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Wednesday, 29 August 1973
Page: 551


Dr GUN (Kingston) - The most interesting part of the speech of the Deputy Leader of the Opposition (Mr Lynch) was his professed support and sympathy for the weaker members of the community. He must think that honourable members on this side of the House have very short memories. We can remember that he was a member of a Government which 2 years ago was prepared to bring in a budget which directly affected the weaker members of the community. The effect of that budget brought in 2 years ago by the previous Government of which he was a member was to put out of work more than 100,000 Australians.

I support this Budget. I congratulate the Treasurer (Mr Crean) for an excellent document and an excellent program of social reform in a wide sphere of activity including health, education, urban transport, other urban problems, social welfare and many other fields. I reject the amendment moved by the Opposition. The Opposition is basing its case against the Government on a completely false premise. Paragraph 2 of the Opposition's amendment reads as follows:

2.   With the resources already under strain it applies wrong economic principles by overloading resources, further by expansionary public sector spending;

It seems to me that the Liberal Party is saying that it is only expenditure in the public sector that is inflationary and that private expenditure is not. Honourable members opposite are saying: 'Let the private sector spending go on in its own way and let us control only the public sector spending.'

The fact is that private investment is no more or no less inflationary than public investment. Private expenditure means competition for resources in exactly the same way as public investment requires. I do not know why the Opposition wants to overlook this fact. An absurd example of this thinking came from the Leader of the Opposition (Mr Snedden) last night when he referred in his speech to the need for cutting out of the Budget the $107m appropriation for the GidgealpaSydney gas pipeline. It would be just as inflationary whether that expenditure was incurred by a public authority or by private enterprise. How could it be any less inflationary if it were carried out by the Australian Gas Light Co. or by any other private enterprise body rather than by the Australian Government? This was a preposterous argument.

The fact is that the pipeline needs to be built and the Government made the decision, for very good social reasons, to establish an asset to be held in perpetuity by the people of Australia and for the benefit of the people of Australia. I do not see this as such a revolutionary decision. After all, a previous Liberal Government in South Australia, the Playford Government, took over the Electricity Trust of South Australia to make that an asset for the people of South Australia. That was done in 1946 which suggests that the Federal Liberal Party is 27 years behind the South Australian Liberal Party.

The Government believes that public investment is needed. If we are to avoid an inflationary situation, it is the private sector which will have to be dampened to some extent. It is irresponsible of the Opposition to oppose, as it has done, all the anti-inflationary measures that this Government has proposed. It is very interesting to look at some of these measures and consider what would have happened if there had not been a change of government last December. Criticisms have been made of this Government's attitude to foreign investment. It is true that this Government has taken very decisive action to prevent the massive flood of foreign investment into Australia. On 23 December last we took action to freeze 25 per cent of foreign capital investment coming into Australia. At the same time the Australian currency was up-valued by some 7 per cent. The effect of this was very considerably to reduce the inflow of foreign capital into Australia. What would have happened if there had been no change of Government? Are we to presume that there would have been the same massive flood of foreign capital into Australia?

We can see evidence of what might have happened if we look at Statement No. 3 attached to the Budget Papers which shows that in the financial year just gone the money supply increased by 16.7 per cent in the first 6 months whereas in the second 6 months most of which was during the tenure of office of the Labor Government the increase was only 9 per cent. This suggests that if that action had not been taken there would have been an enormously greater volume of money floating around in the community than there is at the present time. What would the Liberals have done in office to overcome this? They have only suggested we should have done something in the Budget. They believe that the Budget should be used to dampen demand. What would they have done to help the economy? I suggest that if the Liberal Government were still in power it would not have revalued or taken any action to control the inflow of foreign investment. I believe that there is reason to suggest that right now there would have been about S750m extra floating around in the community. Would a Liberal Government have taken all that out of the community by budgetary means? How else would it have done it?

What we are asked to believe is that a government comprising honourable members opposite would have introduced a budget with a deficit of some $750m. Yet everything that the Government has done to try to restrain expenditure in the Budget has been criticised by the Opposition. The Opposition says that we should have increased defence spending. Almost every suggestion in the Coombs task force report for reducing government expen diture has been attacked by the Opposition, so presumably it would have done none of those things. In relation to the Karmel report, presumably the Opposition would like to keep funds up to category A schools. The Opposition is completely irresponsible in suggesting that all these expenditures should continue. Is it suggested that we should do nothing to dampen the private sector? How else are we expected to believe that the alternative government would have gone about restraining inflation? In other words, there is a complete credibility gap in the approach of the Opposition.

A most important method of countering inflation is to increase productivity. This was mentioned last night by the Leader of the Opposition and we would agree with him. We are all for increasing productivity but it seems that whenever the Government tries to do anything in particular about it the Leader of the Opposition wants to baulk at it. Recently the Federal Government announced a 25 per cent reduction in tariffs. This was surely a most important measure. If possible tariffs must be low rather than high for only if they are can we enable resources to flow into the most efficient industries. This measure will bring about an increase in productivity, and by this mechanism inflation can be restrained. Also - this looms very large with honourable members on this side of the House - if workers are employed in more productive industries they can be paid higher wages both in money terms and in real terms. Yet these very important anti-inflationary measures and measures designed to increase productivity were attacked and opposed by the LiberalCountry Party Opposition. The same can be said for the various subsidies. Surely if we are to get any rationalisation and efficiency in our industries, primary and secondary, we cannot go on interfering with market mechanisms. Yet it is the so-called party of free enterprise which has opposed the actions taken by the Government to allow the market mechanisms to operate and the most efficient industries to develop.

The main problems we have in Australia at the present time are poverty, inequality and the under-privileged members of our society, particularly the Aborigines. These are the problems of a modern industrialised society with the many social pressures of urban living. We know the great problems we have in our cities with rising drug consumption - I do not mean just illicit drug consumption but also the consumption of drugs such as tranquiliser and barbiturates - and the increa.se in violent crime. All these are tremendously important social problems and things which this Government is determined to do something about. What this requires is a transfer of resources to those areas and to those people where the need is greatest. In a context in which we need a transfer of resources, the sort of action advocated by the Opposition is completely irrelevant. The suggestion of a wage-price freeze is utterly irrelevant. It is like trying to fix somebody who has a fever by tampering with the thermometer. All one is doing is affecting the way in which one calibrates the severity of the problem without getting at the problem itself. What we have to do is tackle these social problems and this is what the Government has done.

In the field of urban public transport the Government has taken an important new initiative. For the first time money is being spent on suburban railways. I congratulate the Government, if I may be parochial, for the initiatives taken in South Australia, particularly in relation to extending the Christie Downs railway and the electrification of the line. This is a most important rapidly developing part of Adelaide, and this action will provide a much needed facility for the area. I hope that the Minister for Transport (Mr Charles Jones) and the Minister for Secondary Industry (Dr J. F. Cairns) will give very close consideration to enabling the rolling stock for this railway to be constructed at the Islington workshops of the South Australian railways. The workers there are amongst the finest in the Commonwealth, and history shows that they are capable of carrying out this work. I believe that favourable consideration should be given to that construction being carried out there. For the first time we have direct grants being made for sewerage works in the capital cities. In the past this has been covered by Loan Council allocations but now they are direct non-repayable grants to catch up with the backlog in the provision of sewerage facilities.

We have important initiatives in the field of community health. At last we are moving towards establishing community health services according to the priorities laid down by the Sax Committee. With those community health services, with heavy emphasis on preventive medicine and with rehabilitation we will make an important break with traditional medical practice in this country and I believe it will be a great breakthrough for the welfare and health of the people of Australia. There have been many problems in the past in the treatment of mental health. I believe that according to some census it is related to the rising consumption of tranquilisers and other sorts of drugs. I believe we must have some sort of break from this tradition.

The provision in the Budget for the establishment of community mental health centres is, I believe, a tremendously important initiative. In the past Commonwealth expenditure has been confined to providing capital grants towards the cost of mental institutions built by the States. From now on we will be providing incentives for health services to be provided in community mental health centres. If care is provided outside institutions the Commonwealth will provide the capital cost and a large share of the recurrent costs. This is a tremendously important incentive to give to State governments. Those who are enlightened in the management and treatment of mental illness will know and appreciate that this is a most important and enlightened step by the Government not only in the treatment of what is conventionally regarded as mental illness but also in the treatment of alcoholism and drug dependence.

The Budget also provides for an important outlay to be made for the promotion of dental health. We believe that the most important place to start is with our school children. We believe that by 1980 we will be providing a comprehensive school dental care treatment for every primary school child within Aus; tralia. A most important start has been made in this Budget with the allocation of $7. 6m. If the States that have not adopted fluoridation of water supplies - Victoria and Queensland - can be persuaded to introduce that most important public health measure, I think we can confidently expect that this plus the dental health scheme will mean that dental decay will become virtually a rarity. It will be a curiousity in 10 years' time. Much credit is due to the Government for this important allocation.

An important field in which resources could compete would be the building industry. The Budget will create a greatly increased demand for buildings particularly welfare housing and school buildings. This means that there will be a heavy demand on resources. What are we going to do about this? We must ensure that resources are diverted from elsewhere because if we just put more money into housing and building without doing anything else or without doing something about the private sector all that will happen is that we will build the same number of dwellings at an increased unit cost. Quite clearly what we must do is to divert resources from elsewhere. I think that the place where we could start would be the excessive high rise redevelopment that is going on in the city areas. Ideally I would like to see this controlled by the Government. We should have a system of capital issues control. It will be very difficult to achieve it.

I hope that the Government can very soon bring about some control over these institutions so that we can ensure that expenditure is in the most pro-social areas. Until the Government has done this we cannot really rely on the developers themselves because they are not concerned with social priorities. Fortunately there is one group in the community that is concerned with social priorities and that is the employees in the building industry. We are fortunate that the Builders Labourers Federation has acted in Sydney with social responsibility in this area by putting an embargo on certain redevelopment projects within the city of Sydney. The Federation's motive behind this action has been to conserve some of Sydney's historic sites and to maintain the basic character of the Sydney area. I suggest that perhaps an equally worthy motive might be that priorities should go into providing schools and housing for low income people at least until such time as the Commonwealth has the legislative power to control capital issues.

Another step which we must take is to place fringe banking organisations under the control of the Reserve Bank of Australia. We have already taken action to call up the statutory reserve deposits of the conventional banking organisations but there is no doubt that this must also be carried out in other areas such as the hire purchase organisations otherwise the measure will be insufficiently effective. In this way I think we will have to dampen down demand in the private sector of the economy. What we will have to do, perhaps in the case of hire purchase companies, is to set up statutory reserve deposits which can be frozen. I do not believe that the interest rate is a good weapon to use to ration the inflow of money into the housing sector because this might mean that it will go to the highest bidder. If we just limit the amount of money available by calling up statutory reserve deposits as we do with the banking sector we could then just establish a waiting list in order of application the same as the public housing authorities do in the various States. It has been argued by some people that if we limit the number of loans available the money will just go to the wealthiest people because they are the most credit worthy. I do not think this is necessarily the case. We have the Housing Loans Insurance Corporation which should enable lenders to lend to borrowers according to the order in which they apply irrespective of what their income or their socalled credit worthiness is.

Another area - I am sure the Government \ has given some attention to this - where action must be taken relates to increasing the supply in certain sectors where there are bottlenecks in the building industry. The case of the bricklayers is well known. However, perhaps it is not so well known that there is no shortage of people who are trying to get into the trade. I think that one of the problems is that with the prevalence of sub-contracting there is a reluctance on the part of these operatives to take on apprentices. Perhaps what we could do is for the Government to give preference to people employing day labour and those people would have some incentive to take on apprentices. Another measure that wc could adopt is to give some sort of incentive to people who take on apprentices so that we can help overcome this bottleneck.

I think the most deafening silence of all from the Opposition has been the failure of its supporters to say anything about the great problem of food prices. Perhaps this is because they are so concerned about the rural rump which occupies a corner of the House on the other side. They are frightened to face up to the basic problem. If we are going to do anything, as I said when this question was referred to the Joint Parliamentary Committee on Prices, a decision has to be made about meat prices. We either have to restrain the export flow of meat or we are just going to cop it. I know there are problems both ways but there is absolutely no other measure which will effectively counter this problem. I have much pleasure in supporting the Budget. I congratulate the Treasurer. I urge the House to throw out the capricious amendment which has been moved by the Leader of the Opposition.







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