Business Council of Australia 2014 Annual Dinner: Prime Minister’s Speech

30 October 2014

This speech was delivered by the Hon. Tony Abbott MP, Prime Minister of Australia, to the Business Council of Australia's 2014 Annual Dinner on 28 October.

Check against delivery.

Well, Catherine thank you so much. It is a real thrill to be here at this glittering BCA dinner in the presence of my distinguished parliamentary colleagues; Minster Macfarlane, Shadow Ministers Bowen and Wong and the leaders of Australian business and society.

It’s good to be here on the eve of the G20 which should focus the world’s mind on growth and jobs and showcase our country and even perhaps give us the chance to lead by example.

My first task tonight is to thank the BCA.

Your members employ one million people, pay over $30 billion a year in company tax and generate no less than 30 per cent of our exports.

So, it is right that the Prime Minister should be here to say ‘thank you’ on behalf of our country.

Not only does the BCA help to shape our economy but you help to drive our economic debate. You have been doing this for years.

Your competitiveness report helped to shape the Government’s recent Competitiveness Agenda and its focus on lower costs, higher skills and more readiness to ‘have a go’.

The BCA and this government share a commitment to market-based economic reform.

But economic reform can never be an end in itself.

It’s the means by which we strengthen the economy, lift living standards and improve all our lives.

Economic reform is what gives us the capability to seize opportunities and respond to challenges and we know this because we have done it before. It is the foundation of our economic strength.

The period 1983–2007 – the era of Hawke and Howard, of Keating and Costello – was a golden age of economic reform.

Now, it wasn’t perfect knowledge that those governments had – it was drive and determination to change our country for the better.

Paul Keating often warned Australia that the mining industry was part of the ‘old’ economy and the mining industry would never deliver future prosperity. 

Well, he was wrong on that but he was right on so much else; deregulating the finance sector, cutting tariffs and starting the privatisation process that John Howard and Peter Costello subsequently took so much further.

The policies of the Hawke and Howard Governments – the leadership of those governments – improved competitiveness, encouraged trade, paid off debt, lowered tax, encouraged participation and made economic reform a national preoccupation.

Under the Howard Government, economic reform led to more than two million new jobs, a 20 per cent plus rise in real wages and real household wealth per person more than doubled.

This government aims to carry on that tradition and to further that example.

Our challenge is to demonstrate that the subsequent period from 2007–2013 is not the new normal. Our challenge is to demonstrate that the age of economic reform is not over, just interrupted, and has now been resumed.

The objective of the government is clear: to build a strong and prosperous economy for a safe, secure Australia.

Especially in these uncertain times, the essential prerequisite of a safe, secure Australia is a strong, prosperous economy.

Our defence budget, our security budget, our aid budget, our social programmes they all depend on a strong economy to sustain them.

Regardless of what is happening in the world, the challenge is always the same: to build the strongest possible economy with lower taxes and less red tape leading to higher productivity, stronger economic growth and government spending that’s sustainable.

But the darker the times elsewhere – the more urgent it is to get things right here at home.

Of course, as you know, government doesn’t create prosperity – business does.

But it is government’s job is to create the right conditions for business to prosper.

Our job is to foster low and stable interest rates by keeping government spending under control.

Our job is to keep taxes low so our businesses are competitive.

Our job is to reduce regulations so that business is busy innovating rather than lobbying.

Lower spending, lower taxes, and less regulation – that’s this government’s core business.

We promised to abolish the carbon tax and the carbon tax is gone.

We promised to abolish the mining tax and that’s gone too.

We promised to fix the highways and the biggest infrastructure programme in Australia’s history is now underway.

We promised to cut red tape and tens of thousands of pages of unnecessary regulation and legislation have been abolished.

We promised to be open for business and we’ve signed two free trade agreements with Japan and South Korea and are working on a third with China. Many of you have been with Andrew Robb and me on trade delegations.

We promised to be open for business so we’ve ended the war on the mining industry – because millions of Australian livelihoods depend on mining and it should never be trashed by government.

We’ve stopped the demonisation of coal – because coal is the world’s lowest cost power source and affordable energy is needed to bring billions of people from poverty into the middle class.

We promised to end the hand wringing and paralysis that stopped too many big projects – and since the election, the Government has given environmental approval for major projects worth one trillion dollars; projects that will provide tens of thousands of jobs far into the future.

And step by difficult step, compromise by hard fought compromise in the Senate we are bringing the Budget back under control.

We saved almost $8 billion by reducing the growth of foreign aid; we saved $10 billion by repeal of the measures that were supposedly funded by the mining tax and we saved $2.7 billion through social services savings that – for once – were supported by the Labor Party and the Greens in the Senate.

The Budget emergency started to ease with the election of a government committed to budget repair – and, with our first Budget, we did show a credible path back to balance within four years – the only path that has been mapped out to a sustainable surplus.

I want to stress how vital it is to get spending under control. Not least to provide the capacity for future tax relief. Because without tax relief, over the next ten years, the average income tax rate for average earners will rise from 23 per cent to 28 per cent.

Without change, the average worker will pay the equivalent of $3,800 more tax every year. And that, in practical personal terms is why this year’s Budget changes are so important.

Full deregulation of higher education will actually mean more scholarships than ever for deserving students.

A modest GP co-payment comparable to the PBS co-payment will make Medicare sustainable and produce the world’s biggest medical research endowment fund.

Changing social welfare indexation means that we avoid saddling the next generation with this generation’s debts.

Insisting that school leavers either get a job or learn a trade will ensure that Australians get the best possible start in life.

Now these are all hard reforms.

To be candid they were reforms that were too hard for the Howard Government.

So, one charge that can’t be made against this government is that we’ve put short-term politics above the long-term national interest. We certainly have not.

When we said that the age of entitlement is over, we meant it – and we proved it by saying “no” to business welfare too.

For all the difficulties of the past six years, we still have a fundamentally strong economy – but we can never rest on our laurels, because every day our competitors are seeking to do better.

Our competitors are cutting taxes, they’re reducing compliance costs, they’re building infrastructure and they’re reining in government expenditure and we need to do likewise if we are to succeed.

Hence, we are restoring the employee share rules so that workers can once more easily become stakeholders and businesses can once more be more like partnerships.

And we’re changing the regulatory culture and structures so that a product that’s approved in a trusted jurisdiction is approved here in Australia without further checking – starting with medical devices.

This government is committed to reform because today’s reform is tomorrow’s prosperity and because we owe it to our children to leave them a better life than our parents left us.

We owe it – people in government like me – we owe it to our forebears in government – to the Hawke and Howard era ministers to be as good at our job as they were at theirs.

But let me make this point about reform.

We will have as much reform as the community lets us.

We will make the case for change – but it’s community acceptance that sets its pace.

The White Paper on Reform of Australia’s Tax System is not about extracting more revenue and the White Paper on Reform of the Federation is not about more power to Canberra.

Tax reform means lower, simpler and fairer taxes with more incentive for all Australians to follow their dreams.

Federation reform means a simpler and more efficient system of government where people know who does what and know who to blame when things go wrong.

As a conservative, I’m not inclined to force reforms on an unwilling people – so I’m inviting everyone to join the conversation to discuss how we might grow as a nation and come closer to being our best selves.

Because no reasonable person thinks that our current tax system is the best we can do. No reasonable person thinks that the current dog’s breakfast of divided responsibilities is the most efficient way to run our country.

The lesson of history is that serious reform does take time. That’s why it must start now if it is to come to fruition within the next five years.

On all these issues, I am inviting the Labor Party, the state governments to join Team Australia and think of our country and not just the next election.

When Australia last had big tax reform the BCA was leading the charge.

It was the Howard Government that introduced the legislation but it was the BCA that had helped to carry the debate.

There is a lesson here.

We will only get change if the people who believe in it are prepared to fight for it.

This government believes in lower, simpler, fairer taxes; we believe in a federation where each level of government is sovereign in its own sphere.

I know that you do too.

Economic reform is not just a job for government – it’s a job for all of us.

We can be fans in the stands, we can be armchair critics or we can help to make it happen.

We can criticise government for not doing enough or we can enter the debate and help make the case for change.

I have to say that I draw great nourishment and find great encouragement in this audience of the most influential leaders in our country.

Reform needs to be owned by our people – not just by our government.

Economic reform is not just a job for MPs – it’s a job for all of us so let’s get on with it because there’s no time to waste.

In the original draft of this speech, I posed this question to the BCA: are you ready to argue your case to the community – not just to tell government what to do – but to tell the whole community what we need to do together.

Well, I think we all know the answer.

You are ready and you must be for our country’s sake.

Thank you.



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