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Monday, 22 April 1985
Page: 1306

Senator PETER RAE(5.14) —I move:

That the Senate take note of the paper.

I believe that this is a matter of great importance and seriousness, particularly to the States of Queensland and Tasmania. The recommendations that are made in this report are such that the report would be a proper subject matter for full debate and not simply for the very temporary consideration that can be given to it during discussion on this aspect of the proceedings. The recommendations have been made in a rather narrow perspective and have already been overtaken by other events, such as the proposal for the tax summit and the proposal for the slashing of the 2 per cent personal income tax revenue which has been previously paid to local government and which is not now going to be paid to local government, if we can believe what the Minister for Finance (Senator Walsh) has not denied in this chamber when the matter has been debated. In fact, he has asserted that he will be seeking to make a very substantial cut.

It is important to look at the report in the context of the Hawke Government announcements, and then retractions, the speculation relating to capital gains taxes and personal tax cuts, the possibility of broadly based indirect taxes, the reduction of payments to local government and the proposals to seek greater contributions to employment and welfare programs by local government, all of which will affect, very significantly and very seriously, the extent to which the report of the Commonwealth Grants Commission is either relevant or already totally and absolutely out of date. I hope that we will be able to identify some of the ways in which this Government proposes to go about a review of gross expenditure and expenditure allocations. This will enable us to get a better idea than we did at Question Time this afternoon on such things as the amount of approximately $50m involved for the Northern Territory. There has been a unilateral disowning of an agreement which was made last year between the Federal Minister for Trade (Mr Dawkins) and the Chief Minister of the Northern Territory, Mr Tuxworth. The agreement that was made in October and November of last year was that there would be continuation of an arrangement which had been entered into that there should be a joint review. This review made some recommendations and there was an acceptance by both sides. This involved the continuing assumption of a liability on the part of the Commonwealth for a contribution towards the cost of the superannuation scheme operating in the Northern Territory. In a unilateral statement made by the Minister, apparently that is to be just wiped out and forgotten. The Federal Minister for Finance is suggesting that that is no longer binding, although from what I can see of the correspondence to date a clear, binding agreement was made at the time.

I do not wish to spend the whole time debating that matter at the moment, but it is one of the aspects of how this Government will go about funding for local government and how it will go about funding for State governments and Territorial governments before we can have a real debate on the recommendations of the Grants Commission which in some ways, I believe, are totally fallaciously based but which certainly involve cuts for Tasmania which would be more than that State could conceivably digest. The Tasmanian Government has been able to reduce the deficit and to make some responsible budgeting. It has made quite substantial cuts in its expenditure. Apparently it is now to pay the penalty for economic management responsibility. It is doing the sort of thing that we have heard the Minister for Industry, Technology and Commerce (Senator Button) talk about. He has been talking about getting some rationality back into industry and some rationality into a whole lot of other areas of economic activity. It is proposed that Tasmania will pay a penalty for economic management responsibility. This could lead only to the recreation of huge deficit budgeting which would be irresponsible from a national as well as from a State point of view. Under these recommendations, Queensland would almost certainly face a similar problem. Quite obviously we need a lot more facts before the matter can be debated properly. I, therefore, seek leave to continue my remarks later.

The DEPUTY PRESIDENT —Order! There are other honourable senators who wish to speak on this matter.

Senator PETER RAE —I am sorry. I had looked around and I had not caught the eye of any honourable senator.

The DEPUTY PRESIDENT —At least one honourable senator has caught my eye.

Senator PETER RAE —I am sorry. That being so, I conclude by saying that I believe this matter should be discussed in more detail when further information is available of the type which I have very briefly outlined which is not taken into account and which does seriously affect the way in which the recommendations should be dealt with. I make the final point that these-

The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. In view of what the honourable senator has said, when all other honourable senators have spoken I will adjourn the debate in order to give him the opportunity to speak at a later stage.