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Wednesday, 15 May 1985
Page: 1976

Senator TATE —Is the Minister for Finance aware of statements made last night by the Deputy Leader of the Opposition, both in a written statement and on television, to the effect that the Government was now likely to abandon all fiscal restraint when it came to the Premiers Conference later this month? In particular, I ask whether he is aware of Mr Howard's remark:

. . . even if you hold them--

that is, the Premiers--

to the same in real terms . . . you're going to add $600 million.

Can he say whether there is any substance to this prediction?

Senator WALSH —In answering the previous question I alluded to this matter. Senator Tate has quoted what Mr Howard said on television. That concurs with the extract from the transcript which was given to me of what Mr Howard had said. The short answer to the question is that no, there is no substance in Mr Howard's prediction. Mr Howard ought to have known that very well because the correct position was set out quite clearly and concisely on the first page of the Press statement which I issued last week in association with the publication of the Forward Estimates. Either Mr Howard is not doing his homework or he has memory problems on quite fundamental aspects of government financing and government policy.

As I have said, Mr Howard could perhaps be forgiven for a momentary lapse in concentration and for misstating the situation while he was on television. What is much more difficult to forgive-indeed it is unforgivable to the degree that a person who makes such a statement should not have pretentions ever again to be Treasurer or a Minister in an economic portfolio-is that in a Press statement issued by Mr Howard last night, he said:

Even the basic assessment is open to serious question. The Government will not save $1,250 million next year because in one stroke half of the so-called ''savings'' will be wiped out at the forthcoming Premiers' Conference.

Even if grants to the States are held to the same amount in real terms as in the current year-which is tougher than the Premiers are expecting-they will wipe out $600 million of Mr Keating's much proclaimed ''savings''.

That is not what the Deputy Leader of the Opposition and shadow Treasurer said; that is what he wrote and had publicly released. Had he bothered to consult the Forward Estimates, or had he been capable of understanding them, he would have seen expressed quite clearly even in the covering Press statement, that the Forward Estimates per se assumed the same money payments would be made to the States as were made this year. The reason that it was done in that form is that the tax sharing legislation expires at the end of June and there is no legislative obligation for the Commonwealth to provide any percentage of taxation revenue to the States in the next year, but of course there will be some replacement policy. It was judged by the Department of Finance officials and by me that it was unrealistic to suggest that the States would be held to the same money amounts in 1985-86 as they had received in 1984-85 and therefore a notional $1 billion was put in, principally to cover whatever actual increase in money payments the States receive pursuant to the Premiers Conference.

If Mr Howard had done his homework at all or if he were capable of understanding fairly simple figures and fairly simple arithmetic, he would have known that; apparently he does not. It is absolutely wrong to write, as Mr Howard did, and subsequently publish, that if the States were held to the same amount in real terms next year as this year $600m of their savings would be wiped out. That is completely incorrect. Whatever the ultimate figure in tax sharing payments to the States overall may be, it will be accommodated within the same money amount which was published in the Forward Estimates and the additional $1 billion to which the name 'conservative bias' was applied. It will be accommodated within those totals and it will not, as Mr Howard asserted, wipe out at least $600m of last night's savings.