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Address to a luncheon hosted by The Australian Council for Europe, Brisbane



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Leader of the Opposition

six┬╗ MluAH

ADDRESS BY THE HON ANDREW PEACOCK MP

LEADER OF THE OPPOSITION

TO A LUNCHEON HOSTED BY

THE AUSTRALIA COUNCIL FOR EUROPE

Brisbane Club, 4th Floor, Cnr Adelaide Street and Isles Lane, Brisbane, Thursday 6 July 1989 at 12.45 pm

Parliament House, Canberra, A.C.T. 2600 Phone 77 4022

ADDRESS BY THE HON ANDREW PEACOCK, HP

LEADER OF THE OPPOSITION

TO THE AUSTRALIAN COUNCIL FOR EUROPE

HELD AT THE BRISBANE CLUB

BRISBANE, 6 JULY 1989

THE NEGOTIATIONS IN EUROPE LEADING TOWARDS THE CREATION OF THE SINGLE MARKET IN 1992 ARE OF CRITICAL INTEREST TO AUSTRALIA, ESPECIALLY TO OUR RURAL PRODUCERS AND EXPORTERS.

THE REMOVAL OF INTERNAL TRADE BARRIERS WILL CREATE A WESTERN EUROPEAN MARKET OF OVER 320 MILLION PEOPLE - A THIRD LARGER THAN THE AMERICAN MARKET AND DOUBLE THE SIZE OF THE JAPANESE MARKET.

ON THE SURFACE THIS PRESENTS TREMENDOUS OPPORTUNITIES FOR SMART AUSTRALIAN EXPORTERS TO BOOST SALES IN THIS NEW MARKET - WHICH WE WOULD ALL WELCOME AND ENCOURAGE.

ON THE OTHER HAND, HOWEVER, WE SHOULD REMEMBER THAT EUROPE IS NOT UNIFYING TO HELP THE REST OF THE WORLD. THE SINGLE MARKET ACT, LIKE THE FORMATION OF THE EUROPEAN COMMUNITY ITSELF, IS AN EXPRESSION OF EUROPEAN SELF-INTEREST.

THERE IS NO REASON FOR CONFIDENCE THAT THE INTERNAL REFORMS WILL BE MATCHED BY THE REMOVAL OF EXTERNAL BARRIERS OR BY AN

ACCELERATED DISMANTLING OF THE COMMON AGRICULTURAL POLICY (CAP).

THE SHEER SIZE OF THE MARKET WILL OFFER UNPARALLELED ECONOMIES OF SCALE FOR THE LARGER EUROPEAN PRODUCERS, MAKING THEM MORE COMPETITIVE IN WORLD MARKETS AGAINST U.S. AND JAPANESE MANUFACTURED PRODUCTS.

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THERE'S BEEN A LOT OF TALK ABOUT THE OPPORTUNITIES FOR AUSTRALIA IN THE SINGLE MARKET - MOST OF IT JUSTIFIED. BUT THERE HAS BEEN A VIRTUAL WALL OF SILENCE ABOUT THE THREAT WE WILL FACE FROM A MORE PRODUCTIVE EUROPE, SEEKING TO REGAIN ITS FORMER LEADERSHIP

IN WORLD TRADE.

IN SHORT, WE SHOULD NOT EXPECT ANY EARLY END TO THE DISTORTIONS OF WORLD AGRICULTURAL TRADE, AND INDEED WE WILL FACE TOUGHER EUROPEAN COMPETITION IN MANUFACTURED GOODS AND SERVICES. .

THIS PRESENTS GREAT CHALLENGES FOR THE AUSTRALIAN ECONOMY - A NATION WITH A SMALL DOMESTIC POPULATION, HEAVILY DEPENDENT ON PRIMARY INDUSTRIES AND COMMODITIES, WITH A MANUFACTURING SECTOR STILL LARGELY UNCOMPETITIVE IN WORLD MARKETS.

THE MESSAGE IS SIMPLE. THE REST OF THE WORLD IS NOT WAITING FOR AUSTRALIA TO CATCH UP, IT IS MOVING AHEAD AND LEAVING US FOR DEAD.

IF WE SERIOUSLY WANT TO REVERSE OUR LONG ECONOMIC SLIDE, REIN IN THE LEVEL OF OUR FOREIGN DEBT AND AGAIN BECOME A SUCCESSFUL TRADING NATION - WE HAVE TO "UP THE ANTE" CONSIDERABLY.

ONE OF THE GREAT PROBLEMS WE HAVE INHERITED FROM OUR PAST, FROM THE DAYS WHEN THE TYRANNY OF DISTANCE WAS ABSOLUTE, IS A TENDENCY TO IGNORE THE OUTSIDE WORLD AND TO JUDGE SUCCESS AGAINST OUR OWN PERFORMANCE MEASURES.

UNDER LABOR OUR POSITION HAS DETERIORATED.

WHILE OUR FOREIGN DEBT HAS BLOWN OUT TO OVER $100 BILLION, AND WITH THE CURRENT ACCOUNT DEFICIT THIS YEAR ALONE EXCEEDING $17 BILLION, THE GOVERNMENT IS RUNNING ON ITS RESERVES OF COMPLACENCY AND SHOWING NONE OF THE LEADERSHIP THAT IS NEEDED.

SNAIL-PACE ADJUSTMENT IS PREVENTING THE EMERGENCE OF A NEW, COMPETITIVE AUSTRALIA, AND WE ARE PAYING A HEAVY PRICE.

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OUR INFLATION RATE IS STILL WELL AHEAD OF OUR TRADING PARTNERS. DOMESTIC INTEREST RATES HAVE REACHED ASTRONOMICAL LEVELS FOR HOME-BUYERS AND BUSINESSES.

WE STILL HAVE ONE OF THE HIGHEST EFFECTIVE CORPORATE TAX REGIMES IN THE WORLD, DESPITE IMPUTATION.

WE ARE HEADING TOWARDS THE 21ST CENTURY WITH AN INDUSTRIAL RELATIONS SYSTEM DESIGNED IN THE HORSE-AND-BUGGY DAYS, WHICH PREVENTS ENTERPRISE-LEVEL ADAPTION TO CHANGE.

PRODUCTIVITY GROWTH IN AUSTRALIA IS NEAR ZERO, AND SHOWS NO IMMEDIATE SIGNS OF IMPROVEMENT.

WE HAVE ONE OF THE LOWEST RATES OF CAPITAL UTILISATION IN THE INDUSTRIAL WORLD. PLANT AND EQUIPMENT IS NOT USED TO ITS TRUE CAPACITY IN AUSTRALIA, WHICH REDUCES OUR ABILITY TO COMPETE.

IN LARGE PART THESE FACTORS EXPLAIN WHY WE HAVE MADE LITTLE GAIN IN THE LAST 6 YEARS DESPITE RECORD WORLD ECONOMIC GROWTH, THE ENDING OF THE DROUGHT AND THE ESPECIALLY STRONG GROWTH RATES OF OUR NEIGHBOURS IN THE ASIA-PACIFIC REGION.

AUSTRALIA IS SLIDING BACKWARDS. THERE IS NO OTHER WAY TO DESCRIBE THE SITUATION. .

AND IF WE ARE TO ENJOY A RECOVERY IN LIVING STANDARDS, IF WE ARE TO PROVIDE FOR OUR CHILDREN THE OPPORTUNITIES OUR PARENTS GAVE MY

GENERATION, THEN WE NEED TO SHIFT THE PROCESS OF ECONOMIC REVIVAL OUT OF NEUTRAL AND INTO TOP-GEAR.

WE HAVE TO STOP SIDE-STEPPING THE DIFFICULT DECISIONS AND MAKE A

COMMITMENT OF ENERGY AND COURAGE TO GETTING THE ECONOMY BACK ON TRACK.

THE LIBERAL AND NATIONAL PARTIES HAVE A CLEAR UNDERSTANDING OF THE PROBLEMS AHEAD AND TOTAL COMMITMENT TO TURNING THE ECONOMY

AROUND AND LIFTING LIVING STANDARDS.

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OUR PRIMARY OBJECTIVE MUST BE TO URGENTLY STABILISE, AND THEN WIND BACK, THE BURDEN OF FOREIGN DEBT.

WE MUST MAKE AUSTRALIAN BUSINESSES MORE COMPETITIVE - BOTH AGAINST IMPORTED GOODS IN OUR DOMESTIC MARKET, AND AGAINST OTHER

NATIONS IN THE WORLD ECONOMY.

OUR ECONOMIC PROGRAMME IS BASED ON A 6-POINT PLAN WHICH SETS A FASTER PACE OF ADJUSTMENT, INCREASES DYNAMIC COMPETITION, AND PROVIDES THE RIGHT ENVIRONMENT FOR SUSTAINED RECOVERY, LOWER INFLATION AND REDUCED INTEREST RATES.

IMPROVED PRODUCTIVITY

THE FIRST PRIORITY IS TO GET AUSTRALIANS WORKING TOGETHER MORE PRODUCTIVELY, WORKING TOWARDS COMMON GOALS AT THE WORKPLACE.

GREATER FLEXIBILITY IN THE LABOUR MARKET IS FUNDAMENTAL TO IMPROVED PRODUCTIVITY AND A BETTER INDUSTRIAL CULTURE.

OUR PLAN FOR VOLUNTARY AGREEMENTS, ENFORCEABLE BY LEGAL REMEDY, WILL ALLOW EMPLOYERS AND EMPLOYEES TO FIND THE MOST APPROPRIATE ARRANGEMENTS COVERING WAGES AND CONDITIONS IN THEIR INDIVIDUAL WORKPLACES.

WE WILL ALSO ENSURE THAT THE CENTRALISED SYSTEM BECOMES MORE FLEXIBLE AND SENSITIVE TO THE DIFFERING CIRCUMSTANCES FACED BY

FIRMS AND INDUSTRIES.

FREQUENT AND WIDESPREAD INDUSTRIAL DISPUTES STILL HINDER THE COMPETITIVENESS OF OUR BUSINESSES AND DAMAGE OUR TRADING REPUTATION. AS YOU WOULD ALL KNOW, OUR COMPETITORS PUT A HIGH

PREMIUM ON RELIABILITY OF SUPPLY - ESPECIALLY IN THESE DAYS OF

"JUST IN TIME" INVENTORY CONTROL.

WE WILL ENSURE SECRET BALLOTS ARE HELD BEFORE STRIKE ACTION; BAN THE PAYMENT AND ACCEPTANCE OF STRIKE PAY; INTRODUCE COMMONWEALTH

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ESSENTIAL SERVICES LEGISLATION AND ENSURE GENUINE VOLUNTARY UNIONISM.

IT'S TIME THE TRADE UNION LEADERSHIP JOINED THE SIDE OF THE FUTURE AND STOPPED RE-FIGHTING THE LOSING BATTLES OF THE PAST.

SMALLER GOVERNMENT

THE SIZE AND COST OF GOVERNMENT MUST ALSO BE WOUND BACK TO FREE GREATER RESOURCES FOR THE PRODUCTIVE SECTOR OF THE ECONOMY.

THE PUBLIC SECTOR IN AUSTRALIA IS STILL 20 PERCENT LARGER THAN

AVERAGE AMONG INDUSTRIAL NATIONS. GOVERNMENT SPENDING IN 1989 REMAINS 12 PERCENT HIGHER IN REAL TERMS THAN IT WAS IN 1983.

WE WILL PRUNE GOVERNMENT SPENDING, REDUCE DUPLICATION BETWEEN THE DIFFERENT LEVELS OF GOVERNMENT, REDUCE WASTE AND INEFFICIENCY, AND ACCELERATE THE REMOVAL OF UNNECESSARY REGULATION.

PRIVATISATION

EUROPEAN FRIENDS OFTEN TELL ME HOW SURPRISED THEY ARE THAT THE HOT ISSUES IN AUSTRALIA ARE ANCIENT HISTORY OVERSEAS.

PRIVATISATION HAS BEEN HAPPENING IN EUROPE FOR ALMOST A DECADE, PROVIDING THE BENEFITS TO CONSUMERS AND INDUSTRY THAT ARE MUCH NEEDED IN AUSTRALIA TODAY.

THE BRITISH ARE PRIVATISING, THE FRENCH SOCIALIST GOVERNMENT HAS BEEN PRIVATISING ... WHILE HERE THE WHOLE PROCESS WAS BROUGHT TO A SUDDEN HALT BY THE PUBLIC SECTOR UNIONS, THE ALP'S FACTIONS, AND THE POLITICAL WEAKNESS OF THE PRIME MINISTER.

OUR PROGRAMME INCLUDES THE PRIVATISATION OF 12 GOVERNMENT BUSINESSES. WE ARE NOW WORKING ON A STRATEGIC IMPLEMENTATION PLAN, WHICH WILL SEE ENORMOUS SUCCESS ACHIEVED IN OUR FIRST TERM OF OFFICE.

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DEREGULATION AND EFFICIENCY

AS AN ISLAND CONTINENT WITH ONE OF THE LARGEST COASTLINES IN THE WORLD, AND FACING A COMPETITIVE HANDICAP FROM OUR RELATIVE

DISTANCE FROM LARGE MARKETS, IT IS VITAL THAT AUSTRALIA'S

TRANSPORT ARTERIES ARE UNCLOGGED.

THE MAJOR REFORMS PROMISED BY THIS GOVERNMENT - LAND TRANSPORT, COASTAL SHIPPING, THE WATERFRONT AND AVIATION - HAVE FALLEN THE

WAY OF PRIVATISATION.

WE WILL PUT THESE ISSUES BACK AT THE TOP OF THE AGENDA. THE PRESENT ABSURDITIES AND INEFFICIENCY OF OUR TRANSPORT SYSTEM ARE COSTING THE ECONOMY OVER A BILLION DOLLARS A YEAR - WITH THE COSTS BORNE BY CONSUMERS AND BY EXPORTERS.

I FIND IT IMPOSSIBLE TO UNDERSTAND HOW WE CAN EXPECT TO BECOME MORE COMPETITIVE WHILE IT COSTS MORE TO SEND MILK POWDER FROM TASMANIA TO MELBOURNE THAN FROM TASMANIA TO TAIWAN.

TAXATION REFORM

OUR TAXATION SYSTEM MUST ALSO BECOME INTERNATIONALLY COMPETITIVE. WE STILL HAVE ONE OF THE HIGHEST PERSONAL TAXATION STRUCTURES OF

ANY INDUSTRIAL NATION, AND THE SECOND-HIGHEST CORPORATE TAX REGIME - NOT TO MENTION LABOR'S PUNITIVE CAPITAL GAINS TAX.

THIS IMPEDES DEVELOPMENT, RESTRICTS THE PROFITABILITY OF OUR INDUSTRY AND - MOST IMPORTANTLY - PENALISES THOSE PEOPLE WHO WANT

TO WORK HARDER, SAVE AND INVEST.

OUR TAXATION REFORMS WILL:

. PROVIDE RELIEF FOR FAMILIES WITH DEPENDENT CHILDREN;

. REPLACE THE CAPITAL GAINS TAX WITH A MORE SENSIBLE TAX ON PURELY SPECULATIVE INVESTMENT HELD FOR LESS THAN 5 YEARS;

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. INTRODUCE THE MEASURES NECESSARY TO STIMULATE SAVINGS;

. MOVE PROGRESSIVELY TOWARDS A FLATTER, TWO-TIER SCALE FOR PERSONAL INCOME TAX.

T.TVTNG STANDARDS

OF COURSE, THE END GOAL OF ECONOMIC GROWTH UNDER MY GOVERNMENT WILL BE THE RESTORATION OF A DECENT STANDARD OF LIVING FOR EVERY AUSTRALIAN.

THE LAST SIX YEARS HAVE SEEN AUSTRALIA DEMORALISED, DEGRADED AND DEVALUED AS OUR TRADITIONALLY HIGH QUALITY OF LIFE HAS TAKEN A NOSEDIVE.

LABOR'S ANTHEM HAS BEEN "RETREAT AUSTRALIA FAIR".

NOWHERE IS THIS CLEARER THAN IN THE HAWKE GOVERNMENT'S DISMISSAL OF THE GREAT AUSTRALIAN DREAM OF HOME OWNERSHIP.

CYNICAL POLITICS, WEAK ECONOMIC LEADERSHIP AND POOR MANAGEMENT BY LABOR ARE THREATENING TO TURN OUR COUNTRY INTO A NATION OF LIFETIME TENANTS.

HERE IN BRISBANE, HOME PRICES HAVE RISEN BY OVER 40 PERCENT IN

THE LAST 12 MONTHS. WITH INTEREST RATES NOW RISING ABOVE 17 PER CENT, REPAYMENTS HAVE INCREASED BY OVER $200 A MONTH FOR MOST

HOME-BUYERS.

WHAT HOPE DOES THIS OFFER ANY YOUNG COUPLES TRYING TO BUILD A SECURE FUTURE FOR THEMSELVES AND THEIR CHILDREN?

I MEAN, IN SYDNEY TODAY YOU HAVE YOUNG COUPLES BEING TOLD, QUITE BLUNTLY, THAT THEY CANNOT HAVE A HOME LOAN UNLESS BOTH PARTNERS REMAIN EMPLOYED FULL-TIME FOR THE NEXT 10 YEARS.

WHEN YOUNG PEOPLE ARE TOLD "YOU CAN HAVE A HOME, OR YOU CAN HAVE KIDS, BUT YOU CAN'T HAVE BOTH" ... THEN THIS IS A COUNTRY LOSING

ITS SOUL.

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A LIBERAL GOVERNMENT WILL SET MONETARY POLICY TO REDUCE INFLATION

AND REDUCE INTEREST RATES.

WE WILL COVER THE COST OF MORTGAGE INSURANCE FOR LOW-INCOME HOME BUYERS, THUS ENCOURAGING BANKS TO LEND 100 PERCENT OF THE VALUE OF THE FIRST HOME.

A GREATER PROPORTION OF COMMONWEALTH HOUSING FUNDS WILL BE DIRECTED TO HOME OWNERSHIP ASSISTANCE SCHEMES, AND WE WILL PERMIT

THE SALE OF PUBLIC HOUSING TO ELIGIBLE TENANTS.

ABOVE ALL, OUR OVERALL ECONOMIC PROGRAMME WILL ARREST THE DECLINE IN LIVING STANDARDS AND LAY THE FOUNDATIONS FOR A.SUSTAINED IMPROVEMENT OVER TIME - HELPING EVERY MEMBER OF THE FAMILY OF AUSTRALIA ACHIEVE A HIGHER QUALITY OF LIFE.

CONCLUSION

THERE IS NO REASON WHY AUSTRALIA CANNOT EMERGE FROM ITS CURRENT TROUBLES AS ONE OF THE GREAT TRADING NATIONS OF THE 21ST CENTURY.

WE LIVE ON THE DOORSTEP OF THE FASTEST GROWING REGION IN THE WORLD ECONOMY. WE HAVE A STABLE DEMOCRATIC POLITICAL SYSTEM, A

WELL-EDUCATED AND INTELLIGENT PEOPLE, ABUNDANT MINERAL AND

NATURAL RESOURCES.

AT THE SAME TIME WE ARE CONSTRAINED BY SHACKLES OF LARGE GOVERNMENT, OVER-REGULATION, RESTRICTION, RIGIDITY AND ATTITUDES

WHICH SHOULD RIGHTLY BE PACKED OFF TO THE MUSEUM.

THE PRESENT LABOR GOVERNMENT HAS BECOME A PROPHET OF DECLINE, UNABLE AND UNWILLING TO MAKE THE CHANGES WE NEED TO BECOME MORE

COMPETITIVE AND EARN OUR WAY OUT OF DEBT.

CRUSHING DEMAND, DRIVING THE NATION INTO RECESSION AND GINGERLY STROKING THE TRADE UNION LEADERSHIP IS NO ANSWER TO OUR PROBLEMS, AND WILL ONLY PROLONG THE PAIN BEING FELT IN OUR SUBURBS, OUR RURAL COMMUNITIES, AMONG THE YOUNG AND OLD ALIKE.

EUROPE, DESPITE THE DISGRACE OF THE COMMON AGRICULTURAL POLICY

AND HIGH BARRIERS TO NON-EUROPEAN EXPORTS, HAS AT LEAST SHOWN A WILLINGNESS TO CHANGE. IT HAS BEEN PREPARED TO KNUCKLE DOWN AND FACE THE HARD DECISIONS TO REVERSE THE EUROPEAN DECLINE.

WE SHOULD NOT THROW STONES. OUR OWN GLASS HOUSES ARE FRAGILE ENOUGH.

I HAVE SAID BEFORE THAT THE HAWKE GOVERNMENT HAS BECOME THE PATRON OF "CANNOT DO" POLITICS. IT CANNOT PRIVATISE. IT CANNOT CUT SPENDING. IT CANNOT BRING INTEREST RATES DOWN. IT CANNOT SAY "NO" TO ANY UNION DEMAND. IT CANNOT REFORM THE PUBLIC SECTOR. IT CANNOT CUT TAXES OR DELIVER THE CHANGES WE NEED.

I SAY : AUSTRALIA CANNOT AFFORD ANOTHER TERM OF LABOR.

IT'S TIME TO GET ON WITH THE JOB.

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