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Monday, 10 September 1984
Page: 694

Senator COOK —I direct my question to the Minister representing the Treasurer. I refer to Mr Howard's Press statements of 16 and 19 July on the Budget deficit. In those Press statements Mr Howard referred to the Hawke Goverment's additional $2.5 billion spending in the 1983-84 Budget. What were the main components of that additional spending? What sort of cuts would have been required to reduce the deficit to the $5.5 billion figure that Mr Howard claimed would have been attained without Labor's additional spending?

Senator WALSH —Yes, I have seen reports of Mr Howard's address to the Press Club of weeks ago when he said:

I believe the Budget deficit is at least $1 billion to $1.5 billion higher than desirable.

He also said:

This is a pre-election Budget for the present. The costs will be paid later.

I must observe here that it must take a particularly thick hide, even for a politician in Mr Howard's position, to make a comment like that. The last Budget that he introduced contained a series of tax concessions aimed at a variety of politically sensitive groups, the additional cost of which in the next financial year was in excess of $2 billion. That, of course, made a major contribution to the impending $10 billion deficit that this Government inherited from Mr Howard when it took office. I would have thought that Mr Howard was about the last person in the world who should be alleging censoriously that any particular Budget was a Budget for the present with the cost to be paid for later because he is the record holder for all time in that area.

However, his earlier point, that the deficit should be $1 billion to $1.5 billion less than it in fact is, is one that might be shared by many people who do not have a partisan interest in the Government or the Budget, as Mr Howard does. That is not a view that I share, but if it is to be proposed seriously that the defict should be $1.5 billion less than it is, those people who propose it have an obligation to describe to the public how they would arrive at that lower figure. It would be possible to come in with a deficit $1.5 billion smaller if all those things were done: The increased allowances to special security recipients, be they pensioners or not, who are paying rent and have dependants, were cancelled; the first home owners assistance scheme, costing $ 265m this year, was cancelled; the community employment program was cancelled; and the increases in welfare housing funds were cancelled. If all those things were done, a Budget deficit of the order of $1.5 billion less would be achievable. If Mr Howard believes that all those things should be done, there is a responsibility for him to say so. It is not the view of this Government that all those things should have been be done. Nor, incidentally, is it the view of this Government that the macro economic situation justified a degree of fiscal stiumlus reduced by $1.5 billion. Perhaps that is a separate question. Mr Howard , I suppose, could have reduced the deficit by that magnitude if he had chosen to increase some other tax and, indeed, that seems to be what he had in mind because he said during the question and answer session--

Senator Chaney —Mr President, I raise a point of order. We now have a Government Minister idling away the time of the Senate and the Question Time available to us by making hypothetical assumptions about what the Opposition might do. He has said nothing which relates to the administration of his own affairs. It may be that he is predicting what may be contained in a mini-Budget if Labor were returned to office and had to re-write the Budget early next year. This has nothing to do with his portfolio responsibilities. It is just a pathetic attempt to make politics out of Question Time and to waste time.

The PRESIDENT —I have listened to the question carefully. The Minister is, in fact, responding to the question, but I would ask him to cut his remarks as short as possible because there have been only a limited number of questions available today and time is running out. I call the Minister representing the Treasurer.

Senator WALSH —I am not about to delve into hypothetical speculation. What I am about to do is to quote what the shadow Treasurer said on 29 August in his views on revenue raising. He said:

The economic policy statement-

and I interpolate that that is the coalition's economic policy statement-

included the commitment to a broadening of the tax base under a future Coalition government.

That from the shadow Treasurer is a statement of intent on behalf of a coalition government. Again, many people might agree with that, but I think it is a bit irresponsible to talk about broadening the tax base, by which he means principally consumption taxes or sales taxes without considering the fact that under present arrangements they would flow in to the consumer price index and wage indexation, and thereby stimulate inflation in a way very similar to what the last government did in 1978. But most important of all, if the Opposition is going to argue that there should be a substantial reduction in the Budget deficit, and if it wishes to be taken seriously, it should explain away the contradiction between that line of argument and the assertion by the Opposition Leader that the--

Senator Chaney —I take a point of order, Mr President. You have indicated to the Minister that he should bring his answer to a close. He is wilfully totally ignoring that suggestion. I suggest you call him to order and sit him down.

The PRESIDENT —Order! The Minister has answered the question and he is starting to get into the realm of debate. I ask him to bring his remarks to a conclusion.

Senator WALSH —I shall, very quickly, Mr President. If the Opposition Leader's policy were adopted, in fact tax revenue in a full year would be reduced by a further $4 billion and the deficit, other things being equal, would be increased accordingly.