Mr KELVIN THOMSON(4.33 p.m.) —An appropriation debate provides the House with the opportunity to review the performance of the government. It is appropriate that we should have some kind of report card, as we are now about a week away from the 12-month anniversary of the election of the Howard government. I think any independent observer would have to conclude that its recent performance has been very ordinary indeed.

At the beginning of this year we had the mid-term budget review, which showed that there was a $3 billion blow-out in the government's budget deficit estimates—a $3 billion Costello black hole; an appalling situation by any yardstick, reflecting very poorly on the government's standards of budget honesty, as they like to term it. Even more serious, we had the estimates for unemployment being revised upwards from 8.25 per cent to 8.5 per cent.

In my address to the House during the budget debate, I said that this government had run up the white flag on unemployment, that it had acknowledged surrender, that the meas ures it had brought down in the budget would exacerbate unemployment and that its encouragement of job shedding and cost cutting at any price would lead to rises in unemployment. That is what we are seeing in the new estimates, with the revision of the unemployment figure up from 8.25 to 8.5 per cent. It is an appalling situation.

Following from that, we have had a procession of issues of propriety come before the House. We had the issue of the awareness of the Prime Minister (Mr Howard) of the Australian Federal Police investigation into Senator Woods. The Prime Minister told the Ray Martin program that his first knowledge of this matter was a couple of days prior to its becoming a matter of public knowledge. In fact, the Attorney-General (Mr Williams) contacted the Prime Minister late last year to advise him that there was an investigation by the Australian Federal Police into this matter.

No-one in the House, no-one in the press gallery and very few people in the Australian community believed the Prime Minister when he said that he had forgotten about this conversation with the Attorney-General. It is absolutely extraordinary for a Prime Minister of this country to say that the first he learnt of it was a couple of days ago and that he had forgotten—overlooked—the fact that one of his most senior parliamentary supporters was under investigation by the Australian Federal Police.

Then, in order to extricate the government from this particular mess, the Prime Minister decided to announce the work for the dole program, something which they thought up on the spur of the moment; we had the Prime Minister advising Laurie Oakes on TV, `Now we will have a work for the dole scheme.' The problem with that is not so much the concept itself. I have to say that I have no problem with the idea of reciprocal obligations. Indeed, the Labor government introduced programs for unemployed people which involved their having obligations to be involved in those programs. If they refused to participate in those programs, they ran the risk of having their unemployment benefits breached or suspended for a time.

However, this work for the dole scheme was a half-baked scheme thought up expressly to take the heat off the Prime Minister over his memory lapses concerning Senator Woods. That became clear in opposition questioning of the government when it was unable to tell the House to whom this work for the dole scheme would relate, what age groups would be involved, what length of unemployment would be involved and what kind of training would accompany it. No information was forthcoming.

The latest we hear is that the scheme will apply to some 5,000 people—a laughable proposition in view of the great many Australians who are unemployed. If it is such a good scheme, why does it not apply to more people? Not only was the scheme shown to be in breach of coalition election promises that it would not introduce a work for the dole scheme, but also both Prime Minister Howard and education minister Kemp were caught out claiming that they had never ruled out work for the dole when, in fact, they had. For that, they had to be brought to account here in this Parliament.

Then, at the time the government wanted to get its Telstra legislation through the Senate, we had the very unsatisfactory arrangements surrounding Senator Colston's staffing. It was revealed that Senator Colston's application for a substantial pay rise for one of his staffers was supported and approved by the Prime Minister, although at first the President of the Senate, Senator Reid, had opposed that pay rise. Her opposition is not surprising, considering that her own staff did not enjoy those same conditions. But, at a time when the government desperately wanted Senator Colston's vote to get the legislation for the partial privatisation of Telstra through the Senate, his staffer was able to get that pay rise.

More recently, we have had the debate in this House concerning the conduct of transport minister Sharp. He has been shown to have been manipulating the members of the CASA board in an attempt to secure their resignation and removal. He has been shown to have engaged in inducements and in a variety of improper conduct, so much so that the Prime Minister had to race out of the parliament to get a legal opinion suggesting that his transport minister had not breached the Crimes Act. It was as serious as that—that it required a legal opinion, delivered in record time, on the express issue of whether or not the transport minister was in breach of the Crimes Act.

This issue is said by the government to be about aviation safety. I certainly say to transport minister Sharp, who is presently considering the future of Essendon airport, an airport in my electorate, that if he is fair dinkum about aviation safety, he will move to relocate the operations of Essendon airport—an airport with an appalling record of aviation safety, with planes crashing into houses and a procession of accidents and incidents as long as your arm. If this minister does not move to relocate those operations from Essendon airport, his credibility on the issue of aviation safety will be absolutely zero.

It is little wonder then that the member for Melbourne (Mr Tanner) was able to say in debate that the expression `Honest John', as applied to Prime Minister Howard, is an ironic one, much as Australians refer to redheads as `Bluey' or big blokes as `Tiny'. It is little wonder also that against that background we have seen for the first time the gap between the political parties closing. The recent Reuters poll trend showed the gap between the two parties on a two-party preferred basis as 6.7 per cent. This is the first time since the 2 March election that it has been a lesser gap than the gap at that time, which was 7.2 per cent. Australians are losing confidence in the ability of this government to deal with the nation's economic problems—and, in particular, the problem of unemployment.

We have also learnt recently that cabinet meetings are preoccupied with appointments. We have had the health minister take a recommendation to cabinet concerning the appointment of Dr John Funder only to have it overturned by his cabinet colleagues. Then we have had the Minister for Primary Industries and Energy (Mr Anderson) take a recommendation to cabinet concerning an extension of the period of appointment of John Kerin only to have that overturned by cabinet also. It is a pretty poor way of doing business and reflects a pretty poor set of preoccupations on the part of the cabinet.

We also find that one year out from the election of the Howard government, a recent poll was taken asking Australians: do you feel you are more secure? That is a particularly important question, given that we have a Prime Minister who promised to make Australians more relaxed and comfortable. Those were his words: I want Australians to feel relaxed and comfortable. Yet one year out, when Australians are surveyed and asked that fundamental question, `Do you feel you are more secure?' the majority say no.

Then we look at specific areas of government performance and policy, and we find massive shortcomings. There is the legal aid crisis. The federal government has cut legal aid funding to the Legal Aid Commission by an amount in the order of $120 million. This amounts to a 25 per cent reduction in Commonwealth funding. What that means—and I have had this experience related to me by my constituents—is that people who are in the middle of their cases, for example family law cases, get told, `Either you will have to settle your case or you will have to fund it yourself from here on in.' So at the door of the court, they are left high and dry through the withdrawal of legal aid funding, as a result of the cuts to the legal aid budget initiated by this government.

In the area of family law we have had some appalling cases develop. In the area of civil law, virtually no funding is available. Even in criminal law we are finding some most unsatisfactory situations, with the possibility that people who are charged with quite serious crimes may, in fact, go free because they cannot be provided with an adequate defence enabling them to receive a fair trial. That is a most unsatisfactory situation, and this government has to accept responsibility for it.

In the area of education, we have had a massive drop-off and decline in participation rates around the states. This commenced with the election of conservative governments. For example, in Victoria, from the time of the Kennett government's election, we had a government which had no commitment towards providing quality education and seeing students through to the end of VCE or secondary education. But this has been exacerbated by the election of a coalition government nationally. Therefore, one of Labor's great achievements—the boosting of that retention rate from one in three children completing secondary school at the time we were elected to over two in three completing secondary school at the time of the conclusion of our period in office—is now at risk.

If you look at the area of health, the time that people have to wait for operations has been blowing out. Also, in my own state of Victoria the ambulance service has become quite unreliable.

In the area of small business, bankruptcies are up, with the economy bumping along the bottom. Certainly the small businesses that I talk to in my electorate do not have any confidence that the economy is recovering, neither do they see any sign of recovery in terms of their own business performance and business outlook.

What a low hurdle the government has been setting itself. It has been crowing about recent news and saying, `Isn't this good about company profits?' The truth is that a lot of that increase in company profits is on the back of tax avoidance and job shedding—precisely things we as a community do not want to see. So it is setting itself a very low hurdle.

Finally, in the areas of leadership and Australia's role in the world, our profile in Asia, our relations with Europe and all these things that are so fundamental to our prosperity and our reputation, we find a government which has exhibited very poor standards. Our Minister for Foreign Affairs (Mr Downer) does not have a high reputation internationally—

Mr Brereton —Very low.

Mr KELVIN THOMSON —A very low reputation internationally, I am advised by the shadow minister. Australia's reputation internationally has declined and we have suffered accordingly.

So there is a lack of leadership for Australia internationally, but nationally as well. The most appalling example of this is in the area of the republic. In a recent survey where most government MPs declined to express a view about whether they were for or against the republic, a number of MPs were asking the paper that conducted the survey, `What is the position of the Prime Minister? How has he answered the survey?' What an appalling failure of leadership on the Prime Minister's part when even his own MPs have to ask the newspaper, `How is Prime Minister answering this question?' On an issue as fundamental as the republic, we need some leadership from the Prime Minister and we are certainly not getting it.

We have a government which is second rate, a government which has let down many of the people who showed great faith in it and a government which is simply not delivering on the expectations it generated whether in the area of employment, in the area of service standards or in the area of integrity, honesty, propriety and so on. I think it is not unrealistic for us to look towards a change of government in a single term.

One of the elements of this has to be labour producing policies which enjoy community support and which are the right policies for Australia as we move into the 21st century. I want to spend the remaining few minutes saying something about what I think opposition policies ought to reflect.

Certainly, we have to deal with the issue of privatisation and public ownership. That has been a difficult issue for us and a difficult issue for the Australian community broadly, but we have to make out the case for continued public ownership of those assets and enterprises which are in monopoly situations or where the market will not act to provide decent services for all Australians.

So at a state level things like electricity, gas and water need to be kept in public ownership because they have essentially monopoly characteristics. At a national level, in the area of telecommunications, phone services, postal services and so on, the same things occur. In a privatised system, it is unlikely that the market will deliver a reasonable quality of service at an affordable price to all Australians.

I think we also have to look at the issue of the increasing disparity of income between Australians. Mr Deputy Speaker Jenkins, I had the occasion to read one of your contributions to the parliament not so long ago on the issue of executive salaries. It does strike me as most unreasonable that ordinary wage and salary earners are expected to show restraint in their incomes—and ordinary wage and salary earners have shown great restraint in their incomes—when executive salaries continue to take off. There are some well known examples of this. For example, Peter Bartels' salary of $2.8 million has enjoyed a great deal of coverage at a time when Coles Myers' bottom line was not improving.

Overall, the situation is most unsatisfactory. For example, average chief executive pay over the past five years has grown 57 per cent even without share options and fringe benefits. If you throw those in, it is estimated that most of the top 50 chief executives now earn around $35,000 a week, which is what the average wage earner earns in a year. The gap between chief executives and ordinary average workers is growing. Back in 1990, the chief executive's pay was some 36 times that of the average worker. Six years later, it is estimated to be 49 times greater and that does not include important things like share options and fringe benefits.

I think we can look at the proposal which you advanced based on the fact that President Clinton had been able to get through the United States Congress a measure whereby any salaries in excess of $1 million a year were not accompanied by tax deduction for the amount in excess of $1 million. If a corporation thinks that its chief executive is worth $1 million, well and good, but they are not going to have the taxpayer subsidise salary rates of that kind.

I think we can also look at revisiting the issue of progressive taxation applied to salaries of an appropriate kind. Going back a generation or two, we did have in Australia marginal tax rates of 60c in the dollar or even higher, but the levels at which they applied if indexed to today's figures would come in at, for example, $300,000 per annum—much greater salaries. I think that is where progressive taxation went wrong over the years. It increasingly started to apply to average incomes or not particularly high incomes. If you look at incomes of the order of $300,000 or $500,000, it is not unreasonable to think about reintroducing progressive taxation and increasing that top marginal rate.

I also think we could consider looking at chief executive salaries and how they move when it comes to looking at how the wages and conditions of ordinary workers ought to move. We now have enterprise bargaining, company based pay rates and consideration of those pay rates, so why not look at how the chief executive salary has moved and say that that percentage increase is going to apply to wage earners within that particular company? That is the sort of thing the federal government has the capacity to do under the corporations power. I would imagine that some companies would seek to avoid that by restructuring their work force, but it is the kind of thing we have to consider.

I also think we have to look at the breakdown of community life and the kind of isolation which is increasingly characteristic of our society. Among the great culprits are TV and media which cause people to cease being involved in community affairs and tend to keep us at home and isolated from each other. I think TV, as the culprit, ought to be asked to make a contribution towards improving standards of community participation by ensuring that these TV and radio companies are required to broadcast community announcements, are required to advertise meetings of community groups and so on. I also think TV plays a considerable role in generating and encouraging violence, so I think it ought to be made to play a role in countering violence.

Areas such as protecting petrol franchisees or retail tenants, looking at our taxation system and looking at trusts, negative gearing and so on are all areas for the Labor Party to be involved in in policy development during 1997 as it becomes an alternative government at the next election. (Time expired)