Mr KATTER(9.02 p.m.) —The previous speaker, the member for Hotham (Mr Crean), said a number of things with which I very strongly agree. I gave a commitment, which I cannot get out of, for tomorrow night before I knew the House would be sitting. However, I formally advise the House that if this Taxation Laws Amendment Bill (No. 3) is voted upon either prior to or after that commitment then I will most certainly vote against it. I do not take that decision lightly. However, it cuts at the very heart of the reason why I passed up opportunities and left the very prominent frontbench position I held in the Queensland parliament to come to the federal arena. Constantly—daily, weekly and monthly—I could see the Australian economy collapsing. Virtually not a month went by without some devastating blow to the vital underpinning of the Australian economy.

Tonight we have heard reference to McEwenism—a word that is strongly abroad these days. Many newspapers and media outlets in Australia are reflecting upon the figures for the McEwen era. For those people in this place who decry the McEwen policies, it is unfortunate that history records things in writing. Going through the performance indicators for the McEwen era and the last 13 but, arguably, 15 or 16 years, the hypocrisy of the Australian Labor Party strikes me as more than passing strange, as they presided over the implementation of the greatest economic rationalism—ideologically driven policies—which has continued for over a decade. I will reflect upon how successful the policies of the super-dries—the economic rationalists, the level playing field people in this place—have been compared with the unapologetically interventionist policies of the McEwenists.

I come from Queensland where the Bjelke-Petersen years saw that state rise to a level of economic dominance that could not have been dreamt of when Bjelke-Petersen was appointed Premier. And he followed the same sorts of policies as John McEwen, who was a very similar person. For the benefit of all those wonderful idealogues in this place who think they have all the answers, let us look at the record. Before I read out the record to this place, if you go back and pick up my speeches, you will find that at one time I was an economic rationalist and a super-dry. But I assessed how each of those decisions worked out on the ground and I rapidly came to the conclusion that the Australian nation was embarking upon a disastrous road.

Let us look at those figures which changed my mind. I find it very difficult to understand how anyone could see these figures and not have their minds changed in exactly the same way. Let me choose the first and most devastating figure of unemployment. In 1972, the last year of the McEwen era, the average rate of unemployment for the 12 months prior to that period was 2.2 per cent. In 1991, it was 10.5 per cent and in 1996 it is arguably 8.8 per cent.

Referring to the work of John Langmore, the ALP member in this place, Dr Kemp and John Quiggan, who won the Academy of Science prize, all three people quote 17 per cent as the real comparable unemployment figure. So we are comparing the great economic rationalist policies that delivered unemployment levels of 17 per cent with the unemployment level of 2.2 per cent in 1972.

The balance of payments in 1972 was a surplus. We now say `current account deficit' as one word, but in 1972 it was a current account surplus of $403 million. The current account deficit in 1991 was over $12,000 million, and the current account deficit for 1996 was $20,259 million.

Let us turn to interest paid on foreign debt. It would be far more startling if I used the actual debt figure, but the figure for interest on foreign debt is what we have to meet out of our taxes and our incomes every year. The interest on foreign debt in 1972—these are non-constant figures—was $202 million. In 1991, it was $14,800 million. In 1996, it was $12,800 million.

I turn to bankruptcies. I do not think there is any clearer indicator of the state of the economy than the bankruptcies and unemployment figures. Bankruptcies in 1972 totalled 2,648. In 1991, they totalled 13,091. In 1996, we hit the all-time record for Australia of 17,340 bankruptcies—17,340 versus 2,648.

Tax revenue in 1972, with this great interventionist policy decried in part by the previous speaker—in part he praised it, I must admit in all fairness to him—needed for these handouts, picking winners and helping and looking after all these people was $8.9 thousand million. In 1991, tax revenue was $97.9 thousand million. In 1996, it was $116,000 million.

Interest rates in 1972 were seven per cent. In actual fact, the average for the four years rising from 1972 was only five per cent. In 1991 they were 15.5 per cent, and in 1996 they were 10.5 per cent. The value of the Australian dollar in 1972 was $1.28 and rising. In 1991, it had collapsed to 76c, and it now stands at around 79c. It took 384 Japanese yen to buy an Australian dollar in 1972. Now it takes only 86 Japanese yen. In 1991, it took 95 Japanese yen.

I think one of the most relevant figures is the change in real terms—I emphasise `real terms'—in average weekly earnings over the 10 years to 1972: a rise of 42.9 per cent. The average working man in Australia was fairing tremendously well under the policies of John McEwen, with a rise of 42.9 per cent. For the 10 years to 1991 it was 2.7 per cent. By 1996 it had fallen to minus 1.2 per cent. If you add to that figure of minus 1.2 per cent the tax bite—remember that taxes have increased 300 per cent over the last 12 years—we are looking at a diminution of some 25 per cent in real income for average weekly wage earners.

Let me move on. I think this bill is very much in the mould of the McEwen era. It is very good to have with us this evening the member for Richmond (Mr Anthony) in the mould of his father, who was first lieutenant and then leader and the person who was responsible for carrying on those policies which were so tremendously effective in delivering a rich and great country to us all.

I particularly prefer to the greatest earner for the Australian economy, the wool industry. One-tenth of our entire earnings came from that one commodity. Thanks to the efforts of Doug Anthony in this place and the continuation of those policies of interventionism, if you like, we found that the price of wool rose some 400 per cent, arguably 600 per cent, in the two or three years after he introduced the price scheme. In the two or three years after the removal of the price scheme, the removal of interventionism, we saw the price collapse, fall clean in half, from around 900c a kilo down to around 380c to 390c a kilo.

The previous speaker, the member for Hotham, said the National Party believes in tariffs and putting up protective barriers and not being scared to involve ourselves in the outside economies of the world. John McEwen spoke only ever in terms of nursery tariffs. They were there for a period to allow new businesses to arise, but today there are two very good reasons for their continued existence.

One of them is that every other country in the world enjoys huge tariff protection. In the sugar industry, which I think is the fifth or sixth biggest export earning industry for this nation, we compete in the world market against Europe. The last time I looked they were the biggest sugar exporters in the world. I think the figures were revised two years ago. At that time they enjoyed a tariff support system from the European Community of 192 per cent. It is extremely hard to compete against a 30 to 40 per cent subsidy or tariff level. To compete against 192 per cent is nigh on impossible.

That is the reason why, if you want to play on a level playing field and you want to be fair dinkum, if they have got a 192 per cent subsidy and they are our biggest competitor in the world, you have to provide something equivalent for our producers or they will simply be crushed and crucified by that sort of competition. This is not a figure that I have plucked out of the air. I am quoting from page 1072 of a 1990 report to the President of the United States on tariff and tariff equivalents on a series of primary industry commodity products throughout the world.

The banana industry is an excellent example. We are competing against people in Central America who work for $2.60 a day. If you want to have a level playing field, then our workers work for $2.60 a day or we have to close down the banana industry, which is worth $300 million a year to the Australian economy. There is no in-between; either you go down to those slave wage levels or you close down the industry here.

I can quote many other examples of what I am talking about. The way in which these people went about delivering the intervention that was so desperately needed for us to stay alive in the international marketplace was through things like the AIDC, the PIBA—money for water, the building of dams throughout Australia.

I will quote one figure in that regard. In Queensland, we have moved to a user-pays principle—some would argue, imposed upon us by the federal government—which takes us to $30 a megalitre for water. The biggest agricultural state in the world apart from Queensland and New South Wales, I would argue, is the state of California. Water charges in California on the last occasion I looked were $3.90 a megalitre. Clearly, the government there builds the dams and does not charge the dams out to the farmers, which was the way in which we operated in this country until very, very recently.

Mr Deputy Speaker, you can say that these people are being subsidised, but if you do not do it you will not have any agriculture taking place in this country. That is exactly what is happening today. This country has lost 40 per cent of its sheep herd, its biggest export earning item throughout our history. It was the biggest export earning item in 1988, when this House removed the reserve price scheme for wool. To those who say that it was going to happen anyway, I say that it is very funny that when the reserve price scheme was introduced the price went up by 400 or 500 per cent; when the reserve price scheme was removed it dropped clean in half. Coincidence!

With regard to government contracts, I was very surprised to find out the other day that 24 per cent of the cars traded in Australia are now being traded to governmental or semi-governmental bodies. So a simple administrative decision to buy all Australian made motor cars will be of absolutely tremendous benefit to the motor vehicle building industry in Australia. There are many other analogies that I can draw to your attention, Mr Deputy Speaker.

I refer to Chalmers Johnson's famous book on the Japanese economy. The computer company IBM has never won a major contract in Japan, yet outside Japan not a single Japanese operator has ever won a contract in competition against IBM. So these are all devices that are used. I have seen them used and I have used them myself in the Queensland government.

I applaud some of the other outstanding examples, such as Doug Anthony's saving of the wool industry in Australia, which delivered an extra $2,000 million or $3,000 million a year into the Australian economy because of his aggressive marketing approach. The other great example was former Senator Button's rescue and re-creation, if you like, of the Australian steel industry—the most inefficient industry that you would probably have found in the world. One worker in the car industry in Australia produced 80 tonnes of steel, one worker in South Korea produced 260 tonnes of steel and one worker in the Kaohsiung plant in Taiwan produced 600 tonnes of steel a year. You could not get anything much more ineffective, competition wise, than that.

A very large grant of money was given by the federal government to BHP—some will argue that it was $300 million; some will argue that it was $1,000 million—on condition that they invest $4,000 million. The industry was restructured and, even though it is now in struggling times again, for 12 or 13 years it was internationally competitive. That was a terrific achievement.

I turn back to the specific proposal before the House tonight with regard to section 121C. The Mossman mill is in a very difficult position. You have to be big if you want to be a successful and efficiently operating sugar mill. They are going to have to expand because they are in a burgeoning tourism area and the cane areas are closing down and being subdivided. That is similarly the case with a number of other mills. But if they want to expand, as they do, they have a very suitable area in which to expand but it will cost them a lot of money—tens of millions of dollars. That is similarly the case with the South Johnston mill, the Tully mill and the Ravenshoe proposal—and I hope that the Queensland government is intending to build a big dam at Ravenshoe—that will produce 2½ million tonnes of cane a year.

There is a classic example at Ingham. CSR point blank refuses to expand its milling capacity at Ingham. So, if we want to grow any more sugarcane at Ingham, we simply have to build a farmer owned mill because there is nobody else out there who will build a mill for us. There are farmers who want to expand and produce an extra million tonnes of cane a year.

When you add all of that together, that is 5.4 million tonnes of cane which we want to grow. That will be a great addition to the Australian economy. It seems to me that we have general principles here but we never climb to the coalface to look at reality. If you are a cooperative, it is very difficult to raise money. You cannot float a share fund because legislatively you are not allowed to. You are a cooperative; you are a farmer owned operation. It is very difficult to borrow money from the banks because the banks, for obvious reasons, find it difficult to foreclose on a cooperative. So it is very difficult for them to raise money. That is the reason why the clause was put there in the first place and that is why successive governments since 1930 have left it there.

That is why a number of us, particularly in the National Party, feel so very strongly that the clause must be left there. If the clause is removed, those people will not be able to raise finance, and if they cannot raise that finance then that expansion will not take place. If that expansion does not take place, then Australia will lose $270 million a year in extra export earnings. The stupidity of these decisions is happening continually in this place. Existing industries will collapse as well because they will be inefficient. (Time expired)