Sir Charles Court Oration

A Perspective From a Past Prime Minister, CPA Congress - 15 May 2002

At Federation, Australians had a clear vision. Six small colonies had peacefully joined together in the Australian Federation. The job ahead of them was building a nation. As Asquith put it, it was a measure …'which transcends in interest and magnitude almost any legislative proposal of our time.' The job ahead of them was building a nation.

The new Federal Parliament set about establishing the fabric of the nation. They did so effectively and with vigour. Democratic Australia led the world in labour legislation and in attitudes to women. But it wasn't long before the young nation faced serious challenges.

When Britain went to war, we went to war. These were in the days when Australian had no separate foreign or defence policy, even though early leaders such as Deakin believed we should. In that war, Australia gave its own name to heroism, to courage, to mateship. These values are revered to this day.

For most of our first fifty years, we remained a child of Empire. Britain looked after our foreign policy and theoretically looked after our defence. We were Anglo-Celtic. There was a significant Protestant majority. On the dark side our view of ourselves was narrow and limited. It is not surprising, most of our population had come from Britain. The 1920s were tumultuous years but the Versailles Peace Treaty had already sowed the seeds of new conflict. In the 1930s, trade embargoes, depression, pointed ever more certainly to another major war.

In the context of the times, Australia was successful. The first steps in building the new nation had been taken with determination. We were still not fully independent. But, towards the end of this first period, moods were changing.

The Empire was weakening. It was Menzies who believed, in 1939, that in relation to the Pacific and to the countries surrounding it, Australia should be advised by her own people and should make her own decisions. On the day he became Prime Minister on 26 April 1939, it was announced that Australia would establish diplomatic missions in Washington, Tokyo and Beijing.

The second phase of Australia's development as a nation began after the Second World War. We had so nearly been invaded. We undertook a major migration programme to build our strength.

The idea of maintaining a British majority was never realistic and never achieved. The migration programme led inevitably to the acceptance of a multicultural Australia in later years.

The idea of Britain managing our defence and foreign policy was now a matter of the past, not to be revived. Australia had to forge her own future in her own way. This obviously led to greater independence.

Broadening education, expanding universities and colleges became a major objective for the Menzies government and for Australia thereafter.

Even then there were impediments to the development of Australia's strengths. Some of our most efficient export industries were then and are still denied access to markets in Europe, Japan and the United States .

We sought new markets and in 1956 negotiated a trade treaty with Japan . We were the first nation post war to grant Japan Most Favoured Nation status. It was this Trade Treaty which really began our march to ever closer relationships with Asia .

We established ANZUS. During the Cold War the alliance gave Australia a sense of security but nation building was our major objective, our major purpose.

The fundamentals which underpinned Australian progress were migration, building essential national infrastructure, the Snowy Mountains Scheme was famous worldwide at the time, and prudent financial policies, policies which encouraged savings to invest in Australia's future.

We wanted Australia to be more independent, to be able to stand on her own feet, to have sufficient status internationally to contribute to a better and more peaceful world.

Writing to Bruce in February 1940, Menzies had this to say:

'But when this war is over, I think the nations will find themselves immeasurably more disposed to accept it (an international force) than they ever have been before. When I say this I am referring not only to the air force, but to an international army and navy.'

Menzies then was ahead of his time, indeed, he is ahead of it still but we became a firm supporter of the United Nations. We supported the advancement of human rights both within Australia and abroad. The acceptance of multiculturalism in the seventies was a major step in strengthening the fabric of Australia and building strength out of our diversity.

In many ways the earlier part of this period was years of certainty. In the Cold War, there was no need for Australians to ask themselves where their sympathies and support lay.

The optimism expressed worldwide at the end of the Cold War soon dissipated. Today in Europe, in Russia, throughout Asia, governments are concerned by the problems of living with one supreme super power, unchallengeable militarily, scientifically or economically. In international circles, the United States' growing unilateralism is being recognised as a potential threat to stability.

Australia's strategic relationship with the United States has been maintained. It has not been effectively re-examined as a consequence of the end of the Cold War and the end of an ideological Communist danger.

While Japan and Asia remain our most important region in relation to trade, we have given the impression that the goodwill of the United States is the most important factor. When there is tension between major states it is normal practice for smaller countries to act with discretion. We have not always done so.

We have not used the end of the Cold War for a new assertion of Australian independence. We have instead sought closer relationships with the United States at the very time when the exercise of American power is beginning to cause concern in many countries worldwide.

We need to define the contribution that an independent and open-minded Australia could make through regional associations to peace, stability and well-being in our own area.

Towards the end of this period our sense of nation building, our sense of purpose, had been dissipated. Our immigration programme, an essential significant element in building Australia, had been reduced to preventing our working population shrinking in future years. Our commitment to the future had been replaced by a sense of immediate gratification. Despite our activities in East Timor and partly because of diplomatic rebuffs, Australia has mistakenly allowed Asia to slip from our agenda.

In many areas though, the second fifty years of Australian Federation must be regarded as a considerable success. For much of the period we worked with a sense of vision and commitment to build Australia and to strengthen Australian institutions. We invested significantly in the future. We built a position in Asia .

We also cemented multiculturalism as an essential part of the fabric of Australia .

In multiculturalism we have forged a radically innovative basis upon which we can respond as a nation to Australia's diversity, to its challenges and opportunities. It is a basis which offers at once both an understanding of the present and a vision of the future. Multiculturalism is built on realism and idealism. There had to be an idea of a nation and a vision of what we could become. Our diversity is regarded as our strength.

We have many other strengths – a continent, with vast and varied potential; a stable political system which enshrines key values of democracy and freedom; a diverse economy; a proud record of contributing to peacekeeping around the world; and amazing sporting prowess, with our sportspeople achieving success and renown that is far beyond normal expectations.

But as we stand at the threshold of this new century and of Australia's third fifty years of nationhood, we seem to be less certain of ourselves. Where our Founding Fathers were concerned to build a nation, where the political leaders of the post Second World War era were concerned to strengthen that nation and share their vision with all Australians, today there is little idea of the future in the political and public agenda.

At the moment the War on Terror has diverted Australia and major states from the underlying realities that will at some point re-emerge. It is not possible to say where the War on Terror will end. Many leading terrorists could be killed but others will take their places. If terror is really to be finally overcome, injustices in the Middle East will have to cease and poverty and deprivation in many parts of the world will have to be tackled.

Those aspects will not be achieved quickly or easily. In today's relentless pursuit of terrorists, the idea that there may be underlying causes which lead to terrorism is not welcome in many places. At the worst, the War on Terror could lead to a clash of civilisations.

I am going to speak tonight of other matters which have, to an extent, passed from our attention.

We are told that globalisation will press ahead. We are told, yet again, that the American alliance is central to our security.

As we prepare for the next fifty years, there are two main areas I would like to discuss:

How will our strategic environment unfold? What demands will be made on Australia?

In a globalising world, how do we maintain the integrity of Australia?

I want to discuss first Australia's own strategic situation and to see where that takes us.

During the Cold War there was a fundamental justification for ANZUS and our reliance on the United States. That does not exist today. We need to re-examine our own region and the benefits or costs that flow from the ANZUS relationship. The benefits are basically of two kinds. We have access to security information which can be important. With that goes access to superior defence equipment. Access to information is useful but we also need to remember that those who control information, its gathering and its sharing go a long way to influencing and controlling the people with whom it is shared. It can be, and sometimes is, used as a potent weapon.

In such circumstances, middle powers such as Australia run the serious risk of compromising their independence.

The main purpose, however, is to keep Australia safe from aggression. In what circumstances would the United States come to Australia's aid? I have no doubt that in the days of the Cold War and the communist ideological threat to Australia that America would have been most concerned. They would not have wanted Australian resources transferred to the Communist bloc. In such circumstances, ANZUS was of significant substance. That likelihood is not on today's agenda.

There is instability on the Australian periphery, involving a number of countries, including Indonesia struggling with democracy. These are regions where the United States has traditionally shown little interest in Australian concerns.

If we move further afield to North Asia, the United States is heavily involved in both Korea and as a guarantor of Japan's defence. Australia has no direct involvement in this region and, in current circumstances, ANZUS is of no relevance. It may have relevance if we can envisage a militarily resurgent Japan but that possibility is remote.

What then of China and her future intentions? The Chinese Government is concerned that the benefits of trade and a more open economy be spread more widely throughout China. China must be given credit for economic development and the prosperity that that has brought to tens of millions of Chinese. In many Western eyes political progress has lagged. Russia however set a bad example. She established some kind of a democracy and destroyed the command economy at one stroke. This has led to disorder, even to chaos. We can be thankful that China has avoided Russia 's fate.

While China will be very much driven by her own imperatives, what she becomes internationally will, in part, depend upon development of relationships between China and countries of the region and between China and the United States. Thus what China becomes is in part a function of the future which we, with others, if we have the whit, have the capacity to influence.

There are too many people in the United States who believe a conflict between the United States and China over Taiwan cannot be avoided. Credible commentators are starting to doubt whether there is still a majority in Congress for a One China Policy. It is too easy to forget that, in exchanging diplomatic relationships with China, we have all done so on the basis that Taiwan is part of China. The United States was the first country to take such action in 1972.

There has been obvious tension between the United States and China and President Bush's statement that America would defend Taiwan, whatever it took, without including the proviso that Taiwan has an obligation to negotiate for genuine reunification made matters worse.

This issue becomes more sensitive and dangerous as time passes. The United States seems to be giving greater support to Taiwan and Taiwan on some counts, seems to be moving closer to a claim for independence. Such a claim will of course be opposed by China. If it were supported by the United States, it would lead to conflict. One of the things that would impel Taiwan towards independence is a belief that the United States would defend them regardless. On the other hand, we also need to take into account the 50 billion dollars worth of Taiwanese investment in the mainland and the increasing cross-strait movements of people. The political problems have not hindered the continuous expansion of business activities.

Taiwan represents the most sensitive issue throughout our whole region. Does ANZUS have relevance to it? Many years ago, when Australian forces were fighting on Borneo, Barwick, as Foreign Minister, said that our troops would be covered under ANZUS. Australia was taken to task thereafter. It was made perfectly clear that that was not so and the next Foreign Minister had to eat humble pie on the issue. If ANZUS did not apply in those circumstances, it certainly should not apply in relation to Taiwan . The terms of the Treaty lend support to this view.

The future of Taiwan is of real concern for Australia and, while we are not party principal to the matter, as has been reported on more than one occasion, a senior United States official has put it to Australians that, if they go to open hostilities with China over Taiwan, Australia would be expected to do its share of the dirty work.

It is totally within the power of the United States to prevent the claim for independence on the part of Taiwan. The United States should not change policy and break solemn commitments. Australia should not be involved if the United States does so. If the United States puts pressure on Taiwan to negotiate in good faith in a way that will lead to reunification at some point, there will be no prospect of war. Australia needs to use and develop her influence to foster such a U.S. approach.

There should be a powerful incentive both for China and for Taiwan to settle the matter peacefully. I would not be surprised if such a negotiating process ended up in Taiwan keeping her own parliament, her own laws, her own judiciary, her own taxation, her own police and her own army and only giving up one thing which she does not now have, that is the right to membership of international organisations for which statehood is a requirement.

The danger for Australia, of course, were we to be involved, would be that at the end conflict we would be the discredited ally of a discredited super-power. We would not have a friend in the region in which we live. That is hardly a good basis for establishing a secure and effective future.

For most of the last fifty years we worked to broaden and improve our relationships with countries throughout Asia . There may well have been a pause in that momentum but it needs to be revived.

It makes no sense for us to get caught in an argument between China and the United States. We should conduct ourselves in a way that avoids such situations. For example the Americans had an interest in the command and control system of our Collins Class submarines because, in the event of hostilities between China and the United States over Taiwan, they would want the cooperation of the Australian Government and the participation of those submarines because they can operate in the shallow waters of the Taiwan Straits while the American nuclear submarines cannot. Military planning in areas which are not in Australia's political or strategic interest should be avoided.

On this analysis, Australia ought to pursue greater independence. For fifty years we relied upon Britain, now we rely too much on the United States . East Timor alone demonstrated many deficiencies in our defence forces. We may regret the necessity but we need greater forces and more effective forces. In terms of a credible, strategically based defence policy, our forces continue to be seriously inadequate. While during the Cold War it was not inappropriate to rely on the United States as an ANZUS partner, in this post Cold War period, such reliance is misplaced.

Independence carries with it other complications and indeed obligations. If we are to be serious in pursuing independence, we need more resources, we need more people.

National integrity is the first obligation on any government. Australia is a large and sparse land mass with a population of around 20 million, maybe creeping up to 24 or 25 million in the next 40 or 50 years. The work begun after the Second World War to build Australia's strength is not yet completed. We should continue to grow, to build and to diversify our population. Indeed, the obligations undertaken then, placed a greater burden on the 7 million Australians in 1946, than would be accepted by today's Australians if we made the decision to head for 40 million people through this century.

Therefore arguments that such an objective is beyond our capacity cease to be credible. In strategic terms, Australia would require the same defence force whatever our population, so the larger our population, the smaller the individual burden.

There are other grounds why we should pursue an expanded population. I happen to believe that possession of a continent like Australia places obligations on Australians. We have an obligation to preserve, to protect, to enhance the land we hold. We have obligations to use Australia's resources wisely but we also have an ethical requirement to share the resources of Australia with a larger number of people than who currently live in Australia . There is no other country in the world where there is such opportunity reserved for so few.

Practical and ethical considerations therefore lead me to the same conclusion. Australia needs to grow and expand to build our capacity and our strength.

Thus far I have been discussing strategic matters and how to preserve Australia's interest. There is a paradox here because modern economic theories are suggesting that the nation state will become increasingly irrelevant and that the economics of globalisation will be all powerful. If globalisation really means that geography will cease to have any meaning there will be broad political consequences. Wealthy countries which will house the headquarters and have the control of most corporations, will cease to have much interest in the political structure or stability of a particular country. If globalisation is fully successful, they would argue that their control through corporations is sufficient. If this were to be true, it underlines the need for Australia to build her own strength ever more vigorously, because globalisation would make reliance on ANZUS even more tenuous than it is now.

Whether globalisation continues to its logical conclusion or not, it is clear that globalisation of the world economies is sharply limiting the independence of action of the nation state.

Governments are now losing influence. Private enterprise, capitalism, summarised as 'the market', is gaining power. Privatisation is a key word. Across the political spectrum, liberal, conservative and formerly socialist parties have all accepted the downsizing of government, the privatisation of many activities and the reduction of government debt.

We have had global corporations for decades but today the structure would be significantly different. Instead of separate national units, there will be one selling unit – the world.

Some aspects of corporate activity will obviously be organised locally but the main frame of the corporation will be organised on a global basis, sourcing different production components from the best current source.

The new outlook for corporations organised in such a way has no allegiance to any particular place of production. They pursue low wage cost opportunities and more favourable government inducements wherever they will, worldwide. Corporations are mobile to a much greater extent than ever before.

The new global organisation of industry has significant consequences for national policy.

It has long been recognised that a fair and competitive market place is desirable. That is why anti-trust legislation was born. It is why fair trading practices were put in place. With globalisation, such national rules to preserve fair trading are no longer effective.

For the most part there are no international rules. Where there has been attempt to establish such rules, they often have a rather different purpose. For example, the European Union sought to promote a Multilateral Agreement on Investment which ran into heavy weather. If it had been accepted, it probably would have reduced the authority of national governments even further and given global corporations an even more influential position.

In today's world, governments must fashion their policies to meet the wishes of the international market-place. This has fundamental consequences for a country such as Australia .

By the rules of globalisation, the Treasurer's decision in relation to the North-West Shelf was wrong. But in terms of Australia's own best interest, his decision and objective were correct. We want ownership of the North West Shelf that will pursue development of the property with energy and vigour in Australia's interests. We do not want it to be controlled by a global corporation which could favour development of other gas fields over the North-West Shelf.

In earlier years of foreign investment in Australia there were strict rules. Foreign investment had to bring new technologies or develop new industries. Investments that merely took over an existing Australian operation were not looked upon favourably. Today of course it is quite different.

In recent years a significant number of major Australian corporations have passed into foreign hands. For a middle-ranking country such as Australia it is likely that there will always be a foreign buyer prepared to pay a little more for an Australian icon than other Australian corporations would be prepared to do. This indeed has happened on a number of occasions in recent years.

If this process continues, major Australian corporations, one by one, are going to become part of some other global operation. This has fundamental consequences for Australian autonomy and serious implications for the role of government. While we adhere to broad globalisation objectives, we still have a capacity to breach the rules of the game. This was done in relation to the North-West Shelf. There is a standing prohibition on the overseas acquisition of Australia's major banks.

For most countries, banks and institutions, which are part of the culture of that country will, on the pure theory of globalisation, become a matter for the past. Banking services will be American, European, Japanese or perhaps Chinese. The consequences of market dominance are clear. Corporations need a global spread and many national rules for the good order and conduct of business and commerce will no longer be relevant.

Globalisation of industry has been accompanied by very much greater freedom in capital or financial markets. The volume of money traded each day is huge, it dwarfs funds needed to finance trade and normal commerce. It is now the determining factor in establishing the value of a currency.

With globalisation of industry and finance we have a much greater reliance on the market as the determinant of value. There are some who say these forces are irresistible and inevitable. That may be so but I can remember at other times apparently knowledgeable people talked about the inevitability of socialism. And where is that today?

There is undoubtedly a major reliance on the market system which has great support amongst economists and business leaders. But the market too can be capricious, irrational, even fanciful.

When President Reagan agreed with Japan that the Dollar-Yen rate should be floated the Dollar went into free fall. Over two years it went from 250 Yen to the Dollar to 110 Yen to the Dollar.

Floating rates, increasingly in place since the early seventies, was meant to make life easier for governments. It has certainly made the financial conditions for capitalism more volatile and less stable.

There are two main tasks: How to establish stability within the financial markets themselves and how to preserve some form of equity and reasonable competition in a globalised market place.

We really do need a more stable exchange rate regime. That can require differing approaches for emerging markets and for the currencies of developed industrial countries. There is a need to reduce short-term volatility and uncertainty.

The US Dollar and the Euro, together with the Yen, will cover the great majority of the world's trade and financial market transactions. The stability of these currencies is important for world stability.

Major states need to consult much more closely about coordination of their fundamental policy objectives and their implications for achieving greater exchange rate stability. Reforms demonstrated to be necessary in 1997 have not been pressed with sufficient urgency.

We have not yet defined an appropriate response to globalisation of industry and commerce. The logic of globalisation suggests that national boundaries will cease to be important. I doubt that. Nationality and national pressures on governments will not disappear.

There are other aspects which cannot be ignored. There are about fifty countries who are too poor even to key in to the Internet. Unless you can plug in to the system, you do get left further behind. If western countries were prepared to build foreign aid to something close to that in the fifties or sixties, this is something which could be overcome with ease. But that does not happen and nobody is particularly interested.

One of the reasons that world economic meetings of different kinds are attracting a good deal of hostility is simply that there is a great feeling of powerlessness amongst many people world wide. The theories of globalisation strengthen that feeling of powerlessness. Governments say that they can't do anything about a problem, it's the market place. In that globalised market place, nations find their power and identity is much reduced. Implications for social policy, for employment and the environment are considerable.

To whom are such corporations going to be accountable? The United States can take on a Microsoft, I doubt if any other country would have the power or capacity to do so. Corporate power will go with the strength and that will be in the large and wealthy countries. Major corporations will not be accountable to countries such as Australia.

Can we envisage a fully globalised system, with international institutions taking over the work of former national mechanisms to ensure transparency, accountability and fair trade? An institution responsible for such matters could be established but that would become a power unto itself, untouchable by middle-ranking countries. The United Nations is not yet sufficiently advanced, nor have its operations been sufficiently successful, to put greater authority into its hands or into international bodies associated with it. There is little evidence in the United Nations that major countries are prepared to subdue nationality sufficiently, and accept even limited global authority. This applies especially to the United States.

In today's mood, current international financial organisations, IMF and WTO, leave people and nations feeling powerless, believing the system has passed them by and that there is nothing they can do about it, except to make their country as attractive as possible for those global corporations.

National objectives, which to many people are important, seem to be pushed aside. A system that places such demands on most countries cannot succeed over the long term. Nation states will require some limits on globalisation. This will be a matter for increasing contention as years pass. It is not insignificant that more peoples throughout the world are demanding empowerment through the call to independence while at a national level independence is being diminished.

There is a need for international agreements to replace national anti-trust and fair trading legislation. The question of supervision and accountability will be difficult.

For Australia, immediate objectives should be to find new ways of seeing that Australian corporations can stand up and be counted in the global marketplace and we need to work with other concerned countries ultimately to find a system that will leave globalised corporations with a clear set of ethical standards which they also must follow.

We need to work for and invest in Australia's future. The search for independence, begun at the birth of a nation, must be continued, in circumstances constantly changing and constantly placing new demands upon us.

Thus I am led to the same conclusion in relation to globalisation as in relation to strategic issues. On both counts, Australian nationality and identity should be preserved. On both counts our identity should be separate and identifiable. We have to live within world rules but we need to be as strong and as effective as we can be in advancing the interests of a multicultural Australia and in contributing to a peaceful world environment. To achieve this objective, we need to grow Australia. We need more people.