Mr EMERSON (3:33 PM) —This budget is living proof of what Labor repeatedly said during the election campaign, and that is that the government does not have a plan for the nation; it has a plan for a tax. Australians are crying out for a plan to reduce unemployment permanently, but in the budget unemployment is stuck at 7½ per cent. I wonder whether the Prime Minister recalls on 18 February this year in this chamber making the comment:

In terms of an individual policy, our top priority is to reduce unemployment.

I wonder whether the Prime Minister can explain why the budget forecast has no reduction in unemployment below 7½ per cent; indeed, why the budget contains no mention of the five per cent unemployment target; why unemployment got a mere five paragraphs on page 8 of the Treasurer's budget speech; and why the government has allocated more in the 1999-2000 financial year for Taxation Office computers to implement the GST than for job creation programs to get unemployed people back to work.

Fleetingly in February of this year, we had bipartisan support for Labor's unemployment target of five per cent—if only because the Treasurer did not want his leadership rival, the Minister for Employment, Workplace Relations and Small Business, to steal the march on him. I refer to an article in the Sydney Morning Herald of 1 February 1999 that begins:

The Treasurer, Mr Costello, has held out the prospect of Australia slashing unemployment to near the United States "full employment" level of 4 to 5 per cent.

It goes on to state:

Mr Costello said the GST would boost employment, giving a fiscal stimulus, reducing income tax rates and producing a better balanced tax system which would lead to higher economic growth.

Then on 2 February, the West Australian reports:

Treasurer Peter Costello said the Federal Government could cut unemployment from 7.5 per cent to less than 5 per cent, but only if the Senate agreed to introduce a goods and services tax.

The budget does contain a goods and services tax, but we have been unable to find any reference anywhere in the budget to the five per cent target. In fact, Treasury expects employment growth over the next three years to slow down and it foresees no improvement in the unemployment rate. This means that the benefits of economic growth are not being shared fairly. I would point out that, compared with Labor over an equivalent period, this government has created less than half as many full-time jobs and only two-thirds as many part-time jobs as Labor. Long-term unemployment has increased to 212,000 since the government began to slash Labor's job programs three years ago.

Where are the jobs in this budget that the Treasurer said would be created by the GST? There are none. Professor Dixon of Monash University in reporting to the Senate GST inquiry described the GST as `job destroying'. Even Mr Murphy, the Prime Minister's preferred modeller, could find no jobs from the GST. For the unemployed and regional Australia, this budget is a budget of despair. It is not a plan for a nation, it is not a plan for jobs; it is a plan for a tax. It is a consumption tax that will affect consumer spending. I point out in the budget documents that very point:

There is also likely to be some net increase in household consumption in the latter part of 1999-2000 ahead of the introduction of the A New Tax System package.

So the GST will affect consumption. But, interestingly, the budget says that the GST will not affect prices. We are assuming that away. On page 1-11 it states:

The impact on prices of the tax reforms under A New Tax System is not included in the projections. However, this impact has been taken into account separately in projecting the revenues and expenses affected by the tax reforms.

So they are going to take the revenues but we are assuming away any impact at all on prices. So they get an inflation figure of 2½ per cent in the year 2000-01. The reality is that Treasury has revealed that the inflationary impact of the GST alone in that year will be at least 3.1 per cent, and it could be more than four per cent if all the indirect tax reductions are not passed through immediately. We know that will be the case. So what we are really looking at is price rises in that year of around 6½ per cent. The government is saying in these documents that it is 2½ per cent.

I would have loved to have been in the cabinet room when this was being discussed. I can see what would have happened. The government would have said, `If we put the true price effect of the cost of living increases from the GST in this budget document, we'll get killed.' Treasury would have said, `Well, you're the ones who put 1.9 per cent out during the election campaign, which is a dodgy figure. You would have to put in 3.1 per cent at least.' The government would have said, `We can't do that, so we'll just assume it away.' In question time today the Treasurer was asked by the shadow Treasurer:

Will you rule out further reducing the surplus in order to bolster the GST compensation and, if not, how much of the surplus are you prepared to spend to increase GST compensation?

It is a pretty straightforward question. The Treasurer replied that we only have one surplus; that is the surplus for the coming year. We only have one surplus in the budget. That's all we've got. I draw your attention again to page 1-3, which projects the surplus figures over three years. I can see what has happened here. The Treasurer has carried the lawyer's brief into the parliament. He has said, `Look, I am not very good at numbers, so just give me one number. What is the surplus this year?' His staff would have given him the number. When the shadow Treasurer asked him about the impact on the surplus in the coming years beyond the first year, he said, `No, we don't have those figures in the budget.' They do have the figures in the budget, but obviously the Treasurer cannot recall those figures. We need to know how much GST compensation is going to be taken off those surplus figures which the Treasurer is saying do not exist in the budget. Clearly they do.

With unemployment stuck at 7½ per cent in this budget, it is timely to remind ourselves of what the five economists have been saying: that is, by economic growth alone we will not get unemployment below 7½ per cent—much or anything below 7½ per cent. What is needed is a comprehensive jobs plan. Labor is advocating a comprehensive jobs plan. It is a plan that involves tax reform without a GST. It involves tax credits. It involves improving the incentives to move from welfare to work. It is a plan that includes active labour market programs. It is a plan most fundamentally that invests in people and ideas.

We can build on a jobs plan on these ideas by investing in the talent of Australia and investing in ideas, by investing in education and in Australia's research and development effort. The Treasurer said on radio today, `Look, you won't get unemployment down if you do nothing.' Well, in the budget unemployment is stuck at 7½ per cent. It is obviously a do-nothing budget. All it does is impose a $32 billion new tax and sell Telstra. It is not a debt reduction strategy; it is a sell Telstra strategy.

We point out that there is a $40 billion undervaluation of Telstra in this budget because of a convenient accounting standard that they are citing—a $40 billion undervaluation that is designed to make the sale of Telstra look attractive. But the sale of Telstra is not attractive. It is clearly better to hold on to Telstra to get the dividends from Telstra and to get the growth in the value of Telstra for the Australian public. It does not make sense to sell Telstra, and they have had to manipulate the figures to try to create a case for selling it.

Again, I would be very interested in the cabinet discussion where the Deputy Prime Minister would have said, `Look, if we are putting all these figures in the budget about the full sale of Telstra, what about my inquiry?' They would have said, `So much for your inquiry. That one is biting the dust.' Obviously he got rolled.

This is a budget that is built almost totally on consumer spending. It is built on the Bankcard. (Time expired)