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PRIME-MINISTER

F O R  MEDIA ____ _________ ______ ; ______ FRIDAY, MAY 15 1981

MELBOURNE

_____  ANNUAL PINNER OF THE

AUSTRALIAN LIBERAL STUDENTS 1 FEDERATION

For more than a century/ the Socialists have thought that  history is on their side. Their view has been that nothing  carr-stop Socialism from coming in the end. This doctrine  is one of historical inevitability, a comforting doctrine  to some kinds of people, and one that has assumed several

forms..

In Australia, the doctrine has, in the mairv assumed a  comparatively non-ideological form, namely, that each  Socialistic policy put in place by a Labor government will  remain in place even after the electors have thrown Labor  out of office at the next election. There has been a belief

that—succeeding Liberal governments will not remove, but  live with established Socialistic policies. So no matter how  infrequently Labor holds office. Socialism is inevitable

in the e n d b y a slow p rocess of accretion.

This version of historical inevitability portrays the  advance of Socialism not as an irrestible swelling tide,  but as a sort- of slow shuffle-. There is little idealism in  it, but it has at least been something for the Socialists  in this country to cling to.

From the time the Liberal Government came to office after  the 1975 election, we made it plain that we did not regard  existing Socialistic type policies as sacrosanct. We expressed  our clear determination to re-establish a more Liberal - '

and more limited and less arrogant - role for government in  Australia. We have done this because we believe that if  Australia is to meet the cirstlengesnot the eighties- and  beyond, we cannot afford to sit back and accept unsatisfactory

and inefficient arrangements which cause more problems than  they solve, and whose costs outweigh— the-benefitsÂ» ------

Never has our direction been made plainer than in our recent  decisions arising out of the Review of Commonwealth Functions  and in relation to hospital and medical arrangements in  this country, and in the recent Premiers1  Conference. There  are major benefits which will flow to all Australians from  a more realistic view of what government can do.

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In announcing the Government’s decisions arising from the  Review of Commonwealth Functions I said that they were a  major contribution to the historic turnaround that the  "Government was making. Our political opponents thought

this turnaround was impossible. This is why so many of —

them were outraged. One of them in fact rose in his place  4n the-Par- ll- i ament>— when I was only halfway through the  speech, and confessed .  himself unable to sit there any  longer.

It also helps explain why our political opponents were so  confused in their immediate response. The Leader of the  Opposition started by accusing us of dismantling the  public sector, yet later on i m t h e  same speech accused the

Government of spending too much. The leaders of the  Labor Party cannot make up their minds whether they should denounce our approach and-our-poi ioies .as a _____ dismantling of government, or whether they should try

to gain popular support for themselves by accusing us of  not having gone far enough. _____ __________ ,  _____

Our turnaround is a move away from big government; away  from damaging interference with people’s lives and activities;  away from excessive bureaucracyr-sway from—the-sort— of—   government that Labor gave this country between 1972-75, when  the number of Commonwealth employees rose by 52,000

(June 1972 - June 1975). We have brought it down by 10,000  and the RCF will bring it down a further 16,000 or 17,000. Andi under Labor the Government’s claims on the nation's  earnings rose from under 24% of GDP in 1972-73-to more than

30% in 1975-76. We have cut this back to lesITtLan 28%,  and we have further to go.

We d o n ’ ^b-want big-govemroenty—nor do the Australian people.  Only Labor wants it. And let me stress that big government  Is not caring government. It makes unemployment inevitable  by undermining private enterprise, and it fosters inflation

and consequently social divisiveness, with soaring taxes  and large deficits.

Limited governmeTvtrfvae a far greater capacity to improve  care for those who need assistance. By strengthening the  economy, limited government provides a foundation for  generous -social security— arrangements. Those in need  benefit from more efficient government, Over the period  of this Government, age pensions have reached higher levels

in relation to average weekly earnings than at any time  in the last 25 years. And you will be aware that n o~re duct ion s  have been made in income security payments as a result of  the RCF.

A Liberal government does care about people, and the Liberal  approach is based on the view that society has immense resources for achieving what people want without the need for___ ^____ counterproductive intrusion by governments. These resources  are the talents, the skills and the knowledge which people  possess. Big government cramps these resources.

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Centralisation and big government held_QUt_any ...____ prospects for the cause of freedom and civilisation, f or__ _ ' initiative and creativity, or for the promotion of those Â·.. values which lead to the advancement of mankind. The  advancement of mankind-comes fundamentally frdnrthe voluntary  efforts of individuals within the framework of civility Ã¢ÂÂ  and of the rule of law~which governments help provide. ....... “

l-iberals believe there isyjorfching inevitable about the course of history - It  *s human beings who mate history, and in tills process, history dees not take sides. I want to say to young people in particular,____ make no assumptions which suggest that the future lies  outside human control. Such assumptions would be unworthy  of your own capacities - and of the responsibilities which  you owe to the generations which will follow you.

It is often said that the West has faced a crisis in recent  decades. I doubt that crisis proportions were-ever- reached  but there certainly have been considerable uncertainties,

of both will and belief. From the late fifties, through  to the mid seventies, the West failed to perceive the need  for new policies, and by the time it did wake up,  unemployment and inflation were both high and becoming Â· entrenched. In those years, the distinction between caring  government and big government was not as clear"to many as *  it should have been. The distinction between a protective

role for government and the omnipresence of government was —  :  not as clear as it should have been.— People-thought- that---governments were entitled to spend almost without limit,  and it was falsely imagined that government money would  ___ solve human problems.

The tradition of freedom - which says that the way to solve  these problems, Is to encourage people to use their skills,  "talents and imaginations - was subordinated to a reliance  on government. Hardly anyone now fails to recognise that

government had grown too much. Our policies reassert that ---  freedom - not paternalism and bureaucracy - is the path to the way of life that most people want.

Let me give a simple, but compelling, example of how _

freedom helps to solve social problems, uur policies reuoynise  that if government creates the right conditions for people  to use their knowledge, and e>cpress their own wants in the marketplace, the inevitable result is the-epenlng-up-of--- -------new opportunities for others, including job opportunities. As a result, almost a quarter of a million additional jobs

came into existence in the two years to last December in the ____ private sector - and the rate of unemployment is now falling. In April it was the lowest rate for fourÂ· years, This

achievement far exceeds what could have been achieved  with government make-work-schemes - which are always—the -Â­ first resort of the Socialists - and which could only have Ã¢ÂÂ¢  been paid for by higher taxes anyway.

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The way of freedom JLeadsto higher economic growth, more 7 .

jobs and lower taxes. And because the freedom I am talking:. . .  Ã¢ÂÂ  Â· about is freedom under dewT— the advance of freedom is-hy_^  definition the retreat of oppression and injustice. By  .  vPPntraet,: ejxc^sslvel pateimdllsm and interfering regulation ,  .:"ÃÂÃÂ¤.ÃÂ.

are the sources of new oppression, nf ri^.w Injustice and of r ;new opportunities:.for subtle discrimination. .  -?Â·Ã¢ÂÂ Ã¢ÂÂ Ã¢ÂÂ

. The retreat of .monolithic Socialism in Poland shows the -   fragility of- ^"system which suppresses the freedom and the  values of the people. Freedom may not end prejudice and  intolerance in private" attitudes - but it deprives the  prejudiced, the intolerant, the domineering of aignificant-  opportunities to grow strong.

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-freedom,_ In implementing policies which _  we believe w e  are being true to the traditions which we have  built in the West, the most humane and creative societies that  the world has ever known. The thread running through all  our policies is that individuals should be able to make  decisions for themselves. This is why this government is

so decisively committed to the protection of the taxpayers, for freedom requires that individuals havo-fcheir own---spending power, and that governments must justify the claims  they make on taxpayers.

The Review of Government Functions has a particular ---- relevance in this connection, for the decisions arising from, that review; amount to. the..most comprehensive practical  expression of this kind o f uoauuitment~t.O'freedom which

has emerged from any modern Australian government.

There were three categories of decisions. The first concerned  with moving over to private enterprise functions which it  will handle better than governments, the second with passing  back to the States functions which they can handle more

appropriately, and thus avoiding waste and duplication,  and the third with rationalising some of the Commonwealth 1 a  own activities. I

I mention here particularly the abolition of the Prices  Justification Tribunal; the freeing up of the airlines  and the establishment of TAA as a public company; the offering  for -sale of a number of government enterprises to private  enterprise; the reductions in industry assistance; the  abolition of dual control over public hospitals, arid the  hew" health arrangements based on voluntary private insurance;

the introduction of a loans scheme for tertiary students  from the beginning of 1982; the major reductions in the  -ÃÂ­- i-ae o f -theÂ· Commonwealth bureaucracy; and a joint  Parliamentary standing committee to review the performance,

role, functions and continued need for all statuatory bodies.

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Such decisions show the Government's determination to followJ ....~ our philosophy - because we believe this is theOnly real ,  . way for Australia to become the strong, and dynamic country^Â® all  want it to be. Our turnabout from high taxes and inflation, ^

and. from unproductive,-, j obs and high unemployment provides- :. Ã¢ÂÂ¢iÂ· Â· __ .v more from our economic growth. And that establishes the  conditions in which tfuture generations can have,yÂ§oipething Â·  -t to "enjoy and look forward to. tar’'  ......... * ’

Our., turn abound also means giving added strengtH^Eo-the-  Australian federal system. One of our concerns"-is to avoid “  *   ÃÂ.,, the twaste and duplication resulting from over-centralisation - - by  giving the States responsibility for functions which —  a re-prepecly theirs.

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What point is- there in the Commonwealth funding a curriculum Â·   development centre of-its own when thi-s merely overlaps "with  work being done by the States? Or what point is-there in  the Commonwealth bureaucracy being involved with the running  of public hospitals when the States are both constitutionally

responsible and very well able indeed to run public hospitals? -

There have been some- differences of view about the precise  financial contribution which the Commonwealth should make to ‘   each State’s general revenue grant for the funding of  hospitals. But I have no doubt that a year or two down

the track when these differences will seem like ancient _____ .  history, the States will value their independent capacity  to run their own hospitals in the ways which seem best  to them. ‘

Over recent decades, and especially from 1972-75t  the general  growth of government in Australia was made worse by an increasing centralism in Canberra, Ideally, .federalism. . , j____  . . . should operate to limit government. But in terms of power,  the Commonwealth Government was the beneficiary of the  centralisation and the growth of government in Australia. Even Sir Robert Menzies, looking back from his retirement,  made the observation that while it was easy in theory to

favour limited power for the Commonwealth, a larger amount  of power made it mueh-easier-to-implement— one’s policies.

Of course, in a situation in which selfish and divisive  groups are extremely powerful, a weak Commonwealth Government  would be a poor protector of individual rights and of the  public interest. So what the Commonwealth needs is that  measure of power which will enable it to discharge its own proper responsibilities-- neither— more nor less - and this Government will seek to retain no power in excess of  that.

Labor has sometimes argued that government is relatively small  and restrained in Australia, by comparison with other countries.  International comparisons are always difficult because of  differencee-irrinstitmtfOiTBrand iTrway.s of compiling statistics.  Nor is there any obvious magic about the average or typical

size of the public sector in other industrial countries.

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,  U ÃÂ Ã¢ÂÂ  But so far as international comparisons are regarded as ,  ^

relevant, it may be noted that while Australia's public-/. -ic .  - - sector ,*ÃÂ¹ÃÂ² a  whole is- smaller, in relation to GDP than that of the  ^-tMitied'States; the United Kingtfcm-eid'GeEmany, -tiie central goMsments^^;. .  all of those countries have "done some thin g'-fco-reduee^-Â· ~;v

".1Â·-^-''—  of their -public sectors, -  , ÃÂ¹

'  Ã¢ÂÂ   Ã¢ÂÂ   ‘  -  Â·  - ' . '5 *  '

" ÃÂ  — m s i..  ÃÂ¯ is partibuiarly interesting that of -the major; OECD.  Ã¢ÂÂ¢  Â·  * countries y Japan — h a s  the smallest public setter relative  ’ /'to GDP:Â· Whose economic .conditions would you prefer

- - Australia to have those ,:of biggger spending^nitea .   Kingdom and United States, or those of smaller spending  Japan?

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.... The reason for the wide recognition in the West of the need for a turnaround is plain to see. Not only does  limited government mean more effective and less intrusive  —  government, it also means higher economic growth, higher

real incomes, more jobs, lower taxes, more influence ~

to ordinary people as users and consumers, and a greater  adaptability in our society to change. .

There are also very real advantages in freeing resources  - and opening opportunities for current priorities. We are no longer so locked into programmes and—activiti_es..Jahifih __ ----- once had an importance they no longer have. We can

devote resources much more adequately to areas we believe  are of major current importance. .  .

v j .  -  Let- me mention energy research as an example Ã¢ÂÂ¦ A  re-location ______ ______ of existing resources in the Australian Atomic Energy ;

Commission Research Establishment and in the CSIRO will  "  enable the Government to establish a new institute of  energy and earth resources in the CSIRO.

The establishment of this institute is a recognition  of the high priority the Government believes must be given -------- to energy research..These decisions will consolidate Australia’s present nuclear research establishment into

a first class nuclear science and technology research  organisation and establish a first class non-nuclear  research organisation.

The resources transferred to CSIRO will enable expansion  of research in such areas as fossil fuels, mining of energy .......resources, alternative fuels and renewable energy and

^ e n e r g y  .conservation, .  - -

Because limited government compels greater awareness of  priorities, it is more effective government and government  better geared to enable Australia to take up the challenges  and opportunities before us. We pioneered .more-limited,

government through the second half of the 1970s. It has  been a hard path calling for a degree of determination,  and for a sustained resistance to demands for government  spending but other countries are nov; trying to follow us.

In these uncertain times, Liberalism stands as a strengthening message; to the w o r M . ^ ^ l t  .  I s s~Ttessage that— identifies .. the efforts and i'af^nts of individual humemf!|pings as - Â· the real source ,ÃÂ¿ÃÂ¾progress, a message whichIraakes Ã¢ÂÂ   "Â«Â·

freedom pre-emihent'l a message which insiets^hat people should not be treated as either p a w n i % r  ‘  "Ã¢ÂÂ *Â·

patients in the hands of government, but as dynamic, responsible and-adult. -  "  Ã¢ÂÂ   Â· * ' ”*Â· ' ;  ' Ã¢ÂÂ  Â·  Â· Â· '  - " Â·  Â·*’Â· * Â·  ' . Â· , Â·  Ã¢ÂÂ   e  , . , '

'  Â·  . . .  v -  f . Â· Â· ,  < I.y, .  ~ -- ...... -

This is the essential message of the free societies to the.  world in our t i m e , ^ M o d e r n  Australian Liberalism stands - Â­ at the forefront a s , a practical example of the benefits  of the Liberal way of life, ours is the message, of optimism.

It is the only message worth entertaining.

And it is the right message because it starts with human  beihga as they are,- with their capabilities as well as  their aspirations, and because it recognises that the -Â­ only way to achieve human aspirations is through the free

operation of human talents and abilities.

