This is why the practice of freedom and the acknowledgement of social and political obligations go hand in hand. There needs to be a recognition that some freedom must be foregone to expand our capacity to enjoy freedom.

Here we come to the paradox I mentioned earlier. Not only is this an age when people are demanding greater personal freedom, it is also an age when the demands on government constantly increase. In order to meet these demands governments almost inevitably tend to dispose of more of a nation's resources and to further regulate people's affairs.

***

In Australia there has been for decades an inexorable move of financial power to the central government, destroying the independent capacities of state governments and making the states subservient to the center.

My government has begun to implement a major reform of our federal arrangmeents designed to restore a large measure of financial independence to the states and to expand the financial base of local governments so that they can respond effectively to problems they recognize in their own communities.

The capacity of Government to assess problems accurately and to take into account people's judgement of their own needs is essential to effective social reform. More than ever such sensitivity is required to foster respect for our institutions. We are all aware that some approaches to social reform do more harm than good. Effective government action requires a deep awareness of how that action will be seen and evaluated by our increasingly active and informed citizens.

So often people have sought to solve social problems merely by the expenditure of money, so often that is only a small part of what is needed. Many problems are related much more to the capacity of people to adapt to a complex society. They are frequently problems of human relationships. A solution that relies on providing funds but does little to encourage the capacity to cope with problems can be a most damaging response to genuine need.

Our institutions can only maintain respect if people can achieve their legitimate aspirations within them in a democratic and peaceful way. If reason and argument can lead to effective reform.

We have to insure that our institutions are as responsible as possible to the needs of those they affect.

***

Preventing these institutions from becoming over-powerful requires not only legal and constitutional restraints but also a recognition on their part that they have broader obligations.

***

The contribution of the universities on this continuing issue will have an important effect on the response of other organizations.

The problem of ensuring adequate responsiveness by our institutions is particularly relevant in an age of large government.

Another challenge we have to meet is the economic and political problem arising from the limits on our national wealth. However rich our countries may be, there is still only a finite amount at any one time to devote to production, to wages, to governmental programmes, to redistribution.