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Thursday, 5 May 1994
Page: 359


Senator KERNOT (Leader of the Australian Democrats) (4.56 p.m.) —We are hearing a lot about John Curtin at the moment.

  Opposition senators—Chifley.


Senator KERNOT —And Ben Chifley.

  Opposition senators interjecting


Senator KERNOT —Excuse me, I want to start by referring to John Curtin. If opposition senators will just listen, they will get the context. In 1944 John Curtin asked his minister for post-war reconstruction to prepare a white paper on unemployment. Ten months and seven drafts later, Ben Chifley tabled the paper Full Employment in Australia. At its heart was Chifley's determination to establish full employment as the fundamental aim of active government policy. That determination was driven by his experience during the Depression. `I am not one of those who suffered want in those years,' he said, `but it left a bitterness in my heart that time cannot eradicate.' Not suffering want applies to a lot of us in here. I say to Senator Ian Macdonald, before he laughs again, that I wonder whether we share the same bitterness.

  Many years later, Chifley's biographer, L.F. Crisp, wrote that `the key to Chifley's life work, the mainspring of his political struggle' was his `compassion for fellow Australians in agony of mind and spirit caused by economic forces outside their individual—but within their collective—powers to control.'  This week, the Prime Minister (Mr Keating) summoned up the spirit of Ben Chifley to help him in the run-up to his own white paper.

  Opposition senators interjecting

  The ACTING DEPUTY PRESIDENT (Senator Teague)—Order!


Senator KERNOT —Yes, Mr Acting Deputy President, there are some things that we cannot expect in terms of courtesy sometimes.

  In summoning up the spirit of Ben Chifley, we find that it has not turned out to be a friendly ghost for the Prime Minister. I note that today the Prime Minister, during his speech to the National Press Club, back-pedalled at a rate of knots from his `Labor to the bootstraps' claim of earlier in the week.

  It is just as well because the Prime Minister knows that the ideas, the concepts and the themes which underpinned Ben Chifley's white paper are absent from his. Where is the recognition that those Australians who bore the brunt of the recession are entitled to a fair share of the recovery—not just any little share but a fair share of the recovery? Where is the commitment to public capital expenditure? Where is the acknowledgment of the need to reform Australia's biased, unfair and outdated taxation system? Where is the recognition of small business as a primary generator of jobs? Where is the basic acceptance of the obligation owed by the government to unemployed Australians to create and maintain the conditions which will encourage employment growth? These things are absent from the Keating white paper.

  The sad fact is that Ben Chifley would be ashamed to put his name to this document, and Paul Keating knows it. The sad fact is that Paul Keating's white paper is, to steal a line from another leader haunted by a ghost, a thing `full of sound and fury, signifying nothing'. It is a pretty enough package. It contains some useful measures and it provides at last some opportunities for unemployed people to gain some additional training and work experience.

  It contains some important changes to the social security system which will go some way towards reducing discrimination against part-time and casual workers and which will hopefully take us a bit further down the track towards achieving a sensible balance between paid work, unpaid work and family responsibilities. It contains a small regional environment employment program—a welcome, if belated, initiative. The acknowledgment, although slight, of the potential of green jobs is also welcome. It will, I think, bring some relief to those Australians who paid for the recession and who are paying for the recovery with the loss of their jobs.

  Welcome though all of this is, it really does not do much more than that. It really cannot be seen as much more than, as Julian Disney described it in today's Australian, `a down payment on what is necessary to restore hope, dignity and security for unemployed people.' But I do not think a down payment is good enough. I think unemployed Australians deserve more than that. I think they deserve more than a smattering of training and work experience schemes and some tinkering around the edges of social security programs. I think they deserve some leadership and vision from the government and the Prime Minister.  I thought it was very ironic today that so many newspaper banners had `Keating's vision' written across the top when actually the two things that are conspicuously absent from this document are leadership and vision.

  There are four key areas which the government has failed to come to grips with in this white paper. We believe that until and unless they are addressed, the government's response to unemployment will continue to be symbolic rather than substantial. The first key area is: moves towards removing tax disincentives to employing new workers. Senator Hill has touched on that point. The Democrats believe that investment by businesses in human capital, in workers, should be treated in a similar way to investment in physical capital.

  What we have at the moment is a taxation system which is biased against investment in employment and which actually penalises labour intensive businesses while encouraging and subsidising capital intensive businesses. This is a situation which makes no sense at all. The white paper does virtually nothing about it. Yes, there is the abolition of the training guarantee levy. We have listened to what business has had to say about how that has outlived its usefulness. We called for the suspension of that levy in our budget submission to the government. But we wanted to replace it with tax incentives for training. The government has partly responded with increased subsidies for traineeships, but it continues to miss the fundamental point of the different tax treatment of capital and labour inputs.

  Another disappointment is the continuing failure of the government to tackle the vexed question of payroll tax—a tax on employment. The Democrats put up a proposal in our budget submission to the government to phase out payroll tax. But the government just keeps putting this in the too-hard basket. Unlike the Liberals, who are absolutely incapable of saying anything civil about the Democrats, I am quite capable of acknowledging the work of the Leader of the Opposition, Dr Hewson, in securing the cooperation of many state premiers in their quest to work towards the phasing-out of payroll tax if the coalition had won the previous federal election.

  I happen to think that if the Democrats, with their scarce resources, can talk to industry and small business and develop a proposal to get rid of payroll tax, and get it independently costed, surely the government can come up with one or two ideas of its own. For a start, it could look at the creative ideas on abolishing payroll tax which are contained in the much more imaginative recent European Community unemployment white paper. At the very least, the government should consider holding a payroll tax summit. It should get on the table some concrete ideas about taking action to do that. It is so frustrating that year after year, when we know what a disincentive this is, we do nothing about it. If the government will not do it, then I will. Constantly running into a brick wall of government indifference on this is unacceptable.

  The second key area that I think the government should have taken action on is that of increasing the capacity of small business to grow and create new jobs. Despite Senator Cook's claims during question time, the white paper's response to this issue is inadequate. On small business, the government's score is one out of three.


Senator Boswell —That is too high.


Senator KERNOT —I think that is fair. The government gets a tick for information sharing, networking and management training. But on the critical issues of access to finance and taxation reform, it just has not gone far enough. Apparently, we are going to train bank managers to be nice to small business. But, for example, there is no plan to reduce interest rate spreads, which are currently twice the OECD average. There are some good initiatives for small business in the white paper, and I have acknowledged that. But the big issues of access to finance and taxation reform are not tackled.

  The third key area I want to touch on is increasing expenditure on infrastructure. This is a really disappointing failure. It is a failure to signal a reversal in a 40-year decline in public investment in infrastructure. It is a failure which is nothing short of a disgrace. I can only hope—and I hope it is not in vain—that there is something in next Tuesday's budget to address the critical areas of public transport, water, health and education infrastructure.

  The fourth key area I want to touch on is that of a strategic and comprehensive industry policy. My colleague Senator Spindler will be dealing with this in detail. All I need to say is that I believe the paper signifies the government's continuing incapacity to learn from the experience of other countries and its total lack of ideas on industry policy. Its inability to come to grips with these issues is a symbol of its failure to recognise that old structures and old systems are changing and it is time for a fresh approach to employment.

  I think the white paper has failed to deliver in this area primarily because those who drafted it do not seem to have got out and talked enough to those who are affected by it. I think the Prime Minister should be out there talking more about green jobs and the enormous potential to generate employment in the environment industries. He needs to understand that it is not just a matter of dreaming up new schemes. We know where the work needs to be done. We know how we have ruined, polluted and destroyed so much of this country. We know where the work needs to be done; we know what work needs to be done; and we know there is plenty of it to be done. So while a 10,000 place REEP scheme is very welcome, it is a long way from being enough.

  I think the Prime Minister should be out there talking to unemployed young people about what they think they should be doing in exchange for their benefits. I think he needs to hear from people like Tinah Hadley from Mullumbimby who came to see us yesterday to talk about her experience of being cut off unemployment benefits because she told the truth; because she said she was not out looking for non-existent work every day as she was trying to establish a business for herself. In her words:

There is a growing group of out of work people who have realised that there are fewer jobs available than any rhetoric the Government may circulate and have taken it upon themselves to experiment and develop skills that will lead to their own employment and possibly employment prospects for other people.

She asked:

Where is the differentiation between those who are unemployed and those who are attempting to create their own work?

People like Tinah will rightly ask why the white paper is so unadventurous in respect of people like her and why it contains such a paltry increase to the new enterprise initiatives scheme, instead of the doubling of places which the Democrats believe is necessary.

  The Prime Minister needs to get out and talk to other young unemployed people about other than an increase in training. He needs to get out into regional Australia, like his mate Bill Kelty has done, and get some idea of the magnitude of suffering out there. If he has not done so—and I wonder whether he has—I think he needs to sit down and have a good chat to Bill Kelty because at least Bill Kelty talked to people and came up with some good ideas for solving some of the problems of rural Australia. But these ideas have been largely ignored.

  Despite the government's assertions to the contrary, the white paper does very little for regional Australia. Yes, the support for regional economic development organisations is welcome. Yes, there will be some employment benefits from the REEP program. But $10 million for regional infrastructure is an insult. Yes, it is good to see the long-awaited reform of infrastructure bonds, but do not hark back to pool development funds as the answer to everything. I am very sceptical about these bonds ever working because they do not click in until the investment makes a profit. Infrastructure and research require significant up-front investment, and we generally do not see the benefits and do not make a profit for many years. Governments know this, and they avoid taking that decision.

  The smart approach would have been to increase government up-front equity and increase government expenditure on infrastructure. I heard a comment today that the regional elements—such as they are in this package—add up to a committee-led recovery: in other words, out in the regions there is going to be a lot of talking, a lot of organising, a lot of meetings, and it is all supposed to be aimed at encouraging people to act. There is not much in the way of direct assistance. The white paper's message from the government to regional Australia is a pretty clear one: `the name of the game is self-help and, despite all our rhetoric, despite the way in which we have said that we are so committed to the role of regions, we do not see any reason to give regional Australia any special treatment.'

  I hope Bill Kelty has been on the phone to Paul Keating and given him a bit of an earful about why he and Lindsay Fox wasted their time and the taxpayers' money developing a set of comprehensive proposals that the government could ignore. Bill Kelty's experience just about sums up the white paper because it is not as if the government has not had enough data upon which to rely. As the Prime Minister said, we have had 11 budgets, three ministerial statements, four major economic statements—a prodigious body of work.

  The government has plenty of the evidence that it needs to radically rethink its direction but, instead of rising to the challenge and seeking the opportunity provided by the white paper to do something genuinely creative, it has come up with a piecemeal package that relies on growth. I have to say that I am very sceptical—and I think I have good reason to be, based on the evidence of the previous decade—about the ability of growth to ultimately deliver all the sorts of real jobs about which the government is speaking. The government has come up with a minimalist package—good rhetoric, full of symbolism, short on vision and substance.


Senator Panizza —You go to caucus; why don't you sort it out?


Senator KERNOT —The envy of the opposition is a matter of great amusement to me. The opposition had an opportunity to be involved in a cooperative process, but it has always avoided it so that those opposite can sit there and carp forever and say nothing constructive of their own.


Senator Panizza —When we are in government, ones like you will never get a look in.


Senator KERNOT —The more Senator Panizza stays out of processes, the less likely his party is to be in government. As I was saying about the white paper, it is a minimalist approach and the opportunity was there to do so much more. To use Ben Chifley's own words—speaking about a different government package—the white paper is a thing of shreds and patches.