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Wednesday, 1 April 1987
Page: 1857

Ms JAKOBSEN(12.18) —In speaking in this debate on the Appropriation Bills it is a pleasure to follow some of my colleagues who have already spoken, in particular the honourable member for Fraser (Mr Langmore), whom I heard. I wish to say how sorry I am that the honourable member for Forde (Dr Watson) has such a biased and unrepresentative view of this Government's capacity for compassion and caring. This is the most caring and compassionate government that Australia has seen for many years.

I would like firstly to express my confidence in the Government's economic policies and its capacity to place Australia on a more secure footing. I point out to the honourable member for Forde, with all his bleating about inflation and interest rates, that interest rates and inflation under this Government have never reached the heights that they reached under the Fraser-Howard Government. I am sure that many of my electors and other electors within Australia are already aware of this fact.

Mr Humphreys —Fancy talking about Malcolm Fraser!

Ms JAKOBSEN —That is right. It is hard to resist, though, in present company. I am certain that the Government's economic policies have placed Australia on a more secure footing. The commodities price reduction, or terms of trade downturn, which impacted so drastically on Australia's export earnings, was a crisis of significant proportions, given this country's reliance on primary industry. Many people on our side of politics have been pointing out for some years that the strategy of digging up Australia and shipping it overseas-or living off the sheep's back, as the Prime Minister (Mr Hawke) put it the other day-has not been a wise one. The terms of trade downturn showed that to be true. If Australia had had a more diversified economy and trade policy, the downturn in commodities prices would not have affected this country so badly.

Ironically, the devaluation of the Australian dollar, which so many people feared, ensured that our primary and secondary industries can now be more competitive on the world market. Now the necessary process of reconstruction of Australian industry is well under way, thanks to the efforts of the Minister for Industry, Technology and Commerce, Senator Button, and export growth is already occurring at an encouraging rate. To summarise: The Government responded quickly to the crisis imposed by the erosion of Australia's terms of trade and the associated fall in the value of the Australian dollar. It took the tough decisions necessary to improve the country's economic position and asked all Australians to tighten their belts. The `Buy Australian' campaign was launched to boost import substitution and thereby assist local producers and manufacturers. As a consequence of these actions and a concerted reduction of the Budget deficit, the Australian dollar has strengthened considerably and export growth is steadily improving. This strategy is already having a positive effect on the current account deficit.

The foreshadowed May economic statement will underwrite these improvements and pare government spending in non-essential areas. I look forward to a gradual but continuing stabilisation of our economy with consequent benefits to families, home buyers, businesses and workers. Of course, interest rates remain too high, but the Government has no intention of keeping them up artificially, as the Opposition would have people believe. On the contrary, every attempt has been made to reduce government demand for money so that the pressure on interest rates can be reduced gradually without adversely affecting the value of our currency.

I take this opportunity to mention our Government's excellent record on housing assistance, as evidenced by the housing package announced yesterday by the Treasurer (Mr Keating) and the Minister for Housing and Construction (Mr West). In the review of housing assistance measures, the Treasurer and the Minister for Housing and Construction said:

With the savings banks housing subsidy due to expire on 31 March 1987, the Government has reviewed the outlook for housing finance and activity. In so doing it has consulted widely with representatives of the housing and finance sectors.

As a result of this review, the Government has decided that:

it will not renew the subsidy arrangement with the savings banks;

the 13.5 per cent ceiling on savings banks interest rates for housing loans made prior to April 1986 should remain;

the Savings Banks Regulations will be amended to reduce the reserve asset ratio from 15 per cent to 13 per cent of deposits;

the income limits for the First Home Owners Scheme are to be raised;

They talked about public housing, which I will mention later. Their statement continued:

The decision not to renew the subsidy with the savings banks should be seen against the background of the very high level of savings banks' lending for housing-currently in excess of $9 billion . . . compared to $4 billion in the March quarter 1986.

As most honourable members will remember, there was a time when we were concerned that savings banks would not have sufficient funds to lend people who required money for housing. Accordingly, the statement continued:

The high level of lending is the direct result of the Government's decision on 2 April 1986-

which was much criticised by the Opposition then and now but was lauded, quite rightly, by members of the Government-

to deregulate savings banks interest rates on new housing loans. This has significantly improved the longer term profit prospects of savings banks, and has encouraged savings banks to compete aggressively in the market for housing loans.

. . .

. . . the Government's decision will enhance the competitive position of the building societies, enabling them to lend more.

If there was criticism of the Government position on subsidies to the banks, it was mainly from building societies. In my electorate many people have borrowed through building societies and some of these have said that they would prefer the building societies also to have a subsidy or that there be no subsidy at all to the banks. Now that position has been redressed, and I am sure the building societies are very pleased, as their borrowers will be.

The changes to the first home owners scheme are very important to the people in my electorate. Cowan is primarily an area of home buyers and 1,315 local families have been assisted by the first home owners scheme since it commenced in 1983. The change to the scheme that was announced yesterday by the Ministers will mean that even more families in my electorate will be able to access this particular form of assistance. The changes are twofold. They will provide significant help to first home buyers and will give a substantial boost to the housing industry-which of course means more jobs. The major beneficiaries of the revised income limits will be low and moderate income families presently experiencing difficulties in affording their own home and for the very first time more generous income limits will apply to families with dependent children. This is a particularly important initiative given the Government's emphasis on family support. The changes will mean that a significant number of families who would have been eligible for only a portion of the maximum assistance will now receive the full grant under the scheme. I will detail those changes as they appear in the Ministers' Press release:

Revised income limits to apply are:

applicants with two or more dependent children will be eligible to receive a $6,000 grant if their taxable incomes are less than $26,000, and for a reduced benefit for taxable incomes up to $34,000.

applicants with one dependent child will be eligible for maximum assistance of $5,500 if their taxable incomes are less than $25,000, and for a reduced benefit for taxable incomes up to $33,000.

joint applicants with no dependent children can qualify for a maximum grant of $4,000 if their taxable income does not exceed $23,000. A reduced benefit is available to taxable incomes up to $31,000.

The Ministers' Press release also covers single applicants without dependent children who can qualify for up to $4,000 if their taxable income does not exceed $11,500. A reduced benefit is available if their taxable income is less than $15,500. The Press release goes on:

The new limits for joint applicants compare with the previous limits of $20,000 to $27,900 and for single people from $10,000 to $13,950.

Mr Hollis —Keep up the good work.

Ms JAKOBSEN —Thank you. It is nice to see the honourable member for Throsby in the House. I heard his speech and I forgot to acknowledge it. I am terribly sorry about that.

The Government has recently made some changes to the amount of funds which will be available for public housing. In the same Press release the Minister for Housing and Construction and the Treasurer indicated that the Government has decided to provide $700m for public housing under the Commonwealth-State Housing Agreement to the States and the Northern Territory in 1987-88 and at least $700m a year will be provided to the States as grants from the Commonwealth in 1988-89 and 1989-90. They also say:

More than 40,000 public rental allocations and over 14,000 home loans are being provided under the CSHA this financial year. Public housing funding will also generate about 20,000 additional dwelling commencements.

As part of the $700 million funding level, the Local Government and Community Housing Program will receive at least $11 million a year, and the Crisis Accommodation Program $14 million a year, for the next three years.

The Ministers also state in their Press release:

The Government also decided to allow all States to nominate up to 60 per cent of the loan component of State Government borrowing program for public housing. This is available at the highly concessional rate of 4.5 per cent repayable over 53 years.

Obviously, this provision is a very strong incentive for State governments to become involved in public housing and to assist people on low incomes into affordable rental housing. The housing Press release makes it clear that the actual level of State Government borrowing programs will be determined at the Premiers Conference in May. I am certain that the Western Australian Government will be pushing very hard to try to nominate more than 60 per cent of its borrowing because it always chooses to put a lot of money into public housing. Many Western Australians benefit from this in terms of their economic situation. Housing is a very important factor in the cost of living and the way people cope with society and its pressures.

A job is also a crucial determinant of a family's economic welfare. Unemployment under this Government is now 8.2 per cent compared to 10 per cent when Labor first came to office. In the past four years more than 750,000 new jobs have been created across Australia. I recall the Prime Minister commenting in Question Time the other day that people were sceptical when this Government first promised to create 500,000 new jobs. Now we have exceeded that undertaking by 50 per cent and we have created 750,000 new jobs. In the electorate of Cowan, 38 community employment program projects have been approved including some sponsored by schools, community groups and local councils. State government departments also have an involvement in community employment program projects but these 38 community employment program projects do not include any of those. The projects have ranged from cycleways and tree planting to community research and construction. As a result of these projects many local people have had an opportunity of working and improving their chances of gaining other employment in the future. The community employment program is a very worthwhile program. I personally support almost every project that goes forward from my electorate because I know the value of people having a job, even in the short term, and its importance to their self-esteem when it comes to looking for work in the future.

The Hawke Government has worked consistently on tax reform since attaining office. An amount of $4 1/2 billion is being returned to taxpayers by way of tax cuts. The purpose of the tax reform process was to pull down high marginal tax rates and to restore fairness and credibility to the Australian tax system, which many people here will recall was being rorted by a large number of people in our society prior to that tax reform process taking place.

Tax reform has happened. Our tax cuts are a fact. They have already been paid for. Let us compare this record with the wild and boundless promises of the divided Opposition. They are without foundation as are their claims. They are illusory-they come and go; the members and the claims. The Opposition's strategy on taxation is one which resembles kite flying. It puts up a suggestion and waits for it to be shot down. Whoever is pulling the strings on this puppet Opposition has a very shaky hand indeed.

The Government has done an excellent job in an economic sense. I am very pleased to have the opportunity to speak on these Appropriation Bills. The inflation rate and interest rates are a concern to members of the Government as well as to the Prime Minister. We would like to see them brought down. We are doing everything possible to bring them down. I know that the Prime Minister will pursue this policy as will the Treasurer. The Appropriation Bills before the House deserve my commendation and also the commendation of all members of this Parliament.