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Thursday, 3 October 1974
Page: 1677


Senator LAUCKE (South Australia) - In speaking to this Budget the Government deserves all the criticism and, indeed, the censure which is embodied in the amendment moved to the motion of the Minister for Agriculture (Senator Wriedt) that the Budget papers be noted. Every word of the amendment moved by the Leader of the Opposition in the Senate, (Senator Withers) could be substantiated. The amendment moved by Senator Withers states:

The Senate is of the opinion that the Budget fails to tackle Australia's economic crisis, in that:

(a)   unemployment is permitted to grow and the prospect for school leavers is prejudiced;

(b)   inflation is accelerated;

(c)   existing poverty is ignored and new poverty is created;

(d)   personal income tax is increased forty-five per cent;

(e)   living standards will be lowered;

(   f) private enterprise is stifled;

(g)   government power is further centralised;

(h)   individual incentive and thrift is penalised;

(i)   a double tax is levied on estates; and because the Government:

(   1 ) has made the Budget a socialist vehicle to intensify the attack on the States and break down the free enterprise system;

(2)   believes the absurdity that the Government can spend without people paying or can build without people producing; and

(3)   has preached private restraint but has threatened its achievement by its own Government extravagance-

Every word of that is, in my opinion, irrefutable. The question uppermost in the minds of responsible and thinking people is where in the world is Australia going economically. One hears this question everywhere. There is an air of real concern and fear at the economic course this Government is taking. The concern, the fear and the lack of confidence stems directly from the Government's disastrous economic policies which have spurred inflation on to the impossible levels now existent. The Government has euchred our previously sound economic base which was set to provide full employment, and rising living standards in real terms.

It is past high time that the Government realised the futility of its pet theory of so-called democratic socialism and got back to some basic business principles- one of which is that one does not spend money before one makes it. One should nuture, encourage and develop the real base from which wealth is created. That base is without a shadow of a doubt, free enterprise. Much has been said about the difficulties besetting us as being of overseas origin. It is said that we have imported them and that we have had unavoidably thrust upon us our inflationary conditions. This is not right. To a degree we have felt the effects of inflation in other parts of the world where the energy crisis has led to the exorbitantly high prices being paid now for petroleum and fuel generally. In our imports we have the reflection of these increased costs. But here in Australia we have not had that basic reason which has generated inflation in most other countries. So, the idea that it is not our fault and that it has been thrust upon us is quite ridiculous. It is not sustainable.

I think that our inflation is fundamentally due to the ineptitude of the Government in assessing what our own economy can afford in governmental expenditures. Our troubles began when the Labor Government, in its first Budget in 1973, increased its expenditure from $ 10,000m to $ 12,500m- an increase of 18.9 percent. It was an increase at a time when we had our inflationary situation held at about 4 per cent. But there were forces latent in the economy then which had to be watched carefully. The injection of the extra $2, 500m into public expenditures at that time sparked off what has now become rampant inflation. The most recent Budget of $ 16,500m, which is an increase of some 32 per cent over the previous Budget, is only further spurring this horrible situation of inflation. This huge Budget we have before us now is not being provided from sound and real productivity but is largely fictitious money arising from bloated Government revenues derived largely from the inflated incomes which are now prevailing. But they are only figures. It is not that there is a real collateral or matching of wealth which creates the figures which now form our Budget. It is hard to believe that in a couple of years our economic position could so deteriorate. We had about $4,200m in credit in our overseas trade balances when this Government came into office. This has now been halved and it is being eroded at the rate of approximately $200m a month. One can see under present trends that we will be bankrupt in overseas balances in the not too distant future.

Our share market has suffered an enormous fall this year. The fact is that the market has halved in less than 6 months. It is a fall of 1929-30 proportions. This is of tremendous significance. It means that about 4 million investors in Australia have seen the value of their investments halved. It means also that the value of practically every superannuation fund and every life assurance policy has been seriously affected. This Government has generated a real fear in the minds of the people. There is no confidence in the Government's direction of the nation's affairs. There has been too much intrusion, in my opinion, into the affairs of private enterprise. It cannot be overstressed that free enterprise has given us our prosperity. It provides 75 per cent of jobs in the community. It creates the community wealth and tax revenue for the sort of social welfare programs we all want to see.

It is worthwhile noting the words of one of our most notable businessmen, Sir John Dunlop, the chairman of Colonial Sugar Refineries Co. Ltd at its recent annual meeting. Here we have one of the best business brains in Australia saying:

This system of private enterprise, of which CSR is a part, has succeeded, as no other system in history has succeeded, in producing material abundance. It is the prime force which provides food, clothing, shelter, education, medical services, necessities and luxuries on a scale undreamed of a few centuries ago. Those societies which have chosen to leave the production of goods and services largely in the hands of private individuals and companies also enjoy a degree of personal liberty and political freedom that has been rare in history. The changes that are happening about us, particularly those changes in people's ways of living, in their attitudes and values and aspirations, are to a large extent brought about and made possible by heightened material standards and a wider share of increasing wealth. Expression of these attitudes and aspirations is largely possible because of that personal liberty and political freedom inherent in private enterprise.

I concur wholehearedly in that statement. It is plain commonsense. This Government has shown itself not to be a friend of private enterprise. It is engrossed in attaining its stated objective- the democratic socialisation of industry, production, distribution and exchange. In the process we find ourselves in the shocking mess we are in now. Heavens above, the result has been shown in those countries where democratic socialism has been thought to be the way to Utopia. The great United Kingdom is in its present predicament largely because of the addiction of successive governments there which have espoused the cause of socialism. It now is in a very sad economic situation. Here the Government seemingly is intent on following the same pattern.

Lest it be thought that I am criticising from a biased point of view I refer to a report of a statement by the Premier of South Australia a few days ago. He made a special plea for aid to South Australia in the present economic difficulties generally. This newspaper report states:

The Premier . . . has called for special Federal consideration to protect S.A. against any downturn in the economy.

He said yesterday that in the interests of national efficiency and regional growth, the Federal Government could:

Provide a 'sufficient' level of tariff protection for S.A.'s most vulnerable industries.

We in South Australia are particularly sensitive to adverse effects in the electronics industry, and the motor vehicle and household appliances industries. The present economic climate is such that we in South Australia are being hit as perhaps no other State is being hit at the present time, bad as it is generally. But in South Australia we are particularly sensitive to the sort of economic climate we are now experiencing. In that newspaper report the South Australian Premier said that the Commonwealth Government could provide compensatory subsidies or support to industry already in, or planned for, outside major population centres. He asked also that the State Government be provided with special money to reduce the added costs of industry in fringe areas. He also said:

We have cause for anxiety in the short, or even medium, term.

The Premier also was reported as having said:

Australia was going through a period of strain, with rising unemployment, strong cost and import pressures on local manufacturers, inflation and restricted lending. South Australia had not been too badly off so far but Australia 's unemployment was rising and the pattern of recent years was that S.A. had suffered disproportionately.

The South Australian Premier said that the situation was such that there was cause for deep anxiety. The Labor Premier of that State has been criticising and pointing to the disabilities the economy is now suffering. That criticism comes from a source which would rather seek to allay the fears we are now experiencing, not forthrightly to condemn.

I want to make a brief reference to the Government's attitude to a very important industry in South Australia. I use this example because I think it is typical of the attitude towards many industries. I refer to it particularly because that which has occurred since this Government came to office is so different from that which it promised would be the situation. Before the 1972 election, Mr Dunstan, the Premier of South Australia, as chairman of the Australian Labor Party Federal Election Finance Committee, wrote to producers of wine and brandy in South Australia seeking funds for his Party. I have no objection to anybody seeking funds for his Party. That is quite all right. However, in that letter to the producers he said:

The only solution that will guarantee prosperity for the wine industry and the many thousands of growers who supply it, is complete abolition of the excise and its nonreplacement by a sales tax or any other imposition. You have already spent many hundreds of thousands of dollars on the wine tax and on collecting the information required by the Customs and Excise Department. The election of a Federal Labor Government will save you these costs in the future.

At the time there was a 5c a gallon excise on table wines. The promise was that those charges would be abolished and that no alternative charge would be placed on the industry. But what has happened? From the situation of 5c a gallon there now are such imposts in the form of brandy excise as will act to the detriment of the industry in our State in a very serious way. Because of the huge increases in brandy excise, sales have fallen by some 25 per cent.

The disastrous effect of the Government's complete disregard for the industry can be seen in the clearance figures for Australian brandy for the period 1 September 1973 to 30 April 1974 which show a decrease in clearances of 19.16 per cent in comparison with the corresponding months in 1972-73. The present deterioration in releases indicates that sales have fallen by 50 per cent. Loss of production, together with no action being taken by this Government to protect the industry against imports of large quantities of cheap overseas brandies- imported brandies are not made in the way Australian brandies are made, so far as source, maturation and so on is concerned- means that we are facing a situation wherein 20,000 tonnes of grapes will not be processed as they were processed 2 years ago. This will be to the detriment of the growers, the makers and the distributors and it is the result of a breach of promise by the Government. That is how this industry has been served. No thought has been given for its wellbeing in respect of the determination of tax on wine stocks. This matter is of vital importance to what is, or has been, a major family organisation business. The system of collecting taxes, one based on stock at selling values, not on the cost of production as shown in a balance sheet, is crippling. The whole background of this industry has been greatly weakened as a direct result of this Government's actions.

As we will have an opportunity to discuss many aspects of this Budget in debates on various Bills emanating from it, both in the Senate and in the Committee of the Whole, I do not propose to keep the Senate any longer now in discussing the Budget generally. I desire to express my feelings and attitudes towards the overall question of the Budget, its effect on our economy and, via the economy, on the people. It is a sad story that what is coming from the Labor Party's policy is inherent in and is the basis for the Budget. I warmly support the amendment. I condemn the Budget which is now before us because it is so detrimental to the interests of our nation.







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