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Wednesday, 7 December 1983
Page: 3437

Mr BILNEY(10.16) —I felt a certain sympathy for Hansard during the course of that last speech because, on a number of occasions, the honourable member for Bennelong (Mr Howard) burst into uncontrollable fits of laughter, and well he might have done so. I am sure that that will be the reaction of a great number of people in the Australian populace who will be forced to read that speech. Why will they be laughing? They will be laughing because of the record of the person who just made that speech. The dire predictions that he made as to what will happen under our policies were very much the sort of thing that we saw come about in the last seven years.

What did the discredited former Treasurer preside over? First of all, he presided over the greatest rise in unemployment for 50 years-unemployment that got into double figures. He presided over interest rates which again were at record high levels. I can tell him here and now that the Liberal Party would still be in command in my electorate of Kingston if somehow or another he had been more successful in the interest rate area. He presided over rises in inflation, which theoretically was the first priority of the last Government, which again went through the roof. The previous Government had no success in its strategy of fighting inflation.

What was the result? What was the upshot of all these policies in the last year of the Fraser Government? We had negative growth in this country, negative growth in gross national product for the first time in 20 years. If the honourable member for Bennelong is the sort of person who is giving us the recipes for economic success in this country then it is really just as well that he is the Deputy Leader of the Opposition. It is really just as well that that is what he will remain unless his own Brutus-like ambitions are successful.

It is disappointing indeed that the Opposition is opposing the Prices Surveillance Bill. It is disappointing perhaps but not surprising because, like the Bourbons, the Opposition has learned nothing and it has forgotten nothing. We, on the other hand, are following a different strategy, a strategy which we believe is working, a strategy which involves-there should be no shame on our part in saying so-consensus and consultation. It involves consultation with the main elements of the economy, with business and the trade union movement. We are not ashamed of that because that is the way in which we believe the kind of prosperity which is already coming about under this Government will be continued , expanded and used to attack the great problems confronting us, particularly the great problem of reducing unemployment.

The strategy to which I refer, of course, and which this Bill implements, is the prices and incomes accord. It is quite true that we were taxed by the Opposition before the election about the time it has taken up to work out the prices and incomes accord. Of course, it did take quite a time. Nevertheless, I think it is beginning to be recognised that it is a durable accord. It is one on which the Government has no shame in saying that it will deliver. That accord had two great elements. One, of course, was on the income side and on that the Government has delivered. It has put it in place and has the agreement of all the main parties to a system of centralised wage fixation. But now we are talking in this Bill of the other leg of the agreement, that is to say, the prices leg. Mr Deputy Speaker, as you know, that, too, was agreed at the National Economic Summit Conference. It has been developed since then by a working party of the Australian Council of Trade Unions, of business, of State and local government and of community groups to the point that we have now reached. I would like to recall to the House the details of the prices and incomes accord as it relates to prices. They are relatively short. The first point reads:

A pricing authority will be established which will be given legislative criteria by which it must assess the validity or otherwise of price rises sought by corporations and the public authorities within its jurisdiction. It is considered unnecessary to attempt to regulate prices of all corporations if the large corporations, which are generally the price-setters in their industry, are subject to public surveillance.

There is surely no quarrel with that. The second point reads:

The legislative criteria will be designed to ensure that enterprises do not earn profits beyond levels necessary for the maintenance and the expansion of the enterprise, that real wages of employees are protected, and that unnecessary cost increases are not reflected in higher prices.

It goes on to say in this regard:

. . . the amount by which wages may increase beyond that warranted by increases in prices and national productivity will not normally be allowable as the basis of a price rise.

The third point from the prices and incomes accord reads:

The pricing authority will operate in a less legalistic manner than the former P.J.T. so that cost to the corporations concerned, and the time involved in processing price rise applications, will be less than those which previously applied.

The last point deals with the strengthening of the trade practices legislation to promote more effective competition and to do away with monopolistic practices . That is the genesis of the Prices Surveillance Bill that we have before us. It implements, at every point, the provisions of the prices and income accord which were agreed upon and made the subject of the communique at this unprecedented event, the National Economic Summit Conference which was held very early in the life of this Government. This Bill reflects not just, as the discredited former Treasurer said, some sort of a deal that has been made just with the unions; it reflects a genuine consensus which embraces all aspects of the Australian economy.

The general approach of the Bill-this is the one aspect on which I think one could agree with the discredited former Treasurer-is the fact that it does take very great account of the need to preserve the health of the private sector. It is quite clear to honourable members on this side of the House that there will not be a genuine, sustained, lasting economic recovery unless jobs are created in the private sector. This Bill puts no difficulty in the way of that recovery; indeed, it is carefully drafted to ensure that that recovery will come about. The Government is well aware that the majority of workers in Australia are employed in the private sector and that also, as part of that, profits need to be such that investment can take place and jobs can be created. It seems to members on this side of the House to be merely the sensible approach to economic management. It is not the dirigiste or directionary approach that the discredited former Treasurer was speaking of, but very much a pragmatic and sensible approach.

One thing that is exemplified in the Bill is the selective approach to price surveillance which it embodies. That selection is one which focuses on certain areas. They are areas where effective competitive disciplines are not present at the moment and where price and wage decisions have pervasive effects throughout the economy. Both conditions will have to be met before a body is made subject to the surveillance that is contemplated in the Bill. In other words, it has to be an industry which has pervasive effects throughout the economy, such as the petroleum industry, and it has to be one within which the most effective discipline and the most effective price for a State discipline-that is to say competitive market forces- is not operating at present.

We are looking at covering a few strategic industries in this Bill. I have already mentioned the petroleum area. The Bill specifically abolishes the Petroleum Products Pricing Authority and brings that under the provisions of this Bill. But two other bodies stand out for attention, namely the Australian Telecommunications Commission and the Australian Postal Commission. These bodies are mentioned specifically in the Bill. I have no particular quarrel with Telecom or Australia Post, but the fact is that they are in a monopoly position. It is certainly well understood by all concerned that there is a concern with their pricing policies. Industries that are not mentioned in the Bill, but which I can perfectly well imagine may very well be covered in the future, could be the steel industry-indeed, that would fit well with the Bill we have recently debated in this House-and the pharmaceuticals industry where again there is a certain lack of effective competition.

The Bill also does not apply to State authorities. It is again the case that certain State authorities enjoy the position which is referred to in the Bill, namely that they have pervasive price effects and that they are in a non- competitive situation. It is the intention of the Federal Government to enter into consultations with the State governments to see whether there can be agreement on bringing State authorities within the purview of the Bill. But to say that this selective approach-this approach which merely looks at those few industries which have these pervasive effects-is some kind of socialist blueprint that can arise only in a mind as fevered and as, if I might say, distorted as that of the discredited former Treasurer, there is no element in it of the kind of grand plan he seems to have in mind. It is also the case that under the Bill industries which are selected for price surveillance will have to be approved by the Treasurer (Mr Keating) before some sort of investigation is instituted.

I ought also to speak of the mechanisms which are proposed. These are by no means draconian. To start with, the Government must nominate the producer of goods and services which fits in under the Bill. If a particular producer is named, the discipline which applies to it is simply that the producer must notify the Government of any intention of bringing in a price rise and must give three weeks' notice of that intention. Should the Government decide to investigate that particular price rise it has three weeks to say yes, no, or maybe. In other words, no great bureaucratic investigation which will last for months is envisaged, it is simply a three-week consideration of the proposed price rise in a strategic sector of industry. Within three weeks an answer must be given. If the answer is yes, of course there is no problem. If the answer is that the price rise should not proceed, the Government may, if it wishes, institute an inquiry which again, must be over in three months, but during that three months an interim price rise is possible by agreement between the Government and the organisation in question. So it is hardly a draconian measure .

Finally, since the discredited former Treasurer mentioned the matter, I want to turn to what he said was the condemnation by the Australian Council of Trade Unions of the Bill. I have in front of me the ACTU's Press release, which looks a very long way from condemnation to me. I will read out the points in the Press release:

The ACTU does not believe the body will be adequate unless:

First the Government initiates specific examination of key pricing problems in the community

That is precisely what the Bill contemplates. The second point is as follows:

The Pricing Authority operates in conjunction with the appropriate industry councils in the development of industry-plans, e.g. the Steel Industry.

Again, that is envisaged in the Bill. The third point states:

All existing price regulatory systems which exist at Federal Government level are brought under the authority of the PSA.

Clearly, the system that has already been brought under the authority of the Prices Surveillance Authority is that dealing with petroleum. That is specifically provided for in the Bill, and there is certainly provision for the other systems which operate at Federal Government level. I am thinking of airline fares and possibly the charges for Aussat which would be contemplated within the structure of the Bill. The fourth point states:

The public corporations such as Telecom, Australia Post and AUSSAT come within its jurisdiction in early 1984.

Telecom and Australia Post are specifically contemplated within the Bill. Doubtless Aussat, when it commences operations will also be included. I must say I do not quite understand the fifth point, which reads:

The PSA when established determines a firm set of price guidelines for general application in the economy.

I am certain that that philosophy can be incorporated by negotiation. The final point is as follows:

The composition of the PSA does not simply reflect a continuation of the remnants of personnel involved in the petroleum Products Pricing Authority.

Again, one can see in the Bill that a structure is contemplated which will meet that concern and meet it thoroughly. I have to agree with the following point made tonight by the Treasurer in his statement:

The ACTU'S points are not generally inconsistent with the PSA's intended operation as conceived by the Government.

I thoroughly endorse that remark. I draw attention to the feeling of the Government that this legislation will underpin the recovery which we now see emerging. We know very well that one of the ways in which recovery can be destroyed totally is by an unwarranted blow-out of wages or prices. The concensus approach, the consultative approach which this Government has brought to the management of the economy, is reflected very well in this Bill. We believe that that is a much better approach than the divisive confrontationist approach of which we have seen far too much in the past seven years. We have seen far too much of it from the point of view of the misery it has brought. There is a so-called misery index, and once it goes over 30 we know that the Government that presides over it is in trouble. When inflation, interest rates and unemployment can be measured in double figures, that is when this rather crude rule of thumb misery index goes over 30. As we all know, the misery index rose under the Fraser Government to a level which might make many honourable members on this side of the House, particularly those who are new, wonder what on earth possessed the former Prime Minister to call an election in the first place. We do not propose to have a misery index of that kind, and this Bill will be conducive to the successful management of the economy, upon which this Government has made such a start.