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Tuesday, 29 November 1983
Page: 2959

Mr KEATING (Treasurer)(3.18) —Of course I absolutely reject as absolutely fanciful the motion moved by the Deputy Leader of the Opposition (Mr Howard). His first and principal charge is that the Government suppressed the document. In the same minutes which the honourable gentleman has-this will give honourable members some idea of his honesty-it is stated:

A report on this work should be prepared for the next meeting. In the meantime it was important that the preliminary work reported in the paper remained confidential to Council members.

The honourable member knew when he stood up here that the minutes of the Economic Planning Advisory Council which he had in his possession confirm that EPAC wished to keep the projection results confidential to Council members. So there was no attempt at all to suppress the results. Indeed over a period all sorts of things will be tendered to EPAC. It would totally destroy the purpose of the Council to publish everything as it was reported to the Council.

The second fallacious charge made was that the Government knew of these things when it presented its case to the Australian Conciliation and Arbitration Commission. That is a lie and the honourable gentleman knows it to be a lie. We presented that information to the Arbitration Commission between 14 and 20 July and we were in receipt of these projections in October. The Deputy Leader of the Opposition realises that, and he knows that that assertion is just as fanciful and misleading and dishonest as was his first.

The third assertion he made was that I misled the House by saying that, generally, EPAC 'criticised technical weaknesses in the paper and generally rejected it as inconsistent with likely future trends in the economy'. It did; if it had not it would have accepted the projections. I did not claim, then or at Question Time, that the projections are not useful. Of course they are useful . Projections are a useful tool and they show that, with certain inputs, one can perceive certain changes in outcomes. But it was the outcome that I and EPAC rejected and not the technical inputs or the sheer usefulness of having such a tool. As to being forthcoming with the public, the Deputy Leader of the Opposition is the champion liar of 1982-83. He is the man--

Mr SPEAKER —Order! I ask the Treasurer to withdraw that remark.

Mr KEATING —Mr Speaker, I withdraw it. The Deputy Leader of the Opposition is the gentleman who in the heat of the last week of an election campaign, when people were making up their minds on a critical election, was told by his Department not about a three-year projection but about a forecast of 12 months, after an estimate had been taken of the Budget Estimates-I am not talking about forecasts and projections; I am talking about the Budget Estimates in November and the outcome--

Opposition members interjecting-

Mr SPEAKER —Order! The Deputy Leader of the Opposition, in speaking to his motion, was heard in relative silence. It is a serious motion for the Minister to answer. He should be given the opportunity and the same courtesy as the Deputy Leader of the Opposition was given.

Mr KEATING —In that critical week of the election campaign the Deputy Leader of the Opposition, the then Treasurer, was giving not a projection about three years, with all sorts of assumptions, but an estimate by his Department, after the forward Estimates had been undertaken, of the Budget deficit within that year-of the likely outcome for 1982-83, and then for 1983-84, of $9.6 billion. He sat on that estimate and let the world believe that the deficit would be $6 billion, and that is the basis on which we went into the election campaign. How can he get up in this chamber and talk with any shred of credibility about anybody else's reputation in respect of coming clean or telling the truth? I simply made a commentary on the fact that EPAC rejected the outcome of the projections. I did not say that the projections were not useful. Of course they are useful. They show all sorts of things.

As I said during Question Time, the three scenarios, A, B and C, presented to the National Economic Summit Conference, indicated that, with more wage restraint, one had a better growth outcome and lower inflation. All that is simply a commentary on the fact that if we hold wages down long enough we will get a bigger restoration of the profit share, higher investment and growth. The fact is that the judgment then had to be made about the industrial relations realities of such a policy. That is why the projections were useful. Essentially , that is why the Government came to its own conclusions and returned to a centralised wage fixation policy. There is no point in the Deputy Leader of the Opposition quoting from this morning's Australian Financial Review on the same matter. A judgment has to be made. The Deputy Leader of the Opposition's policies in respect of wages are policies for a recession. They are not policies for a recovery. He would have no idea about how to restrain wages in a recovery. He would sit back like a stunned mullet, as he did in the years when he was Treasurer, and watch wages, inflation, growth and unemployment blow out. This man is the biggest job destroyer since the bubonic plague. He is the man who saw unemployment rise by 250,000 in one year. He is the high unemployment and high interest rate specialist. He does not have any credibility. It is a joke that he is his Party's economic spokesman! The only reason he is the spokesman is that the Leader of the Opposition (Mr Peacock) is totally economically illiterate. That is why the Deputy Leader of the Opposition is the only one in the Opposition who understands the expressions gross domestic product or growth, or any other technical terms or any basic rudimentaries about the economy. To have him sitting here as the economic spokesman of the Opposition after his destruction of a very nice economy is a damning indictment of the Australian parliamentary system and the coalition parties. I reject absolutely the notion that he has any shred of credibility when attacking me or any member of this Government about any element of wages policy or about these projections.

In the course of the discussion the Deputy Leader of the Opposition also raised the other two projections. He talked about the likely outcome of projections two and three. Of course, if we take the gloomy view that he takes, that the world economy will collapse, I suppose we are all in trouble. But that is not the view of the International Monetary Fund or of the Organisation for Economic Co- operation and Development. The Deputy Leader of the Opposition and the Leader of the Opposition persist in being the pariahs of the economy, the people who go around talking down the economy. When I was being attacked on Friday by Bib and Bub-the Leader of the Opposition and his Deputy-I was having lunch with the Board of the Broken Hill Proprietary Co. Ltd. BHP is getting on with the economy , as we can see in today's newspapers. There was no interest there whatsoever in the doomsaying of the Deputy Leader of the Opposition or of the Leader of the Opposition. The Board of BHP wants to see the Australian economy grow. The remarks by the Leader of the Opposition and Deputy Leader of the Opposition are not appreciated by business in Australia. It does not matter where one goes, one always hears about how disappointed business people are with the Liberal Party and its incapacity to get across the basic economic issues.

Let us look at the performance of the Leader of the Opposition the other day in the Kooyong electorate, which I referred to in Question Time, and his view of the fiscal parameters. The Deputy Leader of the Opposition talked about how we do not have a deficit outcome of the kind he envisaged. How does he match those remarks with the idiot remarks of his Leader on the weekend about what the Opposition would do with the structural component of the deficit? The Opposition does not have a policy. The Deputy Leader of the Opposition's own foolish notion about wages-this latest nonsense he is speaking-is to let certain companies and certain unions opt out of the system. The people who can opt out-the people who can actually try to eke high wage claims out of the economy-are the people who are likely to opt out. We would have the strong pushing for higher wages while the rest receive indexation from the centralised system. That is a nonsense proposal and a disgrace coming from a man who was Treasurer of this country for five years. It would be a recipe for high inflation and wage disaster. In fact the Deputy Leader of the Opposition said something very revealing on the Sunday program last week. He said: 'In my view wages policy was the weakest part of the Fraser Government's economic policy'.

Mr Howard —True.

Mr KEATING —The honourable member acknowledges that fact. He was the Treasurer for five years. What he is saying is: 'I ran the economy for five years but I could not get it together on wages. The economy destroyed itself and inflation and unemployment came up. I could not hack it on wages. We did not have a policy '.

He said on the Sunday program: 'We did not really try decentralisation of wages . We had a schizophrenic approach'. He confirms that statement. The fact is that on both these counts the Deputy Leader of the Opposition admits that during his five years as Treasurer he was not able to get a wages policy together. Now he calls up these projections to support his assertion that in the six or eight months since he lost the Treasurership of this country he had discovered the formula on wages. He is now the guru on wages policy in Australia. We are supposed to say 'Yes, we will adopt your policies', and that anything he wants to claim from the projections he can embrace and drag to himself after having wrecked the Australian economy and put it into negative growth for the first time in 30 years. One of the other things he said in his attack on me was that projection one was not as optimistic as scenario A. That is true because scenario A was based upon the November national accounts. A judgment was made that the economy would be better at the close of the year on 30 June. In fact, when we got to 30 June, which was essentially the end of a year of still operating under the previous Government's policies, we found the economy was much worse. Because projection one was based on the June accounts it reflected that fact. That is the reason-the Deputy Leader of the Opposition does not want to listen to that-for the difference. The economy performed much worse in 1982- 83 under his policies than we assumed it would at the time of the National Economic Summit Conference. When we based projection one upon the June accounts rather than the November accounts we were in a position to base that projection on the fact that the economy was performing much worse.

This is really an attack of sour grapes. With this puerile attack the Opposition is claiming that the Australian economy is on the path of economic mediocrity, but for seven years we have had its disaster. When we look at the performance of the present Government in this period we see that the inflation rate is down to 1.6 per cent in the September quarter, the lowest quarterly increase for five years. The annual inflation rate is running at 9.2 per cent. In December it will be running at somewhat over 8 per cent. We see an employment growth of 82,000 since April. Retail sales are up 2.5 per cent. Interest rates have come down by 2 per cent since the beginning of the financial year despite the fact that we are financing a fairly large Budget deficit. We see a pickup in production. We see a dramatic pickup in the number of dwellings-they are now running at an annual rate of about 140,000. On that basis, what the coalition parties can see is that the economy is responding to the policies of the Government and that business and consumer confidence in starting to pick up. In fact, when the previous Government likes to chance its hand at another election we will see that it has no chance whatsoever of overcoming the successful performance of the Government with its economic policy. I reject absolutely this puerile, stupid, phoney and amateur attack on me on the basis of this projection .

Let me just repeat the charges. On the first charge, the Government made no attempt to suppress these matters. It was the decision of EPAC not to publish that particular document. The second charge is the claim of the Deputy Leader of the Opposition that we had the information and did not give it to the Arbitration Commission. That is untrue and he knows it, because we gave that submission in July and we received these figures in October. The third charge is the Opposition's claim that I claimed that we reject absolutely EPAC projection one. In fact, what I said was that EPAC rejected the outcome of the projections, but that the projections are a useful tool. I stand by that. There is no basis for the censure motion. We reject it absolutely and we will continue to put the economic policies of the economically illiterate Leader of the Opposition and his failed Deputy under the kind of scrutiny that the Australian public deserves that we put them under.