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Wednesday, 20 March 1985
Page: 475

Senator SHORT(12.10) —I am honoured and delighted to have been elected to the Senate as a representative of the people of Victoria. I assure all Victorians that I will strive at all times to work in their best interests and in the interests of our State. I will travel widely throughout the State, and seek a wide range of views on the issues which concern Victorians and Victoria. I congratulate the other newly elected senators, from all States and all parties. I look forward to working with them and with other senators in the important tasks we face as members of this Thirty-fourth Parliament.

I also take this opportunity to thank those many people, both within and outside the Liberal Party, who have provided such wonderful support and encouragement to me, from the time prior to my preselection, to my election and since. In particular, I thank my wife, Jan, and my family.

The Senate plays an essential watchdog role on behalf of the basic rights and freedoms of all Australians, and over the excesses of executive government. Any attempts to weaken or dilute that role, or the responsibility of the Senate, must be vigorously resisted by every member of this chamber.

I have returned to the Federal Parliament after an absence of more than four years, having been the member for Ballarat in the lower House for five years prior to 1980. Those four years spent in the private sector, away from active politics, have clearly brought home to me the fact that the electorate is very cynical about politics. The people of Australia simply do not believe that political parties or politicians are committed to firm political principles. The electoral rebuff the Labor Government suffered on 1 December was due, importantly, to the fact that the electorate saw the Government as governing on the basis of expediency rather than principle.

The electorate demands, and deserves, much more from its politicians. Australians are desperately looking for leadership based on firm principles which they understand and which accord with the long-standing basic values of our society and the desire for growth, stability and security in an increasingly unstable world.

I wish to use the unique opportunity provided by a maiden speech to state the broad principles which will guide me as a Senator; and to apply these principles to some of the major issues which I see as important to the future of our nation. At the time of my preselection as a candidate for the Senate I said, without qualification, that the political principles which motivate me are those of a Liberal who believes passionately that it is people, through the economic freedom of the competitive market, who have built our nation, not governments. This view of the fundamental importance of the role of the individual in our society extends to all areas of human activity. It extends beyond economic issues. It goes to the core of those other issues about which Australians today have such great concerns. I refer to the role of the family in today's society, the quality of education, the values and attitudes of our people, the future of our younger generation, and pride in our nation and our endeavours. It extends to the values, the legitimacy and the rights of private enterprise and property ownership, of social cohesion, of taking the best from the past and building on it for the future. It extends also to thrift, to reward for effort in whatever field of endeavour, and to self-help and family responsibility.

The great majority of Australians want a vigorous assertion of a new and creative kind of liberalism based on these issues and values. There is a mood of change throughout much of the Western world. There is a return to some of the basic values which we neglected in the 1960s and 1970s. The spectacular electoral success of President Reagan and Mrs Thatcher owes much to their unflinching demonstration of their commitment to free enterprise, smaller governments, lower taxes, strong national defences and traditional values. This mood of change is also happening here. Any political party which ignores this fact is out of tune with contemporary Australia.

The intellectual debate on these issues needs to be vigorously pursued in the market-place of ideas by those who believe that individual freedom of choice is the fundamental virtue of a democratic society. This debate must include a strong exposure of two of the dangerous hoaxes that have been foisted on the Australian community in recent years. I refer to the concepts of consensus and corporatism. The concept of consensus ignores the fact that in our community there are numerous differences, many of which are simply not reconcilable. The danger in consensus lies in agreements being reached on a lowest common denominator. That is the path of mediocrity, of suppression of opportunity and of abdication of political leadership. Consensus is a myth. It implies harmony, but where is this harmony? Is it with the 25 per cent of young people who cannot get jobs, the pensioners who are to undergo assets tests, or those communities, both Aboriginal and non-Aboriginal, involved with land rights? Is it with those small unions and their members who are losing their individual freedoms under the guise of the prices and incomes accord, the chronically ill who are forced out of hospital after 35 days, or those average wage earners who now pay 47c tax on every extra dollar earned? Of course it is not. Consensus is a myth. It may also well be a substitute for a lack of conviction that the elected Government has in its own policies.

Corporatism in Australia has inhibited the free and wide-ranging expression of views. It has been used by the Government as a device to railroad through its own economic policy objectives. It has ignored the views of the great mainstream of Australians who are not part of the corporate state. Last year the Prime Minister (Mr Hawke) described Australia as a successful corporatist state. Did he really mean that? If he did, he was saying in effect that individualism in this country is dead and that it is a good thing that individual interests are being submerged by the dominance of a small number of groups of politically organised and powerful interests to the exclusion of the views and aspirations of the majority. I wonder how many Australians would agree that that is a desirable state of affairs.

I now wish to apply some of the political principles I have mentioned to a few of the vital economic and social issues which face us. Underlying these issues is the basic question of the appropriate role of government in the Australia of the 1980s and 1990s. Australia today is inextricably linked to the international economy. There is no way we can avoid this; nor should we. If we manage our affairs correctly we stand to gain a great deal domestically. We will also enhance firmly our stature as an independent nation. If we do not recognise that we are part of the international economy and adopt appropriate policies, we will face an inevitable progressive decline in our living standards, our quality of life and our independence.

The essential prerequisite for a better society is economic growth. Only through economic growth can the living standards of an expanding population be improved and new jobs created, and wealth and income created to meet the needs of those in our community who require support.

Australia lags behind most other Western nations in economic growth rates. Only a generation ago Australia had the fifth highest standard of living in the world. Today we rank about twentieth and are rapidly being overtaken by many other countries, including the newly industrialising countries. Why is this so when we have a wealth of natural resources, a skilled work force, a stable political system and a host of other advantages which should have kept us near the top of the growth table rather than towards the bottom? There are several reasons. We have not capitalised on our natural advantages to produce those goods and services that we are best at producing. We have tried to produce too wide a range of goods and services. For too long we have ignored the fundamental economic principle of comparative advantage. We have been unwilling to remove the rigidities and the roadblocks in our economy which raise our cost structure and prevent our resources being used as efficiently as they should.

We have allowed government to become too large and too intrusive. We have too much government and too much regulation. Each of these is a major drag on wealth and income-creating productive enterprise and a major destroyer of personal incentive and innovation. Between 1960 and 1980 some 49,000 new Acts and regulations were introduced. Many of the regulations escaped the scrutiny of Parliament. Each one of them imposed heavy costs on the community and particularly the business sector, large and small businesses alike. This financial year the public sector in Australia will absorb almost 45 per cent of our total national production. As recently as 1970 it was 32 per cent. In 1960 it was only 28 per cent.

Growth in government can be financed only by taxes and borrowings, and both have increased staggeringly over recent years. Thirty years ago, in the mid-1950s, an adult male on average weekly wages paid less than 20c tax on each additional dollar he earned. Today he pays 47c in the dollar. Average tax on each dollar earned has increased two-and-a-half times over this period. Let us look at the income tax burden in another way. In the mid-1950s the top rate of personal income tax began at an income level 18 times average weekly earnings. Today the top rate begins at an income less than twice average weekly earnings.

But that is not the end of the story. Not only has the tax burden increased seemingly uncontrollably; so has the debt burden-and under successive governments. In the past two years alone the Labor Government has borrowed an additional $15,000m. That is approximately $1,000 for every man, woman and child in Australia. The interest bill on Federal Government debt in this year alone is $5,600m. That is more than the Government spends on education and it is almost as much as it spends on the total defence and security of our nation. When State and local government borrowings are included, the total public sector deficit this year is 8 per cent of gross domestic product, twice the figure it was only two years ago. These levels of borrowing are dangerously high. They weaken confidence in our currency. They produce political instability. They make interest rates higher than they should be, thereby discouraging productive investment. They damage the prospect of any meaningful tax reforms and they leave both ourselves and future generations with a huge legacy of debt to repay, with interest. Government borrowing is simply a form of deferred taxation.

It is imperative that these trends be reversed, and reversed quickly. They can be if government has the political courage to reduce its share of the total national cake. The only reason governments tax and borrow is to pay for their spending programs. Hold government spending and we hold taxation and government debt. But it is not sufficient merely to hold government spending at its present share of our national product, because that share is now the biggest in our history and, therefore, the tax burden and the debt burden are the highest in our history. We must reduce these burdens, not just hold them at present levels. If the Government is determined to reduce these burdens, there is no reason why it cannot reduce its spending. The private sector has been forced to do so in recent years in the interests of efficiency and, in many cases, its very survival. Why should the private sector, through taxes and regulations and other government-imposed costs, be sent to the wall while governments spend seemingly without any constraint?

But the Government does not need to go even as far as to reduce its actual spending. All it needs to do is not to introduce new programs or more extensive services than already exist. Even a real increase of one to two per cent a year in government spending, to take account of new recipients under existing programs, would produce a progressive decline in the share of government spending in gross domestic product, assuming economic growth at the average rate of the past two decades. This objective should not be difficult to achieve, given political courage. However, the Labor Government's performance over the past two years does not provide grounds for much hope. If the Labor Government continues over the next three years to increase its real spending at the same rate as in the past two years, about 7 per cent, total government spending over those three years will be at least $25,000m more than it would be if spending increased by one to two per cent. No wonder the Labor Government is looking at more and more ways to increase its revenue.

That brings me to the so-called tax summit. It will not be possible to achieve any meaningful tax reform unless the overall tax burden is eased, and that is not possible unless the total share of government spending is reduced. I therefore urge the Government to call a summit on expenditure before the summit on taxation. This expenditure summit should look at both the total level of government spending and a comprehensive review of the effect of government spending programs. For example, government spending on education, health, social security and welfare has trebled in real terms in the last 20 years. What the taxpayer and the community in general are rightly asking is whether the nation's literacy, security, health or ability to care for those in need has increased proportionately. The answer must surely be a loud no, and surely we must ask why.

There are other areas of expenditure the effectiveness of which in furthering desirable economic objectives must be questioned. The Human Rights Commission is one and the Commission for the Future is another. Programs being proposed by the Australian Bicentennial Authority also suggest that savings could be made in this area. The potential list is very long. Unless the Government sets explicit ceilings on its expenditures, the hastily conceived and politically motivated tax summit will be not only a waste of time; it will be a farce and, worst of all, highly divisive. There are several other dangers in the tax summit. The most worrying is that it will look at tax reform in a vacuum. It will neglect the expenditure side of the equation. It will also not form part of any integrated approach to national policy formulation, which should include wages policy and social welfare policy.

If we are to make real and worthwhile policy advances to reduce the scourges of unemployment and poverty in Australia, the interrelationships between the taxation system and these other areas are crucial. A primary aim of social policy must surely be to enable people to provide for themselves by their own efforts. We can make social progress in Australia only through economic discipline based on sound political principles. Principled politics is the only basis on which Australians will understand and accept basic and sometimes hard economic and social truths. Yes, we do need tax reform in this country, but please let us approach it properly. There should be scope for constructive and vigorous debate on a wide range of ideas. Some of these may be for the longer term; for example, a uniform rate of income tax at, say, 25 per cent with a constitutional guarantee ensuring that governments cannot change the rate unless under very strict safeguards.

Tax reform should aim for equity, neutrality and simplicity, but within these parameters its overall objective must be to encourage the creation of income and wealth in an entrepreneurial environment in which effort is rewarded and economic growth and job creation encouraged. We must avoid taxing the inputs of wealth-creating industries. We must provide positive encouragement to economic growth and international competitiveness, and only then look to the resultant enhanced profit flow as an appropriate source of revenue. For too long in Australia we have attempted to tax wealth and income before they have been created, and the result is quite simply that they have not been created. We must change course. Not to do so would be to condemn all Australians to progressively declining living standards and an unacceptably large proportion of our potential work force, particularly young people, to permanent unemployment.

It is a tragedy that in 1985, International Youth Year, we find so many of our young people alienated from the political system and in danger of becoming a forgotten political generation. We have an opportunity through creative tax reform to help retrieve this situation. But we also need to do much more in other areas. The most important of these is the area of wage fixation. There can be no doubt that Australia's wage fixing and industrial relations mechanisms are in need of even more fundamental review and reform than our taxation system. To achieve this, governments are required to balance wider public interests against the narrow sectional self-interest of particular community groups. Only in this way can a meaningful attack on unemployment be mounted. There can be no sustained reduction in unemployment if sectional interest groups such as the Australian Council of Trade Unions continue to pursue such policies as full wage indexation, increases in minimum wages, dubious equal pay and superannuation claims, and calls for ever-increasing redundancy payments.

Supporters of the present wage fixing and conciliation and arbitration systems argue that wage indexation is necessary to buy industrial peace with the unions. But why? Who is running this country? It is obviously not the Government. The Deputy President of the Conciliation and Arbitration Commission, Mr Justice Ludeke, has stated quite bluntly that the system no longer satisfies Australia's requirements. Many of its elements, particularly the concept of comparative wage justice, defy logic although they are deeply ingrained in the Australian psyche.

Why should all employees receive the same wage increases at the same time, regardless of their respective employer's capacity to pay? Why is it wrong to pay one employee more than another because he or she is better at his or her job? Why is it illegal to pay a potential employee a wage which the employer can afford and the employee finds acceptable, if that is the wage that will create an extra job? Why should young people be forced into unemployment and on to the dole, when they want to work and when there are jobs waiting for them at an affordable price?

Many Australians are asking these questions. They are not finding acceptable answers. The absurd rigidities of our wage fixing system are the cause of much of our current economically and socially intolerable level of unemployment. Our conciliation and arbitration system suffers from other fundamental defects; the excessive legalism, the inability to enforce labour contracts, the inherent tendency to settle wage and wage-related claims to buy industrial peace, regardless of capacity to pay, and at the expense of both existing jobs and potential new jobs.

Through a failure to meet these defects head-on, through a failure to stand up to the narrow sectional interest groups that support the present system-and these include not just the unions-we are unnecessarily and cruelly condemning countless thousands of people to continuing unemployment. Our young people deserve a better go than this. They deserve to be permitted to take advantage of competitive wage opportunities. These are not just matters of economics. They are also matters of profound social policy. The only sustainable and meaningful way of creating the right environment in which to tackle our social problems is by improving our economic performance. That in itself will not, of course, cure all the problems, but without it they will be incurable.

All sections of the community have a role to play in pressing for change and improvement in our economic and social conditions. In particular, I urge the private sector to play a much more prominent role. As the former President of the Business Council of Australia, Sir Arvi Parbo, has said:

There is nothing which businessmen do which is more important than their duty to be involved in public policy.

We all have a duty to examine our own actions, to ask whether we have demanded too much by way of so-called rights, and offered too little in the way of acceptance of our responsibilities.

In this respect in particular, there is an important role for government. Successive governments, from both sides of politics, have been guilty of encouraging unrealistic community expectations as to what government can provide for people rather than what people can and should provide for themselves.

I repeat what I said at the outset. Australians are desperately looking for leadership which has a basis of firm political principles rather than expediency and populism. As a Victorian senator, I intend to do all in my power to encourage my Party to continue to pursue creative policies in line with political principles which have as their objective greater freedom of economic choice, a smaller role for government in terms of spending and taxing and in regulating our commercial and other activities, the encouragement and strengthening of the family as the basic cohesive unit of our society, and the promotion of those basic values which have been so vital to our development as a nation, and of which we are in danger of losing sight.

I shall be encouraging my Party to speak out on those social issues which concern so many Australians. I shall be saying that unless individuals are given the freedom to choose, and to reap the benefits of their efforts, we Australians will not grow in economic or social well being. Nor will Australia be a fair, just or vibrant society. I want to see an Australia where Australians are encouraged to dare to strive to achieve. Surely that is what government should be about, and what human freedom and liberty are all about. I thank the Senate.