79-02-B2
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Australia I[edit]
Transcript[edit]With inflation plaguing these United States, and our market place coming more and more under government domination, I thought you might like to hear of what has happened almost overnight to the land down under -- our ally, Australia. Less than six years ago runaway inflation there was at an annual 20 percent rate. Taxes were punitive, if not confiscatory, and government costs had gone up 50 percent in two years. Unemployment was high, the strike record was the third worst in the world, and labor costs were rising 70 times faster than productivity. Foreign capital, the lifeblood of Australian economic progress, had dried up and key industries were threatened with nationalization. Then came a change. Taxes were cut by $1 billion, annual budget increases were cut to two-fifths of what they had been, interest rates went down, strikes fell to one-fourth of what they had been, and the inflation rate fell from 20 percent to far less than what we have - 5.2 percent. Now foreign investment is back with hundreds of millions of dollars being invested in mines and other ventures. The turn around began when a coalition of parties opposed to the socialist policies of the labor party elected Malcolm Fraser, Prime Minister. The Prime Minister would be the first to say, however, that a most important element in the turn around was a new management organization which advocates better cooperation and understanding in labor/management relations. It is called "Enterprise Australia". Its chief executive says t hey are trying a new approach emphasizing consensus and cooperation between management and labor -- instead of conflict and confrontation. The election of Fraser was the catalyst which brought former adversaries together. In short, they stopped talking about each other, and began talking to each other. Employers and employees found there was more they agreed on than they disagreed on. Labor turned away from nationalizing industries after they were shown that employees took home more than 10 times as much as there was profit. "Enterprise Australia" imported John Q. Jennings from New York, a one-time federal mediator and now a management/labor consultant. A breakthrough was made with R.J. Hawke, president of the Trade Union Congress, Australia's counterpart to George Meany of our AFL-CIO. Jennings persuaded management to send their employees company statements -- annual reports clearly telling how the companies' income is shared between employees and stockholders . Prime Minister Fraser told management, "How can I explain to the people that free enterprise is the best system for them if you can't be bothered to explain it to your own employees?" One labor spokesman said, "The old enemy capitalists no longer exist. Today, in our society , corporate management has reached the stage where real ownership of capital is all of us. There are no capitalists of a form you can identify." And, all this came about by talking to each other. TRW Corporation, for example, sent its employees a highly graphic report showing among other things that, after other expenses are paid, out of every dollar available for payroll and profit 91.3 cents goes to the employees, 4.1 cents to the stockholders and 4.5 cents is reinvested in the business. Nationalization of a steel company was rejected by the workers when they received a report showing they were getting 95 cents out of the dollar. Would this work in America? I think so -- listen to the next broadcast. This is Ronald Reagan. Thanks for listening. |
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