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Wednesday, 15 May 1985
Page: 2001

Senator MESSNER(4.30) —I will read the terms of this matter of public importance for those who may be interested at this late stage of the debate.

The continuing doubts and uncertainties about key economic issues, particularly wages policy.

I suppose we should give some credit to Senator Richardson, who at least came into the chamber and adopted his best form of defence-and that is attack. The key issue on which he attacked the Opposition was to ask us where we would undertake the cuts if we say that the cuts in the mini-Budget handed down last night have not been large enough. There are a few areas that we should redraw to the consciousness of Senator Richardson and the Government. They may remember that at Question Time today Senator Walsh, the Minister for Finance, said quite clearly that he could give no guarantees as to whether or not these Budget cuts outlined last night will survive the coming Budget. The scene is set for a situation that would repeat the performance of 1983-84 when the Government announced cuts in the Forward Estimates, but then immediately proceeded to boost spending with new programs worth $2.5 billion. That is the sleight of hand trick this Government is on about. It will not guarantee that there will not be new programs in the forthcoming Budget. That is why these expenditure cuts are illusory, superficial and cannot be relied upon.

Senator Cook —What are you complaining about them for, then?

Senator MESSNER —Senator Cook, that great supporter of the Western Australian wine industry, interjects with his usual ill informed comments. We know that he is a great supporter of the establishment of the National Occupational Health and Safety Commission. A new Commission is being set up by legislation today in this place at a cost of over $34m, with at least 140 new employees and a budgeted rise to 300 or a figure of that order. These represent three new statutory authorities, yet I believe that already 25 new statutory authorities have been created since this Government came to power in March 1983. What has this Government done to look at those sorts of issues? It has gone ahead and implemented its own programs while it puts the screws on the people who really need the help.

Let us come to those points. What last night's economic statement means to the people of Australia is that it screws down on those who need help most. One does not have to look too far. I looked at a report on the Forward Estimates that was brought down the other day by the Minister for Finance, particularly page 36 where the expenditure items are summarised. Under the heading of 'Assistance to Families', the key unit in our society, we find that there is to be a reduction in expenditure of 0.2 per cent. That is the scale of the Government's thinking. Let us examine another area which offsets that kind of thinking-and this is how this Government goes about cutting expenditures. It is so conscious of the taxpayers' welfare that it goes about looking after expenditure wherever it can in the area of the invalid pension. The amount allocated has increased by $119m. Under questioning in the Estimates committees and in debates in this place last year, it was revealed that the Minister responsible at that stage, Senator Grimes, gave instructions to medical officers administering the program to be more lenient in giving out invalid pensions. He is on the record for that. Does that show a real concern about government expenditure? These are the facts. The document that was before the House last night is cosmetic and without any real effect in changing the direction of government expenditures.

Senator Kilgariff —You have driven him outside.

Senator MESSNER —Senator Cook is easily driven outside. The document is an exercise in creative accounting. It fails in the area of leadership. Obviously it was designed to create an impression in the community that the Government knew what it was doing, that it was determined to change the direction of the Australian economy, or at least the perceptions of it, and in that way to try to stop the fall in the Australian dollar. What people in the community, the financial community, the businessmen were looking for was some definite statement as to what this Government intended on wage policy. That is where this document fails again. Not only did it pile hardship on the most needy, but it failed to discuss this vital element of policy which is facing us right now, in the light of the devaluation of the dollar. The newspapers recognise that. The editorial in the Melbourne Age on 15 April 1985 recognised the need for that and encouraged the Government to do something about it-and it has not done so. The Australian Financial Review on 12 April 1985 drew attention to this very important need as follows:

Mr Hawke's basic credibility problem with all this is that he is negotiating about wage rises that are in addition to full indexation.

I will come back to that point. The editorial continued:

Mr Hawke is at sea because even a serious argument about possible additions to full indexation is rightly inimical to financial markets. The balance is so fine between full indexation of wages and inflation that confusion about where the Government stands must inevitably lead to fears in the markets, as Mr Hawke is finding.

That key issue is summed up very well in that article-namely, that the perception about leadership in wage policy is the key to financial market stability. Let us see what the Government says about that. In its financial statement yesterday, instead of showing a determined attempt to say what the Government's policy will be-that it will not support productivity wage increases, that it will not seek to defeat indexation, and will not go to the wages tribunals to seek that kind of approach-it argued weakly that it will be discussing with the Australian Council of Trade Unions how to trade off productivity increases later in the year as against a discounting in wages which would perhaps be desirable as a result of the devaluations of the Australian dollar.

That is the weak argument that this Government is seeking to sell-some kind of backdoor deal with the trade union movement. It cannot come out and deal directly in the open and lay down its position, because it knows that it is in the thrall of the trade union movement. Many honourable senators on the Government benches owe their pre-selection to the trade union movement and are beholden to it. How can they stand up in this place and argue appropriate wage policy for all Australia when they are so beholden to a section of it, the trade union movement? They cannot and they will not, and certainly the Treasurer Mr Keating, last night did not. This document is a disaster in that respect. The comment one reads in the newspapers today shows clearly that that is so. The editorial in the Australian Financial Review today said that Mr Keating:

. . . wriggled out of any firm commitment on wages policy by arguing that the impact of devaluation on the CPI is gradual and uncertain.

The editorial continued:

This is quite true but it hardly excuses a simple declaration that therefore full indexation can safely proceed in September.

I believe that editorial says it all. I return to the point about the productivity case that is coming up next year, and the attempt by the Government to trade it off against discounting. I do not know how many honourable senators on the Government side saw on television this morning Mr Geoff Allen from the Business Council of Australia. He said:

In our view there really ought not to be a distribution to labor--

he means to wages-

through the productivity hearing in any case . . .

He was thinking of the unemployed in the community rather than the employed. That is the vital element that is missing from this Government's thinking. All it is concerned about is looking after those who are in jobs now. It is not interested in taking on the trade union movement and seeking to increase the number of jobs for the unemployed in the Australian community.

Senator Kilgariff —The club.

Senator MESSNER —That is the club, as Senator Kilgariff so rightly points out. Mr Allen's remarks are particularly pertinent because they indicate that productivity increases should go into the area of private investment where jobs can be created. Did not Mr Hawke, the Prime Minister, say this morning on AM that, indeed, the public sector had to get out of the financial markets now and make room for the private sector to expand its investment and so create more jobs for the unemployed? Yet the Government does the opposite. It says that that is what it wants to do but it does not do it. Why? Because it is in the hands of the trade union movement and it cannot move without losing its solid political base in that area. The Government knows that. I just want to repeat that point: Mr Allen says it all, that the way in which we can create jobs for the unemployed is by saving our productivity gains in such a way that we can stimulate private investment in this country. That is a vital element in this thinking. This Government has failed to address that matter in its wages policy.

That point having been stressed, I want to refer quickly to just one or two other matters, in particular to the freezing of nursing home fees. Senator Walsh sought to make fun of this matter in Question Time today. In South Australia, Victoria and the Northern Territory nursing home fees will now be frozen. As a result, there is a chance that a number of people will be forced out of nursing home beds in those States and the Northern Territory. I want to make this point to the Government, which should appreciate it and I am sure that in its saner moments it does: The increased costs which appertain in those States result from State government regulations, from the imposition of certain ratios of staff to patients. This has the effect of driving costs higher in those States. The Commonwealth must bear the cost. The appropriate response from the Commonwealth would be to go to its colleagues, the Premiers of those States, negotiate with them and seek to have those charges reduced. Perhaps that is what the Government intends doing in the Premiers Conference. Maybe that is what it intends to say-I do not know-but the Government should at least acknowledge the truth of that position at this moment.

The second area was referred to by Senator Dame Margaret Guilfoyle, and that is child care places. The Government is cutting current support levels for the people most in need of child care but maintaining the sacred cow of its program announced two years ago to increase the number of places by 20,000. Where is the logic of that? If the Government is seeking to cut from the Budget expenditure in the area of child care it should be attacking the new places because they are the ones which will cause the increase in the future. They will be an ongoing increase to expenditures. This is what this Government does not do; it does not face up to the real issues at all. All it does is fool around at the edges and it never gets things right. Unfortunately, that is the situation with child care and with numerous other measures which have been mentioned by my colleagues this afternoon.

I conclude by reiterating that not only in the Opposition but also in the business community, certainly in the welfare community and in the wider Australian community, there are continuing doubts and uncertainties about this Government's policies and particularly about its key economic policies and its lack of any coherent wages policy.