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Tuesday, 21 August 1973
Page: 32


Mr CREAN (Melbourne Ports) (Treasurer)

That the Bill be now read a second time.

In doing so I present the Budget for 1973-74.

Since taking office nine months ago the Government has acted energetically to implement many of its election undertakings. Many major spending proposals of the Government's program had of course to wait for the Budget and are now included in it. The task of the Budget, however, is to reconcile the Government's determination to carry out the whole of its program with wise management of the economy. This we have done.


Mr MALCOLM FRASER (WANNON, VICTORIA) - Ha, ha!


Mr CREAN - If wisdom had been displayed before I might not have been here. This Budget incorporates far more decisions than any previous Budget and therefore it will take longer to read. Its overriding theme is one of reform. It is designed both to clear the decks for progress in the years ahead and to ensure that in major areas of concern- social welfare, education, the quality of urban life- real forward moves are made immediately.

THE ECONOMIC CONTEXT

The main elements of the economic situation are strongly rising demand, vigorous growth in output, full employment and external strength. These favourable features are, however, coupled with persistent inflation.

Outstanding recently has been consumer spending. With disposable incomes buoyant, and confidence rising, consumer spending has accelerated and is now running high.

Investment spending presents a mixed picture. The continuing housing boom is straining resources and adding considerably to the upward pressures on prices of homes and land. By contrast, private business fixed investment has been until recently rather weak. However, preliminary figures suggest a strengthening during the first half of 1973.

Public spending continues to rise strongly. Exports too continue to grow rapidly. Imports have gathered pace recently and are now rising fast.

Overall, the economy has responded well to the buoyancy of demand. In 1972-73 non-farm product at constant prices rose by over 5 per cent. The rate of increase, however, was considerably faster than that in the second half of the year.

The labour market has reflected this resurgence. Unemployment has receded markedly, job opportunities have broadened and the workforce has grown rapidly.

For the year ahead, expansionary forces are powerful and likely to remain so. Personal incomes will continue buoyant and keep up consumer spending. This applies to all forms of incomesfarm and other business incomes, social service incomes and the rest, no less than wages and salaries.

Additionally, prospects for private business fixed investment are improving. Domestic demands are already straining productive capacity in many industries. Some of these demands can and will be met by imports; but increasingly they are inducing a strengthening of business investment.

Housing demands, given the backlog of finance approvals not yet translated into bricks and mortar, should continue high. However, we will be seeking some moderate abatement of the private housing boom in 1973-74, both to reduce the strains on the industry and to make room for the substantial expansion of public welfare housing for which we have recently provided.

Public sector demands on the economy will be expanding strongly during 1973-74. Exports also are expected to go on rising.

Overall, non-farm product should grow by as much as 6 or 7 per cent; given a favourable season, gross domestic product could actually better 7 per cent.

Inflation has been and remains our major economic problem. Like other countries, Australia will be grappling with it in the year ahead. However, there will be at least two moderating factors. The first is a high rate of importing. When the year began we expected imports to increase by some $800m or 20 per cent in 1973-74; the decision to cut tariffs by one quarter will add further to that increase. We can well afford a strong expansion in imports. By taking some pressure off domestic productive capacity, that will help to ease inflationary strains.

Secondly, the monetary situation will be much less expansive than last year. Particularly in the first half of 1972-73, the money supply rose very rapidly. Since then, we have acted both to diminish our current account surplus on the balance of payments and to cut off excessive capital inflow. In addition, the Reserve Bank has made calls to the Statutory Reserve Deposit Accounts to help mop up excessive bank liquidity. The very successful July loan has also contributed to this.

With resources already under strain, however, we would be foolish to overload them further. In framing this Budget, that consideration has been very much to the forefront.

OUR BUDGETARY OBJECTIVES

The Budget is not simply an economic document. It is also an important instrument whereby we give effect to our goals and aspirations.

In Australia today we are much better at selling cars than providing decent public transport services; much better at building houses than providing sewerage services for them. I could go on, but the point needs no labouring. These priorities are all wrong. However, as the Prime Minister said in his Election Policy Speech, 'We cannot expect to clear away that backlog in three months or even three years'. But we are now embarking on the task.

In doing so, we engaged in a wide-ranging examination of the commitments inherited from previous governments. We believe that proper budgeting requires continuing critical review of existing programs. It is only too easy for inertia to take over- for 95 per cent of budget outlays each year to be pre-determined by the past. It was time for such a thoroughgoing critical reviewagain that might well have been taken years before-to clear away deadwood, and we cleared some of that, and thereby begin to make room for the programs to which we are pledged. As a first step in carrying out that review the Prime Minister appointed a Task Force under Dr Coombs.


Mr Sinclair - We read about that some months ago.


Mr CREAN -Yes, and the honourable member will be able to judge how much of a leak it was. He will find that it would not have mattered much if it had been left on the tram. His report, which makes no specific recommendations on individual outlay or tax items, was used by the Government as a working document in our task of balancing existing expenditures with the requirements of our own program. It is being published with the Budget papers. Why people cannot contain their patience about what is in or is not in a Budget until the night of presentation is beyond my comprehension.

In a buoyant and strongly growing economy, with inflationary pressures intense, we are limited by the over-riding need to bring down a Budget which does not add to these pressures.

I do not suggest that we can aim, through the Budget, to do the whole job of curbing inflation. Rather, we aim to attack rising prices by a series of inter-related measures.

We have already taken some far-reaching steps. The Prices Justification Tribunal is now in operation. In December 1972 we acted to appreciate the Australian dollar and thereby restrain price increases. We have cut all protective tariffs by one quarter. The report leading to that decision is being published with the Budget papers. The flood of borrowed overseas funds in 1972 which helped to build up the inflationary pressures now so evident has been stopped. We have acted to reduce excess liquidity.

The Budget too must fit into the overall antiinflationary policy. With that in mind the Government came to two major conclusions.

First, despite competing demands for resources, the whole thesis of the Government's policies requires that there be some increase in the share of resources going to the public sector. (Opposition members interjecting)-


Mr CREAN -Honourable members opposite can indicate which ones they would like to cut down on.


Mr SPEAKER -Order! I will name honourable members if they continue to interject. I will see that the Leader of the Opposition when he speaks on Tuesday night next is heard in silence just as I intend the Treasurer to be heard in silence. I warn Opposition members that if they persist in interjecting I will name them.


Mr CREAN -Secondly, given the need to avoid adding to net pressure on resources, it is necesary that the increase in outlays budgeted for be more than covered by increased receipts. In 1972-73 outlays increased about twice as fast as receipts- and I did not draw that year's Budget. The very different economic circumstances 34 REPRESENATIVES 21 August 1973 Appropriation Bill (No.1) now prevailing dictate a much more circumspect approach.

OUTLAYS

This year, for the first time, we have adopted a classification of outlays based on their functions and purposes. In certain cases items previously treated as revenue are now classified as offsets to outlays. The classification adopted is based on a widely used international standard developed by the United Nations. The functional classification is, I believe, a major innovation which will aid in the understanding of Government policies.

This functional classification is also being used in the three-year forward estimates of Australian Government budget outlays which have been developed in the Treasury over recent years. We give high priority to the further development of this work. Longer-term estimates can provide a much more rational framework for decisionmaking.

Total budget outlays are estimated at $12, 168m in 1973-74. This is an increase of $ 1,938m or 18.9 per cent on actual outlays in 1972- 73. Details are set out in Statement No. 4.I shall be briefly outlining our proposals for 1973- 74 but not much detail can be given here. Additional information will, as appropriate, be provided by the responsible Ministers.

DEFENCE

The Budget provides for a total defence ouday in 1973-74 of$ 1,266m. This compares with actual outlays of $1,234m in 1972-73, and comprises some 10.4 per cent of total budget outlays. This provision for defence purposes results from careful assessment both of relevant strategic considerations and of the competing demands of other Government programs.

Since coming to office, the Government has successfully implemented its policy for an allvolunteer Army. Pay and allowances for Servicemen have been markedly improved with the adoption of the recommendations of the Woodward Committee on Service Pay and Conditions and an improved Defence Forces Retirement Benefits Scheme. This approach has proved successful, and volunteer enlistments and reengagements in each of the Services are buoyant.

There will be some re-structuring of the defence forces and manning of particular units in 1973-74 in conformity with the present strategic outlook. This will permit some reduction in civilian manpower and a smaller reduction in Service manpower, mainly in support and other lower priority areas. Australia's defence capability, as a base for future expansion should the need arise, will be maintained and in some areas improved.

The Government is pursuing its policy of equipping the Armed Services with modern weapons systems. A number of significant defence equipment projects are in hand. These include additional Oberon submarines, improvements to the Charles F. Adams class destroyers, heavy landing craft and anti-submarine cargo helicopters for the Navy; Nomad aircraft, light observation helicopters and radio relay equipment for the Army; and medium lift helicopters, Mirage trainers and new Air Traffic Control Radars for the RAAF. Other authorisations are expected to be announced later in the financial year by the Minister for Defence.

EDUCATION

For this Government, education is a top priority -it constitutes the fastest growing component of the Budget. We will provide $843m for education in 1973-74, an increase of $404m or 92 per cent on last year. There will be a further substantial rise in 1974-75 as the programs commencing in 1 974 come fully into effect.

Tertiary Education

The assumption by the Government, from 1 January 1974, of full financial responsibility for tertiary education at universities, colleges of advanced education, State teachers colleges and other approved teachers colleges, including the abolition of fees at all these institutions and at technical colleges, will entail additional oudays of$ 179m in 1973-74. In addition, the Government's decision to support a program of financial assistance for the recurrent and capital needs of teachers and pre-school teachers colleges from 1 July 1973 will involve it in an outlay of $33m in 1973-74.

From the beginning of 1974 non-competitive means-tested living allowances will be offered to all full-time un-bonded Australian students admitted to approved courses in tertiary and approved post-secondary institutions; the allowances will be higher than are at present available under existing scholarship schemes. These measures will cost $32m in 1973-74, or $17m more than the cost of continuing present schemes with existing benefits.

Increases in allowances will be made in the Government Post-graduate Awards scheme, together with the provision of some additional awards. These new awards and increased allowances are estimated to cost $531,000 in 1973-74.

Technical and Vocational Training

The Government will increase by $10m to $25.6m the unmatched capital grant for the building and equipment costs of technical schools and colleges in 1973-74.

Primary and Secondary Education

To assist low-income families to educate their children in the final two years of secondary school, means-tested educational allowances of up to $304 per annum will be paid from the beginning of 1974. The cost is estimated at $1.75min 1973-74.

The two-year program of capital and recurrent grants for primary and secondary education, arising out of the recommendations of the Interim Committee for the Australian Schools Commission, will commence in 1974. This will require expenditure of $97m in 1973-74. This program will improve the quality of education in Australian schools and promote greater equality of opportunity in education. Substantial special assistance will be made available to provide for areas of particular need.

Pre-schools

The Government's promise to make one year of pre-school education available toall Australian children will begin to take effect from January next. $10m has been included in the Budget in advance of the report and recommendations of the Australian Pre-Schools Committee so that a start may be made as early as possible in 1 974. In addition, $8m is being provided to assist in the construction and operation of child care centres.

Other Education Programs

Several other important programs in the field of education are provided for: $2m will be provided in 1973-74 for emergency supplementary class-room accommodation in State and nongovernment schools to facilitate special instruction of migrant children; subject to negotiating satisfactory arrangements with the New South Wales Government and the University of New South Wales, we are prepared to provide for the establishment of a national post-graduate school of management at that University. $2. 3m will be made available in the 1973-75 triennium, of which $350,000 is provided this year; in order to increase the number of social workers in training, special grants will be made available to New South Wales,

Queensland and Victoria to provide additional places for trainee social workers in universities in those States; the value of the grants over the triennium 1973-75 is $440,000, of which $162,000 is provided this year.

Education in the Territories

Grants totalling $54m will be paid to the Australian National University and the Canberra College of Advanced Education in 1973-74. Outlays on schools and technical colleges in the Australian Capital Territory and the Northern Territory are estimated at $57m in 1973-74, compared with $52m last year.

HEALTH

In this Budget we are making the first financial provisions for reforming health services in Australia.

Universal Health Insurance Program

The present health insurance scheme is inequitable and inefficient. This Government intends to introduce a fair and universal health insurance program. A Health Insurance Commission is to be established to administer the program, to operate from 1 July 1974. $8m is provided in the Budget for the purchase of computing equipment for the program. We are providing $361m to meet the Government's commitments in 1973-74 under the existing scheme.

Community Health Facilities and Services

The establishment of regionally organised, community-based health services, with their emphasis on rehabilitation and preventive rather than curative health measures, must not be delayed any longer. Accordingly, we are making an initial allocation of $10m in 1973-74 to assist States and eligible organisations to meet the capital and operating costs of providing such services.

We have also allocated $7.5m to assist the States to develop community-based mental health, alcoholism and drug dependency services. An additional $1.75m is included to meet the remaining commitments towards the capital costs of mental health institutions.

Capital Cities Hospital Development Program

The Hospitals and Health Services Commission is assessing hospital and health service requirements throughout Australia. In the interim, $4.5m is being provided in 1973-74 to meet urgent needs for additional hospitals in Sydney, Melbourne and Brisbane. Of the total, $4m will be provided towards the costs of planning and commencement of construction of a major hospital at Westmead in Sydney, and $250,000 in each case towards the cost of acquiring sites and preparing plans for major hospitals in Melbourne and Brisbane.

School Dental Scheme

A sum of $7.9m is included in the Budget for the national school dental scheme in 1 973-74.

Hearing Aids

We propose to abolish the $ 10 charge currently paid by eligible pensioners and their dependants who are supplied with hearing aids by the Government Acoustic Laboratories. Also, the Laboratories will supply these persons with hearing aid batteries free of charge.

Home Nursing

The Hospitals and Health Services Commission will be examining ways to encourage the expansion of home nursing services. Pending the receipt of its recommendations, we propose to increase, with effect from 1 September 1973, the existing subsidy to approved organisations providing such services. For organisations established before September 1956, the annual Australian Government payment for each nurse who attracts subsidy will be increased from $4,300 to $4,700. For organisations formed after that date, the annual subsidy for each nurse employed will be increased from $2,150 to $2,350. As at present, the Australian Government subsidy to any organisation will not exceed that paid to the organisation by a State. The increase in the subsidy is expected to cost $155,000 in 1973-74.

Anti-Smoking Campaign

Advertising of cigarettes and cigarette tobacco on radio and television is to be phased out over three years. In addition, the Government will continue to support anti-smoking education programs through the National Warning Against Smoking Campaign. A sum of $500,000 will be directed towards this campaign in 1973-74.

Free Milk for School Children

The Government has decided to enter into discussions with the State Governments with a view to modifying the free school milk scheme as from 1 January 1974, or as soon as possible thereafter. The modified scheme will apply only to children at specific community schools and others selected on a 'needs' basis to be agreed with State health authorities. Other than in these limited areas, there is no longer any justification for the scheme on nutritional grounds; it is an outstanding example of a scheme that has long since outlived its purpose but has been allowed to continue at a cost running presently at $ 12.7m per annum.

SOCIAL SECURITY AND WELFARE

Australia was once a leader in the provision of welfare services. It is so no longer but this Government intends to change that, state of affairs.

Social Security Benefits

Since 2 December much has been done to improve social security benefits. We shall now do more.

All social service pensions will be increased by $1.50 per week as soon as legislation can be enacted, thus bringing to $23 per week the rate for single aged, invalid and widow pensioners and to $40.50 per week the combined rate for a married couple. This increase will apply also to supporting mothers benefit, sheltered employment -and rehabilitation allowances, and unemployment and sickness benefits. Further increases of the same amounts will be made in the Autumn session.

Additional pensions and benefits payable in respect of dependent children, including student children, are to be increased by 50c to $5 per week.

The increases in the rates of social service pensions and benefits will also apply to repatriation service pensioners and to recipients of tuberculosis allowances.

We propose also to introduce a new benefit of $ 10 per week to be payable in respect of children whose parents are both dead.

We have promised to abolish the means test on age pensions payable to residentially qualified persons 65 years of age and over within the life of the Parliament. As the first step, the means test on age pensions for persons 75 years of age and over will be abolished from the Spring of 1973. The means test will also be abolished for repatriation service pensions for persons 75 years of age and over. The 40St is estimated at $40m in 1973-74.

Abolition of the means test does, however, give rise to problems of equity. (Opposition members interjecting)-


Mr CREAN -Listen carefully. After all, this was suggested by yourselves. At least honourable members opposite can begin to see how it is to be implemented. There are others outside this

House who may want to listen. Unless age pensions are taxable, aged persons on higher incomes would be put in a privileged position by comparison not only with pensioners on lower incomes, but also with people below pensionable age on equivalent or smaller incomes and paying tax on the whole of that income. It is necessary, however, in introducing taxation of age pensions, to ensure that pensioners in the lower ranges are not disadvantaged. The Government proposes therefore that age pensions should become taxable but that special steps be taken to protect those wholly or largerly dependent on pensions from detriment.

The existing age allowance cannot do this. Indeed, the age allowance has been anomalous ever since the introduction of the tapered means test and we propose to abolish it with effect from the beginning of this income year. The Government proposes that all pensions, excluding supplementary payments, paid under the social security legislation to people of pensionable age, including wives of age pensioners, will be taxable. Equivalent pensions paid under the Repatriation legislation to people of age pension age, but not war pensions, will also be subject to tax. A basic tax rebate of $156 will be given in 1973-74 to aged people. This will ensure that persons wholly or largerly dependent on pensions will not have to pay any tax. The rebate will reduce by 25 cents in the $1 for each dollar of taxable income in excess of $2,236 and will be limited to the amount of tax otherwise payable. The rebate will be phased out as it serves its purpose.

Home Care Programs for the Aged

We propose to increase subsidy payments by the Australian Government under the States Grants (Home Care) Act from one-half to twothirds of State expenditure on such services. It will be a condition of this additional assistance that a State's own expenditure be not reduced below its present level.

We propose, in addition, to double the Australian Government's present contribution towards the capital cost of senior citizens centres to $2 for every $ 1 contributed by a State Government or local governing body, and we will increase from one-half to two-thirds the Australian Government's contribution towards the salaries of welfare officers employed at such centres.

The basic rate of subsidy paid to 'mealsonwheels' services under the Delivered Meals Subsidy Act will be increased from 15 cents to 20 cents per meal. The increased subsidy will become payable from 1 January 1974 and will apply retrospectively to meals delivered since 1 January 1973. To facilitate the financial arrangements of 'meals-on-wheels' organisations we will, from 1974 onwards, make payments to them on a quarterly rather than an annual basis.

The present rate of subsidy to eligible organisations providing personal care services for the aged in approved hostel accommodation will be increased from $10 to $12 per week for each resident aged 80 years or more. The same subsidy will be paid also in respect of residents of approved hostels who though not yet 80 years of age require and are receiving approved personal care services.

Rehabilitation Services

We are proposing improvements in rehabilitation services. Details will be announced by the Minister for Social Security.

Australian Assistance Plan

The need for social planning at the regional level was recognised in a major election proposal, the Australian Assistance Plan. A pilot program is being started. Regional Councils for Social Development will be established at an estimated cost of $ 1.5m in 1973-74.

Regional Offices

To improve personal service and attention in those areas presently poorly covered, we are embarking on a considerable expansion of the Regional Office network of the Department of Social Security; a $lm program will be implemented in 1973-74.

Handicapped Childrens Benefit

The Handicapped Childrens Benefit will be doubled to $3 per day.

REPATRIATION BENEFITS

Repatriation benefits are being substantially increased.

The Special Rate pension, or its equivalent, will be increased by $4.50 per week to $55.60 during the Budget sittings, and by a further $4.50 to $60. 10 during the Autumn sittings.

The maximum General Rate war pension will be increased by $3 per week to $19 during the Budget sittings and by a further $3 a week to $22 during the Autumn sittings. The Special Compensation Allowance will be reduced by $3 during the Budget sittings and eliminated in the Autumn.

There will be an increase of $ 1.50 per week in the rate of war widows pension in both the Bud- get and Autumn sittings. Domestic allowances will also be increased by $ 1 a week in the Budget sittings.

New benefits to be introducted in the Repatriation field this year include free medical and hospital treatment for all returned servicemen of the Boer War and World War I, and free treatment of malignant cancer for ex-service personnel who served in a theatre of war.

We have decided that 25 per cent of war pensions will be disregarded as income for the purpose of calculating Repatriation service pension payments.

We will arrange for Repatriation Artificial Limb and Appliance Centres to be expanded so that, in addition to their present functions, they can arrange the supply, either directly or through commercial limb makers, of artificial limbs, free of charge, to all persons in the community who need them.

ABORIGINAL ADVANCEMENT

Since achieving Government we have been active in the cause of the Aboriginal citizens of this nation. This Budget provides a major expansion in activity. Outlays on Aboriginal advancement will total more than $1 17m in 1973-74, almost double the level in 1972-73. Improvements in housing, health, education and employment training facilities and opportunities are the prime objectives.

HOUSING AND COMMUNITY AMENITIES

We propose action on several fronts to help meet the housing needs of low-income families and intending home buyers.

Welfare Housing

At the Premier's Conference in June we agreed to advance $2 19m to the States for welfare housing purposes in 1973-74. This is 26 per cent more than in 1972-73.

Defence Service Homes

An amount of $102m, $28m more than last year, is being provided for housing loans under the Defence Service Homes Scheme in 1973-7$?

Deductibility of Mortgage Interest

The Government proposes to introduce during the coming Autumn Parliamentary session legislation to provide for a scheme of deductibility of mortgage interest as promised in the Policy Speech, to have effect from 1 July 1974. In the light of that we have decided to end the Home Savings Grant Scheme.

Opposition members- Oh!


Mr CREAN -If honourable members opposite will listen they will see that we do not do things suddenly and that what we put back is better than what we take away.

Grants will continue to be paid on homes contracted to be bought or built, or to be commenced by an owner-builder, on or before 31 December 1976, by persons who have commenced to save in the prescribed manner before this announcement. This will give those who have only recently commenced to save for the grant time to complete their three years saving and to acquire a home.

Housing in the Territories

We are providing a net $38.6m for housing in the Australian Capital Territory and Northern Territory in 1973-74, nearly 40 per cent more than last year. The Government has decided that there is no longer justification for concessional rentals for government housing in the Territories, including housing provided through the Northern Territory Housing Commission. Full economic rentals will apply to government housing in the Territories from the earliest date practicable. As a first step, pending that, the present maximum rental of $15 per week paid by public servants in the Northern Territory will be increased to $25. Special assistance will continue to be given to needy tenants of Government houses in both Territories.

Cities- both old and new- will be a continuing focus of our attention and efforts. We have pledged to involve ourselves directly in the cities. Australia is essentially an urban nation; the overwhelming majority of Australians live in cities and towns. We are seeking to work with the States and with their authorities, especially at the local government level, in a major effort to improve our urban areas and make life in them more pleasant and more purposeful. Already in our brief period of office we have taken important steps to that end. The Department of Urban and Regional Development has been established to provide the overall co-ordinating machinery for our policies. A Cities Commission is operating to provide expert independent advice and work in close consultation with the States on technical aspects of our cities initiatives.

This Budget provides in total for expenditure of $ 1 36m in 1 973-74 for our cities initiatives. Even so, this marks only the beginning.

Growth Centres

An amount of $33m has been provided for expenditure on Albury/Wodonga and other growth centres in 1973-74. The States will be invited to enter into agreements in 1973-74 for the development of these growth centres as alternative high-quality urban living environments. Also provided is about S2.7m for specific activities of the Cities Commission in facilitating preparatory planning and feasibility studies and associated technical work required for growth centres.

Land Commissions

A further basic element of our cities initiatives relates to land. We have initiated negotiations with all the States for the establishment of Land Commissions designed to provide Australian families with land at fair prices. The functions of Land Commissions may also include the acquisition of land for national parks, the national estate and scenic and recreational pursuits and funds are provided in the Budget for these purposes. The Australian Government will be prepared to provide assistance of up to $60m to the State by way of repayable loans to meet expenditures deriving from commitments entered into by them during 1973-74 for the acquisition of land for urban development and is providing $30m in this Budget for expenditures during 1973-74 for this purpose. Again, this should be seen as merely the beginning of a continuing involvement by the Australian Government in land acquisition and management for the benefit and welfare of the whole community.

Sewerage

We have undertaken to overcome the national backlog in sewerage services in major urban areas. This initiative is well advanced. State and other instrumentalities are geared to making a start on the physical task. So that real progress can be achieved in 1973-74, the Budget provides for $30m to be advanced to the States as a first step towards this objective.

Western Sectors of Sydney and Melbourne

The Western sectors of our two major cities illustrate in their most acute form the problems typical of our urban areas. In this Budget we have made provision for the urgent task of assisting local councils in these two areas. This assistance will cover such items as surveys and investigations, administrative and technical assistance and housing and welfare demonstration projects. Amounts of $5m for expenditure in Sydney and $3m in Melbourne have been provided for in 1973-74. The specific programs will be worked out with the appropriate State and local government authorities.

Urban Public Transport

Another key initiative designed to improve the quality of urban life is our program to provide efficient and economic public transport systems in Australian cities. A provision of $32m has been made in this Budget for assistance to the States for upgrading urban public transport services. The detailed arrangements are being worked out with the States and it can be expected that our outlays in this field will increase rapidly in 1974-75 and beyond as this major new capital works program gets under way.

Protection of the Environment

The Australian Government is supporting a wide range of activities in the field of environmental protection and conservation.

Provision is made in this Budget to contribute $150,000, on a matching basis with the States, towards the establishment of an Australian Environment Council Fund that will enable the Council to commission selected environmental studies.

We propose to establish an Interim Council to be responsible for stimulating the scientific study of Australia's biological resources and an amount of $120,000 is provided in the Budget for this purpose.

CULTURE AND RECREATION

The Budget provides for significant developments over a wide range of cultural and recreational needs.

National Library $7m will be provided for the National Library in 1973-74, including a provision of about $100,000 for the initial development of scientific and technological information services.

Australian National Gallery and Collection $4.7m is provided for additions to and maintenance of the national collection, and for activities associated with the construction of the National Gallery.

Assistance to the Arts

Provision is made for expenditure of $ 14m on the programs of the Australian Council for the Arts- an increase of $7.3m on 1972-73 expenditure.

Film and Television School

The Film and Television School will provide training courses and open-school activities for the industry, educational institutions and community groups. It will co-ordinate the granting of financial assistance for film and television training both in Australia and overseas. The Budget provision is $292,500.

Recreation and National Fitness

The Government aims to facilitate the creative use of leisure time. Our proposals include the provision of $3.2m for the development of community recreation complexes and we will continue discussions with the States on the development of multi-purpose community centres in schools.

We also propose to increase the annual grant to the National Fitness Council in 1973-74 from $600,000 to $lm, and $lm will be provided to assist sportsmen and sportswomen to participate in national and international events

National Estate and National Parks

The Government will legislate in this session to establish an Australian National Parks and Wildlife Commission and Service. $3m will be provided for the acquisition of land for the development of national parks within the States, and to preserve the national estate. Although the precise allocation of funds between the two programs is to remain flexible, tentative allocations of $500,000 and $2.5m respectively are proposed.

Broadcasting Services

It is the Government's policy to increase the quality and content of Australian programs in radio and television. To enable the Australian Broadcasting Commission to play its full role in this respect, almost $76.5m, or $ 10m more than in 1972-73, has been provided for operational expenditure by the ABC. An amount of $1 1.3m has also been provided for expenditure on capital equipment, including equipment required for colour television.

Broadcasting Station Licence Fees

The fees for commercial broadcasting station licences will be increased. It is expected that the increase will yield about $120,000 in the year 1973-74. The higher fees will apply to licence renewals from tomorrow. Details will be announced by the Minister for the Media.

IMMIGRATION

The immigration program for 1973-74 is 1 10,000 settlers, the same as the revised 1 972-73 program. The number of assisted migrants is expected to increase from 57,000 in 1972-73 to 60,000 in 1973-74.

Embarkation and passage costs of the program are expected to increase from $ 1 8.7m to $20. lm in 1973-74, although much of this rise will be offset by the recent increase in migrant contributions to passage costs. Total outlays associated with the immigration program, net of recoveries and repayments, are estimated to be $5 1.6m this year compared with actual expenditure of $47.6m in 1972-73.

ECONOMIC SERVICES

I turn now to the various services and forms of assistance provided by the Australian Government to industry and the community generally.

TRANSPORT AND COMMUNICATION

Post Office

The Post Office investment program needs to provide for normal growth in demand and maintenance of service standards. An advance of $320m is provided in the Budget to help the Post Office finance its investment program in 1 973-74, compared with $288m in 1972-73.

To provide additional resources and at the same time reduce the heavy deficit in prospect on the postal services, some increases in Post Office charges and certain cost-saving measures are proposed. Certain concessions which the Government considers no longer justified will be eliminated. Among these are concessional postage rates on registered newspapers and periodicals, concessional tele-communications charges to the media and the low telephone rentals that have applied in non-metropolitan areas up to now. The basic postage rate of 7 cents will not be changed some other postal charges and charges for a range of tele-communications services used primarily by business subscribers will be increased. The telephone connection fee for new subscribers will be increased from $50 to $60.

Details of these and other measures will be announced by the Postmaster-General.

Airports and Airway Facilities

The annual cost of providing and operating airport and airway facilities is currently running some $70m above the annual revenues received from their use. We see no reason why the general taxpayer should subsidise air services in this way. We propose to increase the rate of recovery of the costs of civil aviation to 80 per cent within five years. Air navigation charges to the airlines will be increased from I December 1973 by 10 per cent, the maximum increase presently permitted under the terms of the Airlines Agreements with the two major domestic airlines. There will be a substantially larger increase in general aviation charges. This will yield additional revenue in 1973-74 of $1.75m. We propose also to move immediately to renegotiate the Airlines Agreements so as to remove the constraints on rates of increase in air navigation charges and aviation fuel taxes.

We have also adopted a policy of recovering the full economic costs of airport terminals from occupants. This policy will be applied in respect of future terminals, and existing terminals as present lease agreements expire.

We have decided that all future proposals for investment in civil aviation projects should be subjected to economic evaluation.

Air Service Subsidies

The Government will continue to provide financial assistance for the operation of air services to remote areas during 1973-74. An amount of almost $2m is included in the Budget for this purpose. We have decided, however, to phase out these subsidies progressively. Subsidies for so-called 'essential rural' services to some country centres will cease on 30 June 1974. Subsides for 'developmental' air services will be phased out over a period of four years.

Department of Civil Aviation Aircraft

To enable the in-flight testing of the large and growing number of air navigation aids, three turbo-jet aircraft will be ordered for the Department of Civil Aviation this year. The estimated cost of the aircraft and associated items is $ 15m of which $700,000 is required this year.

Light Dues

Marine navigation aids are now provided to users at less than full cost. To remove this burden from the general taxpayer we propose to increase light dues- the charges to shipping for the use of these facilities- from 25 cents to 31 cents per net registered ton per quarter from 1 October 1973. This is estimated to yield an additional $ 1 .6m in 1973-74.

Tasmanian Shipping Services

The Australian National Line loses at least $1.5m per annum on sea passenger services to Tasmania. Given the importance of this tourist link to Tasmania, the Government has approved a subsidy of $lm per annum to continue the operation of the 'Empress of Australia' passenger services. This will be reviewed in three years. Changes in passenger and vehicle rates will be made and other arrangements pursued with a view to reducing the present rate of loss.

Pipeline Authority

The Budget provides for an advance of $ 107m to the Pipeline Authority for the purpose of constructing a natural gas pipeline from the Cooper Basin gas fields in South Australia to Sydney.

INDUSTRY ASSISTANCE

This Government supports the development of sound and healthy industries in Australia as being basic to the growth of a modern industrial economy. But to achieve this objective it is essential that industry be competitive and responsive to the challenge of economic change, and that such assistance as the Government does provide facilitates desirable change and does not impede it by propping up uneconomic and contracting industries. Against this background we have carefully examined the arrangements for assistance to industry which we inherited from the previous Government.

In what follows I deal primarily with the outlays side. I come later to assistance provided in the past through taxation concessions.

Assistance for Agricultural and Pastoral Industries

Details are provided in Statement No. 4.

As already announced, the Government has decided to phase out the bounties on butter and cheese production over the next two years and to place increasing emphasis on adjustment of the industry. Butter and cheese bounty payments will thus be reduced by $9m, to $18m, for 1973-74 and to $9m for 1974-75. They will then cease. The processed milk products bounty, the rate of which is tied to the butter and cheese bounty, will be phased out simultaneously.

Meanwhile, the Government will examine the most effective way of further assisting the industry to adjust to changing circumstances. We will stand ready to provide additional funds for this purpose.

The Government has decided to impose a charge on the export of meats, to recoup from the meat industry the substantial expenditure incurred by the Government for the benefit of the industry on export meat inspection services.

From 1 October 1973 to 30 June 1976, the charge will be 1 cent a lb on meat exports. The charge is expected to yield $ 14m in 1 973-74.

The Government has also decided to recoup from the beef industry the expenditure incurred in the campaign to eradicate bovine brucellosis and tuberculosis. The amount to be recouped in 1973-74 will be approximately $6m. Details will be announced by the Minister for Primary Industry in due course.

Rural Credit

As already announced, $20m is provided in the Budget to facilitate long-term rural lending by the Commonwealth Development Bank for a wider range of purposes, namely financing of farm purchase, repayment of short-term debts in appropriate cases and holding a farm together after the death of a farm proprietor.

Rural Reconstruction

The whole of the $100m provided only two years ago for expenditure on rural reconstruction has now been committed, although the agreement with the States has two years to run. The Government will introduce legislation to extend the scheme to 30 June 1 976 and is providing $47.2m in this Budget for expenditure in 1973-74. In addition, the fruitgrowing reconstruction scheme will be extended to 30 June 1974 at an estimated cost of $2m. These measures will facilitate the adjustment of rural industries to changing market trends.

Mining Industry

The Government has decided to undertake an exploration program to add to knowledge of recoverable coal reserves. The Budget provides $ 1 m for a coal exploration drilling program.

The Government's contribution to research and investigation undertaken by the Joint Coal Board is to be phased out by 30 June 1975. The contribution was $200,000 in 1972-73; in 1973-74 it will be $167,000

Manufacturing Industry

A review will be made of the Industrial Research and Development Grants Scheme. Firms will be assisted to commence research and development and thereafter will be required to finance such activities themselves.

We propose to set a limit on the amount of grant payable to any one company or its whollyowned subsidiaries for any one grant year. Also we are extending the scheme to enable consideration of applications from companiesgenerally smaller concerns- which perform worthwhile research and development under the direction of personnel who possess practical skills and experience but who lack formal qualifications. The Budget allocaton for the grants scheme in 1973-74 is $ 16.5m, compared with expenditure of $ 1 4.0m in 1 972-73.

The main effort to encourage higher standards of industrial design in Australia is undertaken by the Industrial Design Council. Last year the Council received $213,000 from the Government of which $168,000 was conditional on the

State and industry matching contributions. It will be increased this year to $340,000, of which onehalf is conditional on matching.


Mr Whittorn -Tell us about revenues.


Mr CREAN -I will come to that, if you will be patient.

Australian Investment Overseas

We are establishing an Interdepartmental Committee to examine and report on the general issue of the encouragement of private Australian investment overseas. Meanwhile, we have decided to provide $100,000 in 1973-74 for this purpose.

Tourism

The Government will expand the scheme of grants for tourist attractions introduced last year. $2m is being provided in 1973-74 for this purpose.

We are also providing $320,000 in 1973-74 for expenditure on domestic tourism promotion by the Department of Tourism and Recreation. i)p to now promotional expenditure by the Australian Government has been directed towards international tourism through the Australian Tourist Commission.

Petroleum Products Prices Stabilization

The Petroleum Products Prices Stabilization Scheme provides a subsidy to users of certain petroleum products in non-metropolitan areas, such that wholesale prices in those areas do not exceed metropolitan prices by more than 3.3 cents per gallon. The Government proposes to increase the margin specified in the scheme to 5 cents per gallon. This will save about $3m on expenditure which would otherwise have arisen this year.

EMPLOYMENT CONDITIONS

It is important that the labour force be trained- and re-trained where possible- to meet present day requirements. The Budget provides for new expenditures directed towards that end, including: $ 1.83m to encourage improved apprentice training and strengthening of the program for the improvement of training in industry and commerce; $200,000 to encourage greater participation of Aboriginals in the Employment Training Scheme for Aboriginals; $750,000 to inform the public of the nature and extent of the Government's various industrial and employment training initiatives.

OTHER ECONOMIC SERVICES

When reducing all non-revenue tariffs by onequarter on 18 July, the Government also announced the immediate establishment of a Tribunal to recommend appropriate assistance to firms and employees who may be affected seriously by this measure. An initial budgetary provision of $25m has been made to meet the cost of such adjustment assistance in 1973-74.

The Government has decided that the Export Payments Insurance Corporation should pay interest on its existing and any future provisions of Government capital at the long-term bond rates ruling at the date of the provision of the capital. It is proposed to phase in this policy over three years in order to enable the Corporation to adjust its premium fixing policy to offset the loss of income thereby involved. Savings in 1973-74 will total $160,000.

GENERAL PUBLIC SERVICES

Road Safety

The Government will provide $3m in 1973-74 for grants to the States for a one-year program of traffic management and improvements at locations with poor accident records. We will also provide $825,000 for road safety promotion and research- an increase of $250,000 over 1972-73- as well as the annual grant to the States of $ 1 50,000 for promotion of road safety practices.

Surf Life Saving

We propose to continue in 1973-74 the existing annual grant of $50,000 to the National Council of Surf Life Saving Associations and in addition we will provide assistance of up to $100,000 during 1973-74 to the National Council to assist surf life saving clubs, on a $ 1 for $ 1 basis, in the purchase of surf life saving rescue equipment.

Legal Aid

In furtherance of its policy on legal aid, the Government has introduced an Aboriginal Legal Aid Scheme, appointed an Expert Committee to examine all aspects of legal aid in Australia, initiated a study of a possible salaried legal aid service, and instituted a comprehensive administrative scheme of legal aid in the Northern Territory. In addition, provision has been made for a grant of $2m to the State Governments to supplement their existing legal aid schemes.

Media Services

The Government has decided to publicise Government activities through the media so that the people may become aware of their rights and responsibilities, the Government's own special responsibilities, and the overall functions of Government. A provision of $ 1.25m has been made for this purpose in 1 973-74.

EXTERNAL AID

Outlays from the Budget on external aid, including defence aid, will increase from $257m in 1972-73 to $334m in 1973-74. Most of this increase will occur in aid to Papua New Guinea and is associated with that country's movement towards self-government and independence. A comprehensive statement of Australia's foreign aid program is given in the document on that subject being tabled with the budget papers.

RECEIPTS

At existing rates of taxation and charges, including the lower customs duties announced in July, receipts in 1973-74 are estimated to increase by $ 1 ,62 1 m to $ 1 1 , 1 42m. That estimated increase falls well short of the estimated increase in outlays of $ 1.938m. We have therefore found it necessary to raise additional revenue.

Aided by the Coombs Report the Government has reviewed a large number of 'disguised expenditures'that is, revenue concessions. The Government has decided to modify or abolish a number of these concessions. We are doing so in the interests both of tax reform generally and of the ordinary taxpayer, who has to bear higher taxes than otherwise simply because the tax base has been so heavily eroded by concessions for sectional purposes. The saving to revenue in 1973-74 will be $1 16m and will rise sharply in later years. Details are set out in Statement No. 5.


Mr Chipp - What a way to present a Budget. What are they?


Mr CREAN -I will tell the honourable member if he is quiet and listens. I am sure he is capable of listening even if he is not capable of acting. There are a number of tax concessions for the mining industry, the original purposes of which have vanished. At present, all profits from gold mining. 20 per cent of the profits from mining certain prescribed minerals, and income derived by prospectors from the sale of mining rights are exempt. In addition, dividends paid out of those categories of exempt income and dividends, up to the level of deductible capital expenditures, paid out of profits from the sale of oil and natural gas, are exempt. The exemptions of profits from gold mining and 20 per cent of profits from mining prescribed minerals will be withdrawn commencing with this income year.

Income from the sale, after today, of mining rights, and dividends in the categories I have mentioned which are declared after today, will not be exempt.

There is a variety of concessions subsidising capital expenditures or encouraging otherwise uneconomic investment that the Government has decided to end.

The investment allowances for manufacturing and primary production plant allow a deduction of 20 per cent of the cost of the plant over and above normal depreciation, so that 120 per cent of the cost is deductible over the life of the plant. These allowances will not apply to expenditure incurred after today except where it is incurred under a contract already entered into and, in the case of manufacturing plant, is incurred by 30 June 1975.

Some capital expenditures by primary producers are wholly deductible in the year in which they are incurred, while others are subject to accelerated depreciation over five years. The deductions unduly favour those benefiting, and are seized upon by some, including 'Pitt Street farmers', to avoid tax. They can lead to resources being channelled into uneconomic activity and, in the process, may have questionable environmental consequences.

The concessions will not apply to expenditures incurred after today unless under a contract already entered into. In future, deductions will be allowed as ordinary depreciation for plant and structures, and over ten years for other items.

I turn now to certain major anomalies in the rates of tax levied on particular classes of companies. The general public company tax rate is 47.5 per cent, but private companies, life insurance companies and certain other companies pay less on some or all of their income. The differentials involved arose on no grounds of principle- indeed, there are no reasons why private and public companies should not be treated alike so far as the company tax rate is concerned. The differentials will be removed except in the case of co-operative and non-profit companies.

This will mean that, with the exceptions mentioned, the lower rate of tax on the first $10,000 of income will be abolished. Its existence encourages tax avoidance by means of company splitting. Mutual income of life insurance companies, which except for the first $10,000 of income has been taxed at 42.5 per cent, will be taxed at 47.5 per cent immediately, to apply in respect of 1972-73 income. A consequential change will be made to the rates on the 1973-74 investment income of a superannuation fund that does not observe the 30/20 rule. Private companies will pay tax on the whole of their 1 972-73 taxable income at a rate of 45 per cent. For subsequent years they will be taxed at the public company rate.

The Government proposes two other changes in the basis on which life insurance companies are taxed. Life insurance companies pay remarkably little tax in all of the relevant circumstances. Their taxable income is assessed on a most generous basis. A special deduction frees from tax an amount of income equal to 3 percent of calculated liabilities, and the rebate of tax on dividends confers an over-generous benefit. In respect of 1973-74 incomes the special deduction will be reduced from 3 per cent to 2 per cent of calculated liabilities, and the amount of dividends subject to rebate will be diminished by an appropriate part of the deductions allowed for calculated liabilities and expenses of general management.

The income tax deduction for private rates and land tax, which now has no upper limit, will be subject to a ceiling of $300 commencing with the income year 1973-74 and will be available only for a principal place of residence.

It is proposed to remove deductibility for gifts to war memorial funds, a concession that has been widely exploited. Gifts to appeals already launched will be deductible for 1973-74 but no deductions will be allowed thereafter.

There exists a remarkable anomaly in the basis of valuation of trading stock manufactured from grapes. A special provision permits a winemaker to value such stock for taxation purposes at any figure he chooses, provided only that it is no less than certain prescribed minimum values that have not been increased since the provision was introduced in 1953. A substantial deferral of tax results. The economic condition of the industry- including the transfer of a large part of it to foreign ownership-has changed markedly since 1953. If there ever was a case for a special basis of valuation it no longer exists. The provision will be repealed, and valuation in accordance with the general provisions of the law will be phased in by three annual steps starting with end- 1 973-74 valuations.

I turn now to the area of sales tax. The exemption from sales tax on non-alcoholic carbonated beverages containing not less than 5 per cent of Australian fruit juice will be abolished, with effect from tomorrow.


Mr Katter - The kids get no milk and now no soft drinks.


Mr CREAN - If the honourable gentleman will listen I will tell him why this has been done. The ostensible purpose of the exemption is to enlarge the market for fruit grown in Australia. As such, it is a classic case of using the wrong instruments to achieve an objective. Of the $25m a year which the exemption costs, only a fraction finds its way to the fruitgrowers. In abolishing the exemption the Government stands ready to provide such funds as may be necessary to assist with the reconstruction of any sectors of the fruitgrowing industry that may be affected.

Several of our decisions designed to correct shortcomings in the taxation system affect customs and excise duties. Two of them merely bring the application of duties into line with current technology and paractice. They are a reduction in the wastage allowance on imported tobacco leaf to levels approximating present day actual wastage, and an increase in the specified dutiable contents of standard bulk beer containers to the actual average fills which are larger, now that stainless steel containers are widely used, than they once were. Both of these changes will take effect from tomorrow.


Mr MacKellar - How much?


Mr CREAN - They are just technical changes to measure honestly the real tobacco content and the real beer content of the keg.

It has also been decided to abolish the difference in the rates of duty on brandy and on other spirits by raising the duty on brandy in three equal annual steps, commencing tomorrow. The differential, which was introduced in 1953-54 as an emergency measure, is anomalous and provides the industry with an advantage over its domestic competitors which cannot be justified.

It has been decided- for you world travellersto reduce the very generous duty free concessions on cigarettes, tobacco and liquor for passengers arriving in Australia. As from 1 October 1973 they will become 200 cigarettes or 250 grams of tobacco, or an equivalent quantity of cigars, and one litre of liquor.

We have also taken some decisions affecting taxation in the Australian Capital Territory and Northern Territory. The rate of pay-roll tax in both territories will be increased from 2 1 12 per cent to the present State level of 3 1/2 per cent from 1 September 1973, and from 1 July 1974 to the projected State level of 4 1 II per cent. Stamp duties in the Northern Territory will be increased to the levels ruling in the Australian Capital Territory. There will be increases in drivers licence and motor vehicle registration fees in the Australian Capital Territory.

The increased revenue arising from the decisions I have announced so far will go some way towards providing the additional revenue required in 1973-74 and towards financing our continuing programs in later years. I reiterate however that the primary objective of these decisions is not one of short-term revenue raising. It is to remove the accumulated distortions in the structure of the revenue system. The waste, economic injustice and misdirection of resources involved have not only hindered economic growth but have also given rise to much resentment as taxes generally have had to rise to offset the erosion of the tax base.

Other Structural Measures

The Government proposes two other measures, in the income tax area, not primarily for their revenue yield but to improve the tax structure.

First, the law relating to taxation of casual profits from the resale of property will be amended to increase certainty and reduce abuseWhere real or personal property is disposed of within twelve months of acquisition any profits made will generally be treated as assessable income of the taxpayer. An important exeption will be made to meet the case of a taxpayer who sells his residence in consequence of changing his place of employment. For disposal outside the twelve-month period the ordinary law will apply. The special provisions inserted last year in relation to share transactions will be repealed. The new provisions will apply to property acquired after today. Full details will be available when the legislation is introduced.

Secondly, in this year we shall commence to move towards a system for collecting company tax by quarterly instalments. This will serve a dual purpose of reducing inequity and improving economic management. The large seasonal swings in monetary liquidity associated with the concentration of company tax payments in the last quarter of the financial year are a hindrance to economic management. A more even spread of such payments would improve matters considerably. The move to quarterly payments will be phased in over three years, commencing in 1973-74. This year, one instalment of 25 per cent of tax will be payable before 1 January 1974, the balance being payable by the ordinary due date. This measure is thus concerned with the timing rather than amount of tax paid by companies.

Other Revenue Measures

Despite the revenue arising from these decisions, further revenue measures are needed. Personal income tax paid in 1973-74 is estimated to rise by $ 1,089m or close to 27 per cent. Even apart from the Policy Speech statement on income tax rates this fact militates against looking to personal income taxation for even more revenue. Companies particularly will be affected by several of the more important decisions I have already announced, as well as, in some sectors, by our tariff reduction decisions. It is therefore not proposed to take any further revenue-raising measures in that area. Those which we propose are in the field of customs and excise.

The increasing usage of motor vehicles, including commercial vehicles, imposes heavy costs on the community. I refer not only to the costs of roads but also the costs of police, traffic control, accidents and pollution. Australia, which on a per capita basis is one of the world's most motorised nations and thus especially subject to these costs, levies comparatively low taxes on petrol. A recent OECD study indicated that, of the OECD members, only in Portugal and the United States were taxes on fuel a lower percentage of gross domestic product than in Australia. Meanwhile public transport services and urban services generally have been held back by lack of funds.

The Government has decided to raise the bulk of the additional revenue it requires by increasing the duty on motor spirit and on aviation gas, aviation turbine fuel and diesel fuel. The increase will be equivalent to 5c a gallon in each case save diesel fuel, where the increase will be fractionally less in order to bring the duties on motor spirit and diesel fuel, which currently differ by the equivalent of 0.2c a gallon, into line. The question whether an excise duty should be levied on liquefied gas used in motor vehicles is being put under study.

These increases will raise an estimated $130m in 1 973-74 and $ 1 5 7m in a full year.

The duty on cigarettes, tobacco and cigars will be increased. The increases will be equivalent to 5c of duty on the average packet of 20 cigarettes. Equivalent increases in duty will apply to other tobacco products. The increased duty will raise an estimated $63m in 1 973-74 and $76m in a full year.

The duty on potable spirits will be increased by the equivalent of about 3c a nip. This increase is estimated to yield $30m in 1973-74 and $36m in a full year.

In total, these increases in duty, which all take effect from tomorrow, are estimated to yield $223m in 1973-74 and $268m in a full year.

The Minister representing the Minister for Customs and Excise will be introducing amending legislation on these matters later this evening.

The question of whether these increases in excise duties I have announced can be added to prices of goods cleared after today, including in the case of potable spirits the consequential increase in sales tax payable, is of course a matter for the Prices Justification Tribunal in relation to those companies subject to the Prices Justification Act. It would be a matter of concern, however, if there were attempts to profit from the increases by adding mark-ups or making other arrangements to profit from the excise increase by those outside the ambit of the Prices Justification Tribunal who are involved in the manufacture, distribution and sale of the items in question.

After allowance for the decisions we have taken it is estimated that receipts will be $ 11,481m in 1973-74. This is an increase of $ 1,960m, or 20.6 per cent, over the 1972-73 level.

BUDGET OUTCOME

The summarise: Budget outlays are estimated to increase by $ 1,938m, or 18.9 per cent, to $12, 168m in 1973-74. Budget receipts are estimated to rise by $ 1,960m, or 20.6 per cent, to $11,48 lm.

The estimated deficit is thus $687m and the estimated domestic deficit $162m. In 1972-73 the deficit, on the same basis, was $709m and the domestic deficit $2 1 5m.

By ensuring that receipts will increase faster than outlays the Government has reduced the prospective domestic deficit from that of 1972-73. We thus propose a marked reversal of the highly expansionary 1972-73 situation, when outlays ran ahead at twice the rate of increase in receipts and the domestic balance, by comparison with the previous year, deteriorated by $620m.

This large turnabout in the Budget trend is, of course, not only appropriate but necessary in the buoyant economic circumstances which confront us in 1973-74.

CONCLUSION

The expenditure programs I have outlined tonight derive from our Election Policy Speech. They will be developed further in the years ahead and those election policy undertakings which we have not yet been able to embark on will also be encompassed. As the Prime Minister has emphasised, we will do what we have said we will do. To raise taxes and remove concessions is not a course on which we eagerly embark; there can have been few Treasurers who have enjoyed that course, and I am not among them. What I do say is that this Budget combines some appreciable steps towards fulfilling our electoral undertakings, with major reforms both on the revenue and the outlays side and, above *. all, a fiscally responsible outcome.

On that note, I commend the Budget to honourable members.







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