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The following is the text of an address given by the Hon. Andrew Peacock



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Leader of the Opposition

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PRESS RELEASE 27/83

The following is the Text of an Address given by the Hon. Andrew Peacock, M.P., at a Business Lunch in the Electorate of Bruce on Friday, 20 May 1983

Before introducing Ken Aldred to you, I should like to comment on the Government's present approach to the economy and the implications for you and the broader Australian community.

What the Labor Government promised was a blueprint for economic recovery - a strategy which would lead to lower taxes and lower unemployment. Yet all the Government has offered so far is a litany of broken promises and a wages policy which, by the Government's own admission, will condemn

at least another 100,000 Australian workers to the dole queue.

The fundamental problem for Australia is clear.

We need to return to economic growth.

We need to make industry more profitable and competitive.

We need to bring interest rates down.

We need to control inflation.

Above all, through these things, we need to create more jobs.

To achieve those goals, an economic climate has to be created in which the private sector can thrive. In which business can plan ahead with confidence that investment will reap profits, that their cost structures, in particular, wage levels and interest rates, will be realist and they can

take on more labour to help meet growing orders.

The private sector is the engine of the Australian economy. It is the wealth creator, the job Greater.

That is why it has to be encouraged. ’ That is why it must be competitive and profitable.

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These are the realities. This is the common sense approach. It is the approach which is not just best for business - it is the best for every Australian.

That is why throughout the community there is recognition that:

one man or woman's wage increase is another person's job;

and

the capacity to provide public welfare depends directly on private sector growth.

The Government's policies and performance have to be judged against these facts.

First, by no stretch of the imagination could the Mini Budget announced last night be called a blueprint for recovery. It does nothing to help to solve the real problems of Australia. It does not even chip at the edges. To quote

today's Financial Review editorial - "Rather than being a deeply considered statement, the Keating speech has to be considered only a ragbag of bits and pieces which reflect no coherent policy except a desire to be seen to be doing something about cutting back on the Budget deficit while not actually doing very much." The Business Editor of The Age calls the Mini Budget "a confusion of economic policy objectives".

Second, no measures by the Government, no number of Mini Budgets, can compensate for the devastating impact on the economy and on employment of the Government's approach to wages.

The Liberal Party quite naturally welcomes any kind of constructive job creation schemes. The Mini Budget promises schemes to add 70,000 extra jobs.

When in Government, the Liberal/National Party Coalition allocated the $300 million savings from the wage pause to job creation schemes, targetted at specially disadvantaged groups.

But the determination of the Government and the ACTU to destroy the wage pause and return to full quarterly wage indexation from March this year will, by the Government's own admission, condemn another 100,000 Australians to the

dole queues. The view of the Director-General of the Confederation of Australian Industry, George Polites, is that this approach would destroy the chances of economic recovery, drive inflation above 10 percent and lead to a major increase in unemployment to over one million Australian workers.

Yet had the wage pause continued, then further savings could have been allocated to job creation schemes.

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The simple fact is that many more permanent jobs would have been created by maintaining the wage pause until next year. ;

While the Opposition welcomes the job creation schemes, we have very grave reservations about the overall impact of the Mini Budget. There has been no real reduction in the Budget deficit. And that can mean only one of two things.

It means higher interest rates, as the Government borrows to finance its deficit. Or, alternatively, it means increased taxes in the August Budget. It is quite possible it could mean both. And whichever way you look at it, higher interest rates or higher taxes will hit all sections of the community hard. Through this Mini Budget the Government has shown its economic ineptness. It has shown that the tired, tried old Labor formula of big spending and big deficits lives on.

But is has shown more. It has shown a Labor . Government just 2 months old cynically breaking its election promises. It is a continuation of the all too familiar "Hawkespeak". When Mr Hawke says one thing, he means the opposite. He promised to maintain the previous Government's housing rebate scheme. Now it has been axed. He promised

immediate tax cuts. They have never come. He promised tax cuts to small business - where are they?

He promised the economic burden would be shared equitably. In fact, the elderly, families, farmers and small investors have had to bear the brunt in this Mini Budget.

The question is what will be next; and who will be next?

Who will be hit in the August Budget? This Government is now showing its true social priorities and values - what Australia needs is more jobs, not more taxes.

The fact is that many people have planned their future - their old age or their house - on the basis that Labor's promises would stick. That these benefits would continue. The Labor Party did not even oppose the measures when they were introduced.

It is the Budget deficit which is probably the best of the many examples of "Hawkespeak". What he once called a "deficit of despair" has now, remarkably, become a "deficit of hope".

Common sense tells us that an extension of the wage pause will help to make our industries more competitive and put Australians back to work. This is not a Party political statement. It is not a statement based on a subjective

and personal judgement of what is common sense. It is a statement recognised according to a recent Morgan opinion poll, by about 70 percent of the community.

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Despite the consensus support for the wage pause, the Government insists that its approach is the only way to buy "industrial peace". That is frankly pathetic - whoever thought we would see an Australian Government accept

a compromise with union leaders which directly leads to another 100,000 Australians losing their jobs.

It is a compromise which the Liberal Party cannot ever accept and will not ever accept.

The ACTU claim for 2.2 percent catch-up for the March quarter has already been criticised by the N.S.W. Chamber of Commerce, the N.S.W. Chamber of Manufacturers and the Victorian Employers Federation. The Government's

response is that the ACTU claim is not inconsistent with the Government's position.

The reality is that it now appears that the ALP/ ACTU Prices and Incomes Accord and the Summit Communique are now in ruins. The explicit central feature of the Accord and the Communique is the guaranteed acceptance of the

decisions of the Arbitration Commission. The ACTU President is now saying that if the Commission does not accept the claims of the unions, there will be a "free-for-all". The implicit central feature of the Accord is that there will be ongoing consultation. Yet Mr Dolan is now saying

that the ACTU has never heard from the Government on the Prime Minister's claim that the 1983 increase will be restricted to 3 to 4 percent. Whichever way you look at it, the Government is waving the white flag at the ACTU but the ACTU is still firing.

This Government has:

- locked Australia into supporting sectional interests

- locked Australian industry into an uncompetitive position

- locked hundreds of thousands of Australians into continued unemployment.

This Government is devoid of leadership, compassion and commitment. It is out of control in every area of the economy and domestic policy in general.

This Government is certainly totally devoid of competence. It has shown its ineptness in allowing the ACTU to take the initiative in the Arbitration Commission. The Government is now in a position of responding only. Where the interests of all Australians are affected, Governments are elected to lead - not to abdicate

responsibilities.

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I assume many of you are directly involved in, or dependent on, small business. It is small business which employes over 70 percent of the private sector work force. It is small business which must be a major contributor if there is to be any sustained recovery in the economy. What is the Government's attitude to small business.

- First, it has broken its campaign promise to increase the tax-free retention allowance to 100 percent. No explanation, no humility - just a singling out of the group which must be encouraged if jobs are to be

created. x

- Secondly, the Government is committed to elimination of the investment allowance - presumably to be announced in the August Budget. As you all know, "real" interest rates remain very high as surely they will under this Government, the investment allowance will be an

important compensating incentive to invest. Without investment there can't be extra jobs.

- Thirdly, it is small business which is hit hardest by wage rises. Their capacity to pass on cost increases is very limited.

- Fourthly, you may not know yet, but the Government is examining amendments to the Companies Act which will strangle small business in more red tape.

This Government does not understand the basic links between profits, investment and jobs. It does not understand that Governments must take tough decisions - that you can't always take the easy way out.

In conclusion, this Government obviously regards the deal with the union leaders as more important that a deal with the unemployed. It obviously regards the mandate from the unions as more important than the mandate from the

electorate. That mandate from the Australian people was for more jobs and lower taxes. The Mini Budget and the wages shambles mean higher taxes and higher unemployment. This Government is failing both business and the people.

20 MAY 1983