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Kooyong 200 Club luncheon, Eden on the Park, Melbourne: transcript of address.

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3 October 2002



Well, thank you very much for those very warms words of introduction. And look, I happen to be going by in C1 and if you're hiking back to Melbourne, I will give you a lift. First of all can I say to Dr Sauter, thank you for the very warm words of introduction and the very interesting proposals for restructuring our international economic relations. We don't of course as some people suggest, we don't have a low dollar in Australia, we just have a super competitive exchange rate. And I’m interested in the suggestion about wine and the only worry I have is that some of your European colleagues in Brussels who run the European Union have these devilish ideas of trying quite improper ways of keeping Australian wine out of Europe, they're now talking about banning some labels using words such as - reserve and vintage and tawny - in relation to port. So, one of things that we will need to do in order to implement this new international economic order is to make sure that these new trade deprivations, which have been dreamt up because Australian wine has been so successful in penetrating the huge tariff barriers of the European Union don't come to anything.

But I am delighted to be here in Kooyong and to associate myself with Petro and to say to all of you thank you for the support that you've given to him and thankyou for the support that you all continue to give to the Liberal Party. And to John Booth the Chairman of the Kooyong 200 Club, Ian Carson the State President, and the Lord Mayor of Melbourne, and my other parliamentary colleagues, ladies and gentleman. Petro of course has made a very big contribution over long years to our side of politics. He had a very close involvement with one of my predecessors as Liberal Prime Minister, Malcolm Fraser, working on his staff both in Opposition and in Government. And he also of course was a guiding light in the party organisation here in Victoria as its State Director. And it is something of a coincidence of course that today I think is the 10th anniversary, is it not, of the election of the Kennett Government in 1992. Now, that should of itself give everybody a renewed sense of enthusiasm and commitment to the upcoming Victorian State Election. Everybody seems to know the date that it's going to be held, if that's case then Mr Bracks wasn't as successful in keeping the date secret as I was just on a year ago in getting ready for the last Federal election.



Can I say very seriously that this Victorian election is going to be a great deal closer and provide a great deal more opportunity for the Liberal Party than many would have predicted a few months ago. I think the Liberal Party's prospects in this election are much stronger than many suggest. Can I unashamedly say, I think Robert Doyle has done an excellent job in the time that he's been the leader of the party - I don't say that critically of his predecessor, who I like immensely. But I think he has brought a clarity of expression. He's brought a sense of realism and commonsense. He understands the dimension of the task, but he also understands that this State, particularly in the area of industrial relations, has suffered by comparison with other States around Australia. People are more reluctant to do business in Victoria than they are in other parts of our country because of the subservience of the Labor Government here to the trade union movement and that is a reality.

So, as far as I am concerned as Prime Minister of Australia an investment in one part of the country is as good as an investment in another part of the country. I don't play regional favouritism. And Australian is an Australian wherever he or she may live, but it's the job of State Governments to make sure that their State is fully competitive. And I have to say to you as Australians living in Victoria, that there are signs emerging that this State has lost some of the competitive edge that was given to it under the Kennett Government. And because 10 years ago, I remember the sense of despair that people felt here in Melbourne. And the sense of going backwards and the sense that Melbourne had fallen off the map as far as a great centre of economic and other activity, and what Jeff Kennett and his colleagues were able to in the period that they were in office was to turn all of that around in a quite remarkable way. And as you all know, I occasionally differed with Jeff on one or two things. But what the matter, in the end, a person’s worth is what that person is able to achieve. And the restoration of the pride and self-respect of Melbourne and the way in which the State was able to lift itself out of the economic despondency that it had fallen into is a mark of the contribution that he and his colleagues made.

So, for all those reasons, I'm delighted Petro to be in your electorate today and to thank you for the contribution that you continue to make in so many ways to our Parliamentary Party and to the Liberal Party not only here in Victoria, but around Australia. You bring with your particular gifts and understanding of certain issues a point of view and a background to the party, which a broad church Liberal Party of Australia needs. Our great success is that we have been able to accommodate within our party and our Government a range of views while adhering at all times to a core philosophy and that's the reason why we have been, over six and a half to seven years, a successful Government.

Can I also say, conscious as I am that our country is suffering a very severe drought at the present time, how much I welcome the initiative Farmhand for Drought campaign, that was launched today in Sydney under the patronage of News Limited, and PBL, and Telstra, and also that well-known Melbourne philanthropic figure, Richard Pratt. This is a campaign which is designed to bring forth corporate and individual support for Australia's farmers. It's an excellent example of the social coalition of which I speak often at work. Governments can do a lot with drought. State Governments have responsibilities and we at a Commonwealth level have a lot of responsibilities. And we will be contributing and are already contributing in a number of ways. To start with, one of things that will help Australia's farmers through this drought is a scheme that we introduced a few years ago called farm development bonds and what they basically do is provide a tax incentive for a farmer in a good year to put some of his surplus income into an interest bearing deposit before paying tax, and in a bad year pull it out and because it's a bad year by definition, pay a lower rate of tax. And there's now about $2 billion in those farm deposit accounts. And over coming months, many people, and there are 43,000 Australian farmers who have utilised these accounts, many people will pull money


out in order to finance their operations and to live. And the tax incentive that was provided to them to put the money in will work very much to their benefit. Now, I don't what the total amount of tax involved in that is, but it will probably run into several hundred million dollars and it represents a very worthwhile investment by the rest of the community. And I think it's something that should be born in mind in assessing the contributions of different sections of the Australian community. And we have a system of providing exceptional circumstances support to Australian farmers and as areas are declared as exceptional circumstances, then welfare payments and other support are made available. I have no idea of what the ultimate call on those will be, but I do know that in the mid-1990s something in the order of $630 million was paid out by federal governments to support exceptional circumstances.

It's tragic that we have such a severe drought and what is particularly agonising for many of our primary producers is that this drought is occurring at the very time that world prices in commodities such as wheat and wool are so strong, and yet the tragedy for so many of them is that because of the drought they can't plant a crop and therefore they can't have some access to these strong world prices, something that is normally not the case. So, there's a double jeopardy, if I can put it that way, for many of Australian farmers. But I do welcome the initiative announced in Sydney. I thank the Packer and Murdoch families and I thank the Pratt family and Telstra and all the others that have been very very much involved in this particular project.

Ladies and gentlemen it’s not possible of course to address any audience in Australia at the present time without saying something about the situation in the Middle East, and particularly something about the situation concerning Iraq. I don’t think in years of studying what has occurred in the Middle East one could be in a greater sense of despair and despondency regarding the ongoing conflict between Israel and some of her Arab neighbours. As a leader of a government that’s been a very long standing supporter of the state of Israel and the right of Israel of exist securely behind internationally recognised boundaries. And also the leader of a government that very openly recognises the legitimate aspirations of the Palestinian people to have a homeland. We have a balanced policy, we don’t accept the view that this issue can be solved in a one sided fashion. We do recognise a few fundamental realities. And one of those fundamental realities is that there is only one functioning democracy in the Middle East at the present time and that is Israel. And we do recognise that two years ago an offer was made by the then Israeli Prime Minister, Ehud Barak, which if it had been accepted would have provided a lasting settlement to what has proved to be one of the most intractable problems the world has faced since the end of World War II. What he offered was essentially 90 - 95 per cent of the demands that had been made and sadly as the Camp David meeting convened in the dying weeks of Bill Clinton’s presidency that initiative was rejected. We remain as a friend both of Israel and the people under the leadership of the Palestinian council and indeed the people of other countries in the Middle East, we remain ready to assist in any way we can to try and achieve a resumption of properly based peace talks. But it is a very deeply distressing and difficult situation.

So far as Iraq is concerned I know that we would all wish that the problem would go away. It’s not a problem that I welcome, it’s not a challenge that I think anybody welcomes with any degree of enthusiasm. But in the nature of difficult national and international issues it won’t of its own volition go away. History tells us that potential threats never die of their own volition, they only disappear if something is done about them. People have said to me well it’s been a problem now for many years, why is America getting concerned about it now? Why has it assumed an immediacy towards the end of 2002? Why wasn’t it immediate and a challenge five years ago? Why can’t it be put off for another five years? Now they are legitimate questions, they’re questions I’ve asked myself and in asking them I’d say a number


of things. There’s no doubt that Iraq, unlike other countries that may have weapons of mass destruction, has shown an aggressive intent. Iraq did attack Iran, it did invade and occupy Kuwait until it was expelled in 1991, it did use chemical weapons against its own population and it has shown for the last 10 to 11 years a very continuing, a strong continuing appetite for these weapons. Its shown a determination to build, if it can, a nuclear capacity. The evidence suggests that it can’t develop that without access to fissile material from overseas and that’s difficult, but if could overcome that challenge it would be somewhat easier.

I think the other dimension that we have to bear in mind, and this is very important in understanding the motivation of our friends in the United States is this, that since the 11th of September last year we have a whole new dimension in international security. If we’re honest with ourselves we wouldn’t have really thought that could have happened to a country like America before it happened. And that’s why it was such a transforming event in our experience. And as a result of that nations, particularly nations such as the United States, must in putting together a national security strategy, they must factor in a capacity to guard against, and where possible prevent occurring, random terrorist attacks orchestrated from abroad. And that’s another reason why it’s something that now assumes a great urgency because a capacity demonstrated by the tragic events of the 11th of September last year, the capacity for terrorist groups with or without the support of states to inflict horrendous damage on the civilian population of another country has been revealed as one of the modern day challenges that we have.

Now what we are doing at the present time, we the Australian Government, is very strongly supporting the attempts being undertaking by the United States and Britain to secure the passage through the Security Council of a new and stronger resolution. The old resolutions on which the agreement concluded in Vienna between Hans Blix and the Iraqis, that old resolution is not good enough. We are where we are now because the old resolution wasn’t good enough. It was one that could be manipulated and bent and twisted towards the purposes of the Iraqis, and we can’t accept that and we have to find ways of establishing a new resolution. And that is why the Americans and the British are now engaged in negotiations with the other permanent members of the Security Council and the other members of the Security Council. And I hope we can get a resolution, a stronger one, and if we do get a stronger one I hope that it is fully enforced and I hope that this issue can be resolved without any resort to military conflict by anybody. Nobody wants a military conflict, I don’t, none of you do, I know that the President of the Unites States does not want one, I spoke to him about the issue only a few weeks ago, and I know that the British Prime Minister, who I saw in London only last week, doesn’t want one either. No sane person wants military conflict of any description, but equally no sane person can ignore the reality that if you leave threats unaddressed they get worse, they don’t get better, they don’t just disappear by the effluxion of time, life is not quite as easy and as simple as that, we all wish it were. And we as a democratic country, as a liberal democracy having a long tradition of playing our role as an international citizen, we can’t expect that if just roll yourself into a little ball that things go away and pass you by. There’s a notion abroad from some that if you make yourself a very small target by rolling yourself into a ball then you won’t have any problem at all in relation to potential terrorist attacks. That’s not a fair and accurate description, there’s plenty of evidence in recent months of countries that have not taken a particularly high profile in relation to the war against terror have themselves seen terrorist activities. Terrorist activities breed off particular things. Those things are not present in Australia and our vulnerability is less than that of many other countries but no country around the world can regard itself as infinitely secure and infinitely untouched by this kind of threat. It is a sober issue. It's an issue that I wish I didn't have to address but it is an issue I must. And it's an issue that the Australian community has got to think about, it has got to debate, it


has got to come to understand because it is an issue that is not, as I said, of its own volition, going to go away. And in the end we will make a decision about what we as a nation do according to the judgement we make about our own national interests and in making that decision we won't be driven by our alliance with the United States nor equally will we be deterred from the decision we ought to take by that alliance. In the end you take the decision that is right for your own country and that will be the judgement that I will bring and my colleagues will bring. And can I say for the present we devoutly hope that the efforts that are now underway to secure a new resolution from the Security Council will be successful.

And can I finally say to those people who are joining a clamour of anti-Americanism - it's easy to be critical of the Americans at the present time. It's always easy to be critical of the biggest fella on the block, that's human nature. For those who are being critical let me remind them that if it hadn't been for the pressure of the United States this issue would not be back with the United Nations Security Council. It was President Bush's speech to the General Assembly a couple of weeks ago that reignited the interest and the commitment of the United Nations and other members of the United Nations to trying to find a solution to this issue.

Can I just move to one or two other things before I conclude, ladies and gentlemen. It is true that the Australian economy remains by world standards very strong. We are performing better than just about any other developed country and that's the product of many years of economic reform but it's also the product of the capacity of the Australian business community and the capacity of the Australian workforce to adapt. People often say to me, why has the country done so well? Well, I put up my hand and say, well, you know, you've had a good government for a start and a few other things like that and I naturally try and claim some of the credit. But I always say, and it's true, that one of the other reasons that we have done so well - and this is very important - is that our business community has adapted. And in saying that I have in mind the group of Australian businessmen and women that are represented in this room, that you think back over 20 years and think how this country has changed - we're sponsored by part of the motor vehicle industry. Now, I know a BMW is in a particular segment of the industry but if you look at the Australian motor manufacturing industry check what levels of protection it had 20 years ago and think what levels of protection it has now. When you said exports to the Australian motor vehicle manufacturers 20 years ago, they thought exclusively in terms of exports coming into Australia, they didn't think of exports going out of Australia, and the way in which that industry has been transformed. And there's credit due to the workforce as well as credit due to the management of the companies. And the way in which we have been able to open up our economy over the last 20 years, be a lot more competitive, win export markets and transform ourselves from a fairly cloistered, protected economy to one that is taking advantage of the global opportunities that are available, I think it is a quite remarkable thing.

There's no reason why the fundamental strengths of the Australian economy should not continue. There are some clouds on the horizon - I mentioned the drought - internationally, the hesitancy in the United States economy can have an effect. Relatively, though, we should continue to do well but we will need, of course, to have a reasonable share of good fortune and also we will need to maintain the momentum for economic change and economic reform. We have done well in this country because over the last 10 to 15 years we have tackled all of the major areas of economic reform that have been needed. We tackled tariff reform, financial deregulation, we tackled industrial relations reform, we tackled taxation reform, we got our budget back into surplus, we've repaid an enormous amount of debt and we've operated a far more flexible economy. Now, when you put all of those things together - and this is driven home to one when one goes to other countries, particularly to Europe where the pace of economic reform, except in the United Kingdom under previous conservative


governments has been particularly slow - when you put it all together it's an enormous amount of reform and it's the fundamental reason why our economy is so very successful.

Now, all of us as Liberals have a role to play in maintaining the momentum for reform. It's not always easy but once you stop reforming and being willing to embrace change you do lose your political direction. And that's one of the reasons why our political opponents at a Federal level are languishing so badly at the present time. There's going to be something at the weekend quaintly called a 'rules' conference - it's nothing to do with football, just a 'rules' conference - of the Australian Labor Party in Canberra and they're going to talk about reforming their rules. Now, let me make a couple of predictions. The Leader of the Opposition - I like making these sorts of predictions, it's easier than predicting football results, can I tell you - the Leader of the Opposition, Simon Crean, let me predict, let me boldly predict without any fear of contradiction, he's going to have a win at the weekend. He's going to win. He's going to walk out and say, I won, they succumbed, I persuaded them, I brought about this enormous reform which has destroyed for all time the influence of the unions in the Australian Labor Party, I've reduced the union participation at four State conferences from 60% to 50%, it's already at 50% at two of the six State conferences but in the other four I've got it down from 60 to 50. I have, of course, agreed that at future Federal conferences it should go from 0 to 50 but I don't expect anybody to take any notice of that. And that will be proclaimed, my friends, as a huge victory but it will happen, I predict now, Crean wins on union restructuring. Can I say, it won't make any real difference of any kind because in the end what really matters is the policies that you produce. And while ever the Labor Party continues to produce policies which are directed by the union movement and overly influenced by the union movement it will be seen by the Australian community as a union dominated party.

And can I say to Mr Crean, and I know he would not be expected to take any of my advice but I'll nonetheless offer it on this particular occasion that if you really want to persuade the Australian community that he might have begun to understand the need to free himself of the union domination of Labor policy he could allow the unfair dismissal reforms to go through the Australian Senate. Because if he were to do that that would do more to generate jobs in the small business community of Australia than all of the other policy options that might be in front of you and that would do more than any rule change, some artificial construct where you go from 60 to 50 over here but you go from 0 to 50 on the other side which means absolutely nothing and the Australian community will see it to be absolutely nothing. Because in the end it's what your policies are that illustrate what your philosophy is and what you really believe in.

Finally, ladies and gentlemen, can I again thank all of you for the support that you have given to the Liberal Party over the years. Kooyong has been a nerve centre of Liberal Party activity. It's had some very dedicated, famous members. It's been a part of the Liberal Party here in Victoria that has produced not only great members but great workers and a lot of financial resources but also a great number of ideas. And it's very important to have people with ideas in the Liberal Party, not only in the parliamentary party but also in the party organisation because it's the contribution that people make with their ideas that, in the end, is the most valuable. I've been very fortunate to have become the Leader of the Liberal Party and to have become Prime Minister of Australia and what I have been able to achieve through assuming that office originally was due to the support of thousands of Liberal Party branch members throughout our country. And to those here in Kooyong I say thank you, continue to support the wonderful member you have in Petro, continue to contribute and very importantly get behind, as I know you will, Robert Doyle in the weeks ahead. I think it could be a thoroughly fascinating election with a great opportunity for the Liberal Party to do very well.