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Wednesday, 21 September 1983
Page: 1105

Mr BURR(5.26) —The crucial test of any government's Budget or program must be the contribution that it makes to economic and social improvements in this country. If we take that as a benchmark to test how a Budget performs to improve the economic and social conditions in this country we would have to agree that the present Government's Budget is a miserable failure. It improves neither the economic conditions nor the social conditions of Australia. Furthermore, it does not give any hope that those factors will improve in the future. On that test I think we would all have to agree that the Budget presented by the Treasurer (Mr Keating) is a miserable failure.

In my contribution to this debate I will look at some of the factors that have been included in the Budget, the effect it is likely to have on the economy and some of the ideology that has led to its formation. We have just heard from the honourable member for Chisholm (Ms Mayer) and from other speakers on the Government side what they consider to be the advantages of this Budget. It seems to me in listening to speakers from the other side of the chamber that the Australian Labor Party is very intent on how it should distribute wealth in this country. It comes up with a great many formulas to show how wealth should be distributed but we have to remember that before wealth can be distributed it must be produced. The Government and members on the other side of the chamber are trying to distribute an ever decreasing piece of cake. What we need in this country is programs that will increase the size of the cake so that more wealth is available for distribution. I urge the Treasurer, the Prime Minister (Mr Hawke) and my friends on the other side of the chamber to apply their minds to how the Commonwealth and the economy of this country can be expanded so that everybody can benefit from the greater wealth.

There are a number of things on which I believe the Government has been quite deceptive in the way it has presented its Budget both to the Parliament and to the people of Australia. I will spend some time looking at some of those things. Firstly, we have been told repeatedly by the Treasurer and by the Prime Minister that this Budget will help to improve general economic conditions in Australia. I for one and others on this side of the chamber would certainly contest that statement. Let us look at some of the major factors that affect the economy. Firstly, I refer to interest rates.

Mr Gear —They have come down.

Mr BURR —My friend the honourable member for Tangney says that interest rates have come down. We need to look at why they have come down. The Government has made the spurious claim that because banks have reduced interest rates on housing loans and other loans it is an indication that the economy is improving and, therefore, it is something to crow about. How deceptive that is. The banks and the financial institutions at the moment are being forced to reduce their interest rates because they are so flush with funds that people have no confidence to borrow money. Business does not have the confidence to expand. The banks have so much money in their vaults that they are forced by the sheer rate of demand to reduce their lending rates. It is not something of which to be proud. It is a matter of grave concern for all of us in this chamber.

If there is such a vacuum of demand both in the business community and amongst private citizens in this country that they have simply no confidence to borrow money for future expansion, we should be gravely concerned and not crow about that as though it were some form of achievement. I suggest to my friend on the other side of the House that he look far more closely at the effects of the reduction in lending interest rates. I consider it to be one of the major matters that should concern the Government. I hope that the Government is privately paying far more attention to and is far more concerned about that reduction in interest rates than it has shown in the House.

We all know that the banks are very flush with funds at the moment but we also have evidence that business is devoid of the confidence to expand and to borrow money for future expansions and job development. That point was indicated quite clearly by the survey jointly conducted by the Westpac Banking Corporation and the Confederation of Australian Industry. That survey was published earlier this week. It showed quite clearly that business has no confidence about future developments and about the prospect of industrial development in this country. That is a matter of very grave concern and it is one of the factors causing this buildup of funds in the banking and financial institutions.

Another matter of grave concern is the blow-out of the Budget deficit. We were told by the Treasurer that again this is some form of achievement. He seemed to indicate in his Budget Speech that, had things remained equal and had the Government been able to do what it perhaps wanted to do, the Budget deficit would have been close to the order of $10.5 billion. He seems to think that it is some sort of achievement that the Government has been able to reduce that figure to $8.63 billion. I remind the House that we are talking about a debt of $8,361m that the people of Australia will have to repay through their taxes in the future. That must have the obvious impact of forcing up interest rates because it puts pressure on private financial institutions, again limiting the capacity of business to be able to borrow from those institutions, limiting the capacity of businesses to expand and, therefore, limiting the opportunity to create new jobs in the future.

The Government, quite fallaciously, seems to think that this is some sort of achievement. I quite honestly cannot work out that mentality. It is something that all of us here should be gravely concerned about. We should not put it forward to the people of Australia as some sort of achievement. We all know that Budget deficits are the scourge on this or any other developed country. Yet it is put forward that this Budget deficit, which is far greater than anything this country has ever known, is some form of achievement. That theory is quite wrong and quite misleading.

I shall press on with other factors. We all know that inflation will limit the capacity of this country to compete in export markets. We all know that high inflation will limit the capacity of the economy to grow. Other economies with which we trade, particularly America, Japan and some of the European countries, have been able drastically to reduce their rate of inflation. Full credit should go to them for being able to do that.

Mr Gear —Why couldn't you?

Mr BURR —Why can the present Government not do that? We are not the Government; we are the Opposition. Why do government members try to pass the responsibility on to us? Opposition members would love to be able to put forward a program that would reduce inflation. Government members are putting forward a program that will force inflation even higher. I fail to understand why they think that that is some form of achievement. The Government is locking this country into high inflation-inflation at least in the order of 10 per cent-at a time when the Americans, the English and the Japanese are able to contain their inflation rates at around 4 per cent. That must have the effect of making all Australian industries, whether they be primary industries or manufacturing industries, less competitive on world markets, and it must also have the effect of putting more people out of jobs. Why Government members think this is some sort of achievement, I cannot understand.

Mr Goodluck —They do not understand themselves.

Mr BURR —I quite agree with my honourable friend from Franklin; they do not understand. As I said earlier, the Australian Labor Party spends a great deal of time determining how to distribute wealth, but it spends very little time determining how to create wealth. This Budget breaks totally new ground. I warn my honourable friends on the other side that it is a very dangerous precedent. The Government has indexed certain benefits in the Budget. That is new ground; it has never been done before. The Government has indexed certain social welfare benefits-unemployment benefits and certain pension benefits. That has never been done before. The Government is locking this country into high inflation. We cannot avoid high inflation by doing that. We on this side of the House hope that Australia's inflation rate can be reduced to the level of that of our trading partners and, hopefully, that it will go lower. But this precedent that the Government has introduced can only have the effect of locking us into continually high inflation. It seems that the Government is content with an inflation rate of around 10 per cent.

On the social and economic front, I am sure that all of us in this chamber share a common concern about unemployment. I agree with my honourable friend from Burke (Dr Theophanous) that all of us share a common concern about the scourge of unemployment. I hope that the Budget and other programs that the Government is putting forward will have the effect of reducing unemployment. I for one commended the Prime Minister during the election campaign when he said: 'We will create 500,000 new jobs'. I am sure that all Australians looked to that promise with great hope. We all commended him and look forward to his being able to achieve the ambition of being able to create 500,000 new jobs.

Mr Goodluck —He did not con you, did he?

Mr BURR —No, he did not con me. I wished him the best of luck in his ambition. The Labor Party very obviously realises that on its present program it will not be able to produce those jobs so it is introducing a scheme to try artificially to create jobs, to give the impression that jobs will be created. The Government introduced the community employment program on the basis that this is job creation. It is not; it is total deception. The Government is increasing the rate of taxation to provide make-believe jobs for up to 12 weeks. Those will not be productive jobs that will expand the economy. That scheme will deceive people for 12 weeks; then they will be back on the dole queues and we will be left with higher rates of taxation and higher inflation. The Government is forcing more people out of existing jobs just to create temporary, illusory jobs. That is the effect of what the Government is doing. Again the Government seems to think that that is some form of achievement. Clearly, it is not. I am glad my friend from Denison agrees with me.

If we look further at employment what statements do we find coming from some of the leaders of our industries? I remind honourable members of a statement by Mr Graham Spurling of Mitsubishi Motors Australia Ltd. He predicted only a few weeks ago that from 5,000 to 10,000 jobs will be lost in the motor vehicle industry.

Mr Hodgman —Shame.

Mr BURR —It is shameful. But this is what is happening. I think Mr Spurling could well be right. Nothing is being done in this Budget or any other government program which tries to stabilise that company or any other existing manufacturing industry. What this Government and the unions are doing is ensuring that these companies will become less and less profitable and, therefore, less and less stable. I think this was a matter of extreme concern at the Australian Council of Trade Unions congress last week and it has now been endorsed by the Government. As a result of the combined forces of the Government and the ACTU we can look forward to a program of unrestrained wage rises in this country which, as the former Treasurer in the Whitlam Government, Mr Crean, said , will have the effect of one man's pay rise costing another man's job. To look behind why this is happening I think we need to go back to the Australian Labor Party conference in Adelaide in July 1979. One of the resolutions that was passed at that conference was:

The new Platform commits an ALP Government to supporting 'the automatic quarterly indexation of wages and salaries in accordance with movements in the Consumer Price Index'.

That is what an ALP organisation commits-not recommends-an ALP government to. If that happens this country will be locked into not existing rates of inflation but higher and higher rates of inflation which, I believe, will force unemployment in this country up over the one million mark. That must be of grave concern. The wage round that we see presently occurring ensures that wages are increasing by around $20 a week. That is happening with the active acquiescence of the Government. We have heard a lot of rhetoric from the Prime Minister and other Ministers that they are seeking to have wage restraint. Yet they are actively supporting the ACTU in a $20 a week wage round that is now flowing through all awards.

Mr Hodgman —That is scandalous.

Mr BURR —I agree that it is scandalous. It will be disastrous for this country. What we see now is not the fear that was expressed earlier this year by the Prime Minister that wage rounds may be pursued by a few maverick unions, but the total ACTU actively pursuing excessive wage increases. This was summed up at the ACTU congress by Mr Bill Kelty who said that the ACTU, in concert, would be pursuing a 4.3 per cent wage rise. As we were reminded by that well-known left wing union leader, Mr Laurie Carmichael, if employers did not pay up then the unions would wring it out of them.

Mr Goodluck —Is he left wing?

Mr BURR —He most certainly is left wing; he is one of the leaders in the left wing. There are other matters to which I would like quickly to refer, particularly the effect of this Budget and what has not been done for Tasmania. During the election campaign we heard a whole diatribe of commitments from the Prime Minister. He made all sorts of unrealistic promises about what he would do for Tasmania if he were in government. What we are seeing now is a total back- off from what he said. People in Tasmania now know that they simply cannot trust him. For instance, he came to my electorate spouting from the rooftops that he would build the Warners Creek dam. We commended him for that. But, rather than build any dam in Tasmania, he stopped all dam construction. We know that there are dams in Tasmania that we do want built. The Prime Minister committed himself to building these dams.

Mr Hodgman —The Craigbourne dam.

Mr BURR —As my colleague from Denison has said, he committed himself to building the Craigbourne dam. We were looking forward to these dams along with other dams in Tasmania. But we know now that we simply cannot trust what the Prime Minister says.

Mr Hodgman —Sewerage works.

Mr BURR —He promised sewerage works. He also said that he would commit money towards the development of fishing ports in Tasmania. What has he done? He has left it to the State Government. He has left it to Robin Gray and the State Government to pick up these projects. These were the promises made by the Prime Minister during and even after the election campaign. Now he has totally backed off. We know that we cannot trust him. I can assure honourable members that we will be reminding all the people in Tasmania in the future that they cannot trust this particular Prime Minister.