Mr TANNER(1.05 p.m.) —The backdrop to this supply legislation is the very harsh fiscal policy of the new federal government, which is essentially designed to decimate critical public sector functions in Australia; to slow the economy by reducing demand at a time when it has already slowed to a relatively painless soft landing under the former government; to increase uncertainty amongst many areas of the Australian community, not the least of which is the public sector; and to cause devastation in many regional economies across Australia as a result of job cuts in the public sector, withdrawal of services and consequential loss of economic opportunities that will flow from that.

It is becoming clear that the chant from the new government in response to virtually any criticism about anything is going to be, `Beazley's $8 billion black hole.' Every question asked on anything to do with any form of expenditure, or any issue that relates to government decisions on any programs, is going to be met with the response, `Kim Beazley is to blame; there is an $8 billion black hole.' Interest rates are going up: blame Beazley's $8 billion black hole. Unemployment is going up: blame Beazley's $8 billion black hole. Foreign debt is going up: same response. There are floods in Queensland: blame Beazley's $8 billion black hole.

Pretty soon it is going to be shortened to `Beazley's black hole' and it will become a religious mantra. People across the country will chant it long after they have forgotten what it is supposed to mean. In response to accusations of adultery, people will say, `Beazley's black hole made me do it.' Schoolboys coming home late will tell their mothers, `Beazley's black hole is the reason I'm late, mum.' The next time Gary Ablett is up before the tribunal he might say, `My defence is Beazley's black hole.'

The government may even legislate to make it a defence for employers in the unfair dismissal legislation. If somebody gets unfairly dismissed and they take the employer to whatever tribunal is going to be hearing unfair dismissals—I suppose we will find out about that some time today—the employer can get up and say, `Beazley's black hole made me do it and therefore there is no case to answer.' No doubt, journalists from other countries will eventually come and study Australia as an interesting case in peculiar mass hysteria because we will have people running across the length and breadth of the land all chanting, `Beazley's black hole.'

Before it gets completely out of hand—and it is rapidly heading in that direction—we need to have a look at what we are actually talking about. What is going on with the finances of the Australian budget and what, precisely, is this government proposing to do? We are actually talking about a gigantic fig leaf being used to cover a number of things being done by this government. First, it is a fig leaf to ensure that they can effectively fund a range of unfunded promises—up to $4 billion worth—and slip them in under the guise of blaming the former government for any cuts that have to be engineered in order to pay for those promises.

Some of those promises are going to be pretty interesting when they come to implementation. For example, they deal with tax cuts for people on incomes as high as $82,000 a year—the Australian battlers the Liberal Party is so keen to represent. When the Prime Minister (Mr Howard) was on the radio during the election campaign, he did not get his lines right; he was not sure what the upper limit was. But it was demonstrated to him that it is likely that there will be some people on incomes as high as $82,000 a year who will be eligible for tax cuts.

How are they going to pay for these things? How are they going to finance tax cuts for people on such miserly incomes as $82,000 a year—more, I might add, than politicians get paid? How are they going to fund those tax cuts? We will see cuts in child care, we will see cuts in social security, we will see cuts in aged care and we will see massive cuts in higher education. That is how they are going to finance their promises.

The second part of the fig leaf is the introduction of Fightback. They went to the election saying, `We are changed; we are soft and cuddly and middle of the road; we are not nasty New Right ideologues any more. Fightback has been put back in the drawer.' But what are they doing now? All of the nasty cuts and all of the winding back of public services for people—all in Fightback—are being introduced one by one.

Look at the macro-economics of this mythical $8 billion figure and see what it actually is. In reality it is a $4.9 billion deficit, proceeding very quickly to a $3 billion deficit over two years. Where has it come from? Some people on the other side seem to have pretty short memories. Almost $2½ billion of the deficit that they have been left with was caused by their own actions in the Senate.

Very shortly we will be dealing with the legislation for the sale of airport leases. This sale should reap substantial revenue for the government. The former government tried to sell airport leases. That was part of its revenue in the existing budget. The deficit blew out because that legislation was stopped by the current government in the Senate. So a big proportion of the problem was something that they created themselves while they were in opposition.

It is important to remember that we are talking about less than one per cent of GDP. That is the actual deficit. It is still the best in the OECD. That has hardly been a secret. There have been tired attempts to beat up suggestions that in some way there was deceit on the part of the previous government; that the former Minister for Finance kept this all a secret; that there was a deterioration in the fiscal outlook. However, it was widely discussed and debated during the election campaign.

The Prime Minister said, `I will give implementation of my promises priority over the deficit.' He said unequivocally on radio in Sydney that he would put that ahead of tackling the deficit. What has happened since he has been in office? Exactly the reverse. Everything relates to the so-called Beazley black hole. Everything relates to the deficit. The promises are being scuttled at an average of three or four a day.

What has brought this about? It is a change in forecasts. The previous forecast for growth was 3.75 per cent, and that was readjusted by Treasury to 3.25 per cent. That was a pretty marginal adjustment but, for reasons that are obvious, it produces implications for the income and expenditure of the government which, ultimately, tally up into significant amounts of money—in the billions of dollars. That is hardly evidence of conspiracy to mislead.

If it were not for the economic policy of the new government, these figures probably would have improved again anyway. They are subject to significant variations from time to time. The Treasury adjusts them as new data emerges. Had it not been for the new policies of the government, the figures probably would have been adjusted upward and, automatically, the anticipated deficit would have been reduced.

I draw your attention to a letter of 20 May in the Australian Financial Review from Fred Argy, Fred Gruen and John Nevile, who are amongst the most prominent and respected economists in Australia. They state that the real deficit is about $4 billion, and then they conclude:

But, it is neither necessary nor desirable to seek to reduce discretionary spending by $8 billion over the next two years simply because the economy is forecast to grow more slowly. If the economy is indeed slowing down, such a policy may well slow it down further and increase unemployment in the short term, while helping neither the fiscal deficit nor the national saving rate.

Here is the irony: rather than the so-called black hole creating the cuts, the cuts are going to create the black hole because the economy will slow down. It has had a soft landing in the business cycle for the first time in many years as a result of the proper economic management of the former government. This government is going to slow it down further.

The end result will be that it will create its own deficit. Rather than sliding up again a fraction to eliminate the gap that had emerged, by cutting viciously into the public sector the government will cause the economy to slow down further, demand will be reduced, and it will create the very problem that it says is causing the cuts.

We are now left with Costello's con—Fightback without John Hewson. That means nearly $10 billion of cuts without a GST—yet. It means a balanced budget with no growth and no jobs. If the crisis is so serious, why is it that we have not had a mini-budget? Some 5½ months have elapsed between the election and the budget. The government is saying that there is this incredible crisis and that Australia has been left in a total mess by the former government—all sorts of nonsense of that sort—but it does not seem to be sufficiently important to have a mini-budget. That tends to suggest that there is a little bit of hype and a little bit of nonsense coming from the other side.

What does Labor's legacy look like? Unemployment has diminished to 8.5 per cent, with a much higher participation rate. If we had the participation rate that we had in 1983, unemployment would be about three per cent. The other side seems to have a bit of difficulty working out what its line on this is. A few days ago, the Minister for Schools, Vocational Education and Training (Dr Kemp) said that the 730,000 jobs created in the last three years under Labor really did not matter because they were almost all part-time jobs. Yet yesterday the Prime Minister said how great it was going to be under the new IR legislation because there would be lots of part-time jobs created. Which is it? Are part-time jobs real jobs, important jobs, worthwhile jobs or not? The government members seem to have a difference of view on that.

We had inflation down and steady around two to three per cent; interest rates steady, at eight to nine per cent; a soft landing in the business cycle; wages growth around five per cent based on productivity above two per cent annual growth; the dollar increasing in strength to a point where it is starting to become a bit of a problem so, if anything, we have now got to dampen down the value of the dollar by intervention; an internationally exposed competitive economy; and massive increases in education and training.

We have to concede there were some problems, such as the current account deficit at six per cent of GDP, but it was falling down to about 4.5 per cent of GDP, and when the current Prime Minister was Treasurer he left the economy with a current account deficit of 5.5 per cent of GDP. There were specific factors involved: the drought, commodity prices and the like. Initiatives that were pursued by the former government—such as the superannuation initiative and industry policies—were starting to impact in the long term on the current account deficit.

Foreign debt is a symptom of internationalisation. It is very amusing to see Access Economics, the great gurus of the Liberal Party, predicting that under Liberal rule foreign debt is going to blow out to over $300 billion. At the same time as foreign debt increased, the holdings of Australians abroad increased from $4 billion to $90 billion, again, as I say, as a symptom of internationalisation. It will not be very long before the Treasurer (Mr Costello) stops talking about $10,000 per Australian in foreign debt because people will start remembering what he used to say and start realising that foreign debt is continuing to increase for entirely understandable economic reasons.

What the Liberals are about is harsh contraction at the bottom of the cycle, turning a soft landing into a hard crash—as the very respected eminent economists I have just quoted indicated—sacking as many public servants as they can, devastating many regional and rural areas of Australia through withdrawal of jobs and services, abandoning any form of wages policy and letting the strong get stronger to get their market outcomes, and letting the weak diminish the limited amount they are already receiving.

It is not surprising that when Access Economics looked at all this they came up with the conclusion that pretty well everything was going to get worse over the next five years. These are the architects of Fightback speaking; these are the Liberal Party speech writers; these are the people who the Liberals have relied on for so many years. The reality that those on the other side are going to have to face in a couple of years is that their performance is going to be compared with the benchmarks left for them. Whether it is their performance on inflation, unemployment, productivity or interest rates, they are going to have great difficulties even to maintain the levels set by the former government, much less improve on them. That is when the reality will hit home.

What will also hit home is their totally bogus claim to represent blue-collar workers in Australia. There were a few exceptions of course. They did not represent blue-collar workers who happened to be seafarers: they wanted to kick them to death; they did not like meat workers; they did not like building workers: `We will slug them extra tax'. It is a bit selective and that is going to come home as well.

I would like to turn in the few minutes left to me to my own shadow portfolio. It is an interesting example of what is likely to happen under this government. We have got a minister in charge who has tried to force the board of the Civil Aviation Safety Authority to resign after only nine months in the position. He failed dismally at doing this and admitted it. Now he has decided that he is going to legislate to increase the board and put one or two people on it that he hopes will force the other people to resign. He seems to think that the only people qualified to sit on a board of an organisation are those who have actually done the things that the organisation does.

On this sort of logic perhaps you would ask why he has appointed Dr Allan Hawke, who is a geneticist, as his head of department. I think it is a great appointment but, using Mr Sharp's logic, perhaps it should be a master mariner or a pilot or a train driver. He is a minister who has said initially about Badgerys Creek, both before and after the election, `We are going to build it. We are committed to it. Labor will wimp on it. We are very strongly behind it.' He did not happen to mention to the people of Hughes and one or two other electorates around Holsworthy that he was thinking something completely different at the time. In the last few days he suddenly says, `We have discovered all these problems at Badgerys Creek and it may have to be knocked on the head.'

When Alan Jones on radio 2UE asked him whether he might have to knock it on the head, he said, `Yes, that certainly could be the case, Alan. We might have to kill Badgerys.' Suddenly somewhere in the vicinity of 100,000 to 200,000 people in a particular region of Sydney, who were at the polls only a couple of months ago making decisions about who they would vote for, are told, `Oh well, it has just occurred to us. We might think about whacking an airport next to you.' That had been killed off and left for dead a long time ago by the previous government. Did they think to put this to the people before the election? Oh no. But, of course, they do not engage in deceit; they do not engage in subterfuge.

We have seen also one or two other amusing performances by the minister. One of my favourites so far would have to be his performance before the Bus and Coach Proprietors Association on the very complex and difficult issue of disabled access to public transport. I would just like to quote a couple of sentences from his speech:

Market forces should have been capable of resolving this issue. Market forces backed by adequate research would have identified the size of the market, its needs and its financial capacity. Market forces, not Labor's politically driven Canberra based agenda, would have solved this problem without a fuss, facilitating the uptake of disabled access vehicles inexpensively.

What on earth does he think has been happening over the last 50 years: centralised socialist planning? Market forces are the very reason why people with disabilities do not have proper access to public transport, because it is too expensive for private operators to have the equipment and to modify buses and the like in order to provide the access, and most disabled people are not millionaires. What an absurd performance!

He is the minister who proposes to basically decimate Australian shipping by removing the sorts of fiscal support that all major shipping nations have across the world and all the major competitors have across the world. He is the minister who has managed to announce an inquiry into Australian National and its financial problems and at the same time announce who is to blame. So he announces the conclusion of the inquiry at the same time as he announces the inquiry. With this sort of track record, many users and people involved in transport must be shuddering at the prospect of what sorts of cuts he is going to offer up to the Treasury and Finance. Perhaps he will abolish air traffic control or maybe the Maritime Safety Authority or something like that! With the current cowboy type approach, anything is possible.

It is instructive to look at the transport budget because it provides in microcosm an illustration of what is actually happening in the public sector in this country. For 1995-96 its budget was $1.37 billion. Only $81 million of that was for running costs, of which $15 million was associated with safety administration. The coalition promises included an extra $147 million in the transport area: $28 million for Adelaide airport; $18.8 million for the Tasmanian sea highway in this forthcoming financial year; $65 million for the Pacific Highway; and $36 million for black spots. The only cuts it promised were the $27 million for the ships capital grants and PAYE legislation which we have just debated in the House. Now, $850 million of the current budget relates to roads, where the coalition was committed to `continue federal road funding expenditure commitments at current levels and add significant new road infrastructure and maintenance programs'.

The next biggest item—and this is where it gets interesting—is noise abatement at Sydney airport: $105 million in 1995-96, to fall gradually to $43 million in 1996-97. So there is not much to cut. Almost all of the budget is in programs which are supposedly supported by the coalition parties. This is where the controversy about Badgerys and Holsworthy becomes so significant, because the forward estimates contain substantial amounts of money, over $500 million over two or three years, to provide for the construction and purchase of land at Badgerys. So now we know what is really going on. It will be very interesting to see those forward estimates on 20 August. Now we know what is really going on, and that is an attempt to rip out that money. Forget about building a second airport for Sydney, because those are the only cuts that are really able to be offered up.

This offers a very good illustration of what is happening. There is minimal fat to cut in Australia's public sector. It is overwhelmingly devoted to programs, to delivery of services, not to administration and bureaucrats and fat cats and all the mantras and myths that come from the other side. All of the major items in the budget are things that the Liberals have committed themselves either to maintain or to increase. No wonder they are looking for alibis, no wonder they are desperate to invent any excuse they can to lay waste to the public sector. No wonder we have now got Costello's con—the mythology of Beazley's black hole. I have got bad news for them. The Australian people are not going to wear these sorts of infantile lies and mythology. They won't let them break their promises and they won't accept the sort of Thatcherite regime that they are trying to construct. It is Fightback in disguise, a situation where they are going to lay waste to a whole host of social support mechanisms in regional and rural Australia as a result of their cuts. (Time expired)