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The challenge of change

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The Attorney-General said he was confident that all

four referendum proposals would be carried. The proposals

were eminently sensible amendments to the Constitution and

they would win the support of all forward thinking people.

The proposal for simultaneous elections would reduce

the number of times that electors would have to vote in

Federal elections. It would also save taxpayers millions of

dollars in unnecessary election expenses.

* If the system is not changed, there could be as many

as four elections in the next four years and eight elections

in the next ten years.

* It means that 14 Federal elections might be held

between 1961 and 1981. '

•People do not want to be turning out every 18 months

to vote in Federal elections. They want the Government they

elect to get on with the job of running the country without

having to campaign constantly for elections·, Mr Ellicott

said. .

Gold Coast

April 29, 1977 . .


81 .





The Australian Society of Senior Executives inevitably

brings together the leaders in our business community. Needless

to say your daily preoccupation will be with matters relating

to the economy and business. Indeed this has been and still

is the major concern of our Government - restoring those

conditions which will enable our economy to grow and prosper.


But to say this is not to identify all the challenges

which face the Australian people and its Government. I say

'challenges' because, as the historian Toynbee has described

it, history is the story of challenge and man’s response.

There are many challenges facing us and our response and the

timing of our response will be critical to our future. The

halcyon days of the 60's have gone. They will not return.

The 7 0 's have exposed the fact that we are facing a

completely new set of social political and economic

circumstances which throw up fresh challenges. Some of us

cry out for· change, others abhor it. The underlying fact is

that change is upon us whether we want it or not and our

response to it is critical. Not only is the nature of our

response critical but also its timing.

A man and his wife visited an art gallery. They

stopped in front of a painting of a beautiful young woman with

leaves strategically placed on her body. The title of the

painting was 'Spring'. Some time later the wife found he was

missing. She returned to find him still staring at the

painting 'Spring' 'For God's sake will you come' she said ■ .

'Autumn's not for nine months. ' '

We cannot afford to wait either. The timing of our

response to some of the challenges we face is critical.

Several weeks ago the Government was presented with

a challenge - a voluntary prices and wages freeze. The

Government and the State Governments responded to the challenge

So did many businessmen in asserting their willingness to

freeze prices. The community generally has favourably

responded to it -whatever may have happened since the matter

was first raised. The Australian people - many of whom are

trade unionists - are now, quite rightly, waiting for a

favourable response from our trade union leaders. This can

best be given at the National Wage Case hearing in.Melbourne

this week.

The latest C.P.I. figures of 2.3% and the continuing

broad support given to a price freeze by businessmen enable


what in effect would be a voluntary freeze to be adopted at

the hearing. All the relevant groups will be there -

Governments, Trade Unions, Employers.

If a worker on say $150 per week gave up a wage rise

of 2.3% it would mean foregoing, after tax, something like

$15 to $20 over three months in return for a broad freeze on

prices. Confronted with that proposition I believe the

average Australian would respond by saying it was completely

reasonable - forego $15 to $20 in return for a broad freeze in

prices over three months. How much more acceptable the

proposition becomes when one remembers that in a contested

hearing the Commission may well order nothing.

I believe that all Australians are therefore

waiting for their trade union leaders to make a timely and

reasonable response to this challenge. If reason does not

prevail, if the challenge is not met, we may lose a golden

opportunity for co-operation between the trade unions, the

employers and the Governments of this country. '

This is an example of a short term challenge. I want to

mention some others which confront us. The modern corporation

itself is under challenge. . It is important to note that

over the decades the freedom of corporations to act has gradually

been eroded. Society has in effect placed its corporations in

a legislative and administrative straightjacket. A significant

proportion of the price of goods and services provided by

corporations represent costs incurred in complying with the

multitude of regulatory provisions.

To some extent, of course, it was inevitable that

some provisions would be adopted, e.g. to require fuller

information to be provided to shareholders and to increase

the responsibilities of directors. Many of the provisions

which are instruments of economic policy are also inevitable

in one form or another.

On the other hand there are some areas of

Government regulation which could possibly have been avoided

if the business community itself had adopted its own self­

discipline, e.g.


(i) There was time in the mid-1960*s when I

believe the securities industries could

have avoided much of the present regulations

if it had regulated itself. C f . City of

London Code.

(ii) Similarly with false or unfair advertising.

(Cf. English experience).

I am sure all of you would agree that the more

the corporation is restricted by Government the less

vigorous and vital it becomes. Self regulation is different

from Government regulation. It is so with individuals. It '

is so with corporations.

What we need to appreciate is that Government has

already intruded so much into corporate activity that the

corporation is in. danger of losing its essential character as

the basic instrument of free enterprise. The corporation is

fast becoming as dependent on the State as are the most

dependent individuals. .

Initiative, independent anpl competitive action,

risk taking, have all been diminished by Government intrusion

and Government dependence. The slowness of our economic

recovery is I believe in part a reflection of the fact that

corporations tend to depend too much on Government action.

The corporation as an instrument of free enterprise and

competititon is therefore under challenge from the very system

within which it operates. .

As I have said this is in part due to the inevitable -

but it is also due to the failure of corporations to regulate

their own conduct in keeping with the demands of our time.

A corporation that reacts to the needs of society

that is responsive to its consumers and innovative in its

products, that is self reliant and maintains high ethical


standards in its business relationships, is alive and vigorous

and performing its true role in our free society.

On the other hand a corporation that has to be

goaded into action or pushed into submission or disciplined

by Government regulation that takes no account of social needs

until told to do so is anatema to a free society inviting not

only the corporation's own destruction but encouraging a

creeping paralysis that will gradually strangle the whole of

our free enterprise system. ■

I was pleased to read that Sir Frank Kitto as

Chairman of the National Press Council has taken up a

similar theme in relation to the press.

There has been a great deal of discussion lately

about reforms to our defamation and privacy laws resulting

from references I have made to the Australian Law Reform

Commission. The press was quick to support a suggestion

from the Commission that the defamation laws should be amended

to remove some of the defences in defamation actions. However,

more recently the Commission has suggested that the privacy of

individuals may need to be protected from the press by

specific legislation. Some sections of the press were quick

to oppose the suggestion.

But the fact ϊβ that the Press does mis-report

statements and events. Many of them, as every politician

knows, go unnoticed. On the question of new privacy laws I

was reported by the Sydney Morning Herald as saying that the

Federal Government would probably enact laws which would

implement the suggestions of the Law Reform Commission and

an editorial was written based on my having said it. In fact I

had said no such thing. I told the reporter I hadn't seen a

copy of the report and I couldn’t comment on it.

It is also clear that from time to time sections of

the press do intrude unnecessarily into the individual's



The best solutions to the problems of defamation and

intrusions into privacy is self regulation by the press

itself. Sir Frank is right. But if the press ignores the

problem or asserts it does not exist - in other words if it

does not respond to the challenge - it cannot be surprised if

at some time some Government, State or Federal, legislates on

the matter. The challenge to the press is to be more accurate

and to be more sympathetic to the privacy of the citizen.

A similar challenge faces those, other large

corporations - the Trade Unions. . .

They wield great power but in a free society this

power is also a measure of the responsibility they bear.

Paul Johnson is right in suggesting they are not part of the

socialist system. They are more the creatures of the free

enterprise system. In a socialist system workers are told

what to do. Unions have no place. In a democracy unions are

in simplistic terms, corporations of labour established to

protect their members from the corporations of capital. They

represent part of the balance of power in a free society.

But the power which union leaders and unions wield,

like the powers of directors and corporations, must be

responsive to their members' wishes and to the society in which

they operate. The price that union leaders and unions pay for

not being responsive is government regulation.

There is really no reason why officials of unions

should not be required to exercise the same high standards and

bear the same personal liability for loss to their members as

are the directors of corporations. If union officials do not

meet these standards it is inevitable that governments of either

political complexion will legislate to regulate their conduct.

This is the reason for secret ballot legislation, for provisions

laying down the duties of officials both in civil and criminal

terms and for measures which define the amount of information

which unions should publish about their finances and affairs

in order to inform the members and the wider public.


If, as I believe, the public are entitled to know

what large corporations are up to why shouldn't the public

also know what large unions are up to. Unions, like

corporations, are by no means identified in all cases with what

is the wider public interest. They can be extremely sectional

in their concerns. *

Similarly, if unions engage in practices which

greatly inconvenience the wider public both in social and

material terms, if they unduly restrict business activity

and damage the property of others (including the goodwill of

businesses) it is inevitable that in a free society they will

be subjected to government regulation. If unions and union

leaders by excessive wage demands fail to recognise that,

broadly speaking, labour costs are too high and are

undermining the strength of our manufacturing industries .

(where most of our job opportunities lie) economic recovery

will be long delayed. Unions and their leaders have a distinct

role in our society but if they seek to broaden that role and

take over the role of government the public through their

government will react to it. There is no threat implicit in

what I am saying. I am merely describing what is an

inevitable process if we are to maintain a free democratic


There are challenges facing us all in many areas.

They are long term but many of them we will have to meet in

the near future.

Let me give you an example in the field of social

welfare. This financial year the amount set aside for social

welfare in our Federal budget is approximately $6.12 Billion

or i of total budget expenditure.

This is large enough. What is equally significant

is the increase in the number of people receiving social

service benefits of various kinds. For example, between

June 1972 and June 1976 the total number receiving aged and

invalid and widows pensions and supporting mothers,


unemployment, sickness and other benefits have increased

from 1.16 million to 1.86 million, an increase of 700,000.

The growth factor in the social welfare area is

clearly disturbing particularly when we remember that the

proportion of older people in our population is itself

growing. The effect of such growth on future budgets and on

the options which will be open to Government in other areas

of expenditure or as tax reform are obvious.

It is a challenge to governments and the community

to reconsider our approaches in this basic area. One aim

would be to ensure that real needs are in fact being met and

in the most appropriate form. The Henderson Commission has

already written a great deal on this. Another aim would be

to see if there are any fundamental changes that should be

made to the present system.

I am constantly being confronted with another basic .

challenge - the increased rate of divorce in the last 15 months

The Family Law Act has exposed the disturbing fact that basic

family life is under threat in our society. The answer is not

to repeal the Family Law Act. That would only sweep the

problem back under the carpet. Nor is the answer to accept

as a fact that marriage is no longer a viable institution.

Marriage and the family are basic to a democractic society. If

they fail then only the State or some other institution remains

to care for children.

The only situation is to strengthen our family life.

The government will play its role in this by continuing to

encourage voluntary counselling organisations and by

establishing the Institute of Family Studies. But in the long

run the challenge must be met by individuals in their own .

personal response. We must remember that excessive

individualism, that is individualism not matched by

responsibility, can corrode a democracy and in the end play

into the hands of those who believe in other forms of



We have basic challenges to meet in the field of

education. This debate is proceeding at the moment. But

it is not just a matter of placing greater emphasis on

technical education. There are deeper problems. For

instance, in recent times has education been organised more

for teachers than for children? Are we educating for too

much mediocrity? Are we encouraging leadership? Does the

educational system encourage dependence on the State rather .

than initiative and a deep concern for others.

There is another area of basic challenge which I

would like to mention and that is the development of our

resources and energy policy. The Prime Minister has spoken

about it over the weekend. Apart from our land resources

we have the resources of our continental shelf. If we

declared a 200 mile economic zone it would mean that our

seabed resources would cover an area not much less than our

continental land. mass. This does not include the seabed of

Australia's antarctic territory which is adjacent to 2000

miles of coastline. The development of our land and sea

resources in accordance with broad policy and the relationship

of that development to our obligations overseas present an

immediate challenge to all our governments and all our people.

Part of that challenge is developing a working

relationship between State and Federal Governments in this

important area.

The High Court has held that the Federal Parliament

has sovereignty over off-shore areas. But under our system

the States can exercise powers thereto. The challenge of

the coming months will be to find a working relationship with

the States which will recognise the legitimate interests of

the States in off-shore areas but acknowledging the appropriate

role for the Commonwealth. This raises a political question

rather than a constitutional or legal question.

My view has always been that the role of politicians

in this country is to conceive of power not as

something which they own or possess for themselves but


something which is there to be exercised for the benefit

of our people. And by ’our people' I mean our people

collectively and individually. The politicians role is to

find the optimum way in which to exercise power. And if it

means that a particular area of power shall only be exercised by

one parliament, if thatfe the optimum way to serve our

people, then so be it. If on the other hand the optimum is

that power be · shared the role of politicians is to find that

way which will most benefit our people. This I believe

applies to all areas of Federal/State relations. It applies

to questions relating to our sea and seabed resources.

But Governments in our federation, be they State or

Federal should not look upon power as their own preserve to

be exercised by themselves without regard to other governments

and to the question whether the people are better served if the

power is exercised by them alone or in conjunction with other


This is the challenge of co-operative federalism.

It is one of the great challenges we face in our federation.

It is part of the challenge of change.


2 May 1977