Good Onya: the continuing success of our Australian liberalism

In the time that I've been Prime Minister I've had three broad national goals. The first of those is that of national security. The second is that of economic strength and the third is social stability.

With our economy more competitive and stronger than it has been for decades, we as a nation are better placed, than at anytime since World War II to embrace a new era of national achievement.

This bright economic outlook can't be taken for granted. It's only going to maintained by consistence and discipline and sensible policies. Too much of the current debate in Australia takes it as a given that it will continue irrespective of the policies that might be applied by governments.

A new era of national achievement depends not only on continued hard work, but also on sensible decision making. The Government that I've led over the past eight years has pursued a distinctly Australian brand of liberalism.

Our governing ethos is grounded in the priorities and values and aspirations of the mainstream of the Australian people. Our belief in self-reliance and individual responsibility means that we favour private initiative, competition and choice over government direction of resources and society. Our belief in national unity and social cohesion means that we embrace that deeply held Australian sense of fairness through a commitment to mutual obligation and support for those most in need. Our belief in a private sphere separate and autonomous from the government means our bias is towards helping Australians achieve their own goals rather than prescribing collective ends through bureaucratic means.

From the time that this Government was elected, we began to put in place the building blocks that have and I hope will continue to deliver Australia's prosperity and security. We firstly restored Australia's public finances. We did face very large national debt and we faced successive deficits inherited in earlier years. We've now repaid about two thirds of the $96 billion of debt that we inherited and Australia's national debt is just under four per cent of GDP compared with an industrial world average of 50 per cent.

Our second great building block is that of industrial relations reform. We have led the way in simplifying the award system and our framework for agreements at the workplace level has provided greater flexibility for both employees and employers. This greater labour market flexibility has flowed through to greater productivity. The really good news for Australian workers over recent years is that because of higher productivity, they have been able to enjoy higher real wages whilst observing a fall in unemployment.

One of the other great building blocks put in place was taxation reform. The New Tax System introduced in July of 2000 not only provided the largest personal income tax cuts in our history, but replaced many inefficient indirect taxes with a broadly based Goods and Services Tax. Fundamental to that reform was that all of the proceeds of the Goods and Services Tax goes to the state governments of Australia.

Another building block for the future has been the Government's sensible approach to trade liberalisation. Our Free Trade Agreement with the United States, and those already concluded with Singapore and Thailand, have further advanced Australia's involvement with the international economy.

I've always given credit to the former government for two things that it did, the floating of the Australian dollar and tariff reform. Those two changes were very important elements of opening up the Australian economy. They received the very strong support at the time of the then opposition. It's against this backdrop that I find it perplexing that the current Opposition is threatening to vote against the Free Trade Agreement with the United States. This Free Trade Agreement is a once in a generation opportunity to link Australia into the most powerful economy the world has ever seen. It would remove all United States tariffs on automotive products. The potential gains in areas of government procurement, goods and services, are enormous. Australian firms under the Agreement will in future be able to bid on United States Federal Government contracts that are worth about $200 billion a year.

I enter a very passionate plea in the national interest for the support when it comes to legislation in the Senate of all parties for the Free Trade Agreement.

Australia is a more competitive and prosperous country as well as a fairer one. The average Australian's standard of living has risen by 19 per cent over the last seven years. For the first time in 35 years we have unemployment below six per cent and inflation below three per cent. Real wages have gone up by 13 per cent since 1996. We've got 1.3 million new jobs. The average mortgage costs $500 a month less than it did almost eight years ago. Tax cuts in 2000-03 together mean that somebody on male average weekly earnings is today about $2,500 better off in income tax terms. Through reforms to the Australian waterfront, its productivity has risen by 75 per cent. We've not neglected areas of proper social provision, real spending on healthcare's gone up 50 per cent and Federal Government funding for schools has gone up by 63 per cent. We've lifted aged care funding by 50 per cent. We've created 200,000 extra childcare places. When we came to government there were only 141,000 people in apprenticeships, that figure is now 407,000.

Good economic management is not an end in itself unless it has a human dividend, unless it generates more jobs, or lifts people's incomes or makes their home mortgage more affordable. We have been able to do these things through a period of some difficulty - an Asian financial crisis, international terrorism, a US recession and a crippling drought. Where we are today does reflect disciplined economic management and we certainly can't afford to go back to reregulated labour markets and more restrictive attitudes to international trade.

I remain unrepentant about the decision the Government took in relation to the operation in Iraq. I make no apology for what we did as part of that coalition. For all its current travails, Iraq because of the removal of Saddam Hussein has a much brighter future. Those who decry the strategic purpose of the United States should ask themselves at least one question. Do they believe for a moment that Libya would have decided to scrap its WMD capabilities without American resolve to ensure that these weapons did not fall into the wrong hands?

We have been able to make increased commitments to security and to defence because we have a healthy economy. But to sustain domestic prosperity we can't stop the process of reform. A major focus in recent times has been reform of Australia's domestic energy markets.

We've always maintained a balanced approach to energy use, resource development and environmental protection. Australia is a world leader when it comes to effective action on greenhouse gases and we are on track to meet an agreed international target for emissions. We continue to take the view that it is not in the Australian national interest to ratify the Kyoto protocol. For a resource intensive country like ours, it would be a crippling blow to Australian jobs, investment and growth to sign up to a mechanism which does not by itself reduce emissions and does not involve major global emitters or other resource suppliers.

In recent months there has been no better example of the Government's willingness to tackle a difficult reform issue than the area of higher education reform. This nation needs to put more money into its universities, but we can not afford for all of that to come from the general government sector. We have to find ways of leveraging a contribution from both private individuals, supported by the government to ensure that additional investment is made in our universities. After a very long and difficult process, the Government's higher education package did get through Parliament. Under that policy there will be a more sustainable and flexible university funding system backed by about $2.6 billion in additional public funding for universities over the next five years and $11 billion over the next ten years.

The Government's approach to schools, education, has two basic goals. One is to set national benchmarks relating to things such as literacy and numeracy. The other very important goal is to facilitate choice by supporting the right of parents to decide where their children are going to be educated. While Government schools educate 68 per cent of our children, Government schools receive 76 per cent of total government funding. Those who suggest that government schools have been disadvantaged don't understand the facts or don't wish to.

Excellence in science and innovation is also critical if Australia is to maintain its high productivity growth. Later this year we'll announce a new science and innovation package with further measures to boost our capacity to turn great ideas into Australian jobs and income.

Rural and regional Australia will, of course, be a major winner out of the Free Trade Agreement with the United States. Two thirds of all agricultural tariffs will be eliminated immediately and products, such as, beef, dairy, lamb, seafood, wine, peanuts and oranges will gain even better access.

The bedrock of Australian society remains the stability and the strength of Australian families. A strong family life is the greatest source of emotional stability, individual education and social development. It's not the role of governments to tell families how to organise their lives or to second-guess parents on what is best for their children's future. Our role is to help Australians facilitate their own goals and make their own choices, while recognising that some families need a bit more help than others.

Responsible social policy is also about maintaining a funding balance between the public and the private sector. Much as our health system is criticised, it is probably a better system than any that can be found in other parts of the world. One of the reasons for that is that we have a balance between the government and the private sector. If you left it entirely to the private sector, it becomes unaffordable and out of the reach of ordinary people. If you give it entirely to the government sector, many of the incentives that are needed are drained away. We have a reasonable balance between the two at the present times. This requirement is going to become even more acute as our population ages, and we need through both the contributions of the public sector and the private sector, to maintain such schemes that are essential to our economic and other futures, such as the Pharmaceutical Benefits Scheme and aged care.

There is one other long-term challenge we do face as a country, and that is to make our Federation work better through a proper balance of rights and responsibilities. State governments on some occasions are very keen to exercise their rights in the Federation, but reluctant often to accept their responsibilities. For decades, state premiers of both political persuasions demanded access to a growth tax to fund their responsibilities in areas of health, law and order, transport, and education. With the introduction of the Goods and Services Tax we acted in a quite historic way to meet this demand.

This financial year the states and territories will receive $575 million more than they would have received under the previous revenue sharing arrangements. By 2006, that figure will be $1.4 billion more.

Accordingly they should stop seeking even more money from the Commonwealth to pay for the services which, with proper management, can now be adequately funded through the resources at their own disposal. One way states could exercise greater responsibility and accountability is to have more open and transparent budget accounts. At a Commonwealth level, we publish detailed forward estimates by function, including for health and education. The states do not.

It is a bright future, it is an optimistic time. The Australian economy now is better and stronger than it has been at any time since World War II. We don't have a fixed exchange rate, we don't have high tariffs, we don't have an overdependence on certain exports. We have a growing capacity in the service industries in relation to exports, we've diversified our manufacturing exports, we still continue to be greatly enriched from our agriculture and mining exports.