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Tuesday, 28 August 1973
Page: 475


Mr FOX (Henty) - I reject the Budget and support the amendment moved by the Leader of the Opposition (Mr Snedden). On 2 December last year many thousands of Australians were persuaded by the Australian Labor Party and by some sections of the news media that it was time for a change of government. It is now history that the Liberal-Country Party Coalition Government was voted out of office. I firmly believe that thousands of voters who supported the Australian Labor Party voted Labor for the first and last time in that election. Surely those who had not previously become disillusioned by the present Government's policies and performance were disillusioned last Tuesday evening when the Treasurer (Mr Crean) presented his Budget. So many of them have been horribly let down. They voted for the ALP full of hope that a new era had dawned and that the rate of inflation which the Prime Minister (Mr Whitlam) described as the worst in 20 years would be attacked and reduced. But the opposite has been the result. The Treasurer has said on a number of occasions that inflation did not begin on 2 December. This is true but it is also a fact that it had been falling steadily over the previous year. The Consumer Price Index moved from 135.8 for the 1971 December quarter, to 141.9 for the 1972 December quarter and this represents an increase of just under 4.5 per cent for the whole year.

Between December 1972 and June of this year,, a period of 6 months, the index has moved from 141.9 to 149.7, a percentage increase of 5.5 per cent for the first half of this year. These are not my figures; they are Business Statistics' issued by the Bureau of Census and Statistics. I have not based these not the figures of the Liberal Party. I have quoted them from the 'Monthly Review of figures only on the December quarter which the honourable member for Adelaide (Mr Hurford) and the 'Australian Financial Review' from which he quoted have said to be unfairly favourable to the previous Government. I have taken out figures for the entire years. Furthermore, the figures for each of the 4 quarters of 1972 were better than those for 1971. The figures for the first 2 quarters of this year - the only 2 completed quarters - are substantially worse than for the first 2 quarters of last year. Should those figures be related to food prices which affect all families alike but particularly pensioners, basic wage earners and the battlers, the people whom the ALP claims to represent, the picture is far worse.

When they are related to food prices the picture is far worse. I again wish to refer to a publication of the Bureau of Census and Statistics - the Bulletin of 17 August last. It indicates that food prices increased between July and December last year by 3.1 per cent at a time when the Liberal-Country Party Government was in office. For the first 6 months of this year food prices have increased by 11.1 per cent. In the period to the end of July food prices increased by 12.8 per cent and it is not very hard to find reasons for the increase. The Labor Government has given its blessing to the 35-hour week, 4 weeks' annual leave, equal pay and a substantial increase in the minimum wage with the flow-on which is consequential to that increase.

Let me make it clear right at the beginning that I am not against any of those benefits. I believe that the Australian worker is entitled to the highest wages and the best working conditions possible but one does not have to be a Rhodes scholar or even the holder of a degree in economics to know that unless industry is able to produce much more in the shorter working week as well as pay higher wages and grant longer holidays, prices must rise. There is no alternative but apparently the Australian Labor Party does not recognise that fact.

All people suffer from inflation, but particularly people on fixed incomes. I am not referring to pensioners in this instance but to the people who have provided for their retirement by way of superannuation or other savings and who at present are ineligible to receive pensions. Surely their interests should be protected. I have referred to pensioners and I thoroughly agree with the honourable member for Mackellar (Mr Wentworth) who said last week after the Budget speech that pensioners have been short-changed. The Prime Minister said in his policy speech:

All pensions will be immediately raised by $1.50 and thereafter every spring and every autumn the basic pension rate will be raised by $1.50 until it reaches 25 per cent of average weekly male earnings. That is the promise. What is the record? An increase of $1.50 a week backdated to 14 December 1972 was made in the autumn session and an increase of $1.50 a week has been provided for in this Budget. As the Treasurer said last Tuesday night that a fur ther increase of $1.50 a week will be made in the autumn, my arithmetic indicates that the pensioners have been diddled out of $1.50 a week because the increase announced in the Budget should have been the third increase and not the second. I am sure the pensioners will not forget that because one of the last things that the Treasurer said in his Budget speech was: 'We will do what we said we will do'. Perhaps he can explain what happened to the promised autumn increase which has not been paid. The pensioners have surely been short-changed. Furthermore, the increases already paid and announced barely cover the increased food prices to which I have already referred and which to the end of July represent an increase of 12.8 per cent as compared with December prices. So I do not believe that pensioners have achieved very much towards gaining their promised rate of 25 per cent of average weekly male earnings because the March increase in the minimum wage has not yet been fully felt in increased costs.

I mentioned earlier some of the causes of current inflation as the 35-hour week, 4 weeks' annual leave, equal pay and increased wages. To those I would like to add the production time lost by industrial stoppages. The Parliamentary Library Research Unit has provided figures on industrial stoppages for the first 5 months of this year, the latest period for which such figures are available. In that time industrial stoppages were 53 per cent greater than for the first 5 months of last year. This must certainly add to the cost of production and therefore to the present rate of inflation. Yet the Minister for Labour (Mr Clyde Cameron) said before the election: "There will be less industrial trouble under Labor because there will be no need for it.' There is no doubt that he should tell that to his boss - Mr Hawke.

It is my personal opinion that the reduction in our immigration intake must be a factor in the increased rate of inflation. It is common knowledge that Broken Hill Pty Co. Ltd and other companies, including many in the building trade, are short of skilled tradesmen. If it is true that the supply and demand for goods influences costs and prices it is equally true that the supply and demand for skilled labour also influences costs and prices. The skilled worker is entitled to make the most of the opportunities available to him. If there is a shortage of workers in his trade and he can ask for higher wages, I say good luck to him.

I do not criticise him, but it is a fact of life which cannot be ignored that higher wages mean increased costs.

I have never believed immigration to be inflationary, but on the other hand I believe that the numbers of immigrants who have come to Australia together with their dependants have provided a steadily increasing local market for our primary and secondary industries. So much for the Prime Minister's promise in his policy speech that Labor would protect the consumers. What a lot of rubbish. The Treasurer said that the Budget will not add to inflation. Does he really believe that an increase of Se a gallon in the price of petrol will not add to transport costs? Does he believe that the elimination of the investment allowance and increased postal charges will not add to increased costs? If he says so he must be kidding because I do not believe that he is as naive as all that.

I wonder whether the Treasurer can per.suade the residents of Canberra that the increases in the Australian Capital Territory in payroll tax and motor registration fees and an extra $10 a week rent for government houses will not add to inflation in this city. 1 believe that the young people of Australia as well as the pensioners have been shortchanged. The Treasurer said on Tuesday night:

The Government proposes to introduce during tho coming autumn parliamentary session legislation to provide for a scheme of deductibility of mortgage interest -

I think most young people expected it in this Budget but it has now been promised for next year. The Treasurer went on: as promised in the policy speech -

I want honourable senators to mark those words - to have effect from 1 July 1974. In the light ot that we have decided to end the home savings grant scheme.

To protests by members of the Opposition the Treasurer replied:

If honourable members opposite will listen they will sec that we do not do things suddenly and that what we put back is better than what we take away.

What did the Prime Minister say in his policy speech? He said:

Labor will deliberately plan to reduce interest rates wherever practicable. Meantime, we propose that a limited tax deductibility be available for interest payments. This tax concession will be concentrated amongst the groups which bear the greatest burden. All taxpayers whose actual income is $4,000 or below will be entitled to deduct 100 per cent of their interest rate payments. The percentage of total interest payments which is deductible will be reduced by 1 per cent for every $100 of income in excess of $4,000.

He said not one word in his policy speech about ending the home savings grant scheme. I wonder how many young people voted for this Government because of that promise. How many of them were disillusioned and felt that they also had been short-changed last Tuesday night? The Treasurer and Prime Minister have both expressed themselves very strongly and frequently about the inequity of the income tax scale. I completely agree with them and I have said so here. To me it is completely wrong that because the minimum wage is increased and all people on higher wages or salaries likewise receive an increase and they are all doubly taxed. And they are doubly taxed. Firstly, they pay more tax because they receive more money. This is reasonable, but in my opinion it is not reasonable that they should pay tax at a higher rate than previously. Relatively they are in the same position. It is past time that the tax scale was restructured. I regret that the Liberal-Country Party Government did not do it but I would have thought that this would have been one of the first things done by a Labor government. There is no doubt that this Government is pleased to take advantage of the extra money provided by this unfair scale to finance its very extravagant Administration. It represents an inbuilt jackpot for this Government. Last year, in spite of an increase in average unemployment of 2.5 per cent and the fact that average earnings increased by only about 9 per cent the Treasurer has budgeted this year for an increase in payasyouearn collections of 24.7 per cent. For income earners other than those on the payasyouearn system the tax collected is expected to rise by 33 1/3 per cent. Inflation suits this Government and it is apparently resigned to further substantial inflation because the Treasury expects average earnings to jump by 13 per cent in the current financial year whilst productivity is expected to increase by only about 3 per cent. Under the present tax scale taxes will be increased by an average of 27 per cent. This surely emphasises the injustice of the present system.

Another hidden cost in consumer prices must surely be the requirement for companies to pay their taxation quarterly. This is fair enough in principle but in terms of money it means that companies will no longer be able to. earn interest on money which but for this change in legislation would have been in the bank or otherwise invested. This must reduce a company's earnings and to this extent increase its costs. I think it is fair comment to say that the Labor Party hates profits. It criticises companies for the amounts of profits they make. It considers, for example, $50m profit excessive, irrespective of what this amount represents as a return on shareholders' funds. This could be as low as 3 per cent to 4 per cent but this matters nothing to the ALP. The amount of itself is too much in the opinion of the ALP. The ALP is not even concerned with relating the amount of profit to the number of times capital has been turned over and obviously the question whether a profit is excessive or not is related to this matter. But Labor would not even think of this. Labor cannot even distinguish between interest on invested capital and profits. As I have said, Labor hates successful companies.

The present Treasurer called the 1971 Budget a 'cynical collection of items'. I am quoting from an article that appeared in the Melbourne 'Herald' on 18 August 1971 following an interview with the Treasurer after the Budget Speech. The Treasurer is reported as having said:

It lets the beer drinker off but it hits the petrol user. The brewery lobby was shrewd enough to organise. The petrol increase will make transport costs rise.

It is strange, is it not, because what this Treasurer criticised in 1971 he has done in 1973. The beer drinker has been let off but the petrol user has been hit. Is it fair to ask the Treasurer whether the brewery lobby has been shrewd enough to organise? Is it also fair to ask him whether he agrees that if an increase in petrol tax in 1971 was inflationary it is equally inflationary on this occasion? Where is the increase in child endowment that the ALP has demanded with regularity each Budget time from the previous Government? If it believed that child endowment should have been increased in the past couple of years what has happened since 2 December last year to make this no longer urgent?

The Government has made much of its intention to abolish university fees as from 1 January next year. I believe it was the presentMinister for Education (Mr Beazley) who expressed an opinion that the parents of many university students are well able to pay for their education. I believe this to be true and I would have thought that the money spent in this direction could have been used to greater advantage by giving greater assistance by way of living allowances, for example, to those students whose needs are greatest.

I believe that the people of Australia made a mistake last December when they elected an ALP government. Some of them will have an opportunity in the by-election for Parramatta to demonstrate clearly that they are disenchanted with the ALP by voting very solidly for Mr Phillip Ruddock, the Liberal Party candidate. I ask the electors of Parramatta to remember that the rate of inflation which the Prime Minister described last year as the worst inflation in 20 years is today even higher under a Labor government. I ask the workers of Parramatta to remember that the average wage earner with a wife and 2 children, who, according to the Prime Minister, paid a higher proportion of his income in tax under the McMahon Government than under any government in Australian history, is paying an even higher tax under this Labor Government because it has not seen fit to alter the inequitable tax scale. I ask the pensioners of Parramatta to remember that an increase of $1.50 per week which was promised has not been paid. I ask the ratepayers of Parramatta to remember that in future if they are unfortunate enough to pay more than $300 a year in rates they will be allowed to claim no more than $300 as an income tax deduction. I ask the young people of Parramatta to remember that unless they contract to buy or build a home before 31 December 1976 they will not receive the home savings grant benefit which was granted by a Liberal-Country Party government. I ask the electors of Parramatta to remember that it was the present Prime Minister of Australia who said during last year's Budget debate, as recorded at page 515 of Hansard:

The Australian citizen is not merely a wage-earner who pays income tax to the Federal Government. He is not just a taxpayer. He is a citizen who must buy land, build a house or rent one, raise a family, keep them and himself in health, travel to work, pay State charges, pay municipal charges, pay insurance charges. If the community, if governments by doing nothing or by deliberate action raise the cost of the other charges he must bear, then he is being taxed as surely and deliberately as he would be if the income tax were increased.


Mr McLeay - Who said that?


Mr FOX - That was said by the present Prime Minister. Has not that been done in this Budget? This Government has increased petrol tax and postal charges; it has reduced the permissible deductible amount for rates; it has increased indirect taxes which Labor professes to dislike, and it has done this in its own Territories. In its own Territories it has increased payroll tax, motor registration fees and rents. Last year it criticised the previous Government for increasing tax collections by 13.5 per cent when earnings increased by only 11 per cent. This year the Treasurer has blandly announced in one of the statements attached to the Budget Speech that 'in contrast to 1972-73, personal income tax liabilities will rise considerably faster than incomes'. In actual figures I believe he has stated that an increase in personal income of 13 per cent will result in an increase in tax collection of 27 per cent. This is a bad Budget for the little people and I am sure that the electors of Parramatta will show clearly that they endorse this view on 22 September next.







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