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Speech: electorate of Barton



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SPEECH BY THE HON JOHN KERIN IN THE ELECTORATE OF BARTON, BRIGHTON LE SANDS, 31 JULY 1991

GARY PUNCH, LADIES AND GENTLEMEN. ,

IT IS A PLEASURE FOR ME TO BE HERE THIS AFTERNOON.

WHEN I FIRST RECEIVED GARY'S INVITATION I THOUGHT TO MYSELF: "WHAT A GREAT IDEA".

ALL THE MORE SO BECAUSE OF THE TASK WHICH AWAITS ME WHEN I GET BACK INTO CANBERRA: WHICH IS GOING THROUGH GOVERNMENT PROGRAMS, LINE BY LINE, IN ORDER TO BED-DOWN THE 1991 BUDGET.

IT'S PERHAPS APPROPRIATE THEN IF I SPEND A LITTLE TIME RUNNING THROUGH THE GOVERNMENT'S GENERAL APPROACH TO THIS YEAR'S BUDGET.

IT'S BEEN A DIFFICULT YEAR FOR AUSTRALIANS. THE RESULT OF THE RECESSION HAS BEEN INCREASED STRUGGLE FOR MANY. IT'S BEEN A STRUGGLE FOR SOME FAMILIES TO MEET THE BILLS AND IT'S BEEN A STRUGGLE FOR SOME BUSINESSES TO CONTAIN COSTS AND BUILD PROFITS.

YOU WILL BE AWARE OF THE EVIDENCE NOW EMERGING POINTING TO A RECOVERY. HOUSING AND HOUSING CREDIT, MOTOR VEHICLE REGISTRATIONS, CONSUMER AND BUSINESS SENTIMENT ARE INDICATORS ALL POINTING TO IMPROVED CONDITIONS IN THE MONTHS AHEAD.

PROGRESSIVE AND SUBSTANTIAL CUTS IN INTEREST RATES HAVE CONTRIBUTED SIGNIFICANTLY TO WHAT IS NOW AN EMERGING RECOVERY. ECONOMIC FUNDAMENTALS HAVE BEEN TURNED AROUND, NOT ENGINEERED BY GOVERNMENT SPENDING DECISIONS. AN ENGINEERED TURNAROUND WOULD HAVE BEEN EASY TO PRODUCE: SIMPLY BY BORROWING LIKE A MAD-MAN AND POURING THE FUNDS INTO GOVERNMENT PROGRAMS.

THE GOVERNMENT HAS EXPLICITLY REJECTED THAT PATH.

WE NEED TO AVOID RELAXING MONTEARY POLICY TOO MUCH. WE ALSO NEED TO MAINTAIN A FIRM FISCAL STANCE WHICH WILL ACT TO BOOST NATIONAL SAVINGS IN THE MEDIUM TERM, AS WELL AS KEEP WAGES POLICY UNDER CONTROL.

THE SOCIAL COST HAS BEEN LARGELY IN TERMS OF UNEMPLOYMENT. THAT COST, AND I’LL ADMIT IT FRANKLY, HAS BEEN MUCH HIGHER THAN THE GOVERNMENT ANTICIPATED. BUT HAVING GONE THROUGH THE PAIN OF THE LAST YEAR THE TASK NOW IT TO ACHIEVE HIGHER LEVELS OF SUSTAINABLE EMPLOYMENT. THE GOVERNMENT IS ALSO COMMITTED TO JOBS WHICH REQUIRE BETTER SKILLS AND BETTER PRACTICES FROM BOTH MANAGEMENT AND THE WORK-FORCE.

FURTHER, THE GOVERNMENT IS COMMITTED TO INCREASED EXPORTS AND INCREASED PRODUCTION.

IT IS IMPORTANT TO DISTINGUISH BETWEEN THE OBJECTIVES OF POLICY AND THE POLICY INSTRUMENTS WHICH WE USE TO ACHIEVE OUR GOALS.

THE KEY TASK CONFRONTING AUSTRALIANS IS TO IMPRESS UPON OUR NATIONAL CONSCIOUSNESS THE IMPORTANCE OF THE TASK OF BEATING INFLATION.

SINCE THE 1970S AUSTRALIA HAS BEEN A HIGH INFLATION COUNTRY IN COMPARISON TO OUR TRADING PARTNERS. THE CONSEQUENCES HAVE BEEN CLEAR: AN EMPHASIS ON DEBT FINANCING, A NATIONAL FIXATION ON CAPITAL GAINS AS OPPOSED TO INVESTMENT IN

PRODUCTIVE CAPITAL, AND A REDUCTION IN COMPETITIVENESS.

COMMONWEALTH PARLIAMENTARY L IB R A R Y MICAH

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IN THE LATE EIGHTIES A VICIOUS CYCLE EXISTED WHICH EFFECTIVELY ROBBED AUSTRALIANS OF A LOW INFLATION ENVIRONMENT. THE BOOM IN THE VALUE OF ASSETS FED THROUGH TO THE GENERAL ECONOMY IN A WAY WHICH MADE THE USE OF HIGH INTEREST RATES INEVITABLE. SPECULATIVE ACTIVITY REINFORCED THE EFFECTS OF THE UNEXPECTEDLY LARGE IMPROVEMENT IN THE TERMS OF TRADE.

THE ECONOMY WAS ON A ROLLER-COASTER, AND ONE OF THE CASUALTIES WAS INFLATION.

OUR TASK NOW IS QUITE SIMPLE. IT IS TO ENSURE THAT WE AVOID THE ROLLER COASTER.

WE WILL DO THAT IN TWO WAYS:

1) WE WILL CONTINUE TO CONTROL INFLATION, CONTINUE TO WORK TO IMPROVE THE CURRENT ACCOUNT, CONTINUE TO BOOST EXPORTS AND PRODUCTION; AND

2) WE WILL WORK TO IMPROVE THE INSTITUTIONS OF GOVERNMENT WHICH HAVE AN EFFECT ON OUR COMPETITIVENESS AS PRODUCERS AND AS EXPORTERS. THAT IS WHY THE SPECIAL PREMIERS’ CONFERENCE IS SO IMPORTANT. FOR IT PROVIDES THE MECHANISM FOR GETTING ROADS AND RAIL, ELECTRICITY, BUSINESS REGULATION AND

ENVIRONMENTAL MANAGEMENT RIGHT.

I AM NOT GOING TO PRETEND THAT HOLDING INFLATION DOWN, IMPROVING THE CURRENT ACCOUNT, OR SUSTANTIALLY BOOSTING EXPORTS ARE GOING TO BE EASY, INSTANTANEOUSLY ACHIEVED.

BECAUSE THEY WON'T BE.

OUR CURRENT ACCOUNT, FOR EXAMPLE, WILL CONTINUE TO BE NEGATIVE FOR SOME TIME INTO THE FUTURE, REFLECTING AS IT DOES REPAYMENT ON DEBT PREVIOUSLY INCURRED.

OUR PROGRESS ON INFLATION WILL VITALLY DEPEND ON THE COMMITMENT OF AUSTRALIANS TO A LOW-INFLATION ENVIRONMENT.

ALTHOUGH THE TASK ISN'T GOING TO BE EASY, IT IS NOT IMPOSSIBLE.

THERE ARE, YOU'LL BE PLEASED TO KNOW, ENCOURAGING SIGNS. THERE HAVE BEEN SIGNIFICANT BREAKTHROUGHS. FOR EXAMPLE:

. MANUFACTURING EXPORTS HAVE INCREASED IN DOLLAR TERMS SINCE 1983 BY 120 PER CENT;

. MANUFACTURING PRODUCTION HAS INCREASED BY 22 PER CENT (EVEN IN THE MIDDLE OF A RECESSION);

. MANUFACTURING INVESTMENT INCREASED 42 PER CENT;

. THE VALUE OF COMMODITY EXPORTS HAS INCREASED BY ABOUT 120 PER CENT TO AROUND $40 BILLION SINCE 1982-83;

. THE VALUE OF SERVICES EXPORTED HAS INCREASED BY 224 PER CENT TO $8.1 BILLION SINCE 1982-83;

. PRODUCTIVITY IN OUR GRAIN-PORTS HAS INCREASED BY 70 PER CENT;

. THERE HAVE BEEN MASSIVE INCREASES IN EMPLOYMENT. EVEN NOW, AT THE TAIL END OF THE RECESSION, MORE AUSTRALIANS ARE IN JOBS THAN IN 1988-89.

THESE RESULTS HAVE REFLECTED HARD WORK BY MANY AUSTRALIANS.

I'D EMPHASISE THIS POINT.

A RECOVERY IS NOT THE SOLE RESPONSIBILITY OF THE COMMONWEALTH GOVERNMENT, ALTHOUGH WE HAVE TO DO OUR PART. RATHER IT IS THE EFFORTS OF INDIVIDUAL AUSTRALIANS WHICH WILL TRULY ACHIEVE A SHIFT IN COMPETITIVENESS AND EXPORTS.

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THERE ARE THINGS INDIVIDUALS CAN DO TO HELP IMPROVE THE QUALITY OF OUR ECONOMIC RECOVERY. FAMILIES, FOR INSTANCE, CAN CONSIDER THE BENEFITS OF USING ADDITIONAL INCOME TO PAY OFF PART OF THEIR HOME LOAN. COMPANY MANAGEMENT CAN CONSIDER THE LONG TERM BENEFITS OF REDUCING THE COMPANY'S DEBT INSTEAD OF PAYING THEMSELVES HIGHER SALARIES.

THERE ARE ALSO THINGS INDIVIDUALS AND COMPANIES CAN DO TO HELP THE NATION AVOID THE TRADITIONAL BOOM-BUST CYCLE. FOR EXAMPLE, THOSE COMPANIES NOW DEVELOPING OVERSEAS MARKETS SHOULD NOT SUDDENLY DROP THOSE MARKETS WHEN CONDITIONS IN AUSTRALIA IMPROVE.

I ’VE HAD SOME EXPERIENCE OF THIS TYPE OF BEHAVIOUR IN MY PREVIOUS PORTFOLIO. ALL TOO OFTEN WE HAVE SEEN SMALL INDUSTRIES WHICH EXPORTED AND DEVELOPED MARKETS WHEN WORLD PRICES FAVOURED EXPORTS, BUT WHICH WITHDREW COMPLETELY WHEN THE AUSTRALIAN MARKET COULD BEAR ADDITIONAL PRODUCE AND HIGHER PRICES. THE

CONSEQUENCES HAVE BEEN BURNT-OFF DISTRIBUTORS AND A SOURED EXPORT REPUTATION.

OUR LONG-TERM PROSPECTS HAVE THEREFORE BEEN DAMAGED BY THE OPPORTUNISTS.

YOU ALL HAVE AN IMPORTANT ROLE HERE. YOUR ROLE IS TO DEVELOP AN EXPORT CULTURE.

EXPORTING ISN'T EASY.

IT REQUIRES HARD WORK AND THE WILLINGNESS TO STAY IN THE GAME FOR THE LONG-TERM.

LIKE EXPORTING, CHANGING THE WAY GOVERNMENTS WORK IS NOT EASY.

I ADMIT THAT THE IDENTIFICATION OF THE TASK IS SIMPLE. PROCESSING THE ISSUES, INSTANTANEOUSLY, IS NOT.

IF YOU THOUGHT MOVING A PACKAGE BY RAIL ACROSS AUSTRALIA WAS DIFFICULT THEN YOU SHOULD TRY NEGOTIATING A PACKAGE THROUGH THE SIX PREMIERS OF THE SIX STATES, AND TWO CHIEF MINISTERS OF TWO TERRITORIES!

EACH OF THESE LEADERS HAS LEGITIMATE INTERESTS TO ADVANCE. REASONABLY SO. AUSTRALIA IS A BIG COUNTRY AND THE ISSUES OF CONCERN IN BROOME ARE NOT IDENTICAL TO THOSE WHICH EXIST IN HAWTHORN OR KOGARAH.

I ADMIT HOWEVER TO BEING ENORMOUSLY ENCOURAGED BY THE RESULT OF THE SPECIAL PREMIERS’ CONFERENCE JUST HELD.

(WE HAVE AGREEMENT ON ROADS.

WE HAVE AGREEMENT ON FORMING A BETTER RAIL SYSTEM.

WE HAVE AGREEMENT ON THE FORMATION OF A NATIONAL ELECTRICITY SYSTEM.

WE HAVE AGREEMENT ON REGULATORY REFORM.

WE HAVE AGREEMENT ON THE REFORM OF GOVERNMENT BUSINESS ENTERPRISES.)

PERHAPS REPORTS ON THE PROGRESS WE HAVE MADE AT THE SPECIAL PREMIERS' CONFERENCE WILL LEAVE MOST OF YOU COLD.

PERHAPS THIS IS SO ESOTERIC THAT ONLY PEOPLE WORKING IN CANBERRA COULD HAIL IT AS A REAL ADVANCE.

BUT REALISTICALLY, WE CAN'T HOPE TO ADVANCE THE ECONOMIC AND SOCIAL AGENDA, CAN'T HOPE TO "DO THINGS BETTER" IF GOVERNMENT "ONLY DOES THINGS WORSE".

AS A LABOR TREASURER I REJECT THE STERILE PHILOSOPHY OF SMALLER GOVERNMENT FOR THE SAKE OF SMALLER GOVERNMENT.

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I REJECT THE NOTION THAT GOVERNMENT SHOULD FOREVER BE WHITTLED BACK, AND THAT THE PROVISION OF ESSENTIAL SERVICES SHOULD ESSENTIALLY BE LEFT TO THE PRIVATE SECTOR.

TO ME THAT INDICATES A BIZARRE VIEW OF THE ROLE OF GOVERNMENT AND PUBLIC POLICY.

IT IS ALRIGHT TO LET MARKETS DO THEIR THING AS LONG AS WE ARE AWARE THAT THE PURSUIT OF SOCIAL JUSTICE CAN BE COMPROMISED BY SOME FREE MARKET EFFECTS AND THAT THE PURSUIT OF SOCIAL JUSTICE IS A KEY OBJECTIVE FOR US. ALSO THERE WILL ALWAYS BE A PLACE FOR REGULATION - WHEN IT IS NECESSARY TO PROTECT PUBLIC HEALTH STANDARDS, FOR EXAMPLE.

AS A LABOR TREASURER, I'M QUITE CONTENT TO RESPOND TO THOSE WHO CLAIM THAT THE PRIVATE SECTOR ALWAYS DOES IT BEST: "YES, THE ENTREPRENEURS AND THE WHITE-SHOE BRIGADE FULLY AGREE". THAT GENERALLY WINS ME THE POINT.

PUBLIC POLICY IS BEING DEFINED BY THE HAWKE LABOR GOVERNMENT IN FOUR KEY AREAS: ECONOMIC AND INDUSTRY REFORM; THE REFORM OF GOVERNMENT INSTITUTIONS AND STATE AND COMMONWEALTH GOVERNMENT RELATIONS; SOCIAL JUSTICE; AND THE PROTECTION OF THE ENVIRONMENT.

A COMMON ELEMENT IS THAT GOVERNMENTS MUST DO THINGS BETTER. THE ANSWER DOESN'T RELY ON JUST OPENING UP THE PURSE BUT RATHER IN MAKING SURE THAT PUBLIC INSTITUTIONS SERVE THE COMMUNITY PROPERLY.

THIS IS A MUCH MORE DIFFICULT TASK. IT'S EASY TO HAVE PEOPLE AGREEING TO SPEND BUCKETS OF MONEY. IT'S A MUCH MORE PROFOUND TASK TO WORK SERIOUSLY THROUGH THE AREAS WHERE, FIRST OFF, THERE IS NOT UNANIMOUS AGREEMENT ON OBJECTIVES OR OUTCOMES.

I'VE TOUCHED BRIEFLY ON THE FIRST TWO AREAS: INDUSTRY AND GOVERNMENT REFORM.

LET ME CONCLUDE THEN BY MAKING JUST A COUPLE OF COMMENTS ON LABOR'S SOCIAL JUSTICE PROGRAM AND OUR EFFORTS TO PROTECT THE ENVIRONMENT.

BOTH ARE DEFINED IN THE EXPRESSION "THE SOCIAL WAGE".

THAT IS, ONLY GOVERNMENT CAN ENSURE THAT INDIVIDUALS HAVE ACCESS TO BOTH COMMUNITY FACILITIES AND SERVICES. AND A CLEAN ENVIRONMENT IS AS MUCH A COMMUNITY SERVICE AS A HOSPITAL.

BOTH REQUIRE A CLEARER UNDERSTANDING OF THE NEEDS OF AUSTRALIANS AND AN UNDERSTANDING OF HOW THE COMMUNITY WILL CHANGE ITS LIVING PATTERNS AND ASPIRATIONS INTO THE FUTURE.

IN SHORT, NONE OF THIS STUFF IS FOR THE TV GRAB: IT’S NOT SEDUCTIVE IMAGERY. IT'S, INSTEAD, PART OF THE LONG-TERM AGENDA WHICH NEEDS TO BE ADDRESSED.

IN CONCLUSION, I'LL AGAIN RETURN TO THE THEME OF "DOING THINGS BETTER".

THAT IS A TASK WHICH ALL OF US NEED TO UNDERSTAND, AND THEN IMPORTANTLY, ACT UPON.

IT'S NOT AN EASY JOB. BUT SOMEBODY HAS TO DO IT. I FIGURE THAT GARY'S SHOULDERS, AND MINE, ARE JUST BROAD ENOUGH. THANKS FOR YOUR TIME TODAY.