Thank you very much Mr Chairman, Alec Brennan, the Managing Director of CSR, ladies and gentlemen. I am especially pleased tonight to be invited to share some time with you and to convey a few thoughts on this very important celebration by one of Australia's oldest companies, a company that has made an incredibly diverse contribution to the development of Australia over many years, a company whose capacity to change and adapt according to changing economic circumstances is something of an example to other large organisations in our country. This gathering tonight brings together people who are not only former employees, former chairmen of the company but also representatives of those facets of CSR's interaction with many industry sectors, the building industry, the resource sector, the food industry, the service industries and of course a reminder all the time of CSR's origins.
On a personal note, I am indebted to the company for having many many years ago employed my father as an apprentice fitter and turner at the Harwood Island Mill, his apprenticeship was interrupted when he volunteered for service in World War I and he completed his time after returning from the War just around the corner at Pyrmont.
This is an occasion to honour the contribution that companies like CSR have made to the Australian economy and to defend the role of large organisations in the Australian capitalist system. The Australian economy has of course, over the last twenty years, become an open and competitive economy and in the process it has changed permanently for the better. If I were asked to remark upon the distinguishing features of the Australian economy in the time that I have been Prime Minister, I would unhesitatingly say the most significant feature has been its extraordinary resilience and its capacity to adjust and its capacity to change and to weather unexpected storms.
In 1997 when the Asian economic downturn afflicted so many countries in our own region, many people feared that Australia would go down with other nations. That we were able to weather that storm and able to weather it in a quite remarkable fashion, said a great deal for the benefit of the changes that have been undertaken, the deregulation of the financial system, the dismantling of protective tariffs, two decisions that were carried by the former government, I might say with the very strong and enthusiastic support of the then opposition and then in our time in government, very important labour market reform in 1996, the fiscal consolidation which we began in 1996 and which has essentially kept our budget in very strong surplus ever since and of course after 1997, the generational changing reforms to the Australian taxation system with the introduction of a goods and services tax in the year 2000. I mention these things to perhaps put into context, some of the commentary about the Australian economy at the present time.
A few weeks ago, all at once we had three or four economic announcements, we had an increase in interest rates of 25 basis points by the Reserve Bank, we had some quarterly growth figures that were a lot more subdued that we had come to expect, we had a very large current account deficit and then to remind ourselves as consumers that we had an increase in private health insurance premiums. There was something of an overreaction by many commentators. Perhaps we had got too used to all of the economic statistics being very positive. We had come to take for granted that each economic number would show the economy even stronger, unemployment even lower, approvals in various industry sectors inexorably rising. The reality is that over a long period of time not all the numbers are of a champagne quality.
But my message to you tonight is that the Australian economy remains fundamentally very strong and the reason it remains fundamentally very strong is that the basic pillars of a strong economy remain. Low inflation, still historically low interest rates, very strong business investment, thirty-year lows in unemployment and over the medium to longer term, an improving trade outlook particularly with the export sector. But that is not to deny that the process of change and reform is a process that has to be maintained persistently not only in the medium term but over a longer period of time.
The current strength of the Australian economy is a consequence of a fairly consistent and repeated program of economic reform that's gone on now for a period of close to twenty years and the message out of that is that if we are to preserve the great strength and vitality that we currently enjoy here in Australia, we need to pursue vigorously and with commitment, further economic reforms. The Chairman drew attention to the fact that as from the 1st July this year, for the first time, certainly since this Government has been in office and the first time since 1981, the Government will command the majority in the Senate as well as in the House of Representatives.
I would have to say to you in all candour it was an unexpected bonus coming out of the last election, I didn't really imagine that we were going to get a majority in the Senate, and having received that great bonus, the Government has no intention of wasting the opportunity it presents. That requires the right balance of boldness in reform but also a recognition that the authority of controlling both Houses of Parliament carries with it, an obligation to use that authority wisdom, wisely and in a manner that does not convey the impression of hubris or drunkenness with power. The Australian people over the years have shown themselves very shrewd judges of governments, they have shown themselves as having a great capacity to discriminate between a government that courageously carries out a mandate that it has, from a government that carelessly and indiscriminately uses the authority the power in office has given us. That is the balance, that we intend as a government to strike, after the 1st July. What we promised we would do in areas such as the further privatisation of Telstra, we will pursue. We committed ourselves to further reforms in the area of industrial relations and my Government is currently giving very detailed consideration to further reforms to the Australian industrial relations system. I suppose that of all the policy issues that I have immersed myself in over the last twenty years I've probably devoted more time to industrial relations reform than any other reform, because I believe at the heart of the maintenance of continued productivity growth in this country is to consolidate the transition of the Australian economy from an economy governed by a centralised approach to industrialisation and wage fixation to one that is truly and fully enterprise based.
We have come a significant way along that path over the last few years but there are further changes that are needed and in the process of making those changes we will undoubtedly be attacked by our political opponents and by many in the trade union movement with the catch cry that our industrial relations reforms are about cutting wages and reducing the living standards of Australian workers, nothing could be further from the truth. No government in its right mind should ever have as a goal a reduction in the living standards of the Australian people. No government in its right mind wants to cut the wages of workers, the aim of my government over the past nine years and one that we can proudly say that we have achieved has been to preside over an economy which has given significant real increases in the wages of Australian employees.
I am very proud of the fact that in the time that we have been in office, real wages in this country have risen by over 13 per cent in real terms and when you add that to lower interest rates, reductions in the personal tax burden and enhancement in employment opportunities, we are able to point to a picture of a very considerable increase in the living standards of the Australian people and my reply therefore to those who would seek to brand our industrial relations reforms as an exercise in cutting wages and reducing living standards is to point to the record of the Government thus far and our solemn commitment to maintain that record in the years ahead.
There's been a great deal of debate in recent weeks and quite properly so about the skills shortages in the Australian economy, and pressures that maybe emerging or bottlenecks that may be emerging in areas of infrastructure in our country. It's been apparent to me now for quite some time that the strength of the Australian economy and the growing demand for skilled labour has created very severe skill shortages in certain parts of the economy. And that is the reason why in the last election campaign I devoted a great deal of my policy launch speech and also many of the commitments we made to additional investments and changes which are designed to address over the medium to longer term those shortages. And those changes include in particular the creation for the first time of federally-funded Australian Technical Colleges in 24 centres around Australia, considerable improvements in the incentives for apprentices, the extension of the Youth Allowance to apprentices, as well as of course the university students and a number of other allowances and enhancements that will make it attractive for people to enter the traditional areas where the shortages are becoming more acute.
We have seen a very significant increase in the number of apprenticeships and traineeships in the Australian economy over the last nine years, but there are still as many of you will know significant shortages in many of the traditional trades. I've said before that this is in part a consequence of unfortunate cultural attitudes that developed in this country a generation ago, when the value of a technical education appeared to be denigrated when compared with a university education. I found in the election campaign that no proposition received a warmer response than the one that said that I wanted an Australia in which a high grade technical qualification was as prized as a university degree and it's very important to solving the skills shortages that we have that that issue be addressed.
Immigration will play a role. It's not possible if you are to meet the immediate demand in certain areas to achieve that by changes in skills training in this country which often take a number of years to bear fruit, and in the meantime a contribution can be made in the area of immigration. And that is why the Government is currently examining whether there are ways to increase the flow of skilled tradesman to Australia in those areas of particular shortage.
Last Friday I announced the establishment of a task group, made up of the head of the Bureau of Agricultural and Resource Economics, Dr. Fisher, Mr Max Moore-Wilton who'll be well known to many of you, the former head of my Department and now Executive Chairman of Sydney Airport Corporation but somebody who has had a very extensive background in infrastructure, at both a Commonwealth and a State level and well-known infrastructure economist, Dr. Henry Ergas to look specifically at bottlenecks of a physical and regularity kind in Australia's infrastructure that maybe having an adverse affect on our export performance.
I've asked this task group to report to me by no later than the 18th of May. They don't have a general remit to look at infrastructure but rather one to look at bottlenecks that may be having a particular impact on our export performance. And I hope as a result of that to have a clearer picture on what changes and responses that might be needed because to use a vernacular it would be a crying shame indeed at a time when this country is poised to reap the enormous benefits of our export capacity, particularly but not only in the resource sector if that were impeded by bottlenecks.
The final thing I would like to say Mr Chairman is something about the housing industry. It's an industry which is very important to your company, it's an industry which has always been at the centre of economic activity in this country and always been not far from the centre of political debate in Australia. Home ownership is an article of faith, not only in the modern Australia but it's been an article of faith in this country in the years that have gone by particularly since World War II.
Investment in housing is in many cases the only major investment that most Australians make. Investment in housing is not only an economic consideration but it's also an investment in family and social stability and social security. We have high levels of home ownership in this country because we believe very strongly that the aspiration that people should seek to own their own home and to provide security, as well as a roof over their head of their families, is a proper and reasonable, indeed noble aspiration for Australians to have.
And through the years and my Government has been no exception, governments have always acted to ensure that home ownership remains within the reach of Australians on modest incomes. It is becoming somewhat harder, housing affordability is more challenging for many young people in the modern Australia. There are multiple reasons for that and tonight I don't intend to attempt to list all of them but clearly the incidence of taxes, particularly at the state level and particularly here in New South Wales act as a disincentive. The lack of supply or inadequate supply of land that works against home ownership and the undue complexity of many of the planning regulations which exist at a State and Local Government level also make a contribution.
There are from time to time calls to alter the existing federal taxation treatment of housing; people argue that we should remove negative gearing. We have repeatedly resisted that call and I would say again tonight that I couldn't think of anything more counterproductive. If you are concerned about the level of rents in this city for example, I couldn't think of anything more calculated to discourage investment in housing of a cheaper variety at which is available for rental. And people have argued from time to time, perhaps not as loudly, for an alteration in the existing capital gains tax regime for housing, once again it's not an argument that's ever found any favour with me and I think unlikely to find favour with anybody in my Government.
When you decide to apply particular taxation regimes to certain forms of investment, you not only take into account economic considerations but you also take into account social and family stability considerations. And governments in Australia over the years and mine has been no exception, have given a preference for home ownership because we believe that home ownership makes a very important contribution to the strength and stability of the way of life we have in Australia and the important role that all of us believe the family should have within our community.
Can I conclude Mr Chairman by congratulating CSR, by thanking it for 150 years of contributing to the Australian nation, of contributing to its growth and development in just about all of the major industry sectors, of over that period of time of employing and training countless thousands of young Australians. Most importantly of all having the capacity to adapt and change according to changing circumstances.
I'm often asked to explain the reason why the Australian economy has done so well in recent years and I suppose instinctively I like to point towards the policy decisions that this Government has made and the contribution that they've made to our economic strength. But I think the most emphatic reason why this country has done well and this country will continue to do well, is that Australians by world standards are remarkably adaptable people, and the capacity of Australian employers and employees in the face of dramatically changed world circumstances, facing the globalisation of the world economy, our capacity to adapt and change has been second to none. And the reason why Australian workers are sought after around the world, the reason why we have an enviable reputation as contributors and innovators, is that we do have a great capacity to adapt. And no company has better demonstrated that capacity to adapt than has your company. What it does now is so different from so many of the things that it did only a few years ago and that capacity to adapt has kept it in the game, has kept it up there as one of Australia's major companies and is a quality about which all of those who now work for CSR and all of those who've been associated with it in the past should be immensely proud.
I thank the company for what it's done for our nation and I wish it well in the years ahead.
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