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Wednesday, 18 September 1996
Page: 4670


Mr SAWFORD(4.32 p.m.) —Mr Deputy Speaker, the greatest challenge for all governments in the industrialised world is to address two basic fundamentals: firstly, the fair distribution of income; and, secondly, the attainment of full employment. This budget does neither. This is a poll-driven budget but without a coherent game plan. This is a budget without the vision thing. This is a budget with a flawed rationale. This is a budget that encourages processes that divide, exclude and ignore. This is a budget based on ill-founded assumptions.

The Liberals say this budget is framed to overcome Australia's biggest problems of debt and deficit. The Liberals tell Australians that the Australian economy is somehow in deep, dire trouble as far as debt and deficit is concerned. What is the real truth about debt and deficit in Australia? According to the criteria of the European Monetary Union, Australia has the fourth lowest debt in the industrialised world. What about the deficit? Australia has the third lowest deficit in the industrialised world. That is the real truth.

Under Labor, Australia developed an economy that was internationally and widely accepted as one of integrity and quality. A couple of months ago the Australian economy was confirmed by the Prime Minister (Mr Howard) as sound. So what is all this nonsense about a budget to deal with debt and deficit? This is an assumption that is clearly wrong.

This is also a government that says its WROLA bill, the Workplace Relations and Other Legislation Amendment Bill, will mean higher productivity which will lead to more employment. It is therefore worth examining that assumption. Over the past 50 years in the industrialised world the following has occurred: capital investment has quadrupled; energy consumption has tripled; productivity has tripled; but—and this is a very big but—employment has grown by only a third. Higher productivity does not lead to higher employment. The government is wrong.

This is also a government that believes in downsizing and that it leads to higher productivity and efficiency. It does not. Its guru, Stephen Roach, said so and has clearly rejected the benefits of downsizing. Corporations and business will not deliver full employment. Why would they? Downsizing does not produce higher productivity. It does increase the unfair distribution of income—the gap between rich and poor simply gets bigger with downsizing.

Mr Deputy Speaker, this is a budget based on flawed assumptions. The debt and deficit argument is wrong. The higher productivity-higher unemployment link is wrong. The downsizing link to productivity is wrong. But the wrong-headed thinking of the government continues. The supposed links of budget surpluses to interest rates is wrong. The claim that privatisation is better than a public sector is wrong.

The Liberals say that Labor's opposition to $425 million of the budget bottom line will risk rises in interest rates. Beg your pardon? Run that past me again. At the end of the 1980s, Labor was running budget surpluses and interest rates were 15 per cent. The Prime Minister's attempt to create a connection between interest rates and surpluses is clearly wrong.

The Liberals say that privatisation works better than the public sector, is more productive and gives greater dividends to consumers. Wrong, wrong, wrong. It is competition, not privatisation, that gives lower prices to consumers.

Labor has never said, and does not say now, that our economy is not without problems. Obviously we have a national savings problem which we addressed with a superannuation scheme. There is also a current account deficit problem, to which curiously I have not heard one reference from the government.

Labor could have achieved a budget balance in the lifetime of this parliament, but without the savagery of this budget's cruelty to vulnerable Australians. The Liberals' budget strategy of taking nearly $8 billion out of the economy will contract growth and employment. And yes, the Liberals admitted it in the budget papers. They project no more than 3½ per cent growth right through to the turn of the century. There is no target for growth, there is no target for employment. As I said, this budget has no game plan. This budget gives no direction.

The Liberals have not got the faintest idea where they are going. And there is the sad irony: they do not know where they are going and there is a great likelihood they will end up somewhere else. The great pity of that scenario is that millions of Australians will be seriously harmed in the process.

By contrast, Labor's budget strategy would have achieved a balance in 1998-99. Labor would have had growth of 4 per cent over the next three or four years. Under Labor that would have meant more jobs; under Labor that would have meant more private income; under Labor that would have meant more savings; and under Labor that would have meant more government revenue.

The reasoning in the Liberal's budget is flawed. It is a blatant betrayal of the ordinary working people of this country, who will pay for this failure. The budget will do nothing for what the Prime Minister said before the March election was Australia's most pressing problem, that of unemployment. By the government's own admission, the budget will do nothing for unemployment at all. The government agrees there is no hope of a brighter outlook for the jobless in the foreseeable future. If this is their number one priority, then they have already admitted failure and broken their promise to Australia and to Australians. Of course, it is clear that, having attained government by claiming that they care about the unemployed and by claiming that they will continue to provide opportunities for people to retrain for the workplace, that priority has been quickly abandoned. It is just a bit of trickery, really—cruel trickery.

No longer do you hear people on the government side saying that unemployment is the country's most pressing problem. These days they say the most pressing problem is the deficit. Before the election, they portrayed themselves as being compassionate, saying that they would frame their policies to create jobs. After winning government, though, what has happened? They have shed the costume and framed a cruel budget based on false assumptions.

The government has abandoned those who are looking for work and those who are facing redundancy for the deficit—the third lowest deficit in the industrialised world? So much for their care about the needs of people, about the plight of the unemployed. This budget completely abolishes $1.8 billion worth of job training and reskilling programs for those seeking work. It abandons all those who are looking for work, young and old, a decision that will deny 230,000 people the training and the skilling they need in order to get ready for the workplace. The truth is that creating jobs was not a priority in the framing of this budget; it was not even a factor. It has been shuffled a long way down the list of priorities, down as far as it has always been for conservative governments.

The Minister for Employment, Education, Training and Youth Affairs (Senator Vanstone) said on television the other night that if unemployment does not come down then the government does not deserve to be re-elected. But it has already demonstrated that it is not willing to formulate a budget designed to bring down unemployment.

This budget will actually make people sick. This budget ruins the quality of health care. There are direct cuts to health care. There are huge cuts in funding to the states, which means that the states will cut health funding. There is also evidence of the first steps in the dismantling of Medicare. Despite the government promising that its policies would not entail cuts to public hospitals, the budget does just that—lopping around $800 million off public hospital funding.

The abolition of the Commonwealth dental care program, which provided basic and emergency dental care to health card and Commonwealth seniors card holders, is a particularly mean and heartless act which will bring greater hardship to low income people and particularly the aged.

The Liberals promised to maintain Medicare in its entirety, but in their first budget the promise has already been betrayed. This budget reduces rebates for certain items and increases the maximum patient payment—signposts on the road to dismantlement of the most popular, most successful and fairest health care system this country has ever had.

But that is nothing too surprising. The Prime Minister has been a lifelong opponent of a fair and a decent health care system, and his squinty-eyed protestations to the contrary during the election campaign can now be seen for what they were. The coalition also promised to maintain the Medicare levy at 1½ per cent. That promise is broken. The budget contains a lot more broken promises, all of which will mean greater hardship for aged pensioners and other beneficiaries. For example, the coalition had promised to maintain the real value of rent assistance. That promise is broken.

The budget increases the pharmaceutical benefits scheme co-payment for all health card holders without offering any compensation whatsoever, which effectively cuts the real value of pensions and other benefits. The coalition promised to maintain the real value of pensions and benefits. That promise is broken.

The coalition promised not to force those eligible for the disability support pension onto unemployment or other benefits. That promise is broken. It promised to maintain a lump sum advance system. That promise is broken. It promised to introduce a pension bonus plan. That promise is broken. The list goes on.

But it is easy to expect the Liberals to frame a budget which hits low income people and beneficiaries the hardest—they always do it. This budget, however, also attacks those on middle incomes: the middle Australia the Prime Minister wanted to feel relaxed and comfortable; the middle Australia the Prime Minister claimed had faired badly and deserved extra support. In fact, it is middle Australia who will feel the brunt of this government's ideological, zealous, irrational cost-cutting.

For families with incomes in the middle range, the small tax cuts offered will be more than countered by a whole raft of increased charges. For example, families will have to pay more for child care; they will have to pay more to give their children a decent education; they will have to pay more to have their elderly parents looked after in a nursing home; and they will have to pay more for hospital and medical care.

Take child care, for example. Those using community-based child care will have to find an additional $14 a week. That alone is far more than what they will get with the tax cuts. In all, the government is taking $500 million out of child care and it is that amount that parents across the country will have to pay from their own pockets to make up the shortfall.

But the Prime Minister also wants the middle range family to pay for the nursing home care for their ageing parents. They may be asked to find $26,000 to buy them entry into a nursing home—maybe more—and then face the new daily fee of up to $34 a day. How will families on middle incomes afford these extra imposts? For those aged persons living in their own homes and utilising the range of services provided under Labor's home and community care program, higher user-pay charges will apply. Again, it is their children and their families who will have to foot the bill—and add the increase to $20 per script for prescription drugs.

But while middle Australia has been hit very hard, it is a budget which will bring perhaps the greatest hardship to older Australians. Firstly, they will be hit with the abolition of the dental health program and next by the failure of the government to adjust the deeming rate to reflect lower interest rates attainable by age pensioners on their savings without having to put their money at risk. The budget cuts the real incomes of age pensioners. And changes in superannuation will unfairly deplete the retirement incomes of those people who retire or who are retrenched at 55 years of age.

This budget will also bring hardship because of its failure to support business. The budget abolishes the research and development syndication, despite the coalition praising it before the election, and reduces the tax concession rate for research and development. These broken promises, along with cuts to a range of schemes and programs like Austrade and AusIndustry, will severely retard small to medium enterprises in their pursuit of innovation and excellence. Is this not the very thing this country needs to create employment and turn around our terms of trade?

There are broken promises in almost every area of government administration most of which I have not even time to mention here. For example, the cuts in Aboriginal programs were a vicious, callous and totally unwarranted attack on some of the most vulnerable people in our community. Another example is the $1.4 billion to be paid by university students in payments and repayments of their course fees. Another broken promise.

Those who remember the Prime Minister when he was the former Liberal Treasurer do not find the broken promises surprising. Nothing has changed in the Prime Minister's head, but he has employed, I admit, better make-over people. Other broken promises include: cuts to the environment, roads—$622 million—tourism, trade, the ABC, education, the arts, foreign aid, and on it goes.

The Prime Minister made a big play in the lead-up to the election about promising Australians a comfortable and a relaxed nation. That promise is broken. This budget will eventually make a lot of people in Australia very uncomfortable and very anxious while at the same time it will send this country intellectually to sleep.

This budget makes almost every sector of the Australian community pay more for the services they currently enjoy while completely abolishing other important services, typically those services which assist those most in need. The focus of the attack on those most in need was, however, predictable. Conservative governments compulsively attack those in need the hardest.

But what was even surprising to me, and not predictable, was the extent to which middle Australia will be made to pay for this budget. And pay they will, for everything from child care, to health care, to education for their children and nursing home care for their ageing parents. But the budget's big failure is a failure to steer the country, a failure to lead. This is the failure which follows inevitably from the failure of vision. This government has no vision for this country. It has no clear view of where it wants to go. This much we know from the budget. This is a budget steering us nowhere in particular. It is a dead hand—as Kim Beazley has said—on the national tiller.

Conservative governments do not lead. Instead, they hand over government to a particular stream of the bureaucracy, to the public servants from Treasury and Finance, who are just the captives of the financial markets. They do not make policy to drive Australia forward; they let their departments in Canberra shuffle the cards. They do not roll up their sleeves and work at the engine of government; they wash their hands of the responsibility of government. They put the country to sleep.

In that respect, this budget returns Australia to the sleepwalking days of the 1950s and 1960s, and even the late 1970s—the era when opportunity passed this country by, the era when our national economic infrastructure developed the great structural faults which Labor has, for the last 13 years, sought to mend. It was the era of the big, irresponsible conservative yawn. True to form, this is a budget which will send Australia to sleep. It is a budget devoid of vision and it is based on false assumptions. It is a product of ideological zealotry, of a frenzy of cost cutting for the wrong reasons, of a failure to reason and of a complete absence of compassion. It is a budget without the spine of commonsense evident in all sensible and responsible offerings. It is a budget that will take this country nowhere.  And it is a budget that will cause great hardship for most in our community—and the greatest hardship will have to be borne by those with the greatest need.

The budget slashes billions of dollars out of government programs—and those billions of dollars are going to have to be found by ordinary working Australians. It is a complete fabrication for the government to argue that the hardship they are inflicting upon Australians with this budget is a harsh but necessary medicine. It is a medicine forced down the throat of a healthy economy, a cure for a non-existent illness.

The real reason is simply ideological zealotry. They do not see a role for government in assisting people in our community who are in need. They do not see a role for leadership. They believe in a crass sort of individualism which, in their thinking, overrides any sense of collective responsibility for the country and the community we are building. They think that, if people are in need of government assistance, they have not worked hard enough. They submit to the fundamentally flawed idea that somebody's failure to get a job, or hold a job, is that person's own fault. You look at the budget papers and you think, `What is the matter with this word "unemployment"?' The old word processor got a bit of a blip, didn't it? You hardly see a mention of it anywhere.

This Liberal government also commits itself to the fundamentally stupid idea that, if somebody gets sick, then it is their responsibility to be able to pay for the medical treatment they need. If they or their kids cannot afford to go to the dentist or to the doctor or to have an education, the government's view—according to this budget—is that they therefore do not deserve any of these services. There are three members of the opposition here—I mean the government. I cannot get used to it, can I?


Ms Gambaro —It will be the case for a while, too.


Mr SAWFORD —I remember the times before Medicare, when aged people, vulnerable people, sat in doctors' surgeries from nine o'clock to five or six o'clock at night and were then told to come back again. This is the era that you are going to bring us back to. Or perhaps the message of this budget is that people who cannot afford dental care should resort to the practice of 50 years ago and get all their teeth pulled out in order to avoid the cost of dental care altogether.

Government members interjecting


Mr SAWFORD —A bit sensitive to that, are you? The conservatives have always been big on whips and punishments. The government's ideological position leaves no room for the idea of collective responsibility, for fairness or equality of opportunity. They subordinate those principles and guiding thoughts to the notions of individual rights and user pays, regardless of the capacity to pay. Just like any plan with concocted wrong reasons, it will fail. This budget was framed on debt and deficit and that has clearly made the proposition unworkable. It is simply not true. This is a government that framed the budget and said that higher productivity will lead to higher employment. Wrong. This is a government that says downsizing will lead to more productivity. Wrong. This is a government that links interest rates to surpluses. Wrong.

They are the four frameworks, the four parameters, on which you have based this budget. Can you not see that, if you base it on the wrong reasons, then the fundamentals in terms of the processes and the outcomes that you deliver are going to be wrong?  This Howard-Costello budget will fail all Australians. So much for a government elected on the slogan, `For all of us.'

There are on the government side perhaps 35 new members and probably 30 of them—at least 20 of them—are in for the short stay in parliament. They are in for the short stay in parliament because when you come new to this place it is a bit of a culture shock for all of us. But they have been manipulated. Their lack of experience in the place has seen them agree to a budget that is going to harm many people in their constituencies, and when it comes to September 1997 everyone in their electorates will know. (Time expired)