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Tuesday, 18 September 1973
Page: 1150

Mr CREAN (Melbourne Ports) (Treasurer) - I must say that I am disappointed at the attitude taken by the Leader of the Opposition (Mr Snedden). I will read the title of the Bill again. It reads:

To alter the Constitution so as to enable the Australian Parliament to control prices.

That will be achieved by a very simple amendment to add a new placitum by inserting in section 51 of the Constitution a new clause, '(xivA.) Prices:'.

Mr Cooke - What does it mean?

Mr CREAN - If the honourable member will give me time I will endeavour to explain what it does mean and I hope to do it with a little less invective and some less personal abuse than the honourable gentleman used in the matter. The Leader of the Opposition claims to be a believer in something that he describes as a prices and incomes policy. He does not say what prices or what incomes but in criticism of this measure which is concerned about prices he asks the hypothetical question: 'What prices?' I would have thought that at least there would have been something genuine in his endeavour if he had said, 'Yes, I want control over prices and incomes', and the had moved to have a separate Bill that he could bring down to alter the Constitution so as to enable the Australian Parliament to control incomes. Then we would have the two.

Mr Turner - They would be put as 2 separate propositions?

Mr CREAN - Yes, put as 2 separate propositions.

Mr Turner - They would not be linked?

Mr CREAN - No, they would be put as 2 separate propositions so that the people of Australia could choose. They could have both; they could have neither; they could have one or the other. Now what is wrong with that?

Mr Turner - Both or none?

Mr CREAN - It is not necessarily a question of both or none. I would ray it is very easy after you have been in government for 23 years, as honourable members opposite were, to seize on the most convenient set of statistics since you have been out of government. The Leader of the Opposition ignores a lot of things from his record. He was not even correct. I hasten not to use the word 'dishonest' because he occasionally just misreads. He says: 'Under us inflation was falling*. If one takes the statistics published for the last quarters in the period 1971-72, all in the period of the previous Government shows that in the consumer price index, which was what the honourable gentleman uses, should a 1.9 per cent increase over the previous September quarter and a 2.3 per cent increase in December. I suppose I could conveniently multiply that by four and say that it was then running 9.2 per cent. In March, it fell to 1 per cent; in June it fell to 0.9 per cent; in September it rose to 1.4 per cent and in December it fell slightly to 1.2 per cent.

I draw to the attention of honourable members the state of the economy at that stage. It was an economy in depression; it was an economy that had the highest level of unemployment in the post-war period of Australia. It was a period also, as I indicated yesterday, that showed the highest historic increase in the volume of money which, after all, is some indicator of the potential for inflation. Once again I point out to the members of the Australian Country Party that, if one is being fair about this sort of thing, the main reason that the consumer price index was worse in the first 2 quarters of our operation of Government was because of increases in food prices, particularly meat prices. If one were to take out of the consumer price index the effects of food prices, inflation would be no worse now than it was when the previous Government was in office.

Mr Anthony - That is not what the Prime Minister said yesterday.

Mr CREAN - I do not want to cavil at this sort of thing. When I am asked, as I have been asked, what J think the rate of inflation ought to be I can only give the sort of general statement that it ought to be as low as it is possible to get it. Nevertheless, a 10 per cent rate of inflation is better than 13 per cent; 8 per cent is better than 10 per cent and nought per cent is better than any of them, but no honourable member would want to bring the level of inflation down to nought unless there were some catastrophic effects on the economy as a whole. At least the Government will not purchase the halt of inflation by depressing the economy or creating unemployment. I wish in many ways that the sort of economy over which I had to preside was one of gloom rather than one of inflation because it is a lot easier to take corrective measures when there is unemployment than it is to take corrective measures in a condition, of over-employment, not only of labour but of other resources as well.

Much has been said about a so-called prices and incomes policy. In the long term every Western democracy will have to have a prices and incomes policy because neither the existing mechanisms for market forces for adjudicating prices nor the existing mechanisms for determining wages are just or adequate in the technological age in which we live. How can one equate the performance of every individual, whatever his service may be, in terms that are either sensible or equitable? How in a world - surely to goodness we all applaud this - that in the future will have excess of demand and shortages of supply in considerable areas, can some rise in the level of prices be avoided? What is not acknowledged in the world, particularly by the United States of America, is that there are no more banana republics left.

Mr Katter - We are going to have one here.

Mr CREAN - Well, the honourable member's Party has turned Queensland into one. Every country believes in the revolution of rising expectations - and why not? It will no longer allow its surplusage of foodstuffs to become the plaything of the pricing of the affluent Western democracies. We have still been disposed to do that in the use of minerals in this country. What is the good of extracting minerals from beneath the earth if you do not receive enough by selling them to cover the reasonable costs of production of those who produce them? Surely whether it is minerals, primary materials or manufactured products, everybody who produces them is entitled to a fair standard of payment for that production.

Whether honourable members opposite like it or not - they are the ones who will profit from it - the primary producer is as entitled as everybody else to receive fair prices for what he sells. But he is not entitled to bellyache, when he does, that the consumer price index has gone up and to say that it has gone up because of the mismanagement by this Government. To do that is to display either economic dishonesty or an incapability of economic analysis. The Leader of the Opposition may jeer about my style but he could do with a hell of a lot of lectures on the fundamentals of economics. He has one or two honourable members on his side of the House who could assist him to do better than he dees. Let me return to the question of the prices and incomes policy. The trade union move ment, which is the movement that supports the Australian Labor Party and which that Party supports-

Mr Anthony - It dictates to you.

Mr CREAN - 'Dictate' is one of those nice easy words that slip off one's tongue while closing one's mind. The trade union movement believes that for nearly 65 years it has had to justify the wage arbitration system in this country. If there are now some areas outside that system, it is because they have not been conciliatory and have not arbitrated in the course of their history. The trade union movement asks why, if its members' wages have to be justified before some tribunal, the price makers also should not have to go through some justification process. I say this, and I will continue to say it: The minimum condition in Australia of achieving a prices and incomes policy - honourable members opposite can put this on record because it is not the first time I have said it - is not primarily the passing of laws; the minimum condition is as the trade union movement believes, that if wages must be justified something systematic must be done about prices. In the long term every country must face this. When that has been done and when some sort of mechanism for the regulating of prices has been built up, as now exists for regulating wages, then and not before can we begin to talk about a prices and incomes policy.

Taking them in aggregate, there is more diversity about prices than there is about incomes. Prices can range from primary production to the products of extractive industries to partly manufactured products, to completely manufactured products and then to retail prices and services. But if one looks at the other side of the social equation - it can be seen in the White Paper on National Income - one sees that the greatest single source of income in the community is wages and salaries. That is the sole source of income for about 85 per cent to 90 per cent of the Australian population. In the past endeavours have been made to regulate wages. It ought to be relatively much more simple to regulate prices than to regulate wages because the great dilemma in a capitalist system is always that it depends in the long run on rising consumer expenditure in real terms. The greatest source of that expenditure is the increase in real wages. The greatest robber of real wages is uncontrolled inflation.

The honourable member for Petrie (Mr Cooke) asked me a question this morning about interest rates. Whatever the levels are now or whatever levels are contemplated, they are less than they are in some other parts of the world. If one wants to try to apportion blame one can say that when the last Labor government went out of office the long term bond rate was 34 per cent and wages were much less than they are now. Who is to take the credit for the fact that in the period from 1949 to 1972 the interest rate rose to 7 per cent?

Mr Whittorn - That is historical.

Mr CREAN - Of course it is history. But honourable members opposite are like Aneurin Bevan who once said about his political opponents that they are in favour of every revolution except the next one. The Opposition is now carping about the Government doing what the Opposition would have had to do in higher degree if it had remained in office after 2 December 1972. It is time that there was a little bit of objective analysis. Honourable members opposite who have criticised the Budget have been asked what they would have cut down in government expenditure. Would they have cut down on social services? Would they have cut down the provisions for education? Would they have cut down the improvements in the health field or the grants to the States? It is easy enough to make loud noises of protest. I now know that there is a lot more luxury in Opposition about what one can say. I have often said that I do not regard my words as any more weighty now that I am on this side of the House than when I was on the other side but they are certainly weighed much more carefully. I sometimes wonder about the kind of logic of people who quote what I said 2 years ago, when it suits them, as though it were Holy Writ and then criticise what I said the day before as being utter nonsense. All of us will quote nonsense at times: none of us is immune from that. But in a debate of this magnitude and importance the Government is arguing that it does not believe the sort of powers that the Opposition claims should be exercised - whether they should be exercised permanently or temporarily is a matter for argument - can be exercised separately. They must be exercised at the national level.

About 14 years ago the previous Government set up a committee to review the Australian Constitution. That Committee, not in its major report but in its interim report, said that what Australia lacked was the ability to pursue an integrated economic policy. That was true when this Government took office. I repeat that what the Budget in itself can do is distinctly limited. The Budget is primarily a parliamentary document that sets out what the Government wants to spend in a period of 12 months. Like everybody else - with the minor exception of those who can run a deficit and not go broke - the Government cannot spend a dollar unless it gets it. That is basically what the Budget is about. It covers only a quarter of economic activity in Australia. The rest of that economic activity is still carried on by what honourable members opposite rather grandly describe as good old private enterprise. No longer in this world can private enterprise go on quite as untrammelled in the circumstances of 1973 as it did in the circumstances of 1933. There are strange people such as ecologists and others - I do not use 'strange* in the sense that they are nuts - who have a great consciousness that the environment to which they belong has some importance in itself and ought not to be there just for the rapacity of private profit. That at least is a circumstance which has changed. Another thing that has changed is that if there is to be a change in the quality of life - as we on this side of the chamber believe - there has to be a change in the overall disposition as between public and private investment - more in favour of public investment and less in favour of private investment.

A prices and incomes policy in the long run will be necessary to achieve that. But the first step should be in the name of the majority of people in Australia who are concerned - the concern is at the level of what they buy in the shops at the retail prices of Sydney and Melbourne, for example - and who believe that governments can do a lot about prices. They are not arguing about incomes at this stage. That is a piece of successful camouflage to do nothing. The Opposition can take its own gallup poll - it is pretty keen to take them for the matters which suit it - and ask the woman who comes out of a shop what she thinks about the prices system. She will say that she thinks that it is crook. If she is asked who she thinks should do something about it she will say: "The Government'. She will not mean the local government or the State government; she will mean the national Government in Canberra. In this simple proposition we are seeking nationally, the powers that are necessary to halt the aggravation of what are great national problems.

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