Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 26 February 1987
Page: 709


Senator GARETH EVANS (Manager of Government Business in the Senate)(3.35) —This Opposition motion is no more than a stunt and it deserves to be treated as such by this Senate. There is nothing that could conceivably justify the expenditure of taxpayers' money that would be involved in setting in train an inquiry of the kind that the Opposition is proposing. Accordingly, there is no conceivable justification for a motion to suspend Standing Orders in order to consider the merits of such an inquiry. The reality is that the substantive motion seeks an inquiry based on three issues.

The first issue is the authorship of the document. The authorship of the document is manifestly not in doubt and there is nothing that an inquiry could establish there that is not already on the public record. Secondly, the inquiry seeks to go to the sources on which that document is based. Let me simply state the obvious; that the sources are described to a very significant extent in the statistics that are noted by the author on the document's own face. But in any event, whatever other sources the author might conceivably have relied upon, the sources of the document are irrelevant, given the status of the document, which is the third and major leg in the Opposition's proposed terms of reference. The reality is that the status of the document is manifestly not in doubt, and there is nothing to investigate about the status of the document. The status of the document has been described already on the public record in the Parliament and outside it by the Prime Minister (Mr Hawke), by the Minister for Housing and Construction (Mr West), by the Minister for Industry, Technology and Commerce (Senator Button) today in Question Time, by the Minister for Education (Senator Ryan) and by other Ministers as well.

The status of the document is as follows: It does not represent the judgment of the Government. It does not represent anything which has ever been endorsed by the Government. It is the opinion formulated by an officer in a department which is not responsible for macroeconomic management or forecasting. I interpolate there-and this will be my only reference to the public servant-that nobody is criticising, bagging or in any other way calumniating the reputation of the officer concerned. The judgment of the officer in question is a matter for that officer. It is a matter to be accepted or rejected by the Government. In this instance it has been rejected, for reasons which have been stated clearly enough by the Prime Minister and which I will put again on the public record in a moment.

The final leg of the series of propositions I would advance as self-evident about the status of this document is that it represents an opinion, formed no doubt in good faith, but formed back on 13 February, nearly two weeks ago before a number of recent developments had occurred including, above all else, the decision to have and the announcement of a May economic statement and the recovery of the Australian dollar that has been associated with that particular announcement. That is a state of affairs that the officer in question who formulated this brief and opinion, no doubt in good faith, manifestly did not know about and could not have known about. So the status of the document is absolutely clear. It does not need the kind of excursion that is proposed by a Senate committee to establish that status and we do not need, as I have said, to suspend Standing Orders in order to debate that substantive issue.

There is further evidence of the status of this document and why it should be regarded as not representing any policy judgment or any judgment about the likely state of affairs that the Government has either formulated or is likely to formulate. That evidence is before our eyes in the record of the policy strategies that the Government has adopted, the reasons why those strategies have been adopted and the way in which those strategies have been explained. All of those factors are utterly inconsistent with the tenor of the particular document from which Senator Ryan quoted in all good faith. The Government's expectation that interest rates can begin to fall this year, which is an expectation which has been reiterated by a number of Government Ministers, is based on a thorough and cautious assessment of all the factors which go to make up the macroeconomic picture. The Prime Minister stated the situation very well on 17 February when he said:

It is the fact that high interest rates are an inevitable feature of adjustment to Australia's current account difficulties. As much as this Government obviously would welcome lower interest rates, it is quite clear that we are responsible economic managers who, unlike the Opposition, eschew politically expedient quick fixes. We have reduced the burden on monetary policy by pursuing appropriately restrained fiscal and wages policies.

Back on 17 February, days ago, before this issue broke, the Prime Minister said:

We look to 1987 with a cautious optimism about the economy--

Senator Chaney sought to derive some debating nourishment from the expression `cautious optimism'. It is language that was used by the Prime Minister over a week ago, long before this particular matter was the subject of controversy. I repeat what the Prime Minister said:

We look to 1987 with a cautious optimism about the economy including a fall in interest rates in 1987, though, as I have said on many occasions-and I repeat on this occasion-the timing of such a fall will be affected by external factors, including what happens to world commodity prices and what happens to international financial conditions and sentiment. It will also depend on the pace at which the current account deficit declines.

He said all that as recorded at page 123 of Hansard on 17 February. On 18 February the Prime Minister again said:

We acknowledge the difficulties and we have introduced policies which, as I have said and the Treasurer has said, through 1987 will lead to a gradual lowering of the interest rate regimen.

That is what the Prime Minister has said and that is what he has said consistently throughout this period. It is manifestly obvious that the status of a document that states something completely contrary to that is self-evidently not something that is accepted by or regarded by the Government as constituting a credible statement. The Government is simply not in the snake oil business of trying to put precise dates, as the Prime Minister has said, or to nominate the precise order in which particular interest rates can come down. What we are in the business of doing is stating to the Australian people and to this Parliament some very plain facts, and the most fundamental of those facts is that unlike the snake oil merchants we do have the policies to achieve over time a lowering of interest rates.


Senator Chaney —Mr Acting Deputy President, I raise a point of order. I fail to see how the Minister's remarks are really related to the motion which is before the Chair. The motion before the Chair is for the suspension of Standing Orders to enable me to move a motion to send off, for examination by a Senate committee, a paper which has been introduced to this chamber by the Government and which says something about interest rates. I have been listening carefully to the Minister for feminism and what he is actually addressing is the substance of the matters which are contained in the motion. I personally would be delighted to debate him on that, because I do not think he knows what he is talking about for a start, but I also think the Government is wrong.


Senator Gareth Evans —What an arrogant little man you are.


Senator Chaney —Like the arrogant little Prime Minister. Mr Acting Deputy President, what I am suggesting to you is that he is debating the substance and he is arguing the case against the accuracy of the paper, which in a sense is the very matter which the Committee will examine to find out what the advice is to the Government from the Reserve Bank of Australia, Treasury and so on. So I ask you to call him to order and ask him to address the question as to why the Government is opposed to this matter being dealt with and going off to a committee.


Senator Gareth Evans —Madam Acting Deputy President--

Honourable senators interjecting-


Senator Gareth Evans —That is to be taken as an overreaction to the recent events. I apologise, not that that is to be taken as in any way a slight upon you to describe you as a woman.


The ACTING DEPUTY PRESIDENT (Senator Colston) —Perhaps we should go back to the point of order.


Senator Gareth Evans —There is a direct chain of reasoning that is involved here, and I have no doubt that it is very embarrassing to Senator Chaney to have these matters of our economic policy laid out, but the reality of the matter is that the motion before the Chair is a motion to suspend Standing Orders to enable us to debate the merits of sending off to a committee an investigation of, among other things, the status of this particular document. I am arguing that the status of this document is supremely self-evidently one of being a private opinion of a particular officer in a department and, as evidence in support of that proposition, I am wanting to sketch out, and am about to do so briefly, Mr Acting Deputy President, some of the considerations which make it self-evident why that document, with its forecasts and so on, is so utterly inconsistent with the policy course that this Government has adopted and the explanation of that policy that it cannot possibly be regarded as the true opinion of the Government.


The ACTING DEPUTY PRESIDENT —Order! I do not uphold the point of order because I understand that the Minister would have to make some reference to the subject matter in developing an argument as to why this matter should not proceed. It is a very delicate line that has to be drawn, but I think the Minister is developing this sort of argument and I would ask him to continue.


Senator GARETH EVANS —Thank you, Mr Acting Deputy President. The evidence then for the status of this document as not representing the Government's position is as follows: We have cut the Budget deficit from 5 per cent of gross domestic product, which we inherited, to about 1 1/2 per cent this year. We have cut the Budget deficit as a proportion of GDP in every one of our four Budgets. We remain committed to fiscal restraint. We have announced an intention to continue that expenditure restraint by bringing down an expenditure savings statement in May. That will be backed up, again, by an approach to the States at the forthcoming Premiers Conference, which will again of necessity be tough. The Australian Labor Party's wages policy, which is again self-evidently on the record, has enabled real unit labour costs to decline consistently over the past four years. The process of adjustment in our balance of payments, which is a product of all these things and which of course will, more than anything else, influence the course of interest rates, has begun. As I have said, that is the key to a sustained lowering of interest rates. The evidence is there on the balance of payments front. It is before our eyes. The evidence goes again to the status of this particular document. The value of manufacturing exports, even excluding the irregular export of aircraft, has increased by 30 per cent in the last seven months compared with the same months a year ago. Our deficit on services trade-that is for tourism, shipping, insurance and the like-has fallen 17 per cent over that period. Our deficit on merchandise trade, after allowing for seasonal factors, has fallen by 40 per cent in the past three months compared with the three months to October. So on the basis of those figures--


Senator Chaney —Mr Acting Deputy President, I raise a point of order--


Senator Robert Ray —I take a point of order.


The ACTING DEPUTY PRESIDENT —No, I am going to hear Senator Chaney's point of order.


Senator Robert Ray —I am taking a point of order on the way he took a point of order, actually.


Senator Chaney —Mr Acting Deputy President, I will come back to that later. My point of order is that we are now being treated to a general economic debate of very great breadth which goes without doubt to the substance of, and well beyond, the issues which are contained in the briefing paper. If Senator Evans wants a general debate on the economic shambles that his Government has produced, that is a matter that would be welcomed by the Opposition. I have already spoken to him about the need for a debate on the Appropriation Bills so that honourable senators on this side will have a chance to say what they think are the solutions to this country's extraordinary economic woes. But, Mr Acting Deputy President, if you are saying that in debating this motion we can range as widely as the Minister has just done, that is fine by the Opposition. But I suggest to you that in that case we will have to have several days set aside for this debate because, as I say, he has raised virtually the whole gamut of the economic shambles with which we are afflicted.


The ACTING DEPUTY PRESIDENT —I will just mention this in relation to the point of order: The previous speaker, who was Senator Chaney, ranged fairly widely and I think that he had to do so in order to put his point across. I think Senator Evans is not ranging so widely that he is not speaking to the particular motion. In fact, as he was interrupted I thought I heard him say `And for these reasons', and he was going on to develop that argument further.


Senator Messner —Oh!


The ACTING DEPUTY PRESIDENT —If you wish to disagree with my ruling, Senator, you know what to do. I ask the Minister to continue.


Senator GARETH EVANS —Thank you, Mr Acting Deputy President. I will be only a couple more minutes, because the points can be very simply and quickly made in that kind of time frame. I have been indicating, as I said, the reasons why we are confident about our balance of payments figures turning around on the balance of current figuring. The final thing I want to say about that is that the Government is confident that the balance of payments deficit for 1986-87 as a whole will be somewhat lower than the $14.7 billion predicted at the time of the Budget, with a significant fall in prospect for 1987-88, both in nominal terms and as a proportion and a share of GDP. That, in turn, is the basis for our confidence about the future for interest rates.


Senator Messner —Is this the briefing that you got the other day when you decided about the May economic statement?


Senator GARETH EVANS —That is the basis of our confidence for what we have said. They are all matters that are on the public record. They are all matters which are self-evidently the case, so far as the nature of our economic strategy is concerned. They are all factors that are manifestly inconsistent with the kind of reasoning and conclusions involved in this document, and they are accordingly all matters which go to reinforce what I and others have asserted to be the status of that document-a status that does not require, because it is so self-evident, the kind of excursion and discursive inquiry contemplated by this motion that we are being asked to suspend Standing Orders to debate.

To hear members of the Opposition talk, one would think that one could never expect interest rates to fall. The reality is that they have fallen already. Ninety-day bank bills are now some two percentage points lower than the 1986 peak in September. The maximum prime overdraft rate is some 0.75 percentage points lower. But even current interest rates pale into insignificance compared with the 22 per cent peak in the 90-day bill rate that was inflicted on this country by the Opposition when in government-a rate which is some two percentage points higher than the highest rate that has occurred under Labor.

That is it in a nutshell. I do not want to embark, and I do not need to embark, on any more discursive a debate on these macroeconomic variables and these realities about the present state of our economy and the present character of the economic strategy that the Government is mobilising to deal with that very difficult state of the economy. That is why I repeat that the document is not to be taken as having any credibility on its face other than as an opinion, formed no doubt in good faith, by an officer in a department that is remote from the basic reality of macroeconomic forecasting and macroeconomic management. That is the reality of the situation. It is self-evidently the case. It does not need, except as a vehicle for political stunting of the kind represented by this motion, an inquiry by a Senate committee. It does not need the kind of expenditure of taxpayers' money that would be so involved. Neither the Senate nor its committees exist as vehicles for the particular whims, fancies, daily sallies and tactical battles that the Opposition may choose to engage in. This institution and its committee system are designed to engage in orderly and sensible debate and investigation of major public policy issues-not to track over things that are self-evident, which is what this motion is all about.


Senator Chaney —Can I ask the Minister to table the paper from which he has been reading?


Senator GARETH EVANS —I do not propose to table that. I claim confidentiality in respect of it. It is a practice that I will adopt almost universally in future.


Senator Chaney —Mr Acting Deputy President, I just raised that because the Minister told us, as he read from that document, that all of these matters were on the public record and were matters that were well known. They were his very words. I ask him to reconsider that in light of his statement that all of this is before us and on the public record. What is he hiding?


The ACTING DEPUTY PRESIDENT (Senator Colston) —If the Minister claims confidentiality, he does not have to table the document.


Senator GARETH EVANS —I read from only a small portion of the document. It is some briefing notes prepared in the Prime Minister's office. I have no idea of the status of some other parts of the document. I will check that status. If the view is taken that there is nothing confidential about it, I will be happy to recast my decision, but it is not one that I care to make on the run.