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Thursday, 14 May 1998
Page: 2896


Senator COOK (7:30 PM) —One of the newspaper cartoonists yesterday gave us the ultimate `I'd like to see that' of Australian politics: the Treasurer (Mr Costello) in pigtails and a blue dress, skipping off down the yellow brick road to the sunny land of Oz, where worries melt, I am told, like lemon drops, and every resident munchkin is relaxed and comfortable, and raking in shares in AMP.

But Madam President, there are always messages between the lines. Because who can think of Dorothy without her supporting cast? I look across at this government and I find the audition hall overflowing for the parts of the lion without courage, the tin man without a heart, and perhaps most oversubscribed of all, the scarecrow without a brain. So somewhere over the rainbow, there you'll find the Treasurer, far up and away, and off with the bluebirds on his technicolour journey, skipping and singing, singing and skipping.

We all have our sustaining fantasies, Madam President, and listening to this budget on Tuesday night I realised that we're not in Kansas any more. Because only in the Treasurer's fantasies can there be good in this budget surplus built on a million small deficits in the lives of ordinary people. The teeth are not fixed. The pills are not bought. The kids in backyard care, or the mother out of work. The apprenticeships not found. The holiday not taken because of the cost of a mother's nursing home. The university degree out of reach, and the fulfilling career therefore not had. The shame of the young school leaver's hundredth unsuccessful job interview. The corroding despair of the long-term jobless, and the alarm of their families. The grief of the parent farewelling a child leaving town for good. The factory closed. The trauma of selling-up and moving. The hundred unspoken small goodbyes of ordinary people to their ordinary lives.

These are the human losses on which this accountants' surplus was built by a government that has long ceased—or has never learned—to care. And these indeed are the hard yards. The long haul. The shouldered burden of battling Australians that somehow fuels the happiness of a Treasurer long unacquainted with the ordinary needs of his fellow Australians. The griefs and consolations, and the quiet unprotested sufferings which underpin the triumph of his numbers and the failure of his government's decency.

The government will have you believe that all the pain was essential. It was not. If it was essential, why did Tuesday's budget contain spending increases of $10 billion over the next four years? If it was essential, why is it that when we look at the effect on financial year 1998-99 of the three Costello budgets, we find that in net terms he cut $6 billion in the first budget, $1 billion in the second, and then put back $2 billion in the third? Why didn't the Treasurer explain here on Tuesday why he has effectively run down two flights of stairs, and back up one on fiscal policy? He didn't, because the admission would be too great.

In the first two budgets, we had selective leaking and pre-announcement of the bad news. This one has been selective leaking, and admission of failure in small instalments, the only instalments a battered, unpopular and fundamentally untrustworthy political outfit can afford. He was wrong, and he can't admit it.

But the net effect of this government's policy changes on financial year 1998-99—the net effect of going down two flights of stairs and up one—was $5.4 billion. Subtracting that $5.4 billion from the surplus announced by the Treasurer leaves us with an underlying `no policy change' deficit of $2.7 billion—no cuts, no surcharges, no fees, no pain.

Now let me tell you something that Gareth Evans said about an alternative budget strategy for Australia—not this week, not last year, but two years ago, after the coalition's first budget, and I quote:

. . . we say we can get to budget balance within a reasonable time—in fact, within the lifetime of this parliament, by 1998-99—with a much less savage budget strategy. . . . We can get to that by targeting savings of no more than $3 billion by that third year.

In other words, $1 billion of new savings each year in three budgets would have produced a starting point surplus this year of at least $300 million. On top of this, the higher economic growth, which Labor's budget strategy would have allowed, would have seen a 1998-99 budget surplus of similar dimensions to the one announced on Tuesday.

Our argument was then, as it is today, that fiscal consolidation in the economic climate this government faced in 1996 was necessary but did not need to be nearly as harsh as what they immediately embarked upon. We need surpluses, of the kind that Labor delivered four years in a row not long after inheriting a $25 billion deficit from the then Treasurer, John Howard—surpluses built on jobs and growth. We need to retire public debt, but we must keep that issue in perspective too. Despite what the Jeremiahs might say, Australia's fiscal position was very good by international standards when this government came into office.

That is not to say that we should become complacent. We should not. But it does seriously question why you would sell Telstra to reduce what, in our last year in government, was the third lowest public sector debt in the industrialised world. That debt, as a percentage of GDP, was less than half of Canada's, and two-thirds the proportion of France, Germany, the United States, and even Britain after a decade of Maggie Thatcher's budget cutting and privatisations.

Why, then, should we allow up to $20 billion worth of Telstra, this great national asset, to go to foreigners? After only four years, we will lose more in Telstra dividends than we will save on our interest bill—dividends that would otherwise be there for generations to pay for hospitals and schools, railways and roads.

This budget puts aside $580 million for the financial managers as costs and commissions for the Telstra float. That is more than half a billion dollars we could save tomorrow, and keep a great national asset into the bargain.

In any budget that spends money like this one, there are things to be welcomed, and you should offer praise where it is due. Two praiseworthy ideas are the extension of the gold card to all World War II veterans, and the extension of the health care card to more self-funded retirees. Labor was proud to establish both cards in our time in government.

It is unfortunate, however, that benefits for a small number of our retirees should accompany reductions for the vast majority. Twenty times as many have experienced those reductions as have received benefits now. Had those self-funded retirees obtained their card under Labor, they would have had access to free dental care, lower-priced prescriptions and free hearing aids. Two hundred and twenty thousand benefit; four million Australians lose.

But all of them now confront a massive expense on entry to essential care in nursing homes. Our specific policies will be announced closer to the election—but I can say two things: we will restore capital funds cut from nursing homes in full, and none of our retirees—or any Australian for that matter—will have to pay a GST on any of their goods or services.

But even though this budget has spent some money, it leaves too many questions unanswered. It cannot answer the people who ask themselves what all the pain was for in the first place, or why someone else's pain was more worthy of being reversed than theirs was.

How precisely did the government make the decision not to restore Commonwealth dental funding? How did it decide it was relaxed about the situation of one woman whose letter to the member for Gilmore was submitted to a recent Senate inquiry, a woman who has been informed that all her teeth need to be extracted and, despite living in constant pain, it will be 18 months before she can be treated? Even then she will have to wait for each individual tooth to cause her pain before she is entitled to have that tooth extracted. What thought processes, what overarching philosophy, what quality of mercy goes into that kind of decision?

And how did the government decide it was relaxed about elderly Australians, in their hour of greatest fragility, still having to sell the family home to pay for entry into a nursing home—and that, after all the backflips and all the reversals—some 14 of them—the fees remain, and the government still circles the family home. How did it decide that it could go right ahead and spend that money elsewhere?

How did it decide there was no relief for women forced out of the work force by spiralling child care fees? How did it decide instead to factor their despair into its employment projections? The bad employment estimates in this budget are still heroic. At a minimum, they only stand up because of the thousands of women driven out of the work force by this government's decisions on child care. The Prime Minister thinks this is about family values. It is not. It is simply a collapse in the living standards of low-income working families.

And how, after all its claims, can there be not one single dollar more for public hospitals in this budget than was on the table when the Premiers walked out on the Commonwealth's last offer in disgust?

Let me say that John Hewson, who seems to have picked the impact of the Asian crisis far better than this government, was absolutely right in saying that this health offer is nothing like 15 per cent over five years. The Premiers walked out on that, because they knew that to sign on would be a wholesale betrayal of their public hospital patients. That inadequacy this budget happily endorses.

But there is one large group of Australians which suffers most from these three budgets. I am speaking, of course, of the unemployed. To see why, we need to remember the level of economic growth before John Howard came into power. In the financial year 1993-94, economic growth in Australia was 4.6 per cent. In 1994-95, it was 4.4 per cent. In 1995-96, it was 4.1 per cent. Australia's economic growth rate for John Howard's first full financial year in office was just 2.7 per cent.

Four percent growth plus under Labor. Not even two-thirds of that in the first year under the coalition. And we are meant to accept that this had nothing to do with the entire government frontbench preaching economic doom for a full five months before the first budget in 1996. Nothing to do with that budget which took $27 billion out of the economy over four years.

Growth got above the parapet of three per cent last year, and now it is forecast to flatline back at three per cent, with unemployment stuck around eight per cent.

But when the Treasurer was asked on Tuesday night about the unemployment rate, this is what he said:

No it bounces around a bit. You know, it's 7.9, it's 8, it's 8.1. We think it's around the 8 mark at the moment, but it will bounce. It's been bouncing for a year.

I am sick of that kind of talk. I am sick of people like the Treasurer with a screen full of teeth making glib analogies about real lives. These are real people, Mr Treasurer, not footballs, not Dr Kemp's rubbery statistics. They are real mums and dads, with real children dependent on them, trying to get a start in life. You were not elected to bounce unemployment around. You were elected to get it down.

Before March 1996, the unemployment rate had been falling for three years. This government came in and worsened the unemployment position immediately. In our last two years in government, Labor created 550,000 jobs. In his first two years, John Howard created not half as many. The difference was 315,000 people—three MCGs jam-packed full of people who would now be in work, and not on the dole queue, if the coalition had just managed to keep up the pace we set.

And anything it has managed to do on unemployment, or might manage, has to be judged against another MCG crowd of nearly 100,000 people who have simply given up looking for work since this government came into office. And what of those left on the dole queue longer than they ever feared, because of the growth this government put on hold? The number of people unemployed for a year or more fell by over a third during Labor's last term in office.

So far, during this government's term, it has actually risen. When you started cutting into skillshare and other labour market programs in May 1996, there were 206,000 long-term unemployed Australians. Figures released this morning show that their ranks have now increased by 33,000 people as a result of your policies. Long-term unemployed used to be a quarter of all unemployed. Today, they are a third.

And they have been ill-served by a government which has wrecked the support systems putting long-term unemployed people into work—exemplary programs emulated around the world put on the scrap heap. Or worse: some of them have been put into the hands of people with no office, no staff, no experience—some of them without even a telephone!

This is where we count the cost of this budget. Having counted the beans, the government has closed the book on Australian families. It is not going to redress the pain of the last two years; it is not going to tell them where it wants to take them next century. As far as the government is concerned, there are only two more stops in the journey—the GST and an election.

So let me talk about their GST—the dead heart of the hidden tax package. John Howard has built a career avoiding the unequivocal, but three years ago this month, he was absolutely unequivocal. These are his words, and we remember them well:

No, there's no way a GST will ever be part of our policy. Never ever. It's dead. It was killed by the voters at the last election.'

Peter Costello has built a career avoiding being quiet, but his budget speech was silent on the issue of a GST. He was like Basil Fawlty, you know—`Don't mention the war!' The budget papers on Tuesday included $20 million for the administration of this tax package, so we are now in the farcical situation where the coalition will tell us what it will cost to implement the tax package, but it will not tell us what is in it.

But one thing is for sure: the GST has come back when no-one thought it would. This tax on jobs, this tax on the poor, this tax on families is back. And as we prepare for its stealthy arrival, we need to remember that it comes back with none of the integrity that was there in its initial presentation when John Hewson put out his fully-costed package, openly and frankly, more than a year out from an election.

John Howard told his party two days ago that we could be in the last parliamentary session before the election. Just weeks to go, but the voters are not going to see the tax package yet. It is something to be dropped, and then scuttled away from, to the polls, before anyone can get the wrapping off and find out what is underneath.

That changes where we stand as a party. Those of us who oppose a GST now have only one course of action. I want to make it clear tonight that the Labor Party believes that John Howard has forfeited any right ever to claim a legitimate mandate for his GST. And our opposition will be there whether we win or lose the next election. A vote for Labor is a guaranteed vote against the GST. If we are elected, you will not get one, and if we are in opposition, we will oppose it in the Senate.

We do this because the lateness of the hour means we are expected to take this Prime Minister on trust. But we see nothing in this government's record to trust that the package will be fair or equitable. The Treasurer has explicitly refused in this place to rule out a GST on the following items: doctors bills; dentists bills; school fees; university fees; power bills; food; nursing home fees; local government and water rates; and even rent.

We see nothing in this government's record to trust that its awesome complexity will become, in their hands, anything other than a complete disaster—a disaster for businesses, workers and all consumers, implemented in the usual manner—with all the grace and poise of Inspector Clouseau in a ball bearing factory. We refuse to help John Howard get his agenda into place, and we will not inflict his tax on the Australian people.

Modern government, as we approach a new century, is about skills, innovation, infrastructure and exports. It is not simply about bean counting. It is not simply about achieving a surplus by any means. It is about achieving a surplus in periods of moderate economic growth, at the same time as creating a modern, successful state which rewards, advances and enhances excellence.

For Australians, this means recognising something about our own country. It means recognising that many other countries have advantages we do not. We are a nation in nobody's trading bloc. We make our way in a region where the big countries are growing by an amount equivalent to our entire population every single year, while we occupy a great proportion of that region's real estate.

It also means recognising what makes us proud to be Australians—our history of innovation, our scientific endeavour and our national courage. Too often, as we have approached issues of reform over the last 15 years or so, we have been critical of Australians' willingness to work hard, innovate and change based on their own convictions rather than on some official view. Too often, we have underestimated how much Australians pride and value their own work and their achievements. Too few Australians, too few members of this parliament know that Victoria and South Australia combined have won more Nobel Prizes in the sciences than the whole country of Japan.

Government must value and enhance those great Australian characteristics. Micro-economic reform is not about depriving people of wages, depriving people of leisure and depriving people of things which make for a constructive family life. We must be about enhancing skills, building on our record of innovation and developing our outward-looking attitude to opportunities in our region. Just try to find anything substantial in these three budgets from this government which builds on these strengths.

Instead, the vast bulk of savings made in the three budgets have been at the expense of this Australia. They have come from our universities, from the labour market programs helping to keep our population permanently skilled, from research and development incentives and from assistance to exporters to gain a foothold in international markets.

The effects are clearly documented in the budget. It forecasts a drop in net export growth. It shows business investment growth slowing throughout the year. Recent figures show growth in business spending on research and development, which reached an all-time record of $4.3 billion in Labor's last year, has stopped dead for the first time in a decade, following the swingeing cuts to R&D support in the first coalition budget.

This is why there is no point in delivering a surplus ringed by deficits. It is a surplus bought from the million deficits in family budgets, a surplus sitting alongside a level of foreign debt which has worsened by $28 billion since the coalition came into power and a current account deficit forecast to grow by another $31 billion over the coming year—and nearly every single independent analyst thinking that is an understatement.

This is why we need a government with a broader vision, why we need to restore the balance, why we need a government that sees where it can forge a partnership with the Australian people: a partnership supporting family life, supporting unemployed, supporting industry, supporting investment and supporting exporters. We need partnership, and we need to have their visions as well.

Two years have told us all we need to know about John Howard's ambitions for Australia. He wants an Australia with him as Prime Minister, and that is where the vision ends. He wants an Australia moulded into the shape he thinks will keep him there—a nation riddled by division, neatly carved up into the few groups whose dislike of each other, encouraged by this government, he thinks will keep him in power forever.

Labor will go into this next election believing in a different Australia. We believe in a proud, confident, intelligent Australia. Labor believes in an Australia that wants security in its workplaces, peace of mind in a strong health system and opportunity flowing from an education system which gives its citizens the best chance they can get in a global economy.

We understand with absolute clarity the importance of the Asian financial crisis for the Australian economy, and the corresponding need for fiscal restraint in that environment. Kim Beazley promised back in February that Labor would deliver three underlying surpluses in our first term in government, and that promise stands as long as this government's projections for the budgetary position and economic forecasts stand.

But Labor is going to look at priorities. We are going to look at where this government has spent money wastefully, and where the money could be used more intelligently and to greater benefit for greater numbers of Australians.

We are not going into this election year with a fistful of dollars as a grudging apology for pain rendered over the previous three years. We are going into this election year with a vision of where we want Australia to go, what Australians want in their everyday lives and how, within the means available to us, we can go in that direction. These three budgets have sacrificed the security and opportunity of the population to Liberal Party prejudices. This is a government that has forgotten its responsibility to govern for all Australians and is now prepared to experiment with an unfair, job-destroying tax in a period of uncertainty.

In the last two years, over the last three budgets, the Australian people have learnt what they were getting when they elected this government. I maintain they deserve something better than what they got. Normally, it would be hard to close the book on a government after only three budgets. Normally, it would be hard to say a government is not worth considering again when it has been around for only two years. Normally, a first-term government just turns up in the queue for another term like it is waiting for dessert. But this is not a normal government. This is not the normal run of events at all.

This is John Howard's government and John Howard's Australia. We know that millions of Australians want no more to do with this government—no more of this government that loses seven ministers in just 18 months; no more of this government that puts black shirts, balaclavas and dogs on chains in our workplaces; no more of this government that defends ministers with tens of millions in their family trusts, and wants working Australians to pay a GST on their grocery bills, their clothing, their rent and their rates; and, no more of this government with a quarter of a billion for companies that want to sack workers, and nothing for those companies who want to keep them on.

These were your three budgets, and they are over. If there was a time and a place for a government as harsh and chaotic as this, it is long, long past, and in another, lesser country. If there is a place for it now to go, it is out of our lives, and out of our lives for good.