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Wednesday, 24 October 1984
Page: 2287


Senator LEWIS(10.32) —The Senate is debating the Appropriation Bills following the Budget. I refer to the October report of the Syntec research team which in the past seems to have had some association with the Federal Treasury. I do not know whether it is friendship but it seems to have some sort of leadership arrangements with the Treasury because, it having reported on certain matters, frequently the Treasury comes out with the same sorts of reports. What a devastating report Syntec came out with for October. Let me quote three parts of it. The first part states:

The first step to re-building our business investment base should be supplementary Budget measures next Autumn to cut the structural Budget deficit.

That is what Syntec thinks. In other words, there should be a mini-Budget in the autumn. Does anyone doubt that there will, in fact, be a mini-Budget in the autumn?


Senator Dame Margaret Guilfoyle —There has to be for all the new taxes.


Senator LEWIS —Of course there will have to be. The aggregate deficit that this Government has come up with in its first two years of office is $14.7 billion. How can the country continue to stagger under the weight of such a deficit? Of course it cannot continue to stagger along in that way and something will have to be done. Clearly, what must be in the minds of members of the Cabinet at the moment is the introduction of new taxes in a mini-Budget next autumn in order to cut the structural deficit to a reasonable figure.

Let me quote the second part of Syntec:

The Government's manipulation of money market interest rates through recent weeks is the antithesis of what is required to get a major and sustained cut in yields here.

The Government has been manipulating the money market in order to keep interest rates down until the election is over. Syntec continues:

The August/September decline in rates was contrived by pumping up the cash base of the system to a point which has put this year's money target in jeopardy.

This year's money target has blown out beyond all reasonable possibilities. I think the Government was looking at M3 at about 10 per cent or 9 per cent. In fact, it is already up around 13 per cent and the Government has broadened the definition to a money base which is now up around about 22.3 per cent. The money target of this Government has been absolutely abandoned in its rush to an election. Why is it rushing to an election? Because clearly it sees that there are major difficulties ahead with the economy and it wants to have an election while the economy appears to be reasonable to those people who are not applying their minds to it. In relation to the money supply, Syntec stated:

To bring money back into the target zone, further tightening is now inevitable. We presume it will await the election.

The economy of this nation will be held up, the proper administration of the economy of this country will be held up until after the election or perhaps the end of November when some moves could be made in anticipation of the election, but it will not become visible to the people out there. Let me quote the third point made in the October edition of Syntec:

The longer-termed attractiveness of this economy is in the balance. Investors should await 1985 . . .

It goes on to suggest some tests that investors should apply in 1985 to see whether they should invest in Australia. Why is the economy a disaster? The economic maladministration of this Government has put this nation into the situation it is at present. This Government had a glorious opportunity. The drought recovery and recovery from the world recession put the Government in a situation-we had waited for years under the Fraser Government for this to happen but it happened under this Government-in which at last there was an increase in the revenue, an increase in the taxation base and the opportunity for the Government at last to take some major economic decisions which should have been taken and had to be taken but could not be taken while there was a drought and a world recession. The Government got its opportunity in its first year to take these major decisions and it not only fluffed them, it has made them worse, it has exacerbated the problem by expanding its expenditure in areas where it has been totally unnecessary.

I am certain that this is one matter that this Government will live to regret. When the back benchers apply their minds next year or the year after, if this Government is re-elected, to what could have been done in 1983-84, they will rue this day and the Cabinet Ministers will be blamed repeatedly for the mistakes they have made just as, I might say, our back bench blamed our Government for not taking the steps in 1976 and again in 1977 that the Fraser Government could have taken and did not take.

I say to those Labor senators who happen to be listening to me at present that in future years if they get re-elected they will look back upon 1983-84 and they will say: 'But why did we not take that step? Why did the Treasurer not do those things? Why did the Prime Minister allow this Government to waste away these opportunities that became available as a result of the ending of the drought and the ending of the world recession'?

Public debt in 1984-85 is estimated to be $90 billion. That involves an average interest bill for every taxpayer of $34 per week. Just think about that. Every taxpayer in this land is paying, on an average, $34 per week just to meet the interest on the national debt. Is that not outrageous? How can the Government continue to allow that national debt to expand at the rate that it is without taking some action to curtail it in some way?

What has happened to the budgetary reform measures that the Minister for Finance, Mr Dawkins, announced as recently as October last year? He told us that the Government would issue financial impact statements with all its proposals. He said that the Government was 'taking this action because it believes the community has the right to know the financial and economic effects of government policies and programs'. Of course we have the right to know the financial and economic effects of government policies and programs. But what has happened? Instead of getting all these financial impact statements we managed to get one. We got only one financial impact statement because the Senate refused to pass the legislation until the Government gave it to us. When we got that statement it was a miserable effort. Mr Dawkins also said in October:

It is especially important that we . . . provide them with information such as will permit real debate and the achievement of consensus about economic policy.

When has that happened? When has there been real debate to give us a chance to come to some consensus about economic policy? Not at all. This Government has been involved in sneer and smear. Let me quote what Mr Keating said on 22 August this year:

The dishonest, shabby, tawdry proposal-

that was a proposal introduced in the House of Representatives by the Opposition -

introduced 15 minutes ago does not deserve careful consideration.

That is the sort of sneer and smear which Labor Ministers have brought into this Parliament and which has brought about similar retorts from our side resulting in chaos in the debates. The Liberal Party of Australia represents a wide spectrum of people. I might say that the people we represent were acknowledged in the Labor Party's own campaign as being concerned about the nation; putting the nation before themselves. Those are the people we represent. The Labor Party , at its campaign opening, said: 'We are going out after the traditional Liberal voter, the person who puts Australia first'. Those are the people we represent; the people who put Australia first. We represent the small businessman, the largest employers of the nation. We represent the pensioners, that large majority of thrifty Australians who are now being penalised for their thrift by loss of their age or service pension. We represent the single income family which is now at least 7 per cent worse off as a result of spouse and children allowances not being indexed, and we care about the ordinary people of this land who need help.

The Labor Government, in this Budget, has displayed its lack of interest in the small man and woman and its lack of care for ordinary people who need help. The Labor Government is interested only in big unions, big business and big government. In this Budget small business has been penalised, the family has been penalised, pensioners have been penalised, people with early retiring ages have been penalised, and science and technology has been penalised. There has been no attempt to encourage excellence. This Government is hellbent on mediocrity, averaging incomes and socialism by stealth. The rhetoric in the delivery of this Budget alleged support for the ordinary person, but the reality of the Budget was support for big business, big unions and big government. Look at the accord. It is an unholy alliance between these three bigs. The Westpac Banking Corporation Review of September 1984 had this to say about the accord:

As it stands, the accord is all about keeping happy the 91 per cent of the labour force which has jobs. It does nothing to alleviate unemployment. . . . Centralised wage indexation is the core of the accord. It is a system which virtually institutionalises unacceptable high rates of unemployment among the group which has suffered most, those between the ages of 15 and 19, one quarter of whom do not have a job.

It is not my saying that, Mr Deputy President, it is the Westpac Review for September 1984. This Government seems to be developing the corporate state. It is coming to its decisions in cahoots with the trade union movement and with some representatives, which it has appointed, of big business. I warn Australians to be wary of it. That was the path that Mussolini took with his famous concordat which bears great similarity to the accord. That was back in the 1920s, and look at the disaster there. Let me quote from Maximilian Walsh writing in the Sydney Morning Herald on 8 October this year. He said:

If the existing industrial movement gains the sort of policy input in this area which it is attempting to do then the spectre of state corporatism really begins to take on substance.

Such corporatism where big government, big business and big unions combine to protect what they perceive as the comfort of the status quo was a feature of Mussolini's Italy and Peron's Argentina-both, incidentally charismatic regimes. In other words it is an economic system which has profound social implications.

Sounds far-fetched? We live in dangerous times.

Part of this accord involves the removal of the sanctions imposed for secondary boycotts and that will come up for debate later today. I hope with the support of the Australian Democrats that part of the accord will not be achieved. If it were achieved, the result would be that militant action, by these trade unions in regard to secondary boycotts, would be subject to no sanctions. I ask the Senate to compare that with the draconian powers exercised by Dr Blewett under Medicare legislation, where he recently used his powers effectively to deny a doctor the right to practice for three years for filling in a wrong Medicare form or a number of Medicare forms.


Senator Townley —That could happen by accident.


Senator LEWIS —As Senator Townley says, it could happen to anyone. It could certainly happen to pensioners around Australia when they get hold of these forms that the Government is sending them at present to complete. There will be great difficulties in completing those forms, as Mr Goodluck said yesterday. When one considers the outrageous legislation brought down by Mr Wran in New South Wales, when doctors in his State refused to be socialised and to take employment under his Government, which penalised them for acting independently, it should be condemned by one and all. But of course Labor Party leaders have repeatedly demonstrated that they support government by punishment unless, of course, we are dealing with the militant trade union movement.

Small businesses, the most efficient, innovative and, as I said, the largest employer in the nation, have been virtually neglected in this Budget. Yet charges in the private sector during the past year rose by only 5.1 per cent compared with public sector increases of 11.6 per cent. So the inflation we had during this time of rising revenue, the recovery from the drought, the recovery from the world recession, was in most cases brought about by government action. The Australian Postal Commission is currently seeking yet another rise in its charges for the lack of service which it provides to this nation. High public sector increases were-I have some figures here-taxes on cigarettes and tobacco, a 20.3 per cent rise; public transport, 13.2 per cent; automotive fuels, 16 per cent; alcoholic beverages, 10 per cent; postal and telephone charges, 9.8 per cent; and government owned dwelling rents, 9.4 per cent.

The automatic indexing of many government charges is one of the major factors contributing to the continuing inflationary pressures. The only real growth seen outside the Public Service has been in the building industry. This has not only been patchy but also was mainly brought about by huge government expenditure. Some years ago the manufacturing industry absorbed 28 per cent of all those employed in Australia. It now absorbs only 17 per cent, and that figure is continuing to fall. Investment in manufacturing has declined by more than 30 per cent. We now have before us the estimates of the Bureau of Agricultural Economics, which indicate that this year revenue from primary industry will fall by 29 per cent.

Let us look at this Government's claims about creating jobs. Some 130,000, or 65 per cent, of the jobs created were in the public sector. We must face the fact that every two years Australia's population grows by about 450,000 at the current rate, so the creation of only 200,000 jobs explains why the job participation rate has fallen from 61.2 per cent to 60.5 per cent. So despite Government claims, there is a chronic and growing unemployment rate. Recently we heard discussion about a projected unemployment rate of 25 per cent across the board by 1990.


Senator Townley —Terrible.


Senator LEWIS —It is absolutely disgraceful that anyone is even considering an unemployment rate of 25 per cent. What do we see this Government doing about unemployment? Where will this massive public deficit end up? Where will this economic mismanagement, with an unemployment rate of 25 per cent across the board, end up? Public sector employment per hundred of population has now reached 9.83 in Australia, compared with 6.22 in Canada, 7.77 in the United States and 5.46 in the Netherlands. In Australia the figure is continuing to grow in areas that are not essential. Let me give an example. A month or so ago I was looking through the newspapers and I saw an advertisement for the Department of Transport which stated:

The Department of Transport is seeking greater awareness of the Federal Government's initiatives in road, rail and sea transport.

If one thinks about the way in which that advertisement has been phrased one realises that it has been prepared by a journalist who is allowing people to understand what it is all about if they read it in detail but is not making it too public for those who just browse through the newspaper. The advertisement seeks greater awareness of the Federal Government's initiatives in road, rail and sea transport. Of course, what it means is that the Department of Transport wants to advertise more publicly what the Federal Government is doing in this area. It advertised for a Director of Public Information which attracted a salary of $35,440, an Assistant Director with a salary of $33,235, a Journalist Grade 1A with a salary range of $29,924-$31,053 and a Journalist Grade B with a salary range of $21,943-$22,963. Four journalists are required to help the Minister for Transport (Mr Peter Morris) to promote himself. What contribution will they make to the production of the wealth of this nation? That sort of improvidence extends to all departments under this Government. One could well ask why it is necessary, for example, for the Department of Defence Support to have its own separate public relations advertising department when one looks at the huge Department of Defence public relations apparatus. Yet in the same paper the Department of Defence Support also advertised for a cameraman, in this case to assist its journalists in promoting the Minister for Defence Support (Mr Howe ). In Estimates Committee A it was revealed that the Department of Industry and Commerce, Senator Button's Department, has added another three journalists, bringing its total to seven. The annual cost for journalists in that Department has risen to $448,538.


Senator Townley —Nearly half a million dollars.


Senator LEWIS —Yes, with loadings.The Department of Employment and Industrial Relations has also added another three journalists, bringing its total to 12. One wonders what this Government is all about. Then one sees this sort of information and one begins to realise that what it is all about is self- promotion wherever possible. The Government is hiding the real facts from the people, as we can see in the run up to this election, but it is promoting itself wherever that is possible.

This sort of wasteful expenditure does not just end in the areas that I have quoted because the estimates that we are debating also reveal all sorts of other services that have been added to departments. There are now some departments that have equal opportunity officers and social workers within them, thus duplicating the departmental services which have been set up elsewhere to provide the same services. What a lot of nonsense this must be and what a waste of taxpayers' money. If this Government were to cut out all these non-essentials and return Commonwealth Government departments to their correct functions and solely to those functions, this deficit could have been reduced to manageable proportions.

We should think back to youth unemployment, which stood at 28.9 per cent in New South Wales and 22.2 per cent in Victoria at 31 March 1984, and ask this Government what it is going to do about that problem. Of course, we know that the special youth employment training program provides wage subsidies to firms which would hire in drop out areas at two-thirds of the average earnings of 15- year-olds, half the average earnings of 18-year-olds and one-third the average earnings of young adults. So the taxpayers are subsiding employers to employ these young people. Is that the correct system? Would it not be better to allow the wages to fall to their proper levels to allow young people to be employed.

I remember when I was practising the law I used to take in two young secretary trainees every year. I would allow them to make the tea, learn about filing in the office and do some typing when it was available. In that way they became top notch girls. When they began their typing work they really understood what was happening in the office, who was who, what people were doing, where the filing cabinets were, what was filed in the strong room, what was in the filing cabinets and so on. They understood what the office was all about and they became first class secretaries by the time they were 19 or 20. These days the firm that I used to belong to cannot afford to take on juniors. It has to take on senior girls because the salary levels are so high that a degree of expertise is expected from the first day a typist is employed. Of course, firms have had to develop other systems to cope with the typing problems, so they have had to install these typing system recovery arrangements. The Bureau of Labour Market Research has now suggested that the SYETP is of little assistance to those who are not retained when the subsidy ends. The real tragedy is that their expectations are destroyed and they then turn to the ranks of the long term unemployed.

This Government has got its priorities wrong. Its policies have been criticised overseas by certain companies, such as the top international broking firm of Rowe and Pitman, which has offices in London, Tokyo, New York, Johannesburg and Hong Kong. In a letter to its clients it said of Australia:

Faced by a government which is essentially hostile to resource development and innately contemptuous of private enterprise, perhaps it would be better to leave investments in Australia to the international institutions just like any other Third World country.

Those are not my words; they are the words of a letter written by Rowe and Pitman, the international brokers. Australia was described as being a Third World country. Is this what the unions and this Government are reducing us to?

Of course, this Budget is built on fragile assumptions about the future of the economy. The Minister for Science and Technology, Mr Barry Jones, has already admitted that if this Government is returned, taxes will have to rise next year, if only to meet the 10 per cent projected increase in staffing levels. This Government has put forward an opportunistic Budget which involves considerable risks. The Government has thrown away the opportunity to reduce the deficit and to attack the size of the national debt. When every other major industrialised nation is desperately searching for ways to reduce public sector indebtedness and the Public Service, this Government goes the other way. It is a throw away Budget designed for an early election, not for the future of Australia. Is it any wonder that Ministers defend it by sneer and smear rather than rational debate?