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Thursday, 7 May 1987
Page: 2829

Mr SINCLAIR (Leader of the National Party of Australia)(4.20) —Week after week, day after day, the Prime Minister (Mr Hawke) and his colleagues in the Government berate the Australian community as to why things are tough in this country. We have heard repeatedly the cry that it was the Fraser-Anthony Government; we have heard constantly that it is the result of actions taken abroad. The reality is that whether it is in this place or whether it is at meetings such as that of the Australian Finance Industry Council-where the Prime Minister pursued the same line-the Prime Minister and his Ministers are misleading the Australian people. They are pursuing a policy which ignores the prime relationship between economic management in Australia and the returns for those who produce the goods and particularly those who sell and export. Indeed, there is little doubt about the statement the other day by Joe de Bruin of the Shop Distributive and Allied Employees Association-that well known affiliate of some honourable members; that factional colleague of those who sit in the corner of the Labor benches-when he said that the last four years had seen the most sustained reduction in living standards since the Depression of the 1930s and with the economy in its present state there was no relief in sight. Sadly, not only is there no relief in sight, but also the connection between our gross external debt and declining exports, on the one hand, and the living standards of Australians, on the other, is totally ignored by the Government and most of those who speak on its behalf.

We all know that the ballooning overseas debt is not purely a product of our declining terms of trade. But I find it quite incredible that when month after month we learn that billions of dollars and, in more recent times, millions of dollars deficit are incurred, we are told that it is really not a bad figure. There is an illusion that because the stock market is buoyant, the average producer is getting on quite well. That is arrant nonsense. The reason for raising this matter of public importance today is to try to ensure that those factors that are contributing to the appalling state of the terms of trade of the Australian family farmer, the appalling state of the Australian small business man and the declining conditions for average Australians, reflected by that comment of Joe de Bruin, are understood in the wider community. The fault lies not in what happened in the previous coalition Government or in what is happening abroad, it lies predominantly in what is not happening in Australia or what is happening as a result of this big spending, big taxing Labor Government.

Above all, we need to understand that while there are external problems created by changing world market circumstances-and I will say a little about that in a moment-those problems were inadequately addressed by this Government, particularly in the early stages of its administration. When my colleague the Deputy Leader of the National Party (Mr Hunt) asked the Prime Minister only yesterday whether he would play some role in the renegotiation of the beef arrangements with Japan, the Prime Minister gave no recognition of the fact that Australia's share of the Japanese beef market is declining and the United States share is increasing largely because of the neglect of the first Labor Minister for Trade, the Deputy Prime Minister (Mr Lionel Bowen) back in 1984. There is a total failure to understand the affront caused by sending a junior Minister, such as the present Minister for Trade (Mr Dawkins) or the Minister for Primary Industry (Mr Kerin), to a country such as Japan. The Japanese treat that with something like contempt. The Americans send their Vice President and the Vice President is the second most senior member of the American Administration. The Prime Minister said that he was really quite concerned and he would like to go to Japan, `but . . . '. The reality is that unless we equal status with the Japanese community, our chances of overcoming what looks like a sweetheart deal between Prime Minister Nakasone and President Reagan is minimal indeed.

Let me emphasise the fact that there is a direct link between market access for Australians exporters and prices paid for Australian exports, and living standards in this country. It is important that at every level this Government should understand that both in its attempt to try to negate the efforts by the Americans to add to their subsidies against imports and its attempts to try to maximise Australian access in markets such as Japan, the Prime Minister, the Deputy Prime Minister and every senior member of the Government should be involved. We have the farcical situation in which someone whom most of us do not even know-I think he is the honourable member for McMillan (Mr Cunningham)-is leading a major delegation from this Parliament to try to persuade members of the United States Congress that their present legislation is not in Australia's interests. Let me try to persuade the Prime Minister and the Deputy Prime Minister that these other figures in their Government do not count. I see that the honourable member for McMillan has just walked into the House. For him to try to persuade members of the American Congress that the steps they are taking through the Gephardt amendment and in their protectionist legislation should, for some reason, be changed is really quite farcical. I think that it is a great pity that the Government does not lift its performance in international trade negotiations.

Of course, we are concerned about the circumstances in which the United States and Japan are introducing an increasing wave of protectionism. On this side of the House at every level we will do all we can to assist those positive attempts by the Government to try to do something to reverse those legislative and administrative trends. But it must be understood that the Government must also play its part and that it is not doing so adequately at the moment.

When we look at the situation in Australia we find that again the Government has no basic understanding of the components of Australia's export income. Primary and mineral exports are still the prime source of Australia's export trade. We just heard a speech from the Minister for Sport, Recreation and Tourism (Mr John Brown) telling us all the efforts that were being made on behalf of tourism. That is to be commended, but we need to understand that tourism is a very small part of gaining Australia's export earnings. Primary and mineral exports remain predominant. In Question Time today we heard an incredible attack by the Treasurer (Mr Keating) on Opposition members and the Australian Democrats because they are opposed to the Government's petroleum resource rent tax. I do not know whether the Treasurer understands, but as at 28 February this year, 38 of Australia's 43 on-shore drilling rigs were idle, as were three of the four drilling vessels and 19 of the 20 seismic crews. The Australian Bureau of Statistics issued figures a couple of weeks ago showing that petroleum exploration spending had dropped from $342m in the first half of last year to $157m in the second half-a drop of 54 per cent. This is the industry on which the Treasurer intends to levy a new resource rental tax, a tax that the industry does not want and cannot afford. This tax will add to the cost of not only every motorist in Australia, but also every producer. For that reason members of the National and Liberal parties will continue to oppose an unwanted, unnecessary, unjustified tax.

Indeed, we need to understand that in Australia today the current marginal Government take on oil found before 1975 is 91 per cent. The take on new discoveries is 69.4 per cent under the resources rent tax legislation and 71 per cent under the new oil excise. That compares with marginal rates of 45 per cent in the United States and only 39 per cent in Canada. That comparison shows why it is quite objectionable for this Government to come to this House, pretend it is concerned with exports and the productive industries, and apply new levels of taxation. Our tax imposition is totally unsatisfactory at every level of business. All one needs to do is look at the 1986 Mount Isa Mines report, where one will find that company tax this year is $1.4m but the new fringe benefits tax imposed by this Government is $5m. What is this Government doing? It is introducing new taxes, such as a capital gains tax and a fringe benefits tax, and denying the new mining operations any chance of playing their proper part in exporting the products that are so necessary for Australia's domestic recovery. The Australian Coal Association tells me that not only is there a problem with government taxes, there is also a problem with government regulations. In the exploration, development, production and transport to the point of export of coal in Australia, 28 State government departments are involved in the State of New South Wales and nearly half the Federal Departments.

We all know that in terms of inflation we are falling further and further behind. Indeed, Mr J. B. Ritchie wrote to the Australian Financial Review earlier this week and said that the extent to which inflation in Australia is rising had eroded almost totally the competitive advantage of the Australian depreciation. That is the situation: Inflation, interest rates, regulation and taxation-all imposed by this Government, all at non-competitive levels and all making it almost impossible for exporters to play their part. As for the poor old family farmer, he has been driven out the back door. That has occurred for several reasons. The first is that all the factors that I mentioned a moment ago, such as interest rates and inflation, apply at least as much to the farmer as to anyone else. The family farmer cannot go out on to the wider market and borrow funds; he must borrow from traditional lending sources. When he is trying to buy agricultural machinery or fund the acquisition of livestock he is forced to pay in accordance with an interest rate regime that is at least three times as high as that of our competitors and under an inflation rate that is at least twice as high.

One of the fundamental reasons why I have raised this matter of public importance this afternoon is that the Government has failed to understand that it has been totally inadequate in taking any steps to reduce those work practices that are totally frustrating for everyone involved in every industry in Australia, particularly those who are involved in export. It was not that long ago that we heard from Mr Charles Copeman from Peko Wallsend. He started the move to try to get changed those work practices at Robe River affecting the mining industry. Honourable members would remember that the work practices in question involved such things as the requirement of two operators, not one, for each loader or bulldozer at the port. Only one operator could work at one time so the other operator spent half of each shift in the crib room. At the mines three water trucks were required on the day shift, even in winter or when it was raining. Full equipment crews were required in the mine at all times, whether or not they were working. Even if no shovels were operating, minimum manning requirements meant that if a rostered operator was off sick another had to be called in-at a minimum of four hours on double time when no work was being done. The company's messing officers were not allowed keys to the company stores. Yet, this Government has the hide to criticise Charles Copeman and others who have tried to bring about a fundamental change in Australia's industrial practices. But just as bad, if not worse, are those industrial practices pursued on Australian wharves. Earlier this week in response to a question that I asked, the Prime Minister (Mr Hawke) showed his total lack of understanding of the appalling non-competitiveness of the handling of grain in the Australian grain terminals.

I draw to the attention of all honourable members an excellent article headed `Why our grain exports are in turmoil', written by Julian Cribb and published in the Australian news- paper of Tuesday 5 May. Figures in relation to the days delayed-relating to average annual delays, 1981-85-are based on claims agreed after applying deductibles, with the exclusion of crew strikes, and they indicate that Australia tops the list around the world. In percentage terms, 26.5 work hours were lost due to industrial strikes. On average, 140.3 days per annum are lost in Australian industry, as compared with a country like Papua New Guinea which loses an average of only 6.06 days per annum and New Zealand, which loses some 10.38 days per annum. More importantly, the average throughput of grain per employee at Sydney terminal is just 17,000 tonnes a year compared to 80,000 tonnes a man at Convent and Westwago in the United States of America and 120,000 tonnes at Kalama in the United States. How can Australia compete when work practices like that are pursued? We need to understand that the average personal income of a family grain farmer over the past two years, of just $580 a year, stands in stark contrast to the average wage paid at the Sydney grain terminal of $30,900. The whole circumstances of work in the export industries is appalling.

It is in this climate that the Government must look at its own soul. It is not the fault of the Fraser-Anthony Government; it is not the fault of what is happening in the United States Congress; it is not the fault of what is happening in Japan; it is the product of a Labor accord between the present Government and the trade union movement. It is the product of an inadequate response by this Government to industrial conditions that are totally unsatisfactory. It is a product of economic policies which have led to quite impossible levels of interest rates. It is the product of Government taxation-and I refer to the resource rental tax, the fringe benefits tax and the capital gains tax, which are anti-production and which are against the interests of small productive Australians. Unless the Government wakes up to the reality that those circumstances must change, the opportunity for us ever to defeat the declining living standards, referred to by Mr Joe de Bruin, are absolutely nil. The only way to change those conditions is to change the Government and with it to change the economic policies that the Government is presently pursuing.