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Tuesday, 10 September 1996
Page: 3852


Mr ROBERT BROWN(4.35 p.m.) —Let there be no misunderstanding about the nature of the most recent federal budget: that budget has proved to be one of the most fraudulent and cynical fiscal exercises ever undertaken in Australia. It represents an act of violence against the welfare system, against aged Australians, against Australian families, against Aboriginal Australians, against the unemployed, against the universities and against the ABC. Other areas that are being hit include child care, the disabled, national roads and foreign aid—the list seems almost endless.

But the remarkable thing—and I give credit to the government for this—was the way in which that budget was initially marketed. You will recall, Madam Deputy Speaker, that before the budget came down on 20 August a list had been released of possible budget cuts equal to $20,000 million. That was just part of the softening-up process. Budget outlays did not need to be, and would never have been, cut by $20,000 million. In fact, the government's target, as we all recall, was indicated to be a total of $8 billion over the first two years.

The purpose of that exercise being undertaken in that way was so that, when the budget was finally announced and people looked to see how their interests, their concerns, their children, their families and their neighbours were affected by it, they would utter a sigh of relief and say, `It wasn't really as bad as it could've been.' So it was a very successful marketing exercise. In fact, it was so successful that we had people like Malcolm Farr, a very highly regarded political reporter for the Daily Telegraph, heading his front page report on the budget in the Daily Telegraph on the following day as `A fair go'.

There are three elements of the budget to which Mr Farr drew attention and they were highlighted at the top of that article. The first one was tax cuts of $200 a child for middle income families. That was part of the family tax package announced in the budget. The second one was tax incentives to encourage private health insurance. The third one was the 15 per cent surcharge on the super contributions for high income earners.

The only one of those three items which has survived is the 15 per cent surcharge on super contributions for high income earners. The family tax cuts have been more than absorbed by the other impositions which have been made as a result of that budget. Various estimates have been made for middle income families where both the husband and the wife work with a combined income of $35,000 to $40,000 and have two children. The additional weekly cost to those families is between $35 and $40.

So the first item referred to by Mr Farr—and I am not criticising him—of tax cuts of $200 a child for middle income families, in the budget which he referred to as a fair go, disappears. The second one he referred to was tax incentives to encourage private health insurance. We have already heard enough of that. The tax incentives to encourage private health insurance have already been absorbed by the private health funds and the Minister for Health and Family Services (Dr Wooldridge) knew when that announcement was made that that was what was going to happen.

Those benefits to assist families and to compensate them for undertaking private health insurance amount to $1.7 billion every year. That was supposed to go, with a firm assurance from the Prime Minister (Mr Howard), into the pockets of the workers and into the pockets of families. It went straight into the coffers of the private health funds—$1.7 billion.

The third point that Mr Farr refers to is the 15 per cent surcharge on super contributions for high income earners. It is probably about time. That includes ourselves, Madam Deputy Speaker. One of the most profitable forms of investment for any people in Australia during their lives is to contribute to superannuation. The taxation benefits which have accrued to them as a result of that have provided them with retirement incomes to which other people—ordinary wage plug Australian families—could never aspire.

I notice the threat that many pensioners who will become patients of nursing homes will be required to sell their homes.


Mrs Gash —That's rubbish!


Mr ROBERT BROWN —The minister acknowledged it.


Mrs Gash —Rubbish.


Mr ROBERT BROWN —I will give you the quote in a minute. You continue to say `Rubbish' because you are accepting all of the nonsense that the people on the frontbench of your party have been feeding you. Why don't you look at the records and come up with your own arguments? I like intelligent interjections. I would seek then to respond to them. If you are going to throw out unintelligent, uninformed and simply false interjections, I will not respond to them—and that was one of them. I know that people who will become patients in nursing homes are going to be required to sell their homes in order to go into those nursing homes.

But in regard to those people who in future may be paying a 15 per cent surcharge on their super contributions, I have not seen any significant diminution in those homes that are being sold in the capital cities of Australia and elsewhere for literally millions of dollars—bought and sold by those people. I have seen no diminution in the number of those types of homes being available.

I said that this budget was one of the greatest frauds ever perpetrated against the Australian people, and increasingly the Australian people are coming to know and to understand the fraudulent nature of that budget. As a result of this budget, the Howard government has set in train a process of turning this country into a second-rate country. That is in connection with research and development, all of the assistance to industry and all of the encouragement that was being provided for initiatives under the previous government.

All of that represented substantial improvements in Australia's capacity to be a competitive nation, to improve its technology, to penetrate those competitive markets of the world, and to do it increasingly. Even in electorates of the kind that I represent in the Newcastle area, small businesses are now in the process of growing as a result of the benefits that came to them because of industry policy, research and development grants, counselling, assistance and advice from the previous government.

This government now has also set in train a process of destroying the delicate framework of social equity and individual opportunity, of reducing our capacity to develop the skills and intellectual capacities of the Australian people. We know that enrolments in university education will diminish substantially. This is the clever country. This is the land of opportunities. But one thing I notice—and everybody needs to keep this in mind as well—is that, when the sons and daughters of ordinary working-class families in Australia who have the ability to go to university are not able to find a place, they will find that many of those places to which they aspired have been taken up by the rich, by the affluent, who will buy those places for their children.

The HECS, the higher education contribution scheme, will be increased in amount. Repayment periods are to be brought forward and the period of time in which HECS is to be repaid will be compressed. If you are the son or daughter of a rich person who can pay your HECS contribution up front, you will get a 25 per cent discount. If you are the son or daughter in the homes of families like those I represent, and you cannot afford to pay it up front, you pay the lot. This government is reverting to the ugly days where people with wealth were able to buy for themselves and their children opportunities which were denied to more able, but poorer, children.

This government is also representing a retreat by the Commonwealth from an effective involvement in the development of the great regional areas of Australia. The Minister for Transport and Regional Development (Mr Sharp) was the one who announced the destruction within his department of the section dealing with that area. Previous government initiatives have developed and improved the great regions of Australia. In future, the government is going to turn its back on them.

This government is replacing a balanced and coordinated approach to economic management and social policy with a mad and obsessive ideological commitment to economic fundamentalism and a renewed faith in discredited market processes. Increasingly, this government is recognised as being ideologically driven.

The government has indicated that, over the next four years, it is going to chop $23 billion from outlays. I want to put this into context for the benefit of those people who do not do the thinking for themselves. The second reading amendment that we have moved and the changes that we are seeking to make to the budget would bring back $7.3 billion of that $23 billion over the four-year period. That represents about $2 billion extra a year on average. That represents one half of one per cent of Australia's GDP. It is minuscule.


Dr Nelson —Ha, ha!


Mr ROBERT BROWN —The honourable doctor laughs. The honourable doctor might be competent at medicine, but he might like to brush up his mathematics. That $7.3 billion over four years is $7.3 billion out of total Commonwealth outlays. If we assume, as we can, about $130 billion each year in Commonwealth outlays, over four years that represents a total of $520 billion. We are suggesting that an additional $7.3 billion would make it possible for the government to bring back all of the significant social programs, to restore equity, fairness and justice. It is $7.3 billion out of $520 billion.

Let me put it in the context of Australia's gross domestic product, which was $450 billion last year. If we multiply that by four over the four-year period, it comes to $1,600 billion. The amount that we are suggesting should go back into the budget is $7.3 billion. That is in relation to a total cumulative gross domestic product over the four years of $1,600 billion. That puts those values, those aggregates, into context. This goes to the reason why I said that the government was madly and ideologically driven. We are talking about a minuscule amount of money.

A number of claims were made by the government about some of the reasons why they had to pursue this objective. When we go to the next election—whenever that is and whatever the circumstances are—a swing against the government of less than four per cent will put the Labor Party back into government. A swing against the government of five per cent will put Labor back into government with a majority of 16 seats. So those people opposite who are so intent on defending the indefensible which is being fed to them by the foolish people on the government front bench need to start examining these things themselves a little more closely, a little more dispassionately, a little more selfishly. Your political future depends upon it. Just a few days before the election, the Australian Treasury said in its report:

The economic outlook for 1996-97 remains favourable . . .

Early in May, a short time after the federal election, Ian Macfarlane, then the Deputy Governor of the Reserve Bank, said:

At the Reserve Bank, we are pretty happy with how things have turned out in Australia.

Comments made by people who are competent give the lie to the claim that this budget was in some way necessary to repair the economy. The head of the economics department at the University of Newcastle, Mr Bill Mitchell, in referring to the circumstances in Australia, said:

And that means that the Keating government left the Australian economy in quite good shape.

Here is another comment about the economy inherited by the new government:

The incoming Government inherited an Australian economy . . . that was a little better than just good in parts . . . We have had 19 quarters of positive economic growth . . . low levels of inflation, and we continue to enjoy the benefits . . . of very close geographic proximity to the fastest growing economic region in the world.

Who said that? It was your leader, the Prime Minister.

Mrs Elson interjecting—


Mr ROBERT BROWN —How foolish! How stupid! You are all as bad as one another. Let me repeat what your leader, the Prime Minister, said about the economy that you inherited:

The incoming Government inherited an Australian economy . . . that was a little better than just good in parts . . . We have had 19 quarters of positive economic growth . . . low levels of inflation, and we continue to enjoy the benefits . . . of very close geographic proximity to the fastest growing economic region in the world.

Comments of that kind confirm the nickname `Honest John'. At his best he is an honest man. So, if it was not to repair any serious deficiencies in the economy, perhaps it was designed, as some people have claimed, to correct some deficiencies in Australia's fiscal performance.

The Sydney Morning Herald—certainly not the mouthpiece of the Australian Labor Party—in an editorial earlier this year referred to Mr Costello, now of course the federal Treasurer, and said:

Mr Costello cannot play the fiscal innocent.

Remember when they were talking about the `Beazley black hole'. It was certainly a slogan which caught on. But the Sydney Morning Herald , referring to Mr Costello, went on to say:

. . . most of the deterioration in the budgetary position has resulted from lower growth forecasts.

What then have been the comments of some of the others? The Sydney Morning Herald on 30 May this year—that is the day it dealt with the expected higher growth disclosed by the March quarter national account figures—said:

. . . the `$8 billion black hole' must now be seen as the political rhetoric it always was.

Max Walsh, on 10 May this year, said:

. . . the demonising of Kim Beazley and his black hole has, for me at least, a lack of credibility.

Ross Gittins, on 13 May this year, in relation to the current state of the budget deficit and its impact on the current account deficit said, `There is no crisis.' Gruen, Neville and Argy, in the Australian Financial Review in May, said:

. . . it is neither necessary nor desirable to seek to reduce discretionary spending by $8 billion over the next two years . . .

If the economy is indeed slowing down, such a policy may well slow it down further and increase unemployment in the short term, while keeping neither the fiscal deficit nor the national saving rate.

Those comments from reputable and respectable spokesmen and women writing for reputable newspapers give the lie to the claims that have been made by the present government. (Time expired)


Mr ACTING SPEAKER —Order! Before I call the honourable member for North Sydney, I remind the House that this is the honourable member's first speech and I ask the House to extend to him the usual courtesies.