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Tuesday, 27 May 2003
Page: 15109

Mr KATTER (8:22 PM) —I rise to speak in this debate on Appropriation Bill (No. 1) 2003-2004. The Treasurer in this budget has balanced the books and has received accolades for so doing. It is a measure of just how intellectually super featherweight the media of Australia and the commentators are that they have praised him for balancing the books. I am most certainly a conservative when it comes to economics, and I like treasurers that balance the books, but I do not like treasurers that cannot balance the books of our nation. Because, whilst the books of the government are balanced—and this makes the Treasurer look wonderful—the books of the nation, if he has not noticed, are slightly out of balance. They are out of balance to the tune of $40,000 million a year! On the basis of the figures available for the first half-year of the current financial year, with each year that is going by the country is rolling up a debt. Let me be very specific: it was $20.9 thousand million for the half-year. So, on an annual basis, we are talking about $42,000 million a year.

To put that in perspective, let me go to another who is my authority for making such a comment: the current Prime Minister of Australia, who is a man I have very great respect for. Let me quote him from 11 July 1995, at a business community breakfast in Perth which was recorded by the media. John Howard said:

Of course the overwhelming economic problem, the economic challenge above all else ... is our continuingly, damagingly high current account deficit. ... just over nine years ago, the Prime Minister—

he is referring to Mr Keating—

declared that unless something was done about our current account deficit, this country was in danger of becoming a banana republic.

For the people on my right here, the ALP, let me quote Paul Keating, because Paul Keating said in 1986 that we were in danger of becoming a banana republic. We were running a current account deficit then of $11,000 million a year. So, if we were a banana republic when we were running a deficit of $11,000 million, I leave to your imagination what we are doing when we are running a current account deficit of $40,000 million a year.

Mr Secker —You know you don't understand economics, Bob.

Mr KATTER —You interject, and I absolutely love you to interject, because I say without any equivocation or apology to you, my friend, that I most certainly do. If you stay here for long enough, you might learn a tiny bit about economics.

The DEPUTY SPEAKER (Ms Corcoran)—Order! I would ask you to address your remarks through the chair.

Mr KATTER —Madam Deputy Speaker, the figure is $42,000 million. When Mr Howard said that in 1995, the current account deficit for that year was $16,000 million. Maybe the member from South Australia interjecting should have a quiet yarn with his leader, because his leader was saying that, when the current account deficit was $16,000 million a year, it was a `continuingly, damagingly high current account deficit' which `of course' was `the overwhelming economic problem' and the most challenging economic problem `above all else'. So, my friend, if you are questioning my soundness in these observations, all I am doing is quoting your leader to you. You had better go and have a quiet yarn with him. Anyway, stay on; you might pick up a few pieces of wisdom about economics, because we are going to talk about economics here.

In the whole of Australian history up to 1983, Australia had rolled up a collective debt of $25,000 million. We are now rolling up a debt every half-year of $21,000 million. Clearly, I do not have a great deal of respect for Mr Keating—and I do not say that lightly, because I think some of the Labor leaders of the past, such as Chifley and, particularly, Theodore, are some of the most outstanding men in our history. The debt is now $354,000 million and rising. The Liberals came to power with a debt truck that wandered around Australia—quite rightly so, in my opinion—having upon it the figure of $191.9 thousand million dollars. It was horrific, and they should have been voted into office. Yes, they were right in that contention. And they have taken that debt from $192,000 million to $354,000 million!

I think one of the problems in this place is that many of the Liberals on the left-hand side—the government—represent very wealthy electorates where they do not come across people who are in pain or who are ordinary people, and that pain is not communicated to them and they are inured to it. On the other side of the House, we have people that, in the main—and there are some notable exceptions, as there are on the other side—think it is very simple: you just take this money off the rich and give it to the poor. We will see the result of their handiwork as my speech continues.

I see in my own hometown of Cloncurry that we have had some new businesses open up. We have had three second-hand shops open up, we have had a motorbike shop open up and we have had two bicycle shops open up. Madam Deputy Speaker, you can see where we are going here: it is moving downmarket. We have had two of our motor dealerships close down. In a two-week period last month, we had three suicides in the sugar industry in North Queensland. I remember asking six people in the bar one afternoon whether they were better off than they were back in the eighties, and five of them said no. We were recently re-forming rugby league. We cannot get—and nor can any of the towns in the area afford any longer—paid players.

This is all interesting anecdotal information. We heard constantly trotted out in the years of Mr Keating, and now hear again in the years of Mr Costello, how wonderful the unemployment figures are. I have a problem with this. The unemployment figures went down in 1982 from a high of 715,000—which was about 11 per cent, if my memory serves me correctly—to 634,000 by the year 1999 and we could say, `There's a wonderful reduction in the unemployment figures; we have brought them down by 81,000.' That is all very well if you make a superficial analysis, but if you, in fact, check up on some ancillary figures such as the increase in the number of people who are totally permanently incapacitated in Australia you suddenly realise that we have a great outbreak of bad backs and migraine headaches and 361,000 people have suddenly gone on to the TPI pension. All that has happened is that we have just shuffled people from one column to another column.

To demonstrate the nature of the unemployment figures it is important to bring the attention of the House to the Sydney Morning Herald of 7 March 1998, in which the then community services minister, Larry Anthony, said:

There are 1.3 million on unemployment benefits. To this figure, we add 300,000 unemployed partners who obtain the dole via their partner, usually male, and the 400,000 unemployed who cannot claim the dole because of the assets and means test.

So what the minister was saying, and he is a very honest and very decent person, is that the number of people who really are unemployed in this country is around two million. On 25 February 1999, the Sydney Morning Herald journalist Tom Allard said:

A million more jobless reveal the true state of Australia's jobs market, which was exposed yesterday with the release of figures showing 1.7 million people want work that can't find it. This is almost a million more than the numbers officially recognised as unemployed.

On 9 April 1998 Ian Henderson, political correspondent of the Australian, said:

The jobs crisis is now so acute that 2.5 million people are unable to find work. Yes, that figure is three times the usually cited number.

Let me continue, because I think this is important. On 6 July 1996, Terry McCrann, the leading economics journalist of the Australian, said:

So that for want of a better term the jobless problem actually directly hits a staggering 2.5 million Australians. Official jobless—800,000, hidden unemployment—1.2 million, 500,000 under employed, leading on to claims that the official jobless figures are some sort of gigantic cover-up.

Is every economics commentator in the country incorrect? Are the figures that are trotted out in this House correct? Not all of them can be correct, that is for certain. We praise Minister Anthony for being as honest as he has been in divulging those figures.

The current Treasurer has the ignominious honour of being the highest taxing Treasurer in Australian history. I must say, in fairness to him, he has little alternative. The social security and welfare component in the budget has leapt from $14,000 million in 1982 to $69,000 million in 2002. It is a huge item in the budget. In the term of the current Treasurer, we are talking about a $20,000 million increase in social security and welfare. I praise the Treasurer insofar as he has not made attempts to cut back on these payments to the poor. But why is this huge explosion occurring? Why suddenly do we have to pay twice as much and allocate to the taxpayers of Australia twice as much for social security and welfare bills, which at $70,000 million are a pretty fair proportion of a budget of 198,000 million? I am including the GST of course and I will come to that in a moment.

We have the unemployment figures, we have this massive increase in social security and welfare payments and, finally, we have the household savings ratio. In 1984, it was 12.9 per cent; it is now minus 0.5 per cent. This is arguably one of the lowest in the OECD, if not in the whole world. Australians are not saving; they are actually going increasingly further into debt every day. These three economic indicators indicate to me what I already know. If you walk the streets of any town in my electorate—and, quite frankly, if you walk streets of Melbourne, Sydney or Brisbane—you would get the same results amongst ordinary people as opposed to the rich people.

Having said those things, I need to be a little bit specific when I make the claim that the Treasurer is the highest taxing Treasurer. If you add the GST of $31.7 thousand million to the figures that are levied in the budget of $166.38 thousand million, you will get $198.1 thousand million, which is about 27.9 per cent—if my memory serves me correctly—of GDP, which is easily the highest percentage of GDP in our history. The Treasurer tries to argue that that is a state government tax. I am sorry, Mr Treasurer; you are imposing that tax, not the state government. The fact is that you gave it to the states on the condition that they reduced their taxes. I am sorry, but you have made a big mistake. If you thought the states were going to decrease their taxation, you believe in the tooth fairy, as I said in this place at the time.

Now we know that they have reduced their budgets. They have reduced them by a minuscule $5,000 million dollars; that is, up to last year. Almost certainly, the budgets for all the state governments throughout Australia will increase by over $5,000 million this year, so in actual fact they never reduced their budgets at all. In real terms, there may be some reduction because of allowing for CPI, but we are talking about an infinitesimally small amount of money. What happened was that the GST was a straight cost add-on to the taxpayers of Australia. Where has this all come from? How did we end up in this dreadful situation? In the final year of the great John McEwen, we had a current account surplus. There was a 49 per cent increase in GDP over a 10-year period. Why are we suddenly in this situation?

I must just add one thing here. The Treasury can argue that average weekly earnings have increased over the last 10 years, which is mostly the period of this government in office, and they have—they have improved by seven per cent. That is minuscule compared with the last 10 years of the McEwen era, when they increased in real terms by 49 per cent, and it is a hell of a lot better than the Keating era, when they went down by 1.2 per cent. But this seven per cent amazed me, because I really do not believe that anyone is better off—most certainly the average Australian has not been better off over the last 10 years. I got to thinking about this, because average weekly earnings have definitely in real terms gone up. But, of course, there are two issues that are not factored in. One is the massive increase in taxation, which takes $16,500 off the average Australian's income. Because most of it is taken indirectly, of course, they do not notice it quite so much and it is not so obvious. There is a further $3,000—$2,989 to be exact—to pay off that extra net foreign debt. If you keep rolling up extra debt each year, it costs you extra money to service it. So the average Australian is $19,528 worse off because of these two factors: this massive increase in taxation over the period from 1984 to 2003, and the increase in the servicing of this huge extra debt burden.

Average weekly earnings in 1984 were $19,000 and by 2002 the figure had risen to $45,136. The CPI increase over that period was 79.8 per cent—which accounts for $15,225 from the increase in average weekly earnings of $26,000. If you take the $19,000 in extra tax and extra debt servicing from the increase in average weekly earnings, you are already down to $6,576, but you have lost another $15,000 because of your CPI. So the average Australian is a whacking great $8,500 worse off than they were before.

That is the reason why, overall, we are not the happy nation that we were many years ago. Where did this come from? It started with Mr Whitlam. He made a 25 per cent, across-the-board cut in tariffs that absolutely devastated manufacturing in this country. You might want to argue about the long-term benefits, but to quote the great John Maynard Keynes, `In the long term, we are all dead.' There is no doubt in my mind that Whitlam's was the first, mortal blow that was struck. Malcolm Fraser then went on the very straitjacketed, monetarist approach of Milton Friedman—that you have got to match money supply growth to the growth in goods and services. That is a reasonable proposition for an academic, but we here would like to think that by manipulating money supply—injecting borrowings, if you like—into certain parts of the economy you can show extraordinary growth in goods and services. In fact, your effect can be deflationary. Even a cursory glance at the works of John Maynard Keynes in the Great Depression, John Kenneth Galbraith, the leader of the New Deal economists in the United States, the German economist Dr Schacht or, right here in Australia, someone I consider easily the greatest man in Australian politics, Theodore—if he had been listened to, but he wasn't; we listened to Dr Niemeyer from the Bank of England—would show you. If you research what those men did in each of their countries in the era of the Great Depression, you would realise that there is enormous opportunity for using that borrowing power to do really wonderful things.

I saw that so vividly in my home state of Queensland with people like Bjelke-Petersen borrowing the money to build infrastructure to make our coalmines easily the cheapest producers of coal in the entire world, and, similarly, in the sugar industry, with the delivery systems and movement systems that we created by investing that money. (Time expired)