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NSW State Council, Masonic Centre, Sydney, 15 May 1999: transcript of address.

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15 May 1999







Thank you very much Mr President. To you and to my State and Federal Parliamentary colleagues and fellow Liber als. It is always a delight to address the State Council of the NSW Division. It always a pleasure to come back to this building where I have attended many meetings over the years and shared with you our common commitment to the Liberal Party cause here in NSW and throughout Australia.

This week of course has been dominated by two significant events. The first of those was the unveiling of the 1999 Federal Budget. Rarely has a government had the opportunity to present a budget in more positive economic circumstances. And rarely has a government earned the right by dint of its own decision making to present a budget in such favourable circumstances. It is not an idle boast to say that the economic condition of this country is better than it has been since the last 1960s.

In the last year the Australian economy has out-performed any economy in the industrialised world. Despite predictions to the contrary, we stared-down the Asian economic downturn. When I became Prime Minister of Australia this country was an anxious outsider knocking on the Asian door, almost begging admission. Such was the mindset that had been acquired under the leadership of the former government. A little over three years on we are seen as a nation stronger, more secure, more progressive and more willing to help with our regional friends than ever in our history. We are seen quite properly as being fully engaged with, and committed, to the Asian region. But we are not obsessed about how we relate to the region any more. We no longer worry about whether we are part of Asia, involved with Asia, enmeshed with Asia. We are simply being ourselves in Asia.

And the ourselves we are being, if I can put it that way, is a nation proud of the fact that we occupy a special intersection of culture, geography and history. And those things a few years ago that were seen almost as weaknesses for Australia in Asia, such as our stable banking system, some people said that was a bit dull and unenterprising, our strong rules of corporate governance, our commitment to a system of open parliamentary democracy, all of those things are now seen as massive strengths. And when I met the President of Indonesia, the leader of 211 million people, our nearest neighbour, the fourth largest nation on earth, I am greeted as the leader of a country which is seen as strong, as positive, as a good but not uncritical friend and ally. I said when I became Prime Minister on the 2 nd of March 1996 that I would propound and defend the values of Australia abroad. And I’ve kept faith with that commitment. And when I spoke to Dr Habibie I propounded and defended the values of Australia, but I did so in a way that did not hector or seek to tell another country that what worked here necessarily worked there. And this is something we should remember in our relations with other societies.

And just as I abhor us wanting to change ourselves to please others I don’t expect others necessarily to change themselves to please us. We have to understand that in a world of differences, philosophical, history, cultural and ethnic, inevitably nations do not need to be carbon copies of each other in order to cooperate in a constructive fashion. And we have achieved in relation to East Timor, we have achieved something that our predecessors did not do. And that was we have played a major role in changing the policy of the Indonesian Government. And we’ve changed it in a very constructive way.

So it was with an enormous pleasure that we were able to present a budget which delivered a surplus, a budget that reported that Australia had grown more strongly than any nation in the industrialised world over the last 12 months. A budget that recorded that we have the lowest interest rates in 30 years, the lowest inflation rate in 30 years, a strong level of business investment. But it was also a budget that was able to make important social provision. It always important to have a balance between economic realism and social concern and social provision.

As I said a couple of weeks ago when addressing the Australian Unlimited Conference in Melbourne, our government is very much about liberalisation in economic affairs, and what I described as modern conservatism in social affairs. A concern to maintain the traditional values of Australian society but to apply them in a modern and contemporary fashion, having regard to the changes that have taken place in our community and our society over the last few generations. And that social provision, or modern conservatism, expressed itself in a number of ways. Our renewed commitment to further reform in the area of private health insurance. We are for a mixed system. We are for the public hospital system, but unlike the Labor Party we believe in private health insurance. That’s why we brought in a 30 per cent rebate, something the Labor Party should have done years ago but refused to do because of their obsession with destroying private health insurance, despite what their now leader says. If they had done something about private health insurance in 1990 when their former health minister Grahame Richardson said they should, then we would not have inherited a private health insurance level in this country of about 32 per cent.

We’ve brought in life-time health cover. Life-time health cover will provide further incentive for young and healthy people to take out private health insurance. But there will be a 12 month grace period until the 1 st of July 2000 for people between age 30 and age 65 to join and under the arrangement everybody over the age of 65 who joins for the first time being able to do so without penalty. And at long last we will actually reward people who have given loyalty to private health insurance funds over the long years. And they are entitled to a reward.

Our social concern was displayed in relation to our commitment to education. Quite unapologetically this budget provided for the most generous and the most supportive provision for non-government schools that any Federal Government in this country’s history has provided for. But it was not done in any way to disadvantage the government schools. We believe in a simple principle in education and that is that every Australian parent has the right to educate his or her children according to their choice. It is a fundamental Liberal principle first dramatically embraced by Sir Robert Menzies 36 years ago when he broke the gridlock - he broke the deadlock on State aid to independent schools and ended almost a century of discrimination against almost 30 per cent of the Australian population. He did it in a dramatic and generous way, he did it in a way that the Labor Party was incapable of doing.

And what I did, and what the budget did last Tuesday night was to carry on that tradition into new areas to provide low income parents in both Catholic and non-Catholic schools greater support and as the Secretary of the Christian Schools Association said in his press release that the announcement we made delivered more justice to working class families and enabled them to make greater choices in education than the provision that any government in Australian history had ever made. And this argument we get from the Labor Party that we’re discriminating against government schools totally ignores the fact that the great providers for the government schools are their owners and that is the State governments of Australia. On a per capita basis Federal Governments always give more money to independent schools because Federal Governments don’t fund government schools, they’re funded by the State Governments. And this business I mean to grab hold of a statistic and to say that because you’re giving $X a head straight out of the Federal budget to Government schools, and X plus to independent schools that you’re discriminating against the Government schools completely ignores the fact that we give billions of dollars in financial assistance grants each year to the State Government, and the biggest claim made on State government budgets is in fact education.

And under the financial agreements this year, the State of NSW for example will receive a five per cent real increase in their financial assistance grants. Well the average will be five per cent across the States and as you know the Commonwealth Grants Commission has awarded the State of NSW an increase of about $165 million under the equalisation arrangements that have operated under our Federal/State financial relations.

So I reject totally and completely the hogwash peddled by the teacher unions and the Labor Party that we are discriminating against government schools. It is our responsibility to fund independent school choice. We are doing it in a fair and balanced way a nd even in the most needy and least provided for parish Catholic school in Australia, the parent is only being subsidised to 70 per cent of the cost of educating a child in a government school. And to suggest in those circumstances, and given the responsibility of State Governments that in some way we are discriminating in favour of so-called elite private schools in this country is nonsense. The greatest expansion in the independent sector is not in the so-called elite schools but is in fact in the low fee schools that are growing up as a result of the relaxation of the new schools policy that I undertook to do before the 1996 election.

So ladies and gentlemen it was a great budget. It was deservedly well received because it combines economic achievement with social concern. It displayed a government that was sensitive to social need but also a government that has its eye very clearly on economic strength and economic rectitude. A government that recognised that we couldn’t be complacent and couldn’t take for granted our economic achievement. But above everything else, as we look back on Tuesday night, we were able to say that today’s strength was a product of yesterday’s reform. Just as tomorrow’s strength will be a product of today’s reform. And that of course brings me to the issue of taxation.

You’ve heard me say before that I regard reforming the Australian taxation system as the largest piece of unfinished economic business in this country. I said that two years ago, I said it repeatedly during the election campaign, I said it last week, and it’s as true today as it was then. And nothing that happened yesterday alters the fact that if we want to maintain the momentum we have developed we need to reform our taxation system in a quite fundamental way. And that is why I committed the Government to taxation reform before the last election. And when I took the decision that we needed taxation reform and when our Cabinet decided we needed taxation reform, we knew that we wouldn’t get control of the Senate at the last election. The reality is that under our present system, particularly as the result of the changes that were made in 1984 to increase the size of the Federal parliament, changes that the Liberal Party voted against but as a result of that it is impossible, virtually, for either side of politics to control the Senate in its own right. And until there’s any change in that, and I don’t speculate about that, that is going to continue to be the situation. I knew, therefore, that we wouldn’t get control of the Senate. And I calculated that if we spelt it all out in detail before the election, if we did what people constantly say politicians don’t do and that is tell the truth about our intentions and then set about keeping our promises, I knew that if we didn’t do that we would have no prospect of getting the legislation through the Parliament.

So we spelt it out in total detail. We made full disclosure. We held nothing back. We exposed ourselves to the most ferocious fear campaign. And what we have sought to do since the election has been to keep that promise. And I was very proud of the fact that Peter Costello was able to hold up a document last Tuesday night, when he delivered the budget, and it was entitled ‘Keeping Our Promises for a Stronger Australia.’ And every single promise I made on behalf of the Government in October of last year has been honoured in full, without variation, in the Federal Budget. We didn’t suddenly discover, as Mr Carr did after the 1995 State election that he couldn’t rid of the toll way. We didn’t suddenly discover, as Mr Keating did after the 1993 election that having won an election campaign fighting an indirect tax that, ‘oh, sorry fella’s, I didn’t tell you about the need to increase all the wholesale sales taxes.’ We didn’t do that. We did the exact opposite. We laid it out in total detail. We exposed ourselves to all the risks that were inherent in laying it out in detail. And we did that because we thought that was the right thing to do and the honest thing to do. And we also felt that that would give us some moral authority to say to the Senate, ‘well, we told the people about it before the election, they returned us to government, you have an obligation to pass it.’ And it’s the operation of those forces which is at stake in the debate that is taking place at the moment. What incentive is there for future governments to be honest and open with the Australian people if they can’t implement what they were elected on? It would have been a different matter if I had gone to the last election and said, ‘well, I believe in taxation reform, trust me,’ or like Bob Hawke in 1984, I’d said I’m going to have a meeting or a summit. Or if I had just generally fudged and said I’m going to cut your income tax and then after the election said, oh, look, I sort of left the page out. And that page contains a whole lot of indirect tax increases. We didn’t do any of that. We produced a document that contained the greatest amount of detail ever presented to the Australian people in an election campaign about a major policy initiative. We could not have been more open and obvious and transparent. We could not have made fuller disclosure. Yet we face a prospect that what we were elected on being voted down by the Australian Senate when the legislation is presented.

Now, the Australian people, in their own way, in their own time, will make judgements about that and they will make judgements about those who’ve made a contribution to that State of affairs. And people keep asking me what is my reaction to this or that pe rson. Other members of the Australian Parliament are not accountable to me, they are accountable to the Australian people, as I am accountable to the Australian people, as my Federal colleagues are accountable to the Australian people. And all we are saying to the Australian people is, we want to do for you what we said we would do for you. That is what I am saying to the Australian people. And I would have thought in its most elementary way parliamentary democracy in our kind of society was about keeping faith with people. And there’s a marvellous quote, I think it’s from Robert Frost, that talks about having promises to keep and miles to walk before I sleep. We have promises to keep. As a party we want to keep them. There are others who are stopping us from keeping those promises.

Ladies and gentlemen, we remain committed, resolutely committed, to reforming the Australian taxation system. We don’t want to reform the Australian taxation system because of some ideological bent. We’re not doing it because of our health. We’re not doing it because it’s the next thing do and we’ve got bored. We’re doing it because we really believe it will strengthen the Australian economy in years to come. I want the Treasurer of this country in 2010 to be able to stand up and present a budget as glowing as the one that Peter presented last Tuesday night and to turn around and say, this is the product of the reforms that the Howard Government undertook at the turn of the century. We do need a new tax system for a new millenium. We owe it to ourselves not to be complacent. In a competitive, globalised world economy your competitor is the other bloke in the race, not your predecessor as Prime Minister 25 years earlier. It’s no good me telling the Australian people that our economy is performing better than it did 30 years ago unless I’m able to say it continues to outperform our competitors. And that is our challenge. We have achieved a lot because of past reforms. We won’t achieve more in the future unless we undertake further reforms. And that is why we need to change the Australian taxation system. And that is why we will presevere in the campaign to change that taxation system.

My friends, that is all I want to say about the Federal political scene. But can I say, as a longstanding member of this Division and as a person who’s attended as a delegate hundreds of State Council meetings since I first started coming to State Council in the early 1960s, that I share the sense of disappointment that the party organisation feels about the outcome of the State election. And I think I would be failing in my duty as a longstanding member of the New South Wales Division if I didn’t make a couple of observations. And I will presume to draw upon that long membership in the candor of the observations that I will make.

Can I first of all say, little is achieved by intense recrimination or retrospection. Little is achieved by that. Nothing is achieved by scape-goating. Something is achieved if lessons of past mistakes are learnt and those lessons are applied. And something is achieved if it is recognised that if there are some fundamental structural weaknesses to a party’s approach then those structural weaknesses should be addressed at the beginning of a term in Opposition and not somewhere else during that term.

Could I make the observation that, and I made it publicly before and perhaps some people may not have liked the language I used but I stand by it, but to be credible any Opposition has to develop an alternative policy agenda. And it has to be developed over the period it is in Opposition. It cannot be cobbled together at the last minute. One of our most revered New South Wales Division’s sons, Sir John Carrick, had that marvelously evocative observation that you can’t fatten a pig on market day. Some people might think it’s old-fashioned, I think it remains very relevant. And you can’t fatten, you can’t, you have to, over a period of time, build. We learnt that through our bitter cost, Federally. We went through 13 years in Opposition Federally. And when I look back on those years I can recognise mistakes that are still being made by others. You can’t put it together at the last minute. You’ve got to develop a policy brand. People have got to know you by your political values otherwise they will not support you and that applies to you whether you’re in government or whether you’re in Opposition. Now, that is a piece of across the board advice. It is meant very genuinely. It is not directed any anybody or any group of people in particular. It is generally directed towards what I saw to be a difficulty here in New South Wales.

The other observation I would make is that one of the implied understandings or covenants, as I often call it, on which the Liberal Party was established is that you had a parliamentary wing and you had an organisational wing. The parliamentary wing, unlik e the Labor Party, was given complete authority to determine policy. We won elections in the 1960s on a campaign about the faceless men who controlled the Parliamentary Labor Party. We prided ourselves on the fact that the people in Parliament elected by the Australian people were the people who ultimately decided policy. And we maintain that principle zealously. I consult the organisation. I talk to them. I listen to them. I have a very close association with my Federal President and with the State organisations and the Federal Director. But in the end, our Cabinet and our Parliamentary Party decides policy.

When we decided to embrace tax reform, before I made the announcement I had a telephone hook-up with all of the State Presidents to explain the Parliamentary Party’s decision so they knew in advance. But we took the decision but that’s the Parliamentary Party’s prerogative. The corollary to that is that the organisation has complete control in relation to candidate selection, has complete control in relation to all of the matters relating to the running of campaigns and to the operation of the organisation.

Can I say, with all the best will in the world, I think those two responsibilities have become too blended and too merged here in New South Wales, especially at a State level. I think one of the things we have got to do is to reassert the separate responsibilities of the organisation and of the Parliamentary party. I think it’s one of the important tasks that the organisation has over the weeks and months ahead.

The other two observations I would make is, and this is as somebody who first sat on the State Executive in 1963, is that I think our State Executive is far too big. You can’t run, in my view, a political party with an executive that big. I think you desirably need an executive of about 20 people whose sole parliamentary representatives are those people who are elected directly to represent the federal and State parliamentary parties. Now, some people in this room won’t like that and I don’t imagine that much notice will be taken of it. But, quite frankly, as somebody who cares about being in government and as somebody who has had a bit of experience of being both in and out of government, and as somebody who loves the Liberal Party and who’s spent all of his adult life as a member of the New South Wales Division, I do think that I’ve earned perhaps the right, just on this one occasion, to say a couple of things.

And there’s one other thing I want to say and that is that if all of that advice, per chance, were taken that would be good but there’s one other thing I just feel duty bound to say and that is that I think this Division has spent far too much time and energy in what I can only describe as self-destructive, personality-based factionalism. I mean, I can understand in a way, providing it doesn’t become self-destructive, a party that has factionalism based on ideology. But for heaven’s sake, when it’s based on mutual self-promotion and it shows an unwillingness to see the common enemy it becomes self-destructive.

And I say that in relation to the behaviour of both sides of the argument. One of the great successes of the Federal Parliamentary party after I resumed the leadership in January 1995 was the fact that it operated as a broad church. That there was proper representation in the shadow Cabinet and in the Cabinet, of different points of view. A recognition that in the end if there was a majority view on a particular issue that majority view would prevail, but not in a triumphal, winner-takes-all sense. And I think any political party is a coalition. We are a coalition. The Liberal Party of Australia is the trustee of both the liberal, the classical liberal tradition of this country, as well as the conservative tradition. We are not exclusively either a small "l" liberal party or a conservative party. We are a mixture of both. And unless we remember that and we keep practising that we are doomed to repeat the mistakes, certainly that we’ve experienced over the last few years here at a State level.

Well Mr President I think I’ve said a fair bit this morning, and perhaps I’ve overdone it, but I don’t think so. There is just one other thing I want to say and that is that I’ve had the privilege as a parliamentary leader and as a senior member of this Di vision to work with quite a number of quite outstanding State presidents over the years. Can I say to you Mr President, I think you are one of the best Presidents that I’ve worked for in this Division. And I say worked for because I think you understand the history and the culture of our Party. You respect the role of the parliamentary party but you assert the authority of the organisation in those matters where it ought to be asserted. And I want to say to you that you will continue to enjoy my total and energetic support as President of this Division for as long as you wish to retain that position.

Thank you.




jy  1999-05-18  11:07