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Thursday, 15 September 1983
Page: 928


Mr CADMAN(5.57) —The prices and incomes accord has been acclaimed as a triumph by the Government, the Australian Labor Party election policy speech has been acclaimed a triumph by the Government, the National Economic Summit Conference has been acclaimed as a triumph by the Government, the mini-Budget has been acclaimed as a triumph by the Government and now the Budget has been acclaimed as a triumph by the Government. It is about time we considered where we are being led. Where is this promised land to which our leader is taking us? I compare him with Moses because we are promised a land of milk and honey provided we are patient enough. But how patient we must be depends on when we make an assessment. If we made it before the last Federal election we were told that the land of milk and honey was only a week or a month away; before the Summit Conference it might have been 12 months away; and today if we ask the Government when we will reach the promised land we learn that it might be before the next election but it might also be some time in the next 10 years.

Let us look at the accord. The accord was an agreement between the Australian Council of Trade Unions and the Australian Labor Party that committed each to full indexation for wages in return for wage moderation. Unemployment and other factors were mentioned as well. The Summit Conference was the vehicle for selling the accord to the business community of Australia and the accord was dressed up for the Summit as a prices and wages policy. The Summit Conference also decided that a deficit of $6,500m would be acceptable to the Australian community, and the aim expressed in the Summit communique was that there should be a joint attack on unemployment and inflation. Finally, but not least in significance, it is important to recall that the Government reached a pre- election accord. Subsequent to the election, the Government reaffirmed many of the precepts of the compact at the National Economic Summit Conference, even though the final communique tended to be conceptual rather than explicit in its implementations.

The mini-Budget in May proposed cuts for everything. There were cuts all round. This is where the Australian community felt the bite. A process of reordering priorities was commenced in the mini-Budget. I do not think that I am misrepresenting the Government's statements. The Budget is the first economic package from the Government. It recognises the accord, the policy statements at the time of the election, the Summit, and the mini-Budget. There are cracks in the accord. It is failing. In today's edition of the Australian Financial Review , we see claims such as this:

With a $15 to $17 wage increase spreading through the Victorian chemical processing industry, an arbitration commissioner yesterday questiond rank-and- file and union-organiser allegiance to the prices and incomes accord.

Commissioner Graham Walker yesterday pointed to a danger of union leaders and their members moving 'in different directions' on wages, an issue he said went to the crux of the trade-union movement.

In the building industry, the oil industry, the apparel industry and the food processing industry, we see the accord shattered and crumbling. The simple terms that the Leader of the National Party of Australia (Mr Anthony) has used describe adequately where the accord stands today. It cannot be explained away. It cannot be said by the Minister for Employment and Industrial Relations (Mr Willis) that a 4.3 per cent increase in wages for the calendar year 1983 will be all that will be paid out in this year following the guidelins of the accord.

As regards the Summit and the prices and wages policy, wages, as I have already mentioned, will blow out beyond the agreement that was conceptualised at the Summit. The retrospective wages decision now in progress and the Government's submission to the Australian Conciliation and Arbitration Commission, involve a 4.2 per cent increase in wages between 1 January and 30 June. Early in January next year there will be another decision which will give a similar increase, making a total increase of wages for the year of the same percentage as the inflation rate. There has been an eight-day wage pause. The benefit to the community will be insubstantial. There will be an increase in inflation, and we shall have the cranking up of the economy by a wages-led inflation process.


Mr Anthony —More unemployment.


Mr CADMAN —The result of the consumer price index decisions that have now been consciously started by the Government will be more unemployment. The wages freeze was agreed to by all State governments, many of them Labor governments, and by the Federal Government. The Federal Government is now spending funds that have been saved in the wages pause; but the wages pause has been proved to be non-existent due to the decisions that the Government has just made. It seems to me that we are looking for a deficit in 1984 that will be considerably larger than the deficit outlined in this year's Budget. It is a cosy relationship between the Government and the trade union movement. The accord has failed because the Government has not understood that that was not a binding decision on the union movement.

As regard employment, it is early days yet in the Government's effort to wind up the nation's capacity to employ people. But even so, the Budget spoke of employment having grown by more than 47,000 from its early April trough. If that Budget were to be written today, the speech-writers would have to reduce that 47 ,000 figure to 28,000. That is how good the record has been on unemployment. Looking at the participation rate, the rate at which people in the Australian community seek a job-those who have jobs are added to those who are seeking jobs and the percentage is taken of all people living in Australia-one finds that in August 1983 the lowest participation rate in at least 20 years, has meant that recorded unemployment was held up and will stay up.

People have given up. There are not the prospects for employment. It is a dangerous circumstance in which the Government is creating false jobs and substituting them for real jobs. We have heard about employment creation programs and the community employment program. Those are false jobs, not lasting jobs. They are not jobs that will be of benefit for the young people of Australia. They will not apply a continuity and a prospect and hope for the future. When we look at unemployment factors, we must say that we need now to come to the Budget and see where the Summit, the accord and the policy speech fit together.

The Budget is weak, and it is delicate in three areas. It is supposed to be a Budget aimed at buildings consensus and honing it to a fine edge. That is the statement, and that would be justified if the processes that have been gone through to arrive at the Budget were soundly based. But in so many areas, the accord and the agreements of the Summit have been shattered, and they no longer have the same relevance as they had when they were first settled. The Budget is weak in three key areas. It is weak because wages stability is a key factor in the Budget. Within days of the Budget being put through this place, the Government decided to backdate its wages decision before the Australian Conciliation and Arbitration Commission at the national wage hearing. It is backdating the wages decision so that there is an additional 3 per cent to 4 per cent increase in wages immediately that was not accounted for by the Budget.

Wage increases will affect unemployment, interest rates and inflation. If wage rises go beyond the level predicted by the Budget, there will be dramatic effects in other sections of the economy. The gross domestic product, the real growth for Australia this year, was predicted in the Budget to be 3 per cent. The best advise that I can gain is that real growth in the Australian economy for the forthcoming year is likely to be 2 per cent. That growth is based on commodity prices, farm incomes, and the success of manufacturing industry. If there is a drop of one per cent in the Budget Estimates, there will be a dramatic change to the deficit, a change of $1,000m.

That is how tenuous the basis of the Budget is. It is based on a wages policy which has crumbled and it is based on wages decisions that the Government is changing itself. It is based on a level of real growth in the economy which is tenuous in the extreme. It is based on the largest deficit on record that this nation has ever seen. Wages, again, will affect the deficit. The real growth of Australian product will affect the deficit. So the outcomes of the three factors which are so significant to the Budget are very substantial for employment, for interest rates and for inflation. Those are the factors which affect people in their daily lives-whether they have a job; whether they can pay off their home; and whether they can afford to borrow money to expand their business and so create employment for others. All three factors are interlocked. I think the House is aware of the significance of employment in Australia today. There is a need for the Government to understand what really creates jobs. A tentative Budget based on such delicate suppositions seems to me to be at risk if we are talking about creating jobs and giving people opportunities. But, at the best, the Government is not unfamiliar with hedging its bets. I return to 3 March of this year. In a report appearing in the Australian Financial Review three days before the election Anne Summers wrote:

Already he--

the Prime Minister-

is signalling that he would; as John Cain in Victoria and John Bannon in South Australia both cleverly did, disclose early in his term of office that the economic situation he inherits is far worse that the previous incumbents had let on-

This will enable him to use national reconciliation as a vehicle for belt- tightening rather than for dispensing a lot of largesse.

Second, Mr Hawke said again yesterday that his promises could be modified as a result of what emerges at the national economic summit.

I think we had better look at some of those promises because they were the promises with which the Australian people expected to be led into the promised land. I quote from page 4 of the policy speech of the then Leader of the Opposition. It states:

I believe that the Australian people have had enough of election promises made only to be broken. I offer no fistfull of dollars to be snatched back after the election.

We must go on to look at other promises because that promise overrides all other promises. Page 7 of the policy speech states

And in these great matters, as in everything else in this campaign and beyond, I am not in the business, and the Labor Party is not in the business, of making promises that cannot be fulfilled.

That promise promised not to break promises.


Mr Anthony —That is the official ALP document too.


Mr CADMAN —It is the official Australian Labor Party document used by the current Prime Minister when he was running for election, trying to convince the Australian people that he could lead them to the promised land. I have another quotation from page 9. When talking about improving the economy the Prime Minister said:

And that cannot be done by taking money out of the weekly pay packet or the pensioner's cheque.

He has done that in this Budget. He has taken money from the average family. He said in his election policy speech that that was one thing that would not get the nation going. On page 10 he promises 'tax reductions for low and middle income earners'. We know what happened in that regard in the Budget. I refer to tax relief and tax reform. There are annexures to this policy speech of the current Prime Minister in which he announced his policies for the election on 5 March. Annexures to this document set out the tables showing the various rates of tax and the reductions people would actually receive.


Mr Anthony —Laughable.


Mr CADMAN —They are laughable. I will read some of them. The tables show that a person on $200 a week in fact would be $4.41 a week better off. The tables go through the categories of dependent spouses, children, people with dependants and pensioners. They tell everybody how much better off they would be under Labor immediately the Labor Party was elected. I refer to another item appearing on page 12 which states:

A taxpayer without dependants earning $225 a week, for example, will get a tax cut of $4.76 a week.

That is laughable. Nothing like that has happened in Australia. If we refer to the comments of Anne Summers on 3 March we see that she said that the now Prime Minister was already preparing to break his promises. Page 14 of this election document states:

Those rejected policies--

he is talking about the previous Government's policies-

would have imposed a 2 1/2 per cent tax on the necessities of life in this country.

He was talking about a sales tax. In the House the Treasurer (Mr Keating) has complained about adjustments to his Budget that have been made in the Senate. They are nothing compared with what the Labor Party did to the previous Government's Budgets in so many ways. The policy speech also states:

In addition to a contribution of $37 million to government schools, we shall provide a further $16 million to the most needy non-government schools in the first year.

That promise has already been broken. I go to page 23 which states:

Pensioner fringe benefit levels will be indexed.

We have not seen that promise fulfilled yet. I could go on and on. I think the Australian people need to be aware that in addition to this great string of broken promises other measures have been introduced. We have seen introduced a withholding tax, an assets test and a tax on lump sum superannuation payments- all revenue raising exercises. They are all measures which were not promised in the election campaign and which increase the cost of living for an average family, but the Prime Minister said before the election that he would be reducing those costs.

I think that the most expensive and attractive promises were broken. I think the Prime Minister knew that he intended to break them. Certainly Anne Summers predicted that he would break them.


Mr Groom —Of course he knew.


Mr CADMAN —He must have known. He must have known the size of the deficit or whatever factors he needed to know. I think the Labor Party certainly did know. It is terrible that a situation such as this exists in Australia. We will have this proposition put to the Prime Minister at the next election campaign: 'Mr Hawke, which promises are really promises? Which of those promises will lead us to the promised land?' I submit to the House that Moses was successful because of his surety and his steadfastness. He knew what he was doing and he kept his promise. The children of Israel were the ones who broke their promises. I suggest to the House that the Prime Minister is not a Moses.