John Howard's Speech to the NSW State Convention of the Liberal Party

Thank you very much Michael for those very warm words of introduction. To Shane Stone the Federal President, Kerry Chikarovski, the Leader of the New South Wales Opposition, to my many ministerial and parliamentary colleagues and most importantly of all my fellow members of the New South Wales Division of the Liberal Party.

Not surprisingly I would like to share with you this morning some thoughts on the past year and also some ideas about the year ahead at a national political level. But I would like to start my remarks this morning by addressing an issue that is very important to the future strength and survival of the New South Wales Division.

I want to congratulate the Executive of the party here in New South Wales for the decision it took last night to establish a committee of management to run the affairs of this party in the months ahead.

I think that was a courageous decision. It was the right decision. It was a long overdue decision. I took the opportunity, as somebody who has been a member of this Division for almost 40 years, I took the opportunity after the last State election to say some very frank things about what needed to be done in New South Wales to revive our fortunes particularly at a State level. But, of course, the organisation of the party here in New South Wales is as precious and important to our federal fortunes here in New South Wales as it is to our State fortunes.

The organisation belongs to all of us. It is neither the plaything of the federal parliamentary party or the State parliamentary party. And in the 40 years that I have been a member of this Division I have always passionately advocated the importance of having a strong organisation. And the steps that have been taken address some of the difficulties the Division has faced. They represent a courageous commitment by many people sharing different views on a number of issues to unite to solve a common problem.

And I believe that the decision that was taken last night will help the Division enormously. I welcome the fact that it’s occurred. I believe it will, in the long run, enhance Kerry Chikarovski’s chances of winning the next New South Wales election. And I believe that it will also lead to a strengthening of the organisation here in New South Wales in preparation for the next federal election to be held in about two years time.

We are entitled as a great pluralistic party, a party of what I frequently call the broad church, to accommodate a range of views and it’s always been the special character of the Liberal Party of Australia to accommodate a range of views because we are the trustees of both the Liberal tradition and the conservative tradition in Australian politics.

But what we must never do is to allow our differences to overcome our common passion to our party’s future. And that is what has happened in the past year. You all know it. I don’t come to apportion blame to either side I come simply to explain the obvious. And that is that divisions have enfeebled our party here in New South Wales for too long. And at last the organisational leadership of the party has seized the moment and done something about it. It has my enthusiastic support and I know it has the enthusiastic support of the federal organisation. And I believe out of this will come a much stronger party here in New South Wales. I congratulate the Executive on the courage and the leadership that it has shown on this issue.

Ladies and gentlemen, it is a year, of course, since I last addressed this Convention. And what a year it has been in national politics. It is a year that has enabled us to consolidate in a way that I would not have thought possible the economic dividend which has come out of the economic reforms and changes that the Government undertook when it was elected in March of 1996.

A year ago I might have hoped, indeed said a few prayers that we might stare down the Asian economic downturn and I wouldn’t have really dared hoped that that was possible. And yet a year on it is undeniably the case that Australia has escaped the Asian economic downturn. Our level of unemployment now is lower than it has been for almost a decade and the prospects for further job growth are very strong.

We still have very strong levels of business investment. We still have a very low inflation rate, it’s lower than it has been for 30 years. We have the lowest interest rates for more than 30 years. And importantly in terms of national prestige and national respect we are seen around the world as a strong vibrant economy. There is new respect for Australia within the region and in the councils of the world. Our Treasurer can go to international financial meetings and be asked about the performance of the Australian economy and his advice can be sought as to how it is that we have been able to escape where others have been engulfed. Now, that should be a cause of, and a source of very great national pride. And it hasn’t happened accidentally. It’s happened because we had the courage to cut spending when we came to power to get rid of Mr Beazley’s $10.5 billion deficit. And don’ t anybody here forget who left us with a $10.5 billion deficit.

And we have also had the courage to embrace industrial relations reform. It ’s now 18 to 20 months since those momentous days in April of 1998 when the Government sought to reform the Australian waterfront. And despite the lukewarm cooperation we received from many State governments we were successfully in bringing about fundamental change. And one of the great areas of economic inefficiency and structural rigidity in the Australian economy, the Australian waterfront, has been changed forever.

But most importantly of all, we went to the last election with a programme of taxation reform. It was dangerous, it was difficult, it was hair raising and at times we all must have wondered whether it was the right thing to do. But we did it and we won. And we not only won the election, but give or take a few things that I would rather have stayed but we had to negotiate them away in discussions with the Australian Democrats, we now have in prospect the implementation of the biggest overhaul of Australia’s taxation system since World War II. And it will make us a more competitive economy. It will cut the price of fuel in the bush. It will provide us with $12 billion of personal income tax cuts. It will make our exports cheaper and it will give to the States of Australia a revenue base in the years ahead to provide the services that the States are required to provide for their citizens.

It represents path breaking, generational economic reform. The stuff of which fundamental change is made. And it is a reform that would never have been possible without the leadership of the Federal Government and would never have been possible without the support you gave us in that election campaign in October of last year.

But on top of that, we have now set about reforming the business taxation system of Australia. Out of those reforms we will cut in half capital gains tax for individuals. Out of those reforms we will give to Australian companies a corporate tax rate of 30 cents in the dollar. It will be amongst the most competitive corporate tax rates anywhere in the world. Out of those reforms we will make Australia a more attractive place in which to invest. And out of those reforms we will encourage people who have bright ideas that require the commitment of capital that doesn’t give a return for a period of time to commit that capital. In other words, our business taxation reforms represent as fundamental a change in the business climate as do our changes to the personal income tax system and the indirect tax system.

So when I look back over that last year I see a year of enormous economic achievement. I look at what together the parliamentary party and the party organisation around Australia have achieved. I think of the strength of the Australian economy. I think of the path breaking reforms in taxation and industrial relations. We think of what has been achieved through a sale of another 16 per cent of Telstra. Yesterday at Eugowra near Parkes in central western New South Wales I opened the first of 500 rural transaction centres. A new concept that will co-locate basic services that have year by year bit by bit been withdrawn from rural and regional Australia. And those regional transaction centres represent not only a symbolic commitment but a real commitment by the Government to putting services back into the Australian bush. I am not going to, as Prime Minister, preside over the progressive withdrawal of services and the basics of life from people who live in rural and regional Australia. It is inconceivable to me as I know it is inconceivable to all of you to even imagine an Australia which doesn’t have as part of its heart and soul the rural and regional communities that have contributed so much, not only to our nation’s wealth but also to our nation’ s self identity. When you think of Australia you think of the bush as well as thinking of many other things. You cannot think of Australia in the future without thinking of a vibrant, strong rural and regional part of our nation.

And that is why we must as a Government and we must as a community recognise that although we live in a time of national economic affluence there are areas of our community that are missing out. And because we are doing well nationally the sense of loss and alienation is all the greater. Because if the rest of the country is doing well and you are not doing well you feel it even more painfully and more keenly. And that is the sense of disillusionment and disappointment that people do feel in many parts of rural and regional Australia. And that is why we are putting in these rural transaction centres.

That is why we are going to generate 7,000 jobs in the construction of the Alice Springs to Darwin railway link. That particular project, which has been dreamt of by Australian governments and by Australians for 89 years, 89 years ladies and gentlemen, will finally become a reality next year when the first sod will be turned in May or June. It will represent a rail track 1400 kilometres long stretching from the Southern Ocean to the Timor Sea. It will provide at least 18 months work for the BHP steelworks in Whyalla and it will put 7,000 jobs into rural and regional Australia.

That is what is needed. That kind of commitment, that kind of partnership, coalition between the Government and the private sector. The South Australian, Northern Territory and Commonwealth Government will be contributing about $480 million and about $750 million will be contributed by the private sector.

I have called it the steel Snowy. And I called it that quite deliberately because there is a hunger within the Australian community for major projects of infrastructure development. We are a big country, we have many sparsely populated areas yet paradoxically almost we are also the most urbanised society in the world. And that is why we need major projects of this kind and that is why we must understand that our fellow Australians in the bush are sending us a clear and unmistakable message ­ don’t forget us, don’t leave us out, understand that we have challenges.

And that is the message that I have heard. It is a message that John Anderson as Deputy Prime Minister heard at the regional summit in Canberra a couple of days ago and it’s the message that is going to be responded to across the board by the Government in the months and years ahead.

But there has been one other event in the last year of absolutely monumental significance. And that is the way in which this country to its eternal pride and credit was able to take the leadership role in one of the more significant security challenges that have affected the Asia-Pacific region for some time. And I refer, of course, to Australia’s role in leading the Interfet forces in East Timor.

This is the first time in our nation’s history that Australia has led a multi-national peacekeeping or peace enforcement operation. And I want to say for you, and I know I say it for all of you, what immense pride we feel in the leadership of General Cosgrove and the tremendous work of the men and women of the Australian Defence Force who are now serving the cause of fairness and decency in East Timor.

We did what we did in East Timor for two reasons. We did it because it was right and we did it because it was in Australia’s national interest. We did not go into East Timor out of hostility to the people of Indonesia but out of concern for the people of East Timor. We seek in the medium to longer term good and friendly relations with the people of Indonesia. We are together forever in this part of the world. And it is in the interest of both nations that we work our way through the period of inevitable tension that has followed our involvement in East Timor and work towards a closer relationship in the years ahead.

And I have no doubt that with skill and patience and commonsense on both sides that goal can be achieved. But it will be achieved against the background of we in Australia and the rest of the world always knowing that when it came to the moment of decision this country was prepared to take the lead in standing up for what was right.

So it has been a very important and a very momentous and in many ways a quite defining year for the Coalition Government. We have seen the retirement from the Deputy Prime Ministership of a well loved figure in Australian politics in Tim Fischer. But we have also seen the smooth accession to the leadership of John Anderson who, in my view, will go on to become one of the great leaders of the National Party of Australia. And he is displaying already as a close colleague of mine as my Deputy Prime Minister, as a person of immense character and trust and decency, a sympathetic but realistic understanding of the problems that are affecting rural people and I look forward to years of close work and co-operation with John as Deputy Prime Minister.

As we survey the last year and as we properly feel a sense of satisfaction and pride in what has been achieved, we must always apply a reality check to ourselves. We must always remember that we are answerable to an electorate of Australians and Australians are properly demanding of their elected representatives.

Australians are properly sceptical of any of their elected representatives who lose sight of the fact that they are answerable to them and they are not there by some kind of divine intervention. It is very important that we understand the volatile unpredictable political climate in which we live. I don’t think there would be a man or woman amongst you who was other than surprised at the outcome of the Victorian election. A Government that had done great things for Victoria and although Jeff and I had the occasional difference of emphasis, its fair to say that he was the best Premier of any state with which I dealt in the time that I was Prime Minister and he did a magnificent job for the people of Victoria. He inherited a smoking economic ruin, he restored the pride of the city of Melbourne he made Victoria’s economy strong again, he reduced its debt yet he lost the election.

Now, we have to ponder that. And it’s no good saying the electorate got it wrong, can I say to you, the electorate never gets it wrong, never, and when politicians start running around saying the electorate got it wrong, its time for them to give politics away. Absolutely. None of us should ever be so arrogant to imagine the electorate gets it wrong. We mightn’t like the conclusion they come to. I have had causes to reflect occasionally on their sanity myself.

But I want to tell you in the end there’s an iron law of Australian politics, and that is that as far as we are concerned the customer is always right.

What all that adds up to my friends is that the next Federal election is going to be a very hard one to win. And I give you all due notice now that you won’t be hearing any talks about long uninterrupted periods of Government from me. We live in a different world. We live in a world where every single election is different from the one before it and nothing like the one that follows it. This idea of some assured path to victory has never really been true in Australian politics. Menzies went within a whisker in 1961 of losing office. One seat, the seat of Moreton, won by Jim Killen, famously on Communist Party preferences, saved the Menzies Government in 1961. I don’t know whether that telegram was ever really sent, but it has become so much part of Liberal Party mythology I don’t want to spoil a good story.

But, we went within a whisker of losing, and that was 1961 and it took another 11 years for the Labor Party to win an election. 1961, then in 1963 we won by 20 seats, 1966 under Holt we had one of the greatest electoral victories ever and then two elections later in 1972 Whitlam finally won. And nothing is predictable, nothing follows the previous election. We went close in 1990 but we went further behind in 1993. What all that instructs us is that every single election is a huge challenge and can I say that just as no election is unloseble, can I say also that no matter what the gap may be at any given moment, and I look directly at you Kerry, can I say that no election, State or Federal, is unwinnable either.

Can I say while we are having this dose of realism, popularity ratings don’t mean a great deal either if you look at electoral results. In 1995 Wayne Goss almost lost office and was ultimately tipped out in the Mundingburra by-election coming off an approval rating of 70 per cent. Kennett’s approval rating in Victoria was 65 per cent. Bob Hawke entered the 1984 election as Mr 75 per cent and went backwards. I mean I am not suggesting I would like to enter the next election with an approval rating of 29 per cent, I don’t quite want to challenge the Gods to that extent, but all of this has a very serious message and that is you can never take anything for granted in politics. Once you do and once you start to believe some of the propaganda that people might dish out to you, you’re starting to lose touch with reality.

The next election is going to be a hard slog for us and we have to work very hard over the next couple of years to win the support and the respect, to retain and win and refresh the support and respect of the Australian people. We do that by understanding them. We do that by understanding that leadership is a combination of listening and courage. Leadership is not about ramming your view down the public’s throat on every issue, but leadership is about occasionally, after having listened to what people have had to say, getting out and arguing for something that you really deeply believe to be right.

Now the last thing I wanted to say something about, is an event that is happening next weekend. Now, can I say to you that I hope that the wallabies, do to beat South Africa tonight and go on to win the world cup next weekend. I am sure everybody will say yes to that.

I have not used any Liberal Party platform over the past year, I don’t think, to express a view about the principal referendum proposal next weekend. And I do not intend to depart from that this morning. We have taken a decision to allow a free vote and that was the right decision. I have a view; I respect the views of my colleagues that are different from mine. And it’s the character of our great party to do that.

But I do want to say something about the preamble. I can talk about that and I do want to urge you all to support that because I think it is a marvellous way in which whatever our views may be on the other issue - and you know my view and I know the views of others - whatever our views may be on that issue the preamble and an affirmative vote on the preamble is an opportunity for republicans and anti-republicans alike to express their support for a properly aspirational statement about the character of modern Australia and the future of our community.

It is importantly the first opportunity we have had in 100 years to put something positive and gracious and decent and generous into our Constitution about the Aboriginal and Torres Strait Islander people. And I can’t for the life of me understand why anybody would want to pass up the opportunity of doing that. So I do, with a lot of passion and commitment, I do urge you to support the preamble. Because it will represent a noble and decent statement of some fundamental Australian values. It cannot be pleaded in aid of a particular construction of our Constitution, it represents a basic statement of Australian values.

It is neutral as to whether we are a republic or a Constitutional Monarchy. It is silent on that subject as it properly should be to enable people who have different views on that issue to express their opinion.

So as well as wanting the Wallabies to win I would also like the preamble to win. But, my friends, can I finish by saying that the last year, like the previous two years, has been a period in which I have enjoyed tremendous support and loyalty from the people of the Liberal Party all around the country and not least here in New South Wales.

I thank the State President. I thank the State Director. I thank all of my federal parliamentary colleagues who have been very loyal, very understanding, very supportive, very willing to allow me to go out in front on issues where a leader should but equally willing to give their point of view and to sound their words of caution where they think the leader might not be listening as closely or as attentively as he should.

It’s been a great partnership, a great journey, and I look forward to working with you all in the years ahead. Thank you.

QUESTIONER:
[Significance of the free vote within the Liberal Party on the Republic referendum]

PRIME MINISTER:

Well Jim I follow a long standing rule that I always avoid being a commentator in a political contest where I am also an advocate on one side. As you may have noted in passing, I do have a view on the issues that you have addressed. I have put my case to that. We have a free vote in the Liberal Party for a couple of reasons. We have a free vote because we think that every so often that is the intelligent, mature, Australian way of handling things and I don’t think that that damages us at all. I think we look better because we are allowing a free vote.

The Labor Party by contrast look rigid and doctrinaire. I mean the reality is that many people who vote Labor habitually will vote no next weekend and they are unrepresented in the councils of the Australian Labor Party’s parliamentary ranks. But equally there will be people who habitually vote both Liberal and Labor who will vote in different ways next weekend. Its one of those issues where the only sensible thing to do is to have a free vote.

When we decided to do that - I announced that at the convention last, the Constitutional Convention at the beginning of last year - and can I say that I believe, despite what has been occasionally said in the papers by one or two commentators who are more interested in creating mischief than promoting objectivity, I think the debate amongst my parliamentary colleagues holding different views on this subject has been conducted with enormous dignity and civility and I don’t have any criticisms of either side. I understand and respect different views on this and I think the whole process is being handled with a degree of maturity and dignity.

Now, whether it proves this or that theory Jim depending on this or that result, I think I’ll wait until I have the result. I am always happy to be a commentator the day after. But I don’t know the result, I don’t know what it will be, nobody knows, all I know is that, whatever the result is it will be the right result, because the customers are always right with referenda as well as elections.

QUESTION:
[Levels of foreign investment in Australia]

PRIME MINISTER:

I don’t think this country will ever be anywhere near 100 per cent foreign owned. I think the level of foreign ownership varies in different industries. Its very high in some, its quite high in sections of the media, in other sections its quite low. I have always, for better or worse I have always taken a fairly liberal view towards foreign investment. I have always taken the view that if you want to develop this country you do need on occasion to accept a high degree of foreign investment and foreign ownership in order to get something going. I know it’s an old story, but it ’s a true story, we would never have had a motor car industry in the country but for foreign investors. The Chifley Government tried to interest local investors into starting a motor car manufacturing industry in this country in the late 40s but it never materialised. We would not have had some of the mining developments in this country without foreign investment.

On the other hand I don’t believe in a completely open slather. I think the foreign investment policy we have at the present time does strike a reasonable balance. I can remember when I was Treasurer I had a number of heated arguments with the then Queensland Government about the level of foreign and Australian ownership in some of the coal developments in Queensland. I can remember holding out very strongly for 50% Australian equity in some of those coal mines in in Queensland. I’m glad I did because it means there has been a greater Australian involvement. I guess my answer is probably to you a bit unsatisfactory in that I can’t put a figurer on it. I don’t think you can. I think the balance is fairly right, however, we do live in a global economy and we have a lot of outward foreign investors. We are one of the, I think either the second or third largest foreign investors in the United Kingdom now. We have an enormous investment in that country and we have increasing investments in other parts of the world, so this is a two way process.

I would hesitate to close down the shutters I really would, but what I think we do need to do is to make it more attractive for Australians to invest in ventures. One of the advantages of the capital gains tax changes is that we ’ll be encouraging people to take more risks and to invest more readily in speculative activity and I think that is a good thing.

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