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Wednesday, 27 May 1987
Page: 3403

Mr CARLTON —I direct a question to the Treasurer. I refer the Treasurer to the large and widespread increases in State charges that were announced by the Premier of New South Wales yesterday-less than 24 hours after the Premiers Conference on Monday. Is it a fact that these increases, which range from 7.25 per cent to 11 per cent, take effect on or about 1 July 1987? Does the Government's inflation forecast of 6 per cent over the 12 months to the June 1988 quarter allow for increases in State charges of this size? What allowance was made in the 6 per cent inflation forecast for increases in telephone and postal charges?

Mr KEATING —Every forecast, as distinct from an opinion, that the Treasury makes is a factor in some increases in State and local taxes and charges. Those charges rise from time to time with the inflation rate-sometimes at less than the inflation rate-to maintain their real value. I have not seen Premier Unsworth's statement, but I know that increases in charges were in the pipeline well before the Premiers Conference. That is probably what these increases reflect. Premier Unsworth has probably maintained the State revenue effort.

Mr Carlton —He increased them over and above the forecast.

Madam SPEAKER —Order! The honourable member for Mackellar has asked the question. He might now listen to the answer.

Mr KEATING —It has probably never occurred to the honourable member that Premier Unsworth is probably intent on keeping up the State revenue effort, which of course is entirely reasonable. As I got no question about the Premiers Conference outcome yesterday, I might record that the outcome which the Commonwealth secured was, of course, the best outcome for the nation.

Mr Hawke —A historic one.

Mr KEATING —And a historic outcome, as the Prime Minister says, in terms of relations between the Commonwealth and the States, because on Monday we saw the States sitting down with the Commonwealth and agreeing to an economic regimen and strategy, which never happened during the coalition Government.

There was never any sense of order or decency brought to the proceedings of the Premiers Conference and Loan Council meetings. That has been the marked change. But the other change was that on Monday again the Commonwealth Government tightened the global ceilings on the State authorities' borrowing programs, which were let run rampant by the former Treasurer, the honourable member for Bennelong, and the former Prime Minister in the so-called infrastructure conference of 1980-81.

In bringing some discipline to the size of the public sector and the public sector borrowing requirement, as usual Labor has had to do the mopping up and the dirty work. At the same time as trying to screw down the size of the public sector, we also confirmed the May statement commitment of taking $1 billion off the recurrent payments to the States. The overall outcome is a decline in real terms of 7.5 per cent. It will be the only time in memory where, for three years in a row, we will see negative outlays in terms of Commonwealth payments in real terms to the States.

That is the kind of discipline which has come from this Government. It did not come in shrieks, it did not come in howls and it did not come in chaos; it came in an organised change down by getting the States to join the Commonwealth in its policy and bringing the States along, as we brought the community along, in the need to restrain public expenditures. It again illustrates the contrast between the way in which this Government runs its economic affairs and its policy-picking up the point made by my colleague, the Minister for Defence-and the sort of unorganised chaos which existed in the years between 1976 and 1983.