Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Wednesday, 13 May 1987
Page: 3065


Mr COBB(11.29) —Mr Deputy Speaker--


Mr Slipper —This will be a truly magnificent speech.


Mr COBB —I thank the honourable member for Fisher for his comment.


Mr DEPUTY SPEAKER (Mr Keogh) — Order! I suggest that the honourable member for Fisher not assist the honourable member during his magnificent speech.


Mr COBB —We are debating Supply Bill (No. 1) 1987-88, Supply Bill (No. 2) 1987-88 and Supply (Parliamentary Departments) Bill 1987-88. They are concerned with topping up the Budget with capital grants to the States, and with some expenditure on the new Parliament House. I thought it appropriate at the beginning of my speech to read part of a letter from a constituent in the wider electorate of Australia that was received in my office and in offices of other members some time ago. The letter is headed `Taxation and Incentive'. I quote the first four paragraphs. They read:

Recently at Wilcannia (N.S.W.) my son, in one day, crutched, wigged and ringed 670 good sized half woolled wethers. Others have reached higher tallies but I quote these figures because I can vouch for their accuracy.

Assuming an average body weight of 100 lbs (not excessive for the sheep in question) he would have dragged 30 tons of kicking meat and wool out of the catching pen. Since the distance from the centre of the pen to the shearing stand was 4 yards, he would have dragged backwards one struggling sheep a distance equivalent to one and a half miles (670 x 4 yds)-one every (42 seconds) for 8 hours, not counting time to change combs and cutters.

At the end of the 3 days in 39 and 40 degree temperatures he had earned $750 from which $355 tax was taken-(almost half)-taken by gutless ghouls who lost no sweat, no blood, and had no aches and pains in the process.

His conclusion when he told me, was `Dad, I'm a . . . idiot, I should get a job in the (Public Service) and knock off at 4 p.m.'

The language in the letter deteriorates after that so I will not read any more of it. Nevertheless, that letter encapsulates in a few paragraphs much of what is wrong in Australia today. Those who are having a go and who are doing the real work are being penalised. It is appropriate in the context of that letter to examine how the profligate spending of this Government has put us in the dreadful economic mess in which we find ourselves today.

It is interesting to compare this Government with the Whitlam Labor Government. The Whitlam Government was, in many senses, a more open government and set the attitudes for this type of spending that will plague us beyond the year 2000. This Government, even though it is not as open in that sense, is worse in many ways. It has got us in a dreadful position and nothing exemplifies this more than our overseas debt. In 1983 when the Hawke Labor Government took over, Australia's gross overseas debt was somewhere between $25 billion and $30 billion. It took 83 years, since Federation, to arrive at that figure. What is the overseas debt today? We heard in the speech given by the honourable member for Mackellar (Mr Carlton) that that figure has quadrupled, within four years, to in excess of $100 billion.

The net debt is rising even faster. As recently as five years ago, in June 1981 the net debt was $9.1 billion which represented 7 per cent of gross domestic product. By June last year that debt had risen sevenfold, in five years, to $65 billion. That is equivalent to 28 per cent of gross domestic product. It has gone up fourfold in relation to gross domestic product. It is an incredible increase. However, if we add the foreign equity investment in Australia to this debt, the net obligation that Australians have to foreigners, as at June last year, is something of the order of $95 billion which is equivalent to about 40 per cent of gross domestic product. That has worsened since then by another 2 1/2 per cent. By any criteria these figures are horrific.

A breakdown of the raw figures reveals even more alarming trends. The composition, or the breakup, of the overseas debt can be divided into two components: Government borrowings from overseas, which represent about a third of the total and private borrowings from overseas, which represent roughly two-thirds of the total. When this Government took office in 1983 the government sector borrowed only about one-sixth as much as the private sector. At the end of 1985, after only a couple of years in government, the government sector was borrowing one-half of what the private sector was borrowing overseas. To look at it another way, in 1983 the public sector was responsible for 14 per cent only of the net foreign debt. At the end of 1985 the public sector was responsible for 34 per cent of the net foreign debt.

It is also worth looking at the purpose of the borrowings. The Government nowadays uses about 50 per cent of its borrowings to finance current consumption expenditures rather than to finance capital outlays. There is nothing intrinsically wrong with borrowing as such; it depends what it is used for. If Government borrowings are used for investment activity in sound areas they will be returned with goods and services which can be used to generate income, and this income can be used to pay the interest and to repay the debt. There is nothing wrong with that. But an increasing proportion of what we are borrowing is being used in consumption areas such as welfare and health, and to pay interest, et cetera. This cannot continue.

It is worth looking at the interest rates paid on these overseas debts. Only a few years ago, the interest rate averages were very low-4, 5, 6, 7 or 8 per cent. Today, they are much higher as we roll over those loans and pay interest rates of 10 per cent to 15 per cent, or even more, for the overseas debts. Therefore, that is also impacting.

It is interesting to look at the terms of the loans being taken out by the Government. Once, they stretched over seven, 10 or 15 years; today, as we roll over the loans as they fall due, they are being measured not in years, but in months.


Mr Slipper —We are the Argentine of the Pacific.


Mr COBB —Yes, we have become the Argentine of the Pacific. Thirty-six or 48 months is not an unusual period for a loan. If our overseas creditors ever decided to call them in, we could be in some considerable difficulty.


Mr Slipper —It is ruining the future for our children.


Mr COBB —Devaluation has increased our overseas debt because much of it is written in United States dollars or even, sometimes, Japanese yen. It is the bad economic policy of the Government, especially during the past four years, that has devalued our dollar, which in turn has led to the increase of debt. Now, to try to balance our overspending, the Government has fixed record high interest rates that are squeezing the life blood out of the productive sector of the economy. Earlier I gave an example of that when I read a letter from a shearer. It is squeezing the farmer, the small businessmen and everyone else.

The Government is pushing up these high interest rates to try to attract foreign money to Australia. That, of course, allows the Government to run Budget and balance of payment deficits larger than would otherwise be possible. In effect, it is allowing the Government to buy time, but it is at a high cost to the nation. As the honourable member for Fisher (Mr Slipper) said a moment ago, it will be a great cost to our children who will eventually have to pay back the loans. It is more and more forcing the private sector to borrow overseas.

Because the Government tends to borrow the greater proportion of the domestic savings that are available in Australia, it is crowding out the private domestic borrowers. That is not only forcing up interest rates, but forcing our private borrowers to borrow more and more overseas. It does not matter who actually borrows overseas-whether it be the Government or the private sector-because it is the total debt that matters. If the Government borrowed all of its money overseas and the private sector borrowed all of its money in Australia, there would still be the same overseas debt. I think that that should be understood. The Government is crowding out the private sector in the domestic market.

It is, therefore, pertinent to look at the question of savings. The latest figures that I have, which are for 1985-86, show that the household sector of Australia saved an amount equivalent to 4 per cent of gross domestic product. However, the public sector borrowing requirement in Australia at the time-that is, the total government borrowings-was equivalent to 5 per cent of GDP. Therefore, the public sector borrowing requirement exceeded our domestic savings by 25 per cent. If we add to that the private sector borrowings, which were also 5 per cent of GDP, that gives a total borrowing requirement for that year of 10 per cent of GDP. Because savings amounted to only 4 per cent of GDP, we ran a current account deficit of 6 per cent of GDP. That means that we drew on the overseas savings of foreigners at a level of 6 per cent of our gross domestic product. All that comes about because the cost of imports and the cost of our overseas interest commitments are exceeding our earnings from exports. As that continues, we increase our overseas debt.

To summarise, the net external debt in Australia has risen twenty-fold during the past 10 years. The main cause of that has been the rise in government deficits in the 1980s. Therefore, we must get imports more in balance with exports. We must cut government spending--


Mr Slipper —And throw out Labor.


Mr COBB —Of course, we must change the Government. At the same time, we must increase domestic savings, and give people an incentive to do so. While our debt has increased, our capacity to service it has not. For heaven's sake, we are now borrowing to service the existing debt. Our interest bill alone exceeds what we spend on health, education and defence individually. In 1982, we spent only $1.8 billion on interest payments; today, we are spending in excess of $7 billion which is equivalent to 18 per cent of our export earnings being given away in interest payments. If we include the repayments of principal falling due, which are equivalent to 28 per cent of our export earnings, that means that 46 per cent of our export earnings are being used to service our debt. It is more than the total of our primary exports alone. It is like going out and shooting every sheep, cow and calf and burning every wheat crop-but still not being able to pay for the servicing of our debt in interest rates and repayments.


Mr McVeigh —They are destroying us.


Mr COBB —They are indeed. The seriousness of the situation is such that I believe that the level of debate among the public must be raised; but especially, it must be raised among the Government members who are occupying the benches today. It is imperative that we obtain a commitment to do something about the problem. If something is not done in the very near future, the situation will be irretrievable, and five years down the track it will be too late. It is pertinent to look at one or two examples of expenditure under the supply Bills, which show where the Government is wasting money. One item that caught my eye relates to the Government giving another $1.433m to the Human Rights and Equal Opportunity Commission.


Mr McGauran —Which we will abolish.


Mr COBB —Yes, which we will abolish on day one. That body is completely unnecessary. It has an appalling track record and has come up with some incredible recommendations during the past year or so. One, for example, was to allow homosexual immigration on the ground of family reunion. Have honourable members ever heard anything more ridiculous? In my naivete, I did not even know that they bred. The Commission has attacked the Queensland Government over the electricity worker legislation, which has proved so successful, calling it slave labour. It claims that quite innocent remarks made by people from day to day are racially defamatory. In its 1983 report, it even suggests that certain behaviour should be unlawful, for example, Irish jokes. Therefore, if we tell an Irish joke we could be hauled before the Commission. It is quite incredible. It has supported the right of Women Against Rape to march on Anzac Day. It wants boys and girls under the age of 12-and it has already implemented this-to compete against each other equally in sporting events. It has offered bribes to school teachers of $500 and $1,000 if they will teach the contents of the Human Rights Commission teaching kit. The list goes on and on.

I wish to highlight one example which has received little or no publicity, but which occurred in my electorate last year. In March 1984, the Human Rights Commission-which this Government is funding through the supply Bills-received a complaint from a Mr C. J. Booker. The Government, through the Department of Immigration and Ethnic Affairs, was trying to deport him. He appealed to the Commission to be allowed to stay in Australia. The history of Christopher Booker is rather interesting. He came from New Zealand in 1973, and back in those days a visa was not needed to enter Australia. People could come and go freely-with one exception, that someone with a criminal record had to notify the authorities of that before making any travel arrangements. Mr Booker, of course, made no such admission, so he entered Australia illegally. In 1978, he went back to New Zealand and then returned to Australia using a false name. What did he do while he was in Australia? Since coming here, he has been convicted of offences of stealing, false pretences and possession of an unlicensed pistol. On the basis of those offences, which he committed in 1982 and 1983, he got two sentences-the first for two years and the second for 12 months. Of course, under our legal system that meant that he had to spend only nine months in gaol. The Immigration Department looked at the case and made the correct decision to deport him, so Mr Booker went along to the Human Rights Commission and trotted out his story. Part of that story was that a year after he came to Australia in 1973, he met a Ms Penelope Sommerville, and they had a de facto relationship that lasted until 1983. As a result of the relationship they had a child called Nicole who was born in 1977. The child now bears the surname of the de facto mother, Sommerville. The relationship subsequently broke up.

In March 1982 Mr Booker commenced living with a Mrs Margaret Roth at Narromine who had three children by a previous marriage-not by Mr Booker-who were aged between five years and 11 years at the time. He lived in a de facto relationship continuously with this woman until May 1983, about a year after he had first met her, until the original de facto, Penelope Somerville, turned up and announced to Mrs Roth that the police were looking for Mr Booker because he had a criminal record. Mrs Roth knew nothing about Mr Booker's record and naturally, being a reasonable woman, she was very upset. They parted for a while. Mr Booker moved from Narromine to Dubbo for a couple of weeks. He then moved back to Narromine and lived in a caravan park a short distance from the home of his second de facto, Mrs Roth. Mr Booker and Mrs Roth told the Human Rights Commission that the reason they had the arrangement whereby they lived apart, he in a caravan park and she in the house, was that if the police ever caught up with him no arrest would take place in the home and therefore upset the children.

This is an extraordinary story, but it does not end there. Mr Booker was finally caught up with. When he was ordered to be deported he went to the Human Rights Commission. Mrs Roth and Mr Booker say that the deportation of Mr Booker would be terribly upsetting for their children-not actually his children but her children from a previous relationship. Evidence was given to the Human Rights Commission that it would have a significant effect on Mrs Roth's children. They had already been found tearful and upset at their school and had to be consoled by the teachers. Despite Mr Booker's criminal record, despite coming into this country illegally and despite the Department of Immigration and Ethnic Affairs quite correctly saying that Mr Booker should be sent back to New Zealand, I do not have to tell honourable members the recommendation of the Human Rights Commission.


Mr McGauran —Tell us anyway.


Mr COBB —Well, I will. The Commission recommended that the deportation order against Mr Booker be revoked. Has the House ever heard such nonsense? The ground on which the deportation order should be revoked, the Commission said, is Article 23 of the International Covenant of Civil and Political Rights, drawn up by Warsaw Pact members. It is almost unbelievable. Article 8 of the European Convention, which requires respect for family life, is also drawn on to give some substance to the Commission's recommendation. Anybody else would have been locked up forever. I do not think that the mere fact that Mr Booker has come out here and had one child whom he does not live with and lives with another woman who has children by a previous relationship should come into it. In one sense the recommendation is an invitation to circumvent the law by fecundity. That is the sort of trick Ronald Biggs used in Brazil. It is what the Human Rights Commission wants to introduce into Australia. I have never heard such nonsense. It is typical of the ridiculous and excessive spending of this Government and is a waste of taxpayers' money. We will abolish the Human Rights Commission from day one when we get back into government. We will cut expenditure in many other areas, too. We will bring our overseas debt back into line as fast as we possibly can. The Government stands condemned for the way it is throwing taxpayers' money around.