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Monday, 23 March 1987
Page: 1276

Ms FATIN —Will the Treasurer inform the House of the measures that are required to ensure continued firmness in fiscal policy?

Mr KEATING —The very subject upon which the Leader of the Opposition based his question, and the Prime Minister's reply, goes to the issue of the need to maintain, at least at the fiscal policy level as well as other levels, a reduction in the demands of the public sector upon Australian savings so that those savings may best be directed to where Australia needs them at this time, which is in the replacement and improvement of the capital stock to lift Australia's export and import competing capacity. The difficulty that the Government has all of the time in trying to maintain the whole structure and sense of discipline in the community is being diminished by the unrepudiated tax commitments of the Leader of the Opposition which, as the Prime Minister said, stand at $16 billion, being $14 billion plus the current deficit-the $14 billion of stated losses which I annotated and handed to the Leader of the Opposition in the sitting week before last and asked him to write to me to show where they were wrong and where they should be corrected. They stand on the record.

Yet we now find that there is a secret strategy document released by the Liberal Party of Australia which promises a $5 billion reduction in public outlays, which would leave, even on the Opposition's figures, $9 billion defined and then the removal of the current deficit. The fact is that those savings, net of sales of assets, add to a gross $2.3 billion-that is, the savings that are indicated in the secret strategy document published in the today's Australian, the Australian Financial Review and other papers add to $2.3 billion. Already, before the day is out, we have seen the Leader of the Opposition back off two commitments-that the age pension ought to be extended to 65 years for women and the abolition of the first home owners scheme. So we are talking about net savings of $2 billion to match $14 billion in tax loss commitments through the Opposition's taxation policy.

Let me go through some of the cost to the Budget of these sorts of policies. The abolition of indexation of pensions occupies almost half of the savings total of $1,300m. I would be very interested to know whether the Leader of the Opposition thinks that that is a good policy and whether he would stick with that policy. He said on the weekend: `It is no good in opposition making commitments you will walk away from in government. I would rather make fewer commitments'. No doubt this statement has been put out to make him look more hairy-chested in the current environment, given the fact that he has had 18 months to bring down coherent fiscal wages and tax policies, and that 18 months down the road we have had to rely on a leak-a leak which has obviously been defended by his office-to try to flesh these points out.

Some of the costs to the Budget of these sorts of policies are: Abolition of indexation of pensions-$1,300m. Abolishing all unemployment benefits to 15- to 18-year-olds would save $140m. Tighten supporting parents benefits: No saving. The Government has already taken action in this area and is achieving savings on Forward Estimates of $25m. Increase in the female age pension eligibility in 1987-88 from 60 to 65: A saving of $50m in the first year. But he backed off that this morning. Tighten eligibility for widows' pensions: No details given. In health, reduce the Medicare rebates from 85 per cent to 75 per cent in 1987-88: A saving of $180m this year and $300m in a full year. Abolish bulk billing: Savings at this stage cannot be estimated, but obviously there would be some modest saving to the system. Increased charges for pharmaceutical benefits from $10 per prescription to, say, $15: A saving of $120m in 1987-88 and $270m in a full year. Abolish the community employment program and Jobstart: $350m. Institute compulsory work for the dole: The costs are $700m, so the net savings on that package would actually cost $350m. Industry assistance: Abolish Austrade for a saving of $130m. A 20 per cent reduction in bounties: A saving of $46m. Abolish the fertiliser subsidies: A saving of $83m. Holding Commonwealth staff to zero increase: A saving of $35m. In education, abolish the equity and participation program: A saving of $46m: Abolish the Commonwealth Schools Commission: A saving of $6m.

There are a number of other minor savings but they add up to $2.3 billion. On my sums, that is about $12 billion less than the Opposition needs to find to fund the tax commitments that it has let stand on the record. After the Leader of the Opposition this morning walked away from the commitment to extend the age pension to 65 years for women, there is $2 billion, of which $1,300m comes from taking the indexation of pensions away. What we finally see is that the Opposition would not have the guts to go through with that, so there would be virtually no savings to match the $14 billion of outlays it has got.

The fact is that, 18 months into his leadership, the Leader of the Opposition has no fiscal policy, no tax policy and no wages policy. Over the weekend we had this urgently leaked document. The Australian Associated Press service said today that a spokesman for the Leader of the Opposition defended the leak of a secret report, showing that the Leader of the Opposition would make giant spending cuts if the Leader of the Opposition was elected Prime Minister. We are down to this: Eighteen months down the road there is no policy; there is only a leak. To make him look good over the weekend and to show that he is a hairy-chested Budget cutter, he sacked the shadow Minister for Foreign Affairs. So, he is not only a hairy-chested Budget cutter, but a sacker! Last week's wimp is this week's hairy-chested, strong, tough Leader of the Liberal Party.

We want to see some solid numbers, and we would like to know from the Leader of the Opposition whether he believes in the non-indexation of pensions. Let him stand up and confirm and defend, as his staff does, this document, and say whether he stands for the non-indexation of pensions. Let him say where he stands on the yet unrepudiated $14 billion of tax commitments which I have read out line by line, for which I have given the authority in detail, and to him, and which he has not repudiated. Let us find out whether the new strong `Leader' of the Liberal Party stands for some decent public policy or whether he is going to run around with grab bags of tax commitments.

It is very interesting that the $1,300m he would save by scrapping the indexation of pensions would just pay for the abolition of the capital gains tax, the fringe benefits tax, entertainment and substantiation. The Opposition, basically, will rip pension increases from pensioners so that it can abolish the capital gains tax, give back free lunches, free cars, and all of the other fringe benefits elements and thereby look after the people it looked after for years when it let them slip through the 60 per cent tax rate by the tax system it had which was full of holes. That is equity Liberal style in 1987-belt pensioners to give millionaires tax cuts through the abolition of the capital gains tax. Massive increments in wealth on the stock market will be given back to them so it can belt the hell out of the pensioners who cannot defend themselves.

I would like to know from the Leader of the Opposition whether he supports the non-indexation of pensions. If he decides to backslide on that issue, let him be pinned down by the public and the media of this country about where he stands on not only fiscal discipline but also simple, decent equity.