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Monday, 13 May 1985
Page: 1806

Senator JACK EVANS(3.45) —The matter of public importance before us is:

The urgent need to implement an effective program for business deregulation.

I wonder when it became urgent. Was it 1901? About then it became obvious that it was impossible for all to make up their minds as to whether Australia should have the sort of deregulation which is being proposed even today. Was it in 1972, when we had a change of government after 23 years and when it suddenly became urgent again to have deregulation of business? Perhaps it was in 1976, when there was another change of government and it was the time for the Australian Labor Party to put the pressure on the incoming Fraser Government for business to deregulate. Perhaps it became urgent in 1983, when the Fraser Government was replaced by the Hawke Government. Or perhaps today it is suddenly urgent. It is not urgent; it is desperate for some industries, particularly some industries in the small business area. When we look at Australia's leadership in international trade and at deregulation in that area, we see that it is desperately urgent to help Third World nations or Southern Hemisphere nations.

The urgency of this has to be tied in with the second part of the wording of the matter of public importance: We are looking for an 'effective' program for business deregulation. To be effective it has to be well planned, it has to have community support in the broad goals of deregulatory practice and it has to have the support, in my view, of all the political parties in those broad goals. Deregulation will not come about in the lifetime of one parliament.

There are substantial benefits from deregulation. I guess the most evident of these is the efficiency which leads to wealth generation within the total community if we can deregulate and if we can get off the back of business. Therefore, I would be applauding this matter of public importance today if that was all there was to it-if we were looking at the wonderful benefits that can come from setting such broad goals.

But it is in the achievement of those goals, in how we get there, that we need to be considering the matter of public importance today, because there are some bad points to deregulation. The deregulated market is not necessarily good for everybody. It has the effect of distributing wealth and income very unevenly. The epitome of a deregulated market was that in the nineteenth century English society of Charles Dickens where there was a massive gap between the rich and the poor in a beautifully deregulated market-almost a classic deregulated market. I am sure that nobody is suggesting that we go back to that. What I am suggesting is that we do not go forward to a variation of that, to a variety of that kind of unevenness, in the distribution of wealth and income. I hesitate to score a political point, but I am a little afraid for Senator Rae who may in this matter of public importance today be exposing himself as the spokesperson for the dries, because the criticisms are directed at a government which has, in fact, gone down a deregulatory path. In some areas we would admire the Government's actions in this regard and in others we would criticise it. As to this Government's actions in the finance sector, as distinct from the words of the previous Government, I think that Senator Rae would applaud them. I suspect that Senator Rae would applaud its actions in respect of the steel and motor vehicle industries.

Senator Peter Rae —I said so.

Senator JACK EVANS —I acknowledge the interjection that Senator Rae has applauded them. I am listing the industries to ensure that we are recognising that certain steps have been taken by this Government which were long overdue to have been taken by the previous Government. This Government has taken these steps at high political risk. The previous Government was not willing to take that political risk, and that is the crunch.

We need to ask a few questions of the proposer of this matter of public importance because there are some dangerous areas. Would the proposer suggest that we deregulate health care and return to the pre-Medicare days when everybody did not have the right to health care, when costs were not shared? Is that what is being proposed? Is this matter of public importance raised by Senator Rae of the Liberal Party suggesting that Australia's rural industries, which are currently a major source of export earnings needing, if anything, more subsidies and assistance in order to compete in world markets, where prices for primary commodities are dropping and where there is ferocious competition for sales, be deregulated?

Let us be honest about this. We have a foreign debt of over $40 billion. We have a widening current account deficit which we desperately need to reduce and, obviously, the one way that we are going to reduce it is to earn export income. That may mean more subsidies, not fewer, to the rural industries, not deregulation. It may mean higher and higher support for rural industries which need to be healthy to help our total economy. So we cannot sweepingly say: 'Deregulate everything'. Rural industries are the old industries but a new industry needs support-the high tech industry-just to get established because over the last decade we have lost the running to competitors in the international high tech world.

It is interesting that it was a coalition government-today in Opposition it is talking about the urgent need for deregulation-which ensured that for the next decade we had one of the great monopolies in an industry. It again signed the renewal of the two-airline agreement.

Senator Peter Rae —It was for eight years, not a decade. We got it reduced to eight years.

Senator JACK EVANS —As a Western Australian senator, let me tell honourable senators-Senator Rae from Tasmania would be equally aware of it-that in eight or 10 years he and his electors in Tasmania will be as disadvantaged as my constituents in Western Australia by the refusal to deregulate the airline industry. We do have a problem with over-regulation in small businesses in particular, and I am the first to acknowledge that. However, it is not just Commonwealth regulation; we have to look at this right across the board-State governments, Commonwealth governments and local governments. We have licences and restraints of trade. We have to regulate for health provisions, safety provisions and consumer protection. In the Commonwealth field we have taxes, customs duties and excises and a whole range of duties, not just to collect taxes. A massive amount of work is done by small businesses just to keep a tab on behalf of Government-they are unpaid servants of the Government-on how much they have to pay it.

We should also be aware that some regulations are there-I suspect that it may even be the majority of them-at industry's request. So let us not pretend that all of the regulations are there on behalf of industries. I am not pretending that they are there on behalf of industries because many of them were introduced to protect an industry. Perhaps they were introduced to protect the consumers but still at the industry's request, because it saw that consumers were being ripped off by some segments of the industry, and to protect the industry's good reputation so that it could flourish and grow in Australia. Of course there were, and still are, pressures to provide protection to keep out competitors, whether they be Australian or overseas. There is a constant demand for government assistance-that sort of regulation.

The Government has moved towards deregulation in a number of areas. I refer to the steel and car industries and the dairy industry package, an interesting package on which perhaps later speakers from both sides will indicate their party's policy. The steel and car industries packages were particularly good models of deregulation because they offered supervised protection over a set number of years to be followed by a reassessment of protection if the industries did not perform. This has the advantages of long term planning, which we would propose, but leaves the difficult political decision, the crunch decision, till later when a government may have to decide to remove all assistance if the industries do not perform satisfactorily.

The other area the Government has deregulated massively is finance and banking. What now remains for the Government to do if it is going to follow through on that kind of deregulation is to lift the controls on housing interest rates, and God help us all if it does. It will be done over the dead bodies of the Australian Democrats. I wonder whether the Opposition supports the lifting of these sorts of controls on housing interest rates. If the controls were lifted people currently purchasing homes would have difficulty meeting the increased mortgage repayments and people wanting to buy homes in the future would put off making that decision for fear that they could not plan to meet future unpredictable increases. That would effectively destroy the housing industry in this country and the industries that depend on it.

A centralised wage fixing system has been referred to. It is one that has problems but let us recognise that complete deregulation of the wages system could easily make matters worse. Those who argue for deregulation argue on grounds of efficiency rather than equity. If deregulation produced more efficient distribution of incomes it would be so inequitable as to threaten the social fabric of Australian society. However, given that deregulation of wages would not take place in a completely free market environment-that is, the monopolies and the oligopolies would exist on both the labour side and the employer side-we would not even end up with an efficient allocation of resources. This is what people fail to recognise. Monopolies can pass on price increases. The unions would use their muscle to get their wage increases and the people who work in the industries where union conditions do not apply and where they do not have the muscle would be the ones who would be forced to accept a level of income which may not enable them to sustain even minimal living standards. At least the prices and incomes accord holds up the hope that the Government can negotiate with unions to prevent the effects of the devaluation in the value of the Australian dollar being frittered away in unjustified wage increases.

On behalf of the Democrats I support the essence of this matter of public importance. I believe that we do have to deregulate; we have to plan for deregulation because we believe that it can improve our efficiency. We can generate more wealth. We can distribute our wealth more evenly so that all Australians benefit, not just the lucky few in some industries. But we can do that only if deregulation is planned; we can do it only if we have agreement between all of the political parties to plan over a long term for that kind of deregulation. We have to recognise that there will be massive job losses along the way. We must consult with employees' representatives to minimise the impact of job losses. We have to help retrain and we can do that if we plan for phasing out of the regulations. We cannot take the risk of having massive disruption through instant deregulation because, although it may benefit us all in the long term, the people who would be disrupted and affected in the short term need to eat today. They cannot live on the promise of a meal in two years time.

We propose that there be a joint party program for deregulation and that it continue through several parliaments. I believe that is possible. We have had some constructive debate already today. The feeling about the community and about the Parliament is that we have no alternative but to plan for deregulation. However, it has to be all party planning because it goes through several parliaments.

The DEPUTY PRESIDENT —Order! The honourable senator's time has expired.