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Thursday, 21 March 1985
Page: 625


Senator TOWNLEY(10.16) —Earlier today I was talking about the economy and the nuclear fuel cycle of which, of course, Australia is part. I said that it would be foolish for Australia not to take advantage of being able to sell uranium to other countries because uranium is a reasonably common mineral. Once contracts were signed with other countries and not with Australia, we would have a lot of trouble getting back into the act. I want to talk, too, about the economy. I commend to everyone a reading of Senator Short's speech of yesterday because it contained some most pertinent facts. I have noticed that at last many financial writers are recognising the danger that faces Australia because of our Government's continuing overspending, because of our deficit. I do not refer only to the present Labor Government. When Mr Fraser was in government he attempted to control the situation but I do not believe that that is happening now. I believe that there is a learning curve with deficits and that it takes a while for members of any government to learn just how important it is to control their spending. I have yet to see evidence that the Hawke Government has learnt that lesson.


Senator Jessop —State governments, too, have a responsibility.


Senator TOWNLEY —Of course, as Senator Jessop says, State governments have a responsibility. I do not absolve any of them from the spending that they are undertaking. All of them have to do something about the amount of money that they are spending. I have before me some figures showing the indebtedness, and the per capita liability of the international banking community of selected countries in 1983. The countries are Australia, Poland, Brazil, Argentina, Mexico and Chile. These figures were prepared for me by the Department of the Parliamentary Library Statistics Group. I seek leave to have the chart incorporated in Hansard.

Leave granted.

The document read as follows-

PER CAPITA LIABILITIES TO THE INTERNATIONAL BANKING COMMUNITY, SELECTED COUNTRIES: 1983

Per capita Country

Liabilities Population liabilities

($US million) (millions) ($US/person) Australia 18,444 15.37 1,200 Poland 10,923 36.57 300 Brazil 62,227 129.66 480 Argentina 25,852 29.63 870 Mexico 68,432 75.10 910 Chile 12,098 11.68 1,040


Senator TOWNLEY —As anybody looking at that chart will see, Australia in 1983 was more indebted than any of those other countries. They are the bad boys, perhaps, of international indebtedness, and we are the worst of the lot. The only one that comes close to us is Chile. The position has changed somewhat from the previous year when Argentina was closest to us. Now Chile is closest. We are more indebted than any of those countries, and I believe that these figures represent the situation before we add the indebtedness that has come about due to the borrowings of this financial year. Certainly, over the last two years we have stupidly borrowed more than $15,000m. That is, as I believe others have stated, roughly $1,000 per man, woman and child per year. The headline to an article in the Sydney Morning Herald a couple of days ago read: 'Government borrowings hit a 30 year high', yet we hear glib talk about another $6m being borrowed in the coming year. I believe that that is quite dangerous for this country. It is easy to see why the value of our dollar has dropped relative to other currencies as well as to the United States dollar and with this, of course, the living standard of every Australian.


Senator Jessop —What will that mean to our interest repayments?


Senator TOWNLEY —I will get to that in a moment. I think that is something that has to be addressed by the Government. The interest rates that apply to the individuals in this country who own or who aspire to own a house will have to rise from their already high levels if governments-I include the State governments-and their agencies continue to compete so heavily for the available funds. It is no wonder that some people are asking whether we will follow the economic slide experienced by countries such as Argentina. We now spend 20 per cent more each year on our bill for interest on borrowings than we do on education. Our interest bill in the August Budget was estimated to be $5,600m, almost as much as the defence budget. I expect that, because of the change in the economic factors brought about as people start to realise just how silly our government spending is, when the figures are finally tallied we will be spending as much on interest as we do on defence. As an engineer used to analysing figures I have to say that the trend of interest payments is a very nasty one. Unless something drastic is done this country will soon be spending 20 per cent of its gross domestic product on its interest bill. Of course tremendous problems are involved with such payments. If our export incomes fall, if our exports fail, we will be in deep trouble. I suggest most strongly that the spectre of our huge Budget deficit, and our huge debt should become the main point of discussion at the summit that will be held shortly. The Prime Minister, Mr Hawke, is overseas pointing Canada in the right direction, making sure that its economy goes well.


Senator Jessop —Is that going to cost another $400,000?


Senator TOWNLEY —I will get on to that in a moment. His real responsibility is here, looking at just what should be done in our next Budget to make sure that the country does not go the way of Argentina.


Senator Kilgariff —He is looking for a quiet two weeks.


Senator TOWNLEY —Sometimes I think it is better when he is out of the country but the situation in Australia is getting so serious that all of us have to give every bit of thought to how we can save this country from the economic disaster that I believe, and others who are now reading the international papers and who see what happens in other countries believe, may occur.


Senator Jessop —Whenever he goes overseas the value of the Australian dollar goes down.


Senator TOWNLEY —I have not plotted a graph of his overseas trips in relation to the Australian dollar but I will do that when I get a chance. Just today I got a statement from the Real Estate Institute of Australia in which its President, Mr Kevin Sullivan, said certain things. If it is the wish of the Minister for Community Services (Senator Grimes) I will read the statement but it is just a straightforward one page document and I seek leave to incorporate it in Hansard.

Leave granted.

The document read as follows-

GOVERNMENT EXPENDITURE 'AN OBSCENITY'

The tax summit should be about government expenditure, Mr Kevin Sullivan, President of the Real Estate Institute of Australia, said today.

'We are told that the tax summit is to be about tax reform, and we certainly need that.

But if governments at all levels reduced their spending there would be a simple tax reform-less income tax to meet insatiable government demands for spending money.

Mr Sullivan said public sector spending in real terms had been allowed to rise steadily year after year and this had forced taxation to intolerable levels.

'Today, some 42 per cent of the nation's income is gobbled up by governments. Ten years ago it was about 32 per cent,' Mr Sullivan said.

'During the last election campaign the Prime Minister promised that government spending would rise at a lower rate than economic growth.

This will be hard to achieve: last financial year the real growth in the economy was 5.7 per cent but the real increase in federal government budget outlays was 7.7 per cent; this financial year a real growth of 4.5 per cent is estimated compared with a real increase in government spending of 6.1 per cent.

Mr Hawke's promise calls for an increase in government spending of no more than 3 per cent.

But the real problem is that we are being conditioned to rises in government expenditure. We should be demanding that government spending falls in absolute terms.'

'Then our taxes could fall too,' Mr Sullivan said.

''To quote a word from the Prime Minister's vocabulary, government spending has become an 'obscenity'.'' Mr Sullivan said.


Senator TOWNLEY —It is my belief that whoever is in government has to cut government expenditure in real terms, in both State and Federal spheres. If we do not those not yet born will have every reason to despise us. Mr Hawke was lucky to take over with the wages pause in place and the breaking of the drought came just after he took office, but his charisma will not save him if he does not control government spending this year and every year he remains in office.

Many people have made rude remarks about the next matter I want to talk about tonight, but I will not comment on them. I object most strongly to the way in which the Leader of the Government in Senate (Senator Button) used a Boeing 707 aircraft as his personal carriage to the recent funeral in Moscow.


Senator Grimes —Oh, Jesus!


Senator TOWNLEY —It is all right for Senator Grimes to say whatever he said-I will not repeat it-but some distinguished Australians, regular world flyers, are starting to use these aircraft as though they are taxis. When they were bought the ruling was that they were to be used by the Prime Minister only outside Australia. I was against their being used by the then Prime Minister, Mr Fraser. At the time I felt that the spending of millions of dollars was not warranted, and I was apprehensive that other Ministers would not be able to keep their fingers out of the till, as it were, and would not be able to resist the temptation to use money from the public purse to travel in the biggest VIP aircraft around.


Senator Messner —It was a good security question.


Senator TOWNLEY —I will get to the security question in a moment. The fact that Senator Button was representing the Prime Minister in this case does not make this misuse of VIP aircraft any better. The pretext that if Ministers do not use the VIP aircraft they will inconvenience people on commercial aircraft does not wash with me one little bit. Who is going to worry about Senator Button? Do honourable senators say that someone will try to apprehend him on his way to Moscow? Saying it was a matter of security is not good enough.


Senator Peter Baume —What did the Labor Party promise before the election?


Senator TOWNLEY —I will get to that in a minute, too. Surely we are not saying that Senator Button would require the same protection as the Prime Minister. Who on earth is kidding whom? The picture of a 707 in turbulence with Senator Button in it is frightening. We would have the little bloke floating around in a big aeroplane; they would have to tie him down. How much would it have cost to fly by Aeroflot from Paris to Moscow? Why did the Government not send somebody with a bit of stature, such as the ex-Labor Prime Minister, Mr Whitlam? If the Government could not make up its mind who was to go from here in time to catch commercial flights, why did it not ask Mr Whitlam to go? I am sure he would have loved it.


Senator Jessop —They could have looked up to him.


Senator TOWNLEY —I do not want to get personal, but if Senator Jessop says that they could have looked up to Mr Whitlam, I believe him. He is not one of my favourite people in the world but I still think for the sake of saving about a third of a million dollars, which is what we are talking about, it would have been a very good idea. This country cannot afford to have Ministers tripping around the world in big aircraft. I hate to exaggerate, but I believe those aircraft cost over $3,000 an hour to run.


Senator Messner —It is $6,000.


Senator TOWNLEY —Someone says $6,000. I do not know whether that is right or wrong. I will try to look it up in the Estimates when those figures are before us. The fact is that Senator Button should have had more sense, decency and consideration for the Australian people than to use a huge aircraft like that to go to Russia. As I said, if he could not make up his mind in time why did the Government not get Mr Whitlam to go with Aeroflot? I am sure he would have loved to fly by Aeroflot from Paris to Moscow. It probably would be a direct flight. It was not being done for security, for the safety of others, but to inflate the ego of small people. It is a scandalous waste of taxpayers' money. If that matter is allowed to go on unnoticed, where will it stop? He is not the only Minister who has used the 707s, against the original decision of the Government which bought them. The list of VIP flights should be tabled much more regularly than at the six-monthly intervals it is now. That enables Ministers to hide behind the time delay to prevent us from seeing exactly what they are doing. I would like to see what a lot of Ministers are doing, but tonight I am talking particularly about the scandalous waste of money in sending one person to Moscow in a 707 which, I am informed, costs $6,000 an hour to run. I was against the purchase of those aircraft, because I knew that Ministers would use any excuse they could think of to expand their use and to get their hands on those aircraft.

If one looks at what has been happening with VIP aircraft over the last few years, one will see a pattern. We have some BAC-111s, which are the biggest and cost a fair bit to run. The next ones down are the Mysteres. If someone goes to the airport and there are two aircraft there, they always say: 'I will have the big one'. It appears that way.


Senator Jessop —You may not get the choice.


Senator TOWNLEY —You may not get the choice, I agree entirely, but why on earth are the hours on the BAC-111s going up and the hours on the Mysteres not going up?


Senator Messner —That is interesting.


Senator TOWNLEY —It is very interesting. It has happened over the last few years, while our government was in power as well, so I am not being one-sided about it. If we let this go, we will gradually see the 707s being used for Ministers to float around Australia, until eventually the 707s will be so busy that somebody will say: 'I need a bigger one; I want a 747'. Some of the Ministers cannot keep their hands off the big aircraft, and they say to the public: 'Get lost; hang the expense'.

For the record, let us talk about what it costs to run the VIP fleet in a year. About a year ago it was costing about $15m per annum to run the VIP fleet to look after our very important-in their eyes-Ministers. They will say it is for training flights. I wish I had $15m to train in an aircraft. The way I fly, I might need it. To put it into perspective, we have 76 senators and 148 members of the House of Representatives. If we give each of them about $50,000 a year, that comes to $12m a year for the salaries of all members of the Parliament. The cost of running the VIP fleet is $15m a year, spread over some few Ministers. That is a good indication of what is happening. Imagine the screams if somebody suggested doubling the salaries of all members of parliament, but that is what the public is spending, in one way or another, by way of the VIP fleet. Let me be perfectly clear that I am not for a moment suggesting that we do have our salaries doubled, Senator Grimes. I believe we are very well looked after at the moment.


Senator Grimes —I would not do that to you.


Senator TOWNLEY —The equivalent of that amount is wasted in VIPs. I leave it to the Senate and to people outside to judge whether we are getting value for money. I see the answer to that question as a clear 'No'.