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Keating will not commit to have treasury analyse "one nation"

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d°e",meo™°,n„ M edia R elease 51/92 3 March 1992


Here is another scribbled press release.

I intend to continue putting them out because they obviously get right up the nose of the individual at whom they are directed.

The fact is that the Prime Minister is playing a duplicitous game.

He puts forward a so called "Plan" which is based entirely on further borrowing against our international bank card

(notwithstanding the alarming foreign debt figures released today) and a set of hopelessly unrealistic forecasts prepared under the close direction of his Office.

Then he refuses to allow it to be scrutinised in the same way as the Coalition's Fightback! program.

His concept of debate is to set up our national broadcaster, with help from some Treasury officials - a number of whom have either previously worked or now work for the Prime Minister - to run a scare campaign against the Coalition's Fightbackt program based on bodgie assumptions and figuring.

The fact is that the Treasury didn't lay a genuine glove on the Fightback! program.

We have responded to the Willis costing furphies which were simply based on wrong assumptions.

And the much heralded attack on the distributional aspects of the Fightback! package has fallen flat and looks particularly shallow given the Government's refusal to model the distributional effects of the One Nation/One Job package under the same

assumptions as used in the analysis of the Fightback! program.

The Treasury attack is revealed to be dependent solely on the assertion that bracket creep should be handed back via tax cuts to specific household groups.

But that assertion is incorrect. The small allowance for bracket creep included in our package goes to the funding of the overall package.


Moreover, the Treasury has conceded in its own documents that the results they obtained were entirely dependent on the inflation assumptions fed in. If you feed in a high enough figure you will get a host of losers.

In other words, the Treasury results simply reflect the

assumptions fed into their model.

Mr Dawkins has learnt nothing from Mr Willis's failed scare mongering.

Of course, if the growth and inflation outlook for the future proved to be anything like the wildly optimistic assumptions set out in the One Nation/One Job dream world, then the Coalition would have money coming out of our ears.

Wa would be able to fund all the measures in the One Nation/One Job document - which we would not do - plus implement all the measures in Fightback1 and still end up with a string of bottom line results several billion dollars better than the assumed

outcome in the One Nation/One Job document.

Of course, Treasury was never allowed to comment on the economic impact of the package nor on the dynamic benefits which will flow from incentive and other benefits which they concede will flow from the package.

So the Fightback 1 program now stands as the only fully funded program of reform on the political market.

It has now been fully tested and can now be implemented after the next election.

It does not depend on spurious forecasts of recovery put together in the Prime Minister's office for its so called "funding".

It is a self contained package which will provide genuine long run solutions to Australia's problems.

If the Prime Minister had any concern about the longer term - instead of simply trying to push the problem beyond the next election - he would have responded positively to our question in the House today suggesting that the One Nation/One Job package

should be subject to similar Treasury analysis.

Let us see an independent Treasury analysis of the One Nation/One Job.

Do they agree that it is a high risk strategy and unlikely to be achievable?

Do they agree with the economic and other forecasts?

Do they agree that low income earners in particular are likely to be hurt by the taxation proposals in One Nation/One Job



3 March 1992 REF: TRANSCR\sr\3392

E & 0 E





My question is to Senator Button representing the Treasurer. And I ask, has the Treasury carried out a distributional analysis of the Government's economic statement using the same methodology that it has applied to its analysis of the Coalition's Fightback package? If so, will the Government provide the full results of that analysis to the Parliament? If not, if it has not conducted

such an analysis, will the Minister explain the reasons for not doing so?


The Minister representing the Treasurer, Senator Button.


Well, Mr President, if Senator Short reads the documents

accompanying the statement made by the Prime Minister last week, he will find a considerable degree of analysis in terms of the economy in those statements.

But, Senator Short asked me about the distributional impact. I don't know whether any work has been done at this stage on the distributional impact of that package. Let me say when I was asked a question about this last week, I mean, I just want to make the point that in terms of lower income earners, there has

been a considerable period of targeting lower income earners in, . ..(interjection) . . . ye s , they have had it too good for too long says Senator Alston by way of interjection. That lower income earners have had it too good for too long. That is what Senator Alston said.

REF: TRANSCR\sr\3392 2 .

And they have been, well one thing is certain about the

Government's position as distinct from the consumption tax package. It does not try and use the same sum of money to

compensate lower incomes and at the same time deal with the bracket creep in respect of the tax rates paid by lower income earners which is what the consumption tax package does.

Now in the statement made the other day we not only dealt with the, I referred already to the question of targeting of lower income groups in the tax scales by this Government, which take account of bracket creep out, I think, to 1995.

But the second thing in that package is, of course, the

improvement in the Family Allowance and the Family Allowance Supplement, which are targeted very much to lower income earners.

Now, Senator in terms of any analysis by the Treasurer, if that is done, I am sure it would be published at the appropriate time. But, of course. Well Senator, the appropriate time when we decide, and when you seek it through F A I . Let me say that that would, I believe, be done.

But Senator, as distinct from the Consumption tax package of the Opposition, the statement made by the Prime Minister last Wednesday does not purport to be a blueprint for every

conceivable issue with which this country might be confronted and, of course, you need a blueprint for every conceivable issue because it enables you all to go bah bah fightback good,

everything else bad all the time, and that gives you a feeling of warmth that you have not otherwise h a d .

And, in respect of Senator Macdonald's repeated interjections, let me say, I have already commented on that issue but he was having a discussion with somebody else at the time and didn't notice.


Supplementary, Senator Short.


Thank you Mr President. Mr President, I ask the Minister, given that he doesn't seem to actually know the answer to my question, which I find extraordinary, would he not agree that it would be equally extraordinary for the government not to subject its own

package to the same conceptual analysis to which it has subjected the Coalition's package and could I also ask in the light of his, could I also ask in the light of his comments in relation to

bracket creep, does the government's economic statement make any provision at all to give back to taxpayers the additional revenue gained through inflation pushing taxpayers into higher marginal income tax brackets.

REF: TRANSCR\sr\3392 3.

In other words, does the Government's package make any provision at all for pay back of bracket creep.


The Minister, Senator Button.


Well, Mr President there is sort of three parts to this

supplementary question.

First of all, Senator Short said I didn't know the answer to what Treasury analysis would be done by Treasury and he found that surprising. Well, I wouldn't find that surprising, Senator. Life is a wheelbarrow full of surprises and the fact that Senator

Short hotted up by this most unfortunate analysis of the

consumption tax package from his point of view, hotted up by that the blood rushing to his head leaps in here today and says, ah, we're doing an analysis too, and I don't know the answer to that.

That doesn't surprise me at all, Senator and shouldn't surprise you because I am not a know all like you people who laugh, laugh out the consumption tax package all the time. It purports to be a solution to everything and it is not. As you will see in the

next few months.

Now, in so far as the question of fair treatment of conception analyses is concerned, that depends on my obtaining an answer to the first part of the question.

Now, in so far as whether this government as distinct from any other government.


Order, you have asked the question.


You have asked your question Senator. I understand your anxiety to change your question now, because the first part w a s , the first part was stupid.

You want to change your question now, but the fact of the matter is the answer has put back all that, anything lost by bracket creep over the years to the taxpayer. As distinct from every other government in the history of Australia. No, no it doesn't, no it doesn't and nor does the consumption tax package because what the consumption tax package does. What the consumption tax package does, is to do a two card trick in respect of lower

income earners. Compensate them for the disability of a

consumption tax and also compensate them for bracket creep with the same amount of money and that is something which cannot be

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done. That is something which cannot be done even by this highly inventive Opposition, Mr President.