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Thursday, 7 May 1987
Page: 2800


Mr HOWARD —I ask the Prime Minister: Is it a fact that during the Prime Minister's term of office Commonwealth outlays for the Commonwealth's purposes increased in real terms by 5.5 per cent whereas State government outlays during the same period rose by only 2.9 per cent per year in real terms? Is it also a fact that had the growth in Commonwealth outlays for the Commonwealth's purposes been restrained to the same rate of growth as that of the States, Commonwealth outlays would have been some $16 billion lower over the past four years and this year's Budget would have been in surplus? Can the Prime Minister assure the House that this year the Commonwealth will begin practising what it preached to the States?


Mr HAWKE —I make these points in answer to the honourable gentleman's question: Firstly, it is evident from any examination of the budgetary outcomes of the last four years that the Commonwealth has exercised an unparalleled restraint which has brought, as the honourable gentleman would know, the position in which the deficit, as a proportion of gross domestic product, has been reduced from the 5 per cent which we inherited from the honourable member's vandalism to 1 1/2 per cent in 1986-87. As distinct from the honourable member's puny and irrelevant efforts of earlier days, we will continue in the May statement the task that is necessary to exercise further restraint.

I make the further point that when this Government exercises restraint, as distinguished from anything the honourable gentleman did, it ensures that any restraint asked for from the community is a restraint with equity, not a restraint-as was the case under the honourable member's administration-which was imposed only upon the lower income sections of the community. As far as relations with the States are concerned, we will continue to meet and treat them fairly.


Mr Howard —Ha, ha, ha!


Mr HAWKE —Giggles are no substitute for policy. He is long on giggles but totally short on policy. I suggest that he turn off his giggleometer and that he do some hard work. If he did some hard work he might see an end to the position in which the Federal President of the Liberal Party is now passing the same vote of no confidence in the honourable member as he did in respect of his predecessor.

We will expect a considerable degree of restraint from the States of the Commonwealth. The honourable gentleman should know that outlays by the States are governed not only by what this Government grants to them but also-he would know this if he had been paying any attention to matters fiscal and the area of government expenditures-by what the States have been doing, which is to draw considerably upon their reserves to finance their economic activities. If he looked at those matters he would find, in terms of the contribution to movement in the public sector borrowing requirement, that the outcome of what the Commonwealth has been doing has been to reduce the movement in the public sector borrowing requirement. But the downward pressure from the activities of the Commonwealth has been more than offset by the way in which the States have circumvented, to a considerable extent, the fiscal intentions of the Commonwealth by so drawing on their reserves. The Government will ensure in its discussions with the States later this month that they will play their proper part in exercising the economic restraint and responsibility which is necessary to safeguard the economic interest of this country.