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New South Wales Division State Conference 2000: address to the Liberal Party of Australia.

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4 November 2000



Thank you Abraham. Kerry Chikarovski the Leader of the New South Wales Opposition, Shane Stone, the National President of the Liberal Party, Tony Staley, my Parliamentary colleagues and fellow Liberals.

Once again I’m delighted to address this annual convention of the New South Wales Liberal Party. And it’s an opportunity to reflect on what’s happened over the last year and it’s also a chance a year out from the next election to throw ahead and project the challenges that lie in front of the Government as it nears the fifth anniversary of its election in March of 1996.

The last twelve months has been a truly momentous period of time at a national political level. We have seen the successful introduction of the largest systemic economic change that this country has had since World War II. And all of the forebodings of doom and despair and disaster that came from our political opponents, all of the hand-wringing, all of the desperate hoping and praying that the tax system would be a disaster and thus confer political advantage on the Australian Labor Party of course came to nought. It’s almost a year since Kim Beazley told the Federal ALP Caucus that they could surf to victory on the back of public discontent over the new taxation system. That really says more about him and about the Labor Party than it does about the Australian people. It indicates a negative mindset, it indicates an unwillingness to present to the Australian public an alternative. And it’s a metaphor for the negative, uninspired alternative government that Australia has at the present time.

This Government has been since the moment of its election an active, reformist government. We have taken the view that the privilege of office is never to be squandered. We’ve taken the view that when you are given the great privilege of office in this country you use that to do good things in the time available for all of the people of Australia. And over the last four and a half or more years, we have seen a very significant strengthening of the Australian economy. We are now enjoying the highest levels of employment for more than ten years. We’ve generated more than 800,000 jobs. We’ve cut the unemployment rate to a level of 6.3%. We’ve cut the youth unemployment rate to its lowest level for more than ten years. We’ve boosted the productivity of the Australian workforce. We’ve increased the real incomes of Australian working men and women. We’ve introduced successfully against tremendous opposition, even political sabotage from our political opponents, a major overhaul of the Australian taxation system.

But we haven’t been a government only focused on economic reform. Of all the pieces of persistent political misinformation that is spread by our political opponents and others who seek to bring us undone politically, is the claim that we are only interested in an economic

agenda - we are not. We are certainly committed to maintaining the economic strength of this country. We are certainly committed to repaying in full the $80/90 billion of government debt that we inherited from Mr Beazley and we are well on the road to doing that. We now have one of the lowest government debt to GDP ratios of any country in the world, a marvellous base for further growth and expansion in the twenty-first century.

But we are a government that has a broader horizon than just economic reform. We have never seen economic reform as an end in itself. You want a strong economy to improve the lives and the wellbeing of Australians and their families. You want a strong economy to generate jobs. You want a strong economy to create greater family and individual opportunities. And economic achievement and economic efficiency is never an end in itself, it is only a way of delivering the great social and human dividends of higher employment, more contented families and individuals enjoying greater and ever broadening personal opportunities.

And as I look back over the last four and a half years, I can reflect on some of the great non-economic achievements of the Government. And in an area such as the environment that the Labor Party once pretended was its alone to claim and to talk about, the environmental credentials of the Coalition Government have been impressive indeed. And yesterday we went a great step further. The really important thing that was discussed yesterday was the Federal Government’s initiative to tackle what in my opinion is the biggest single environmental challenge we face and that is the problem of salinity and water quality. And unless something is done about salinity we face a deteriorating economic base. We face a progressive retreat of the farm sector. We face in twenty years time unless something is done about water quality, the truly astonishing proposition that in three out of five days the people of Adelaide will not have water fit for human consumption, an absolutely disgraceful prospect for a modern industrialised country such as Australia. And the commitment at the instance of the Commonwealth and as a result of Commonwealth leadership, the commitment of the Federal Government and all of the State and Territory Governments to a $1.4 billion plan over the next seven years to isolate and begin developing appropriate responses in twenty catchment areas around Australia to deal with the problem of salinity represents the most consolidated attempt yet by any government, federal or state to tackle this problem.

And this initiative my friends builds on many other environmental initiatives of the Government. It builds on the Natural Heritage Trust. It builds on the Regional Forest Agreements that we have progressively negotiated, sometimes with little co-operation from State Governments, but on other occasions with their enthusiastic help. And it all adds up over a period of four and a half years to a government that is active and committed and in a very practical way to the improvement of the Australian environment.

But of course it is not only in areas such as the environment where the Government’s credentials of a non-economic kind, rather of a broader national kind, have been very much on display. And over the weeks ahead you will see revealed by the Government its thinking and its long-range plans in relation to that area which is always the first responsibility of any national government and that is the defence of Australia. In December we will release a white paper on defence policy. That white paper will be the outcome of the most fundamental re-examination for decades of the security environment in which Australia now finds herself. Australia’s defence priorities and the capabilities required to meet those priorities. It will build amongst other things on the lessons that we have learnt from the ADF deployment in East Timor. Especially the need for Australia to be able to respond to the many contingencies that might arise in our immediate neighbourhood. As part of its preparation of this white paper the Government has undertaken a process of public consultation and a group of Australian citizens led by Andrew Peacock, a former Opposition Leader and minister and former very distinguished Australian Ambassador to Washington, that public consultation has formed a major part of the input to the preparation of the white paper. And the Defence Minister Mr Moore will release the results of that public consultation during the course of the coming week.

The Government does set a very high priority on maintaining a strong defence capability. We do need as a nation to spend more money on defence. The white paper will indicate the degree of additional financial commitment that Australia will make to the defence of this country and

the security of the neighbourhood in which we live. It is the first priority of government and it is always the first responsibility of any government to ensure that the defence forces are not only appropriate to deal with the great unlikelihood of a direct assault upon Australia but also to make a contribution to greater stability and a more secure strategic environment in the area in which we live.

And we have been reminded not only in relation to East Timor, but also in relation to what has occurred in Fiji and the Solomon Islands that we do live in a less stable part of the world than we might otherwise have thought. And that does require an intelligent response. It won’t be a threatening response but it will be a response that will deliver a sense of continuity and stability and security and standing to the role of Australia in our region. We have already in the defence area done quite a lot this year. We have made a number of announcements to enhance the role of the Reserves. We have improved the employment security of people who serve in the Reserves, thus meeting one of the frequently stated criticisms of past policy of governments in relation to Australia’s defence reserves. And we are also proposing legislation to enable the deployment of reserves overseas, thus reversing a long-term previous policy. We have extended the principle of mutual obligation to include reserve service. And when the White paper is released in December we will have in front of us as a nation, one of the most carefully prepared and thorough going assessments of the defence and strategic environment in which Australia finds itself but also in a very consistent and credible way the response that we propose to those circumstances.

And that White paper will be yet another element of a broad ranging approach by this Government to the many problems that face Australia, the many opportunities and the many challenges. In about a year’s time an election is due. And we will need all of our campaigning muscle and every sinew of political effort to secure re-election. Winning elections are never easy and this will be our third attempt to secure a favourable result. And it will be a challenge. I have no doubt that we have both in the personnel of our existing sitting members here in New South Wales but also the candidates that we will assemble in the marginal seats that we hope to win from Labor, and there are a number here in New South Wales, that represent real opportunities, I am sure we have high quality men and women. And I want to tell you, the rank and file of the membership of the Liberal Party here in New South Wales what an outstanding Federal Parliamentary team you have in Canberra. In depth and quality the men and women who hold the marginal seats and those who hold the less marginal seats. And I want to thank them and all of my federal parliamentary colleagues for the tremendous support and loyalty that they have given to me over the last twelve months.

We have come a long way in the last year. In many senses, the last year has been a time in which any doubt that anybody may have had that this Government was going to make a lasting contribution to changing for the better the way in which Australia operated was removed. There are always out there, some of those people who wondered about the wisdom of tackling something like taxation reform. There were many who crossed their fingers and held their breath when we took taxation reform to the last election. There were many who rather skeptically said well you may have won the election but you will never get it through the Parliament. And there were others who said well you might have got it through the Parliament with a few changes, but the public will never accept it. Well the Australian public did accept it and the reason the Australian public accepted it was because it fulfilled those two essential conditions of any fundamental reform and that is we were able to persuade the Australian people that it was good for their country and we were able to satisfy them of its fundamental fairness. And the reality is that the reception of the tax system changes have been much better than even the most optimistic of us imagined.

That doesn’t mean that there aren’t challenges in relation to the detailed implementation, it doesn’t mean that some fine tuning in relation to that won’t be undertaken. But all of the doom and disaster predicted by the Labor Party simply didn’t come to fruition and we now have this pathetic situation from our political opponents that they have a policy they dare not mention. And that policy is Rollback. It was exposed by John Della Bosca for the fraud that it was. And you now have the unbelievable situation that Kim Beazley knows that John Della Bosca was right but he is unable to say so. And you now have the situation where rollback is there but you can’t talk about it. It’s a policy that dare not speak its name. But it is there, I promise you

it’s there. And I promise you that if Labor wins they will implement it. And if there is one thing that the small business community wants like the proverbial hole in the head, it’s rollback. Because rollback will add confusion. Rollback will undermine the improvements of the new taxation system. Rollback will create inequity. Rollback will discriminate against small business and rollback will be resented and rejected by the small business community of Australia. That is why the Labor Party dare not speak its name. Yet Mr Beazley is unable to do the honest decent thing and repudiate it because it will represent a final policy humiliation of him and will represent the vindication of the man in the Labor Party, John Della Bosca, who was sacked for telling the truth about Labor’s federal taxation policy.

So ladies and gentlemen, we have ahead of us a very challenging year. We have achieved a lot together, we cannot afford to relax and I promise you we have no intention of doing so. In the modern political and economic environment the reform process is never over. You have to keep going, otherwise you go backwards. And in the twelve months ahead of us we will be unveiling further policies and further reform agendas. And I have outlined some of the thinking that will lie behind the Defence White paper, so important to our future, which will be released in December.

Finally can I say to you that I can’t win the next election on my own. I can’t win it without the support of all of my federal parliamentary colleagues not only here in New South Wales but around Australia. And we cannot win it without your help. I have always regarded the link between the parliamentary party and the organisation as absolutely essential to our political success. When it is close and productive we win, when it is distant and ineffective we lose. And it is important that the organisation here in New South Wales play a major role. It’s important that your efforts be directed outwards and not inwards over the next twelve months. It’s important that your efforts focus on defeating the Labor Party and nobody else. It’s important that your effort remembers that in politics you cannot achieve anything unless you win political office and have the opportunity of implementing the philosophy and acting according to the values that you hold dear.

We won a great victory in 1996. Against significant political odds we won again in 1998. We have kept faith with the commitments we made in 1998 and we have taken the agenda even further. And we will offer once again in the next election a real agenda for continuing reform and improvement for Australia and we will be able to contrast ourselves with a Labor Party that is obsessed indeed, mired in negativism and seeks only to win political support through relying on the negative reaction of the public to either adversity from elsewhere or the inevitable difficulty in the short term of introducing major change.

I have a lot of faith that the Australian people will see through that. I have a lot of faith that the Australian people will in the end give us credit for having a go. For trying to do the right thing against difficult odds for the long-term future of Australia. But we can’t just rely on that faith we have to match it with a lot of hard work, a lot of unity, a lot of discipline and lot of cooperative effort between the parliamentary party and the organisation.

I warmly thank you again, it’s always a special personal privilege for me to address a gathering of the New South Wales division of the Liberal Party with which I have had such a close personal association all of my adult life. I warmly thank you, I am greatly in your debt for past help and past loyalty. I look forward to its continuation over the next year. Thank you.


[Petrol prices and fuel excise]


Well I will deal very directly with that question that the reason for a high fuel price is the doubling of the world price of crude oil. It is not the GST. If it hadn’t been for the doubling of the world price of crude oil this issue would not be on the national political agenda. It is the reality that the doubling of the world price is causing the difficulty. If the indexation in February is deferred the impact on the price of petrol will be less than two cents a litre which

you will appreciate could easily be devoured by subsequent fluctuations in the world price of oil. It would involve in a full year almost 600 million dollars on an ongoing basis and it wouldn’t just be for one year because you will have had an impact on the revenue base. It is not an easy situation, I acknowledge that but I don’t see merit in the proposition given the other responsibilities of the government and I wasn’t joking when I said we would have to put more resources into defence and I don’t mean $50 million more a year I mean a lot more and we have a lot of other responsibilities. We have a lot of requests for additional road funding and that is something I think is important and we have a lot of other areas of request. The other thing we have to make absolutely certain is that we don’t run down the budget surplus. If we do that we will exert upward pressure on interest rates and I can’t think of anything that would be less welcome in rural Australia at the present time than interest rates that are higher than they might otherwise be. They are lower now than they were but I would not want to do anything as Prime Minister to exert upward pressure on interest rates. And when you take all of those things together that is the explanation for the government’s position.

Now we have seen over the last week the most blatantly opportunistic cooperative stunt from all of the State premiers with the exception of one and I single out John Olsen, the South Australian Premier who took a rather broader national view on the subject and quite rightly said that salinity was more important than political grandstanding. Nobody likes high petrol prices. I understand the unpopularity of them in rural Australia, indeed in metropolitan Australia. But it is due to the world price having been doubled and I think anybody who puts a contrary view is simply misstating the truth. If the world price had not doubled we would not be debating the matter this morning, we would not have discussed it yesterday. It’s not because of the GST, it’s because the world price has doubled.


[Government funding for science and information technology]


Yes, okay. Yes science one, information technology two, okay. Well we have in front of us right at the moment some reports one of them coming out of the Innovation Summit held earlier this year, one of them coming out of the Prime Minister’s Science Council which deals with this broad area. Senator Minchin, Senator Alston and David Kemp the three ministers with direct responsibility are working with me on this issue right at the present time. I think I could broadly say we will be having something to say about it. I have spent a lot of time myself looking at the various submissions, some of them make a great deal of sense, some of them don’t. And it shouldn’t be assumed that every proposition that’s put to the Government in this area is necessarily going to be supported. I think investment in science is very important to the future of this country, very important indeed. There’s a lot of misinformation around. This country is one of the great devourers of information technology in the world. Our Internet usage, our e-commerce server usage, all of those things are already very mature and very sophisticated in Australia. This very odd proposition that because we’re not a manufacturer of certain types of technology than we’re an old economy is about the most unintellectual argument I’ve had presented to me for a long time. But it is an issue that’s quite high on the Government’s agenda and of course I would make the gentle point that we’ve heard, I’ve talked about defence, I’ve talked about roads, you’ve talked about extra resources going in a particular area and we want to keep a Budget surplus, so you know we’ve got to always remember that it’s all got to add up in the end and you can’t do everything.


[Collins Class submarines]


Well Bob we didn’t inaugurate the Collins’ Class Submarine project, I think you’re aware of that, it was started when Mr Beazley was Defence Minister. But we want to make the project work, we believe that the remedial measures that we have adopted in order to deal with clearly a lot of difficulties, a lot of mismanagement of the project and a lot of cost blow-outs we

believe that those arrangements and they include the acquisition of the Submarine Corporation so that we can get control of the project and thereby ensure that it is properly completed within reasonable budget constraints. All of those things are directed towards making sure that the submarine, having consumed as a project billions of dollars over a period of years, that it is a useful and integral part of the defence framework of Australia. Now this will be dealt with in some more detail when the white paper is released. But you will I am sure accept that our obligation, our national interest obligation is to make sure that the submarine is operational and effective. Now we believe it can be very operational, of course very effective and can make a strong contribution.

As to separately what might be said about the way in which the project was originally conceived and the way in which it was managed well that is a separate matter and that may well receive attention and should receive attention. But I don’t want that to take priority over the national interest and the national interest is having invested so much money in the submarine we’ve got to make sure it’s useful and is employed in our defence array. And I believe it can be and I believe it will be and it’s important that we keep the two things, one’s a defence national interest issue, the other’s an area of legitimate political analysis. Neither of them will be left begging but it’s important that we keep the two of them separate.


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