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Wednesday, 15 May 1985
Page: 2003

Senator COOK(4.45) —This matter of public importance signals a new strategy-the poetic might even say a lunatic, mock heroic strategy-from the Opposition. Instead of attacking us at our weakest point the Opposition has launched a human wave assault from its front bench at our strongest point-the fortress of the Australian Labor Party-led economy. It could be that the ideologues of the Opposition believe their rhetoric and perhaps that is why they are doing that. It could be that the new approach is born out of desperation and frustration because, as the economic progress inexorably continues, the chances of a Peacock-led government recede. Perhaps that is why the Opposition is doing that. It could be that the Opposition is gripped by childhood images of the Boys' Own Annual-or girls'-and the Opposition hopes that it will be eulogised in verse like the Charge of the Light Brigade. Perhaps that is why it is doing that. The realists among us know that the situation is different. The last assault upon the fortress of the economy-an attack upon the Government a month ago about the waning fortunes of the Australian dollar-resulted in confidence in both the dollar and the Government rising. The Opposition is not so much poetic as foolish. It is as irrelevant as its arguments, which are irrelevant indeed.

The facts about the Australian economy are that since 1983 when we came to power we have strongly signalled our intentions and acted firmly on them. All of the macroeconomic measures we have proposed have been taken up. There is no mystery about where the Hawke-led Government stands on the economy. We have been bold, moved confidently and delivered upon our promises. Even the audience to which the Opposition is appealing now with this matter of public importance is not listening. Last night on a special edition of the National the Business Council of Australia indicated through its President, Mr Bob White, strong support for the Government's position. I want to quote a few excerpts from the question and answer routine on that program. The transcript states:

JOURNALIST: If you are a little more confident now, how can we expect your confidence to manifest itself? How will the Government be able to measure this confidence?

The President of the Business Council of Australia, Bob White, referring to the May economic statement delivered by the Treasurer (Mr Keating) last night, replied:

I think there will be widespread support. It will be very difficult for any single area of the community to criticise the Treasurer's policies or Treasurer's announcement tonight because virtually no area of activity has been exempted from the Government's attempt . . .

The transcript continues:

JOURNALIST: Mr White are we now likely to see more investment, more sales, more jobs, that sort of thing, as a result-now that you're getting what you want?

WHITE: I think this will restore a lot of confidence in the investment community.

That is the Business Council commenting upon the Treasurer's May economic statement. To traverse the reviews that statement has received, let me go to another speaker, Mr Ken Court, the son of the conservative former Premier of Western Australia, Sir Charles Court. Mr Ken Court is now President of the Australian Chamber of Commerce. He said:

. . . the statement should be warmly applauded as a first attack on waste and inefficiency in Federal public spending.

The spending reform should be extended by a tripartite review of waste and inefficiency . . .

They were warm words indeed from conservative spokesmen. They were not, of course, the only ones. In the corporate sector, one sees comments by Sir Arvi Parbo, the chief executive of Western Mining Corporation Ltd, who applauded the Government. Andrew Robb of the National Farmers Federation gave very strong support in comments he made. Editorials and comments by feature writers in the Age, the Canberra Times and the Sydney Morning Herald all have warmly and glowingly acknowledged that what the Government has done in announcing its May economic statement last night is cut $1.2 billion-odd from expenditure to get the full-year effects of the savings of that money and, therefore, to be in a position to lower the deficit and deliver the trilogy. That has been recognised as the effect of last night's announcement. That is yet another of the bold and firmly delivered initiatives of the Government. It has given confidence to both the money market and the stock market, as has been remarked upon today. The Australian dollar, in anticipation of the economic statement, rose to its highest level since it began to fall. Of course, the stock market is now booming. The market is signalling approval to this Parliament and the community at large that the track, the economic direction of this Government, is proper.

Let us remember that this matter of public importance was launched by the Opposition parties. It is important when considering their allegations, promises and performance to look back to the Fraser years to see how they managed the economy when they were in charge. There is a residual hanging-over of the conservative ethic in Australian politics because there is still an opportunity to compare the two different approaches. We can compare the Bjelke-Petersen regime in Queensland and the wallowing economic fortunes of that accursed State because of the leadership of the Premier and his conservative policies with the rising, strong and firmly improving fortunes of the Australian economy.

However, let us look at what the Opposition parties achieved when they were in power. In 1982, their last year of office, non-farm economic growth was 0.9 per cent. In 1983, the first year of our period of office, non-farm economic growth rose by 2.6 per cent and last year by 5.1 per cent. The years 1983 and 1984 showed in Australia the strongest economic growth of any country in the industrialised world. We can contrast that with 1982-83, under the former Government, when there was negative economic growth of 1.1 per cent. Those opposite cannot blame the drought as they have been doing because Fraser's record in the seven years of his period in office shows an average growth in the economy of less than 2 per cent. Our record, I reiterate, was growth last year of 5.1 per cent, and that growth means jobs, profits, new investment and expansion.

The Government's economic policies are grounded in giving clear signals and following through. Last night's mini-Budget, as it has been called, or economic statement, as it really was, declared cuts of $1.259 billion. We clearly signalled that we intended to provide cuts of that magnitude. The cuts delivered cut expenditure programs that required some paring back in order to get the full year savings on those expenditures, to lower the deficit and to keep the promise of trilogy. As well, we floated the Australian dollar in 1984, something that the Fraser Government talked about but never had the courage to do. When its fortunes waned we had the courage to stick with our undertakings confidently to make sure that we took positive advantages from the devaluation while countering the negative effects of the devaluation. We moved confidently to allow for a freeing up of the banking system in Australia and agreed to introduce new foreign banks, sixteen of which are coming in.

As a general strategy, we have provided the approach of giving government stimulus to the economy when it was flagging and needed lifting and, as it has lifted, we have gradually withdrawn from the economy and provided room for expanding private investment to come in-not crowding that out-to allow for growth without overheating interest rates. This was our main strategy. It is showing signs of working, and the working of that strategy was the basis for the Australian people returning this Party to government at the election at the end of last year.

We have taken the uncertainty out of wage fixation by adhering to the accord. As a consequence, industrial disputes are at a 17-year low. The clear inference is that if workers do not know how their fortunes will be affected they will take industrial action. Now they know confidently that their wages will be indexed according to movements in the consumer price index every six months, and that takes the uncertainty out of it. They have security. They have reacted accordingly. Disputes are at a 17-year low. There have been three increases in wages in the last 26 months and the next wage increase is not due for another four months. Through the accord, tax cuts and Medicare we have been able to keep inflation down. The Government will pull off a major tax review in July and in August bring in a sound Budget enshrining the trilogy-tax, expenditure and deficit-which will guarantee that the private sector will be able to continue to share in the economy, that productive investment will be up and that job creation will grow, as will private sector growth. They are some of the things that we have done. They ought to be clearly on the record.

What also ought to be on the record, given the nature of the debate that has flowed from the Opposition in this chamber, is that, had the promises of Mr Howard at the last election been believed, there would be a still-blowing-out Budget. The promises of Mr Howard, in real hard terms, have been costed to show that there would have been expenditure of $1.08 billion more than was expended when we were returned to office. They were the hard promises, the so-called inducements to vote Liberal, in the last election which would have had irrational effects on the economy, would have blown out the deficit further and would have pushed up interest rates accordingly. In fact when one looks down the list of those promises one can see that they are nothing more than an attempt to pork barrel the electorates which the Opposition earmarked as target areas for itself. It is testimony to the good sense of the Australian people that they just did not believe Howard, based on his performance as Treasurer during the Fraser years and on his presiding over huge and growing unemployment, ballooning inflation and massive deficit problems. That is his record and that is what we remember him for. Every time he puts his head up to talk about fiscal responsibility and economic restraint we ought to remind him of his record.

This matter of public importance, however, is supposed to deal in part with wages policy. In the few minutes left to me I want to turn to that matter because it is of prime importance when one considers how one should try to manage an economy as diverse and as subject to different pressures as the Australian economy. First, let me deal with some of the matters that Senator Dame Margaret Guilfoyle and Senator Chaney spoke about because they really took upon themselves the soft option. Senator Jack Evans of the Australian Democrats, unfortunately for him and for his benighted Party, also fell foul of that approach and attacked particular cuts. The truth is that we made cuts that were necessary. Had we not made cuts and not brought in a May economic statement announcing those cuts, we would have been attacked today by the Opposition for being fiscally irresponsible. That would have been the main thrust of the attack of those opposite. They would have tried to stampede business confidence, attack the Australian economy and lower general confidence in our handling of it. That would have been their case. Everyone knows that that would have been their case. Left, therefore, to argue that we were right in the macro settings that we adopted, they have done the soft thing. They have said: 'Okay, the cuts have been made. Let us select some of the juicier ones, misrepresent them, try to get people confused about them, scare them and attack particular cuts'.

Senator Messner —We would not do that.

Senator COOK —The lie was proved by Senator Messner himself because while Senator Dame Margaret Guilfoyle and Senator Chaney were pumping themselves up and stirring up their emotions in an attack upon particular cuts, he followed them by saying that all the cuts were illusory and cosmetic. When he gets into the party room he had better sort out with his Leader and his senior finance spokesperson who is telling the truth-he or they. The facts are that the cuts were across the board. There was a bit in each area. They were fair and in accordance with the accord. They cut $1.2 billion off our expenditure. They have helped turn the deficit down. They are an incentive and a signal to the private sector to take up the expansion. What those opposite failed to do when attacking particular cuts, and what they ought to have had the courage to do if they wanted to be seen as a responsible alternative government, was to indicate which areas they would have cut. They declined to do that. They have not had the guts to say where they would have pared back. But had we not made those cuts, they would have been criticising us for being too weak to make them. If those opposite are to be credible and are to try somehow to argue that Howard was right to propose in the election campaign expenditure of an extra $1.08 billion, they ought to be honest and say what they would have cut. They do not have the guts or the courage to say that.

This debate is also supposed to be about wages policy. I was mystified at first why that was the case, but now I see that those opposite are trying to use this occasion to argue that wages should be reduced. There has been a reduction in real wages. Wages have been reduced as a proportion of the gross domestic product and profits have risen over the last two years of this Government. We are now experiencing 1960s levels of wage and profit share of GDP. That has been done painlessly with the consent of the trade union movement and has helped enable the economy to expand. No back door deal is involved because what has happened between the Government and the ACTU is nothing more than what happened between the ACTU and the Fraser Government. As a Vice-President of the ACTU I well remember sitting in the Cabinet room at a meeting chaired by Malcolm Fraser when he tried to do a deal in 1982 to get the union movement in this country to accept his 1982 Budget cuts so he could sail into the 1983 election. Honourable senators opposite sought an accord then but now condemn the Government for having one. We have achieved what honourable senators opposite tried to do. Honourable senators opposite are now saying: 'Don't do as we did, do as we say'. That is the height of hypocrisy and they know it. I move:

That the business of the day be called on.

Question resolved in the affirmative.