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Tuesday, 24 February 1987
Page: 615

Mr YOUNG (Leader of the House)(5.44) —I move:

That this House condemns the Opposition parties for misleading and confusing the Australian people with reckless and reactionary promises of change-promises which they are unable to enunciate or cost.

This is a unique occasion of which the Government takes advantage because we have now been back in this House for eight sitting days and we have been listening to the Opposition parties-all of them-putting forward their views about taxation, government expenditure and wage policies, none of which have been manifested or articulated in such a way that the Australian people can understand what all the Opposition parties or any one of the Opposition parties stand for. In fact, not only are there differences between the parties, but there are differences within the parties--(Quorum formed) As I was saying, not only are there differences between the parties-the National Party of Australia, the Liberal Party of Australia and the Joh Party-but there are vast differences within the parties. I notice from the speakers list put out by the Whips that leading the Opposition in this debate is the Leader of the National Party (Mr Sinclair), the junior coalition member. Mr Howard, the Leader of the Liberal Party, will also speak in this debate and his alternate, the honourable member for Kooyong, Mr Peacock, is eighth on the list. This debate will not finish until all three have had the opportunity to speak so that we know exactly what their policies are-both the National Party and the Liberal Party-and what the Liberal Party will do under the leadership of Andrew Peacock.

Let us look at why the Government has brought on this debate. Taxation, the Opposition has said, will be the major issue for 1987. We have welcomed it and have put it on the agenda today, as the Standing Committee on Procedure asked us to have these general debates from time to time. But what has the Opposition to say about taxation? The Australian of 10 January this year said:

Pick a tax policy, any tax policy. If you are buying conservative you can have an old federalist tax policy or you can have a new centralised one, and you can have either in any one of several tiers or any degree of inclination in flatness. It is the silly season for politics and the Liberal and National parties are excelling themselves even by their previous best efforts.

Federal leader John Howard's outburst about a `flatter' tax regime, followed by Ian Sinclair's new federalist State income tax policy, followed by John Howard's repudiation of the National Party leader, followed in turn by the honourable gentleman's protest that his was not a Coalition orientated plan, just a National Party plan, all revealed the fundamental ideological torment among the conservatives and the resultant paralysis of policy formulation.

That is a pretty accurate description of how the Opposition parties now stand in the Australian political spectrum. The Deputy Leader of the Opposition (Mr N.A. Brown), speaking at the Young Liberals conference, said:

My message to you and to the Party today therefore is concise and clear. First, it is that government will not simply fall into our lap. We will win if we present to the people a sharp and clear Liberal alternative.

Secondly, my argument is that we will lose if we do not present that sharp and clear alternative.

It has been like a London fog since we came back to the Parliament. It has not been the sharp clear alternative about which the Deputy Leader of the Opposition was telling the Young Liberals and about which he seeks to pull the wool over people's eyes when he is called to account in the national Parliament. Indeed, we notice that the Deputy Leader has not been on his feet in the fortnight that we have been back.

One goes on to examine some of the propositions put forward by spokesmen on the other side of the House. Let me quote from an article by Tom Connors in the Canberra Times headed `When the rich piddle on the poor':

You would have noticed that the leading proponents of a flat tax are wealthy people, such as the Queensland Premier . . . the business knights who have found their Nirvana in the Sunshine State and the mining magnate, Mr Lang Hancock. They would be a lot better off if the progressive income tax system was abolished and replaced with a simple 25 per cent tax rate.

Unfortunately, there would be many people worse off; the 60 per cent of Australians who earn less than $22,000 a year and already, under the progressive tax system, pay less than 25 per cent.

So here we have an analysis of the simple policies being put forward by various spokesmen from the Opposition, none of which stand up. We cannot find out which ones they will adhere to, which ones the Australian people must judge. The Leader of the National Party got out of bed one morning, and we were told:

The Liberal Party moved decisively yesterday to distance themselves from the State income-tax proposal put forward by the National Party Leader, Mr Sinclair.

That was another proposal which was put forward in January. Let us see what people said about that. An article in the Australian Financial Review reads:

The divisions first surfaced with a suggestion by the Queensland Premier, Sir Joh Bjelke-Petersen, for a 25 per cent single rate tax. This was quickly followed by the Federal National Party Leader, Mr Sinclair, unveiling plans to hand back income tax powers back to the States.

. . .

Mr Sinclair's tax initiative was not endorsed by the Opposition Leader, Mr Howard, and was attacked by the deputy leader, Mr Neil Brown, who said it was `unlikely, very unlikely, that (it) would be accepted by either our party or by the National Party'.

But it was pointed out that under the 25c in the dollar taxation system, the Queensland Premier and his wife, Senator Bjelke-Petersen, would be $30,000 a year better off.

Mr Howard told us about the condition of the coalition and how it would put forward its policies when parliament resumed. In an article in the Sydney Morning Herald he stated:

`The coalition is strong. It has endured despite major, and at times acrimonious, disputes and differences of opinion between the two parties in some of the States'.

Mr Howard, promised a flatter, less progressive income tax scale, broader consumption taxes . . .

So in January he was promising broader consumption taxes. The Leader of the National Party told us last night that he could be persuaded to a consumption tax as long as it did not hurt his constituents in the bush. It can be imposed on people in the cities, but not on his constituents outside the metropolitan area. So are we, or are we not, going to have a consumption tax?

I will follow another line and quote from an article in the Canberra Times in January, in which Mr Howard talked about American taxation reform. He stated:

``When the largest and most powerful free-enterprise nation in the world reduces its personal tax rates to a bare 15 per cent and 28 per cent, that has worldwide ramifications,'' . . .

``The rest of the industrialised world cannot stand apart from such a change. Inevitably, the sheer size of the United States economy and the competitive impact of President Reagan's tax reforms will create pressure for similar changes in other countries.''.

The Leader of the Opposition knows that that is nonsense, as was exposed by Ross Gittins in the Sydney Morning Herald, who stated that what the people who look at America forget is that-and I quote:

. . . the Americans have gone about their tax reform in just the same way. After all, they've had even less success in slashing government spending than we have.

The US tax reform package is `revenue neutral' . . .

Like us, the Americans are lowering the rates of income tax but covering the cost of this by abolishing deductions and tax shelters and closing loopholes. The difference is that they were able to make more dramatic reductions in rates because they had more lurks and loopholes to get rid of.

American tax payers will lose their deductions for interest paid on credit cards and personal loans . . . They will lose their deductions for payments of State and local government sales taxes; their deductions for contributions to retirement funds will be curtailed, and most will lose their deductions for donations to churches and charities, medical expenses and work-related expenses. Income averaging will be abolished, even for farmers.

And the tax on capital gains will be much tougher. At present you only pay tax on 40 per cent of your . . . gain, at a maximum rate of 20 per cent. Under the new scheme, you pay tax on 100 per cent of the gain, at a maximum rate of 33 per cent . . .

. . . .

What these pluses and minuses mean is that the tax table gives a quite misleading impression of the net tax savings people will make-particularly higher income-earners.

. . . .

The net effect in the case of American companies is that although their tax rate will fall from 46 per cent to 34 per cent, their overall tax payments are estimated to rise by about 25 per cent.

The article states that an additional trick to remember about the United States is that people have to pay social security contributions. The article continues:

This is just a form of ear-marked income tax. The rate for social security contributions has been rising rapidly in recent years and at present stands at 7.2 per cent of income, up to a ceiling of about $A162,000.

So much for Mr Howard being attracted to the American system of reform of the taxation system! That shows what the Opposition has been telling the Australian people in the lead-up to this parliamentary session, which began just 10 days ago.

But what has happened subsequently? We have had a spate of fighting between the coalition partners and between the leaders about what they stand for now. They are not prepared in any forum-either inside or outside the Parliament-to say what they have in mind for the Australian people with regard to taxation. This is an election year. They said at the end of the parliamentary session in 1986 that taxation was the big issue. They have not been able to articulate a tax policy within the Liberal Party, within the National Party or between themselves. There are many other political factors at work within those parties which prevent them from being able to do this work.

Of course, do honourable members remember that, after mollycoddling Joh for the first week after he announced he would be the great Messiah of Australian politics, John Howard said: `Joh and I are not that far apart. We both want lower taxes and we both want to bash the unions'. I tell honourable members opposite that they should get a copy of the tape of the speech by the honourable member for Ryan (Mr Moore) to his Party room this morning about getting into bed with Joh. Let everyone throughout Australia hear what the honourable member for Ryan said in his advice to the Liberal Party in his Party room this morning about honourable members opposite not being too far removed from Joh. Joh and the National Party detest the Liberal Party. They absolutely detest it. Members of the Liberal Party are walking around, saying: `Let's shake hands, Joh; we can make agreements, Joh; we can run Australia together, Joh'. He will walk right over the top of the Liberal Party, just as he has done in Queensland. If I were a member of the Liberal Party I would listen very carefully to the State President of the Liberal Party. It is only in the last few days that the Liberal Party has woken up. Now we are told by Senator Messner that everybody earning under $27,000 a year-and that makes up about 80 per cent of Australian wage and salary earners-will be worse off under Joh's plan. It took the Liberal Party six weeks to get up the courage to confront Joh, to say that what he is doing would benefit 20 per cent of Australia and that he will hurt 80 per cent of Australia.

More than that, when one goes through the document which was released by Senator Messner, explaining how people will suffer under Joh's scheme, one sees that on page 5 he talks about the consumption tax. He said: `What if we leave out things like food, clothing, gas, electricity, health, education and fuel. If we leave out all of those things, we do not need a 7 per cent tax; we need a 9.4 per cent tax'. Is that Liberal Party policy? Is that what it will present to the people? It will have some tax exemptions so it will lift the rate of revenue by having a tax rate of 9.4 per cent. That will be terrific. Why does the Liberal Party not tell us so that we can debate the issues in the Parliament?

As I said, Senator Messner has finally woken up and has put out a document dissociating the Liberal Party from what Joh is putting up. The National Party is still silent because it is terrified of Joh. He has most members' pre-selections in his pocket. They will go down the drain as soon as they utter one word of criticism about Joh in Queensland. The Leader of the National Party received an overwhelming vote of confidence in Wagga Wagga-87 to 58. On the Australian Broadcasting Corporation news on Sunday he said. `Have I had a great day today'. He was wiping the sweat from his brow. He said: `I have absolutely floored them'. But the other resolution was carried. They still want Joh down here in his job. So the motion was carried overwhelmingly by a margin of 87 to 58. What a great victory for this person who has been in the Parliament for 25 years-this great leader of the National Party, this great tactician, who, with his deputy went into his Party room last week, twice, and said: `Come on fellows, give me a vote of confidence'. Did they give him the raspberry! They said: `You must be joking; you are lucky to have a job at all, let alone get votes of confidence'. There are a lot of people who want the right honourable member's job; it is not only Joh. Personally, I do not think Joh will ever come here but he has all the Opposition members terrified. If they are not terrified why will they not tell us their policies?

Everybody who earns less than $600 a week will be worse off under the plan being put forward by the nut from Kingaroy. The Opposition is talking about a 9.4 per cent tax, yet it has no wages policy. The Deputy Leader of the Liberal Party, who is the shadow Minister for Employment and Industrial Relations, sits opposite smiling at us. That is all right, I do not mind looking at his smiles. I just wish he would tell us what his wages policy is. I have been looking at a media statement from the Confederation of Australian Industry. Honourable members should see what it has to say about those who want to destroy the Conciliation and Arbitration Act. The CAI approves of refining the Act, but it says:

. . . this is a very different thing from those who would do away with the system in its entirety.

Their arguments however have nothing to support them but their own personal opinions and in fact represent a grave danger to employers.

They advocate massive change with its commensurate risk of massive dislocation, without providing any clear idea as to how this change will be brought about nor any evidence that it will in the end be better for employers.

The honourable member for Boothby (Mr Steele Hall) is quite right. He made that brilliant 12-page speech about the Liberal Party which everyone in this House should read. This is one of the reasons why the Opposition cannot get a policy. The honourable member for Boothby pointed out to everybody in the Liberal Party that up until Christmas the Leader of the Opposition had as his chief of staff Dr Gerard Henderson. The Leader of the Opposition cannot be responsible for everything that Dr Henderson says but it was noticeable that as soon as Dr Henderson left the staff of the Leader of the Opposition he began writing all these articles in the Australian. He said that the honourable member for Boothby, the honourable member for Higgins (Mr Shipton), the late Senator Missen, Senator Puplick and the honourable member for Goldstein (Mr Macphee) really had no place in the Liberal Party. Would it not be nice to have freedom of information applying to the office of the Leader of the Opposition? Would it not be nice to look at the memos which Dr Henderson sent to him about some of his colleagues during the two years he was chief of staff? Then the Leader of the Opposition said: `I will stick by the Liberal Party. I will not sell the Liberal Party out. This issue is far too important.' However, for two years he sat there listening to Dr Henderson telling him that these people were not worthy of their positions in the Liberal Party.

That is why the Liberals cannot formulate a policy-because the honourable member for Boothby, the honourable member for Higgins and others on that side of the House who have a rational view about Australian institutions and do not want them destroyed will not put their hands up for all the reactionary right wing madness that is flowing through the veins of the National and Liberal parties in Australia today.

That is why the Liberals cannot tell us what they will do with all these programs. They go to the universities and tell the kids that they will do away with the administration fee. They go to the stock exchange and tell the people there that they will do away with capital gains tax. They go to the wine and grape growers and tell them that they will do away with the brandy excise. But when they get together these matters are never all packaged up. They have to sneak around Australia hoping that little interest groups will believe their promises. The Opposition is an absolute rabble and it is about time this Parliament said it was a rabble and condemned it for its inability-and this is the first time for any Opposition since Federation-to give us any insight into what it intends to present to the Australian people.