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Partial transcript of address to the Federation of Industrial, Manufacturing and Engineering Employees inaugural conference, Sydney



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PRIME MINISTER

PARTIAL TRANSCRIPT OF ADDRESS TO THE FEDERATION OF INDUSTRIAL, MANUFACTURING AND ENGINEERING EMPLOYEES INAUGURAL CONFERENCE, SYDNEY - 24 JULY 1991

E & Ο E - PROOF ONLY

PM: So I've spoken of the past, now my friends, let us briefly look to the way ahead, to the future. And may I say that the in this centenary year of the Australian Labor Party I believe that all Australians will be proud of the

fact that that 100 year old partnership between industrial and political Labor is still alive and well and that it is still contributing so vitally to the urgent reform task posing this nation. We are committed to continue that path.

Against that commitment that we together have as an industrial and as a labour movement together working to take the interests of the nation as a whole as our guiding beacon, against that our political opponents are pledged to destroy the Accord and they are pledged to demolish the

framework of industrial harmony that together we have erected in this country over the last eight years.

And they do this as part of their attack on the living standards of ordinary Australians. As I've said before and I say to you, the representatives of ordinary working men and women, what our political opponents are about is the most concerted such attack on the living standards of ordinary Australians that we have ever witnessed in the history of this nation. Now that is a large statement but

it is an accurate and a provable statement. The centrepiece of that attack by the conservative coalition in this country upon the living standards of the people that you directly

represent, the workers, and indirectly their dependency also represents a centrepiece of that attack by the conservatives is the proposed 15% consumption tax on all goods and services. As I've said, profoundly regressive.

Now that word regressive is the adjective of the language of the economists. But it means simply this; it's a tax which relatively imposes a far greater burden upon low and middle income people than upon the rich. So it is precisely of that character, it's profoundly regressive. It is a tax which would put Australia right back into the high inflation

league from which together we have taken Australia. We inherited an inflation rate about 11%. But together you in the industrial movement and we as a Labor Government have brought Australia out of that high inflation league and we

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now have an inflation rate which is lower than our major trading partners.

But they would put us straight back into that high inflation league and they would do it in a way which would involve no compensation that coulcl be adequate for the devastating impact that it would wreak upon ordinary people.

Let me put it quite simply. This new tax would make every trip to the supermarket, every trip to McDonald's, they would make those a visit to the tax man. It would require

every butcher and every motor mechanic and every doctor to impose the tax on their customers and their clients. It would turn every corner shop and every school bus and every turnstile at every football ground into an agency of the Tax Office.

And you've got to ask yourself, why would they do this? The answer is that in very large part, they would propose to do it to fund the abolition of Labor's capital gains tax so that they could hand back billions of dollars to the already well off in this country and give them back the right to

accumulate capital gains on assets which would never be taxed. Which would simply mean a return after 1993 to the Australia of pre-1983 in which we had the most viciously unfair and inefficient tax system in the western world because it was a tax system in which it was a matter of choice for the rich as to whether they paid which meant that

the people that you represent who have no choice at all as to whether they pay their tax or not, had to pay more. And this is a prescription, a precise prescription, for a return to an Australia of that sort where the rich, those with the greatest capacity to pay, will pay less and those, the people that you represent, who should pay relatively less, would in fact pay relatively more.

And let me, my friends, take this opportunity to dispel here and now any notion of the justification that's been put forward in some quarters, of justification for this tax that such a tax might significantly boost national savings.

My authority for the demolition of that proposition is none other than Dr Hewson himself. Let me quote what Dr Hewson said on the 13 April last year on this point: "A lot of people do write that if only we'd had a consumption tax it would solve the problem. I tell you in those circumstances

even if you did have a 15% across-the-board consumption tax with all those political advantages it may only make a marginal effect on savings".

So there is no argument that it would improve savings and there could be also no argument that in respect of those who already have savings, that it would be extremely harmful, including for those who have retired and those who as a result of our shared reforms of the area of superannuation,

have been saving for their retirement in that way. Simply put, the introduction of a broad-based consumption tax at

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the stroke of the pen, every savings account in this country would be slashed in value.

As the Australian Catholic Social Welfare Commission observed, there appears to be no serious proposals for compensating retirees and others for the loss and the value of their savings. And they admit that they couldn't protect

those savings. I suggest that all Australians should take very seriously those observations of the Australian Catholic Social Welfare Commission.

In Queensland, John Moore, who was a former president of the Liberal Party, has made his views known. Let me just quote him, a couple things he said in this area, he said; "We must put on a human face, warm, down to earth. We must promise

immediate benefits and not just a long-term plan which lacks clarity in the minds of voters".

Well Moore is right but I simply ask this question of him. I ask you all who are proposing this tax. How do you put a human face on a plan to tax the necessities of life? How do you put a human face on that, where the necessities of life which are now untaxed would be subject to a massive tax

impost? And how can you promise immediate benefits when there are none?

My friends, it's going to be my job in the period between now and 1993 to explain to ordinary Australians like the people that you represent and to whom you are committed, it's going to be my responsibility between now and 1993 to

spell these facts out. It's not because we are opposed to reform. Because the truth is that in the history of this federation there has been no government to match this one in terms of reform in the areas of tax, the area of social welfare, any areas ... We are a reformist Government. But

the great difference - and this will be spelled out week after week, month after month till 1993 - our reform is ... is founded firmly in the tradition of which you are part, the tradition of our great Australian labour movement,

industrial and political, that the forces of society and the forces of government should be used to reform.

ends