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Wednesday, 6 May 1987
Page: 2402


Senator MAGUIRE(3.30) —I rise to say, on behalf of the Government, that we disagree with the terms of the matter of public importance brought forward by Senator Short which condemns this Government over living standards. It is surprising that the Liberals have claimed that a decline in living standards has necessitated a mini-Budget and it is surprising that the Liberals criticise the Government for its record on living standards. It is incredible that they are trying to rewrite the history books of Australia. They are trying to rewrite the history of their record of destroying living standards in this country. They destroyed the living standards of hundreds of thousands of Australians in the late 1970s and early 1980s. They destroyed the livelihoods of Australian workers and condemned them to the industrial scrapheap and to a life of misery and despair.

When the present Leader of the Opposition (Mr Howard) was the Treasurer of this nation in the Fraser Government, we had double digit inflation, double digit rises in the cost of living and double digit unemployment. In the 12 months to March 1983, increases in the cost of living-that is, inflation-amounted to 11 1/2 per cent and were accompanied by a jobless rate of over 10 per cent, with a peak of 10.4 per cent when Mr Howard was the Treasurer of this country. So more than one in 10 Australians were out of work. A total of 186,000 Australians were thrown on the industrial scrapheap in his last 12 months as Treasurer. I ask Senator Short: What about the living standards of those Australians, and their livelihoods? What about the reduction to despair and misery of those Australians thrown out of work by the callous, inhuman policies that operated in Australia when Mr Howard was the Treasurer? He has had one go as Treasurer. His legacy, as I have indicated, was double digit unemployment and double digit inflation.

We simply cannot afford to let Mr Howard run this country again. His record was disastrous. This country had its highest, its worst, unemployment level in the post-war period. His principal policy response to an increase in the cost of living was to increase unemployment. That is how the Liberals regulated the economy; they adjusted the amount of utilisation of plant and equipment in the community and regulated unemployment-it was the tool they used to influence the rate of inflation. They did not see jobs for people as an end in itself; they saw it as a means of regulating the rising cost of living. That is how they reduced the living standards of hundreds of thousands of Australians in the late 1970s and the early 1980s.

The Hawke Government pledged itself, following the National Economic Summit Conference in early 1983, to fight inflation and unemployment simultaneously. It did so through the development of the accord with the trade union movement. That enabled the expansion of the economy without the inflationary pressures characteristic in Australia in previous years. One of the important aspects of that accord was that it placed emphasis on the social wage. It looked at a wider definition of living standards in Australia. The social wage was one of the central points of that accord. It was a more broadly based measure of living standards than cash disposable incomes.

Of course, the Liberal Party takes a very narrow view of living standards. Senator Short, in his speech in the preceding 20 minutes, talked about living standards essentially in terms of after-tax cash incomes. However, the Liberals ignore the vital contribution in modern industrialised societies that government spending programs make to living standards. I refer to health expenditure through Medicare, education expenditure, social welfare expenditure and housing expenditure. They all make a major contribution to the standard of living as we measure it in modern industrialised societies. All of those things make up the social wage. They all add to living standards. As I have said, the Liberals take a very narrow view of those things. Their view is blinkered because of the narrow view they take of the public sector. They do not see the influence of the social wage on living standards.

The Government takes a much wider view on this matter. We define standards of living more broadly. I am pleased to see that, to its credit, the trade union movement, through the Australian Council of Trade Unions, also takes a wider view of living standards. It has worked under the accord since 1983 on the basis that standards of living are not based on cash disposable incomes; they are based on a combination of that and the facilities and programs that can be provided by modern governments. I am pleased to note that an increasing number of employers in Australia take that view also. They realise that it is in their interests to have part of the remuneration, if you like, of wage and salary earners come through social wage items. The advantage to employers in having remuneration in that fashion is that it helps keep down production costs. The whole of the remuneration of wage and salary earners does not have to be paid by the employer. That is a very important point to note.

This Government has been fighting inflation and unemployment simultaneously since the National Economic Summit Conference. At the 1983 election, we promised that 500,000 new jobs would be created in Australia in three years. I recall prominent Liberal Party members scoffing at the pledge that we would create half a million extra jobs in Australia in three years. I invite them to look at the record. Within four years of making that promise, we have created up to 750,000 new jobs. So the figure of half a million has been exceeded well and truly, with three-quarters of a million Australians now being employed over and above the number in work when this Government was elected in 1983. That is in contrast with Mr Howard's record, when 186,000 Australians were thrown on the industrial scrapheap as a result of his policies. When he was Treasurer, we had 10 per cent unemployment. The figure has been reduced to 8.4 per cent. That has led to a tremendous improvement in the welfare and the standard of living of many Australians. I invite Senator Short to look at the ratio of the number of unemployed people in Australia to job vacancies. In February 1983, there were 28 unemployed people for every job vacancy. The ratio was 28:1. That was Mr Howard's record.


Senator Short —Unemployment here has fallen less than it has in other countries.


Senator MAGUIRE —Senator Short is a former Treasury officer. He should know that economists use vacancy ratios as an indicator of what is happening in the economy. By February 1987, the ratio had been reduced from 28 unemployed persons for every job vacancy to 11. I do not find that figure acceptable, but it is a tremendous improvement on Mr Howard's record. There has been a tremendous fall in that vital indicator of performance in the labour market. I ask Senator Short: Who are we talking about when we talk about standards of living? Are we talking about the standards of living of those extra three-quarters of a million Australians who have found work under the Hawke Government? Are we talking about the standards of living of all those people who have been taken off the dole queues as a result of finding work under the Hawke Labor Government? Of course we are not. This matter of public importance simply cannot refer to them. In terms of cost of living rises, I said earlier that when Mr Howard was Treasurer this country had an inflation rate of 11.5 per cent per annum. We have reduced that to 9.3 per cent. Despite a big devaluation in the Australian dollar and the higher cost of imports feeding into the consumer price index, we have reduced the rate of inflation in this country by over 2 per cent. That has led to a major improvement in the economic health of this country, which is a major contributor to the standard of living of Australians.

The Liberal Party has been making a lot of noise lately about youth unemployment. I suppose we are entitled to inquire into who created youth unemployment. When Mr Howard was Treasurer the national jobless rate for 15-to 19- year-old persons seeking full time work was 26.9 per cent. Mr Howard's legacy to the young people of Australia, his bequest to the up and coming generation of this country, was 26.9 per cent unemployment. That rate has been reduced to 23 per cent. Again, I do not find that rate acceptable but it is certainly preferable to the rate that was left to this country by Mr Howard.

The area of wages is a very important factor in standards of living. During the first three years of the Hawke Government's period in office, wages were indexed to take account of cost rises. Wages went up in line with the consumer price index. That provided some real protection to wage and salary earners against cost of living rises. But we had to admit to reality. We had to say that we could not continue to index wages in a climate where people were not prepared to purchase our products on the world market and pay the prices that we had been accustomed to charging in the past, where our balance of payments position was suffering and where the prices paid for our exports were falling compared with the prices that we paid for imports. We could not persist with that, so we looked for a new form of wage remuneration. The Government, before the Australian Conciliation and Arbitration Commission, supported the concept of a flat wage rise with a proportionate percentage increase at a later date for certain performance criteria being met. That is our wages record-indexation for the first three years and support for a flat rate wage increase more recently.

But let us look at the record of the Liberal Party. It has absolutely no credibility on wages and absolutely no credibility on living standards because the fact is that in 18 out of the last 20 national wage cases heard in this country the Liberal Party has gone before the Commission and called for a wage freeze. That is what it has done time and time again. In only two cases out of the last 20 have the Liberals not called for a wage freeze. Yet here we have people such as Senator Short coming into the Senate this afternoon and castigating and criticising this Government for an alleged decline in living standards, when on 18 out of 20 occasions the Liberal spokesman went into the Arbitration Commission and said: `Freeze wages'. That is the Liberals' record. Irrespective of the economic circumstances in this country, over the last four years the Liberals have asked for wage freezes.

Whether we had high or low economic growth the recipe was still the same. It was the same old formula: `Let us have a wage freeze'. Whether we had high economic export proceeds or low export proceeds it has been exactly the same recipe: `Let us have a wage freeze'. When inflation has been low or has increased, the same formula has been put forward: `Let us have a wage freeze'. The Liberals are like a bunch of parrots reciting by rote. They want a wage freeze whatever the economic circumstances in Australia. How can they talk today about living standards? How can they criticise the Hawke Labor Government for Australian living standards when on virtually every occasion for the best part of the last four years they have tried to deny the wage and salary earning people of this country a wage rise. That has been their attitude and their record and they stand con- demned for it.

I move on to the question of housing. Housing is an area which is vital to the standard of living of most Australians. The family home is typically the largest single purchase that people make during their lives. Our record has been very good in the area of housing, yet we have Liberal senators criticising the Government. Senator Short today talked about public housing. It is very unusual to hear Liberal Party senators talk about public housing, that is housing provided to Australians on lower incomes through housing trusts, as in the case of my State, or housing commissions elsewhere. It is something they do not talk about very much, and when they do they are usually trying to slash the money available to the housing commissions. But the record of this Government in this regard has been second to none.

I put forward the figures. In 1982-83, when Mr Howard was Treasurer, $333m was made available through the Commonwealth Budget for public housing in Australia. In 1986-87, the current financial year, not $333m was put forward, or $433m, or $533m, or $633m; instead, $694m has been appropriated for public housing purposes in this country. That is more than a doubling of the funds available. This Government introduced the first home owners scheme to bring housing within the reach of lower and middle income Australians who would not otherwise be able to afford their own homes.

Complaints have been made in this place time and again by Liberal senators about the position of the housing industry. It is as though they believe the industry is at rock bottom at the moment and that the golden age was when Mr Howard was Treasurer and running the country. The allegations are that housing is now in a much more parlous position than it was when the Liberals were on the Treasury bench. But this morning I looked at the figures in regard to activity in the housing industry. I am sure that you, Mr Acting Deputy President, will be interested to hear what they were. The fact is that in the calendar year 1982 there were 109,300 housing starts. That is the number of new dwellings commenced in Australia. That is what Mr Howard, as Treasurer, could achieve. But in the calendar year 1986 the number was not 109,300 new housing starts; it was 121,200. In that one area in which the Liberals would have us, the community and the electorate believe that the housing industry is on its knees, the fact is that in 1986 there were 11 per cent more new housing commencements throughout Australia than Mr Howard could achieve in 1982 when he was the Treasurer of Australia.


Senator Short —How many fewer than in 1985?


Senator MAGUIRE —So there we are, Senator Short. His Government's record was 109,300 new housing starts, and our record in 1986 is 121,000 new housing starts. So I have put forward the Liberals record on housing and I have put forward our record. Australian families know the difference, the electorate knows the difference and, of course, the Housing Industry Association knows the difference. Only this week the Housing Industry Association wrote to the Prime Minister (Mr Hawke) congratulating him on this Government's record in housing. I put that on the record. It is a very significant indication by a major sector of the economy that it appreciates the work that this Government has done in the housing area.

Senator Short, in bringing this matter on the standards of living forward this afternoon, obviously was not aware of the latest information made available on the social wage. I earlier gave the broader definition of `standards of living', by looking at items such as government expenditure programs in addition to cash wages and salaries. I refer Senator Short to report No. 27 of the Economic Planning Advisory Council entitled `Aspects of Social Wage', which looks at the influence of items such as health, education, social welfare and housing expenditure on the economic circumstances of Australian households. There is some very interesting reading on page 13, because there EPAC looks at the Commonwealth Budget sector, the overall contribution of the Commonwealth Government to the community, and at the social wage contributions made by the Commonwealth Government over the period 1975-76 to 1985-86. Some very interesting comparisons emerge, and I am sure that Senator Short will be very interested to hear about them.

For example, real annual social wage spending per head of population-that is, per capita spending per annum-from 1975, to 1978-1979, that is the first three years of the Fraser-Howard Government, did not rise at all. In fact it was reduced. It was slashed by five per cent on average per head of population per annum. That is a devastating reduction in living standards when looked at from the point of view of the social wage. Whilst the Liberals brought forward for discussion in the Senate this afternoon a matter criticising this Government about standards of living, the fact is that the social wage under the Liberals was devastated. In the first three years of the Liberal Government of Mr Fraser and Mr Howard, the social wage was devastated. In the period from 1978 to 1982 under Mr Howard only a very modest increase was possible in the social wage.

While we had an average two per cent growth in the social wage over that period, since the Australian Labor Party has been in office the increase has averaged 4 1/2 per cent per annum-more than double the increase in the social wage and more than double the contribution of government programs to the welfare of Australian households under Mr Howard. I therefore put that forward as an important indicator of standards of living in Australia. It is hypocritical for the Liberals to criticise the Labor Party over living standards. Mr Howard, as Treasurer, hit the living standards of hundreds of thousands of Australians. We have acted to restore and improve the living standards that were decimated by Mr Howard. There are more jobs, fewer unemployed, lower cost of living rises and more homes being built in Australia than when Mr Howard was the Treasurer of this country.