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Lynch mini budget



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HOUSE OF REPRESENTATIVES 25.5.76

LYNCH MINI-BUDGET

The statement by the Treasurer on Thursday night spelt

the end of any commitment by the Australian Government to the

basic needs of the Australian people. It served notice

to the world that- one of: the- richest and most, fortunate nations

on earth: cannot, afford to give its citizens the minimum decent

standards of health care, public transport, urban development

and social amenities enjoyed.by the people, of all other advanced

western- democracies .

. Nowhere, is the: nature of the Fraser Government; more

clearly revealed than in the priorities set by the Treasurer

last week. The attack on Government expenditure in the

Treasurer's proposals is not primarily an attack on the deficit

but an attack on :the living standards of Australians. Medibank

as we know it is finished. Expenditure on urban and regional .

development is virtually eliminated. Public investment in transport

is cut back. Any responsibility for the growth of our cities

and the quality of life of their people is abandoned. At one

stroke the Government is condemning millions of Australians to

second-rate housing, second-rate transport, and a second-rate

environment in second-rate suburbs and towns. It is abdicating

its responsibility in the very areas where public expenditure alone

can meet the people's needs. It is demonstrating the classic

complacency of conservative governments - the do-nothing defeatism

of successive Liberal administrations which blighted the nation's

progress for 23 years. .

-2-

During/ the election campaign the threat to all these

programs was concealed in the usual wad of Liberal verbiage.

The people were never told that Medibank, their sewerage programs,

their, growth, centres, their., urban transport improvements and

their chances of. buying land at~fair prirces'would be virtually .

wiped out by. a Fraser Government. It has taken, the Prime Minister

just ..six months since his policy speech" to come clean about his .

promises. On television last night he was asked about his

undertaking that education, health,, welfare and urban programs

would be retained. He replied: .

"You will remember those comments were made in the

context of the last election campaign and in the context

of what was going to happen immediately thereafter".

In other words, all those fraudulent promises were for electoral

consumption only. Yet for those who studied the Liberal policy

documents closely the deception was clear from the beginning.

By promising that health, education, welfare and urban programs

would not be curtailed in the present financial year the Government

was able to disguise its intentions for subsequent years. The

real mendacity of their policy documents hinged on a double-edged use

of the word "essential". The public was assured that essential

spending would be maintained. It was never told what the Government

considered essential.

.. ./3

-3-

Now we know. Nothing is considered essential.

Medibank is not essential: health care is again to become a

needless worry and a needless, financial-burden. Growth centres

are not essential·: our bulging and bloated capitals will

continue to sprawl unchecked.. Sewerage is not essential:

a fundamental-amenity for-civilised populations is to be denied

to hundreds of thousands of ’ Australians.. Land commissions are

not e s s e n t i a l m a n ' s one irreplaceable, and immovable resource

is to be handed back to developers and speculators for their

personal enrichment. Spending on urban public transport is not

essential: no additional funds will be provided next financial

year. New hospital programs are not essential: funds for .

hospitals are at a .standstill. .

. The Liberals have never grasped that all these ·

deficiencies, all these inadequate services and untackled problems

add inexorably to society's costs. If human values don't concern

them, at least let them think of economic values. It is not

the government's spending in these areas that constitutes waste:

it is the government's failure to spend. The real waste is in

the time, money and human resources dissipated by sub-standand

services and public amenities which no other affluent nation in the

world will tolerate. The high cost structure and built-in wastage

entailed in overgrown cities are beyond estimation. The longer

we postpone essential services like sewerage the greater the ultimate

cost and disruption of providing them. The longer we delay the

building of necessary hospitals and health centres the greater the

cost in sickness, rehabilitation and absenteeism. The longer it

takes to get to work on dilapidated trains the higher the toll in

industrial production and human efficiency. .../4

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The more deprived and backward our cities and towns, the greater ' ' ϊ . .

the toll in crime and mental illness. All this neglect and

impoverishment diminishes the nation's productivity, blunts its .

competitiveness as a trading nation- and- burdens its people with

needless inconvenience--and hardship^-

' . No other country in the world has neglected these areas

as wantonly as Australia, No other Federal nation — the. United

States, West Germany, Canada — is abandoning Federal programs

in order to reduce its Federal deficit or deal with its economic

problems. The least the Liberals can do if they want to reduce

expenditure is evolve some rational system of priorities. Where

should our available resources go first - on a superphosphate

bounty, on abolishing a* beefexport levy,, on. investment allowances,

on school cadets? Or on land commissions, on sewerage, on '

national transport systems, on growth centres? These programs

are not luxuries. They are essentials. For most Australians

they are the only essentials. These are the indispensable conditions

of advanced, civilized societies, and they can only be achieved by

Government action and Government expenditure. No matter how great

a person's income he cannot provide decent transport or decent .

cities for himself and his family without the intervention of

governments - without government spending.

The problem is one of growing urgency. In the quarter

of a century between the end of World War II and 1971 Australia's

population growth was increasingly concentrated in the major urban

centres of New South Wales, Victoria and Queensland. Between 1947

and 1971 the percentage of Australians living in urban centres with

a thousand or more people increased from 68.9 to 85.6.

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The 1971 census showed that of 11,000,000 people then living in

urban centres, approximately 7,500,000 or 68 per cent, lived in

the 15 largest cities. The only way to reduce the pressures on

already overstrained and overburdened community resources is to

ericourhge the . growth, of. new^.cities. :

. ,; . ' The Treasurer served notice on Thursday , that the . .

growth centre program will be terminated. In the favourite

euphemism of the Fraser Government, it is "subject to review". .

The Acting Minister, for Environment, Housing and Community Development

admitted in his own statement on Thursday -The Government is fully aware of the problems that

uncertainty can cause to business confidence in the

centres and as a result has directed that the review be

carried out as a matter of urgency. . . ·

The only respite for the condemned man is to be a hastening of his .

execution. For Albury-Wodonga - the most successful and creative

experiment in co-operative federalism - the Government is providing

$9 million to meet its legal commitments compared with $45 million

sought by the department to maintain the program at its natural rate

of development. Other'growth centre projects are to lapse altogether

The commitment to Albury-Wodonga was made on 25 January 1973

by the Premiers of New South Wales and Victoria, my Deputy and me.

It was spelt out in solemn agreements between the three Governments

and embodied in a development corporation set up by the three

Governments and already operating. -

Whatever one ma| think of growth centres, they are not something

where the Federal Government alone has a divine right to grant or

withhold expenditure. Decisions by other Governments and local .

government are affected. Decisions.by. private firms, developers,

planning authorities and individual citizens all depend-on firm

assurances of government, support - on government commitments. .

The Fraser Government's backtracking, far from eliminating waste,

will endanger millions of dollars in private investment and

jeopardise the employment of thousands of local residents and

public servants.

Public investment in Albury-Wodo.nga was recommended by

a body established by a Liberal Government - the McMahon Government - .

and headed b y .Australians leading planning consultant, Sir John Overall

The first annual report of the Cities Commission - a body derived

from the National Urban and Regional Development Authority

established by the Liberals - stated in 1973:

"If the cities of Australia continue to grow in their

present way, the opportunity for the economic and social

advancement of an increasing number of Australians will be

severely curtailed. It is already apparent that sub-standard .

neighbourhoods are growing around the central cores of the

major.capital cities with many people living in conditions ·

of poverty, poor housing, and a lack of social and

recreational opportunities. Without positive Government

intervention this urban decay will spread. .

"It is not only deprived minorities who are suffering from

the problems and inadequacies of our cities. An increasing

proportion of the middle and higher income earners are

finding that as the metropolitan area expands, their economic

. and social opportunities are curtailed and the quality of

their life and environmental surrounds is diminishing."

If this problem was urgent in 1972 and 1973 it is more Z '

urgent today. The Government has chosen to ignore this sombre

warning from the very authorities appointed to advise it. The

conditions of life in Australian cities are no longer, it seems, .

a concern of the Australian Government. The planning and.

development of new cities-is-no longer important. In a report

commissioned by the Albury-Wodonga Development Corporation and

issued last March, Sir John Overall recommended that the centre

be promoted as a national, endeavour with the Prime Minister's .

personal backing. He is still determined that the project go ahead,

local residents want it to go ahead; the Government is dumping it.

The most successful and ambitious project for a new city ever.

attempted in Australia - the result of initiatives by two Federal .

Governments, recommended by the best authorities, and supported by

three Governments from its inception - is to be virtually thrown

away, and with it a public investment of more than $90 million

in federal funds over the past three years. This is how the

Fraser Government eliminates waste and extravagance.

As with cities and growth centres, so with hospitals and

health insurance. The concept of Medibank., like Albury-Wodonga,

was endorsed by a committee set up by our predecessors. The

Nimmo Committee in 1969 called for a thoroughgoing reform of the

old health scheme and described the private funds as bureaucracies.

The pretence that Medibank will be preserved by the Fraser Government

now deceives no one. People were deceived during the election but

they are deceived no longer.

The Prime Minister.has yet to explain how Medibank will be • ' · If ■

preserved when more than half the Australian people - the estimate

of the Minister for Health on Friday - will be forced out of it.

That is how the Liberals will preserve Medibank - by chopping it

in half. Medibank will be made so expensive that half the people

now covered for free, automatic, universal health insurance will

be driven to join private funds. What waste and extravagance will

be eliminated here? What, are the savings for.the Australian

people? There are none.

Employers, State Governments, taxpayers and motorists

are familiar enough already with the waste, duplication, inefficiency -

and above all, ever-mounting costs - of compulsory private insurance . . .

for third party and workers compensation. The Fraser. Government

has now decreed that precisely the same pattern of waste and .

high cost will afflict health insurance. We are to get the worst

of both worlds. Whatever arguments there may be for private

health funds there can be no argument for a competing mixture of

public and private funds. The Fraser Government is merely adding

to the inefficiency and duplication of existing funds. Statistics

tabled in this Parliament on 28 October and never challenged,

demonstrate conclusively that a single Government scheme for . '

third party and workers compensation would have saved employers and

vehicle owners $225 million this financial year - $225 million less

than they pay under a multiplicty of schemes under State laws.

Here we have the clearest example of how a Government's failure to

spend produces inevitable waste and extravagance by the private sector.

The withdrawal.of hospital subsidies, the destruction of ■ ' . / ' · ■ .

Medibank, the drastic increases decreed in public hospital charges

for intermediate^and private wards will put the best medical care

beyond the reach of even moderately well-to-do families.

The Fraser Government is ensuring that private health insurance

premiums-, will go on mounting year by year in-the same way as

third party charges to motorists. Every country in the world

is facing steeply· . · rising costs of medical care: and. hospital.

treatment. It/is; beyond question;that-the only way to rationalise

and apportion these costs fairly throughout the community is by

means of a single", comprehensive, national insurance fund. The

only economical and efficient way to provide compulsory insurance

is for a government to provide it. The destruction of"Medibank

will serve no purpose other than to revive the moribund private

health bureaucracies. .It is an ideological hangup by the

Liberals. · v- . . . ■ . .

In April 1974 the Hospital and Health Services Commission

presented to the.Government a report on hospitals in Australia

recommending an urgent program of capital expenditure on public

hospitals, mental hospital facilities and public nursing homes.

My Government accepted the Commission's recommendations. The

Fraser Government does not. There is to be no growth next year.in

the hospitals development program. Expenditure allocated for 1976-77

will remain at the level of $108 million for this financial year.

According to the Minister for Health the allocation will be $43 millio:

less than the department's estimated needs. In other words, the

program for new hospitals will come to a standstill. In recommending

a program of national expenditure, the Chairman of the Commission,

Dr Sax, stressed the need for an organised approach to health problems

in Australia. ’

-10-

His report stated: .

"The Australian Government should play a role in stimulating

inquiry into the health care system, in policy formulation

and .tin financial provision. It should be involved

directly with the States as a participant in regional

planning.... . .

. The Australian and State Government payments towards . .

hospital costs should be co-ordinated to achieve greater

efficiency." . . .

There is nothing in the statements of the Prime Minister, the .

Treasurer or the Minister for Health to show that these priorities

are accepted or understood, let alone that the increasing funds

will be available. On.ce again there are to be false economies. - " · · * . · · . - . * > ·: ·· ···· · . * ' < · · '

The Treasurer's statement offered no hope to Australians

who want to buy land. The land price spiral will continue.

The Fraser Government will do nothing to halt the growth of land

prices - always the most expensive component in the price of a home.

The statement last Thursday by the Treasurer and that of the acting

Minister for Environment, Housing and Community Development made

it clear that Federal funds for land commissions will be curtailed.

This is another area set down for "urgent review". Land commissions

are already operating in South Australia and Victoria and the Labor

Government of New South Wales will be going ahead with a land

commission shortly. Only through Government intervention can. the

community ensure that land is made available at fair prices to

homebuyers. · .

v .

../II

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Land commissions depend largely on Federal funds which my

Government provided. The department has estimated that $41 million

will be needed for the coming year. The Government will give

nothing save the $14.3 million needed to meet existing legal

commitments. The Treasurer stated that an interdepartmental

committee would inquire into land commissions. He gave a useful

insight into the Government's thinking when he revealed that one

of the committee's main considerations would be the "viability

of the private sector" - in other words, the private land developers

and speculators who have grown rich on the hopes and savings of

young Australians.

. There is to be a drastic cut in funds under the national .

sewerage program. My Government allocated $113 million for the "

current year, the department sought $145 million for next year, . . .

the Government will provide only $50 million. The National . '

Estate Program - an investment of modest cost but inestimable · ' . ·

public value - will be virtually destroyed. Of the $8 million

sought by the department, the Government will provide $1.35 million

compared with the $5 million provided by my Government. Despite

pious words from the Minister for Transport, there is to be no more

money for urban public transport next year. The New South Wales

state election showed how keenly people feel on this subject. Yet

public transport is another field where there has been unanimity of

advice from qualified bodies and experts. A report by the Bureau .

of Transport Economics available to the Liberals in 1972 drew attention

to the need for investment in urban public transport and the magnitude

of the funds required. The broad thrust of that report was accepted

by the Labor Government in 1973. The Liberals are abandoning it. .

-12-

The Government maintains its deception and obfuscation

even when announcing its new measures·.. It is difficult to discover

anywhere in the Treasurer's speech exactly how much is being cut

from particular programs or what real savings are contemplated.

The Government constantly gives figures for proposed expenditure

but never compares them with actual expenditure under my Government.

It compares them with forward estimates provided by Departments.

In the case of education, some $80 million is to be cut from

the amount sought by the Department, but we are not told how much

the Department sought. The Government wants to give the impression

of substantial government savings while concealing the extent of

public deprivation. The figure of $2,600 million in projected

savings is largely an illusion. The honourable member for Oxley .

pointed out on Sunday, that half the -$2.,-600 million., expenditure cuts,

have yet to be announced. The economist of the Melbourne Age wrote

yesterday:

"The bulk of the $1300 million expenditure cuts not announced

must come from Federal Government transfers to the States.

This means that the States will have to reduce their spending .

or massively increase their taxes and charges. . . . . Thus it is

inevitable that indirect taxes and charges will have to rise

next year at State level and probably at Federal level as well."

So it comes down to this: essential services for the

Australian people will no longer be provided - 6r even assisted to

any worthwhile extent - by the Federal Government. They will not

be provided at all unless State and local governments take them over.

And without double taxation or massive increases in indirect taxes,

rates and charges, State and local government will be no more able to

afford these services in the future than they were in the years betwee.

1949 and 1972.

- -13-

This is the meaning of the new Federalism. This is

the brave new deal for. the States and local government. This

is the Liberal recipe for progress and prosperity.

For generations the Australian people have been waiting for ,

governments to provide their basic, everyday needs in health,

transport, housing, decent cities and towns. How much longer

must they go on waiting? How many more years before these

simple needs are met? Reports presented to the Parliament

three or more years ago drew attention to the needs and

recommended the necessary expenditures to meet them.

My Government got the basic programs underway after a quarter of

a century of Liberal neglect. Now the Fraser Government proposes

to undo everything that was achieved after years of painstaking

work and research, after millions of words of expert reports and

millions of dollars of public expenditure. Never in our history

has there been such indifference to the people's needs or such a

monumental waste of money and human resources.