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Tuesday, 28 April 1987
Page: 2077

Mr HOWE (Minister for Social Security)(3.20) —The honourable member for Mackellar (Mr Carlton) is, I think, one of the nicer people around the Parliament, and he speaks with the nicest of tones, but once again the honourable member for Mackellar has said absolutely nothing. He concluded his speech by saying, in stentorian tones, that what we need to do in this country is to cut spending, reduce and restructure tax, and reform industrial relations. Yet, we heard not a single word from the honourable member for Mackellar about how the Opposition plans to achieve any of those three objectives. He said not a single specific word in relation to this aspect of the Opposition's policy. I think that that is quite extraordinary. The Opposition planned to give the Government some advice. The Government has decided to go ahead with the May statement and has made it very clear that that statement will be a tough statement involving a rigorous cutting of government expenditure. The honourable member for Mac-kellar said not a single word about the priorities, in terms of the Opposition, of where those cuts ought to be made. There was no suggestion of a specific program that might need to be especially examined.

Of course, this is essentially the problem not only of divided parties but of divisions within parties, with wets and dries, as different as oranges and lemons, and a kind of factionalism that has absolutely run riot. So, it becomes absolutely impossible for the honourable member for Mackellar to say in this House a single specific word in relation to policy that has any meaning at all. What we have just heard was a kind of mumbo-jumbo, a kind of strawberry fudge, sort of sweet and nice and helpful but with no substance there whatever.

Of course, that is very frustrating to the kinds of forces that are moving to influence the conservative parties and to determine the shape of Opposition or coalition policies. For example, this morning Andrew Hay was asked this question: `Do you think Mr Howard and the Liberal Party will suffer by not releasing policies, such as a tax policy, now?' He replied: `Yes, I do believe that the Party will suffer, because if you are going to come up with radical proposals which in themselves entail very significant future change, then you need to be able to persuade the community of their validity'. Further, in response to the question: `Do you think John Howard won't come up with the policies that will satisfy business?', he replied: `Look, he may well do that, but my point is that it has been too long in coming and, secondly, that the Liberal Party is totally bogged down'.

Of course, the Liberal Party is totally bogged down, as indeed is the National Party, because we have internecine warfare going on; there are clashes, which are not merely clashes over personalities but fundamental clashes in terms of policy and the interests under which various policies would benefit. We cannot have the Opposition's tax policy announced because members opposite, and particularly the dry element, want to run the concept of a consumption tax. That is fundamental to the development of the alternative economic policy. We cannot have the consumption tax because, essentially, the National Party-and I think this is something that it might be united on-will not have a bar of the notion of a consumption tax. So, that is the reason why members opposite cannot outline a taxation policy.

Let me say that it is very easy indeed-and I think that I am well qualified to speak on this subject-to speak about cutting expenditure. It is very easy to talk about that in general terms, but it is extraordinarily difficult when one gets down to the particular problem. The Government inherited a massive problem. Certainly members of the House will recall the massive deficit that was in prospect when we came into government, and over four years we have had to face the task of taking many tough measures indeed in each Budget. We have seen the deficit come down from 4.2 per cent of gross domestic product to, in the 1986-87 Budget, 1.4 per cent of GDP. Again, it seems very easy to say that. But to cut the range of programs-an unspecified range-that produces a May statement that is respected and is seen to be rigorous is not easy.

On the theme of divisions and the reasons for them, it is interesting that we are talking about families, because there is not much family spirit on the other side of the House. I refer to a speech made recently by Senator Peter Baume, who I understand is no longer a member of the Opposition front bench. I thought it was a very interesting speech and one well worth reading. I am sure the wets would be interested, but the dries might like to read it as well. In part, Senator Baume said:

It is a sad commentary on the motive power of greed and self-interest that many of those who most criticise cash provision for others through the social welfare system in Australia are the same people who are to the forefront in advocating the extension of benefits for themselves, payable through the taxation system.

Too often there is a call to restrict the eligibility for benefits under the social welfare system for someone else and a simultaneous and associated demand that benefits available through tax rebates be extended for whoever is making the claim. Benefits given through the taxation system are, by definition, limited to those with income sufficient to require the payment of tax.

I think that what Senator Baume is saying to members of his own Party is that one cannot look just at the one side of the ledger. One cannot just do what we just heard the honourable member for Mackellar, in his very nice way, do; that is, to go through a series of nasties that he did not want-but not nasties that would affect the average family. Let us consider the things that he wanted to throw out. The fringe benefits tax is not affecting the average family; the entertainment tax is not affecting the average family; the capital gains tax is not affecting the average family; the resource rent tax is not affecting the average family. They are taxes which redistribute within the system and make it possible to sustain some fairness in relation to the overall tax and welfare systems. That is what those taxes are about, and they are the taxes that the honourable member for Mackellar nominated as ones that he wants to get rid of.

Of course, if one gets rid of those taxes one has to pay for them. One has to find the revenue somewhere else or one has to cut very deeply indeed. Of course, we will never hear this from the Opposition. We hear about all the things that honourable members opposite will protect-$14 billion worth of things to be protected or enhanced, mostly for people who are very well off indeed, if I might say so. No commitments of any specificity are made in the social welfare area; but they protect those interests.

I want to come back to the framework that it is important not only to look at taxes but also to look at social expenditure or what the Government is doing with its money. I remind the House that in every Budget we have made massive cutbacks in relation to social expenditure. We have made very significant cuts and no doubt there will be further cuts in the May statement. But let us have a look at the family on average weekly earnings. In terms of the current rounds of tax cuts in December and June, such families are receiving something like $10 a week. That is an important part of their real income. They are also wage earners, and the honourable member for Mackellar referred to wage earners. In terms of wages as against price movements, over the period that we have been in government there has been something like a 29 per cent increase in wages, or a 6 per cent decrease in real terms. So, considerable restraint has been delivered by the wage earners. We think that is fair enough because they are getting some of the benefits of tax cuts and some other benefits in terms of the social wage.

But let us look across at the other side of the ledger and ask: `What would the Opposition do in relation to wages?'. The Opposition's policy has been to urge a wage freeze in 18 out of the last 20 national wage cases. What does that actually mean in dollar terms? Families would be $106 a week worse off if the Opposition's policy had been adopted every time it had been advocated at the national wage case. In terms of real living standards, average Australian families are not very well off. I am talking about families who are receiving an income of around $20,000 to $25,000.

What else have families been eligible for during the period of our Government and what areas have changed? Clearly, Medicare has been extremely important in providing people with access to health care in a cheaper way than happened under any previous health system. The honourable member for Mackellar ought to know about that because he invented about three of the previous Government's health systems. So Medicare is part of the social wage. It is part of the real income of the average family. Many families on the average wage are young families. One of the great problems within this community has been the failure to develop a system of child care. One of the priorities of the Government, one which has been very heavily targeted to low income families, has been the delivery of 20,000 child care places. During our time in Government more child care places have been built than were built in the whole previous history of this Commonwealth.

Many families with average incomes between $25,000 and $35,000 are young home buyers. The honourable member for Mackellar mentioned the subject of interest rates. Of course the Government is concerned about interest rates. That is the reason why established home buyers have had their interest rates protected despite the movement towards deregulation of home loan interest rates. This was a move, incidentally, which the Opposition welcomed and supported. This Government-not the previous Government-put in place the first home buyers scheme. Two hundred and thirty thousand households in Australia-and again, this has been very heavily targeted to a little above average weekly earnings-have received the benefit of those policies.

It is very easy to talk about the family. We had the chocolate fudge in December from the Leader of the Opposition (Mr Howard) about the family, about what lovely values there were associated with family life in Australia. But we have not had from the Opposition a single substantive policy in relation to families. We have not even had a definition of `families'. It is quite clear that when we talk about families we are simply talking about people. We are talking about young people and older people. We are talking about people with children and people without children. There is an enormous diversity of families around Australia.

Of course, when the Opposition talks about cutting, do not for a moment think that it is not going to cut into families. After all, we heard the National Party member for Maranoa (Mr Ian Cameron) talking about how people were going to squeal like stuck pigs. He said that of course the pension would have to be frozen. Pensioners are part of families. We have tried to sustain over time the real income of pensioners. We have also tried to do something more than that. We have tried to make it possible through the home and community care program for elderly family members to live longer in their own homes and be supported within their local community. Younger people with young children will be less worried if they know that kind of program is being developed. That is part of the social wage. It is part of the real living standards and real income of people within the Australian community.

Through Priority One: Young Australia there has been a doubling of the support that is provided to families on around average weekly earnings with young teenagers of 16 and 17 years of age. When we came to office in 1983 kids were leaving schools in droves. Australia had the lowest retention rate in secondary education of any country in the Western world. What has this Government done? It has doubled the family income support for those young people so that they will be encouraged to stay at school longer and so that they will not finish up on the unemployment benefit, which the Opposition wants to remove and abolish. The honourable member for Richmond (Mr Blunt) said that we ought to give young people a hessian bag and tell them to pick up rubbish. That is the Opposition's policy in relation to young kids on the unemployment benefit. What we have said is: `Let us encourage them to stay at school. Let us pay them $40 a week this year. Let us pay families $50 a week to help those young people stay on at school'. How often have we heard kids say: `Look, I could not stay at school; the family could not afford it.'? We have tackled that.

It is all very well for the honourable member for Mackellar to talk a little bit tough. But he wants to talk tough without any compassion, without any understanding and without trying to support people during what admittedly has been a very difficult economic period when we have seen our national income reduced by the problems associated with the balance of trade. That has created an enormous tension. I am sure that the Australian people have no confidence that the four groups opposite have even begun to grapple with the fundamental underlying problems not only of managing an economy but also of being a bit fair about it and giving our kids a fair go and a leg up occasionally.