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Tuesday, 24 March 1987
Page: 1361


Mr BILNEY —Can the Treasurer inform the House whether it is a correct response to Australia's present adverse international trading circumstances to reduce public sector spending? Further, what evidence is there of a growing community consensus to this view?


Mr KEATING —At a time when Australia is suffering from a very dramatic decline in the terms of trade, one of the obvious things that Australia should do is to try to rebalance its external accounts by producing more, importing less and producing more for export. The way this should happen is to essentially lift investment in Australia and the capital stock in plant and equipment and to make the country more competitive. That can best happen by diminishing the call upon Australian savings at least by the public sector-that is, the Commonwealth and the States-so that that investment may be able to take place.

Getting this country interested in the importance of fiscal policy and fiscal rectitude has been a very difficult problem for the Government, given the fact that the former Government was so reckless with fiscal policy. We are seeing, in the face of this whole structure of discipline which the Government has erected across fiscal wages and monetary policy, a return of that recklessness which is diminishing again, or seeking to diminish, of having caused to diminish, the respect in which the public holds decent fiscal policy.

Yesterday the Opposition released a package of proposed savings measures, supposedly totalling $5 billion, which in fact totalled $2.3m net of asset sales. Within eight hours that package had diminished considerably, as a number of spokespersons jumped out of it. Yesterday on the Reuters screen we had from the Leader of the Opposition, in what was an attempt, again, to at least display some sort of toughness to the financial markets, the statement that his staff had defended the leaking of a secret report showing that he would make a giant spending cut if elected Prime Minister. The statement went on to say:

. . . in his first week as Prime Minister Howard would slash $2 billion in public spending . . .

He would put the axe through a range of community programs. I have the report from the Reuters screen in front of me. That report is going all around Australia and the world. This was accompanied by the following language on the Australian Broadcasting Corporation's AM program:

I don't offer pie in the sky I mean what I say and frankly I see it as a virtue and not a vice in our present economic circumstances to be committed to heavy expenditure cuts.

The Leader of the Opposition went on to say on Willesee-I invite honourable members to listen to this classic:

. . . I have never in my political life been unwilling to do a difficult or unpopular thing. I don't think anybody who aspires to be Prime Minister of this country, if they can't do difficult unpopular things on occasions, then they're not worth the job.

What about financial deregulation and the floating of the exchange rate? He was the supposed author of it all. He hankered after a consumption tax during all the years he was Treasurer. What about the back-down at Blackwater-the show-down at Blackwater on the fringe benefits tax? What about the collapse of his strength with the 1982 Budget? When have we seen from this man as the Treasurer any strength or willingness to take unpopular decisions?


Mr Carlton —Telling lies again.


Madam SPEAKER —The honourable member will withdraw that comment.


Mr Carlton —I withdraw.


Mr KEATING —He is more to be pitied than despised, so do not worry about him, Madam Speaker. In eight hours the Opposition's $2.3 billion package yesterday shrank to $845m as Opposition members all jumped out. It was in the market for about eight hours and they were all jumping out, trying to leave it behind-I was going to say `like rats leaving a sinking ship', but that would probably be unparliamentary. The fact is that everybody is jumping out now. The Leader of the Opposition and his Party fold in the face of any pressure. They could never change fiscal policy. As the Prime Minister says, there is a $16 billion credibility gap which day after day we instance the detail of here. I have given these instances, each with annotations, with the references to where the statements were made, and I invited the Leader of the Opposition to repudiate them in writing if he wished.


Mr Howard —Ooh.


Mr KEATING —Wait until Opposition members tell the financial markets Ooh. Honourable members should go to the financial markets to see what they have to say about their $16 billion worth of commitments. They will look at all these backdowns and they will see--


Mr Reith —Madam Speaker, I raise a point of order. I invite you, Madam Speaker, to use your powers of persuasion to encourage the Treasurer to limit his answers so that members of our back bench and members on the Government side can have an opportunity to ask a question at Question Time.


Madam SPEAKER —There are a number of points of order raised during Question Time, quite often the same ones. However, I draw the attention of the House to standing order 55. I ask that all honourable members read it and observe it.


Mr KEATING —I do not need to go on too long to make this point: The so-called tough talking Leader of the Opposition always collapses at the first whiff of grapeshot across the trench from the public. The reason why fiscal policy got away when he was Treasurer is the same reason why fiscal policy would get away if he happened to be Prime Minister. All he is doing by promising $16 billion of tax changes and outlays changes is dismantling, or seeking to dismantle, or causing to see dismantled the whole respect for fiscal policy and the importance of fiscal policy in the management of this country. Let me repeat the Prime Minister's request, and my request of a week earlier, that the Leader of the Opposition repudiate the line by line points we have made to him and that he tell us where the Opposition stands on his tax commitments, or whether we will really see pensions cut so that he can abolish the capital gains tax or the fringe benefits tax, so he can put money back into the hands of millionaires at the expense of pensioners. It is about time that the Opposition came clean and started to act tough and realise that Australia has real economic troubles which cannot be belaboured or added to by the tomfoolery and weakness of the Opposition.