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Wednesday, 4 November 1992
Page: 2568

Mr KEATING (Prime Minister) (4.46 p.m.) —It is a measure of the frivolity with which the Opposition regards this matter that the motion, having been moved by the shadow industrial relations Minister, the honourable member for Bennelong (Mr Howard), was seconded by the shadow defence Minister, the honourable member for Mayo (Mr Downer)—not by the Leader of the Opposition (Dr Hewson).

  Mr Reith interjecting

  Mr DEPUTY SPEAKER (Mr Ronald Edwards)—Order! I warn the honourable member for Flinders.

Mr KEATING —Not by the shadow Treasurer, the honourable member for Flinders (Mr Reith), who was sidelined in this debate. The only contribution of the Leader of the Opposition was basically inane interjections muttered under his breath across the table. That was his total contribution. That is how seriously the Opposition regards this motion that it should be moved by the honourable member for Bennelong and seconded by the honourable member for Mayo—not the relevant people.

  This motion is the censuring of a Treasurer. The motion was not moved by the Leader of the Opposition or by the shadow Treasurer, the person on the other side of the House with responsibility for Treasury matters. No, it was the honourable member for Bennelong. Honourable members are supposed to say, `Here comes the sage, 20 years in here. He remembers all the names of the 1970s'. He is trying to make these cheap points about 1975 which, of course, have no relevance whatsoever. He must have died when I referred to Budget Paper No. 4 from 1984.

  I could see him over there in Question Time rehearsing this little speech, telling us about here he was, and about Khemlani, mentioning all the names, trying to make this into a 1970s-type thing. Mind you, we heard about a temporary borrowing of one State, of one borrowing rolled into a medium term borrowing, as if that can be compared with any matters in the 1970s—any matters. There it is. He is thinking up all these things, so that if he becomes a historian of the period he can roll all the names out, and just as he was going through this, up pops his record. What does his record show? In the bureaucratese of the Treasury, it is the most damning indictment of his treasurership. It says:

The main fact of accounting for this development is the absolute haemorrhaging of Loan Council control over States borrowings was the decision at the meeting of Loan Council of 24-25 June 1982 to exempt from the trial period—

and it goes on—

. . . the borrowings of States.

So, there is the then Treasurer whose handiwork let the State authorities borrowings blow to pieces and who is rehearsing all these sorts of recitals of names from the Khemlani affair to find that, bang, here is his record right in front of him again.

  Of course, it is very interesting that in Budget Paper No. 4 of 1984-85 there is also a table. There is not just text, there is a table. The table shows that the Treasury had an outside Loan Council program. In 1979-80 it was $54m. By 1982-83 it was $1,900m—$1.9 billion—and on top of that there was $2.6 billion for the electricity authorities. So in 1979-80 there was $34m outside the Loan Council—$34m only outside the Loan Council—and by 1982-83 there was just on $5 billion. In other words, go for your life.

  When I became Treasurer, the Treasury said to me, `Treasurer, how can we hope to rein in the public borrowing requirement of Australia that is pulling back the deficit of the Commonwealth's recurrent Budget when the States are just free to borrow as they wish, to just let the stuff haemorrhage out the back?'. So, in other words, you cut back Commonwealth programs and, in doing so, deny people benefits and suchlike. And then you get it in and boom, out the back it blows with the States.

  But who put the policy there? The honourable member for Bennelong! He was the one until Question Time, until his record arrived, to give us a few bon mots from the seventies. Need I say that the Liberal Party always runs to type. I have shamed the Leader of the Opposition into an appearance—he is now appearing. Sorry, fella. You have given us the mover and the seconder. You have had your chance. You had the chance to put the priority on this and you put on the honourable member for Bennelong and the honourable member for Mayo. In other words, this was a matter of such import and such substance that you got not the shadow Treasurer but the honourable member for Bennelong and the honourable member for Mayo. You then hurled little interjections across the table, and then they called you from your office that I was on my feet. Of course I am, to make the point that you never regarded this as a matter of priority.

Dr Hewson —On a point of order—

Mr KEATING —There is no point of order. You are not debating this, mate.

Dr Hewson —It is such a rare occasion that he is on his feet.

Mr DEPUTY SPEAKER —I warn the Leader of the Opposition.

Mr KEATING —Mr Deputy Speaker, just to make the point: whom do the Liberals go and appoint to the Senate committee over there to actually go through the Loan Council processes? None other than Senator Baume and Senator Bishop. So you can see just how seriously they regard this matter. Then, of course, as the Treasurer made it clear, we find in their policy, Building a Better Federation:

We support the Federal system which distributes powers in a way which encourages participation.

Listen to this, Mr Deputy Speaker:

It acts as a barrier against centralist, remote and authoritarian control.

In other words, in the policy we do not want any of these Commonwealth controls; they are an abomination, they are centralist, remote and authoritarian. But we do want them under the Labor Party. Your hypocrisy and humbug is just profound. I mean, you are unbelievable. As I have been known to say in here, Mr Deputy Speaker, they would make a cat laugh.

  In other words, it was all right for the honourable member for Bennelong to let $5 billion or $6 billion of State borrowings run unhindered from the control and purview of the Loan Council. But there was one borrowing by a State which they contest and say is temporary, and which they contest the status of—one borrowing in a decade of tight controls imposed by this Government. Even on 2 November, the current Victorian Treasury—

  Mr Filing interjecting

Mr DEPUTY SPEAKER —I warn the honourable member for Moore.

Mr KEATING —says this:

On this basis the funding of the deficit was treated as temporary and was not reported for Loan Council purposes pending clarification of Loan Council treatment.

So there is the Victorian Treasury under Mr Kennett saying—

Mr Reith —Table the letter.

Mr DEPUTY SPEAKER —The honourable member for Flinders has already been warned and should not try the patience of the Chair.

Mr KEATING —that it regarded this as a temporary borrowing pending clarification of Loan Council purposes. And what did the Treasurer of this Government do? The right thing, and he did it quickly. In his letter, which he signed off on 27 July, he said:

Your officials have also indicated you may undertake further medium term borrowings. While I do not wish to canvass those issues in this letter I am sure that you appreciate that Victoria's actions and your proposals are not consistent with either the spirit or the letter of the Loan Council arrangements.

How more forthright can one be? He said:

In my view Victoria would need to have in place a clear and credible strategy to achieve such an outcome and that strategy would need to be accepted by other members of Loan Council. I suggest a meeting this week.

Then he went on to say on 7 August:

In any case the replacement on 1 May 1992 of the Treasury Bills with medium term borrowings should not have been undertaken without Loan Council approval.

Totally forthright. He went on to say:

At a minimum, as Chairman of the Loan Council, I should have been consulted.

He went on further to say:

The medium term borrowings undertaken on 1 May and those further borrowings which you foreshadowed in our discussions must have Loan Council approval, and I urge you to submit a formal proposal as soon as possible.

He went on further to say:

You indicated that the report being prepared by Don Nicholls would be available in mid-September and will provide an independent basis on which the strategy can be assessed. I look forward to being advised of the content and conclusions of the report as soon as it is available.

He said:

It should provide a basis for discussion between the incoming Victorian Government, the Commonwealth and other members of Loan Council on these issues.

That was on 7 August. On 14 August the Victorian Budget was presented and two days later the Victorian election was called. So what would you have the Treasurer of the Commonwealth do? Go out and say to a caretaker administration which had no authority whatsoever to borrow $1 on the marketplace that there was a borrowing left undone; see all sort of chaos in the financial markets about this authority, and a Treasurer of Victoria in a caretaker government, in an election campaign, totally powerless to do anything about it? Is that the sort of irresponsibility you would urge upon us? Is that the sort of irresponsibility you would urge upon this Government? We will have none of that.

  As the Treasurer said in his letter of 7 August:

It should provide a basis for discussion between the incoming Victorian Government . . .

Because he knew that the Treasurer needed the political authority of an election, the forthcoming election, to be able to sort the matter out in the context of a strategy. As it turns out, the Nicholls report was presented. The Nicholls report was published, and it was made quite clear that the $1.267 billion of borrowings was temporary and needed an application for its future.

Dr Hewson —It did not say that.

Mr KEATING —Well, it made a very clear reference to the $1.267 billion. Mr Deputy Speaker, where were the bloodhounds of the Liberal Party on that? Where were the Terry McCranns and the other great sleuths of Victorian financial accounts? Where were they? The thing is that they were asleep at the wheel. So here we have the report which the Treasurer urges be presented. It has actually been presented and is in the public marketplace. Then, at the first available opportunity, the incoming Government was apprised of these matters. We met Mr Kennett and his Treasurer, and these matters were dealt with the other evening. What more proper process is imaginable than the one undertaken by the Treasurer? The answer is none—absolutely, totally, thoroughly none.

  On the point about the Budget documents—and God, it makes me laugh when you talk about Budget documents; the stuff that you left out of Budgets! I mean, you could write—

Dr Hewson —You fiddled the last one.

Mr DEPUTY SPEAKER —The Leader of the Opposition should not interject.

Mr KEATING —on a postage stamp the amount of stuff you had in Budgets compared with today, and in the facsimile from the Victorian Treasury it says:

For inclusion in the Commonwealth Budget compendium—

the table, and it says:

* excludes $1,267m of temporary borrowing purposes. Treatment of the Victorian Equity Trust still under consideration.

In other words, there was no authority for the Commonwealth Treasury to publish that number as an ongoing borrowing, and it did not. Again, your charge against the Treasurer about the documents is totally without foundation. What does all this amount to? As Mr Kennett said eloquently on his lawn yesterday morning—

Mr Goodluck —On his lawn?

Mr KEATING —On his lawn when he did his interview, Mr Kennett said, `We want to get on with restoring the fortunes of Victoria'. You people have added to the cost of public debt interest enormously—by about $30m in Victoria. You are the people now calling into question the Victorian recovery. You are the wilful people trying to say that you are now fighting in Victorians' best interests; that is, you are wearing down their best interests in your own shabby interests. The Treasurer has no case to answer. The frivolity of the censure motion was demonstrated by the people who moved and seconded it: a former Treasurer who let the Loan Council processes criminally haemorrhage and a front bencher in the historical context of no account. That is who moved and seconded the proposition. We reject it absolutely. I move:

  That the question be now put.