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Tuesday, 17 February 1987
Page: 148

Mr HOWARD (Leader of the Opposition)(3.18) —During Question Time when we had the benefit of the advice of the Treasurer (Mr Keating) on a whole range of subjects he said that during the parliamentary recess he had been around talking to the business community. I can believe that, because he certainly was not anywhere to be seen around Bankstown during the recess. In fact, his electorate did not see hide nor hair of him during a very important by-election. I can also believe that the Treasurer had been around the business community during the recess because I do not think he has been around middle Australia, and I do not think he has been in any of the marginal electorates that will determine the fate of his Government at the next election. If he had been around those marginal electorates he would have gathered a very clear idea of one fundamental fact-that the Australian Labor Party is utterly on the nose in middle Australia.

Nobody represents that rejection of the Labor Government better than the present honourable member for Blaxland, the Treasurer of this country, because his policies, his Prime Minister and his Government have been seen to let down Australian families, Australian individuals, Australian farmers and Australian small businesses. It is a tired government. It has lost direction. It has lost touch with ordinary people, and middle Australia is hurting a great deal under this Government. Interest rates have gone up, inflation has gone up, taxes have gone up, debt has gone up, and the dollar has gone down. All of this is the legacy of the man who could not even fulfil what a Federal Court of Australia judge described as a fundamental obligation of an ordinary citizen. The Prime Minister (Mr Hawke) may want to think that chapter is closed, but I can assure him on behalf of the constituents of middle Australia that that chapter is far from closed.

There was one thing that the Treasurer said during Question Time with which I agreed. He said that this country faces a parlous balance of payments situation. He was absolutely right. He hit the nail right on the head when he said that this country faces a parlous balance of payments situation. It is not a time for anybody to advance irresponsible economic alternatives or instant fix economic propositions; it is a time when the Australian public are looking for a credible, responsible alternative to the present Government. That credible, responsible alternative has to be built around a credible, responsible, believable economic package.

A number of things constitute a believable economic package. The first thing we have to do is to have a mini-Budget in May and do something about expenditure. People talk a lot about cutting tax. I will say again to the House that we cannot cut tax in this country unless we are prepared to take the knife to government spending. People who pretend otherwise are misleading themselves and the Australian public. We say again to the Treasurer: `You bring in a mini-Budget in May and if you are prepared to cut the Commonwealth's outlays to the tune of 3 or 4 per cent in real terms you will get support from the Opposition, you will not get condemnation. If you want to do something to ease interest rates and to put a floor under the dollar at the same time you will adopt a responsible fiscal policy, because up to date you certainly have not done it'. That is the first thing that has to be done to redress what is happening to the economy.

The second thing we have to have is a fundamentally reformed Australian taxation system. I do not yield from anything I have said in the past about what should underlie the reform of the Australian taxation system. We need a simpler taxation system, one that is based upon expenditure reductions, with a more intelligent mix between direct and indirect taxes. We need to get rid of the incentive deadening effects of the fringe benefits tax, the capital gains tax and the lump sum tax on superannuation. The Treasurer begs the Opposition not to be populist, but he is a craven populist when he accuses every one of his opponents on the taxation front of being a friend of the taxation cheats. He knows as well as everybody in this House that I did more to smash the tax avoidance industry than any Treasurer since Federation. I do not apologise for having done that because I am not prepared to stand by and see ordinary people carry a tax burden that has been shifted upon them by the misdeeds of the greedy and those people who would despoil the reputation of capitalism. We need a reformed taxation system; a taxation system based upon putting greater incentive; one that walks away from the existing progressive taxation system; one that is far flatter in terms of personal rate scales; and one that has a more intelligent mix between direct and indirect taxes.

We need also urgently to lift totally all of the existing restrictions on foreign investment, except in one or two extremely sensitive areas such as media ownership. If we were to do that we would bring about a recycling and replacement of debt and investment to the benefit of our long term balance of payments situation. It is absolutely essential for the Government to go much further than it has in the area of freeing up foreign investment.

The fourth thing we have to do is to be willing to free up Australia's overregulated and excessively controlled labour markets. I remember a year ago when my colleagues and I were talking about freeing up the labour market and talking about reform. What did the Government, newspapers, commentators and trade unions say? They said that we could not do it, that we would not even get a policy through our joint party room. They said that blood would flow out under the door as we debated the policy. They said that it would divide the Liberal Party down the middle and that it would divide the Liberal Party from the National Party. We produced the policy and it has drawn overwhelming support from the Australian business community. It has been endorsed by the Confederation of Australian Industry, farmers, small business, the Business Council of Australia and by those who want a new deal in industrial relations. Even more significantly, major industrial figures in the labour movement, such as Charlie Fitzgibbon, have talked about the very things that underpin our policy. If ever there was an example of what was seen as radical at the beginning of last year becoming the conventional mainstream of a political debate, it is what the Liberal and National parties propose in the area of industrial relations.

Absolutely fundamental to that policy is one very important principle; that is, that the trade unions of this country must be brought within the reach of the ordinary laws of this country. One of the greatest legislative achievements of the Fraser Government was the introduction of section 45D of the Trade Practices Act. I remember it well because I was the Minister responsible, if honourable members will forgive me for saying so. Without that section it would never have been possible for Jay Pendarvis to have had his triumph at Mudginberri, because that was the legislative backing for Pendarvis's triumph. That triumph has been rightly hailed as a new dawn in industrial relations.

Mr N.A. Brown —Who opposed it?

Mr HOWARD —It was opposed by the present Prime Minister and, I regret to say, many sections of the business community. It was opposed by the then leader of the Australian Council of Trade Unions and the present Minister for Employment and Industrial Relations (Mr Willis). Not only did section 45D play a very important part in the Mudginberri dispute; it also played a very important part in the historic victory of the Queensland Government over power workers in that State, which is the other significant milestone along the hard march towards a far better industrial relations system in this country. That piece of legislation has played a very important role. That is the fourth thing that we need if we are to improve this country's economy.

The fifth thing that we need-I think that there may be some measure of bipartisanship on this-is a significant boost to the migrant intake of this country. We should not be ashamed to say it. We know in our hearts that it is the right thing to do. We know that migration to this country has enormously boosted our economic growth. We know that without further migration we will not realise the growing economy and provide a greater level of demand for the goods produced by our manufacturers.

The final thing that we need in order to start turning around the Australian economy, and which constitutes an element of our policy, is to make a massive assault on the lather and the layers of regulations that constrict and constrain the business community and many aspects of the Australian commercial sector. That assault must not be restricted only to the Federal Government; it also needs to reach into the activities of State and local government. My experience in politics is that State and local governments are the greatest regulators of all. Regulation at a State and local government level needs to be significantly attacked and assaulted. Not only do we need to attack that regulation; we also need to go much further in freeing up areas such as transport and communications.

The Government's media proposals have a number of basic flaws. One is that they maintain the ridiculous barriers that exist on entry. If people are really worried about concentration of media ownership, they should be prepared to free up the barriers to entry. They should allow more players on to the field and not allow the existing players to wax fatter. If the Government is serious about freeing up the system, and if it wants a diversity, that is what it should be prepared to do.

The Government has been a miserable economic failure. Over the Christmas recess, it found the false dawn that it promised us. The Government said that the trade account would turn around. It said that things were getting better. All of that was exploded by what happened over the past two months. This Treasurer has presided over an inflation rate which in relative terms is the worst that this country has had since the Organisation for Economic Co-operation and Development was formed. The trade figure released yesterday is the worst January trade figure that this country has ever had. One may well ask when on earth his fabled J-curve is going to arrive. How much longer must the Australian community wait for the Treasurer's J-curve? How much longer can the Australian community put up with month after month of promises that it will get better next month? We were told in December that the dawn had arrived. We were told that everything was starting to turn around, but what have we found over the Christmas recess? We have found that we have double digit inflation which is not twice that of our trading partners, not three times that of our trading partners but four to five times that of our trading partners. We have also found that we are back on the rack of $1 billion to $1.5 billion current account deficits every month.

This is the legacy of the man who the Prime Minister certifies to us today is going to remain Treasurer until the next election. All I can say is pity help Australia. It might boost the electoral prospects of the Opposition for him to remain Treasurer until the next election, but pity help Australia. This is the man who was too ashamed to go into his own electorate during a by-election. They kept him on holidays until the Sunday after the by-election. They trotted him out the day after. They kept him well and truly under wraps in his own electorate. They were not even prepared to send him into his own electorate in that special car he has, with the darkened glass. It is no wonder they kept him under wraps, because I can tell this Parliament and the people of Australia that this Treasurer has failed. He is seen as a wrecker and a destroyer of the living standards of average Australians; he is seen as a man who has abandoned the very battlers that he craves acceptance as a representative of; and he is seen as a man who has wreaked havoc upon and pillaged the Australian economy. He and his Prime Minister will be thrown out at the first available opportunity.