Mr ALLAN MORRIS (11:42 AM) —In the past few days we have had a couple of anniversaries. We have seen the fifth anniversary of the election of the current Howard government and, of course, the 18th anniversary of the election of the first Hawke government. So this is a time to perhaps consider future anniversaries and landmark issues.

This government has been marked by two key characteristics. The first one is its politicisation of the process of government. We saw that very much in the early stages, when we saw the blackguarding of the previous government and the distortion of figures in a most extraordinary way to create artificial perceptions of the national economy of the day. We saw the peremptory dismissal of a string of public servants, particularly the six secretaries of departments who were dismissed without explanation and without justification in the first few weeks of the incoming Howard government. And we have seen this politicisation in dramatic form in more recent times with the massive waste of money on government advertising programs to promote a tax and to falsely present its own credentials. Whether it be on the natural heritage program or various other government programs, we are still seeing massive expenditure on advertising.

We are also seeing the politicisation of the Public Service. Increasingly, now, my staff—and, I understand, my colleagues—are being told by public servants that they have been told not to talk to opposition members and that they cannot discuss policy matters or what they are doing. They can only talk about constituent complaints; not about what the policy is supposed to do to clarify things, which is obviously fundamental in dealing with anomalies and with people who are having difficulties with the government.

Then there has been the dividing up of the Public Service into separate departments. The great irony last year—and I found this really quite fascinating—was that the Australian Taxation Office was retrenching something like 1,000 to 2,000 people while at the same time creating a new GST unit. But they could not transfer officers from one area of the department to the other. The tax officers who were being retrenched from the ATO were required to apply separately and individually for positions with the ATO's GST unit. In other words, the ATO were not going to have the same people; they were trying to make changes not just within government but within departments.

So the separate pay systems for public servants in different departments, which were being negotiated under individual contracts, would remove the potential for a public servant to transfer within government, from department to department—and that had been the norm, not just in this country but certainly in the UK. The Westminster model that we came from has an independent civil service serving its political masters regardless of their persuasion but also being, to some degree, responsible to the parliament—and to both sides of the parliament. That has all been chopped up in both the contraction of the Public Service and the cellular nature, if you like, that has now been established—the compartmentalisation of the departments so that people can no longer transfer from department to department.

In fact, it is quite difficult now. If you get a person in Comcare who once worked in Veterans' Affairs and you try to establish what their wage would be if they were still working there, in terms of their compensation payments, there is no uniform wage, there is no parameter. In theory, each individual now has a separate wage—no more do you have situation where an ASO4 or an ASO6 in Veterans Affairs would have earned so much. A particular case that I am dealing with involves a young woman who was a nurse in Veterans' Affairs. It is virtually impossible to establish precisely what her equivalent salary would have been now, from the time when she was injured. In fact, you cannot be precise; you can only make some form of estimation and try to argue that.

So that breakdown has been quite important to this government's political agenda. We have never seen such a shift of both the funding—or spending patterns—and the structural systems to achieve a political purpose. A move towards the American system—with the change of government you get a complete change of all the key personnel—is obviously this government's agenda. It is not in this country's interests. The Westminster system requires a separation of the civil service from the government to a sufficient degree that the civil service is seen to be objective and to provide professional and objective advice. It is ironic, because this government is conservative and the Westminster system is a conservative system. It is normally more supportive of conservative governments, because, with a continuing, independent civil service, it is much more difficult to have dramatic change. So the Westminster system has been traditionally a conservative model. This government, the members of which are radical conservatives, is actually ripping up the system. I find that particularly interesting, but, more importantly, I find it very damaging for the longer term.

The second strand which has been so interesting and so important—and which I think the history books will be able to cover in more detail—has been the shifting financial relationships within this country brought about by this government. If you go back to the 1996 period, you will remember that we had that massive deficit nonsense—all that rubbish about how the economy was. The Prime Minister said that, in parts, the economy was very good—the curate's egg kind of example—and it was, with a number of factors trending in the direction you would want. There was very strong growth which has continued for the last five years. On the one hand he was saying that but, on the other hand, at the same time we had those massive cuts in budget and there were budget distortions.

Let us go through some of those cuts. We had a $500 million—half a billion—cut in funding for aged care, for nursing homes. Half a billion dollars over four years was cut in that 1996 budget. We had an $80 million cut in funding for Home and Community Care, one of the most important programs we had which was bipartisan. On both sides of the House we were all very supportive of giving more and extending and expanding our Home and Community Care service for those who wanted to age at home. This government cut that by $80 million in the budget of 1996.

There was a cut of $200 million for dental services. That was one of the nastiest criminal exercises that this government has undertaken—a cut of $200 million in the forward estimates for dental services for people who are on benefits. We all know how many people have been waiting for two, three or four years for access to dental services. There was the massive blackguarding of the R&D system—the so-called syndicate rorts. The government created a straw man in the form of these syndicates which, I agree, had some anomalies and things that needed correcting, but rather than correct those, it destroyed the system altogether. We have seen this massive downturn, against all world trends and our trends for the previous five years. Business research and development has gone into serious decline, and it has stayed that way. There were also the massive cuts in Working Nation, particularly support for the long-term unemployed in getting back into the work force. Effectively, there was a substantial cut in health. Remember those cuts to state budgets? The states' biggest expenditures are on health and education. Those two areas were hurt seriously by this government in 1996.

So we had all those massive cuts in the name of this so-called black hole, which we know was a furphy, and which government members know was a furphy. That was the first year of radical conservatism. Where did that all go? Let me tell members where it ended up. All the money that was saved was given out last year in tax cuts, half of which went to the top 20 per cent of taxpayers—not to the unemployed, not to the pensioners, not to people on lower incomes. The majority of those cuts have now been spent in the form of assistance to higher income earners in our community—a tremendous shift in the application of government resources.

Whatever else the history books say in the future, one thing that will be very clear is that there has been a substantial shift in how this country taxes its workers and how it distributes the results of that taxation. Nothing has been more dramatic than the events surrounding the GST. We had the massive campaign, costing half a billion dollars, to promote a tax which is regressive, cumbersome and a discouragement particularly to micro businesses to be more active. In Europe, it is increasingly seen as a soul destroying and suffocating tax on economic growth. The offset of tax cuts and benefits went essentially to high earners and large companies.

Think it through: large companies invest their cashflow each night on the money markets. The big companies are actually making money on the GST by having their cashflow to play with. The micro businesses—the mums and dads who are running their own businesses—are actually moving further into overdraft. In recent weeks I have dealt with two organisations that were owed between $200,000 and $350,000 by the tax office because of the non-refund of GST they had paid. They were supposed to be paid back monthly. They had put in all their forms and they had been told almost weekly—daily, towards the end—that the cheque was in the mail. In both cases, neither had been paid adequately since July last year. It took four or five months for these people to be paid. The amounts involved were hundreds of thousands of dollars. So these two businesses almost went bankrupt on the basis of this government's policies and procedures and the non-rebating of their GST payment.

Amongst all that, this government has been blessed with good fortune in another sense. We see the attempt to pick the eyes out of what is happening. The strength of the Australian economy has been in many ways surprising to many commentators, myself included. The reason is very obvious—the American economy. The American economy has bowled along at six, seven and eight per cent for eight or nine years. It has been an amazing circumstance which has puzzled and surprised most commentators. The effect of that was to keep the Australian economy buoyant. If you look at the figures, you will see that we had a downturn in 1997 as a result of that contractionary budget, where the government deliberately contracted the Australian economy with those cuts. It chopped it back earlier in the electoral cycle so it would be over before the election. But, amongst all that, the American economy kept surging. That is why the Asian recession did not have the effect it was feared it would have. It is certainly why the Australian economy stayed so strong. Now the American economy has come to a halt. Guess who is blaming that for the Australian situation? This government.

The government credits our economic strength to its management, not to the previous government—not to all the things that were done, put in train and operational when they came into government—and not to America, but simply to the skills and cleverness of our current Treasurer. Dream on! What has kept this country going has been the American economy, but what has brought that to an end? Westpac said yesterday that the slowdown in Australia pre-dates the American slowdown and it is GST affected. In other words, the government mugged the economy back in 1996 with that massive budget cut which was enormously contractionary. It contracted the economy. It was able to get through that because the American economy's strength kept us going. It then had a second go last year with the GST, which all the experts are now saying did slow down this economy. The American economy's slowdown coming in behind that over these next few months is going to have an even bigger effect.

We see today's figures. The last quarter was a negative of 0.6 per cent. The economy in the last quarter of last year has collapsed in a fairly substantial way. Who is getting the blame for that? America is. This government is mean in a lot of ways but at least you would think they would credit the Americans with some help with our economy. Not at all. And when they are in trouble, they blame somebody else. They take all the credit and none of the blame. Funny about that. They are so clever. How come we have had so many problems if they are so clever? Certainly the attempt to establish their economic credentials is now totally shattered.

For one example, we only have to go back to the Treasurer's comments in 1995 about foreign debt. He used a figure, which was either amateurish or deliberately deceptive, of $10,000 per person. The foreign debt of $190 billion net equated to $10,000 per Australian. He knows and I know that those figures are very misleading. But on his parameters and terminology from `the debt truck' in 1995 the figure last week was $16,000—a 60 per cent increase. Look at the five-year record: the first quarter of recession in nine years and the first time the foreign debt has exceeded $300 billion. It is now $301 billion. The value of the dollar is drastically low.

I will give people an exercise: look at the web site that lists all the petrol prices around the world for the last three or four years. You will notice that the January and February figures for 1997, four years ago, and the figures for January and February this year are remarkably similar. The actual American cent price per imperial gallon is almost identical for the month. What was the petrol price back in 1997 in Australia? It was in the 70s. Why is it so dear now? Guess what? It is to do with currency, not world oil prices. The collapse of the Australian dollar, which the Treasurer now lauds as some clever economic trick, has absolutely destroyed this country's competitiveness in terms of what it buys. It might be a short-term five minutes of sunshine for the farmers who export on the cheap—getting into cheap exports with a cheap currency—but, in the longer term, the strength of this economy is measured by its currency.

Those who sell the currency down to the disastrously low 51c figure that it is at now are doing us enormous harm in the long term. To climb back from that to the 70c or 65c where it would normally be is going to be a long, hard haul, and there will be a lot of pain through that haul. We have the Treasurer going around saying, `This is great. This low dollar is helping our export performances.' It is also hurting us and the biggest hurt it is doing is on world parity pricing.

Do the check, colleagues. Go and look at that web site. Look at the daily price in Singapore—and Rotterdam as well if you like. They are all there but Singapore sets our prices. Look at the American cents per imperial gallon price from 1997 and look at it now and you will find that it is virtually identical—perhaps there is one or two cents difference. The problem in fact is our currency; it is not world parity. It is the Australian dollar that has destroyed our petrol pricing systems and therefore increased our transport costs, an increase which eventually will feed into our export costs. All that nonsense that the Treasurer is saying about the low dollar helping exports is babble. It is worse than that: it is deceitful and misleading because he knows that the transport costs will feed back in to the cost of exports eventually—it will take time but they will. Then our export costs will go up and the dollar will still be down. A Labor government will have an enormous task ahead of it in the years ahead to rebuild world confidence in our economy because this government—in five years—has destroyed it.

The mark of the world's judgment of your country economically is how it values your currency. There is not one Treasurer who has collapsed our currency in the way that the present one has, nor any previous government. The record low of business research and development is another terrifying figure. It took us years to get business to start investing in R&D and we started to really get somewhere: it was really starting to move along. But since 1996 the decline has been quite dramatic and disturbing.

The government now is in recovery mode: it is rushing around the place absolutely panic stricken. It is not driven by good economic policy or national interest but by the absolute desperation of a lot of parliamentarians who are in their second term and who will not get the parliamentary pension that we hear so much about because they will not make a third term. That is what is driving this government: the pension paranoia of a lot of two-termers who will not make a third term. Just watch those two-termers in the next few months, because their paranoia and fear will get even worse. That is what is driving economic policy. The reversal in R&D will not work in the way that the government thinks it will. There is a lot of rhetoric out there to try and calm down the electorate, but it will not solve the problem because it does not address the real issues.

The shift in petrol excise is nonsensical because it again avoids the real issue. With regard to talking the dollar down—as the Treasurer has done by saying, `This is terrific'—if the world marks you down and you say `wonderful', what does it do then? It marks you down some more. It is trying to give us a message; the Treasurer does not want to accept the message, so he denies it. Whilst ever he is in denial the world will keep on marking down our currency and, therefore, for our economy, our country and this government it will be down, down, down.