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Wednesday, 1 April 1987
Page: 1889

Mr BRAITHWAITE(4.16) — Obviously in debating these Appropriation Bills we are allowed quite some latitude to discuss various points about the economy. It is fair enough on this occasion to reveal what has happened in the last four years of this Government and to wonder where we are now and how the economy affects everyone who calls himself an Australian, everyone who is proud to live within our shores and work towards a greater Australia. Such people want to find out how they are being treated. Four years down the track I doubt whether any Australians anywhere, whether they be aged, young or middle of the road, could claim that their standard of living is better than four years ago, that their way of life has improved to any extent. Indeed, they are worse off.

Mr Kent —Do you remember seven years ago?

Mr BRAITHWAITE —I remember; in fact, I was part of the Government the honourable member criticised. I remember the promises made by the Australian Labor Party at that time. So many promises were made, such as that there would be full employment, a reduction in the price of petrol, and everything would be rosy. They were the types of promises made to the people of Australia four years ago. I ask the honourable member to listen a bit more intently to see where we are at the moment.

There is no doubt in my mind that Australia, as large as it is and with its population so spread out, is unique in many ways. We are unique in that, as our national anthem says, we have wealth. I think we would all agree with that. Our primary industries, our minerals and everything else indicate that we have a great degree of wealth. There is no question about that. Unfortunately we have forgotten that the national anthem also mentions that Australians have to toil to produce that wealth. The last four years has seen a decline in the way in which Australians have been prepared to apply themselves to the task of making this a wealthy country. We lack the productivity, and that has been evident over this time. The Australia that I have just described, with its uniqueness, can survive only if we are prepared to trade with our neighbours, with the rest of the world, on a fair and equitable basis because we must trade in order to maintain standards of living for the 16 million Australians who live within our boundaries.

I wish to begin my contribution to this debate by comparing where we stand in a trading sense. I refer the Parliament to the last indicators of our trading record published by the Australian Bureau of Statistics. I want to give honourable members the results of the three complete years so far under Labor and the schedule to date. The balance on capital account plus balancing item, which is currently known as the current account deficit, totalled $7,283m in 1983-84, $11,009m in 1984-85 and $13,822m in 1985-86. We have surpassed that 1985-86 figure already in 1986-87. The figures show that Australians are spending more and increasing their foreign debt to the extent of that amount a year. In the face of those figures it is not surprising that last September our debt reached the grand figure of $101 billion.

Mr Milton —It is all these takeover bids.

Mr BRAITHWAITE —It is not the takeover bids. What I am trying to tell the honourable member is indicated in the figures I have just given to him. If that interjection by a government member is an indication of the awareness of government honourable members of the economic situation in Australia, maybe we should expect these results under Labor. I will give a comparison of those four years. In June 1983 Australia's net foreign indebtedness was $22 billion. It took Australia 82 years since Federation to reach that figure of $22 billion. Within the three years to June 1986 under Labor, that figure had trebled to $66 billion. Maybe a part of that was due to the takeover philosophy.

Mr Milton —That is right.

Mr BRAITHWAITE —I said part-a very small part. I have the honourable member's attention, so he might learn a little more about how the debt has accumulated. It has accumulated because Australia cannot trade profitably with the outside world. Every Australian has to realise that our standard of living-the way we make our way in life-depends on how well we trade with overseas countries and what we import in return. The figures show that we are living beyond our means, that we are borrowing against the future and that we are leaving a dreadful legacy for our children and their children.

Mr Milton —It is private debt, not government debt.

Mr BRAITHWAITE —The honourable member mentioned government debt. That was a very healthy interjection. I mentioned that our foreign debt had tripled. Does the honourable member know how many times the foreign component of the Commonwealth Government's debt increased in those same three years? I will tell him; it was eight times. That comes back to another part of the economic policies of this Government-the manner in which it has been prepared to fund its Budget expenditures through borrowings to the extent of $25 billion over the last four years. Not all of that is foreign debt, but it goes to show the extravagances of this Government, along with the extravagances of the people of Australia, resulting in the building up of massive debts in our generation, not to pay for assets in the future that our children can enjoy but so that we can enjoy our lives today and keep our members in government. The debt we are leaving will be left to our children and our grandchildren of tomorrow. I make a comparison with Argentina because people, unfortunately, are making that comparison.

Mr Milton —You can't make the comparison.

Mr BRAITHWAITE —The comparison should not be made; I am glad that the honourable member agrees. The foreign debt component is almost the same. The only difference is that Argentina has a vastly bigger population than we have to service that debt now and into the future. Australia's debt rests on the shoulders of 16 million Australians, while Argentina's debt rests on the shoulders of 30 million or 35 million people. That is the difference and I am glad I have been able to acquaint my colleague with that fact.

Australians are living beyond their means, but this Government has nothing to show in the way of policies to address that. We had a debate on a matter of public importance in this House only yesterday dealing with the factors of the standard of living, high interest rates, high inflation and all the other things that affect every Australian. Honourable members opposite should not say that they do not affect every Australian. Interest rates have a very definite influence on every Australian, every house owner and businessman who is trying to compete. Businesses that are being asked to expand to take advantage of the wonderful opportunities devaluation presents must first face the risk of servicing the money they borrow to invest. The figures mentioned in the debate yesterday indicate that interest rates have had a marked effect on the number of mortgages foreclosed, rentals and the number of people who just cannot afford the basic type of housing of which Australians have been proud.

At the beginning of the four-year period Labor has been in office, more than 70 per cent of Australians lived in houses which they owned. I fear that today that figure is fast diminishing, particularly in light of the foreclosures I mentioned and the problems of interest rates. What disturbs me is that Ministers and the Government try to claim that this is due to outside pressures. I would be the first to admit that the current account deficit is more than ordinarily influenced by our terms of trade and the manner in which other countries trade against us in competitive markets.

However, I am not here to suggest that the whole problem lies with international factors. I would be the first to admit that the practice of the European Economic Community in giving subsidies, the practice of the United States of America with its farm Bill and its enhancement program and the manner in which Japan protects its industries and expects everybody else to trade on a fair basis have a major influence on what we do. I am only too happy to acknow- ledge that the Government and its Ministers are doing all they can to bring about, through the 14 fair trading nations, an element of reality, particularly to agricultural exports. I believe the Government is making ground. Every time we go to the EEC and tell its members how its subsidy policies and the common agricultural policy are ravaging Australian primary industry and other industries, there is a message in that too. Perhaps, in the fullness of time, the 14 fair traders might just accelerate some meaningful conclusion to those difficulties.

Whilst I admit that there is a problem there and whilst I agree that the Government is doing something, let us not forget what four years of Labor have done within the domestic scene. For instance, we only have to address taxation, industrial relations, inflation, devaluation, interest rates and regulation. Businesses in Australia have been hit particularly with the fringe benefits tax, the capital gains tax and negative gearing-all imposts at a time when industry is trying to get off the bottom rung of the ladder to participate in the marvellous advantages that it is told exist in the wide world. But how can it participate when it is paying an additional penalty of some $1.2 billion introduced by the Labor Government?

Until we can give incentive to companies and to individuals to keep more in their pockets than they are spending in taxation, the Government will not get the revival that it seeks. It will not get that revival under the taxation policies that influence interest. I have mentioned the effect of the Budget and the effect of our trade deficit and overseas debt. Since 1982-83 this Government's expenditure in real terms has increased by some $6 billion. The tragedy of that figure is that nearly $2 billion is not recoverable because that is the additional amount that is now required to service the interest on our national debt. This year the deficit is estimated to be $7.5 billion. I have read that that is expected to blow out. That is 10 per cent of the Commonwealth Government's expenditure, and that is an indictment of that Government.

If we compare how the average Australian is suffering in comparison with our competitors overseas, we find that Australia's rate of inflation is 9.8 per cent. In Japan it is minus 0.2 per cent, in West Germany it is minus 1.1 per cent and in France it is 2.1 per cent. No country in the list that I have has an inflation rate that come within 50 per cent of Australia's, and they are the countries that we are competing with. Our standard of living must be depreciated when we face an inflation rate of that amount. Interest rates in Australia, compared with 10.8 per cent in Italy-that is rather high-and 5.84 per cent in the United States of America, are in the vicinity of 16 or 17 per cent. Those factors influence the style of living of every Australian. Yet it is the deliberate policy of this Government to bring down the standard of living and to increase government influence, as any socialist society would require.

I mention just one factor that demonstrates the way in which Australia is viewed by other nations. I refer to our currency valuation. Day by day the rest of the world is devaluing our currency, and therefore downgrading the functioning of our economy. Let us look at the value of the dollar over the past four years, particularly against the yen. The Australian dollar was worth about 210 yen in 1983 and today it is worth just over 100 yen. We have depreciated our currency by 50 per cent against the currency of one of our major trading partners. People say that devaluation is good for industry. I remind the Government that as of today, 1 April, the start of Japan's new financial year, the price of our iron ore has significantly decreased, as has the price of our coal. So there is no benefit at all from devaluation in respect of those commodities.

So much more could be said as to what this Government has done in its four years. I come back to the point that unless we trade-and trade successfully-and bring our deficit into line, the standard of living of every Australian will be affected. Interest rates will continue to be high and all the other factors which reduce our standard of living will remain. The standard of living of every Australian is determined by his after tax buying power. We should compare that with what it was four years ago. The standard of living of all Australians is based on their ability to obtain a job that they want to do. The standard of living is related to the ability of a family to survive on a relatively low single income with the high taxation imposed on it. The standard of living depends upon a person's education-and education should be the right of every Australian. On just those simple formulas it can be seen that the standard of living has fallen significantly over the past three years, and it is the economic policies of this Government that are entirely to blame.