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Wednesday, 9 October 1991
Page: 1549


Mr JULL(3.35 p.m.) —-The most telling quote of the day appears on the front page of this morning's edition of the Australian newspaper, which states:

Resistance to mass unemployment--horror at the impact of mass unemployment--has again been one of those core Labor beliefs that from generation to generation enabled the persistence of the Australian Labor Party in the Australian political system.

If unemployment persists at 10 per cent throughout . . . the first half of the 90s under a Labor government then I believe it will end up rendering that federal Labor government an object of apology.

It will be seen as ultimately unsuccessful as, say, the Wilson government in the United Kingdom and be regarded as repellent by Labor Party people.

That quote came from the New South Wales Leader of the Opposition, Mr Bob Carr. How true it is as we look around the landscape of Australia and see the devastation and the disaster that have been wreaked upon this particular nation through the inactivity and the lack of forward thought and policies of this present Government.

The scene around Australia at the moment is a very sorry one indeed. What do we see? The worst economic conditions in almost 60 years. Unemployment at one million. The official unemployment rate is 841,000, up some 350,000 since August 1989. But we are not told that the method of calculation of the unemployment figures in Australia has been changed so many times in recent years that the figure of 841,000 is not really the true figure.

How many people throughout the nation have been put out of employment in recent months and have collected severance packages? How many of those people are allowed to receive unemployment benefit? How many people now are working 15 hours a week or less, barely making an income? Those figures are not included there either. More than one million Australians now face the prospect of very little income indeed to help bring up their families. Even the Government and its spokesmen refuse to rule out the prospect that 10 per cent unemployment in Australia is going to be the norm for some years to come.

It is an absolute disaster when we think that for every job advertised there are 30 unemployed people in Australia to fill that particular vacancy. Let us look at what is happening in terms of the economic activity of Australia. Retail turnover increased by 2.8 per cent in 1990-91 compared with 8.4 per cent in 1989-90 and 6 per cent in 1988-89. If we look at another measure, the new capital expenditure, we see that it is down from 9.9 per cent in 1990-91 compared with the decline of 1.7 per cent in the previous year and an increase of 13.9 per cent in 1988-89.

Let us look at the bankruptcies. As we go around Australia and see the conditions in our shopping centres, in our small businesses and in our factory areas, these figures really come home because bankruptcies have increased over 50 per cent in the 1990-91 year--up from 8,600 to a massive 13,000.

While this goes on, the terms of Australian trade get progressively worse and worse. Members on this side of the House have been battling in their electorates to try to get the message through to the Government of Australia that things are wrong and things have got to change. They will tell us what it is like in places such as Ballarat, Bendigo and Logan City in my own electorate where businesses are closing.

In respect of that latter case of an area of Australia that I share with the Minister for Small Business and Customs (Mr Beddall), I am sure that he is absolutely delighted to know that 27 per cent of the small businesses of Logan City--the 4,186 of them that used to exist 12 months ago--have now gone to the wall. In his electorate, one which contains so many small businesses, he has an unemployment rate of 30 per cent, and 43 per cent amongst the youth of his area.

Australia is getting to a stage where it is falling more and more behind its overseas competitors. If we look at the annual average growth in Australia in 1990, we see that it was a mere 1.5 per cent, and if we compare that with the situations in our major trading partners, we see a growth rate in Japan of 5.6 per cent, in Germany of 4.5 per cent, in France of 2.8 per cent, and even in Italy a growth of 2 per cent. One would think that when these figures keep coming home to the Government there would be some move to try to solve the problems, to bring some life back into the Australian economy, to revive business and to provide jobs for our young people and indeed for the work force as a whole. But what happens? Very little indeed. That is because this Government appears to be totally incapable of acknowledging that its policies are wrong and of then changing those policies to correct its mistakes.

I think it is not unkind to say that, when we saw the demise of the former Treasurer, the honourable member for Blaxland (Mr Keating), there was a feeling that at last here was a chance that we might see some change of direction and policy. But what happened? Nothing at all. We got another Treasurer, who, quite frankly, is just a pale imitation of the honourable member for Blaxland. He has continued with the same failed policy prescriptions and the same inflexibility. The only thing we do not have now is the flamboyance and the media attention that the honourable member for Blaxland attracted.

Business has summed up the situation that this Government has now got us into. In Business Background dated October 1991 this is what business had to say:

For some considerable time the Business Council and others have been pointing to the disastrous collapse in investment in fixed capital formation that has occurred over the past two years. The ratio of investment (business investment, housing and public capital) to GDP is at a forty year low, and is likely to fall even further in 1991-92. The Treasurer's expressed concerns of over-investment at this time seem misplaced, to say the least. Unless we get business investment moving again, the economic recovery will not be sustainable, and high rates of unemployment will be with us for a long time.

It continued:

The new rhetoric will have credibility only if it is backed up by action to resurrect business investment. Senator Button's proposal that some major development projects would be put on a `fast track' by `massaging' the approval process is welcome. But it is symptomatic of the Government's approach of `doing deals', rather than getting the principles and the business environment right in the first place.

How much we have to agree with that. When we look at some of the real reforms that have to be made in terms of the resuscitation of Australian industry, we realise that what is really needed is a major overhaul of the very infrastructure of this nation and of the taxation system, which to a very great extent has been a prime cause of the demise of business and of the situation in which more than one million Australians are out of work.

The annoying thing is simply this: when the Opposition takes real initiatives in this place and puts up real suggestions for debate, we get nothing but bucketing and denigration, and not even an indication that the Government is prepared to look at other propositions which in fact could help resuscitate the Australian economy. Government members are not interested; they do not have the policy directions; they are not prepared to think these things out; and we just go on from one disaster to another.

I wonder how many people sitting at home today out of work realise just what the present structure that the Government has lumbered Australia with does to them. I wonder how many of those people who do have jobs and who are on the average incomes realise what a tremendous taxation burden has been placed on them by this Government. It is interesting to analyse the weakness of the current taxation system. In the last Budget under the coalition, the income tax as a proportion of total revenue in the 1982-83 year was 62.5 per cent. In the latest Budget figures, the estimate of that take for 1991-92 is 69.8 per cent. The plain fact is that the burden of that taxation is falling on the average income earners of Australia.

It is all very well for Government spokesmen to talk about how much they have done on income tax reform, but the plain facts are these: we have had inflation in recent years; we have had wages growth; and those average income earners, those average Australian families battling to provide for their children, are in actual fact paying the bulk of taxation and are now paying some of the highest rates of taxation. This is because there has been absolutely no attempt to alleviate the strains that those high rates of personal income tax have caused to Australian families.

If we are concerned about Australian families and their desire to have jobs, we must be concerned about the state of Australian industry and its capacity to provide jobs. The burden is falling increasingly on individuals and companies, and we must look at company tax as a proportion of total revenue to see just what is happening to Australian companies. If we go back to the figures for 1982-83, we see that the amount taken was 10.8 per cent. If we compare that with 13.9 per cent this year, we see an increase of 30 per cent for companies. That gives us an indication of just what is happening in terms of the constraints on industry.

We are really quite crazy, because Australia is one of the few countries in the world that actually impose sales tax on their exports and export components. It will not be too long now before the coalition parties present to the people of Australia a package of major tax reform. There is a recognition that, if we are going to get jobs for Australians again and if we are going to get some wealth back into the community, we have to make sure that we fix business as well. If we are going to be competitive and if we are going to get back into those overseas markets, we must have in place a taxation system that allows Australia to be competitive again. The system that is being offered--including a goods and services tax, the abolition of sales tax, some real tax cuts for the average income people of Australia, and compensation for low income earners, all combined with a whole package of industry reforms--will at last give some hope to Australians once again.

It is absolutely incredible that individuals in Australia in 1982-83 paid $22,900m in tax and this year they had to pay $49,900m--more than double. It is incredible that in 1982-83 Australian companies paid $4,800m in tax and this year they will pay $13,500m--a threefold increase. That gives an indication of just how critical the reform of the Australian taxation system will be for Australia and for Australian families generally.

I mentioned a moment ago that if we are really going to get back into the export markets we have to make Australia competitive again. That is very true. The program of micro-economic reform proposed by the coalition will address that, with reforms of the waterfront, telecommunications and the aviation industry. It will certainly do it in terms of our industrial reform, but the Government has a real obligation, too, to keep its side of the bargain and to make sure that we get government expenditure down and right, and to make sure that we undertake this massive overhaul of the Australian taxation system.

I mentioned that Australia is one of the few countries in the world that have the capacity to impose sales taxes on inputs for exports. It is interesting to go through the latest OECD review and see just how those rates are applied. It is incredible to think that the effective tax rate on our export of transport equipment is 6.3 per cent; that we apply an effective tax rate of 4.6 per cent on the export of forestry, fishing and hunting products; 4.4 per cent on wood products; 3.8 per cent on repairs; 2.8 per cent on paper and printing; and 2.6 per cent on mining. One thing that this next coalition government will do is make sure that that sales tax component is taken right out of all export products. We have to make sure that that is one of the first things that we do as part of that taxation reform to ensure that we can be competitive with overseas products.

Never before has Australia been in such a disastrous situation. The Prime Minister comes in here day after day and is starting to talk about a 1993 election. I say to the Prime Minister that he has very little chance to reform the Australian economy and to try to provide some incentive back for Australian business in that short time. I suggest too that he looks at a report in the Australian newspaper today of a suggestion that John Halfpenny has made to the Prime Minister. The article states:

``I would suggest, even insist, that does give the trade union movement in this country some special rights, some special entitlements. . . so far as the performance of Labor in government is concerned,'' he said.

``Within the family of the labour movement, those who gave birth to the party have a right to expect Labor to govern with a bias that is distinctly in favour of the working class. . . the disadvantaged and oppressed.'' (Time expired)