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Monday, 22 October 1984
Page: 2142


Senator WALTERS(8.12) —Tonight we are discussing the Appropriation Bills, which outline the proposed expenditure by the Government on its policies for this financial year. I would like to explain the areas of difference, as I see them, between the performance of this Government and that of the previous Government. I start with the economy. In 1981-82 the previous Government just about balanced the Budget. It had a deficit of $700m. The following year, 1982- 83, that deficit blew out to $4.4 billion at a time when the country was going through the worst drought on record. We all know the tremendous outlays that the Government made to drought-affected areas, to all country areas in Australia. We know the effect that that drought had on the economy. Our exports were so far down that the Government really had great problems. At the same time, the overseas economic climate was very low. All in all, it was a time throughout the world of a great downturn in economies, particularly in the United States. We were suffering the worst drought on record, which underlined the problems we were facing.

In March that year, of course, we had a change of government. The drought broke , and there was an upturn in the economy. At that time, the first Hawke Government Budget allowed for a deficit of almost twice the deficit that we had left. We left the present Government with a $4.4 billion deficit. That was immediately nearly doubled, to $8.3 billion. The Government did that during a year of broken drought, and in a year in which overseas economies had a tremendous boost. Yet the Hawke Government doubled the deficit. As it worked out , the deficit came out slightly better than that; the eventual deficit was $7.9 billion. It was not much better; it was $400m less. But it was less by the end of the year.

The second Budget deficit of the Hawke Government was still well up. It is estimated that the deficit for this financial year will be $6.7 billion. This estimate is made at a time, as I have said, when the country has seen a wonderful upturn in the farming area in particular and when our exports are at a tremendous high. Yet the Government in its advertising campaign has said that it has brought the deficit down. The deceit of that advertising campaign has to be understood by the people of Australia. The annual report of the Reserve Bank of Australia, which is not a political document by anyone's imagination, makes it very clear that the Hawke Government was left with a deficit of $4.4 billion. Yet the Government's advertising campaign says that it has brought the deficit down. The deficit for this financial year has gone up by $2.3 billion on the deficit which we left. A tremendous deceit has been going on all through the Hawke Government regarding deficits. When Senator Cook became a member of the Senate he was fooled, along with a tremendous number of other people in the community, into believing that the Hawke Government had been left with a $9.6 billion deficit. He said in this place that the Government had been left with $9 .6 billion deficit. At that time the Opposition said, 'For what year?', and he replied, 'This year'. Senator Cook was a candidate in that election and he believed the rhetoric of the Prime Minister, Mr Hawke, when he said that the proposed deficit was $9.6 billion. Senator Cook had to come into the Senate and apologise for misleading the Senate. He had not understood that the rhetoric of the Hawke Government had been a deceit. He had believed it, as a candidate in the election, and he had to come into the Senate and apologise.

That $9.6 billion deficit that Mr Hawke still talks about as the reason for all the broken promises was an estimate at that time released by him of what the deficit could be for the following financial year. That estimate was made without a Budget ever being formed. In March this year, on the anniversary of this $9.6 billion deficit being put by the Treasurer, Mr Keating, Mr Howard asked Mr Keating for the estimate of the Budget deficit for the following year. Mr Keating said that he would not give it to him, that it was not appropriate for him to do so. He said that it was not in the public interest and was not applicable. When Mr Howard asked for the figure under the freedom of information legislation, he was told that he could not have it. I have never heard anything quite so hypocritical put forward by any group of people as the statements about the Budget deficit that were perpetrated on the Australian people at that time.

Let us go back to the financial report of the Reserve Bank because I find it very interesting reading. Page 17 of that report assures the Australian people that we have now a $15.5 billion borrowing requirement for the public sector. That is the worst in Australia's history. The report says that the interest payment on the debt is just under 12 per cent of total public sector outlays in 1983-84. Twelve per cent of total public sector outlays for 1983-84 just goes to pay off our debt. As we all know, private enterprise, governments and people in the community generally who want to borrow money must borrow from the X number of dollars available in the community. If the Government and the public sector take up all that money interest rates must rise. That is plain, simple fact.

We are assured by the Reserve Bank that offsetting factors last year stopped interest rates from rising in a large way. It said that one such factor was the decline in borrowing by the business sector because of the weakness of investment. In other words, it said that the business sector did not want to borrow. It did not have the confidence to do so. It did not think things were going well enough, so it did not borrow. That was one reason why there was no competition to borrow money. So interest rates did not go over the ceiling. The other reason given was an increase in lending by households as people's savings grew. In other words, the people of Australia also did not have the confidence to spend. Because there was an increase in their savings and consequently an increase in the money available for lending the Government was able to borrow large amounts without raising interest rates. However, the annual report of the Reserve Bank points out that that is a one-off situation and that a large deficit, and indeed, we are facing a very large deficit, will increase inflation . As I say, total borrowing for the public sector is $15.5 billion. Twelve per cent of total public sector outlays goes towards paying off that borrowing.

There are many other areas where the two major parties disagree. We have been told by the Government that it has created a tremendous number of jobs for the unemployed. Yet unemployment is still rising. Those who are unemployed know full well that the jobs are not there. They know full well that under the community employment program they may have a job for a couple of weeks but then they go back to the unemployment queues. They know that full well; the Government cannot fool them.

We come to the assets test, another area from which the Government is aiming to bring in quite a bit of money. Of course the fact that the assets test will cost us $35m in the first two years means nothing to the Government. That is a cost to the Government but the Government is ploughing ahead anyway. All the pensioners know that they are the only sector in the community to which death duties apply. They know that if they do not want to sell their assets and they need the unemployment benefit they can claim the unemployment benefit, but on their death the assets are sold up by the Government. We also know that pensioners are the only sector of the community to which gift duties apply. Pensioners are not permitted to give to their children any of their assets. The rest of the community is permitted to do so, but not the pensioners. If pensioners want to give anything to their children over and above $2,000 a year they have to pay for it. Their pensions are taken away. The assets they have given are valued and taxed. We have an assets test whereby this Government has said to the pensioners: 'You will not have assets over a certain amount. If your assets are valued over a certain amount, even though you have no income, you will have to sell up because you will not get the pension unless you do. If you do not want to sell up, upon your death your estate will pay'.

Another issue on which we are poles apart is the dependent spouse rebate. Under the Fraser Government we took the dependent spouse rebate from $400 a year to $1 ,030 a year for mothers who were not earning but who were staying at home and had dependent children. We were working towards the splitting of incomes for taxation purposes. What has happened under this Government? We have had two Budgets from this Government and not one cent increase in the dependent spouse rebate. I do not think anyone queries why. We know why. We have been told by some of the radical feminists opposite that they do not believe in the dependent spouse rebate and that it ought to be abolished. We have been told that it is degrading for a woman to be dependent on her husband; in other words, that she should be out in the work force. What right has any government to decide on behalf of women what they should do?

I was delighted when our policy was announced today. Our Party, if in government after the election, will bring in the splitting of incomes for low income families, whether two-income families or single income families. The situation will then be more equitable. Low income wage earners will then even be able to do what others who work for themselves can do, that is, split their incomes with their spouses. Under our policy, wage earners would be able to split their incomes with their spouses. The difference in the tax situation will be quite incredible. Our tax policy is very clear. It includes the splitting of incomes for families; a great saving of taxation for families with dependent children; no assets test; no tax on superannuation; no capital gains tax or capital taxes and no death duties. We have made it very clear what our taxation policy would be.

On the other hand, the Government has said: 'We will review it all after the election. We will not let you in on it. We will tell you after the election what we will do'. Of course, the Minister for Industry and Commerce, Senator Button, and the Prime Minister have let slip that a capital gains tax or a capital tax will be in the air. Let us look at what capital taxes and capital gains taxes mean. There is no doubt-Senator Button made this very clear not only today but also last week-that next year will present a very difficult problem for the Government. It will have to collect more money. He has made that very clear.

Let us look at what capital gains taxes and capital taxes mean. A capital tax means that each year one pays an additional tax on the valuation of one's assets . The Prime Minister has said: 'Well, we will not include the family home'. What does that mean to a farmer? What is the family home? The valuation of his farm could be quite considerable. I presume the family home in that case will be valued on the same basis as for the pension; that is, the family home and the curtilage. All the rest of it will be the farm-the equipment, stock, acreage and all the rest. Each year there will be a tax on the valuation of that property, stock and equipment.

Let us look at what sort of assets would be included in a capital tax in the cities. The home will be taken out but if one dares have a country shack, beach cottage or whatever, that plus the valuation of the family car and the contents of the house such as antiques, jewellery or any possession that one may have saved up for over the years and done without trips for, I suppose what some people would call luxury items, would be added and a yearly tax would be put on them. Senator Button says that there should be a more equitable distribution of wealth in this country. He says that people should not be allowed to save or to accumulate the odd assets that they may want just because everyone else has not been able to do so. That is what a capital tax is all about-nothing more, nothing less.

What is capital gains tax? If one sells an asset, the capital gain resulting from inflation or any improvement that one may have worked hard to add is taxed. It applies to any gain at all. These are the sorts of surprise packages the Prime Minister is talking about when he says: 'We will review taxation after the elections'. Senator Button has said: 'We are going to need more money. It is going to be a very difficult year for the Government'. We have been assured by the Prime Minister: 'Don't worry, we are going to keep the home out of this capital tax'.

Another area of difference between the two sides is that the Government has increased tax on superannuation quite considerably. We have promised that such a tax will be taken off. Not only has the Government increased that tax but also it has imposed the Medicare levy on superannuation. We not only have the normal taxation of superannuation but also a one per cent levy on the lump sum. It is quite incredible to have such a tax imposed after one has saved for years and put money away for one's retirement. Where is the incentive for people in this country to look after themselves? The Government is frightened it will make little capitalists out of Australians if they save to look after themselves, if they own too much and if they dare to accumulate a few assets as they go on through life. The Government is going to make sure there is a redistribution of wealth. People will be taxed on these things.

Let us look now at Medicare because the cost of that to the Government is quite incredible. Indeed, we have been told that the one per cent levy imposed on everyone to pay for Medicare was short by $830m this year. Did Dr Blewett increase the levy? He did not because he had said to people that the levy would not have to go up and that the Government could cope on a one per cent levy. He chose not to put the levy up. I was assured during consideration of the Estimates that that was a political decision. When I asked officers of the Department of Health why the levy had not gone up as a result of the $830m shortfall it was stated that that was a political decision. When I asked the Minister present about that, he said: 'Yes, that is right; it was a political decision. We decided not to put the levy up'. I asked whether that meant that the rest just came out of Consolidated Revenue, and the Minister said: 'Yes, that is right'. So the people will have no idea what Medicare is costing them. It is not one per cent. We know already that the one per cent levy has gone up by 0.7 per cent and that the levy should now be 1.7 per cent, but instead the $ 830m is just being snuck out of Consolidated Revenue without the people's knowledge.

Let us look at a few other changes. The Prime Minister said: 'I do not like the anthem, so we will change it. By the way, I do not like the words, either. They are too sexist'. Many people believe that we ought to have an anthem of our own but I have not struck one person who says that one man should decree what the anthem and its words should be. Most people, even those who think the anthem should be changed, believe that the matter should be debated in this place. The Government attempted to change the oath of allegiance so that there would be no mention at all of the Queen of Australia. Fortunately the Australian Democrats supported the Opposition on that occasion and we were able to defeat that proposal. We said to the Government that the people of Australia, the majority of Senate electors, did not agree with the Government. I refer also to the crown on the passport. That has just gone. Nobody will know until they get a new passport that a crown is not to be found on it. It has gone-another decree by the Hawke Government.

What has happened in the area of videos? There is a vast difference between the two parties. The Attorney-General, Senator Gareth Evans, Mr Hawke and all the feminists on the Government side of the chamber say that people ought to be able to see, read and hear whatever they want in the privacy of their own homes. However, we on this side of the chamber believe there is a limit to what could be seen and what could be hired. It was only because we were able to force the Government into setting up a committee that we now have a body to review the Attorney-General's decree that the people ought to be able to see, read or hear whatever they want in the privacy of their own homes. Even though the Attorney- General had all the evidence in the world to convince him he was going down the wrong track; even though he knew very well that the Standing Committee on Regulations and Ordinances, on which members of his own Party sat, had said that if he did change the regulations in the way in which he proposed the Government would lose control of the viewing by children of those types of videos; and even though the Victorian Psychological Council pleaded with him not to change the regulations until it brought down its final report, its interim report having stated that repeated viewing of violent videos has an effect on the average man in the street; he said 'Rubbish' and went ahead. Since 1 February we have allowed these X-rated violent videos into Australia. Even though the Attorney had reports from the United Kingdom, the European Parliament and West Germany on which he could have relied he still went ahead.

The differences between our parties are very great. I do not believe that the people of Australia will be hoodwinked by the Government into believing that its members are a moderate lot. They are far from being a moderate lot. As my time is expiring, I get back to the original point that our parties are very different. Under our government the economy would be run in a totally different way from the way it is run under the present Government. The people of Australia will not have a bar of the Hawke Government going to them, saying: 'Trust us. Do not ask us what is in our taxation policy, do not ask us what we are going to rip off you next year. Trust us and put us back to do as we will in another few months time'.