EMBARGOJ". 2*35pm

PRIM E MINISTER

FOR MEDIA MONDAY, IQ MAY 19fr2

1982 AUSTRALIANÂ· LIBERAL STUDENTSr

FEDERATION CONFERENCE

It is a great pleasure to be with you to open the 1932 annual  conference of the ALSF. You have a broad agenda,ranging,  as I understand, from airfares to education policy, from  student unionism to foreign policy and defence issues and I  am sure you will have a productive conference, Ã¢ÂÂ

It is well known that the ALSF accommodates a variety of  views within its membership. That is the essence of Liberalism,  just as it is Of; the essence of the.imiversity idealÂ» But  the ALSF also has Â«mother great strength, its commitment to .

standing up for what it believes in and its determination to  work effectively and persistently to achieve its priorities.

One of the great causes for which the ALSF has fought and for  which it continues-'.to fight is voluntary student unionism. You have fought for the right of students to choose freely  whether or not they wish to belong to a union, whether or

not they wish to pay student union fees without fearing that  their student status will be threatened. .

In this campaign, especially in relation to eliminating the  diversion of compulsory fees for socio-political activities  you have the full support of the Federal Government. *

The Government has implemented a number of measures designed  to guarantee voluntary student unionism in the Australian  Capital Territory and I hope the time will come when your  -Ã¢ÂÂ¢continuing campaign will be successful throughout Australia.

Voluntary student unionism is bbviously a vital part of freedom  in education, so is that freedom of expression which"the  ALSF has championed on tertiary campuses throughout Australia.

Freedom in the widest sense is the cornerstone of the ALSF.  Indeed, it is the overriding priority and objective which  binds together all Liberals. Freedom is the great"ideal " which positions us on the political spectrum. It is the

basis of our rejection of the conformity and oppressive  levelling of socialism and the reason for our commitment  to a society which encourages individuals to pursue their own  goals and aspirations to the fullest extent of their ability.

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We also need to remember that influences which threaten  prosperity are in the end threats to freedom itself, I know the ALSF does not take freedom for granted, that  yourealise it must be worked for and defended. But too  many people do take freedom easily, they accept it, they

take advantage of its benefits, and the prosperity which  it has created in Australia without realising that it  creates responsibilities, and that it cannot exist without  being defended.

As Liberals, we obviously have freedom as our central ideal. But we should remember that freedom also provides a basis  for practical policies, and for our analysis of what the real  issues are. .

I want to talk today about the real issues for Australia as  we look down the months and the years ahead. For in spite  of our comparative prosperity, in spite of the comparative  stability and security which we enjoy in Australia, there are

real and fundamental threats abroad in the world to the values  and the way of life which we enjoy and which we believe in.

In concrete terms, those threats are essentially strategic and  economic. To cope with them. Western societies need resolve  and imagination to build up effective responses and practical  policies.

I want"to talk about the strategic and then the economic  problems which the world is facing although the two are very  much intertwined. I also want to look at'what we have done  and need to do in Australia and to emphasise the contribution

we should seek to make in the:"international environment.

It would be disastrous for Australians to forget or overlook  that while we are an independent country we are affected by  what happens in other countries, in the world economy, and in the  strategic balance.

At the present time, the world strategic and political situation  gives rise to many causes for concern. The overriding strategic  reality is that Soviet military power is greater than it has  ever been, both in a comparative and an absolute sense. The

Soviet stance continues to be essentially provocative and  the reality of Soviet policy is evident in the occupation of  Afghanistan, behind the forces for repression in Poland,  through Soviet backing for the Vietnamese occupation of Kampuchea  and directly and indirectly in central America, in Africa and

in parts of the Middle East.

Can anyone deny that a firm response to Soviet actions is now  a most pressing priority? Can anybody now deny the weight  of the Australian Government’s consistent argument since we..came .   to power in the mid 1970’s that the advantages of detente

seemed to flow one way towards the Soviet Union?

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There is now great, and widespread concern among Western  governments about the situation and growing concern about  the state of the Western Alliance.

President Reagan*s sustained determination to revive  Western :power has. given heart bixall those people who have  been aware of what was happening, but obviously the United  States cannot carry the whole burden.

Indeed, it ia not just a matter for the United States and  Europe, the whole world has vital interests at stake, Australia*s interests are obviously involved in the while  question of world peace and security and 1 want to make a

comment here on the priority which the Government has  consistently given to defence expenditure.

There are always different views about which particular  expenditures should come first in the defence area, always  arguments about which priorities are the greatest. We have  seen some of these arguments in recent times in relation to

the purchase of a new aircraft carrier and bringing forward  the new Orion aircraft.

But in the midst of those arguments, we must not lose sight  of the fact that the Government hfes given defence spending  the high priority it needs. We emphasised defence when  others were downgrading it. We are continuing to increase  defence expenditure, it is up Almost 20% this year and  Australia is experiencing the benefits.

Coming back to the international strategic situation, 1  believe that what is needed now among Western nations is an  accurate perception of what the Soviet Union’s actions are  all about, because that perception must provide the basis

of an adequate overall Western response to the situation that  has now developed.

There are many questions ys need to ask ourselves in the West.  In the early post-war years there, would have been faiÂ±ly  general understanding and agreement on the nature of the  Soviet Union’s intentions. That agreement led to the formation  of NATO and the continuation of the Western Alliance,

Js there Still the same understanding of the nature and  purposes of the Soviet Union? Are the differences that  sometimes appear in the Alliance caused by different perceptions  now of the Soviet threat? Is there the capacity to achieve  agreement about the way we should conduct our relations with  the Soviet Union? Is the West making itself a hostage to

fortune by building dependence on Soviet markets nnd on Soviet  strategic supplies?

And these Questions come on top of the economic difficulties  in the western industrialised democracies which threaten the  cohesion and purpose of Western countries.

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In Europe next month, there will be two vital summits which  provide an opportunity to address these questions and  difficulties.

The Heads of Government of NATO countries will be meeting in  Bonn to discuss the issues facing the Western Alliance. This  meeting is potentially of enormous significance. It will  be searching for a strategy for the 1980’s.and it is certainly

the hope of the Australian government that this meeting will  lead to a renewal and strengthening of the Alliance.

The Bonn summit meeting will follow the Versailles economic  summit, at which the Headsrof Government of the United Kingdom,  France, West Germany, Italy, Japan, Canada and the United  States together with the' Presidents of the Commission and the

Council -of the European Ocmnunities will discuss the economic problems  faced by the West and policies to overcome them, energy  problems faced by the West beyond the present downturn in  world prices, the dialogue between developed and developing

countries and problems and strategies in economic relations  between the Western countries and the Soviet bloc.

World economic conditions and their implications for the  stability of the Western democracies are serious indeed. It is estimated that last calendar year the vAlue of world  exports fell for the first time in over twenty years. The  average rate growth of GDP in the industrialised countries  of the West was only a little over 1% and real GDP actually

fell in the final quarter of the year in the United States, West Germany and even Japan. " ,

Predictions of recovery from recession are repeatedly made,  and repeatedly fail to materialise. Already this year, the  United States economy which produces over one third of the  output of the member countries of the OECD has experienced "   a further fall in its real GDP in the"first quarter and its  unemployment rate has reached almost 9Jj% of its labour force  which means that oyer 10 million Americans are out of work.

This pattern of recession and rising unemployment is being  repeated throughout the Western industrialised countries and  it is predicted that total unemployment in the OECD countries  will reach 30 million during this year.

It is true that inflation rates have been falling rapidly in  Europe and North America; that some workers have accepted cuts  in real wages to help protect their:employment prospects and  oil prices have been declining.

But while these trends provide reason for some optimism -  about future prospects for recovery, the persistence of  real interest rates at historically high levels continues to  discourage the investment which is so essential to building

a sustained economic recovery.

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The costs of these conditions in terms of unfulfilled expectations  in terms of unemployment and associated suffering are high  indeed, and the potential for even higher costs as confidence  in the ability of governments to cope is undermined cannot be  ignored. .  -

in some cases the reactions of governments has been to try  to defend themselves and their people not by facing up to  the need for firm policy settings, not by accepting and facilitating the structural adjustment that.is needed to ....

accommodate changed economic conditions, but rather by seeking  to increase and extend protectionism.

For example, the European Community has intensified its  already massive protection of its agricultural producers __ . and has introduced a system of subsidies for exports of its  agricultural produce to third markets. There is an increasing,  and intensely disturbing trend towards bilateral trade  agreements cutting across the forces of multilateral competition

in trade that have been the basis of world growth and world_  prosperity for most of the post-war period.

It is true, of course, as our recent experience -  in Australia  has made clear that economic interdependence can impose costs  on countries when world economic conditions are difficult. . But if the experience of the years of depression which preceded  World War II has taught us anything, it is surely that the

costs of isolationism are far more severe. Â·

Throughout the 1950’s and the 1960’sy the new economic order  established in the aftermath of World War II, the liberal  system of trade and payments, sustained unprecedented' growth  of. trade and prosperity.

Following the experiencesÂ·Of the 1970’s, the world today is  a very different place and it is vital to the interests Of us  all that the Heads of Government meeting at the Versailles  Economic Summit face up to that fact.and seek a clearer

understanding of why it is so different, and what must be done  to put the Western countries back on a path that will generate  renewed growth and renewed prosperity. .

As with the NATO meeting-'-at Bonn, Australia is not directly  represented at the Versailles meeting, but our interests are  very must involved,

Our economy, our workforce, is small by comparison to those  of the major countries involved in the Versailles Summit. We currently produce a little under 2% of total GDP in the  OECD Countries taken together. There are millions more people

unemployed in the United States today than there are members  of the total labour force in Australia.and we rely on trade  with the major economies to keep us growing, to underpin the  prosperity of all Australians.

Nonetheless, as we have shown in recent years with the right  policies we can succeed against world trends. Indeed in 1981  our growth rate of 5% was about 4 times the estimated average  growth rate for the OECD as a whole.

We have shown that our Interdependence with the rest of the  world has not prevented us from taking independent"action to  promote the living standards of Australians, and keep  building Australia up,

Let me add that we have succeeded in this endeavour without  pursuing the path of increasing protectionism. Indeed in  the process we have taken decisions to gradually lower  protection throughout Australian industry.

The importance of keeping on building Australia up by  continuing to bear down on inflation, by maintaining a  responsible approach to our budgets, by continuing appropriately  firm monetary policies, cannot be overstated.

For it is growth that is the primary source of increased  living standards for Australia's families. It is growth that  provides the resources to enable us to effectively care for  the needy in our society, and to help other less fortunate  peoples of the world to escape from the vicious circle: of  poverty so many of them face and it is growth that gives us

the capacity to effectively defendÂ· ourselves, and play a  wider role in promoting peace and freedom in the international  community.

As a result of the policies that the Commonwealth Government  has pursued since the end of 1975, not only do we now have  one of the strongest economies among the Western industrialised  nations today, but we also are one of the few net exporters

of energy in a world which, following theorise of OPEC, badly  needs diversified sources and forms of energy.

The importance.of our energy resources not"only provides an  incentive for other countries to be aware of the impact of  their policies on us but it also serves as one example of the  fact that Australia does have a real contribution to make in  relation to issues and problems of world concern.

There are obvious "limits to what a nation Ã¢ÂÂof 15 million can do,  but we have a role :and a responsiblity, as a concerned and  outward-looking nation, to do what we can.

I believe that a country like ours sometimes has the capacity  to highlight the concerns and interests of smaller and less  powerful nations and thus contribute to a more balanced  perspective overall.

We have also demonstrated our capacity to take initiatives  designed to encourage or enable others to act in pursuit of  important objectives. Our decision on the Sinai, for example,  was a catalyst in encouraging ' .  other countries to join the  peacekeeping force, and our CHOGM initiative to set up a

study group to examine obstacles to negotiations in the  North-South dialogue which arise from the negotiating process  itself is a further important example.

Not only does Australia have something to contribute, we also  have responsibilities to secure Australia’s own well-being  and interests.

In the conjunction of strategic and economic circumstances  which I have been discussing in this speech, I believe it  is vitally important for Australians to be aware of what is  at issue, and how the events may affect us.

It is also important for us to realise that while Australia,  will not be attending either of the June summits, our interests  are involved.

Against that background, the discussions that I shall be  having next week with President Reagan, with Pierre Trudeau  and with Prime Minister Suzuki are obviously timely, and they  will provide a valuable opportunity to bring forward our  concerns and perspectives.

We live in a troubled and uncertain world. If ever;, anyone  needed an example of that, look at the Falklands.

As Liberals, as a Party and a federation determined to defend  the values of freedom and democracy, we have tremendous  responsibilities, and tremendously challenging tasks.

We need the courage to stand up for what we know to be right. We need the will to match our ideals with effective action  and we need the dedication to stick with far-sighted policies.

Provided we do that, there is much that we can achieve, and  we can be confident of our ability to surmount the problems  and build the kind of future that we want.

