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Wednesday, 18 March 1987
Page: 1042

Mr COBB(3.27) —I guess that nothing more amply demonstrates this Government's dearth of economic understanding or its abysmal ignorance of what the real world market-place is all about than its latest charade called `price watch'. What most people find extraordinary is that the man leading this move, the Minister for Science (Mr Barry Jones)-I will not refer to him as the Minister for puffed wheat as has been done previously--

Mr DEPUTY SPEAKER (Mr Leo McLeay) —Order! The honourable member knows that one does not offend only by explicit points but also by allusion. You know that you must refer to the Minister by his title and you know that you should not use a disclaimer to get away with doing something else. You may proceed with your speech but bear that in mind.

Mr COBB —Most people find it extraordinary that this supposedly intelligent man could be conned into an exercise which is nothing more than populist economic jiggery-pokery of the most childlike kind. He is to attempt to keep price rises down by running around supermarkets with a notebook and terrorising those who are providing a service to the consumer. Nothing is to be done to alleviate the causes of why price rises may be necessary and the part that government policy contributes to these rises. Oh, no; only the symptoms are to be treated, not the cause. It is a bit like a nurse frantically putting a band-aid over every little bump that emerges on a patient with measles rather than looking to the cause of the disease and how the patient should be nursed to get him over the disease.

Many of the price rises that we see today are due largely to government policy. Governments that have caused massive price rises since the time of ancient Rome have tried to contain consumer prices to cover up their mistakes. The tactic has never worked because it is economic nonsense-and it will not work this time. If the Minister has half a brain and knows something of history he must surely understand that. But the Government is trying to give the impression that prices are rising because evil businessmen are making obscene profits by overcharging their customers. How pathetically and economically naive this argument is. Anyone who has the slightest skerrick of knowledge of how the business world operates would know how ridiculous the proposition is.

Business today is probably more highly competitive and cut throat than it ever was. Profits have been cut to the bone in order to survive. Even the large and supposedly successful supermarkets, such as Woolworths and Coles, are often making only a miserable 2 per cent profit on their sales. That is only 2c profit in every dollar of sales-hardly the rapacious ripoff this Government is trying to paint. If supermarkets sold the food and made no profit on it at all the prices of many items would come down on average by only the barest of margins. I seek leave to incorporate in Hansard a table which shows how much prices have dropped, in real terms, in the last 20 years.

Leave granted.

The table read as follows-





Rump Steak (500g)...

32 mins

24 mins

Eggs (1 doz)...

26 mins

6 mins

Laundry detergent (750g)...

22 mins

15 mins

Bacon rashers (250g)...

22 mins

10 mins

Butter (500g)...

22 mins

9 mins

Sugar (2kg)...

16 mins

8 mins

Peaches (825g can)...

13 mins

7 mins

Tea (250g)...

13 mins

5 mins

Cheese (250g)...

11 mins

6 mins

Jam (500g)...

11 mins

5 mins

Milk (1 lt bottles)...

8 mins

4 mins

Bread (white sliced)...

7 mins

6 mins

Flour (SR, 1kg)...

7 mins

4 mins

Mr COBB —I thank the House. The profit component of the price that the consumer pays is often only one of the smallest of many components of the overall price. However, this Government latches on to that component because it has an ideological hang up about anyone making a profit. To the Government, all profits are exploitive and obscene. It hates profits. Let me state quite clearly that--

Mr Braithwaite —It's a dirty word to them.

Mr COBB —It is to the Government. Let me state quite clearly that coalition members like to see business making profits because when it is there are funds for investment, funds for jobs, funds for growth and funds for development. We become distressed only when business is not making a profit. We become distressed when government charges and policies force up costs which eventually must be passed on to the consumers of this country. This is what has been happening to an unprecedented extent in Australia over the last four years.

This Government has increased government charges and taxes along with a massive increase in rules and regulations and often to an extent far greater than anything we saw in the days of the destructive Whitlam Government. Honourable members should look at the table entitled `Who Needs Watching? Supermarkets or Governments?' which states that over the last few years food prices have gone up 47.7 per cent, the consumer price index has gone up 53.9 per cent but electricity has gone up 91 per cent, Telecom Australia charges have gone up 100 per cent, workers compensation has gone up 113 per cent, water rates have gone up 120 per cent, sales tax has gone up 116 per cent and the cost of finance, interest rates, has gone up 93 per cent. Hardly a day goes by in Australia when the cost of running a business is not attacked in some way by this Government. It has increased existing taxes, introduced new taxes and expanded the paper work that goes with them. Surely it goes without saying that all of these extra costs have to be passed on if business is not to close down. Every government cost one can think of has gone through the roof and to a much greater extent than the CPI.

Let us look at the last Budget. If ever we needed restraint it was in the last Budget but what did we get? We got an extra $1,400m of taxes in one form or another. There was the Medicare levy increase and petroleum products price increases. Remember the promises about alcoholic wine and cider? Fruit juices, flavoured milk, motor vehicles and even computer software all attracted additional taxes. The bank account debits tax was introduced. The list of extra taxes goes on for pages. Let us look at the new taxes the Government has brought in. The capital gains tax, costing hundreds of millions of dollars--

Mr Nehl —Shame!

Mr COBB —It is a shameful thing, as the honourable member for Cowper says. The fringe benefits tax ran into hundreds of millions of dollars and the abolition of negative gearing means that the poor cannot now rent a house. In an ideological fervour to soak the rich, all the Government has managed to do is drown the poor. Fuel excise has increased hundreds of per cent in the four years the Government has been in office. Interest rates are the highest in the world.

Mr Braithwaite —An absolute scandal.

Mr COBB —It is scandalous. Inflation, compared with that of our overseas trading partners, is at its highest level ever and the length of time people are unemployed has doubled. No government in the history of this country has so failed in what it set out to do, has so deceived the people with its statements or broken as many promises as this one. Let us look at the last $10 a week wage increase, and that is only the first and smallest of the many steps that have yet to come. That $10 alone will mean an extra $1,200m cost to business in Australia. The Government blames everyone except itself; the fault is everyone else's. For example, the Government says that the depression in the farming industry is all due to the overseas drop in farm commodity prices. What a load of hogwash! Of course depressed prices for some products such as wheat, sugar and rice are a factor but that is only part of the story. The prices for wool and beef, for example, are quite good. It is the costs and the effects of government policies that we are getting rammed down our necks that are killing farmers in Australia today. If honourable members doubt that they have to look only at the latest Bureau of Agricultural Economics figures of the latest quarterly increase in fuel prices. How much did they go up? They went up 11.9 per cent for the quarter and machinery, equipment and car prices went up 5 per cent in the quarter, and that is just one quarter. Interest paid went up a massive 13.3 per cent and for the year it went up 23.7 per cent.

Mr McGauran —You would not credit it.

Mr COBB —One would not; it is unbelievable what is happening in this country today.

Mr Peter Fisher —And the Minister talks of biscuits.

Mr COBB —He does.

Mr Carlton —He's crackers.

Mr COBB —He is crackers, as the honourable member for Mackellar says. It is of no use blaming other countries for our problems. Our inflation and interest rates were only marginally above those of our trading partners when this Government took over in 1983. Today our inflation rate is four to five times the level of that of our trading partners and interest rates are two to three times the level of those of our trading partners. However, since 1983 countries which had rates at roughly the same level as ours have got their act together. They have got their house in order. As the honourable member for Deakin (Mr Beale) said, their inflation rates are between nought and 2 per cent and their interest rates are between 5 and 10 per cent. We have gone the other way; we are setting all these abysmal records and all that is doing is putting continued downward pressure on the dollar and putting up import prices, as the Minister for Science and Minister Assisting the Treasurer on Prices (Mr Barry Jones) admitted. Economic mismanagement in this country today is causing higher inflation, higher wages and higher costs and this is ultimately leading to what we are talking about today-higher prices. If the Minister for Science really wants to do something about rising prices and why Australia is going down the economic gurgle hole, I suggest that he examine the cause of the problem, not the result. If he does not the Australian people will surely pull the plug on this Government's credibility at the next election.