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Wednesday, 26 September 1973
Page: 1527


Mr SPEAKER -Order! No point of order is involved.


Mr SNEDDEN - The immorality and the deception into which the Prime Minister has fallen are reprehensible on any principle of judgment. Caucus intervened and the irrepressible Mr Hawke was muttering, 'No control over incomes'. The Prime Minister gave one version of the unions' attitude. In the House he said:

I did have a conversation with the President of the Australian Council of Trade Unions, a member of the Reserve Bank board, last Wednesday night, and in the course of a conversation on many matters he told me that if the Government were able to moderate the rise in prices through the application of such constitutional power as it obtains the trade union movement would fully co-operate in restraining wages and incomes.

Mr Hawkehas said that that is false. Mr Hawke said that he had no more capacity to deliver the Interstate Executive of the ACTU than did the Prime Minister. The Prime Minister has never had the decency to say in this chamber that what he said on 17 September is wrong, or alternatively, to come in here and say that what Mr Hawke said the day after is wrong. Both of them cannot be right. They are the Prime Minister of the country and the President of the Australian Labor Party, from which the Government is drawn.


Mr Gorton - They could both be wrong.


Mr SNEDDEN - They could both be wrong, as I am reminded by the right honourable member for Higgins. No doubt both are wrong. Would it not be refreshing to have apologies from each of them? The muttering Mr Hawke promptly contradicted the Prime Minister and said that it was a promise of moderation which he could never give. Confusion was compounded. Now we have the next episode of the saga. Late last night notice was given of the intention to introduce today the Constitution Alteration (Incomes) Bill. Confusion is accelerating because, instead of 2 days for the debate to be resolved, we now have 2 hours.

The Caucus has somersaulted. Everybody wants to embrace the DLP proposal. Those fellows who fought like crazy against the DLP in the early 1950s are now embracing it. Caucus has taken the lead and it is not to be denied. The Bill is introduced into the House by the second most important man in government, the Prime Minister. One might well ask: 'Who is the most important man in government?' Why, it is Bill Brown, the Chairman of Caucus. The second most important man is directed by Caucus to bring this matter before Parliament. There must have been a fascinating exchange of letters between the DLP and the Labor Party. The Prime Minister asserts that his Party is a party of principle. That is a lot of baloney; it is just not true. Parliament is afforded the spectacle of the second most important man in government introducing this Bill. The bureaucracy labours over the papers for these referendum proposals. Typical back room Labor Party deals are made totally ignoring professional advice, which will cost the taxpayer a packet of money, so that this Bill can be introduced before the House.

The Prime Minister has had a conference with the DLP on this matter - another first for the second most important man in government. He capitulated and the Labor Government capitulated. The Labor Party has come home to the DLP. All is forgiven. The events of 1954 did not happen. They are kissing and making up. Some may say it is an exercise in black comedy. I think it is more properly described a? an exercise in Brown comedy. At first it seems strange that we have no more than the assertion in the 2 pieces of legislation that the Labor Administration wants a permanent shift of power to control incomes and prices. But thinking of the history of these measures - as we have examined it - it is not surprising. Mr Oakes, a journalist with the Melbourne 'Sun', has made himself somewhat of an authority on this curious man, the Prime Minister. He, like Samuel finding God, decided on a prices referendum when he was at home in bed. We have seen that the incomes question was decided by barter with the DLP. We have had this Government deciding the value of our currency by a telephone call between 2 economic illiterates, the Prime Minister and the Treasurer. A dramatic new interest rate policy was determined by the same 2 economic illiterates, greatly added to in illiteracy by the Deputy Prime Minister. Airport sites are plucked out of the hat without any consideration of the ramifications. It is like saying: 'Pick a figure, any one you like, anywhere between $600m and S 1,000m'. These decisions are announced by the Prime Minister but they are denied by others. Whether the airport site decision is definite remains to be seen.

Major nationaldecisions have been taken in and ad hoc, cavalier and amateur fashion. It is no wonder that there is such confusion; no wonder the Government's skilled expert advisers are frustrated; no wonder that in a few short months Labor under Whitlam is on the run. Does the Government - the Caucus which has the power, and the puppet Cabinet - know what it wants to do with these powers? Surely a responsible government would consider these things - the use of the powers and the consequences. In November 1971 I addressed the Committee for Economic Development of Australia on incomes and prices policies. I identified the 3 points that need consideration and decision when determining an incomes-prices policy. Firstly, what is the power over incomes to cover? There is nothing in the second reading speech to indicate that.

Is it to cover wages and salaries alone? Is it to cover the self-employed, the professional, the truck driver, the taxi driver, the estate agent and all sorts of agents? How will it affect the incomes of farmers and shopkeepers? Will it extend to interest payments on investments and dividends? Can it cover in some way capital gains, interest on past savings or superannuation? At what point should it be imposed?' Does it freeze current relativities?

Is the present relativity between a machinist second class and a fitter forever frozen? What of the clerks in the Postmaster-General's Department? What machinery will be employed to handle wage adjustments? Is there still to be a role for the Commonwealth Conciliation and Arbitration Commission or even for collective bargaining under incomes control? If so, how and why? Is the distribution of incomes between capital and labour to remain fixed? What happens if the relative growth rates of labour and capital inputs diverge or the relative importance of a risky and therefore high profit/ high loss investment varies over a time? Will incomes be fixed at an hourly rate? If so, does that mean that with the reduction in weekly working hours there will be a reduction in the weekly wage? We have not been told those particulars.

The second point is: How long will the Government impose the power? We know that the Government says it wants the power because it gives it total domination over every aspect of economic life. We know that Labor wants those powers for the central government forever. Has the Government thought how long it would use these powers to impose income control? Does it plan to use them in the long term? Government supporters ought to know. They ought to tell us now when they are before the Parliament asking for the powers. Australians are scared of the socialist authoritarianism and arrogance in power. They suspected this before the election and it has been confirmed since. To give the Labor Government these powers on a permanent basis is to give it all the powers that it needs by a Caucus whim to destroy our free enterprise system. If this is to happen, we want it to be voted on openly with the Labor Party saying what it is that it wants and why. We do not want this given to it as a power secretly and deceptively achieved.

The third point which must be made is that of enforcement. The Government in determining its policy on prices and incomes should have formulated and should now announce its approach to enforcement. What do controls mean? If the Labor Government is asking for guidelines or voluntary constraints, there is no need for the powers that it asks for. It has not attempted to urge reason on trade unions to restrict their incomes growth. Everything that it has done so far has been to stimulate labour costs, not restrain them. It is apparent that the Labor Government wants full direct control by law and this must entail penalties for infringement.

Last week, I asked the Prime Minister whether an incomes policy would be enforced with the same sanctions as the prices policy? He gave me many words, but he gave me no reply to that simple question. Today, the honourable member for Deakin (Mr Jarman) asked the same question. The Prime Minister's answer was an extraordinary T expect to have an incomes policy'. I then asked him what sanctions would apply. He refused to say that he would impose the same sanctions in relation to incomes paid or demanded above the maximum as he would impose in relation to prices. One can only assume that if he is genuine there will be fines and eventually gaol for those who breach the relevant laws. Those in that category will include trade unionists as well as employers or those charging prices beyond a fixed level. How well thought through is the question of sanctions? Has the Government made decisions about them? If the answer is yes, the Parliament should know. If the answer is no, the Government should confess openly and not merely by implication even though the confession was given today.

In the developing serious problem of inflation, I have consistently advocated a positive full policy to deal with the incomes and price rises that we are experiencing. The proposals that I have put forward are these: The principal attack upon inflation is through proper demand management. This represents the major requirement of economic management. Failure to do this correctly produces excessive wage demands which push up prices and this in turn produces excessive wage claims. There should be curbs on public expenditure achieved by appropriate fiscal and monetary measures. For these measures there is no shortage of power at all. They can be taken by Government decision supported by legislation of this Parliament. Such action by the Commonwealth supported by similar actions of the States would make a major attack on the problem.

I am satisfied that it could be supplemented by a short freeze on incomes and prices. I advocate this as a circuit breaker on inflationary expectation. I have emphasised that this cannot be a permanent feature of economic management in a country such as Australia. I have stated the coverage, the time that it is temporary and the limits of its use.

I have repeatedly called on the Government to call a meeting with the States to achieve a co-operative approach to this major national problem. I have repeatedly called on the Government to state its policy. In any country, there is full sovereignty. In a federation, it is distributed between central and State governments. But it is complete sovereignty. There is no shortage of power collectively. On 18 July, I had the agreement of all Liberal Party Premiers and leaders to co-operate with the Government. This was willingly offered because these Premiers and leaders realise the evil of inflation for social and economic development, that it unfairly distributes-


Mr SPEAKER -Order! The right honourable gentleman's time has expired.


Mr Lynch - I move:

That the Leader of the Opposition be granted an extension of time.


Mr Hayden - I second that. We will give him a chance to speak specifically for a change, including the details-


Mr SPEAKER

Question resolved in the affirmative.







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