PM Transcripts

Transcripts from the Prime Ministers of Australia

Howard, John

Period of Service: 11/03/1996 - 03/12/2007
Release Date:
03/03/2005
Release Type:
Speech
Transcript ID:
21634
Released by:
  • Howard, John Winston
Address to the Business Council of Australia Aitken Hill, Melbourne

Well thank you very much Hugh. I 'd like to start by recalling that the Business Council, which I think emerged out of the economic summit - we don't have those anymore - but it did emerge out of the economic summit of 1983 and over that 22 year period I've had a close association in various guises with the activities of the Business Council and one of the things that the Government has tried to do in the 9 years - it was 9 years yesterday - that it's been in office, has been to maintain a very close link with the business community of Australia, and that is inevitably because this body, more than any other, represents the larger corporations and business enterprises of the country, a very close link because of our very strong belief in the importance of wealth creation and the contribution that all of you as leaders of your companies and enterprises make to the Australian economy.

This little address of mine of course comes at a time when there is a little bit in the papers about the economy, and, as a result of the coming together of a number of figures and events yesterday, I suppose politicians and particularly prime ministers are always asking people to preserve a sense of perspective. And today is certainly no exception to that. As I was coming down on the plane, I was talking to my economic adviser, Peter Crone, who many of you know, and I sort of said, under the heading of keeping a sense of perspective I wrote down about six or seven things. And I wrote down inflation is low, interest rates are still at historically low levels, the Budget is strongly in surplus, unemployment is at a 30 year low, business investment is very strong, and profit share is close to a record and that most of the challenges that the Australian economy has at the present time are more challenges of success rather then challenges of failure and challenges of weakness.

But having said that, as has always been the case, there are a lot of challenges ahead of the Australian economy and therefore a lot of challenges ahead of Government. I don't want examine the entrails of the figures that were released yesterday, you've no doubt done that and you can draw your own conclusions. I don't think using the language of direct communication, I don't think anybody believes for a moment that the Australian economy has slowed to a point where we should contemplate any fundamental reversal of the very strong direction that it has enjoyed over the last few years. I think the Australian economy will continue to grow very strongly, I think our employment levels will remain high, I believe business investment will remain strong and I believe that inflation, not only in Australia, but in most of the industrialised world will also remain at a very low level.

But there are challenges and there are further reforms that I want to say something about those and I also want to say something about those in the context of an event, that you alluded to Hugh and that is that on the1st July, the Government in its own right for the first time for any government since the 30th June 1981 will have control of both houses of Parliament. I have to say and it's no secret that I never contemplated that this would happen. The best that I thought the Coalition would win at the last election in the Senate was 37 seats, with an outside prospect of winning 38, the idea of winning 39 seats and to win 4 out of 6 Senate seats in Queensland was never in my contemplation. But of course it does prove the veracity of that wonderful advertising slogan of "Queensland beautiful one day, perfect the next". The contribution it made to my sense of wellbeing and my affection for the politics of Queensland, I mean an affection that there was in the distant past, I never felt quite to the same degree that I did on that night but it was an unexpected bonus and it has also given us an extraordinary opportunity, but extraordinary opportunities and unexpected bonuses in politics also carry with them the responsibility of using them wisely.

The Australian electorate has an ambivalence towards governments having apparently absolute or untrammeled authority, they do have an ambivalence, there are a lot of people in the Australian community who deliberately vote for the party of their normal choice in the Lower House and then deliberately vote in the other direction in the Upper House. And you can see it. I watch it in my own electorate, there's normally a gap between the vote that you get, the primary vote you get in the House of Representatives and the primary vote cast for your Senate candidates. So there's nothing accidental about that, it's quite deliberate and it does carry with it a certain deliberation and it marks an attitude and a caste of mind.

I think it's important for us and it's important for you to have that in mind and to understand that not everybody thinks that the Senate in the hands of minor parties, or deliberations of the Senate being determined by minor parties is a bad thing. I mean there are plenty of times that I have thought that, in fact most of the time I have thought that, but you'd expect me to think that because of who I am and the party that I lead. But we do have this wonderful opportunity, the composition of the Senate is profoundly less left-wing than anybody expected, because not only are there 39 senators from the Liberal and National Party's but there is also a Senator from Family First, and I don't presume to speak for that party and I respect its complete independence. But the program that it campaigned on before the last election is significantly different from the campaign on which the Greens and the Australian Democrats campaigned on. So surprisingly the complexion of the Senate is profoundly less centre left and more centre right than what I expected in my wildest dreams would be the case.

Now that gives us a great opportunity and the challenges that we have is to balance the opportunity that it gives with the need to ensure that we are not seen or perceived, or in reality, go about in any way abusing the power and authority that's given us, because electorates, particularly Australian electorates, they don't like that. They don't like arrogant governments, they don't like governments that take their support for granted but I am very conscious that in the past when governments of my persuasion have had the capacity to do so, they have sometimes disappointed their supporters in their failure to implement the programs that they took to the Australian public.

And one of the things that this control of the Senate will enable us to do, reasonably, is to implement so many of the things that in the past we've had blocked in the Senate. But it also enables us to go into some other areas, consistent with the philosophy that we've enunciated in the past, if not the detail, and bring about some other reforms that were not possible. Now Hugh, you have mentioned some of the things that are on the BCA's agenda, and as you know and as many around this room know there's probably no issue that I have had a greater policy commitment to in the time certainly since I ceased to be the Treasurer in the Fraser Government in March of 1983, and that's 22 years ago, there's no issue I've had more interest in and commitment to policy wise than reform of our industrial relations system.

I think the Australian industrial relations system is a world away from what it was when Andrew and I were members of the former coalition government. There was a view then I think and it had a certain amount of bipartisan support, that one of the greatest things Australia had ever done was to build a system of conciliation and arbitration. Paul Kelly the political journalist in his book, "The End of Certainty", talked about it as being one of the pillars of the Australian settlement, along with protection and imperial preference and the White Australia policy and other things that have properly gone the way of out-dated nations through the passage of time and the march of history. But we for many years in this country clung to that as an ideal and there were many people who sat around this table as members of the Business Council in the early 1980s who argued passionately against any deregulation of the Australian labour market and argued very strongly that you would change the social fabric of this country if you took away the central role of the then Conciliation and Arbitration Commission and later the Industrial Relations Commission.

And I think one of the really great reforms this government has carried out in the last nine years, despite the difficulties we've had in the Senate, and partly through the courtesy of support at the time from the then leader of Australian Democrats, Cheryl Kernot, we have been able to bring about very significant freeing of the labour market. And I was reflecting during and I gave voice to this during the last election campaign that if I wanted to encapsulate to the Australian public the economic success of the Government, it was to be able to say that over the last 9 years we have simultaneously seen real wages rise, yet unemployment fall, interest rates go lower and inflation remained constrained. And that is about the best gift that you can give to the working men and women of this country. To lift their wages, keep their interest rates low, give their children jobs and give them the economic security of stable inflationary expectations. Now one of the reasons that we've been able to see real wages go up is that labour the market is now based far more on productivity than was ever the case in earlier years, and all the bargains and compromises wrought out of the more corporate state approach didn't produce any of that.

Now there are a lot of reasons why it's happened, it's not only the deregulation of the labour market, I think Australian business has changed beyond all recognition in its approach to work practices, Australian business is far more outward looking, export oriented, has a greater understanding of the need for modernisation in the work place than was the case 20 years ago, and one of the great, innate capacities of Australians has also shone through and that is our ability to adapt. And the world wide reputation of the adaptability of the Australian worker has been one of the reasons that we have succeed in doing it.

But having said that I think we do need to go further and we have already as a Government given a lot of thought and we will continue that process over the next two or three weeks, to the sort of further changes we need to make to our industrial relations system. We need to make changes that obviously implement things like unfair dismissal changes that were part and parcel of the program we presented before and had knocked back and although the proposals are of more direct relevance to smaller enterprises, they are I think changes that will make an overall contribution, and there are other changes to the law that are probably well known to many of you who follow this debate closely, that we will obviously implement. But there are some further areas that we need to examine and we're examining the way in which the minimum wage is set.

I have to say to you that I think it would be out of step with the Australian ethos to not have a minimum wage. People will argue in pure economic theory that you shouldn't have a minimum wage, and you can mount a very good intellectual case for that to which a lot of people might say yes, but there is such a thing as the Australian ethos, and there is such a thing as the perception in the Australian community of what is regarded as a fair go. And I think the perception of there being the idea that there is no minimum wage at all would in the eyes of a majority of Australians challenge part of the Australian ethos. I think there is general support amongst reasonable people for further significant changes, and I have been informed, by Hugh and others, with the views of the Business Council and we are going to give them an enormous amount of consideration.

I suppose, you know, as Peter Costello said to Laurie Oakes when he compared some of the policies of some of us in relation to using the corporations power of industrial relation as Whitlamism, and Peter said to Laurie, 'you know how to hurt a man'. I think it's fair to say that some people say why is it that a party which has historically been built on support for the principles for federalism, why a party such as that, namely the Liberal Party, should look at the notion of having a more uniform industrial relations system throughout the country. I think there is a difference between a commitment to nationalism and a commitment to federalism. I'm a very strong nationalist in the sense that I think that the guiding principle should be to produce a system, whether it's an industrial relations system or indeed any other system, that best suits the national need. And my support for going further in that area is based on a belief that the Australian economy is far more national in character now than it's been in my lifetime. And the difference, once again going back 20, 25 years: the emergence over that period of time of national law and accounting firms, the integration of the operation of companies in different parts of the country, the way in which people think in national terms now as distinct from city-based or regional terms, has brought about a very profound difference. And I think that does call for a more nationalistic, more Australian-based approach to the solution of many of these problems, and it will be an interesting debate because we do have, as everybody knows, this strange juxtaposition of eight Labor state and territory governments and a Liberal-National Party Government at the federal level, and I can find, digging through the archives of many speeches by Labor premiers talking about - then-Labor premiers - talking about the virtues of national industrial relations system. I can remember Neville Wran making some very powerful speeches on that subject, and of course you can find numerous speeches made by Liberal Party and National Party identities, at the same time, railing against the infamy of such an approach. But it is part of a process, and just as your ways of doing business have changed over the last 20 years, so in an area like this I think we're going to have to change our attitudes. I don't think it is shaking the foundations of anything. I think it is just a recognition of the modern day realities of the economy and of the nature of the country in which we live.

There are other areas that you have alluded to Hugh, and I won't endeavor to touch on all of them but I do want to mention that in relation to our own reform agenda we see the process of moving people from welfare into work as being an important challenge. I think all of you know that we are very short of workers in this country. I feel almost strange saying that because most of my political life we have seen unemployment, in other words a surfeit of workers, as being one of the big challenges, but almost within the space of a few years that has turned around. We have a very dramatic shortage of skilled workers and it's one of the bigger challenges that we face, and I'm pleased to report to you that best applause line I had in the last federal election campaign, or the one that seemed to me to produce the most enthusiastic response, was the one when I said I would like an Australia in which a high grade technical qualification was as prized as a university degree, and it seemed to bring forth a very warm, even emotional response from audiences all around the country. It seemed to be saying to me, and it's been borne out not only by our research, but also by other discussions - even to be borne out very strongly by the discussion that I've had and, as many of you know, we are implementing a series of policy changes which are designed to improve the capacity of this country to produce more tradesmen and women, to boost the technical skills of our workforce, to provide new opportunities, and most importantly of all to elevate the status of being a skilled tradesman in this country.

I think we made a mistake; I think we made a cultural error a generation ago in believing that the only fit and proper thing for our children to do was to go through to Year 12 and to go to university. I think that's a mistake. I think there are some people who are simply not cut out to do that, and we all made an error in promoting a view that everybody had to do that. But we need to place a greater emphasis on that. We do also need to recognise that there are too many people on the disability support pension, and in saying that I'm not talking about forcing back into the workforce people who are genuinely disabled and unable to work. Nothing could be further from the truth. The way in which that benefit has been administered, and the way in which some other benefits are administered provides a disincentive for people to re-enter the workforce, and it is one of the issues that is also engaging our attention, not as a cost reduction measure - we're not trying to save money - we're rather trying to shift people from welfare into work and through the belief that not only will that boost the available workforce, which is important, but it is also from the point of view of their own self esteem and their own wellbeing and their capacity to support members of their family, who are children, will be gravely enhanced.

Hugh, I know in a private session there will be some other things that you will delve into, and I'll be very happy to respond as directly as I can. It will be an interesting six months because it will be the cutting edge of what the Government is going to do on the reform agenda. Our electoral cycle is pretty short. You know, I look fondly at those four years terms that state governments have, although when I was in opposition I didn't think they were so flash. I've got to say that you have to get cracking fairly early in the three-year cycle, and this a very good time to be engaging with the Business Council.

The process of reform is ongoing, and you are quite right as a Business Council to be described as: 'Turn up the heat on Howard', 'Keep the Government's nose to the grindstone on Reform'. That is part of the job in a democratic process, and it's also part of that same democratic process for the Prime Minister occasionally to sort of check on his scorecard. So, coming down in the plane, Peter, who's done a fantastic job in helping me with some of these gatherings, pulled out a copy of the Australian - the Weekend Australian, April 6-7th 2002, which is just about three years ago - and it listed all of these things that had to be done to really get the country on its feet and going. The first one was a new job creation strategy that recognizes economic growth is not enough. I think it's a fair proposition and Peter and I worked out that since then we'd created 670,000 jobs. So we thought we'd done reasonably well on that score. And in the second one - and you don't think much about it now, because I think we may have done it - and that is a fresh blueprint for universities that arrests the decline in our intellectual resources. Now, I'm not suggesting that everything that has been done on universities, everything that ought to be done has been done - I'm sure it hasn't - but I think Brendan Nelson did a pretty remarkable job negotiating that package through the Senate at the end of 2003. So, I think we might have got 51 percent on that. And here is a very controversial one that I think is probably always going to be there - restructuring of the health system to keep universal access yet improve efficiency. Now, I think the universal access has been greatly enhanced and strengthened, and when I understandably hear Peter Costello and Nick Minchin complaining to me about how much money Tony Abbott has been able to spend on health I think we have done quite a bit about improving that.

A national population strategy that integrates fertility, integration and sustainability. Well I won't stray too directly into the fertility area, but can I say that barely a month after that was said Peter Costello produced the intergenerational report as part of the 2003 Budget, and I think of all the documents that have been produced by the Government over the last few years, none has been more integral in stimulating a national debate on a very important issue. I think three years ago we were beginning to talk about this issue, and I think over the last few years not only have we engaged in a very significant dialogue, but there are a number of major policy changes which have begun the process of doing something about that has gone on. Immigration, can I say the number of migrants we have taken has risen substantially since then, and it's no secret to say that at the Government right at the present time, in the lead up to the decision that it normally takes on the eve of the Budget, is looking at the possibility of a further significant increase in the skilled migrant intake, and there is very strong support, if that can be achieved, for that to be done. The next one was a revamp of retirement and superannuation policies. I think there have been some very significant changes made in that area, and I think the most spectacular, the most important, was the very important changes that were made to the co-contribution part of superannuation, which is of particular value to low and middle income earners who find it a lot harder than the rest of us do to accumulate their superannuation.

And then a couple of ones that are very general economic policies that reinforce Australia as an open, competitive, and innovative nation. Well, we've had a few free trade agreements signed since then. I don't think in April of 2002, I don't think I thought that we would have a Free Trade Agreement with the United States coming into operation on the 1st of January 2005. In fact I can recall going to at a meeting in New York that Michael Thawley convened, and I think Hugh and a number of other people attended, in which one very prominent Australian businessman said it was going to be a 10-year process to bring about the sort of support for the negotiation of a free trade agreement.

And then of course, as one might expect, given generalities some of these propositions, the last one is a search for a unique synthesis of Australian commitments to equity and excellence. Well, I suppose that's something that we are in constant pursuit of and will endeavor to do so.

Well, Hugh, they are my thoughts. Can I conclude by saying that, again, how much I enjoy interaction with the Business Council. I think it right that you challenge the Government on its reform credentials. I think it is right that we respond. We'll agree on some things and we'll disagree on others. The synthesis always that we have to achieve is economic progress, social stability, and political achievement. And I have a mild interest in political achievement, and I know you met somebody this morning, some of you for the first time, who's been a very important person in my life over the last few years, and that's the Liberal Party pollster. And we try from time to time to connect. He's a very good pollster, but then I leave the polling to him and he leaves the politics to me, and we get on famously. But can I just say thank you very much and I look forward to our round the table exchange in a few moments. Thank you.

[ends]

21634