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Tuesday, 31 March 1987
Page: 1771


Mr CARLTON(3.32) —It is said time and time again by the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) that the Opposition does not bring economic debate into this House. Like so much of the organised campaign of misrepresentation that has been used by the Prime Minister and the Treasurer to cast a smokescreen over their own activities, that is absolute nonsense. Any look at Hansard over the last two or three years will show time and time again in matters of public importance, in Appropriation debates, in Budget debates and in questions that the basic economic issues that face this country have been raised by the Opposition in this chamber. Time and time again there has been an abject failure on the part of the Government through the Prime Minister and the Treasurer to meet those demands by the Opposition for satisfactory economic performance and to respond to the specific proposals that we have put forward.

Today, again, we have the Treasurer failing to appear in the House to respond to this matter of economic importance:

The total failure of the Government's economic policies, causing record interest rates, rising prices and falling living standards.

This is at the very heart of economic debate. It is at the very heart of the issues the Treasurer says we do not raise. When we do raise them in the House he is not here to respond. He sends an assistant Minister to do so. Today that Minister is not the Minister Assisting the Treasurer on Prices (Mr Barry Jones). It is the Minister for signing the fringe benefits tax letters to all those who continue to complain about the fringe benefits tax-the Minister for Community Services (Mr Hurford). I almost do not need to make the case that I was going to make today because the Prime Minister yesterday in the House admitted the main problem. On page 1669 of Hansard the Prime Minister of Australia, in response to a question from the honourable member for Mayo (Mr Downer), is reported as saying:

Of course I acknowledge that there has been a fall in living standards.

So, when questioned about the fall in living standards under this Government, the Prime Minister acknowledged that that was the case. We are not worried about all the complicated bits that make up economic policy. The test of any economic policy is whether or not it brings about an improvement in the living standards of all Australians. Therefore, we have a very clear idea, after four years of Hawke-Keating government, of how the Government's economic policies have affected the ordinary Australian family. One only has to apply that simple test. If we look at the indicators of living standards, it is quite clear that, by any examination, the results of the Hawke-Keating economic policies are disastrous for the average Australian family, which at the moment are facing higher prices, higher interest rates and higher taxes. Australian families are paying more in rent for houses and they are paying more for their health care. They are finding it harder and harder to make ends meet.

Let us have a look at some specific examples of what is faced by the average family. A typical basket of food to feed the family cost $80 in 1983. The price of that basket of food has gone up to $105 now. That is an increase of 31 per cent. The price of a modest car-for this purpose I have taken the price of the bottom of the line model Ford Laser-was $7,500 in 1983. One could save this amount of money within a reasonable time. That cost has gone up from $7,500 to $12,200.


Mr Hunt —How much?


Mr CARLTON —It has gone up to $12,200. So there has been an increase of 63 per cent in the cost of a modest family car. The other day I pointed out in the House that the price of a haircut had gone up not 10 per cent, not 15 per cent, not 30 per cent but 54 per cent. The cost of a haircut in a saloon in Sydney has gone up from $6.50 in 1983 to $10 today.

What about home interest rates? At the time of the last election home interest rates were 11 1/2 per cent. The standard rate on a savings bank loan now, if one can get a loan, is 15 1/2 per cent. Repayments have gone up from $508 a month to $660 a month. What family, without receiving major wage increases-which families have not had-can pay an extra $152 a month without it really hurting? And, by God, it is hurting.

What about rents? Over the last 12 months alone, the rent for a home in Sydney-and it is jolly difficult to find a home to rent because of this Government's policies-has gone up from $214 to $267, an increase of $53 a week in one year. Of course, if one cannot buy or rent a home, one can apply to the Housing Commission. Under the Hawke Government the queues for Housing Commission homes have gone up from 124,000 to 158,000.

What about health care? Many families want basic private health cover because they do not want to join the queues in public hospitals under Medicare. Before Medicare this cost them $9.66 a week after the tax rebate was taken into account. That amount is now $14.30 a week, an increase of 48 per cent since this Government came to power.

What about taxation? I ask honourable members to look at the weekly tax bill for a family with two dependent children on average weekly earnings. This is a stunner. The weekly tax for that family in 1983 was $57.94. Do honourable members know what it is now? It is $106.19. The amount has gone up by over $50. That is unbelievable. Overall, families in Australia are $31 a week worse off, even after adjustments are made for inflation, as a result of Hawke-Keating policies. It is no wonder that the Prime Minister had to admit in the House yesterday that standards of living under his Government had fallen.

The person who is mainly to blame for all this is the person who ought to be sitting in the dock on the other side of the table-not the assistant Minister but the Treasurer, the person who is fundamentally responsible for all of this, the person who has brought in four Budgets, the person who has nailed his colours to the mast of certain economic policies. This Government, in order to overcome the criticisms that it has had in respect of economic policy, in order to try to dodge the verdict of this House, has tried to bring into the House a whole pattern of misrepresentation. The Treasurer has come into the House with two big excuses, both of which I am going to tackle in depth here today. The first excuse of the Treasurer is: `We inherited a $9.6 billion deficit from the previous Government'.


Mr Robert Brown —True.


Mr CARLTON —The honourable member for Charlton says that this is true. Let us go through the facts. I ask the Minister for Community Services, who is at the table, whether he can reply to these facts. Are these facts? The Prime Minister keeps repeating like a screeching white cockatoo, `$9.6 billion and 5 per cent of gross domestic product'. What was the $9.6 billion figure? It was the forward estimate of a deficit produced in February of 1983 for the financial year which would begin on 1 July 1983. Therefore it was an estimate of the difference between expected revenue and expected expenditure. The figure of $9.6 billion was the forward estimate of the deficit for that period.

What actually happened? It is instructive to see what happened. The fact of the matter is that the last Howard Budget, the 1982-83 Budget, which was incidentally brought down in the middle of a recession, resulted in a deficit of $4.4 billion, not $9.6 billion-2.7 per cent of GDP, not 5 per cent. Let us go on. The Keating 1983 Budget had a deficit of $7.9 billion. But that was after the Treasurer had increased spending by $7.6 billion. In other words, after he had increased spending by $7.6 billion he still had a deficit, somehow, of only $7.9 billion. Where was the $9.6 billion? He said there was a $9.6 billion deficit, he spent an extra $7 billion odd and he still came in with a deficit of over $7 billion. All I can say is that if the Treasurer had not increased spending in that Budget he would have had virtually no deficit. That is the legacy he got from the present Leader of the Opposition (Mr Howard). He got a legacy of a capacity to reduce the deficit to zero. If he had had no real increase in spending in his 1983 Budget he could have brought the deficit down to zero. As it was he pushed it up to over $7 billion. That is where he made his major mistake. He did not inherit a spending problem; he created it. If the $9.6 billion was correct, the extra Keating spending of $7.6 billion would have left a deficit of $17.2 billion. If Keating had not spent $7.6 billion more the deficit would have been only $0.3 billion. That is the nonsense of this. The people in the Press gallery know it is nonsense but the Prime Minister was repeating this misrepresentation again only yesterday in this House.

Let us look at the second excuse for this devastating effect on families; that is, the decline in the terms of trade. The Prime Minister trotted this out again yesterday and in the process brought in another gross misrepresentation. He said that there is a $6 billion decline in the terms of trade. We accept that. There is no doubt about that. But what the Prime Minister also said, referring to the period of the previous Treasurer, was this:

in his five years of economic stewardship of this nation, no external crisis imposed upon him . . .

He said that no external crisis was imposed upon the previous Treasurer in the last five years of the Fraser Government. Heaven forbid, does he know what happened? In the last two years of the Fraser Government the United States of America, West Germany, Italy, Canada and the Organisation for Economic Co-operation and Development countries as a whole experienced negative growth. The OECD contraction overall in 1982 was the most severe ever recorded. Yet the Prime Minister said there was no external impact. What about the drought, which was one of the worst in living memory? Yet the Prime Minister said there were no external impacts, no external shocks.

I must say that I was astonished that even the Prime Minister could come into this House and say something which is so patently untrue in two material respects. Do honourable members know what were the effects of the external recession and the drought? They decreased our export earnings by about $7 billion in 1980 prices. In current prices that is about $10 billion. We lost that amount in that period because of the world recession and the drought. It dwarfs the $6 billion that the present Government has had to worry about. What happened? We came out of that period, after sensible budgeting and a wage pause put in by us, and after two years in office this Government was able to put out a document called the `First Two years of the Accord'. It said: `Look what we did. All the graphs are going in the right direction'. In this document all the good points are derived from the end of the world recession, the end of the drought and the beneficial effects of the Fraser wage pause. Where is the second volume? Where is the report on the second two years of the accord? Why is the Government ashamed to publish it? It is because the second two years of the accord are the fruit of the Keating Budgets, not the Howard Budgets. These are the fruits of the Howard Budgets but the last two years are the fruits of the Keating Budgets. High taxes--


Mr DEPUTY SPEAKER (Mr Leo McLeay) —Order! The honourable member might refer to honourable members by their electorates.


Mr CARLTON —I have nearly finished, Mr Deputy Speaker. I will do so if I have a moment to do it, thank you. The results have been high taxes, high inflation, prices going up and a decline in the living standards of the average family. The Prime Minister has admitted that there has been a decline. All those Labor members in marginal seats all over the country will have to front up to every Australian family to explain why under the Hawke-Keating policies their living standards have declined.


Mr DEPUTY SPEAKER —Order! The honourable member's time has expired.


Mr Howard —Mr Deputy Speaker, I seek your indulgence and guidance on a procedural matter. I put it to you that surely just as it is permissible usage in this House to talk about the Hawke Government, the Fraser Government or the future Howard Government, it is equally permissible to talk about a Keating Budget or a Howard Budget.


Mr DEPUTY SPEAKER —I would think that while we are talking about a person who is a member of the House who has a title--


Mr Howard —So I cannot say `the Hawke Government' any more?


Mr DEPUTY SPEAKER —I think I recall the people on the honourable member's side of the House raising this question early in the week. They said that the Prime Minister should refer to people by their title. I think that if the Treasurer brings down the Budget, we might refer to him as the `Treasurer'. I did not draw--


Mr Howard —Am I not allowed to say `the Hawke Government' any more?


Mr DEPUTY SPEAKER —If you will let me finish, I did not draw your colleague's attention to the fact that he was referring to the Hawke-Keating Government or to the previous Fraser Government. If we are talking about a person who is a member of the House it probably helps to keep the spirit of what you and your colleagues raised earlier this week if we refer to people by their title.


Mr Howard —I am very happy with that. I just wanted to clarify it and I will go away and work out whether it has been; thank you.


Mr DEPUTY SPEAKER —Do not take too long.


Mr Reith —Mr Deputy Speaker, is that a ruling? Is the McLeay report to be no longer?


Mr DEPUTY SPEAKER —There is no point of order. I call the Minister for Community Services.