John Howard's Second Anniversary Speech to the NSW Division of the Liberal Party

Thank you very much Wil. To Michael Osborne, the President of the New South Wales Division of the Liberal Party, to my Federal Ministerial colleagues of which there are a number here tonight; Richard Alston, John Moore, Judi Moylan, Bronwyn Bishop, John Herron - I don’t think I have missed any of the Ministers. If I have, put your hand up. To my Federal Parliamentary colleagues other than Ministers, to Peter Collins and other state parliamentarians, Ian Armstrong, the Leader of the National Party in New South Wales, ladies and gentlemen.

Can I start by thanking all of you for being here tonight and to thank so many of you for the tremendous support that you have given to the Liberal Party in Sydney and New South Wales and therefore throughout Australia over the last couple of years. It is a tremendous sense of satisfaction that I have in marking the second anniversary here in Sydney of the election of the first Coalition Government in Australia for 13 years and I take the opportunity through this gathering tonight to thank all the members and supporters of the Liberal Party for the tremendous help that they have given to me and the tremendous understanding they have displayed and the loyalty they have demonstrated over the last couple of years.

I came into the Prime Ministership and my Government came into office with a number of quite basic guiding principles. I have always had a strong personal philosophy about the quality of government in this country that essentially says that the art of good statecraft as we come towards the end of this century and we approach the third Christian millennium, the art of good statecraft is really to strike a balance between preserving those values of our past and those values of our culture and our history that continue to serve us well and continue to remain relevant for our future, and to be willing to defend those values and those cultures with great tenacity. But by the same token, to be ready to challenge and to change, fundamentally if necessary, those practices and those attitudes that really have no place in the future Australia that we want to build into the 21st Century.

And I also believe that what you have to do is to strike a balance between those two. I have also brought to my view of the Prime Ministership of this country a fundamental belief that Australia occupies a quite unique intersection of history, geography, culture and economic circumstance. We are the only nation in the world that is geographically cast in Asia, has deep and enduring links with Britain and the rest of Europe and also profound historical and strategic ties with North America, particularly the United States. So far from that intersection being a liability or an encumbrance, it is of immense advantage to this country.

That has been demonstrated over the past few months as our neighbours in Asia have passed into great economic turmoil and Australia has been able to emerge from that as a nation fighting above, hitting above and punching above its own weight and a nation that is able to be a reliable friend and a good regional mate of those countries in their difficulties. In the years ahead, when those countries recover, as inevitably they will, they will remember that it was Australia occupying that unique intersection, with all of the influences that intersection can bring, that Australia was amongst the countries that was willing to help and to give them succour and comfort during their difficult times.

We do occupy that very special place in the world and it’s a source of immense pride to me that my Government has been able to turn what was a, what I could only describe as an Asia-only focus of the former government into an Asia-first focus under my Government. Asia will forever be the most important area of our operations, both politically, economically and strategically. But as Wil said, we do have important and enduring economic, historical and cultural links with other parts of the world.

We came to office with many things that we wanted to do. We came to office believing that the social fundamentals of this country were srong, that we had a stable political system but there are aspects of our economic management that needed dramatic change, and as I look back over the last two years, I do so with some satisfaction but certainly no sense of complacency or smugness. We have turned a deficit of $10.5 billion into a prospective surplus in Peter Costello’s third budget. We do have the lowest inflation rate in the OECD. We do have a very strong level of business investment. We have the lowest interest rate for 30 years and only this afternoon as a result of the competitive pressures that are now within the Australian financial system, some of them directly flowing from the implementation of the recommendations of the Wallis Committee, we have seen further reductions in business overdraft rates. And we have seen over the last week through the actions of the Westpac Bank, and this afternoon by the Commonwealth Bank, we have seen the first real interest rate breakthrough that the small business community of Australia has been hoping for and wanting for many long years. That represents extraordinarily good news for what remains the backbone of the Australian economy.

We have been able to reduce, even before the prospective privatisation of the remaining part of Telstra, we have been able to produce a situation that our debt to GDP ratio which was about 20 per cent in 1995 is now prospectively only 10 per cent in the year 2000. By the one single decision to allow the men and women of Australia to buy the remaining two thirds of Telstra, we will be able, by that one single decision to eliminate almost 40 per cent of the total Federal Government debt of this country that existed when we came to office in March 1996.

So we have been able, in a quite fundamental way, to give to the Australian economy, the strongest economic foundations that it’s had for 25 years. And I can, with some feeling, ask the rhetorical question, where do you imagine the Australian economy would have been? What do you imagine the impact of the Australian economy would have been from the turmoil in Asia if we had been running the loose fiscal policy that we inherited two years ago, if we were still struggling with a deficit of over $10 billion a year. It certainly would have left us weak, vulnerable and subject to very severe economic buffeting. Instead of that, we are seen as a stable, reliable, predictable country with which to do business and in which to invest.

But we’ve also, very importantly, undertaken some quite fundamental changes to Australia’s industrial relations system and I guess of all the causes with which I have been strongly identified in my political time, on the economic front none has been more important than the need to reform Australia’s outdated industrial relations system. Just as I believe that there are many things about Australia that have been part of our past, that we should fight with passion to defend as we go into the future, there are some things about our past that we should fight to get rid of because they are holding us back and one of those things is the industrial relations system which has its origins back in pre-World War One days, built on some rather unsound notions, coming out of the decision of the old Arbitration Commission in the now almost infamous Harvester Case.

And over the years, that award-driven system has weakened Australia economically and one of the things we resolved to do in 1996 was to change that forever. And at first some of the changes we made were seen with suspicion, even by some of our friends and supporters as perhaps not going far enough, as perhaps being weaker than the would have liked.

But those critics were wrong and those suspicions were misplaced because we have brought about fundamental change in the industrial relations area and we have been able to do it without industrial turmoil. We were told before the last election that if we tried to do what we had in mind there would be industrial strife. The reality has been completely the opposite. It may stagger some of you to know that in 1997 Australia recorded the lowest number of days lost to industrial disputes for 85 years. In other words, we had to go back to World War One days to find such an impeccable industrial record.

What we have done with those industrial relations changes is to build a framework and a basis for one of the most defining industrial challenges that this country has faced and that of course is fundamental reform of the industrial relations of Australia’s waterfront.

We all know that Australia has an inefficient waterfront. We all know that the unproductive practices of the waterfront, and the activities of the Maritime Union of Australia and its predecessors, are almost legend in the industrial relations folklore of Australia. We all know that it’s one of the things that stands between Australia and the full realisation of her potential as a modern, competitive, highly productive and highly successful nation. It’s one of those things that continues to deny us the full realisation of the potential that the rest of the world has always seen in our country. And at long last we have that intersection of circumstances. We have a government which has had the courage to change the law of this country, to break the monopoly of the Maritime Union on the supply of labour. We have, in the National Farmers’ Federation, we have a very courageous organisation of men and women who are seen as an integral part, not only of the history and the backbone of this country but also of its export capacity and it’s export future. And we also see in the Patricks company and led by a person who I think has conducted himself with great courage and great commitment, Mr Chris Corrigan, we see a company, and we see in the National Farmers’ Federation together, people who are prepared to use the tools provided by the changes to the law that my Government has made.

Now this is a defining moment. It is a defining dispute in the industrial relations history of Australia. We do not seek an argument with any union in this country. We have no enduring quarrels with any union. We do not wish to destroy unions, we do not wish to destroy unionists and we do not wish to destroy unionism. There is a place for both union and non-union labour on the waterfront of Australia just as there is a place for union and non -union labour on any factory floor and in any office in this country.

It is a question of personal choice. Over a period of time, union membership has declined and I guess that process will go on. But that is a matter of individual choice. But what we are determined to see changed because it is important for the generation of jobs and the earning of export income for this country, what we are determined to see changed are of course the practices on the waterfront that have damaged this country’s interests over such a long period of time.

So it is an important dispute. It is a crucial issue. It is one of those defining moments in the industrial relations experience of any country and it will be important that those who want the goals that we have talked about for so long in this area to be achieved and realised over the months ahead. It will be important that you continue to give us and those involved in these events your wholehearted support because Australia’s export income future is at stake. The potential jobs of thousands of Australians are involved and the economic reputation and the reliability of this country as seen by the rest of the world is very much involved.

The other area, my friends, of course which is extremely important to Australia’s economic future is dealing with what I regard to be the great piece of unfinished economic reform business in Australia and that is the long-overdue reform of our taxation system. By any measure, we have a very old fashioned, increasingly unworkable, and in the eyes of many people, increasingly unfair taxation system. We have tried, and I speak collectively of us as a nation, we have tried to change it on a number of occasions over the years. I had a go when I was the Treasurer in the Fraser Government. Mr Keating had a go when he was the Treasurer in the Hawke Government. He had the rug pulled from under his feet by the ACTU and his Prime Minister. We courageously had a go under John Hewson’s leadership in 1993 and through one of the most, I think, dishonest and destructive scare campaigns that I have ever seen run in Australian politics, that attempt was defeated in the 1993 election.

We said in the 1996 election that we wouldn’t introduce this kind of reform during our first term and we have remained true to our word. But I came to the conclusion in about August of last year that it wasn’t real life for me to go to the next election and once again rule out taxation reform. You don’t get more than one go at being Prime Minister of this country and none of us are either on this earth or in any of these positions of immense responsibility for indefinite periods of time. And that means that you’ve got to use the opportunities you have wisely. You’ve got to be, I guess, a faithful steward to the responsibilities that you have while you have them. And it seemed to me that when it came to the issue of taxation reform, I really had two alternatives. I could either sort of say look, it’s all too hard, and fudge it and pretend that nothing needed to be done or alternatively, we would go to the next election full bloodedly committed to the fundamental reform of the taxation system.

And that we’d lay out in some detail the plans that we had in mind. Now there may be some of you and there may be some of our supporters elsewhere who question the wisdom of it. But I don’t think I could have credibly got away with going to the next election campaign, saying we’re going to put tax reform off for yet another three years. And I certainly wasn’t going to stand in front of cameras at the next election campaign and say solemnly that of course we’re not going to change the tax system, having all the time an intention if I won that election to do the exact opposite. I am not interested in that kind of duplicity.

So we have decided to reform the tax system. We have decided to go to the next election with a detailed proposal. I think there has been something of a mood change in the Australian community about the need for tax reform. I believe that increasing numbers of Australians believe our present system is outmoded, out of date and is in need of root and branch reform. There is a growing acceptance in the business community that reformed taxation in Australia will particularly boost our export capacity. There is a realisation that there is rorting of the present system at both ends and if it is to be made more fair, fundamental changes are needed. But whatever the arguments may be, we are committed and Peter Costello and I, in particular are working very hard at present to put together the details of a proposal which will be presented to the Australian people in enough time for them to analyse and understand it and digest it before the next election.

Now I don’t underestimate for a moment the difficulty of the task. I know that we will fight, we will face a ferocious fear campaign from our Labor opponents, our Labor opponents who have offered no policy alternatives, who seem to have a growing capacity to muck rake and to make trivial personal attacks on individuals, who this week were busy making personal attacks on people, from myself down in the Government while my Government was busily getting on with the job of providing good government for the people of Australia.

We will face a very strong fear campaign. I have no doubt of that. But I also have a belief in the great maturity and the commonsense of the Australian people. I think as we come towards the end of this century, the expectations of the public are of their politicians and of their leaders, that they will endeavour to make an honest attempt and to have a go at fixing the fundamental problems, not only of the economy but of the nation generally. And I think we will earn respect and we will win support because we are prepared to tackle those fundamental problems. I think Australians want a different taxation system. I think they see the present one as failing and as being unfair and I think they will give us marks for tackling it. But I don’t pretend it will be easy. We will need your support, we will need your understanding and we will need your advocacy in the weeks and months ahead.

Could I just say one or two other personal things about the Liberal Party and about what it has meant to me and what it continues to mean to me after my many years of membership and the enormous privilege I now have, not only of being its Federal Parliamentary Leader but also of being Prime Minister of Australia. I have never forgotten my organisational roots in the Liberal Party. I have never forgotten the long association that I have had with so many people in this room, the long association I have had with the Party organisation.

At the present time I am the fortunate beneficiary of, I suppose a collection of loyalties and a collection of committed people, the like of which has not been my experience before and the like of which comes for few people as an experience in their life and I am very conscious of that. And I am very grateful for all of the support that you have given to me. And I am very grateful that together, we have been able to achieve an enormous amount over the last two years. And I remember that night two years ago on the second of March when we had that wonderful win, and one of the greatest senses of satisfaction that I had on that occasion was the realisation that there were many people at the Wentworth Hotel that night who had literally spent years and years with us, trying to win, and time after time we kept losing. And we were told by our political opponents that we didn’t have a decent Party organisation. We were told by our political opponents and by some of our critics in the media, of which there were many, that we of course were never going to win, that we weren’t professionals and that we were political no-hopers. And it was a source of tremendous pride and satisfaction to me that together, we proved all of them wrong.

That is what an occasion like this reminds me of. This is what an occasion like this enthuses me to say to all of you, that we can win again and we can win well, provided we don’t take the Australian people for granted, provided we continue to address those things that the Australian people want addressed. They want their governments to do things, to deal with problems, to tackle difficult issues, to have a go at reforming areas that need reforming. They don’t want a Government that sits there and does nothing. They don’t want a government that imagines it can sit on a large majority and automatically be re-elected on the assumption that they won’t put back a government they threw out or a party they threw out so unceremoniously only three years earlier.

We do live in a more volatile political climate than ever before. The differences between the parties are narrower. We are less tribal, politically, than we used to be and the number of swinging voters is much greater than used to be the case and that puts an obligation all the time of good, innovative government on those who happen to be in power. It means that you can never rest on your laurels. You can never assume that having done a certain amount is enough. It means that you have to, having conquered one issue and dealt with one problem, that you have got to move very rapidly onto the next. And that is the philosophy and that is the approach that we have endeavoured to adopt and we will continue to adopt between now and the next election.

Can I thank all of you personally again for what you have done, for the support you have given us, and prospectively for the support I hope you continue to give us into the future. To you Michael, as President of the Patty in New South Wales and to our new State Director, Remo Nogarotto, I thank both of you for your commitment to the organisation. And there is one other person I would like to thank tonight and that is somebody who has helped and sustained me through all of my years in politics, and shared the ups and downs and the trials and tribulations as well as some of the more happy moments and that is my wife, Janette, who is with me tonight. If I can say to you, we celebrate our 27th wedding anniversary tomorrow and typically of course, not surprisingly, we are at a Liberal Party gathering and it has certainly been characteristic of our lives. Thanks a lot Janette, you have made it all possible.

Thanks a lot.

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