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Tuesday, 16 April 1985
Page: 1054

Senator COOK(5.21) —It is in many respects a pity that the Opposition has chosen to bring on this discussion of a matter of public importance today. It is a pity because it tends to conform with the tradition of members of the Opposition to see no avenue for themselves on the economy except to carp, to criticise and in general to develop an image of gloom and doom. They have not been on strong grounds ever in that approach. They are not on strong grounds today. The economy is in firm and resolute hands, being well managed by the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) with the support of the rest of the Cabinet and the Caucus. Nonetheless, the gloom and doom continue to be generated and sooner or later someone will have to save members of the Opposition. What do they want? Do they want to shake business confidence, undermine the standing of the economy further and, therefore, wear the blame for any difficulties which might arise? (Quorum formed) The point I was making was that the Opposition has done nothing but try to generate gloom and doom about the economy and that, therefore, it must bear some responsibility if it is true, as it claims, that it has a special relationship with the business community and if some businessmen, in part misguided, believe the gloom and doom that it creates. Let it be put clearly on the agenda that if members of the Opposition continue to be carping, critical and doom-mongering they have to bear the responsibility for those sections of the business sector which may well believe them.

Of course, the truth is that the economy is in firm and resolute hands and is developing well. That is illustrated no better than by the performance of the Australian stock exchanges trading at record levels. The performance of the stock exchanges could be contrasted with what has been described as the irrational performance of the foreign exchange market. Looking at the irrationality of some of the choices made on the foreign exchange market has encouraged members of the Opposition to bring forward this matter of public importance today. They divine a fall in the Australian dollar, which is of course quite a substantial fall, and seek to exploit that by shaking the confidence of the community through their traditional approach, as the Leader of the Opposition (Mr Peacock) in the other place and his discredited deputy, Mr Howard, have been doing, of continuing to attack and undermine the Government.

The reason members of the Opposition have adopted this policy is that they recognise that a strong economy equals a strong government. They know that the economy is performing well. They therefore try to cast a spell over it in order to undermine the Government. We are seeing a debased use of economic statistics and argument for fairly base political purposes, and one ought to recognise that. It was said by my predecessor in argument, Senator Short, that were credit due credit would be given. Senator Short was not here between 1983 and the beginning of this term in 1985. He ought to be informed that had he been here he would have known that, after we had performed the miracle of the economic summit, developed the Economic Planning Advisory Council and established the accord as a firmly adopted instrument of economic regulation, something that the business community and the commentators were all giving us credit for, the Opposition was not moved to give credit where it was due but continued to try to undermine those achievements. So we are seeing nothing but a continuous stream of carping criticism.

Members of the Opposition, by this matter of public importance, have tried to focus on three different areas. First, they have tried to discredit our economic performance, and I want to say something in detail about that shortly. Secondly, they have tried to undermine the accord and the Government's management of wages policy, and I want to go into some detail about that as well. Their third and most recently discovered method of attacking the Government is to pretend that somehow or other the Prime Minister is not in a firm position in his leadership of the Party. I participate in all avenues of the Australian Labor Party and its Caucus and I can say quite clearly that he is and that he has the full backing of the Caucus and of the Party in his economic management and his leadership. Let no one on the other side pretend, as Senator Short did a moment ago in reading a somewhat fanciful litany of so-called failings of the Government, that the Prime Minister is not strongly and powerfully supported by all sectors of the Caucus and that they will not make sure that our economic performance continues. Of course, we will continue in government for a long time-the very thing that the Opposition does not want.

Having, I trust, therefore allayed that particular and latest creature of coalition invention, let me now move to the more important issues of the substance of the matter of public importance-economic performance and wages policy. They seem to be the real nub removed from the political froth and bubble of the Opposition's argument. It is extraordinary that this matter should emanate from an opposition which, when in government, presided over-let no one ever forget this-double digit inflation and double digit unemployment, which brought in the first negative growth rate in 30 years, and which had as its leader in the 1983 election a person who tried to talk down the exchange rate by making boo-statements about massive devaluations for purely political reasons. That is, in shorthand, part of the record of so-called economic management of the coalition when it occupied the treasury bench. It is the very reason those opposite occupy the Opposition benches now. It is the very reason their words are not credible when they talk about the economy and why they will remain where they are.

Our approach has always been to take sober, considered and responsible decisions. Let the results speak for themselves. The runs in terms of this economy are certainly on the board. Members of the Opposition are talking now about international competitiveness. I remind them that that state of competitiveness is the result of 30 years of their government. The ALP has been in government for two years. If there is a loss of competitiveness-we certainly do not concede that there is to the extent to which those opposite assert-it has been their responsibility, not ours. The coalition consistently over-valued the exchange rate because it had no credible alternative for containing inflation. As a result, Australian exporters and Australian import-competing manufacturers were made internationally uncompetitive. That is the record of the coalition. Its industry policy, basic to an approach on competitiveness, is a long saga of failed protection plans. We at least have moved in the steel industry and the automobile industry-where the coalition, I might add, when in government, had policies that were in tatters-and in heavy engineering; and we have started to turn around the regressive effects of long years of neglect. We have had to pick up the pieces and make those industries healthy. They are moving in that direction now.

The coalition's crowning glory was the 1981-82 wages explosion. In that period wages rose at an annual rate approaching 17 per cent. When we get to talk about wages policy that is a point that I will keep coming back to because that ought to be contrasted with our performance. The wages explosion then occurred because the coalition was talking up a lift in resources investment as a boom, a boom which, of course, did not exist. That is the coalition's proud record and its bold experiment in free wage fixing. In fact, the unions in the growth industries got wage rises which flowed through to the rest of the economy. The Leader of the Opposition was Minister for Industrial Relations during part of that time and the Deputy Leader of the Opposition was the Treasurer during that time. That is the Opposition's strategy and it now has the gall to lecture us on wages policy. It lectures us with no strength in its argument at all. We all know of the celebrated Macphee-Howard tussle over what should really be the wages policy of the Opposition which has resulted only in a pathetic compromise of platitudes with no real sense or meaning to it-a vague coalition of promises and assertion that no-one in the industrial relations field believes. The truth is that the Opposition does not have a wages policy. Everyone acknowledges that wages policy is a central plank to economic recovery in this country.

Let us compare the Opposition's record with that of the Government. We have an accord with the Australian Council of Trade Unions, an agreement that has provided a basis for an unprecedented period of wage and dispute moderation. It started with the National Economic Summit Conference, it operates through the Economic Planning and Advisory Council, it is supported by the Conciliation and Arbitration Commission, it has, to the Opposition's chagrin, wide support in the business community and it is standing in stark contrast to the theories espoused by the Opposition. We have achieved in practice through the accord significant improvements in the economy. I might say that anyone in the media or anyone who reads the Press, who has been following this argument as to whether the accord will break and who has bet on the accord breaking down, has done his dough cold. It has not; it has remained solid.

What is the record of the accord, however? Wage rises have been contained completely within its guidelines. This month a 2.6 per cent increase was the first increase in wages for 12 months. The accord, in concert with tax cuts, allowed the Medicare adjusted consumer price index to be accepted for wage indexation purposes. After rising in the early 1980s real unit labour costs have fallen back to their lowest levels in more than a decade. That is an achievement of the accord. In 1983-84 the share of corporate gross operating surpluses for non-farm gross domestic product was the highest for a decade. There has been under the accord in terms of GDP a shift away from wages and salaries towards profits. That has enabled the development of the reinvestment in the economy that we are now seeing beginning to come through strongly. That has taken place in a climate of very low inflation and expansionary economic growth, an achievement which stands without precedent in Australia. When we add to that the fact that our dispute level in terms of man days lost through industrial disputes is at the lowest for 17 years, we can pronounce the accord an unbridled success. Perhaps we ought to remind ourselves that that unbridled success has a human dimension in that now the approach in the field of general industry is much more one of co-operation and teamwork in contrast to the policy of confrontation and putting Australian against Australian in a debilitating and depleting struggle that has sapped the strength of the economy.

The accord has made possible the reduction in inflation to 5 per cent from the coalition's record of 11 per cent-an unprecedented recovery. The accord is the cornerstone of our economic framework. Members of the Coalition in this debate have tried to pitch the falling Australian dollar against the accord in some battle between the two. Now they argue for the destruction of our wage fixing system. I suggest to the coalition that were we to throw out the accord and move back into the market in the way in which it suggests, the exchange rate would plummet because there would be a sudden shock and a loss of confidence in the Government. I can assure the business community that we are not about to retreat from the very successful base of our growth. The Opposition demands that confrontation replace consensus. What better example is there than a contrast of the industrial dispute figures? In 1979-80, 429,000 man days were lost. In 1980-81 the figure was 3,289,000 and, in 1981-82, it was 4,564,000. Let us contrast those figures to our record in 1984-85 of 1,326,000 man days lost. That is the comparison of the result of the Opposition's management of industrial relations, its wages policy, with the effect of our wages policy.

If one wanted to go further one would look at the chaos that is now occurring in Queensland compared to the position in the rest of Australia. We have a ring-side seat for seeing the way in which the two economic systems can run. If we have confrontation we have the sort of social disharmony that is developing in Queensland all of which is based on a flagging Queensland economic performance, a performance which has dragged down the retail figures released today and which, moreover, is dragging down the generally burgeoning economic performance of all of Australia. That has to be recognised.

As to the main argument that the Opposition has been putting concerning a wages policy, the Prime Minister has made it quite clear that within the flexibility of the accord there are alternatives to talking single-mindedly and stupidly about an indexation discount on the upcoming indexation case for September this year. Let me conclude with what I think is a summary quote from a respected economic commentator, Ross Gittins of the Sydney Morning Herald.

The ACTING DEPUTY PRESIDENT (Senator Haines) —Order! The honourable senator's time has expired. The discussion is concluded.