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Thursday, 26 February 1987
Page: 705

Senator CHANEY (Leader of the Opposition)(3.13) —I move:

That so much of the Standing Orders be suspended as would prevent Senator Chaney moving forthwith the motion of which Senator Chaney gave notice earlier this day, relating to the reference to the Standing Committee on Finance and Government Operations of the Paper on interest rates tabled by the Minister for Education (Senator Ryan) on 25 February 1986.

There has been a deal of hilarity in this chamber over the last 10 minutes or so. That has been a welcome break in the politics of the moment because the country is going down the tube and there are a great number of political issues around that are of great concern to both Government and Opposition senators. But I think the time for a little light relief has passed, and the Opposition believes that it is important that we should focus on the matter which has been before us since the Minister for Education (Senator Ryan) tabled the paper from which she quoted in Question Time yesterday.

I have moved this motion today because today is the first opportunity we have had to bring this matter forward, and the normal forms of the Senate are such that giving notice of motion today would result in something coming forward for consideration on our return in two weeks time. We believe that the issues which are raised here are too important to leave. Those issues will still be before us in two weeks time. We will, of course, come back to the matter if we do not succeed in getting a suspension of Standing Orders today and re-debate the matter on our return.

It is quite clear that the issue of interest rates, which was so extensively canvassed in an urgency motion brought forward by Senator Archer yesterday, remains an issue which is of vital concern not just to home owners in Australia but to farmers who are being crippled by the cost of interest-that is a major part of their present difficulty. It is causing enormous difficulties to both small and large businesses in Australia. At all levels, whether one is looking at the economic recovery of this country or at the burdens being suffered by ordinary Australians, this is a matter of high importance.

This week the Government announced that it was proposing to have a mini-Budget. After successive requests from this Senate which have been denied, Government senators all dutifully lined up with their Government and expressed the view that there was no need for such a measure. The Government has announced in the last few days that there is to be a mini-Budget. Quite clearly, an important element of the Government's thinking in bringing forward a mini-Budget is that it is one of the steps which need to be taken if we are to tackle the economic problems of Australia, including the excessive level of interest rates. What sort of a mini-Budget is required is really going to be affected by the sort of prospect we have for interest rates in this country. Is the position as it was outlined by Dr Hawkins in that minute which was tabled by the Minister for Education, representing the Minister for Housing and Construction (Mr West), or is it the more optimistic assessment which was given by the Prime Minister (Mr Hawke) and parroted by the Minister in this place today? Honourable senators will note that when Senator Ryan was talking both on AM this morning and again in this chamber, she chose to use very carefully the precise words which were used by the Prime Minister to describe his cautious optimism about the future of interest rates.

The reality is that this is of significance now. Having some inquiry into the truth or falsity of the situation with respect to interest rates and the real strength of opinion which lies behind this briefing paper is something which needs to be tackled by the Government and, since the Government will not tackle it, by this Senate forthwith. I seek to have the Standing Orders suspended so that the Senate Standing Committee on Finance and Government Operations can examine this paper, look at where it came from, and find out what advice was brought together to prepare it for the Minister and what its current status is.

They are all matters which the present Government has tried to obscure in its reaction to the events of yesterday. What is being said by the Government is totally inconsistent with what is contained in the document that was tabled yesterday. What is now being said by the Government is that it is out of date. It has been said that this no longer represents policy. We are not looking for the Government's policy; we are looking for the facts. We want to know what is the future of interest rates in Australia so that we can be sure what remedial measures are required if we are to ease the misery of the men and women of Australia who are suffering these extraordinary high interest rates. The Government is saying that the information in this note is out of date, that it is not its view, and that it is something which does not take into account what is known to the Government and other sources of advice. Yet, what the Minister tabled is not just the opinion of a single public servant. I will talk about that public servant in a moment because I think in a very unpleasant way the inference has been drawn that this is a relatively junior chap and that he does not have access to advice, and all the rest of it. There has been a real attempt at a put-down here of a man who has, I think, an entitlement to better treatment from this Government. I will come back to that later.

Let me look at what is in this briefing paper, because it discloses why the Opposition is so deeply concerned at the Government's claim now that this is something which is out of date. The note, in the last paragraph, says:

The Report of the Indicative Planning Council to be presented to the March 1987 meeting of the Australian Housing Council--

The Australian Housing Council, as I understand it, comprises the Ministers for Housing of the States and the Commonwealth. This is no junior fest; this is a gathering of all of those Ministers who are responsible for housing around Australia. The Minister's note goes on:

It will contain an assumption that any reductions in market rates that occur this year will not be sufficient to allow reductions in housing loan interest rates in 1987.

It goes on:

whilst reductions in housing rates may occur in the first half of 1988, it is unlikely that such reductions would have any significant impact on building activity until the second half of 1988.

Senator Archer —That is a view shared by every responsible body.

Senator CHANEY —That, as Senator Archer says, is a view that is shared by every responsible body, but the point that I think warrants inquiry by the Senate and the Senate Committee at the moment is that on the one hand we have the Government telling us that this is non-operative. It has a President Nixon-like ability to say `That is something which is inoperative', yet what this note says is that the Indicative Planning Council will present this report-not that it presented it last week or last month-next month as a statement which is to be taken into account by the Housing Ministers of Australia. That is totally incompatible with any suggestion that this view, this opinion contained in this briefing note, is in any sense out of date.

Who is on the Indicative Planning Council? What is it? Is it just another body of second ranking public servants who can be written off as people who do not have access to the facts? I point out to the Senate that the Indicative Planning Council for the Housing Industry, which operates within the purview of the Department of Housing and Construction, contains a whole series of people from private industry and elsewhere but it is chaired by Professor Fred Gruen. It happens that Dr Hawkins, the man who wrote this briefing note, is also a member of the Indicative Planning Council, and the view that he has expressed is the same view that we are told in the note itself has been adopted by the Council, which is chaired by Professor Gruen. It really does make the mind boggle to know that the body is chaired by one of the premier economists of this country, an economist, like any economist, with whom one might disagree from time to time but a man who I think is generally one of the most respected economists in this country. I am not sure whether he is the current President of the Australian professional body of economists-the Economic Society of Australia-but if he is not he was very recently. I last saw him at the annual meeting of that body. As I say, he has a very high economic reputation. It is a very large group and I will not go through all of the names. I have to say that many of the names do not mean much to me, but this happens to be the expert group put together to provide advice to the Minister for Housing and Construction of the Commonwealth and indeed to Ministers for housing around Australia. This is the body which is expressing the self same view as is expressed in the minute which was the subject of the answer from Senator Ryan.

On an issue of absolutely major importance to the Australian people Senator Ryan came into this Senate yesterday and, without using any formula of words to dissociate herself from the answer-she did not say `I have a note which suggests this but I am not really sure and I'll have to check it'; she did not say `I am advised'-she simply repeated exactly the words which were prepared for her. This is a Minister who supposedly has been part of the economic deliberations of this Government, including the deliberations leading up to the decision to have a mini-Budget. Senator Ryan said yesterday:

. . . the Government's economic strategy, including last year's Budget, is directed at providing an environment conducive to achieving lower interest rates. At this stage it appears that any reductions in market rates that may appear over the course of 1987 will not be sufficiently sustained or will not result in a reduction of loan interest rates in 1987. Accordingly it does appear unlikely that reductions in housing loan interest rates will occur until the first half of 1988 at the earliest.

That is a vital piece of advice to the people of Australia, to the businesses of Australia and to the home buyers of Australia, and this Minister gave it without apology, without qualification, and in the opinion of the Opposition that view was given by her without qualification or apology because it was her honest view. We believe that this Minister is in trouble with her Prime Minister because she has been honest, and now she has been forced to adopt the weasel words of the Prime Minister to describe one of the critical economic factors which will influence what happens to the people of Australia.

The urgency of this matter is that we have an opportunity, by using the normal mechanisms of this Senate, to check just how much weight should be given to this note which we believe represents the true position. We believe that it should be open to a committee of this Senate to inquire of Dr Hawkins, to inquire of other public servants and indeed to inquire of the Reserve Bank of Australia what is the outlook for interest rates in Australia today. Is this note, which was given so faithfully by the Minister, a true statement of the position-as the Opposition believes it is-or is it a mistake, something that is out of date, and are the poor old housing Ministers about to be given a bum steer by the Indicative Planning Council at their meeting in March?

This is not an academic matter; it is a matter which goes squarely to the issues which this Senate and the people of Australia want to be considering at the moment. What are we going to do about, inter alia, the $101 billion external debt that is weighing this country down? The relevance of examining this matter now is that this is a real opportunity for the truth to be exposed in a way which will not only force the Government to move towards the sort of mini-Budget which is required, one which will bring about a substantial reduction in government expenditure, but also it will expedite and assist the Government to carry out the very difficult task it has.

Senator Button said in the chamber today that the Government believed that for any government there was a difficult task ahead. I cannot remember a single speaker from the Opposition side of this Senate chamber ever claiming that the task we face at the moment is easy. We have been extremely careful not to engage in oversimplifications. We have set out in detail the whole range of interrelated things we believe the Government must do if it is to have some impact on the disastrous situation that we face. A mini-Budget is but an eighth, perhaps a quarter, of the task which has to be undertaken by the Government. It is a very important task and unless it is undertaken properly the interest rates problem will not be solved.

There is another reason for examining this matter and examining it quickly, and that is the inference that has come from the reports that have flowed from the Minister's burst of honesty yesterday that in some way this Dr Hawkins is a man whose advice we do not have to worry about too much because he is not really in the field; he does not have access to the right sort of information. The Opposition does not believe that to be true, but let me say a few things about this man because I think it is important that his position be clarified, and the sort of inquiries we are promoting is the only way that it will be.

Senator Watson —And his reputation.

Senator CHANEY —My colleague Senator Watson refers to his reputation. I almost hesitate to raise it because I believe it is grossly unfair to make any suggestion against the reputation of Dr Hawkins.

Senator Ryan —None has been made.

Senator CHANEY —I am glad to hear the Minister say that. Let me say that from the remarks which have been made by various Ministers it would be hard to realise that this man occupies under this Government the position of First Assistant Secretary of the Industry Policy Division of the Department of Housing and Construction. That is not a junior position; it is a senior position. I do not think one would have divined from the comments that have been made since the Minister tabled the paper that this man holds a PhD in Economics from the Australian National University. I do not think one would have divined that he was a member of the Construction Industry Council, he has been appointed as a member of the Joint Venture for More Affordable Housing and he is a member of the Indicative Planning Council for the Housing Industry. I mention those things because they suggest to me quite clearly, along with his membership of the Construction Forecasting Committee, that until this paper was exposed Dr Hawkins was seen by this Government as a man who warranted having those very responsible positions and being in a position to give vitally important advice not just to this Government but to governments and to industry bodies around Australia.

We have a situation, therefore, where the Government has not only muddied the water, it has not only obscured what the interest rate position is, but also it has set about obscuring the status, the stature, the standing and the reputation of this man. I for one believe that if we expose the sources of the advice which actually went into this note we will see a complete vindication not just of Dr Hawkins; we will see a complete vindication of Senator Ryan as of yesterday. The Senator Ryan of last night and this morning will not look so flash; the Senator Ryan of last night and this morning is a Minister who has been called to heel by an arrogant little man named Bob Hawke, who is taking this country to destruction--

The DEPUTY PRESIDENT —Order! Senator Chaney, that language is unparliamentary.

Senator CHANEY —I withdraw. She was called to heel by an arrogant Prime Minister who is taking this country down the drain. The sad element of this debate is that a Minister who spoke honestly and truthfully is now being put down and brought to heel. I believe that this inquiry would expose that to be the case.

The further reason that I want to put forward for dealing with this matter now and for getting a proper inquiry under way is the response we have had from Ministers to questions on this subject today. When Senator Collard asked his question the answer was that that note was out of date. It was the President Nixon technique-that it was something that is now inoperative. We believe that to be untrue. In response to Senator Michael Baume's very proper inquiry about what procedures were followed to bring us to the point where we were given a note which Senator Ryan has said is supposed to reflect government policy, he was told that that was not a matter for Question Time. In fact, he was told to talk to his ex-ministerial colleagues. I can only say in response to that that there is not much point in talking to his ex-ministerial colleagues on this side of the chamber because we must follow very different procedures. I cannot remember a Minister in the Fraser Government who got up and tried to bag or blame a public servant for a crook reply that he may have been given.

Senator Ryan —Nobody did.

Senator CHANEY —It has been said that the advice was wrong and that it was made without access to adequate information. One of the real reasons for pursuing this matter further is that, when one looks at the comparison between the words used by Senator Ryan yesterday and the words she used once to my knowledge in the media and certainly in this chamber today, she picked up precisely what the Prime Minister said about interest rates in the House of Representatives on 17 February, which was this:

We look to 1987 with a cautious optimism about the economy including a fall in interest rates in 1987 . . .

Today we heard those words not once, but twice, from Senator Ryan. It was a classic but, I thought, very clumsy illustration of the extent to which she has been brought to heel. For a Minister of the Government to be in that position is little short of pathetic. On 18 February, last week, the Prime Minister also said:

We acknowledge the difficulties and we have introduced policies which, as I have said and the Treasurer has said-

I interpolate there that I think the Treasurer is being a mite more cautious than the Prime Minister-

through 1987 will lead to a gradual lowering of the interest rate regimen.

The Senate is in a position to make a contribution to getting the facts before the Australian people as well as before this Parliament. We have seen a very shabby situation-but not at Question Time yesterday. I thought at Question Time yesterday we saw a proper answer from a Minister using the sources that were properly made available to her and putting a view about interest rates that we in the Opposition sadly believe to be true. If it is not true, let the Government produce the contrary advice. Let it show that the Department of Housing and Construction did not have access to the information which the Department says is the basis of the Prime Minister's and this post-the Road to Damascus Minister's view of interest rates in Australia.

It is the view of the Opposition that there is no more serious issue facing the Australian people and that it would be nice if we got off some of the more irrelevant matters that take up our time and devoted a few committee weeks to getting to this vital issue. We seek a report in March because that is in plenty of time for the Government to take it into account in its preparation of the mini-Budget in May. We may even be able to assist the Housing Ministers in their deliberations in that month, although I am not sure on what date they are sitting. I ask the Australian Democrats-who in the end will have a vote on this matter and who will be able to determine whether we can suspend Standing Orders-to consider the practical assistance which could be given to the Australian people in understanding this issue if this inquiry is undertaken, to consider the protection of the reputation of the public servant who is involved, and to enable the Committee to make what would be a quite limited, straightforward but very helpful inquiry on a matter of major public importance.