For example, a move to make Australia a financial centre for Asia means opening up Australia to large-scale capital movements and, therefore, to potential exchange rate instability. However, if we are to achieve greater growth, the challenge we must meet is to find imaginative solutions to the problems growth creates. The alternative is mediocrity. A Liberal government is one which encourages the community to accept the inevitability of change, the need for change in areas such as industrial relations, and the need for a greater awareness of the value of enterprise, effort, and economic growth. There is little doubt that the most difficult function of government is its role as the major channel for the redistribution of the national income.
Liberals take a clear view of the distribution process.
Firstly, although there are excellent social reasons for governments to intervene in the distribution process, it will be counterproductive if this intervention damages the machinery of wealth creation. Government intervention should not undermine the incentives which drive work and creativity. Excessive taxation on rewards for enterprise, for example, will undermine those incentives. The trend in Australia has been to divert more and more resources into the welfare area. I am not saying that this is necessarily a bad thing, but social welfare is only a product of community wealth.