Mr McCLELLAND(9.13 p.m.) —There is no such thing in this modern world as keeping pace. You have two choices: you either move forward or you fall behind. As a result of this budget one thing is certain: we will fall prey to other nations in our region where there is still a cooperative and dynamic relationship between government, industry, labour and community organisations. Until this government was elected, we were unquestionably going forward. That is not my opinion; it is an opinion confirmed by objective economic statistics.

The May national accounts figures showed that Australia's growth was running at 4.8 per cent, not for one month but for the 12-month period prior to May of this year. On 30 May 1996, the Daily Telegraph said, `Australia's economy has recorded a spectacular growth surge'—a surge over 12 months on top of four previous years. Also on that day the Sydney Morning Herald said, `The Australian economy is now growing at twice the rate of other industrialised economies.'

If you want to disregard those commentators, you cannot possibly ignore the following words of the Prime Minister (Mr Howard), which were noted by the member for Werriwa (Mr Latham):

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 the very close geographic proximity to the fastest growing economic region in the world.

Further proof that Labor left the economy in excellent shape is the interest rate cut of 0.5 per cent announced on 31 July 1996, even before this draconian budget. Labor's legacy was low inflation, moderate wage growth, a current account deficit which was manageable and falling, together with falling interest rates—all achieved with an economy which was achieving on objective analysis spectacular growth and leading the OECD countries and, indeed, twice that of other industrialised economies.

One aspect of our economy which was unsatisfactory, however, was the extent of unemployment. As with most industrialised countries, the unemployment rate was unacceptably high. It followed the most rapid period of technological change industry has ever seen—not just since the turn of this century but which industry has ever seen. That is where this budget is going to cause suffering.

I have been in this House now on several occasions when the Prime Minister has been asked to specify what the government's target on reducing unemployment is. When you are talking about reducing unemployment, you are talking about reducing human misery. He has no such target, and that was confirmed this very day in question time. Labor, on the other hand, had a target to reduce unemployment to at least five per cent by the year 2000. With the economic growth figures as they were, we were well on target to produce that result.

So whatever is said here today in this debate on the Appropriation Bill and despite the cowardice in not setting a target for reducing unemployment, this government is going to be judged against the Labor Party's target, which would have been achieved, of five per cent unemployment by the year 2000. That is how it will be judged, that is how it should be judged and that is where it will fail and be thrown out of office.

By crushing the spirit of the economy, as this budget does, the government is going to cause great human suffering and underutilisation of this nation's greatest resource—its people. Australians want a government. If they were obsessed by having economic fundamentalists determine their lives, they would go and engage a firm of chartered accountants. Even reputable firms, whether they be Ernst and Young or Peat Marwick, would not be as obsessed as this fanatical government is with its own propaganda and ideology. Those respectable firms of accountants would appreciate that, in advising a prosperous company, that company would need to invest in and develop its resource base and its infrastructure.

The government's own published budget overview and economic outlook predictions published on page 2 of the budget overview summary showed the underlying budget balance returning to zero over the next few years without displacing the economic momentum which was developing, without displacing the job creation strategies and programs put in place by the Labor government and without causing the unjustified hardship that many Australians will suffer as a result of this budget.

When you are in a debate you know that the other side is in real trouble when they retreat to rhetoric. It is a sure sign that they lack vision, it is a sure sign that they lack balance, it is a sure sign that they lack reason; but that is the mode of operation of this government. It is a government based on rhetoric.

As was predicted by an economic commentator in the Financial Review on 2 May 1996, the government was building its plans on the foundation of the supposed black hole. It was described as the front-line ideological bludgeon of the government. The commentator quite correctly stated: `Repeat any proposition often enough and loudly enough and it becomes the received truth.'

It is a clear aim of the new federal government to convince Australians that there is an $8 billion hole in the Commonwealth budget. Of course, repetition has been the strategy of propaganda since recorded time. I did a quick search of the Hansard reports as to the number of times that government members have repeated this hollow catchcry of `black hole', and it was astounding.

The Prime Minister admitted that the government achieved a score of only about seven out of 10 in complying with its election commitments. If the Prime Minister in his former capacity as a solicitor were only seven-tenths forthright in his professional dealings, he would have been struck off. It is effectively saying that during the last election campaign the Australian people were conned almost a third of the time.

The nation is not a balance sheet; it is a nation of people. We all have a common interest in the welfare and the advancement of each other. Any civilised country is judged according to how it treats its elderly, how it treats its children and how it treats its disadvantaged. This government fails on all counts.

The Prime Minister said on 20 April this year, `The one group in the community that is not going to be hurt is the most vulnerable.' When we look at the facts, frail older people who need nursing home care will pay twice—in up-front fees and in means testing of nursing home fees. The combination of the nursing home fees and the pension income tests means that many people will pay at least 75c of every dollar they earn in lost pension and nursing home fees.

The coalition also promised to maintain all Commonwealth concessions. Yet, since the budget, concession cards are now worth three-quarters of a billion dollars less. Four million concession card holders will have to pay an extra 50c for each prescription, and they will have to pay at least $26 more each year before their prescriptions are free.

Perhaps the cruelest blow of all is demonstrated by this government's action in cutting out assistance for dental care. In my electorate, more than 10,000 people will no longer have access to free dental treatment. If they have a chronic toothache, or a tooth which can be saved, they will have to wait. By the time they get care, they will probably have to have that tooth removed. Once that tooth is removed, they may well have to go to a job interview. Mr Deputy Speaker, you and I know what prospects they will have of obtaining employment when they go to a job interview missing a front tooth. That does not matter, however, because they are part of a substratum that falls on the negative side of a balance sheet. They can be discarded according to this government and they have been discarded.

Older people using the home and community care program services will pay more; for example, people receiving meals on wheels and people receiving home nursing assistance. The carers of these people, who are receiving home respite care, will also be affected. A massive amount of assistance to these people has been taken out of the budget.

In a television interview the Minister for Family Services (Mrs Moylan) quite rightly said that no-one would be forced to sell their home in order to move into a nursing home. That is true if you want to move into a substandard nursing home. If two people apply to a successful, reputable, competent nursing home but only one of those people can afford an up-front fee, which person is the nursing home going to choose? The answer is obvious. The people who do not have the up-front fee are going to be prejudiced. That is particularly so when both partners are alive. If one partner becomes disabled, the other will have to find the means to obtain the up-front fee or put their partner into a substandard nursing home.

Probably all honourable members in this place have been into those substandard nursing homes during election periods to collect postal votes and the like. They are soul destroying places. If you had your facilities when you went into such a nursing home, you would lose them within weeks. That is going to be the tragedy befalling many, many families. The other alternative is to borrow money to meet that up-front fee, in which case the debt—which is a debt imposed on the entire family—is going to amount to nothing less than a death tax.

The other important aspect of this budget is what it has done to children. Before the last election the Prime Minister described how he was committed to maintaining a non-means tested child-care cash rebate and said that he would maintain the system of child-care assistance. But child-care fees are about to go up by half a billion dollars, thanks to the Prime Minister's so-called family budget.

The child-care cash rebate has been cut by $34.7 million, and the operational subsidies for community based long day care centres have been abolished, producing government cuts of about $108 million. These are amounts which have to be made up by the users of these facilities. It is going to mean about an extra $25 a week for a child under three and about an extra $14 a week for a child over three. An average wage earner with one child receives perhaps an additional $400 as a result of the taxation threshold being raised. That compares with an additional child-care impost of about $1,500 net or $3,000 gross per year. There is no comparison. There is no doubt that the Australian people have been conned by the Prime Minister, both before the election and in the delivery of this policy. No matter what we say here today, they will find that out and he will be judged accordingly.

As a result of this budget, the extra long day care places which were to become available between now and the year 2000 will not go ahead, making it even more difficult to get good quality affordable care. A constituent recently contacted me and described the hardship which the family was going to face as a result of having to either increase the amount of their contribution to the child-care centre where their child is supported and feels comfortable or take the child away. In the United States a situation known as `child warehousing' has developed, where parents literally open the front door of the child-care centre and push their children inside. The children receive no stimulation. What happens to the children is more a matter of luck than of competent management.

The minority groups which are going to suffer as a result of the removal of assistance to community day care centres include children with disabilities, children of migrant families and children who need additional literacy skills. With a bit of assistance and encouragement, those children would go on to become upstanding and productive members of our society. The tragedy is that those children are now going to remain disadvantaged for all of their lives as a result of what this government has done in its budget. It is not simply a question of bleeding hearts. It is a question of our future.

The conservative philosophy is based on encouraging so-called free enterprises and encouraging profits in the belief that economic development will flow down to the more needy elements of society. When judging what the government has done in terms of the aged, children and the disabled we find that it falls short. A classic example is the reduction in research and development tax concession which was previously allowed to Australian industry at the rate of 150 per cent. We are comparing ourselves with Singapore and Malaysia which currently have an allowance of 200 per cent. This government has taken 25 per cent off that 150 per cent. If we were talking about a rugby union team we would be talking about taking the two breakaways off the field and telling the lock forward that he can play only half a game.

If you compare Australia with those other teams—Singapore and Malaysia—you find that they are allowing a rebate of 200 per cent, confirmed in the government's own budget papers. They have effectively put in another back line—another five places on their team. New Zealand has foolishly reduced its rebate for research and development to 100 per cent and we have seen what has happened there.

If you are playing in a global competition and you take 2½ players off the field and the other side puts five extra players on the field, who is going to win? They are going to win. Australia is going to lose. What does it mean in terms of Australian jobs? They will not be there. We will return to the old days of the 1950s where we were pulling out minerals and exploiting our agricultural raw materials but not value adding because we were not engaged in sufficient research and development to promote those resources. Independent studies have shown that, with the previous research and development allowances, by the year 2010 we were headed for earning an extra $60 billion a year in exports. That surely must now be questioned because we are not investing in our own infrastructure.

We should look at what the government has done in terms of assistance for the manufacturing industry. We are talking here about taking money away from the textile, clothing and footwear, shipbuilding, printing, information and technology, automotive and engineering, pharmaceutical and food industries. All these industries were moving beyond the embryonic stage and starting to get into some real and meaty export activity. Those industries are very much threatened as a result of this government's budget.

The government talks about the sanctity of the small business sector. A great proportion of the small business sector is tied to those very industries I have mentioned. They are going to be handicapped. Their ability to employ people and promote Australia is going to be all but snuffed out in a very short time by this ideologically driven budget. The black hole has nothing to do with it. It is an ideology which the Prime Minister has had for at least 10 years. (Time expired)