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Tuesday, 23 April 1985
Page: 1354


Senator VANSTONE —I refer the Minister for Finance to the Prime Minister's Press conference yesterday at which, with respect to the claimed $1 billion spending cut, the Prime Minister said:

It represents a cut of $1 billion in the 1985-86 year from what would have been the case if we had in 1985-86 continued the policies operating in 1984-85.

The Minister has already confirmed that this simply means a reduction against the forward estimates of expenditure. Can the Minister confirm that the reduction effected from that figure in 1983-84 was more than $1,600m and in 1984-85 more than $1,300m, so that these reductions from the forward estimates this year are less than in each of the last two years? I further ask the Minister: What would have been the total expenditure required to continue the 1984-85 policies in 1985-86 without the $1 billion reduction?


Senator WALSH —I certainly will not answer the last question. I have had, I suppose, a couple of dozen journalists pestering me with that question for about the last two months. I have not answered any of them and I will not answer Senator Vanstone.


Senator Chipp —Give Brian Toohey a ring on the phone.


Senator WALSH —Go and wash the blood off your hands.


The PRESIDENT —Order! Senator Walsh, I ask you to ignore the interjection and answer Senator Vanstone's question.


Senator WALSH —Normally I would, Mr President, but when the interjection comes from the former Minister who officially presided over the first death lottery in 1965--


The PRESIDENT —Order! I ask Senator Walsh to answer Senator Vanstone's question.


Senator WALSH —Certainly, Mr President. I do not have in my head what the margin was between the ultimate estimate of expenditure for this year and the 1984-85 forward estimates of expenditure. I do know, though, that there was a massive reduction in the forward estimates of the deficit issued in March 1983 when the discredited former Treasurer was removed from office, because he had left this Government with a prospective Budget deficit of $9.6 billion. However, the origin of a great deal of that record and irresponsible deficit did not appear as Budget outlays because the Fraser Government and the former Treasurer preferred the devious route of hiding expenditure by transferring it from outlays to taxation concessions. At the time that the discredited former Treasurer brought in his last and worst Budget that particular subterfuge was used to a quite alarming degree because it had the additional advantage not only of hiding expenditure by transferring it from outlays to taxation forgone but also it deferred at that time the cost of the hand-outs which were announced in the 1982 Budget to the next financial year. It did so because when a new tax expenditure is announced, minus only the degree to which it can be utilised by pay as you earn taxpayers, the cost of that tax expenditure is deferred in to the next year. That is precisely the subterfuge which the discredited former Treasurer used to a record degree when he introduced his last Budget in 1982, because of course the Fraser Government was contemplating the premature election which it ultimately called and which led to its removal from office.

But that bit of fiddling with the books, which the former Treasurer had done, of course left this Government with a tremendous problem-the tremendous problem of coping with the inherited cost, the Budget blow-out caused by the wild and irresponsible spending spree of the former Prime Minister and the former Treasurer. We had considerable difficulty coping with that. I am not sure how much was taken off the forward estimates of that year because the forward estimates, by definition, include only estimated outlays. Nor, as I said before, am I certain how much was taken off the forward estimates of outlays produced in early 1984 for this financial year, but I will get that figure and supply it to Senator Vanstone.