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Transcript 5906

ADDRESS TO THE 8TH NATIONAL AUSTRALIAN RETAILERS CONVENTION

Photo of Fraser, Malcolm

Fraser, Malcolm

Period of Service: 11/11/1975 to 11/03/1983

More information about Fraser, Malcolm on The National Archive website.

Release Date: 13/09/1982

Release Type: Speech

Transcript ID: 5906

ljAUSTRLA
FOR MEDIA MONDAY, 13 SEPTEMBER 1982
ADDRESS TO 8TH NATIONAL AUSTRALIAN
RETAILERS CONVENTION
The retail industry makes a very significant contribution to
the Australian economy, to a significant part of our Gross National
Product, to a significant part of Australia's employment, but
while there are some large firms in the industry there is also
a large part of the industry that is composed of small retailers
employing relatively few people.
The industry in recent years has gone through some difficult and
competitive times although I am told that everyone is friendly
this morning once the convention is over normal competition
takes over again. There has been a good deal of rationalisation
within the industry and it is in an industry also that has been
affected as many others are by the introduction of new technology.
Changing and changing with the times is part of a dynamic society
and if the retailing industry or a retailing firm or the nation,
ever becomes complacent and decides we can stand still, that they
have done well enough, then that is the moment that that firm
or the nation will start to move backwards. There isa real
need always to look to the future to the challenges of the
future, you can grasp it, exploit and develop it and to capitalise
on it.
obviously your industry together other industries in Australia
are affected by the current economic circumstances and they are
not the best that we could wish for. The world recession over
the last 8 or 9 months has started to hit Australia hard, it has
gone on longer than anyone envisaged or believed, but one of the
remarkable things about it is that up to the end of 1981 Australia
had been able to move against the tide so far as the world recession
was concerned. This economy had been growing strongly, sales
and many parts of your industry had been growing strongly and
employment had grown strongly in the three years to December 1981.
Then, continuing recession and dramatically significant falls in
the price of our major export commodities started to have an
impact on what we were doing in Australia.
The seven major economiies. h. ave recorded falls in industrial
uroduction over the last twelve months and
trade has recorded falls over the last year or so for the first
time in more than 20 years. In the circumstances, it is obvious
that there are going to be difficulties for many traders and for
industries. / 2

RETAILERS CONVENTION 398
The sharpest and clearest reminder of the difficulties of the
world trading situation at the present time is in my own
electorate because Alcoa were building one of -the bigget, best
most modern aluminium smelters and not one tonne of that aluminium
was going to supply the Australian market, it was all going to
markets overseas. Then having spent some hundrE~ ds of millions
of dollarsAlcoa suddenly realised they didn't have a market
for a single tonne of that aluminium. Then they found that they
couldn't get any partners to help them to continue to build up
the smelter, and since they didn't have a marketthat is not
altogether surprising. Then they found they didn't have enough
money to continue the project, so instead of building a
smelter, it is now a ghost works with the major structures reaching
up into the sky, with hundreds of thousands of tonnes of concrete
poured but by Christmas there will be no work being done on it at all.
It will not be reactivated until there is confidence that
world demand and markets are going to be available for what is
a very expensive operation. Nobody can blame Alcoa for that,
they are a victim of what has happened overseas in this instance,
and it is a very sharp and clear reminder of the way it is going
to affect industry and people in Australia. If that is one
example, there must be many in different industries. The prices
of mining and rural commodities, the difficulties of our
manufacturers selling overseas are compounded in the present
circumstances. We as the 14th or 15th most significant trading
nation, with about 30% of our national income dependent upon
trade are obviously going to be affected by these things.
In addition to that our investment overall throughout this
year is likely to stay at a high level by the end of the financial
year it will obviously running then at a lesser rate than it is
now as projects come to be completed and in the current inves-tment
climate, new projects are not begun or are deferred.
You cannot blame for one moment all of our problems on what
has happened in the United States, the United Kingdom, France,
Germany or somewhere else, because over the last 18 months we
did a good deal of damage to ourselves which certainly should
not have occurred. Our wage settlements were running at 15% to
but-overseas they were running at 5% or 6% and it is not much
consolation to say that that was happening and they were getting
more sensible wage settlements overseas under the stimulus of much
higher levels of unemployment, under the stimulus of a trading
climate that was much slacker than that which occurred in
Australia. Wage settlements and the movements
towards shorters hours through last year compounded the difficulties
we find in the world trade scene.
It has obviously made us less competitive but now these problems
are starting to be better understood. There are three tribunals
that have come out with relatively sensible wage decisions.
The Remuneration Tribunal for politicians and the public service
came out with a decision of 7% when they said that in justice,
they should have come out with one of about 1i% or 14%. I have no
doubt that in justice they would have said they should have come out
with a nil return Or a minus 7% or 14%, but be that as it may, / 3
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RETAILERS CONVENT ION 1.. 8
a judgement that was significantly below the level of inflation
is encouraging. The Academic Salaries Tribunal made the same
kind of judgement, but more significant than that, the Western
Australian Public Service Tribunal came out with a 7% return
at the end of last week when the unions had been arguing for
17% or 18%. That might be the most significant of the three
because if that is carried through all the public services
and the general wage tribunals throughout the country, then that
will start to give us an opportunity to get on top of the.
excessive wage decisions of earlier times. That kind of decision
alone is not going to be enough, it is going to need a cor'stancy
of effort and a real level of wage moderation over time.
In this total background we obviously had a somewhat difficult
Budget to frame. It would have been possible to take a purist
economic hair shirt approach, and we could have come out with
an overall Budget surplus of about $ 1500 billion, and I have
not the slightest doubt that that would have been better for
inflation and better for interest rates than the Budget we actually
introduced. If we had had an overall surplus of say, $ 1500 billion,
that also would have been extraordinarily depressive upon the
Australian economy at a time when the level of private investment
is falling which was unlike the circumstances of the previous
3 or 4 years, where private investment had been expanding one
year upon the other and a Budget of that kind would have been
difficult and would not have done anything to ameliorate any of
the difficulties which industries and individuals are facing
as a result of world circumstances.
In the event, we opted for a Budget that was a compromise. We
believe it is responsible economically, and it is also one that
is designed in a significant way to assist industry and to assist
individuals who might be worst hit and hurt by current circumstances.
The tax cuts obviously help individuals and businesses. The
depreciation provisions that were announced before the Budget
should be of significant help to industry, putting our industry
in the same ccrpetitive basis as industries in other countries
where the depreciation provisions have been more generous than
in Australia. The assistance to families, the assistance through
the housing rebate for housing, again, help those individuals,
families and businesses. The increased retention allowance
is obviously ar1. assistance for small companies. There are
two innovations in this Budget tax relief on dividend income
for small investors and changed rules for employee share
participation schemes and these two things can be seen together,
one to encourage investment by employees in their own firm and
two, to encourage investment by small investors in Australian
companies generally. They are measures that can be built upon
and I believe that they are. significant and important.
While John Howard in a very real way called this a family Budget,
I hope it would be better regarded as a Budget which enables
Australians to work together. If you take the ' example of a family
on $ 300 a week, with a dependent spouse and two kids, as a
result of the Budget they are $ 17 or $ 18 a Q. eek better off.
If they were going to be as much better off through their employers,
with a $ 25 or $ 26 a week increase in wages, that could be enough
of an increase in some cases to send the employef broke, then there
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RETAILERS CONVENTION 13.9.82
would be no wages and no job. So it does establish a basis on
which it is not only reasonable to ask for but to expect, and
to fight for in a most vigorous way, wage restraint across
the whole spectrum in Australia at the present time.
Many of the advantages of the Budget have been overshadowed
by other debates which have occurred as a result of a certain
Royal Commission, and I thought perhaps I should say one or
two things about that.
It needs to be remembered that we established this Royal Commission
into the Painters and Dockers-. Union because we had heard
of many things that seemed to be wrong with that Union. I
believe all Australians will be disturbed at the extent of the
criminality that has been revealed of the links between that union
and white collar crime. Since these things have been revealed
I am glad that the Royal Commission report was established,
I am grateful for the work that Mr Costigan has done and what
he has shown is that there is a massive task ahead of Governments,
both State and Federal, to put what was wrong, right. That is
the important thing.
We need to understand that the Painters and Dockers Union
in the Royal Commissioner's terms is not really a union for
industrial purposes, it is a union for criminal purposes, if
you like, a secret society. In Victoria he said that every
member of the union, every office bearer has a criminal record.
If our American friends won't take offence, it seems to me
that some of the things that that union has done has more than
given. credit to Chicago in the 1920' s and maybe the movie
reputation of Chicago because I don't know if that is the reality
or not. With a somewhat graphic-phrase which an office bearer
of the Union used to another Royal Commission-' we catch and
we kill our own' now that is not fancy, it might be the kind
of phrase that people thought could never be used in Australia
but all it is doing in relation to this union is describing
quite accurately, what the Union has in fact done. I am glad
the Labor Party is moving to disaffiliate the Union from its
own ranks. That ought to have happened a long time ago and I
wish my colleague good fortune in that particular effort.
When we find out the sorts of things that the Union was doing,
the kind of services they were providing, not only in dirty crime
around the docks, when you find that they are also providing
services for those who wanted to undertake or promote white
collar crime, signatures for people who could disappear and
be given changed identities through the operations of the Union,
it is not surprising that there came to be a link between the
Union and some of the worst and~ the tax evasion schemes.
It was the Union who supplied the names and signatures for a fee
and often quite a modest fee, for other people who would have
been making large sums indeed. So you come again, to the description
of bottom of theharbour tax evasion schemes.
It doesn't hurt also to say that John Howardhas legislated
and has done more against tax evasion than any other Treasurer,
maybe than all the' other Treasurers of the Commonwealth put together.
The various things* that have occurred in the last two years
make it necessary for the health of the mciety that we live in
that that campaign be pursued vigorously and relentlessly. We
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RETAILERS CONVENTION 13.9.82
are establishing a task force, a special prosecutor will
be established, mostly in relation to promoters of bottom
of the harbour schemes. The Attorney -General was; having
discussions with Mr Costigan on Friday in relation to other
aspects that had been revealed in the report and the best
way to pursue prosecutions in the speediest possible way.
We will be establishing a national Crimes Commission
and I hope the states will join with us in that, and it will
have available to it a prosecuting arm. The establishment
of a special prosecutor under legislation that has now gone
through the House of Representatives and I hope through th ' e
S~ enate tomorrow, will go a long way to establishing that
kind of prosecuting arm to the present royal commission.
This brinqs me to the other aspect of what we are about,
legislation in a wide way has been branded as retrospective.
Nobody likes that, the Government doesn't like it and I am
sure that many people in the community don't like it. For
those that don't understand the nature-of the legislation
because it is quite specifice, let me emphasise that it
is tax legislation, it is designed to collect tax that should
have been paid and had not been paid, it is not in that sense
creating a new tax liability it will be collecting a tax that
was evaded and in that sense retrospective is the wrong word
to apply to it but I do not deny for one minute that there is
a retrospective element to the legislation.
It is sometimes said that people can go into the schemes and
not really know that they were doinx something that was wrong
and the legislation is related to the bottom of the
harbour tchemes, not to the generality of what might have happened
over the last 10 years. I find it very hard to believe that if
somebody had a company worth $ 100 with $ 10 tax being owed to the
Commonwealth, then another person comes along who is the promoter,
and says: " I have a way in which you can convert your $ 10 tax to
the Commonwealth into a capital gain for yourself, the only
thing you have to do is to pay me a fee of $ 1 or $ 2 for the
privilege of doing this for you. All you have to do is to
sign a couple of papers and you are obviously going to be
better of Most people would know there is something a bit
odd with that kind of arrangement, most people would think there
is something slightly wrong, it is not quite as easy as that
to evade normal liabilities to your own people in the community
or to the tax commissioner and most people would have felt it
reasonable to ask one or two questions about what was involved.
If there is a principle of retrospectivity, that my Party and
other people don't like as there is, there are other principles
-that are very important to Government and very important to the
Liberal Party. Sometimes Governments are faced with competing
principles and you cannot pursue either one to the full as you
might like. one of the principles upon which my Party was
founded by Sir Robert Menzies some decades ago, was a-principle
of acting fairly for all Australians, no matter where they are
or where they come from, what sort of job they are in, or what sort
of income they have. We are indeed the only Party that does
act fairly for all'Australians. My colleagues in partnership,
the National Party, represent more specifically rural interests
as you all know and the Labor Party represents the union movement

RETAILERS CONVENTION 13.9.82
rather than the generality of the Australian public. The
Liberal Party is the only Party that can and does act fairly
for all Australians.
You are all aware that in recent times there have been a view
that the tax system was unfair, that some wealthy people were
becoming much wealthier because they don't pay any taxes due
and they weren't really robbing the Commissioner, so much
as robbing other taxpayers in that particular activity.
Average PAYE taxpayers, average people in small businesses
or whatever were beginning to have the view that the whole
system was unfair because of the activities of the few
that were ripping off the system. If the Liberal Party has to
make a choice between acting fairly to all taxpayers or
acting fairly to all Australians and adopting some element
of retrospectivity, in this instance, the principle of acting
fairly in the interests of all Australians must be given
predominance. If the Liberal Party ever ceases to have that
capacity, if it ever ceases to be regarded as a Party who does
act fairly for all Australians, the rationale for the existence*
of the Party and the life of the Government ceases to be. I would
not want to lead, or be part of any Party which failed to stand
by that principle.
That is why the Government has taken the view that it has.
I would-much prefer not having to be forced into making these
kind of choices, but I suppose retailers sometimes have to
make unfortunate choices which they don't always like or when
they have a product that they cannot sell they have
to do something about it. We have the product of the tax
evasion industry which we do not like and we have to do something
about it. I am not sure what that has to do with the retailing
industry but it was something that I wanted to say.
I am sure you are going to have productive discussions and. I
am sure that you are going to learn a great deal from each
other, know better how to compete with each other and that
will result in a much better deal for customers than would otherwi
be the case without this convention. I wish you in your
deliberations good fortune, a happy time, and for visitors from
overseas I hope you are not just going to be kept in this room,
I hope you will have time to see something of Australia also.

Transcript 5906