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Wednesday, 6 May 1987
Page: 2701

Mr TUCKEY(3.02) —Yesterday I asked a question of the Prime Minister (Mr Hawke) seeking his recognition of a statement of fact by the Chairman of the Australian Financial Conference, at one time known as the Hire Purchase Conference, which I think is significant. His statement was that consumers and small businesses are going broke in ever increasing numbers. The Prime Minister gave me a short but rhetorical answer. Today the Treasurer (Mr Keating) gave us mark 1,555 of his attitude and answer on taxation matters. It is getting to the stage where he has said it more times than there were episodes of Blue Hills-and we are getting pretty bored with that.

We know the reason for this situation. The Government no longer has any good news for the electorate. The Government totally regiments its back bench to ask questions here which are totally unrelated to the welfare of their constituents, questions that invite Ministers to attack an Opposition yet to reach government-although the time gets closer every day. There is no good news. The great pity about that is that there are ways to fix these problems which the Government with its rhetoric refuses even to consider. The matter of public importance debate is a daily institution in this Parliament. Contrary to the views of the Treasurer and the Prime Minister it is not an excuse for some confrontationist contest of rhetoric. To the contrary, it is an opportunity to bring to this Parliament matters of concern to the Australian people. The words `matter of public importance' should be interpreted literally.

Today I stand here to put a case for Australian families and their basic need for shelter. When my mother spoke to me as a child she was at pains to stress the fundamentals of family security. I have never forgotten her advice that she and my father and their young family were insulated against the worst effects of the Great Depression because they owned their own home. I have never forgotten her other homily, which said that when poverty comes through the door love flies out the window. Nobody enters marriage without a belief that it will be a lasting arrangement. The present horrendous statistics of marriage breakdown represent substantially more than some change in moral attitude. Marriages are failing through the financial pressures of falling living standards caused by the increasing financial pressures of the Hawke Government's tax and interest rate policies.

I am not here to convince the voting public of their financial plight; they know it already. I am here today to mount a case to a callous and insensitive government, to convince it of the failure of its policies and to beg the back bench at least to ignore the razmataz of the Prime Minister's and the Treasurer's rhetoric. While the Prime Minister lectures us about his popularity at black tie dinners, I ask the Minister for Housing and Construction (Mr West) when a working constituent last went to him voluntarily to thank him for the benefit of his policies. I want him to think about that in the interest of those people, because it is only the Prime Minister who is getting those sorts of compliments at black tie dinners. It is time that the Minister, considering his position in his party, started fighting for these people. This is the purpose of my presentation today.

Statistically, let us consider the situation that confronts Australian home owners. They must first discount their income for taxation. For every dollar they pay in personal income tax, they must pay 35c in Federal indirect taxes. Fuel alone takes $7,000m in tax out of Australian pockets this year. Home owners must pay a further 13c in the dollar in State and local government taxes. The Hawke Government has increased government revenue from $44,000m in the last Fraser Budget to $71,000m today-an increase of 66 per cent in just four years. For an ordinary family on average earnings of $446.30 a week, this represents a jump in weekly personal taxation from $65 a week to $102 a week. Total taxation, including all those indirect taxes, is therefore approximately $150 a week. Then we have to deduct another $150 a week for a typical home loan and $100 a week for the family car. That leaves $146 out of average weekly earnings to feed and educate the family. One wonders why many wives have been driven back into the work force. It is not necessarily by choice or through ambition, but by absolute necessity. As the Minister would know from his own constituency, very few single income families earn average weekly earnings. A shop assistant probably earns about $13,000 per annum.

Let us look at the Hawke Government's much publicised tax cuts this year. For high income earners, they represent a drop from 60c in the dollar to 49c in the dollar. But the tax cut for that shop assistant is from 30c in the dollar to 29c in the dollar. His circumstances are now such that wage increases have little beneficial effect. The recent $10 national wage increase represents a total of $18 to the employer with his on-costs, with a consequent effect on the price that the family must pay. The sum of $18 is being fed into the cost structure but the employee is lucky to take home $5 or $6 after tax to meet his additional living costs.

We hear those opposite boast about the fringe benefits tax being so fair to low income earners. It is the factory foreman who is denied the right to drive home the work utility-it is now locked up. It is the low level bank officer who has had adjustments made to his interest charges. The chief executive now gets his Mercedes at a rate of 25c in the dollar. That is how fair that procedure is. It is all about black tie dinners and ignoring the constituency. The housing and tax policies that the Government has pursued are imposing the highest burden of all.

Every family will attempt to gain a home. Family members will probably try to purchase one; if not, they will rent one. I just ask this Minister to recognise how his Government's policies have greatly increased the cost, as a percentage of disposable income, of providing that home. I do not want the Minister to give me excuses. I do not want him to blame past governments. Excuses will not put food on family tables. I just want some action and a change in the government borrowing policies which produce the funds that the Government takes from the market. It should instead make them available at affordable rates to home owners and small business. I just want Government members to remember that this Government has borrowed $24,000m in just four years to make up the difference between the sorts of spending programs it likes to give and the sorts of taxes that it wants to raise. The Government is using our kids as security for that money. Their standards of living will suffer for that extravagance.

The reality of the international economic situation is that interest rates are at an all time low. Japanese borrowers enjoy interest rates below 5 per cent; borrowers in Europe and the United States enjoy rates below 10 per cent. Only Australia has interest rates of 15 to 22 per cent, and it is the first time in our history that domestic interest rates have not reflected international trends, whether high or low. It is not just a terms of trade problem. The Prime Minister and the Treasurer daily try to blame foreigners. The United States has similar massive trade problems-its terms of trade are pretty lousy also-and so do numerous countries in Europe. Yet their interest rates are below 10 per cent and their inflation rates are low or next to nothing. In fact, their inflation rates average 1.7 per cent compared with Australia's 9.5 per cent. It is not a problem that one can blame on trade problems and inflation rates. Trade problems are as old as settlement in this country. Trade problems have always been around but good governments make provision for them. It is only this lousy Government which cannot even get its Budget balanced after it has set it and allowed itself $3,000m, $4,000m and $5,000m worth of borrowing. It is only this Government that overran last year's Budget by $800m and will apparently overrun this one by $500m. The last Fraser Government paid $3,300m in interest. This year's Budget predicts $7,500m but now we are told that it will probably be $8,000m and that is just too bad.

There are many ways we can measure the costs in the community. In recent times we have had a growth in construction costs and in interest charges. The Government supported a $52 a week pay increase to workers in the building industry and that will not contribute positively to any cuts in building costs. These costs are all government induced and the people are paying. The Real Estate Institute produces a home affordability survey which simply divides the average home loan into median family income. Between September 1985 and September 1986, when Labor governments prevailed around Australia, the percentage of gross income required to service a home loan jumped from 23.2 per cent to 26.7 per cent. An extra 3.5 per cent of increased earnings must be used to maintain a home loan. That is after wage increases and does not take account of tax increases which further reduce disposable income, as I have already explained.

In more dramatic terms, the cost of servicing a mortgage has increased from 18 per cent of after-tax earnings in 1972 to 36 per cent today. The massive jumps in those figures have occurred under the Whitlam and Hawke governments. In the four years of the Hawke Government the price of a manual Holden Commodore has risen from $10,500 to $16,500, and combined with high interest it has become beyond the resources of a typical family. Families have stopped buying. Car sales are at their lowest point in real terms than they have been since 1967 and consequently other working families have lost their employment.

Another interesting comparison is the number of working days at full wages required to purchase an item. Since the Hawke Government assumed office an Australian worker must work an additional eight weeks-from 38 to 46-to buy a car. When we left office 38 weeks' wages would buy a car; now it is 46 week's work. A worker must work an additional 0.3 of a day per week-an increase from 1.5 days per week to 1.8 days-to meet his family housing commitment. This has required a further shift of disposable income. The savings in family expenditure are made by fewer purchases at the clothing store and less money being spent on kids' toys. The family gets its priorities right.

Then of course we have business failures. If the current rate of bankruptcy is any indication, business failures are running at an all time record high. For the first nine months of this financial year 7,304 bankruptcies were recorded. The honourable member for Charlton (Mr Robert Brown) has gone very silent on bankruptcy; he used to make a lot of speeches about it. That figure compares with the maximum number of 6,034 bankruptcies in the great drought and depression under the Fraser Government.

Today I hope to convince the Government that its policies have failed in the hope that it will change them. I am not here to criticise the Government; I am here to beg it to make some changes in the interests of the people who support it. The Government must first stop misleading Australians and itself. A recent example of the Treasurer misleading Australia was the damage he did when he and the Prime Minister told people they could expect falling interest rates. The people who believed him in those days-it would be difficult to find them today-went and contracted debt with the surety of the Treasurer that it would not be more expensive and that it would, in fact, get cheaper and now they of course are joining the statistics of the bankrupt. The latest example was the claim by the Treasurer and the Prime Minister-the Prime Minister made it only yesterday-that the reduction of the savings banks reserve asset ratio from 15 per cent to 13 per cent would provide $900m in additional funds for home lending. A study of saving bank statistics at the time of the announcement showed that all the banks exceeded the maximum statutory limit of 15 per cent anyway. The Commonwealth Banking Corporation was at 15.9 per cent and the National Australia Bank at 17.6 per cent. The reason for that is simple: There is more profit in lending money to this big borrowing Government than to most home owners at 15.5 per cent. There is no reason to believe that the banks will change their attitude to profit. The only time they will stop lending to the Government is when the net return on government paper falls below the return on home lending. Interest rates will fall when the Government stops borrowing. We await with interest the May economic statement to discover whether the rhetoric of the Treasurer will be matched by reality or whether we are to be treated to a shuffling of the deck chairs on the Titanic.

Mr DEPUTY SPEAKER (Mr Leo McLeay) -Order! The honourable member's time has expired.