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Speech at the Baradine Branch of the National Party



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SPEECH BY MINISTER FOR DEFENCE, IAN SINCLAIR, AT THE BARADINE BRANCH OF THE NATIONAL PARTY, ON FRIDAY, 27TH AUGUST 1982

The Budget the Treasurer introduced a fortnight ago was

designed to offset malaise apparent in some sections of our

community.

This does not mean that it was a budget that wilfully allocated

money beyond the nation's ability to pay. It did not provide

sums to the point of generating excess Government pressures on

the economy to the detriment of the interests of individuals.

Rather it was intended to provide across all sections of the

community, benefits designed to stimulate economic activity.

Importantly in our community'over the last 12 months there have

been wage pressures leading to both increases in the real rate of wages and also reduced working hours.

Of themselves these seem highly desirable objectives. In a highly

internationally competitive world the result has been that Aust­

ralia's ability to sell goods against our competitors has been impaired.

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This has contributed to our deteriorating balance of payments in

the last few months and reduced our ability for an early recovery.

The Labor Party has been making much of a wages and prices compact which it is supposedly negotiating with the ACTU.

Certainly there needs to be a proper relationship between the Trade Union movement and Government but this relationship cannot be on the

basis established in States such as New South Wales where it has

meant an unquestioning acceptance of wage and salary demands with

consequential cost disabilities on the rest of the community.

The budget introduced by John Howard has in it the genesis for a

worthwhile wages compact.

Meaningfully, every taxpayer is better off as a result. Where there

are sales tax or excise increases, they are in areas of

discretionary spending.

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As a result I believe all trade unionists should now be able to ease

their pay demands, conscious that their living standards will in no

way be prejudiced.

It is to be hoped that the leaders of the ACTU recognise the benefits

of the Budget and on this basis give leadership to Trade Unionists

so that the community can progressively see restored the level of productivity essential to domestic economic recovery.

In rural areas particular concern is related to the drought situation.

In NSW 38 of the 58 Pasture Protection Districts are currently drought declared.

Queensland, Victoria and'South Australia are all suffering significant

lower than average rainfall.

Prospects for the wheat crop in the eastern States are poor.

The Bureau of Agricultural Economics is now estimating wheat production in 1982 and total winter cereal production will drop by 31% to 15

million tonnes compared with 21.7 million tonnes last year. ^

Similarly the pastoral industries.are now being acutely affected

by water shortage and a lack of feed for livestock and this is reflected in falling herd numbers.

The Commonwealth Government has always stood ready to provide

assistance under the agreed natural disaster relief arrangements.

These arrangements have been in place since 1970/71 and have been agreed between the Commonwealth and the States.

Under the arrangementsthe Commonwealth provides financial assistance

to the States, on a $3 for $1 basis, once a State has reached its base

level of expenditure which in NSW is set at $10 million in a financial year. .

In NSW in spite of a 17% increase in its tax reimbursement allocation

from the Commonwealth this year, it claims it cannot even afford that

$10 million.

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To ensure that there is no financial impediment in providing assistance

the Commonwealth has already advanced that $10 million to NSW. .

It is now a matter of persuading the NSW Government to introduce a range

of financial assistance schemes similar to those in Queensland and

other States to assist primary producers and small businessmen.

To assist, the Prime Minister has called for a special meeting of the

Agricultural Council to discuss possible new measures to provide

relief to the rural communities.

Allied with a 40% increase in the funds provided for the rural sector

in this year's Budget, this should alleviate economic conditions now being experienced throughout the countryside.

When the Treasurer said last week that the Budget "...represented

the endeavours of the Government to provide a fair and workable response; to the very difficult economic problems Australia faces..." he struck*

a chord with a very wide section of Australians.

It is clearly seen that we were put in a position of forming a Budget: :

against the problems created by the world slump and all that has ■ .

meant for our overseas markets which have been in decline, interest

rates which are far too high and an excessive hike in wages.

What we say was the need for our economy to be able to handle the

situation of the inevitable rise in economic activity both nationally

and internationally. At the same time the Government perceived that it

had to provide assistance and relief to those in our community who

most needed it. ,

What has resulted is an economically responsible Budget which does

however provide considerable assistance to families, assists the less

fortunate, and aids industry and employment prospects for all those honestly seeking work. ,

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For families there are personal tax cuts which provide an extra $7.65

a week to someone on average weekly earnings.. There are increases in

the family allowances by 50%. There was the effective cut in home

loan interest rates by up to 2% through the rebate on interest over

10% on mortgages up to $60,000.

For those who invest in Australian companies there is a new tax rebate

on dividends up to $1000, there is extensive student assistance

through increases in post graduate TEAS and SAS as well as an easing of income test requirements for the parents of students and a low interest

loan scheme for students.

As I said there were also considerable benefits for those in need,

particularly pensioners with increased, permissible earnings before

pensions are affected, there are raised income limits for fringe

benefits, and a new special tax rebate of $2.50 per annum along

with concessional rates for prescriptions.

However in the areas of industry employment steps have also been

taken particularly for small business which will benefit from an

increase from 70% to 80% in the Division 7 retention allowance which

will give this vital sector of our economy greater flexibility to

finance its operation. .

Just prior to the Budget direct assistance measures for industry were

announced including generous depreciation provisions on equipment

and machinery in both primary and secondary industries.

While there were increases in unemployment benefits, there are also

considerable increases in expenditures on employment and training

programmes so that we can ensure that our young people are better

fitted for the workforce.

The fact we will be spending $250 million this year on such programmes

which is an overall rise of 21% on last year, and which includes

funds for work experience projects for no less than 74,000 people

and there is an increase in the CRAFT rebate for training 111,000

apprentices.

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One of the most exciting projects announced was the $2 billion

Australian Bi-Centennial Road Development Programme which is aimed

at providing a national highway network completely sealed and ·

virtually flood free across and around Australia by our Bi-Centennial

year, drawn from a 1Φ a litre tax on fuel, all. of which will go

directly to road funding.

The Commonwealth roads programme will continue so that over the next

six years nealy $6 billion will be spent on roads.

This will be of considerable benefit to you in the non-metropolitan

areas but there are also considerable levels of increases in existing

programmes of. budgetary assistance to rural industries this year.

Total Budget outlays are estimated on agricultural and pastoral

industries to be $310 million in 1982/83, up 40% on the 1981/82

level of $220 million.

The overall increase in outlays on agricultural and pastoral

industries is despite the Government's continuing commitment to

expenditure restraint.

They are a reflection of the Government's recognition of the

importance'of primary industry to.the national economy and also

recognise the difficult situation currently facing many primary

producers.

A major feature of the increased budget outlays is the provision of

assistance to the beef industry, including the total write-off of the

industry's $23.5 million debt to the Brucellosis and Tuberculosis Eradication Campaign.

This is one of a number of provisions in the 1982/83 Budget designed

to assist the cattle industry.

Other measures included:

. A 68% increase in the Commonwealth contribution to compensation

for slaughtering brucellosis and tuberculosis reactors.

. No increase in meat export inspection charges.

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. A grant of $2.5 million to the Australian Meat and Livestock

Corporation over the next two years to enable it to establish

a quality control programme for meat exports. ,

. $1.73 million for restructuring the meat operations of the Commonwealth Export Inspection Service.

. A continuing financial commitment to research programmes and

the development of a system of objective description for carcass

meat.

. The provision of $100,000 for the purchase of equipment to counter any outbreak of screw worm fly.

These measures have been adopted by the Government because the cattle

and meat industries had been experiencing serious economic difficulties

for some time, particularly .because of depressed export markets,

drought conditions, and lower numbers of cattle for slaughter

following the sharp fall in cattle numbers in recent years.

The Budget had also recognised additional and new funding requirements

in areas including:

. $22.5 million for rural research in 1982/83, compared with the

estimated $19.2.million last financial year;

. an increase in provision for the Rural Adjustment Scheme of $2 million to $18.4 million;

. for deciduous canning fruit growers, provision of $1.75 million

for tree-pull assistance and $500,000 for carry-on finance assistance; .

. implementation of a cotton research scheme;

. payment of a $100 per tonne bounty for berry fruit sold for processing at an estimated cost of $300,000 in 1982/83;

. outlays in reimbursing the Australian Wheat Board for borrowing up $17 million to $39.2 million;

. no change to tax averaging arrangements for primary producers.

Now that the Opposition parties in the Senate have passed the legis­

lation, the superphosphate and nitrogenous fertiliser subsidies will

be paid on all purchases made in the financial year, at a cost of more than $50 million.

The hard statistics of the Budget are very much the basis of the human programmes our Government pursues.

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In this Budget I believe the Government has struck a proper

balance in giving individuals tax relief in providing'for families

for the old, for the young, and the' disadvantaged in our community

This sets the framework within which Australia should be able to

get on the move once again.