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Thursday, 9 December 1976


Mr E G Whitlam (WERRIWA, NEW SOUTH WALES) -The Prime Minister in his policy speech a year ago stated as a firm promise to the Australian people: 'Our policies will maintain the purchasing power of wages'. That promise has been broken. The Government has never had the slightest intention of maintaining the purchasing power of wages. In the supplementary economic statement issued with the Liberal policy speech the Prime Minister said:

The Government will support the wage indexation agreement in the current economic circumstances.

That specific promise, too, was broken. There was no suggestion that the commitment was partial or qualified in the circumstances of last December. In the light of our experience of this Government's deception it would be obvious now that the phrase 'in the current economic circumstances' was a deliberate loophole; a year ago the Australian people were entitled to take the promise at face value. Yet 7 weeks after the election the commitment to wage indexation was abandoned. Wage indexation was effectively destroyed and with it the essential protection for personal incomes and the essential foundation of trust and co-operation on which economic recovery was based. As a consequence of this broken promise the Arbitration Commission was persuaded to grant only partial indexation in response to the increase in cost of living in the March and June quarters. The effect of this reduction in real wages is substantial for certain groups of income earners. A wage earner receiving $200 a week before these 2 decisions has received an increase of 3.4 per cent compared with the 5.6 per cent he would have received under full indexation.

Real wages have declined as a result of the Government's policies. Take the case of the average wage earner with a dependent wife and 2 children. Allowing for taxation, including the health tax and social security payments such as family allowances, the net income of such a person when Labor went out of office averaged $1 1 1.64 a week; today it has fallen to $108.54 a week. These figures are based on the Government's own estimates, presented to the Conciliation and Arbitration Commission at its September wage hearing. So the Government has been misleading the Australian people about the trend of real wages and the effect of its policies. Real wages are not galloping ahead; they are failing. For the largest group of employees, those on the average income of $180 a week, real wages are back where they were 2 years ago. The Government's policies are not defending the value of real wages: They are deliberately undermining them. The Australian people will note that every one of the Fraser Government's attacks on real living standards- on actual money incomes- is the result of a broken promise. The dismantling of Medibank was a broken promise; the abandonment of wage indexation was a broken promise. Yet another broken promise is the decision to scrap tax deductions for house mortgages. The Prime Minister said in his policy speech:

A Liberal and National Country Party Government will continue to support such programs as ... (c) The Tax Deductibility of Mortgage Interest.

At a Press conference on 5 December last year the Prime Minister said: 'The interest subsidies scheme continues'. We know now that it was to continue for only as long as the Government needed to phase it out. It was another typical and stupid deception, and it means a heavy loss to people paying off their homes. The Liberal dogma about the sanctity of home ownership has been exploded. The effect of scrapping this tax deduction for home buyers- a deduction which gave the greatest benefits to those most in needwill be a further cut in after-tax income of as much as $5 a week for the average wage earner. So all these broken promises and accumulated assaults on real incomes will leave the average wage earner with 3 dependants and paying off a house more than $8 a week worse off in real terms while inflation and unemployment continue. Not surprisingly, the poor and the disadvantaged have suffered from the Government's policies as much as the ordinary wage-earner. Under a Labor Government the real value of pensions increased from 19.2 per cent of average weekly earnings to just on 25 per cent. That was the target I promised on behalf of the Labor Party at the 1972 election. Under the Fraser Government the value of basic pensions has slipped back and the additional allowances have not been indexed automatically. In March the Government increased the cost of drugs and prescription fees under the pharmaceutical benefits scheme. The public will now pay nearly $34m in a full year, the heaviest burden falling on the chronically ill and those most in need.

The Fraser Government has attacked living standards on 2 fronts- by reducing the real value of wages and by scrapping necessary investment in community services. It is bad enough that a government, because of its economic mismanagement, should attack people's wages; it is bad enough that a government should neglect community services which people expect it to provide. It is preposterous that the Fraser Government should be guilty of both. Yet such is its record. Medibank is dismantled: Health care is again a needless worry and a needless financial burden. Growth centres are stunted. Our bulging and bloated capitals will continue to sprawl unchecked. Sewerage programs are curtailed; a fundamental amenity for civilized populations is to be denied to hundreds of thousands of Australians. Funds for urban transport are frozen; funds for hospitals are at a standstill. Legal aid is threatened. The Australian Broadcasting Commission is under attack from a vindictive and remorseless Government. No other country in the world has neglected these areas as wantonly as Australia. No other federal or national government is abandoning and attacking these services as a pretext for dealing with its economic problems. No other government is compounding these destructive policies with an onslaught on the real living standards and incomes of its people.

A year ago the Liberals invited the Australian people to turn on the lights. The man who propounded that slogan said this a couple of days ago:

Turning on the lights has proved a little more difficult than any of us had imagined. The correct combination of switches seems to be elusive. There have been several shocks and short circuits.

In truth it has not been difficult to turn on the lights. In the past year they have been turned on with dazzling brilliance. They have been turned on to illuminate the Government's incompetence, its dishonesty, its cynicism, its heartlessness; its favours for the wealthy and the privileged; its sustained attacks on the living standards of the Australian people; its ad hoc decisions; its economic disasters; its broken promises; its utter lack of grace and generosity; its mean and blinkered vision for this nation and its future.







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