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Wednesday, 6 June 1984
Page: 2620

Senator BOLKUS —I refer the Minister representing the Minister for Finance to comments made on Monday by Senator Chaney on comparisons of government spending under the Hawke Government and the Fraser Government. Can the Minister advise the Senate as to the accuracy of these assertions and the Government's plans for the scrutiny of government expenditure?

Senator WALSH —I recall Senator Chaney making some baseless allegations. I think it was last Monday, as Senator Bolkus said. Again it is incongruous, to say the least, that a senior member of a government which in its final fatal year produced a Budget which wound up with an increased expenditure of 18.5 per cent, as the Fraser Government did, should have the temerity to criticise any government for allegedly allowing expenditure to get out of control. The plain fact on the comparison between the Fraser Government's last Budget and the likely outcome of this Government's first Budget is that--

Senator Chaney —I rise on a point of order. The question related to facts which I allegedly put before the Senate last Monday. I remember them very well. My facts related to the average over seven years of the Fraser Government, and the Minister is responding with respect to the Fraser Government in terms of one Budget. In view of the introduction he gave about inaccuracies on my part, I suggest he address himself to the matter which was put before the Senate and not to his own point.

Senator Grimes —On a point of order, Mr President, I ask you how long you will allow the Leader of the Opposition to indulge in what can only be described as vexatious points of order? I suppose in the last two days he has taken eight points of order. They have all been ruled out of order. They have all taken the form of Senator Chaney getting up and debating the facts, or otherwise, of a question or answer. I believe that if he is to persist you should stop listening to the complaints of Opposition members about the length of answers or the infrequency of questions.

The PRESIDENT —Order! On the second point of order, any honourable senator is entitled to take a point of order at any time. On the first point of order, I cannot direct a Minister to answer a question in any way. It is his entitlement to answer a question as he so chooses provided he does not debate the matter. I now call the Minister representing the Minister for Finance.

Senator WALSH —The plain fact is that in the last Budget produced by the Fraser Government, the final outcome was an increase in expenditure of 18.5 per cent. Subject to final verification, that was reduced by the present Government in its first Budget to an increase in outlays of 15.8 per cent. That was achieved in spite of such very difficult or indeed mandatory expenditure increases required, for example, by the huge increases in unemployment. I refer to the enormous army of unemployed which this Government inherited from the Fraser Government and which automatically required very large increases in government expenditure.

Senator Chaney —There was a big increase in the preceding year. Another lie! Another lie!

The PRESIDENT —Order! I ask the Leader of the Opposition to withdraw that remark .

Senator Chaney —I substitute untruth.

Senator WALSH —Well, I did not hear the comment so I do not know what I said that was allegedly untrue. It is a fact that this Government inherited an army of unemployed of the order of 700,000 from the previous Government, and that under long established law a high proportion of those people were entitled to receive unemployment benefit. As a result of the changes in the level of unemployment benefit in the last year or so of the Fraser Government's life, payments of unemployment benefit increased by more than $2 billion. That was a problem that we inherited-an expenditure requirement which could not be avoided, short of allowing the unemployed to starve.

Another very important component of increased expenditure under this Government , also inescapable, is the interest payments on public debt which, again, is largely attributable to the deficit of the Fraser Government in 1981-82 of the order of $5 billion and the tremendous impending deficit which this Government inherited from that Government of the order of $10 billion, which we have managed to pare down to about $8.5 billion. Those deficits have been funded principally by borrowings, and therefore interest payments accrue to them.

All that would be bad enough, but the real situation is worse from the Fraser Government's perspective because it concealed the real level of its expenditure, just as it concealed the real level of the deficit that was looming up just before the last Federal election. It concealed the deficit by the sort of trick which was typical of the Fraser Government and of senior Ministers in it, such as Mr Sinclair. The trick was to hide expenditures by converting them into tax expenditures rather than leaving them open as Budget expenditures.

Senator Chaney —Another lie! You could not lie straight in bed. Tell the truth.

Senator WALSH —These cosmetic arrangements of the Fraser Government were designed to hide from the public the true level--

Senator Gareth Evans —On a point of order, Mr President; the Leader of the Opposition is again being grotesquely unparliamentary in his interjections. I urge that you bring him to heel. I refer particularly to the expression 'could not lie straight in bed' which is most unbecoming of the leader of a party in this place.

Senator WALSH —I did not hear the interjection. It does not worry me because I regard an insult from Senator Chaney as a compliment.

This cosmetic trick employed by the Fraser Government was particularly important in two areas-its housing policy and health policy vis-a- vis the policies of this Government. There is no difference in macro-economic terms between government expenditure concealed as a taxation concession and government expenditure appropriated in the Budget. In both housing and health the Fraser Government hid its spending in taxation concessions, to a substantial extent. This Government does it openly as Budget appropriations. The ultimate effect of the changes made in the reduction of tax expenditures by this Government last year will be to reduce taxation expenditures by $1.5 billion. The most damning indictment of the Fraser Government was the final Budget it produced which had no economic strategy whatsoever. It had a political strategy designed, it hoped, to win a premature election and completely abandoned all economic responsibility or any attempt to present a coherent economic policy.