by Peter Beattie. He simply said that if we pass up this opportunity it wouldn't come our way again, that the Free Trade Agreement would not cost jobs in manufacturing industries as Dougie Cameron argues, it will actually deliver jobs in manufacturing industries. He pointed out that the free trade agreement delivers benefits to the beef industry and the dairy industry and he made a point that I have made over and over again and that is that as a relatively small though a powerful economy Australia has everything to gain and nothing to lose be linking herself to the most powerful economy the world has every seen. Anybody who has any glimpse of the future that we could have ourselves, and any understanding of the future we could have for ourselves, could do nothing other than to endorse the Free Trade Agreement. And yet for five months the Leader of the Opposition has said he can't make a decision on it, he said that he has to wait until the Senate report, in other words we are told that the Labor Party must wait on the Senate and yet I read in the newspaper this morning, I hear over the radio this morning that that is no longer so. Mr Latham has said oh I can't make a firm decision until this bipartisan Senate committee reports and yet apparently when they had a telephone hook up yesterday what happened was that the recommendations that had been circulated by the chairman, the draft recommendations, did not recommend either way. In other words they did not recommend against the agreement, they did not recommend in favour of it. Apparently the Government members on the committee quite rightly argued that the committee should recommend that the Senate approve the agreement. And astonishingly and what Mr Latham has said the Labor and Democrat members on the Senate said that they weren't going to accept that motion until after the Labor party's Caucus had met on Monday. So in other words, for five months we have been told the Caucus waits on the Senate committee, we are now told that the Senate committee waits on the Caucus. Well what this has done is to expose to the Australian public the pretence, the political alibi that Mr Latham has clung to over the last five months as a substitute for the courage he ought to assume to give his own party leadership on this issue, because this issue should have been settled five months ago, nothing has changed, the terms and conditions of the Agreement can't change, everybody knows that, the Labor Premiers all know that, the reappointed Labor spokesman on Defence knows that, everybody in this room knows that, and yet in a craven weak fashion the Leader of the Opposition has hid behind this political alibi of saying well I've got to wait until the Senate committee reports, and yet in reality the Senate committee won't report until the Labor members are told by Caucus what that report should be. Now this is a total fraud and a huge pretence which has been now exposed and laid bare by the news that has come out of the Senate committee's deliberations. And I can but ask you and through you the rhetorical question and that is that he handles issues like this in opposition imagine his incapability to handle difficult issues in government.
This Free Trade Agreement is not only good in reality, but it also symbolises alongside our capacity to negotiate close and enduring economic agreements with the nations of our region. That this Government and this nation under this Government does have the capacity to build ever closer relationships not only with the United States, but also with the nations of Asia. And all of the stories we were given, all of the warnings that were sent out before 1996 that Asian leaders wouldn't deal with this Government, that you couldn't get closer to America because you'd lose friends in Asia, all of that has been reduced to the total nonsense that it always was. Not only have we maintained our close relationship with Japan and Korea, but of course we have built impressively and due in no small measure to the contribution of Richard Court when he was Premier of Western Australia and others in the Liberal Government, we have built this very important and growing and significant relationship with China. All of this demonstrates very clearly that the pragmatic decisions that we have taken in relation to trade, there is one single goal and that is is the proposal good for Australia's future? We have been able to cement our close relationship with the United States and also build an ever closer relationship with nations such as China. Of course as we go into the future this is what we will have to continue to do. We all would hope that one day we will have a great multilateral breakthrough on trade. We would all hope that one day the European Union would abandon its restrictive agricultural policies, we would hope that, but the evidence is not very strong that it will occur. We would all hope that Japan and the United States might abandon some of the more restrictive policies they have in certain areas. But until that day comes what we as a nation must do is to negotiate bilateral trade deals where we can achieve them and we've done so with Singapore, we've done so with Thailand, we did so 20 years ago with New Zealand and we are on the verge, if only the Labor Party will seize the national interest instead of dithering with its own political predicaments, we have the capacity to make this historic agreement, this once in a generation agreement with the United States of America.
But not only of course is our economic future bound up with an expansion of our trade opportunities, our economic future is also bound up with a continuation of that part of our economy which is underpinning our extraordinary growth over the last decade, and that is the significant rise in productivity due in no small measure to the deregulation of Australia's industrial relations system. And I'm very conscious whenever I come to Western Australia of the change in attitude of the business community towards doing business in this state, it's always great to do business in Western Australia, but it's much harder now because the Gallop Government has reimposed union control over state industrial relations and you know and we all know that if Labor wins the federal election absent a change of government at a state level the same thing will happen federally and I can't think of any policy of Federal Labor that would do more damage to the Australian economy that a restoration of trade union control over industrial relations. There has been an historic shift in this country over the last decade, and there can be no turning back, our economy has changed forever as a result of industrial relations deregulation. Our economy has forever, if that deregulation continues, become a more productive economy. In 1986, 35 per cent of the Australian workforce employed in the private sector were members of the trade unions. That figure is now 17.5 per cent. And yet over the same period the proportion of membership of the Federal Parliamentary Labor Party owing allegiance to trade union members has gone in the opposite direction. In other words, as fewer Australians have joined trade unions more members of the Federal Parliamentary Labor Party has become beholden to them. And the notion that you would hand back control of Australia's industrial relations system to a movement that now attracts only 17.5 per cent of private sector workers is absurd. Yet that in reality is what would happen. The centrality of awards in determining workplace conditions would be restored under a Federal Labor government. Australian workplace agreements would be abolished, despite the fact that I was told in the Pilbara that 92 per cent of people employed in the resource sector were on individual contracts. The right of union entry into workplaces would become even more extensive. The secondary boycott provisions in the Trade Practices Act, which I as a junior Minister for Business and Consumer Affairs way back in 1977 inserted into that Act against the fierce opposition of the then trade union leader Bob Hawke, that protection would be taken out of the Trade Practices Act. Companies doing business with the federal Government would be required to disclose the identity of their sub-contractors, thus facilitating the odd pastoral call and caring call on those sub-contractors by the local union leader. And so the list my friends will go on. And one of the interesting things about this is that the Labor Party of Australia from time to time seeks to compare itself with the British Labour Party. My opponent has frequently spoken of the third way, and he's spoken approvingly of some policies followed by Mr Blair which he claims are third way policies, although he doesn't say too much about that these days when it comes to reform of tertiary education or policies relating to Iraq, but in one important respect there'll be a further departure because one of the intelligent things that Mr Blair did when he became Prime Minister of Britain was to recognise that whatever the ideological views of the Labour Party in that country may have been, the industrial relations reforms brought in by the Thatcher Government had changed the face of Britain forever and had changed the face of Britain for better and that it would have not been in the national interest of that country to seek to reverse those reforms. Yet it appears that the third way Mr Latham does not intend to adopt that attitude if he were to become Prime Minister of Australia.
So in making the decision, in looking at the choice, in asking the rhetorical questions which side of politics can better lead this country into the future, which set of policies will underpin the things that we need to deliver our hopes and our aspirations? And running a strong economy is never an end in itself, it is a means to an end, by paying back $70 billion of Labor's debt we've given ourselves $5.5 billion extra every year to invest in health and education and roads and all of the other things that we either have direct responsibility for or we share responsibility with the states. And can I say one of the other things that we have done which we committed ourselves to do in our very early years in government, and that is to reform Commonwealth/State financial relations. It used to be a legitimate complaint of state premiers coming to premiers conferences that they did not have access to a growth tax. And through the introduction of the Goods and Services Tax that position has now changed. And over the five years commencing with the beginning of this financial years the states cumulatively will be $9 billion better off in unconditional revenue payments as a result of the introduction of the GST then they would have been under the old per capita funding formula of the Keating Government that we inherited in March of 1996. And every time you hear Dr Gallop say I'd love to do that but the Federal Government doesn't give me enough money, just remember that this year the Western Australian state will be some $200-300 million better off under that new funding formula, and over the five year period $1.16 billion. And also remember that no less than 45.1 per cent of the total Western Australian budget this financial year will be funded from Commonwealth payments and revenue from the GST. 45.1 per cent. Now I believe in a fair go for the states, I campaigned for the GST, and one of the reasons I campaigned for the GST was I said I wanted to give the states access to a growth tax so that they could abolish certain state taxes and they would have a growing funding base to look after the important social services for which they have responsibility. It appears in the case of Premiers such as Dr Gallop, they're very happy to have the extra revenue but they still want to the blame the Commonwealth whenever something goes wrong due to their own faulty administration.
My friends, as we get closer to the choice that the Australian people make we will have to focus on the relative capacities of the two sides, not only in relation to economic management, but also in relation to the management of our international affairs. This has been a difficult period of time in relation to national security, I would never have dreamt in March of 1996 that the Government I was about to lead would face the sort of challenges on that front that we've had. And over that period of eight and a half years we've had to cope with some unpredictably tragic events and some challenging assaults upon our national security. And it's important in the years ahead that the steadiness and the predictability that we have displayed over recent years is maintained. This is not an international environment in which to inject unpredictable leadership. It is not an international environment which to inject leadership that delivers policy changes during radio interviews. And I refer in particular to two of my opponent's most memorable contributions in that fashion. The infamous troops home by Christmas commitment in relation to Iraq, and this extraordinary commitment to recommence the sea bed negotiations with East Timor if there were to be a change of government, breaking the most elementary principle of one nation dealing with another, I mean we negotiate as Australia, we don't negotiate as Liberal Australia or Labor Australia, we negotiate as Australia and it stands to reason that if the alternative Prime Minister of the day raises the possibility that the nation with whom we're negotiating might get a better deal if there were a change of government, that fatally undercuts the bona fides of the negotiations and our capacity to negotiate from the national interest. Now no political figure in Australia has done more to advance the cause of the people of East Timor than I have. After all it was the Government that I led with a Foreign Minister in Alexander Downer who of course stood up for the rights of that tiny country and proudly with the magnificent contribution of course of our Defence Forces we led the Interfet intervention. And we've already made significant concessions in the context of other negotiations with East Timor. We want to continue our current negotiations in good faith, and we will do that, that remains a desire. But this blundering, ridiculous, top of the head without thinking through intervention from Mr Latham is another illustration of his unreliability and his unpredictability when it comes to pursuing the national interest.
Let me simply say in relation to Iraq, that the publication of the Flood Report which made it perfectly clear beyond any serious argument that there had been no heavying of our intelligence services. Our intelligence services, although there were obviously flaws in the intelligence flow, our intelligence services had reached a conclusion based on the material in front of them that was more consistent with that material than the opposite conclusion, what that report has done is to totally repudiate this proposition that we took Australia into that military commitment based on a lie. That was never the case, that charge was always a lie in itself. But whatever personal views are about the wisdom of that decision, the truth remains that we must in the proper Australian tradition stay in Iraq to finish the job. And the job is being slowly done. I'm pleased to say today Robert Hill has announced some changes in the composition of our deployment to Iraq and one of those changes is the consequence of our being able to hand over control of Baghdad International Airport to Iraqi air traffic controllers with affect from tomorrow, 1st of August. We've also decided to extend by a further six months our commitment of trainers for the Iraqi Army and it's a very, very important commitment because if there is to be an enduring handover, an enduring stability in that country, the effective training of the Iraqi Army and the Iraqi police is absolutely fundamental and in this connection I cannot understand the logic and inconsistency in a Labor policy that says they want Iraq to have a democratic future and to run her own affairs without foreign involvement, yet would bring back the very trainers that are making such an important contribution to delivering that outcome.
My friends, let me finally say this, the next election is going to be very hard to win. I mean that. I'm not going through the ritual of saying that because it's the thing that a leader should say at a conference of the eve of an election. But we've been in power for eight and a half years, and that is whilst it's nothing like the 13 years we endured of Labor and of course it's only a little over a third of the 23 years that we were in office after 1949, inevitably memories dim, younger voters come onto the roll and we face a new and fresh challenges. And one of the great challenges we face is that many in the Australian electorate will take our current prosperity for granted, that we have gotten too used to it, we look around and we see that unemployment is the lowest it's been since 1981. For the first time since 1968 we have unemployment below six per cent and inflation below three per cent, and as I said at breakfast this morning that in 1996 when I became Prime Minister 35 federal electorates in Australia had unemployment in double digits, we now have only four electorates in Australia that has unemployment in double digits. And there is a danger that people will take all of that for granted, and they will say well, the economy sort of runs itself doesn't it? It's all due to international forces. Maybe the other fellow won't muck it up. Maybe. That's the danger, complacency and a sort of an easy assumption that economic prosperity has now become a given is one of the greatest threats that we face. Part of our task is to point out the weaknesses of the alternative. It's part of our task to remind the Australian people that the reimposition of industrial relations re-regulation will do permanent and lasting damage to our Australian economy. The time to remind the Australian people of all those things, when Labor was last in office interest rates went to 17 per cent and unemployment to over 11 per cent. And right here in Western Australia as well as arguing that case we have a challenge. The challenge of course is to hold all of the seats we now hold, but to carry the battle into a number of seats that are held by the Labor Party. I want to say how grateful I am to the Western Australian division for delivering such high quality candidates in all of the marginal seats that we are trying to wrest from the Australian Labor Party. I think it gives a tremendous opportunity and it gives us a flying start due to the quality of those candidates. And can I say to all of you, many I've known for a very long time, some only fairly recently, we've been through some great struggles in the past against the Labor Party. We've gone in political terms both up and down. At a national level our Government is strong, it's united, it's a great team, it's not a one man band, it is a band of men and women, and in fact a record number of women in the Federal Cabinet since Federation, without the patronising imposition of quotas. But it is a great and united team and if we work together and fight together against the common enemy we can win. But it will be a struggle. In the past you have come so passionately and effectively to the aid of our common cause, and I know that you will so again.
Can I thank again Danielle Blain and Paul Everingham in particular for the tremendous leadership both of them have given to the party organisation here in Western Australia, they've been a constant source of encouragement and help to me and I think that if we continue how we're going we might see the contribution of Western Australia to the federal election outcome whenever it takes place as being, let me put it this way, highly significant.
Thank you very much.