Published with various contributors in a column headed ‘Where Are We Heading?’, in The Age, 17 August, 1992, p. 11.
The worst is over. There is still a lot of structural adjustment occurring, and that will lead to more unemployment in some parts of the economy in the next 12 months. But overall employment will grow.
I am optimistic about the future. We have seen a substantial increase in elaborately transformed manufactured exports over the last five years. In 1991 it was in the order of 19 per cent with low inflation, a tremendous achievement.
I think the main ingredients for the future are low inflation and more structural adjustment. Whoever wins the election will benefit from that, and we will see a stronger economy in the 1990s. Many enterprise agreements are being organised, and a lot of industries are seeing significant improvements.
The main danger is lack of confidence in the economy. Leadership on the part of the government is important. It ought to accelerate the base for tourism: building the third runway at Sydney airport, bringing forward Badgery’s Creek airport, improving landing rights and doing more to promote tours and access for foreign airlines instead of looking after Qantas.
The National Rail Corporation should move more rapidly. I am pleased with the progress so far, but you have got all these state governments with a say, it has got headquarters in three states, and there is four years to go before it is fully established – it is not good enough.
The Budget announcements should continue the push for change, and bed down the priorities achieved thus far: waterfront reform, airline deregulation and access, the National Rail Corporation, and with the electricity industry, set specific objectives for it to achieve this year to increase the efficiency of Australian industry.
Unemployment will fall only slowly. More can be done through labor-market programs. The best way for us to go is to higher-skilled jobs, and the government’s initiative in putting more money into training, TAFE and universities is the way. Its Best Practice Programs are important complementary initiatives.
We need to accelerate change in some industries. The government should have a look at the TCF industries, and whether the existing phase-downs are appropriate. New Zealand now has no duty on the import of cloth, whereas there is a 37 per cent duty in Australia; that gives them a competitive advantage over us. The government ought to review a number of duties on inputs, where this assists jobs. The most important lesson we should learn from the 1980s is the evil that inflation can wreak on an economy, and the way it can distort the pattern of activity.