PRIME MINISTER
CHECK AGAINST DELIVERY EMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER
CEDA ECONOMIC AND POLITICAL OVERVIEW
ADELAIDE 24 JANUARY 1990
I appreciate this opportunity, at the outset of the 1990s,
to present my overview of the Australian political and
economic scene.
CEDA of course has for many years taken a close interest in
both domestic and international policy. I recall with
particular pleasure your conference in Sydney last May at
which I launched the CEDA publication Towards Freer Trade
Between Nations a book which made a significant
contribution to the ' inderstanding of an issue vital to our
national future.
This is a timely gathering.
Internationally, the past twelve months have seen profound
and, in modern experience, unprecedented change
spectacularly in Eastern Europe, and very encouragingly,
too, in relations between the superpowers, but from
Australia's vantage point even more powerfully felt in the
continuing explosion of economic activity in our own region.
Domestically, we witnessed the further steady emergence of
an Australia that, though still grappling with shorter-term
economic problems that are causing hardship, is becoming
equipped as never before to tackle and conquer the
challenges of the 1990s and the 21st Century.
So against this background of change, the overview provided
by a forum such as this is not merely useful but necessary.
As we approach the next century I want to see the evolution
of an Australia that is attuned to, and conscious of, these
tremendous changes an Australia with several distinctive,
deeply interrelated characteristics.
Late last year, in a speech to the National Press Club, I
outlined my ideas as to what these necessary characteristics
of an emerging Australia must be.
I said, first, that I want to see us become a modern,
growing Australian economy, shaken out of the old complacent
dependence on commodity exports, re-equipped and
restructured in its attitudes, institutions and technology
to be fully competitive in the world.
Second, I want an Australia self confidently and vigorously
engaged with the world economy, and in particular enmeshed
with the dynamism of Asia and the Pacific an outward
looking country capable of contributing to and drawing
enduring prosperity from the region a country which others
wish to have as a partner because they see that we have got
our own act together and are able to contribute.
Third, I want an Australia committed to maintaining and
enhancing the quality of life, not merely the quantity of
our economic output. We must not be panicked into a strategy
of industrialisation at any cost. We must enlarge our
commitment to social justice; to the preservation of our
natural environment; to the creation of a tolerant,
multicultural, egalitarian society a society immensely
vigorous because of its diversity yet uniquely harmonious
because of the deep and genuine mutual respect each
component group holds for all others.
And fourth I want a self-reliant Australia, drawing strength
from its traditional attachments to other countries but
attuned to and pursuing in a hard headed way its own
interests in a changing world; speaking with an independent
voice; not merely fitting in with the world as we find it
but helping shape it.
When you look around Australia today you see abundant
evidence that the attainment of these goals ambitious as
they are is well within our grasp.
After virtually three decades of conservative inertia,
neglect and distorted priorities our vision is starting to
be realised. Australians have turned the national tide,
from ebb to flow.
So, today, you see factories and offices infused with a
greater capacity and a greater determination to modernise,
to look outward, to compete. You appreciate what our
creation of 1.6 million new jobs really means for
Australians and for Australia.
You see schools where the kids are staying on to Year 12.
You see universities, technical colleges, research labs,
where that most vital of resources, human knowledge, is
being fostered and put to use.
You see ethnic clubs, child care centres, environmental
societies crucibles all of them for a big-hearted, decent,
secure Australian community.
You see prosperity being shared, on the basis of fair and
efficient systems of taxation and social justice. You see
investment for productive purposes rather than the
manipulation of the tax system to accrue untaxed capital
gains; and you see unprecedented social assistance targeted
to the people who need it, instead of the allocation of
pensions to millionaires.
You see Australia more actively and creatively involved in
international affairs than ever, including the affairs of
our region as witness for instance our initiatives on
Cambodia and on new arrangements for Asia-Pacific Economic
Co-operation.
And let me say that as part of this transformation underway
in Australia you see now a united Labor movement maturely
and constructively responding to the challenges of our time.
Now, none of this gives cause for complacency. This is not
a time for deluding ourselves about the magnitude of either
the challenges still ahead of us or the opportunities. It
is certainly not a time for listening to those among us who
are prepared to sacrifice our hard won gains on the altar of
ideology, be it that of the New Right or, let me say, the
Old Left.
As I said at the National Press Club, I am perfectly open to
debate about the pace of our progress towards these goals.
But I shall fiercely resist those who would impede or
jeopardise or reverse this progress.
Nowhere is this more important than in the crucial area of
industrial relations.
I appreciate that your organisation is not involved in party
politics but exists to conduct research and education on
public affairs in a non-partisan, objective fashion.
But I think you will understand that my responsibility is
not merely for the analysis of good public policy but also
for its implementation and, in a pre-election period, its
advocacy against those who would reverse it.
My concern is with the welfare of the Australian economy and
people and it is with those interests that I want today to
outline the dimensions, including the political dimensions,
of this issue of industrial relations.
As we enter the 1990s, industrial relations stands at the
heart of the profound differences between the two main
political parties.
On this issue of whether the way forward lies with
consensus or confrontation in the workplace the two
parties have been divided for more than a decade more
consistently, more sharply and more profoundly than on any
other issue.
Evidence for how this critical question will be resolved in
the 1990s is provided by the dramatic events of the 1980s.
At the start of the decade, the Fraser Government was
grandstanding over the impending resources boom, with its
chimerical promise of massive investment and higher living
standards which would give all Australians a bigger slice of
a bigger cake.
At the same time, that Government deliberately abandoned
attempts to control aggregate wages outcomes.
The combined effect of such measures would be obvious to any
first year economics student. In effect the Government was
saying that in an impending period of demand growth, those
with power in the economy should exercise it in their own
interests, and let prices be determined accordingly.
That was certainly a message heard clearly by the metal
trades and transport unionists who, responding to those
signals being emitted by the Government, sparked the wages
explosion of 1981/ 82.
In that way, the simultaneous double digit inflation and
unemployment that followed in 1983 an achievement
unequalled by any other Government in the history of
Federation was an achievement directly and explicitly the
result of the irresponsible economic management of the
Fraser Government.
The nation's well-being as a whole was retarded and corroded
by the selfish pursuit of short-term interests in the
poisonous atmosphere of confrontation fostered by the
Commonwealth. I have said this before on many occasions, but its truth has
not been eroded by time or by repetition: effective
industrial relations is the result of making workers
understand that their legitimate aspirations for improved
standards, and employers' equally legitimate aspirations for
growth, are not likely to be achieved by confrontationist,
tunnel visioned pursuit of their individual aspirations.
The early 1980s proved that.
Effective industrial relations requires both sides to
understand that their legitimate aspirations can best be met
by constructive co-operation.
The rest of the 1980s proved that.
Because under the Accord with the trade union movement, this
Government has given life to that philosophy.
The Accord has been the crucial instrument of economic and
social policy under this Government.
The fact that under the Accord, the trade union movement has
accepted smaller pay packets has led to two massively
important and genuinely beneficial processes:
first, it has allowed social wage increases such
as the restoration of Medicare, the opening up of
superannuation, the trebling of childcare places,
increases in Family Allowances, and the
inauguration of the Family Allowance Supplement;
and second, real wage restraint has started a dynamic
process in which the resultant record profits have
led to record investment and sustained record
employment growth. I repeat: record profits,
record investment and record job growth.
At the same time the consensus model of industrial relations
is allowing the restructuring of craft based unions and
union awards so as to lay the basis for greater flexibility
in wages and working conditions across industries. And all
this with a reduction of some 60 per cent in industrial
disputes under this Government.
Here then is the essence of the industrial relations lesson
of the 1980s.
At the start of the decade, a confrontationist, selfish
approach led to recession. By the end of the decade, the
co-operative approach had produced new jobs, a stronger
safety net of social welfare, a fairer taxation system,
steady economic growth, and a durable and genuine investment
boom. Such achievements are not just helping Australians of today.
Just as importantly, they are providing building blocks for
the future critical elements in the achievement of those
four goals I outlined earlier.
Now all this would be the stuff of the history books if it
were not that the industrial relations prejudices and
self-delusions of the Coalition that were so decisively
exploded by the trauma of the early 1980s were threatening
to return, in new garb, in the 1990s.
Industrial relations is still at the heart of the
differences between the two parties. The Peacock
conservatives have failed to learn the lesson so
dramatically taught by their Fraser predecessors that
lifting the lid off wages for a few will spell disaster for
the nation as a whole.
We saw this most clearly during the pilots' efforts,
supported by the Coalition, to overthrow the centralised
wage fixing system.
What the pilots sought to do extract a massive and
unjustified wage increase, with all that this would mean for
industry and economy wide employment and productivity levels
would be replicated any number of times whenever a
powerful union believed it could get away with it.
Saying " let * em rip" to the powerful few would mean the
weaker many are trampled in the rush.
Is that the kind of Australia that the Opposition Leader
wanted when he promised a fairer and more compassionate
Australia? The fact is simple: do away with a mechanism to control
aggregate wages outcomes and you will do away with effective
management of the entire economy.
Do away with consensus and you will remove from the hand of
public policy the means to achieve
national wage outcomes that will restore and
improve our international competitiveness;
the wage protection of employees whose bargaining
position is weaker than a metal worker or a pilot;
the capacity to bring to bear other elements of
public policy such as taxation, superannuation,
training, social welfare policies to the key
task of wage fixing;
the means to achieve productivity improvements
through award restructuring and union
amalgamation.
Do away with consensus and you do away with the system that
is delivering those record levels of profits, investment and
jobs. But doing away with consensus is precisely what the
Opposition proposes.
A deeper difficulty lies in the process under which the
Coalition's system would be established the transitional
phase in any immediate post-Accord years and the effect of
the Opposition's industrial relations policies on aggregate
wage outcomes.
It was when he was questioned about this that the Opposition
Leader produced his now famous " who's to know" comment a
shrug of the shoulders that conveyed so eloquently his lack
of understanding on this key issue.
Andrew Peacock may not understand the implications of his
own policy. But Australians can be assured that the real
architects of the policy those such as John Stone, John
Elliott, Ian McLachlan understand clearly.
What they clearly foresee, because they have coldbloodedly
planned it, is the chaos of industrial confrontation a
bonfire which would consume in flames the progress we have
achieved in the past seven and a half years.
Australians are now by and large well informed about the
nature of the national economic challenge; they have
experienced, in their workplaces, their homes, their schools
and communities, the impact of money wage restraint and
social wage improvement; they understand the need for
international competitiveness through micro-economic
productivity improvements even if they skip the economic
jargon.
They are not going to be satisfied with strategies for the
future that fail to address the fundamentals.
So what we need to do is carefully to appraise the progress
we have made; clear-sightedly to understand the reasons for
that progress; and deliberately to chart a course for the
future that will ensure continued progress.
Ladies and gentlemen,
Your invitation to address this seminar reminded me of an
invitation to address another January conference seven years
ago the 1983 Summer School of the Australian Institute of
Political Science.
The title of that conference is today an evocative relic of
the era: " Industrial Confrontation Can we Survive It?"
In my address, I summed up the essential malaise of the
Fraser Government's period of office as being, " an
increasing erosion of any sense of common national purpose".
That same phrase could apply with equal relevance and
accuracy to the conservative parties today.
Because a determination to put the private interest of a few
ahead of the public interest of the many is the touchstone
of all they are offering for the 1990s.
It is the philosophy underlining John Elliott's infamous
statement that the Liberals would take from the ' bludgers'
and give to the ' workers'.
It is the key to their determination to undo the fair and
efficient Capital Gains Tax in favour of the privileged
minority. It is the basis for the callous determination to pull the
carpet from under the sick, the elderly, the Aboriginal, the
newly arrived migrant, as seen in the cuts outlined in the
so-called Economic Action Plan.
It is the raison d'etre for their short-sighted stubbornness
to develop policies for the genuine protection of the
natural environment.
But most critically, this absence of a sense of common
national purpose is the essence of their proposals for
industrial relations. Their proposals will see once again
the triumph of sectoral interest over the public good the
triumph of the strong over the weak the triumph of blind
ideology over rational common sense.
It would also, let me add, be a triumph of the John Stones
and the other ideologues of the Coalition parties over
Andrew Peacock who, though he nominally leads that
Coalition, utterly lacks the weight to control it.
Australians cannot afford and I believe, will not choose
a Coalition that deliberately, consistently and blatantly
seeks to put the interests of the few ahead of the interests
of the nation as a whole.
Ladies and gentlemen,
My theme today has been change within Australia, and how it
can be effectively managed by consultation.
But I began by mentioning the spectacular transformation
sweeping Eastern Europe.
In closing I want to return to those historic developments,
as they are relevant to that theme of the management of
change. There is of course an intimate connection these days between
the future character of Australia and of the world in which
Australia must operate. Foreign and domestic policy are
increasingly two sides of the same coin.
The lesson of Eastern Europe is that a society that turns
its face against change, and that tells its people that the
received wisdom of 40 years ago remains relevant and valid
today, will fail.
Even the harshest surveillance and repression will in the
end provide inadequate shields against a people determined
to claim their birthrights of freedom and well-being.
Australia of course will never experience the depths of
official corruption and depravity represented so vividly by
the fallen despots of Eastern Europe.
But the lesson is valid nevertheless: societies that are
successful and that best fulfil the aspirations of their
people are societies capable of anticipating and responding
to change, of taking advantage of opportunities as they
arise and of eschewing the comfortable temptations of habit
and entrenched interests.
On the threshold of the 1990s, Australia would do well to
take that lesson to heart.
I feel that I can stand before you and say with complete
conviction, backed up by seven years of achievement in both
domestic and foreign policy, that ours has been a Government
attuned to change.
We have shown the capacity to anticipate change and to
devise effective strategies which are not merely reactive
but look to the future and to shaping that future for the
benefit of the Australian people.
And therefore over-arching every particular proposition and
message which I will be putting in coming months is the
critical commitment that, while my Government is deeply
proud of its record, we will never be a Government that
shirks the challenge of capturing the benefits of further
change for the Australian people.
Let me say finally that I have deeply appreciated the
positive response of so many in the business community to
our consultative approach to governing for change. And over
the whole of my period of leadership, no organisation has
been more consistently co-operative in facilitating the
process of consultation and exposition than CEDA. I thank
you most sincerely for that.