Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Wednesday, 21 September 1983
Page: 1113

Mr GEAR(6.17) —This Budget represents a major step out of the dark years of Mr Fraser, away from the needless suffering to which that man and his Treasurer condemned millions of Australians. It embodies a major reversal of direction away from the contractionary monetary policies which for seven years have choked the life out of our businesses towards a stimulatory expansionism that will give Australia a real chance to achieve economic recovery. So well received has this Budget been by all sectors of the community that the Opposition has refrained from what would have been the hypocrisy of a censure motion. A scan of the headlines the day after the Budget was delivered tells the story: 'Help for the jobless, poor', said the Canberra Times; 'Welfare Budget', said the West Australian; 'Mild Mannered Budget' said the Melbourne Age; ' Disadvantaged get help' said the Tasmanian Mercury; and 'Budget for recovery' said the Australian Financial Review. Perhaps the most eloquent testimony was that expressed in the actions of sharemarket traders. As the Australian of 25 August headlined it: 'Investors give Budget $69 million vote of approval'.

I invite honourable members to contrast these independent statements with that of the present Leader of the Opposition (Mr Peacock), who called the Budget a disaster in his reply to it. He also predicted higher interest rates arising from the Budget. Events have proven him wrong on both assertions. The Deputy Leader of the Opposition (Mr Howard), who will always be remembered as the man who withheld the fact of a $9.6 billion deficit from the people of Australia at election time, was also wrong on the question of interest rates, as he was wrong over the last seven years when he hopefully predicted a fall in interest rates. The credibility of these two is a total zero. It has become a regular feature of their ramblings that they do not tell us what they would have done if they were in power. They do not offer any alternative. The reason is simple: They do not have a clue. I would say that there are still some speakers from the Opposition to come in this debate and it might be a good idea if at least one of them were to tell us how they would get us out of this mess if they were in government. But I doubt they will do that.

I would like to compare the media comments on the first Hawke Labor Budget with those which followed the last Budget by the former Treasurer, Mr Howard. The Melbourne Age, an eminently conservative newspaper, was moved to declare in a now famous editorial: 'As for the poor, the jobless and the homeless, most of them can expect to remain poor, jobless and homeless.' Honourable members should compare that damning indictment with the facts of this Government's first Budget .

Benefits for a wide range of people dependent on social security-I see in today 's Sydney Morning Herald that they number about four million people now-have been increased, new payments introduced and additional earnings restrictions relaxed. The introduction of Medicare will further help the poor of our community. Some $958m is to be spent on employment and training schemes which will involve some 300,000 people in a year, while civil works expenditure has been increased by 16 per cent and direct capital expenditure boosted 22 per cent to $3.7 billion. The first Budget of this Government is expected to create 130, 000 new jobs. The community employment program, a major element in the thrust to reduce unemployment, will ensure that those who have suffered most during the Fraser years will be given special attention. This is the kind of news that the jobless have been wanting to hear. First home buyers will be eligible for assistance of up to $7,000 over five years and investment in public housing will increase by 50 per cent, with additional funding for Aboriginal housing. These initiatives will themselves create 30,000 jobs, while giving the first worthwhile assistance for the last seven years to low income earners who want to own their own homes. In other words, this Budget does precisely what the last Budget of those who should now remain for a long time opposite failed to do-it helps the poor, the jobless and the homeless. They may tell what lies they will in circumstances where they are able to suppress the truth, but they cannot deny this.

Our Budget is aimed primarily at helping the poor, the jobless and the homeless . Their Budget did nothing for these people while it supported those who were already privileged-a fact which was recognised at the time their Budget was presented, before it fell apart. Their is no way the conservatives of this place can claim they would have delivered such a caring Budget as this, and their failure seriously to criticise it underlines their recognition of that fact. The deep differences in philosophy and in responsiveness to the problems facing the people of Australia which underly this Budget can be clearly seen in a comparison with the spending trends established under the former Treasurer who misled the people.

Eight years ago, under a Labor Government, health, education, housing, welfare and urban and regional development and the environment were clearly established as spending priorities, and funds in real terms were substantially increased. What happened during the seven dark years of Mr Fraser? Health expenditure, which had increased by an average 38.4 per cent a year in real terms through three Labor budgets, was reduced by 22.5 per cent in real terms during those unhealthy years. Education expenditure increased by an average 42.6 per cent a year in real terms under three Labor budgets, but increased only 3.7 per cent in total during Mr Fraser's seven years, despite substantial increases in the numbers of people in education. Surely they were our darkest years for education , and we are paying the price now as we find our labour force lacks the skills needed for international competition. Housing expenditure increased in real terms by an average 108.8 per cent a year through three Labor budgets, but fell 31.9 per cent during the dark years. The victims of that neglect are suffering today. Social security and welfare spending rose by an average 14.3 per cent a year under Labor, while the Fraser Government screwed this down to only 5.6 per cent a year during its seven budgets, despite doubling the ranks of the unemployed, leaving an additional 437,000 without jobs. As the numbers of needy increased, the amount allotted to them stayed much the same, and in real terms each got less.

Finally, I come to expenditure on urban and regional development and the environment. Here there is some confusion over terminology, for the dark years of Fraserism were not concerned with development in the true sense of the word, as is evidenced by their restrictive economic policies. They did however use the word development, by which they meant ripping our resources out of the ground to sell them basically unprocessed at knockdown prices to overseas interests. Generally they even gave the job of ripping these resources out to overseas companies. With that background there is little surprise in the observation that no concern was shown for the environment during the Fraser years. The last Labor government increased spending on urban and regional development and the environment by an annual 88.5 per cent in real terms, those on the Opposition side reduced this spending by 84.0 per cent during their term. We are in danger of slipping back to the status of an underdeveloped economy, largely because of the economic culpability of the former Treasurer. An 84 per cent cut in spending on development and the environment! No wonder those opposite have had little to say in criticism of our Budget.

While it is apparent that the conservatives care little for health, education, housing, welfare, urban and regional development and the environment, and that they rejected these as priorities during the Fraser years, it is interesting to look at what priorities they did adopt. Expenditure on the Australian Security Intelligence Organisation rose more than 100 per cent under the last government, not one cent of which is accountable to the tax paying public. One wonders if this was payment for services rendered. Certainly the extra money has not produced any apparent increase in competence. There was also an increase of 54.6 per cent in expenditure on law, order and public safety during the dark years, a traditional enough response from those with vested interests to protect when the population is getting restless with its lot. Fortunately for Australia the priorities which the previous government dismantled are now being re-asserted. Under this Budget there are to be increases in real terms of 16.1 per cent in health expenditure, 2.5 per cent in education, 10.5 per cent in housing, 10.5 per cent in social security and welfare and 9 per cent in urban and regional development and the environment. The needs of people and the needs of a growing economy are to be recognised instead of the misdirected policies of indifference and neglect practiced over the last seven years. The soul of a budget, if a budget may be regarded as having a unifying spirit, is probably best reflected not in the words of those who criticise it, or praise it, but in who launches the criticisms. The budgets of the previous government were condemned by the groans of over two million Australians condemned to poverty, while successive budgets directed resources to those who were already well off, cushioning them against the impacts of world wide recession while leaving the poor, the aged, the unemployed and many minority groups to carry the burden.

The economic policies of this Government have not been without their critics, most of whom have been very vocal and adept at using the media to amplify their cries. They are the airline pilots, an immensely privileged group, who enjoy greater superannuation benefits even than Prime Ministers with a similar length of service; they are the operators of companies sent to the bottom of the harbour, who fear for their tax free millions; they are the wealthy retirees who have benefited throughout their lives by superannuation concessions given so they would provide for themselves, but who then use contrived and shady investment schemes so they can hit the taxpayer for more benefits; they are the contractors who have avoided tax so they can live in luxury, paying nothing for the Government services they share in and giving nothing to help those in need. The soul of this Budget is apparent in those who have criticised it: Those who have the most and are not willing to share, those who are already very privileged, and those who have made a way of life out of tax bludging.

This Budget is one step towards our commitment to redistribute wealth in Australia, and for that alone is the most significant Budget in seven years. It is only the first step, but it shows that we have changed direction and that we are on our way out of the dark ages. Under the previous government we arrived at a situation where the top 10 per cent of income earners earned more than the bottom 60 per cent, according to Australian Bureau of Statistics figures released last week. Equally important, these figures reveal the situation has worsened since the last Labor Government. The policies of Fraserism have ensured that the rich have got richer, while the poor have got poorer. In 1978-79 the top 10 per cent earned 27.8 per cent of the total income while the bottom 60 per cent earned 27.9 per cent. This has now changed so that the proportion of total income going to the richest 10 per cent has risen to 29 per cent and the proportion going to the poorest 60 per cent has declined to only 25 per cent of the total. That is the philosophy which the previous government implemented-that in times when low and middle income earners are facing increasing hardship, income share should be taken away from them and given to high income earners who are already enjoying an increased income share. No doubt the Treasurer who misled the people would continue that deliberate and oppressive income shift if he could, but thankfully he will never again get the opportunity. Myths about wage rises and profit squeezes aside, the facts are that from 1975-76 to 1980-81 profits rose some 26.7 per cent faster than wages. The minimum income of the top 20 per cent of income earners rose faster than the maximum income of the bottom 20 per cent of income earners. The figures here probably seriously underestimate the extent to which the rich got richer, for they exclude lurks and perks increasingly a part of upper income remuneration packages, and variously estimated at up to $14 billion in 1980-81. Nor do these figures allow for the popular upper income activities of tax avoidance and evasion, recently estimated as worth around $7 billion a year.

The previous Government's tinkering with the tax scales left higher income earners paying less tax, but as wages struggled to keep pace with inflation lower income earners found themselves paying increasingly higher proportions of their income in tax. As Professor Mathews, who headed the Government inquiry into inflation and taxation, put it: 'The taxation system has become a major instrument for redistributing income and wealth in favour of the rich'. In short , under the previous Government the proportion of tax receipts which came from pay-as-you-earn taxpayers increased while the proportion which came from profits , dividends, the self employed, professionals and wealth declined. While the previous Government took more from low and middle income earners, it gave less back. The social wage of benefits and services provided by the Government, as I have already shown, took a big dive during the dark years with cuts to health, housing, education, and welfare. The commitment of this Government is to reverse the trend of the last seven years, to redirect wealth from those who have the most to those who are in greatest need.

As part of that commitment I believe that we need to relook at payment of unemployment benefits. They are inappropriate in the longer term. The intended function of such benefits is income security during short periods spent between jobs during a period of full employment. The problems of long term unemployment are not answered, so we will have to investigate a more equitable distribution of national income that takes account of the influence of modern technology and the evolution of capitalist society. In short, unemployment benefits were more appropriate to the 1950s than they are to the 1980s. I strongly support this Budget as a step in the process of redressing the great imbalances in the distribution of wealth in Australia, as a step towards rebuilding the social wage, and as another step towards a comprehensive welfare system. Of course, those opposite care little for the welfare of the mass of Australians who did not vote for them. They would prefer to talk about economic management and what good economic performers they would like to think they are, which generally means how well they have served the interests of big companies and how well they are thought of in boardrooms in New York and Tokyo. Perhaps that is why they have so little to say now, for these businesses have deserted them now that the consequences of their fiscal vandalism are apparent. There are many people in Australia who once held the view that members of the Liberal Party were good economic managers. Perhaps this illusion was because of the Menzies days when post-war reconstruction produced growth during the 1950s and 1960s. However, when the going gets tough, as it is now, their lack of competence is exposed. No -one will forget the Fraser years, because the Liberal and National Country parties during that time were shown up for the incompetents that they are. They did not start with a clean slate on 6 March, and members on this side of the House will not let them forget it.

At the start of the last decade Australia experienced a bout of inflation which was basically in keeping with trends in the economies of our major trading partners. The conservatives came to power promising to end that level of inflation. What have they achieved in the seven years they were given to live up to that promise? Our inflation level is now almost unique among our major trading partners. Unlike our neighbours, we have failed to make any progress in reducing inflation, despite rapidly rising unemployment. The British inflation rate is now 3.7 per cent, the lowest for many years, while the United States rate has fallen to 2.4 per cent, the lowest in 17 years. Compare these figures with the consumer price index rise of 11.4 per cent we recorded for the 12 months to March this year-almost five times the United States rate. The conservatives had seven years to achieve the one single objective they set themselves, to reduce inflation. In pursuit of that goal they allowed post- depression record unemployment, increasingly widespread poverty, declining social security benefits, a diminishing social wage, falling living standards, rising interest rates, and then declining real wages through their wage freeze. What did they achieve as a result of wreaking such devastation? Only that Australia can now truly claim its relentless inflation rate is entirely home grown. The only foreign import the conservatives stopped was inflation. The foreign version just could not compete with the super version the conservatives bred right here in Australia.

There is little wonder those opposite do not have the gall to mount a serious criticism of our Budget-they have too much to be ashamed of. The 7.5 per cent CPI rise predicted in the Budget will be a substantial improvement and catch up with our major trading partners, and in the context of the Budget initiatives is very achievable. A rate of inflation of 7.5 per cent after one year in office, a year of help for the needy and bold stimulus to the economy, will be an achievement the previous Government did not come anywhere near in seven years. It will be a clear demonstration to the Australian people that the Labor Party is the party of economic competence, the Government with the economic management skills. I hope the Australian people will long remember how the conservatives left millions to suffer as they screwed down the deficit in the false hope that that would reduce inflation, while major economies that have run much higher proportionate deficits have recovered ahead of ours. I do not believe that if the previous Government had spared a little more money for the relief of urgent need over the last seven years our economy would now be any worse off, and I am sure that if they had spent more on expansionary measures we would now be a lot better off. Those opposite have to forever shoulder the guilt of the suffering they caused and ignored and the extent to which they set our economy back. I commend this Budget to the House. Australia has waited long enough for it.