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Wednesday, 20 March 1985
Page: 461

Senator CHANEY (Leader of the Opposition)(10.45) —The Senate is debating the Address-in-Reply, and it is perhaps worth remembering just what we are debating and whose speech we are going to be talking about. The Senate has before it a motion for agreement to the Address-in-Reply which says many things that the Opposition believes. We are debating the proposition that we should deliver to the Governor-General a message in these terms:

We, the Senate of the Commonwealth of Australia in Parliament assembled, desire to express our loyalty to our Most Gracious Sovereign . . .

Of course, we are very happy to do that and to support that part of the motion. We are quite happy to go on, in accordance with the motion:

. . . to thank Your Excellency for the Speech which you have been pleased to address to Parliament.

We are thankful to the Governor-General for coming here to deliver it. It is not of course the Governor-General's speech. It is a speech prepared by Mr Hawke and his Ministers and we are not quite so pleased with its content. It is the view of the Opposition that the Governor-General's Speech is extremely defective as an outline of a program for Australia in 1985. On behalf of the Opposition, I move the amendment which has been circulated in my name and which seeks to add to the message of loyalty, which of course we accept, as follows:

At end of motion, add: But the Senate is of the opinion that the Government's program outlined in the Governor-General's speech fails to address critical problems facing Australia in that

(a) it fails to reassure the Australian people that the country's defence arrangements within the Western alliance will be preserved and strengthened following

(i) the Prime Minister's capitulation to internal party pressures on the issue of Australia providing logistical assistance to the United States for its testing of the MX missile, and

(ii) increasing uncertainty as to the future of the ANZUS Treaty fuelled by members of the Labor Government, including a Cabinet Minister;

We object to the Governor-General's Speech and the Government message which it contains because as the amendment continues:

(b) it contains no coherent economic strategy at a time when recovery is threatened by:

(i) record government taxation and spending,

(ii) continuing pressure within the Government for new taxes on assets,

(iii) growing demands for higher wages and other extra cost burdens on industry,

(iv) the level of public debt repayments, and

(v) loss of value of the currency reflecting world concern about Australia's competitiveness and government instability; and

Finally, we reject the message which the Government has put down in that, as the amendment continues:

(c) it endorses a rigid, centralised wage determining structure which imposes the same cost burdens on commerce and industry regardless of ability to pay.

The Governor-General's Speech is in fact a very interesting document. One can conclude after reading it only that it was written not in February 1985 but in November 1984. That is only a few months ago, but of course November 1984 was when the Government was dashing to its early election before the fragility of its hold on government in Australia and of its economic management became apparent. I do not need to burden the Senate with a long reminder of our explanation at that time of why the Government was rushing to an early election. We said that difficulties were facing the Government and it wished to have an election before those difficulties became apparent to the electorate.

The Speech really reflects the sorts of bland assurances that the Government was offering the Australian people at that time-bland assurances on the basis of which it was re-elected to government in Australia with a rather narrower majority than it and many commentators expected. The Governor-General's message makes the most of a series of positives which the Government grasped then as it does now. Let me start by acknowledging that there are some positives. It is not the wish of the Opposition to see anything but progress and improvement in Australia and, where there is any sign of any progress and improvement, we will welcome it.

If we look at the Governor-General's Speech and at the policy speeches put forward by Labor at the time of the election, I suppose we see that four positive points stand out. Over the last two years, there has been a useful increase in economic growth. There has been a respectable decrease in inflation, some growth in employment and, over that period, some decrease in industrial disputes. We are highly critical of the fact that opportunities presented to this Government have been wasted. We believe, and I think every commentator whose comments I have read agrees, that the good points that the Government was able to point to at the time of the election and in the Governor-General's Speech related largely to factors beyond the Government's control. They are the benefits of the wage pause put in place by the Fraser Government; the end of the drought, put in place by the Lord Almighty-or by physical occurrences beyond the control of man, if one is not religiously minded-something for which the Australian Labor Party cannot claim credit; the United States recovery, which has continued; and the Fraser Budget. In an address to the Economic Society in Canberra last week, the Prime Minister (Mr Hawke) acknowledged the role of the 1982-83 Budget in contributing to the recovery.

What is puzzling about this document is the way it totally fails to acknowledge the extraordinary developments and changes which have occurred since last November and which clearly should have been addressed by this Government when it was saying what it would do in the time given to it to govern Australia. Since November 1984, we have seen the whole Australian defence policy and foreign policy under threat. We have seen a great deal of division and difficulty. We have seen decisions taken within the Government which have been determined, not by the senior Ministers' views as to what is in the best interests of Australia, but by the views of the Labor Left.

We have had a great deal of debate in this place about the fragile condition of ANZUS and we have had endless quotation of the Government's own assessment of the way that the effectiveness and the operations of that Treaty have been diminished. The operations of the Treaty have effectively been condemned out of the Prime Minister's mouth. We know from him that the decision, not to test the MX missile in Australia but the decision to allow a few American aircraft to refuel in Australia while unarmed missiles were being tested in the Pacific, was forced on him, not because he believed it was in the national interest, but because of the concern and revolt within the left wing of his Party-a situation which he did not believe he could control.

We have seen in the Government's meanderings through South East Asia, in policies that it has pursued with respect to Kampuchea and Vietnam, a most extraordinary confusion and condemnation emanating from senior spokesmen from countries in the region. Again, I do not need to labour that point. Let me contrast the attitude of the Government to Kampuchea and Vietnam with its attitude to its peacekeeping role in Israel. We have a government led by Mr Hawke at the moment, who is supposedly a great friend of Israel. He is a frequent visitor to that country and he has shown, by his words and his emotional displays, a deep attachment to Israel. For the last three years, Australia has been engaged in a practical peacekeeping operation with the support and co-operation of both Israel and Egypt. As part of the peace treaty between those countries, Australian troops have been participating in a multinational force, which is universally regarded as having been a successful element in maintaining peace in that part of the Middle East.

This Government is now prepared to disengage itself and has made it clear that it intends to disengage itself from a peace keeping operation which is of enormous importance to Israel. Our continued involvement is supported not merely by Israel but also by Egypt. It is seen as important by the United States. New Zealand wishes to continue its involvement and its part in that constructive exercise of maintaining peace. Yet we are withdrawing. We have the spectacle of an Australian Foreign Minister wandering through Asia being misled by the Vietnamese and attracting condemnation of countries which are friendly to us, at the same time as we are ratting on the peace arrangements that were put in place under President Carter and in which we have played a constructive part.

A group from this side of the House has recently returned from the Middle East. Some members were able to go to Israel and Egypt. I can say only that we came back utterly convinced that in our participation in the Sinai peace keeping force, we were performing a constructive, useful and appreciated role. Why is it that this Government withdraws from that sort of operation and indulges in the kind of nonsense we have seen in South East Asia over recent weeks?

There is no suggestion of any of that in this Speech, this anodyne publication. This is a Speech for last year; it is certainly not a Speech for 1985 or 1986. There is no suggestion in this Speech that in the months before it was delivered there was a dramatic decline in the value of the Australian dollar. I do not know when the Speech was printed. Perhaps next year the Government might do us the favour of putting the date of printing on it. I suspect that the date was 1 December or 3 December 1984, because there is no suggestion in that Speech of the reality that Australia faced on 21 February 1985, the date on which that speech was delivered, that in the three weeks before the Australian dollar has declined from a United States dollar value of 81c to a value of 68.20c. There had been this decline in the three weeks leading up to the publication of that speech. Perhaps the Government does not think that matters. Perhaps it does not see the international market for our currency, and the international value of our currency, as any measure of international concern or any measure of the effectiveness of our economic policies. I say only that is not the view of the Opposition. I think it is extraordinary that the Government can lay down its program without reference to that extraordinary change in the value of the Australian dollar.

That is not something that is totally outside the Government's control or concern. The Prime Minister has publicly conceded that the debacle over the MX missile testing and the Government's own failure to deal with its Public Service dispute and to control the flow of money in Australia were significant contributors to the difficulty faced over the Australia dollar. Nothing in this Speech draws attention to the fact that, since the improvement in industrial relations that we saw during the difficult economic times of the last two years, we have had an outbreak of industrial mayhem. What is the situation with respect to industrial relations when one looks at it from the vantage point of the Speech made on 21 February? The Speech talks in terms of great improvement. What was happening during the December-January period? Our major export industry, the coal industry, which returns the greatest value in exports today, was again being struck down by futile trade union activity in the Hunter Valley. That strike did not have the support of the Government, nor did it have the support of the New South Wales Labor Government. However, the Governor-General's Speech claims that this Government has skills in industrial relations. But we had, yet again, the cutting off of the flow of our major export, a further demonstration of our unreliability as a supplier, and a total failure of the governments concerned to deal with this serious industrial relations issue.

At the Commonwealth level, Government senators have spent a lot of time telling us, the elected senators from the Liberal and National parties, that there could be no more heinous offence than that we should deny Supply. That would be an absolutely dreadful thing. Yet they let their own public servants cut off the supply of money to their own Government. They allowed public servants to bank up the moneys, to put the moneys that were being delivered to the Government into cupboards, and to deny that money to the Government. It is not good enough for the elected senators to be allowed to deny the Government Supply. But members of the Administrative and Clerical Officers Association may do so. They did it with impunity, and eventually the Government weakly resurrected some of the provisions it had taken out of the Act to control the actions of public servants-the illicit, unprincipled and anti-public interest actions of public servants. The Government took those provisions out of the legislation, so it was forced to go back to the Arbitration Commission to seek the power to stand down public servants, and then it weakly stood down a few. The Government let public servants get away with it after those public servants had had access to arbitration. Those public servants were striking because the Arbitration Commission had refused their demands. Now the Government is allowing them to go back to the Arbitration Commission to try again. Rumour has it that if the public servants are not satisfied, they will deny Supply to the Government again. Is that not some sort of crisis that might have warranted passing mention in the Governor-General's Speech? No mention is made of it.

The list of problems that are ignored or skated over in this Speech is quite extensive, and I do not have time to deal with them all intensively. In terms of our long term health as a nation, we face a series of threats to our economic and social wellbeing beyond those I have mentioned. There are poor prospects for many of our export commodities. There is an extraordinarily difficult cost-price squeeze on the rural sector. I was in a wheat growing town in Western Australia a week ago and I was told by wheatgrowers that there was not a single budget submitted to the local banks that was not in deficit for that year-not one. That tells us something in a practical way about the cost-price squeeze facing the Australian rural sector. The Bureau of Agricultural Economics is predicting declines in rural incomes, declines in returns, an extraordinarily difficult market for wheat and other primary produce, and sugar is in a desperate situation. Where is the sense of any of that in this so-called blueprint for Australia, the Governor-General's Speech?

The balance of trade problems which are resulting from the sorts of points I have been making meant that in the seven months ended January 1985 Australia's trade account had slumped into a deficit of $1.5 billion, compared with a $376m surplus for the equivalent period in the previous year. Our current account deficit had climbed to $6.8 billion compared with $3.8 billion in the previous year. We have an absolute disaster facing Australia in that area. Where is that dealt with in the Governor-General's Speech? Where is there mention of our lessening competitiveness? Where is there mention of the barriers to increased productivity? Where is there mention of the rigid labour market in both wages and work practices which is denying employers and employees the opportunity to create work? Where is there reference to the inefficient and costly statutory monopolies that are costing this country so much? Where is there any reflection of what the Minister for Communications (Mr Duffy) had to say about the Postal Commission in a very fine speech about a week ago? He pointed out that there is no future for the Postal Commission if it maintains the sort of work practices and attitudes it has now and the results it is achieving now. Where is there any sense in this Governor-General's Speech that Australia is being hampered by its transport and statutory monopolies, the cost of which has risen so much faster than inflation in the private sector in recent years? There is no mention of that and there is no prospect that those problems will be tackled.

Where is there any mention of the turmoil on the tax front? Yesterday the Prime Minister had to get up in Caucus and ask Government members to stop talking about tax because of the confusion they were causing in the electorate-turmoil about what might or might not be done. Where is there any really serious attempt to come to grips with the fact that for the foreseeable future nearly one in four young Australians will remain out of work? The whole of this document stands as a disgrace to this Government, and there is no attempt at all to blueprint the next three years for Australia. What this Government has presented is a bland and pathetic non-program for real reform.

I suppose it is unfair to say that there is no reference to employment; there is. I just say that it is totally inadequate. Let me touch quickly on the community employment program, which gets honourable mention as the creator of 57,000 jobs and something that will create 65,000 jobs this year. The Minister for Employment and Industrial Relations (Mr Willis) has said himself that if one tries to make these jobs permanent one will simply create more unemployment in the private sector. There are some useful things being done in the community employment program, but I would ask how many people think the Government is coming to grips with the real problems of Australia when they look through the Press releases put out by Mr Willis and note the jobs which are being created. Let me pick some really fine examples. There will be a $143,000 grant to the performing arts group Women on a Shoe String to provide seven jobs for long term unemployed women for 12 months to help present musical and theatrical performances, including free public performances, aimed at the general community. I do not think that many people would see that as a very serious attempt to come to grips with long term problems facing the Australian unemployed. We might be more attracted by the Royal Australian Ornithologists Union's promotion of public appreciation and awareness of birds in the Perth metropolitan area, one job for one year; or perhaps by five jobs for 26 weeks collecting urban stray cats in Western Australia. I am really sick of this sort of farce being presented as a serious attempt to come to grips with Australia's problems, and when I see the ability of Government members to slide past these facts, I can only say that they stand condemned.

There is one solitary area of boldness in this whole program which gives a pointer to what the Government should be doing to come to grips with Australia's real, long term problems. We have the extraordinary aberration that in the financial area the Government has been prepared to move boldly and, in the view of the Opposition, correctly down the path of financial deregulation. We have supported the floating of the dollar, we have supported the deregulation of the financial system, and we have supported the admission of banks-we were advocating that in the teeth of Labor opposition when we were in government. The important point to note is that that is a splendid but isolated example of what is required in Australia today. In its isolation it is an important lesson to us. The fact is that elements of this Government know what is required. Somewhere, hidden away in the Government, there is a streak of economic rationalism that would like to burst out, but it has been able to burst out only in the financial sector. We welcome that. Let me repeat what Mr Howard said a week or two ago as economic spokesman for the Opposition:

We wish that we could join in partnership with the Government in a similarly constructive effort to deregulate other sectors of the Australian economy, and particularly the labour market.

The Opposition stands very ready to co-operate fully with the Government in anything that will ease and remove the long term problems we face, particularly the problem of long term unemployment, but the Government does not have either the conviction or the courage to make the related changes, particularly those to the labour market.

I shall quickly touch on the labour market change. The easy political answer for Government members-sometimes the Australian Democrats may tend towards this argument too; I hope not-is that the Liberal Party and the National Party are arguing for lower wages. That is not our argument. Our argument is to have a flexible system that will permit economic growth and enable us all to be better off. The Labor Party can say that it is against cutting wages, but it has just seen the value of the Australian dollar-the dollar which is earned by Australian workers-decline from US81c to US70c. I would have thought that that was a cut in wages. The fact that the goods one wants to buy from overseas have become that much more expensive is clearly a cut in wages. What we are saying is that living standards are being destroyed in Australia, and that is only being hidden from sight by the fact that the burden is being borne by the unemployed. Those who are in work can protect themselves-or appear to protect themselves-in the short term on the backs of those who are unable to get work. The country goes down the chute. We go from being the richest country in the world to being the fifteenth richest. We drop, we drop, we drop, and we hear plaintive cries from the Labor Party that it is protecting living standards. That is an absurdity, and the sooner we have an honest debate about it the better.

We have a country in which an assembly line can be stopped because the wrong man puts a screwdriver on to a machine. A factory can be stopped because the wrong man picks up a piece of paper off the floor. We have a country where a new way of producing things can be blocked because the trade union does not agree with it. We have a country that is capable of strangling itself in that sort of stupidity. There is no sense in this Governor-General's Speech that the Government is prepared to come to grips with that. The Governor-General's Speech really skates past the squandered opportunities that the first Hawke Government had. The major lost opportunity was to use the recovery and revenue surge that resulted from the ending of the drought and the wage pause to get the Government's house in order. Instead, the Government expanded expenditure and taxation to the highest levels ever. Now, when we are walking a knife edge on the path to recovery, the Government is facing all of the difficulties that that profligate action over the first year and a half of government is costing it.

I conclude by saying that it is the Opposition's firm belief that this is still a time of opportunity for Australia. The day after the Governor-General made his speech on behalf of the Government, the views of 10 economists were published in Business Review Weekly. I would like to quote the reasons given by one of them as to why we can be optimistic about the prospects that Australia could have if it were governed properly and in the public interest. I refer to a report of what was said by the economist to CRA Ltd, John Macleod. Business Review Weekly states:

The outlook for the international economy is 'probably the best we have seen in three decades' . . .

Macleod forecasts further strong economic growth in the United States and Japan, the rising industrial nations of Asia and some Latin American countries such as Mexico and Brazil. However Europe-with its 20 million unemployed-is still lagging in the growth stakes.

I do not have time to analyse why Europe is lagging and the other countries mentioned are not lagging but growing; however it is important to note that in the view of that commentator and many others this is the time of opportunity for Australia. I close by referring to what those 10 economists, including Mr Fraser, the head of the Treasury, thought was the problem for Australia. I quote again from Business Review Weekly, which brought together the views of these 10 people:

Australia is walking an economic tightrope-one slip and it is the recession all over again-and the main hazard is another bout of wages-fired inflation.

No one put it better than the new Treasury mandarin, Bernie Fraser, when he said a 5 per cent productivity-based wage rise would be 'disastrous' for the economy.

Mr Fraser's final remark, as reported in this section, was:

The best outcome would be no productivity rise at all.

Mr Deputy President, there are opportunities for Australia at the moment. There are opportunities for us to capitalise on the reality of continuing economic recovery. There are still opportunities for us to do something about the long term unemployment problem and about the need for vigorous economic growth in Australia. The sad fact of the matter is that this Governor-General's Speech indicates that the Government will not have the courage to grasp the nettles that have to be grasped if we are to meet that challenge. There will be no total opposition to the sort of productivity rise which is demanded by the unions and which the head of the Treasury says will be so damaging to us. The Government shilly-shallies on issues such as whether it will discount rises in the consumer price index from wage rises to allow for the effects of devaluation. We have a government which has lost its nerve, lost its courage and lost its sense of direction. I think we will all keep the Governor-General's Speech of 21 February 1985 because it marks a milestone in the destruction and failure of the Hawke Government.

The DEPUTY PRESIDENT —Before I call Senator Vigor, I draw the Senate's attention to the fact that this will be his first speech in this chamber. I ask honourable senators to afford him the usual courtesies.