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Wednesday, 18 February 1987
Page: 172

Senator CHANEY (Leader of the Opposition)(3.03) —On behalf of the Opposition, I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The urgent need for a Mini Budget to reverse the disastrous Hawke government policies that have produced high interest rates, huge increases in the price of essential items such as the family car, the highest tax burden in Australia's peace time history and a crippling foreign debt.

Question Time has just concluded. It is not surprising, when one looks at the state of this country, that the Minister for Finance (Senator Walsh), who will respond to this motion, tries to hide behind personal vilification and abuse, because he has very little to say that is relevant to the problems that are driving people away from his Government in droves and the problems that are making Australia a place which is full not of hope but, rather, of hopelessness. The people that Senator Walsh is supposed to represent have been priced out of housing by the interest rate policies that his Government has introduced and enforced. People cannot afford to buy a car because of the price changes of motor vehicles and the interest rates they will have to pay if they are purchasing a car.

People have steeply rising food bills and little prospect of increased income to cover those bills. Crippling taxes have been imposed on individuals at levels which are far higher than they have been in the past, and new taxes are being introduced to reduce incentive and discourage general activity. We have high interest payments on any major household purchase. We have much more costly petrol, although the world price of oil has dropped very significantly since this Government came to power. There are record numbers of bankruptcies in Australia and continuing high unemployment-far higher than was experienced under the Fraser Government. We have low levels of investment. Of course, it is investment that would do something to solve the unemployment problems that afflict Australia. And we have fragile industries that are hanging on by their fingernails in the economic circumstances that the Government has imposed.

I suggest that Minister Walsh, rather than vilifying members of the House, should talk to some of the people who are in the car industry, who are trying to sell cars in Australia and who have seen such a major part of their market disappear and ask them how interested they are in the sort of rubbish we have had to put up with in the Senate today, as against some solutions to the problems that this Government has imposed on the Australian people. The fact is that the Government has lost the confidence of the Australian electorate. All the surveys show that the Government has minority support and, with or without the assistance of the Premier of Queensland-and it looks as though we will have his assistance-we will sweep this Government from office. I think it is quite clear, from whatever source one looks at, that the Liberal and National parties have majority support in this country. That is because of the policies that have been imposed by this Government and the failure of Ministers such as Minister Walsh to be prepared to face up to their failures and do something about them.

This Government is on the nose because the Australian people are simply suffering from the impact of the policies, and the impact of those failed policies can no longer be disguised. We can look at it from any sort of level. I suppose that today the dramatic reminder we have all had of the failures of this Government is the foreign debt figures that have been released. Really, the figures are so bad as to be almost unbelievable. We were given the September quarter figures, and they showed a quarterly increase of 11.2 per cent. In a quarter, our total foreign debt went from $91 billion to $101 billion-an 11 per cent increase in three months. I wonder which Australian believes that we can go on accruing debt at that rate. It is quite clear that the Business Council of Australia does not believe that we can. I think that all of the men and women of Australia who have experienced the effects of this trade imbalance and the effect of the devaluation of the dollar would agree that the Government is facing disaster without being prepared to take action.

If one looks at a net figure, an offset of the foreign currency reserves that Australia has, one will see that there has been an increase from $72 billion to $80 billion over that same quarter. That is an increase of over 12 per cent. In the four years since this Government came to office-it has had this economy supposedly under its control for four years-net foreign debt has increased 3 1/2 times. That single statistic tells us a great deal about the failures of the Hawke Government.

This problem does not have a single solution. A great deal needs to be done. But the Opposition has steadily and regularly pointed out the alternative way-the way that we can get Australia moving again, the way that we can restore some incentive in Australia so that there are some productivity increases, and the way that we can start to climb up. What we have is a government which is saying to the people of Australia: `We will help you climb down'. If one looks at the Budget which was introduced in the Senate by Senator Walsh, one will find that it states quite clearly that it is a Budget concerned with trimming the living standards of Australians. Senator Walsh has said over and over again: `Well, that is what has to be done. We have to reduce the living standards of Australians'. The Government is doing nothing to turn that around and to say to the Australian people that there really is some light at the end of the tunnel.

I make it clear that the Opposition is not saying that there is some single golden key that one can turn to solve all the problems that Australia has. But last July we set down in a document called `Policies for Business' what we saw as the broad requirements for economic recovery in Australia. We did that before the Budget. We made it quite clear to the Government what had to be done if the Australian situation was to be improved. Our broad requirements were these: We said that the Government needed to reduce and restructure taxes and that that had to be made possible by reduced government spending. That is one leg of a four-legged chair-reduced taxes, underpinned by reduced government spending. There must be reduced and less costly regulation of business activity. Attention must be paid to the disastrous state of industry relations in Australia, with the restoration of the rule of law, a flexible labour market and a reduction in trade union power. Lastly, there must be rigorous control and reduction of business input costs, especially government taxes and charges.

The policy goes on in much more detail to spell out a vast array of things that need to be tackled if we are to turn Australia around. It goes from improving the education system to changing Australian attitudes. But we made it quite clear when the Government brought in its Budget in August that we did not believe that it was a satisfactory response to Australia's problems. In September last, only about a month after the Budget was passed, we carried a motion in this Senate asking for a mini-Budget to be brought in that year. In that motion we had the support of the Australian Democrats. The Senate passed a motion as long ago as 17 September 1986 calling for a mini-Budget containing measures to restore confidence in the Australian economy. Mr Jim Carlton, the shadow Treasurer, repeated that call in December, and the Business Council of Australia in a document issued yesterday made it quite clear that it believed that the present budgetary settings of the Government are simply inadequate.

It is interesting to see what the chief executives of the 50 largest companies in Australia have come forward with in the way of an analysis of Australia's problems. The analysis fits squarely with the views that the Opposition has been putting forward in a positive way demanding change from this Government. The Business Council pointed out that Australia, as a rich country with a skilled population, ought to be able to look forward to a prosperous economic future as we go into the 1990s. But that depends on how we deal with our external imbalance and rapidly growing foreign debt. The Business Council pointed out that those same elements of policy that we identified last July have to be attacked. Something has to be done about protective and regulatory policies, the industrial relations system, reducing regulation and cutting back sharply on the public sector. All these things which were identified by the Opposition last July are reflected in the document issued yesterday by the Business Council.

The important and central point we want to make today is that one essential element of tackling the problems of Australia is to do something about Government expenditure, not next August but now, so that the Government can tackle these other things like the crippling taxes which are being imposed on individuals and businesses and something about the interest rates which are also crippling Australian individuals and industries. Since Senator Button, the Leader of the Government in the Senate, was prepared to quote the Sydney Morning Herald in his aid yesterday in Question Time, let me refer to the Australian Financial Review of the same date whose editorial said:

. . . the Government's fiscal and wage policy is not tight enough. It should take urgent action on both fronts by bringing down a mini-Budget in May and by revising its submission to the National Wage case.

There is a clear unanimity of view, it would appear, everywhere but on the Government benches that action is required now in the shape of a mini-Budget; some clear movement on the expenditure front if we are to do anything about interest rates, the tax burden, and the issues which are grinding the men and women of Australia into the dust. The sad fact is that the Government is locked in by its trade union mates to not acting in these vital areas, particularly on the labour market front. All I can say is that now that the Government's supposed mates in the Australian Council of Trade Unions have deserted it in the current national wage case, perhaps it is time that it took its courage in both hands and started to govern Australia for the benefit of all Australians, instead of for the benefit of the trade union movement.

Let me touch on some of the essential elements of suburban and country life in Australia to show how badly this Government has affected the normal lives of our people. The evidence of this Government's failure is everywhere to be seen in those areas I mentioned in opening this debate-whether one looks at the cost of cars and their inaccessibility to so many Australians now, at prices, interest rates, housing, or whatever. On the subject of cars, one of my colleagues said to me: `Do you think a car is really an essential in Australia?' If one looks around the Australian community, I think one would say that there are probably two major items that are essential to the sort of life that is enjoyed by most Australians. One is decent accommodation, and the other is a car. They would be the major capital items that are part of normal life in Australia.

Since this Government came into office the price of a standard motor vehicle in this country has changed enormously. Take the sort of car that I drive in Canberra, a Laser, a car made here in Australia by the Ford Motor Co. In May 1984, a year after this Government came into office, the price of a Laser standard model was under $8,000. What is the price of a Laser today? It is over $12,000. In other words, in those few years since May 1984 the price of that small vehicle has increased by 53 per cent. I suppose somebody will say that such a car is a luxury and so on, but many Australians see it as an essential part of their life and its price has risen by 53 per cent in those few years. The price of a Corona has gone up by 43 per cent, the Commodore by 42 per cent, and the Falcon by 33 per cent. All those things impact very directly on every Australian family. Then there are the poor devils who are employed in the car industry and who have now seen, because of price pressures and items such as the fringe benefits tax, a collapse of the motor vehicle market, the loss of 150,000 sales, the loss of jobs in the retail industry. There was a dramatic drop of activity in that area. It is an economic problem in the macro sense; it is a personal problem for every man, woman and child in Australia.

Let us look at associated matters and take petrol prices. Petrol prices again impinge on the lives of every Australian directly and indirectly. In the first three months of 1983 the average price for petrol in this country was 44c. Under this Government in the last three months of 1986 the average price was 55.5c. One can say that that is not too great a rise and that the price has only risen from 44c to 55c in that three-year period. But the fact is that in that time world oil prices virtually halved. In other words, while the rest of the world saw the price of oil drop by half, we saw petrol prices going up and up and up, after the Prime Minister (Mr Hawke) had promised to reduce the price of petrol-another wonderful Labor promise! Why has the price of petrol gone up? It has gone up because the tax take of this Government under excise has trebled from 6c to 18c-in fact, probably by more than that since the last indexation. The men and women of Australia are simply being milked dry by this Government, their pockets are being lightened and their lives made a misery.

Let us look at interest rates. I can remember sitting in this chamber and listening to Senator Walsh complain about interest rates and talking about the simplistic views of Liberals and Nationals. Do honourable senators remember the lectures he used to give the then Minister for Finance, Senator Dame Margaret Guilfoyle, on her failure to understand that interest rates were not just a function of the deficit? I do not know what Senator Walsh's analysis will be this afternoon, but when we lost office in 1983 the prime commercial rate was 14 per cent, and in February 1987 it is 18.25 per cent. Every business in Australia is being crushed by that interest rate which is so totally out of line--

Senator Walsh —But that was years ago.

Senator CHANEY —I am delighted if Senator Walsh can prove his point about deficits. I am asking what the Minister intends to do about the interest rates which are crushing Australian consumers, whether individuals or businesses. Bankcard interest has gone from 18 per cent to 22 per cent, overdrafts under $100,000 from 13.5 per cent to 18 or 20 per cent, and the interest rate on personal loans has risen from under 10 per cent to 20 per cent. That is the record of this Government on interest rates and what does the Government intend to do about it?

I turn to the subject of housing. How many times when we were in government did we sit and listen to people like Senator Grimes telling us about the hardship people suffered if they did not have access to decent affordable housing? That is a serious social comment-a point made over and over again by Labor speakers when they were in opposition. We hear nothing of it today. We find that the cost of home ownership in Australia has steadily risen under this Government. The cost of buying one's home has gone up since the June quarter of 1985-not very long ago-from taking 22.3 per cent of average income to 26 per cent of average income. In other words, the burden of high interest is steadily eating into the disposable income of Australian families. A lot of them cannot afford to buy a house; a lot more of them are losing their houses; and those that are not losing their houses find themselves financially strapped. Of course they are financially strapped. They are paying higher taxes; higher mortgage rates; their disposable income is dropping; they are paying more for their motor vehicles and their petrol; and so it goes. That is the pattern that this Government has imposed on the Australian community and it has no remedies. There is no suggestion that this Government is acting to reverse those trends. That is why we in the Opposition are demanding that there should be action by this Government in the form of a mini-Budget as one of the essential steps that needs to be taken.

Let us remember the Labor attitude to unemployment. When Labor was in Opposition it lectured the Fraser Government over and over again about the evils of unemployment, the social misery it caused, the destruction of lives and how bad it was to have economic policies that did nothing about unemployment. Let me quote from the Australian Financial Review because it pointed out the harsh facts a few days ago. Let me quote not a politician but the Australian Financial Review. It said:

. . . the harsh fact remains that during the 86 months of the Fraser Government, only five months returned a higher unemployment figure than the monthly rates we have experienced since July last year.

The unemployment situation under the Fraser Government averaged 5.8 per cent. We thought that that was bad and needed to be improved. Senator Walsh and his colleagues continually complained about an unemployment rate that averaged 5.8 per cent under us. The average unemployment rate under Labor has been 8.7 per cent. In other words, the bad situation that Labor complained about under Fraser has got worse by nearly 50 per cent. That is a further part of the record of this Government and it is why we again say that it is time for action and not a time simply for more platitudes. We want employment and that means that we want investment.

The last thing that I have time to refer to is the fact that not only do we have a record number of bankruptcies under this Government but we have a situation in which fixed capital expenditure which will produce jobs for the men and women of Australia is continually declining. Under this Government we have seen a continuous decline in capital expenditure year by year. This is a serious matter. The Opposition has put forward what needs to be done and this Government has refused to act. I ask the Senate to support this motion. I close by saying that I believe that Treasurer Keating will make a lot of money when he leaves this Parliament because what I have been able to point out in the last 20 minutes shows what a disaster he has made of the economy; yet he managed to sell himself as the world's greatest Treasurer. What a laugh!

The ACTING DEPUTY PRESIDENT (Senator Townley) —Order! The honourable senator's time has expired.