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P R I M E  MINISTER

FOR PRESS 5 NOVEMBER 1978

ELECTORATE TALK

The meeting of the Loan Council tomorrow is clearly of great  importance for Australia. It forms an integral part of a long  history of Australian growth and development.

The history of Australia is one of innovation and enterprise  by individual Australians. It is a history of growth and  development of our vast natural resources.

We have had our ups and downs,  but overall as a nation we have  enjoyed continuing growth and prosperity.

The main catalyst for the development of our country has been  private enterprise - individual Australian men and women of  initiative, with a capacity for sheer hard work and a willingness  when necessary to take risks.

Our farmers have built up a most efficient and productive  primary industry. Business people, particularly since the  Second World War, have brought about a very significant.. . .   expansion to our manufacturing base. In more recent times our

tertiary and service industries have grown strongly.

In the past 20 years, private industry has opened up vast new  natural resources projects and mineral export industries.

While the prime motivating force for the development of this  country must always lie in the hands of individual Australians  and private enterprise, Government has a vital role to play.

The Commonwealth Government must provide sound economic management  and a climate of stability that will encourage the private  sector to invest.

Reduction of inflation, control' over Government expenditure and  restraint in wage increases are fundamental to the long term  economic stability of Australia. It is the Government's task  to strive for the right pre-conditions which will enable sustained  activity and growth by private industry. This was the message  of the last Budget. It remains a paramount objective.

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Government - both Commonwealth and State - has a further role too,  for it must be prepared to assist with transport, ports, power,  water and other basic resources. 1

In the Australian Federal system, there is a long history of  co-operation between the Commonwealth and the States in  providing such resources as these.

The Commonwealth has been assisting the states in the funding of  new roads since 1923. For the past 20 years, the Commonwealth  has assisted the States in railway construction and updating  rolling stock, in particular the standardisation of railway track  gauges.

The Snowy Mountain Hydro-Electric Scheme was a co-operative effort  with Victoria and New South Wales, which made an important  contribution to the economic development of Australia.

During the past three years, Commonwealth support for development  projects has continued to be strong. This year, the Commonwealth  will be paying to the States over $500 million for roads; on  railways, the Government will be providing $70 million over the

next five years to upgrade the National Mainline Railway Network;  and we have announced a five-year $200 million National Water  Resources Programme to improve Australia's water supplies.

In other areas too there has been increasingly close co-operation  between the Commonwealth and the States. Agreement in principle  has been reached on offshore matters - a subject which had caused  much heat and little agreement in previous years.

Close co-operation has also been achieved in the development of-Â·  a national Companies and Securities Scheme, the training of  apprentices, joint arrangements to protect the environment and  counter-terrorist measures.

The Loan Council meeting tomorrow is another example of such  co-operation.

Together with the States, we have been exploring the possibility  of an entirely new approach to encourage the development of new  major resource projects in Australia.

One of the factors which investors must take into account in  making decisions on new projects is the availability of basic  facilities such as transport, water resources, energy supplies,  pipelines,and port and harbour works. We have been keen to see

that new projects are not held up because of the lack of  availability of these basic facilities.

Arising from discussions which I initially had with Sir Charles  Court in 1976, and after more than two years' study and discussion  with the States, the Loan Council broke new ground on this issue  at its meeting last June.

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It adopted new guidelines for its future consideration of  proposals for special additions to the normal annual "semiÂ­ government" borrowing programmes and for overseas borrowings  by authorities to finance these additions. These additional  borrowings were to finance projects of special significance

for development.

It was decided that a special Loan Council would be held at  a later date this year to consider the first batch of projects  submitted by the States for approval. This decision was of course  taken before the Budget, and it was in the context of this  decision that the parameters of this year's Budget were set.

In accordance with the guidelines set down by the Loan Council,  a working party of Commonwealth and State officers have been  examining a total of 12 such projects proposed by each of the  State Governments. The 12 projects cover significant development

in all States.

Two projects have been submitted by New South Wales - coal  loading facilities at Port Kembla and Balmain and the Eraring  Electricity Project.

Victoria is seeking additional borrowings for the vast Loy Yang  Power Project and the proposed World Trade Centre in Melbourne.

Queensland has put forward the development of coal export  facilities at Hay point and power station projects -at Gladstone,  Wivenhoe and Tarong.

South Australia wants to finance infrastructure for the Redcliff  Petrochemical Project.

Western Australia has submitted for approval the 1500 kilometre  pipeline to bring natural gas from the North-West Shelf to Perth,  water supply and rail facilities for an alumina project at Worsley  and the upgrading of power supplies in the Pilbara.

Tasmania wants to make additional borrowings to develop further  its hydro-electric power system and water supply projects in  Hobart and North-Western Tasmania. .

The borrowings for these projects would be phased over a period  of up to eight years and the total applied for is an additional  borrowing of about $150 million this year, and amounts ranging  from $236 - $393 million in the succeeding five years at  June 1978 prices.

The report of the working party on these 12 projects will be  examined at the Loan Council meeting tomorrow.

A responsible borrowing programme could greatly assist development  of a number of important new projects - projects which would  obviously have a significant impact on activity, export earnings  and employment.

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At the same time, the Commonwealth has a responsibility to  make sure that any programme of special borrowings approved  by the Loan Council is consistent with the over-riding need  to maintain our fiscal and monetary policy and thus to v

nurture economic recovery.

It is for this reason that the voting procedure at the Loan  Council requires approval for any individual project by a simple  majority of which the Commonwealth forms a part.

It is these considerations which will be foremost in our  minds during our discussions with the States tomorrow.

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