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Wednesday, 25 February 1987
Page: 618

Senator BLACK(4.42) —I listened with interest to Senator Collard's comments. At the outset I think I ought to say that he is really being a bit modest when he says that the coalition is not in government, therefore it has no specific alternatives to offer and there is no obligation on it to offer specific alternatives. He is forgetting that in Queensland the National Party of Australia-I assume it is still his Party-has been in government since October 1983 and has a pretty deplorable economic record which I will go into later on in this speech.

I would like to discuss some of the realities of our current economic situation. Australia's balance of payments situation requires over $1 billion a month to fund the current account. The structure of interest rates simply has to reflect this position. The Federal Government cannot be blamed for creating this situation. Firstly, I point out that the Commonwealth is responsible for only 10 per cent of this external debt that we are now facing. Most of the money has been borrowed by the private sector. Secondly, Australia's balance of payments situation is a direct legacy of the neglect of proper public policies by conservative governments during the 1960s and the 1970s. As a result of this neglect, Australia's export and import competing base has been narrowed significantly. When commodity prices fall, as they have in the last 18 months-the worst fall, I might point out, since the Great Depression-the country has not been able to fall back on a broad base of manufactured exports as it has been able to do in the past. Turning around over 20 years of conservative government neglect is a bit like trying to turn around the Queen Elizabeth II. No party could achieve a rapid turnaround in our trade situation and no serious analyst, private sector economist or businessman believes it can be done rapidly, but that seems to be the belief of the Opposition.

Let us look at what the Government has done in the area of fiscal and monetary policy. The tax cuts which took effect on 1 December 1986 and which are to take effect from 1 July 1987 are worth an aggregate $4.5 billion. Of that, $1.5 billion is funded by base broadening measures such as fringe benefits and capital gains taxes, the results of which will go straight back to the income earner. The remainder will be funded by genuine expenditure cuts of $43 billion. In summary, the Federal Government's current policy is, firstly, to make substantial savings-$4 billion in last year's Budget-to fund our tax cuts, and secondly, to make further expenditure cuts this year as indicated just yesterday by the announcement of a May economic statement to keep budgetary policy in line with Australia's trading circumstances. In the current economic climate the framework of the Federal Government's economic policy is a firm monetary policy, a tough fiscal policy and wage restraint. The Government backs up its framework with detail, while on the other hand the Opposition does not even have a framework.

I would like now to touch briefly on the Opposition's alternatives, such as I can nail those alternatives down, and then I will discuss the Joh alternative, as it is known. The Opposition seems to think that it can wave a magic wand and bring down interest rates. This demonstrates its appalling lack of comprehension of economic fundamentals. The Opposition's fiscal policy consists of $32.6m in expenditure cuts and billions of dollars in tax bribes. The Leader of the Opposition (Mr Howard) has been making the same promises since the last election, but after two years he has become no more specific except to admit that the nation cannot afford his tax policy. The Opposition's wages policy is regarded as frivolous nonsense by the Business Council of Australia, the Confederation of Australian Industry and the Australian trade union movement.

I would now like to go on to what is popularly known as the Joh alternative. It is an alternative that is likely to be put by a large section of the Opposition at the next election, so I would like to canvass some of his records in Queensland. While the Federal Government has been taking constructive measures to establish a firm economic policy, the Queensland Premier, Sir Joh Bjelke-Petersen, has presented a dangerous alternative in his campaign to enter the Federal arena. While the Premier has labelled himself Australia's great white hope, his home State is wallowing in an economic mess. Let us look at the Queensland situation in relation to taxes and charges; firstly, charges. Between the December quarter 1983 and the December quarter 1986, Brisbane had the highest increase in State and local government charges-30.1 per cent. This compares with the capital city weighted average of only 21 1/2 per cent. Over the same period the consumer price index rose in Brisbane by 21.7 per cent. Secondly, motor vehicle registration fees--

Senator Boswell —I raise a point of order. The business sheet today says:

The need for the Hawke Government to reverse its high interest rate and high taxation policies which are having such a disastrous impact on home owners and prospective home owners throughout Australia.

I put it to you that the honourable senator is not addressing this matter of public importance and that you should ask him to be more relevant to this matter of urgency.

The ACTING DEPUTY PRESIDENT (Senator Elstob) —Order! There is no point of order. Senator Black is replying and he is entitled to put his side of the case.

Senator BLACK —As I said earlier, I am attempting to flesh out the Opposition's policy alternatives to what the Government has been doing and I am seeking to illustrate the effect those policies are likely to have on the national economy through illustrating what those policies have done to the Queensland economy. I would like to go on and talk about metropolitan electricity prices, and get Senator Boswell even more upset. Metropolitan electricity prices have risen in Queensland by 31.6 per cent since the National Party won government in October 1983. The consumer price index in Brisbane over the same period rose by 21.7 per cent. The average Brisbane householder's quarterly electricity bill has risen to $136.80, higher than that in Sydney, Melbourne, Adelaide and Hobart.

In respect of taxes, Australian Bureau of Statistics figures show that in the 1985-86 financial year Queensland had the lowest level of State taxes per head of population of any Australian State. Senator Boswell will agree with that. Queensland's figure for the Budget sector was $552.35 per person, but the catch is that this figure did not reveal the hidden taxes in Queensland such as the rail freight surcharge paid by mining companies. This hidden tax is estimated at $394m for 1985-86 and if it was included as part of the tax structure in Queensland, as was pointed out in the Senate earlier this week--

Senator Chaney —I raise a point of order. I came into the chamber just a few minutes ago but I fail to see any relevance at all to the motion before us in what is being said. The people of Australia are groaning under the high interest rate policies of the Hawke Government. The Minister for Education, Senator Susan Ryan, tabled a paper today-a briefing to her Government-indicating quite clearly that there is no relief in sight. This is a very serious matter. Yet we find that an honourable senator from Queensland who is participating in the debate is waffling on about matters that have nothing to do with it. Parliament is in low enough odour as it is without that sort of irrelevance. Mr Acting Deputy President, I ask you to look carefully at the motion which is before us and to take the honourable senator back to the very important issues that the Senate is supposed to be discussing.

Senator Tate —On the point of order, Mr Acting Deputy President: The whole question of the interest rates which must be borne by those purchasing a home or wishing to purchase a home is affected by all those competing in the market for moneys for various programs, including State governments. Therefore, it is relevant for Senator Black to raise the question of the direct and indirect taxation policies and the borrowing requirements of the Government of Queensland. It is also relevant for him to raise matters such as the amount that those in the metropolitan area of Brisbane have to pay for electricity, because that reduces the disposable income of home owners, and those wishing to become home owners, to service the loans that they get from a bank or building society.

Senator Archer —Mr Acting Deputy President, I support the point of order raised by Senator Chaney. Senator Black's contribution so far has had nothing to do with the question before us, that is:

The need for the Hawke Government to reverse its high interest rate and high taxation policies which are having such a disastrous impact on home owners and prospective home owners throughout Australia.

That is very clear. It is very straightforward, and Senator Black is nowhere near it.

The ACTING DEPUTY PRESIDENT (Senator Elstob) —Order! There has been a wide- ranging debate. I rule that Senator Black is within the Standing Orders. Senator Archer has the right to reply at a later stage. There is no point of order.

Senator BLACK —As I said earlier, I do not believe that the national government can set priorities for Australia without taking into consideration the policies of the various State governments. They will be forced to nail their banners to the masthead shortly and to indicate just what share of the burden they are prepared to take. It is relevant to discuss their record and to relate that to the Opposition's statements. I will continue in that vein.

Senator Tate —We want to hear you.

Senator BLACK —Thank you. I will talk about the hidden taxes which people in Queensland have to pay. The tax paid by Queensland mining companies was estimated to be worth $394m in 1985-86. If that were included as part of the Queensland tax structure, it would increase State taxes for that year to $705.82 per person, which is higher than those paid in South Australia, Western Australia and Tasmania--

Senator Archer —On a point of order, Mr Deputy President: I was prepared to accept the ruling by the Chair on this question a moment ago, but I feel that to discuss rail freights under what is a housing debate-we are talking about the policies of the Federal Government on taxation and housing-is to step way over the line.

Senator Elstob —On the point of order, Mr Deputy President: This is a States House. Senator Black has brought in relevant material and has answered the Opposition in this debate. I maintain that Senator Black is within his rights because this is a States House. I ask you to rule in those terms.

Senator Chaney —The Senate is debating the following subject:

The need for the Hawke Government to reverse its high interest rate and high taxation policies which are having such a disastrous impact on home owners and prospective home owners throughout Australia.

A somewhat similar point of order was taken a few minutes ago. As I understood the point that was made in opposing that point of order, it was that the States have an influence on interest rates. The point being made by the Government is that the States, by their excessive borrowings, are having an impact on interest rates. What Senator Black is complaining about is not high State borrowings but high State taxation, which is a totally different proposition. If the States were taxing more and borrowing less, the whole problem would disappear. The economic case that is being put forward is not the case that was defended in the earlier point of order. We have simply an argument about State taxes which has nothing at all to do with the level of interest rates. If we were talking about the States' public sector borrowing requirements-if that is what Senator Black was talking about-I would totally agree that he was being relevant to the motion. However, he is not. He is talking about the quite separate burden which has been placed on individuals; namely, State taxes. That is a completely collateral matter which has nothing to do with the motion before us. It is a shame that this issue, which is of such significance to literally millions of Australians, has been totally ignored in this debate by the Australian Labor Party, which is responsible for their plight.

Senator Haines —I rise on this occasion-I normally keep out of arguments on points of order-because, much as it delights me to hear people point out the disparity between what the Premier of Queensland says he would do for Federal politics and what he actually does in his own State, I agree with some of the previous speakers that some of the issues that have been raised by Senator Black have been, not to put too fine a point on it, drawing rather a long bow. Although they are interesting of themselves, I suggest that they are not particularly relevant to this debate.

The DEPUTY PRESIDENT —Order! I uphold the point of order.

Senator Tate —Mr Deputy President, I would like to be heard.

The DEPUTY PRESIDENT —Do you have a new point to make, Senator Tate? If you go on, the matter will be solved by the effluxion of time. There is only about 30 seconds left for Senator Black to speak.

Senator Tate —It seems to me that Senator Chaney conceded that any comments by Senator Black on borrowing programs of State governments, or charges which they might impose on residents in the State which reduce their disposable income, are relevant. Insofar as one is talking about the taxation policies of State governments and insofar as the matter of urgency speaks of high taxation policies having an effect, I understood Senator Black's point to be that high and low taxation policies and programs can be quite illusory. It is apparent that the Queensland Government's claimed low taxation policy is balanced by the impositions it makes by way of freight charges on those using the railways. In that regard, I think that Senator Black is perfectly relevant to the question of the mix of high and low taxation policies and other government charges.

The DEPUTY PRESIDENT —Order! Senator Black's time has expired.