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Tuesday, 26 August 1980
Page: 727


Mr HAYDEN (Oxley) (Leader of the Opposition) - We are now in the final months, perhaps the final weeks, of this Thirty-first Parliament. Fortunately for Australia we are also in the final months of this Government. When we return after the coming elections, some 25 to 30 of the members who sit opposite will no longer be with us. They will include some outstanding examples of so much that is wrong with this Government and its policies. We look forward with great pleasure and anticipation to their permanent absence. We shall not miss them. Neither will our fellow Australians, the great majority of whom will simply be thankful that they are gone. Those of their colleagues who remain will be sitting where they belong - on this side of the House.

It will be a great and memorable day for Australia. We in the Labor Party will then be able to get on with the fair and proper administration of this nation's affairs. We will do so on the basis of all that has been lacking in national government for the last five barren years. I refer specifically to the qualities of competence, honesty, compassion, proper standards and fair play - qualities that are as foreign to this Government's character and conduct as truth is to the language of the Prime Minister (Mr Malcolm Fraser).

In its broad essentials, this latest Budget is no different. The Government's failure in economic management is matched only by its failure to keep its word. A year ago, in my response to the 1 979 Budget, I reminded the House of the 91 promises the Prime Minister had made to the Australian people just before his election four years earlier. I recalled to members how the great majority of those promises had been broken, discarded, ignored, or dismissed because, as the Treasurer (Mr Howard) once sought to explain, they were no longer appropriate.

To the Prime Minister's great discomfort, I also reminded him of his central promise five years ago of full economic prosperity within three years. Well, we now have come five long hard years since that commitment was given to the Australian people. What this Prime Minister promised would be achieved in three years has not been achieved in five. It was not achieved within the promised three years, and it has still not been achieved after five years.

Yet, for four years now, we on this side of the House have been saying that the Government's harsh and unyielding approach to economic management would not work. With each Budget in each of the last four years we have argued that the Government's approach was wrong. Each time we argued that what the Government sought to do Could not be achieved with these policies. Each year the Government has persisted. And each year the Government has been wrong. Each year the Government has not delivered what it promised in the Budget it would deliver. The great battle of economic recovery is now an undignified rout. Full economic prosperity is now further away than it ever was. We have the highest taxes, the highest prices, and the highest interest rates in our history. We have the lowest family living standards in half a decade, and the worst unemployment in almost half a century.

Yet despite this magnificent record of failure, the Treasurer came into this House last week and presented the country with another massive dose of the same economic formula of the last five years - more economic attrition, more unemployment, higher interest rates, more squeezing of family living standards, and a few welfare crumbs for some of the disadvantaged groups in our community. And for what? To quote the Treasurer from his Budget Speech:

The dominant feature of our policies has been our relentless effort to control inflation. There must be no relaxation of that effort.

Government members - Hear, hear!


Mr HAYDEN - Of course Government members say: 'Hear, hear!' The people from the bush would believe anything because the Treasurer said virtually the same thing in his Budget Speech a year ago. Again I quote him:

Tonight I reaffirm the determination of this Government to maintain the uncompromising nature of its attack upon inflation.

And the year before that, in presenting the 1 978 Budget, the same Treasurer forecast that government policy would have inflation down to an annual rate of 5 per cent within 1 2 months.

Opposition members - Oh!


Mr HAYDEN - I am waiting for the 'hear, hears!' So what happened to those forecasts? In 1978-79, inflation turned around and, by the middle of last year, it was more than twice the predicted 5 per cent rate. Throughout last year, the rate increased by 20 per cent over the 12 months to take Australia solidly back into yearonyear double figure inflation by the end of June. By the end of this year, 1 have no doubt inflation will have reached between 1 2 and 1 3 per cent, despite all the hardship, and distress, and unemployment, and falling living standards, of the last five years. So much for this Government's economic competence and the quality of its policies. In the last two years, its Budget measures have achieved exactly the opposite of what they were framed to do. Now the Treasurer tells us exactly the same as he had done in the last two years, and still he expects the Australian people to believe him.

The simple, stark fact is that there are no measures in this Budget to control inflation, and I defy the Treasurer or anyone else in this Government to say that there are. What we have is another thinly-disguised high tax Budget which continues the same rigid policies of economic attrition of the last five years; policies that are wrong, that have not worked in previous years, and will not work now - except to take Australia even further backwards.

However, I do not suggest that economic incompetence is the sole reason why this Government persists year after year with management policies which achieve the opposite to their intended purpose. Most sensible people would think that even this Government would wake up after five years, and accept the evidence of its failures. The reason it has not done so, I suspect, is to be found in the remarks of a former Cabinet Minister in another place whom the Prime Minister sacked two years ago when the senator was careless enough to get caught fiddling with the electoral redistribution process.

Government members interjecting--


Mr HAYDEN - I am afraid that the Government benches are full of arrogance and old brandy after dinner. But Senator Withers said not so long ago - and 1 quote him exactly:

Malcolm's got a psychological genetic incapacity to admit that he's ever wrong.

Those who know him best can speak of him best. That is not a flattering description of the Prime

Minister, but it is a very accurate one, as his record testifies. And it is one that our unemployed, our handicapped pensioners, our black Australians, our poor Australians, our Greekborn citizens of Sydney, and our Olympic athletes, would confirm without hesitation.

As everyone in this Parliament knows, the Prime Minister is as stubborn, and as rigid, as he is immune from the harsh realities of his Government's economic mismanagement. He would no more admit publicly to a mistake than he would concede that he was a Prime Ministerial dwarf alongside the stature of his predecessor. It is one of the defects in his makeup that will cost his Government dearly in the weeks ahead. Another is his credibility, or total lack of it, as 1 pointed out earlier when I referred to his long list of broken promises to the Australian people. Yet even now, when his public relations machine is turning itself inside out to erase his record of mendacity, the Prime Minister cannot shake off the habits of a lifetime.

Last week, in an attempt to obscure his Government's deplorable record as the highest taxing Government in our history, the Prime Minister abused Question Time to prevaricate about what Hansard loosely describes as the 'Government reduction of the taxation burden'.


Mr SPEAKER - Order! The Leader of the Opposition will resume his seat.


Mr Neil - Mr Speaker, you have ruled that word unparliamentary. The Leader of the Opposition should withdraw.


Mr SPEAKER - Order! The honourable member for St George will resume his seat. The Leader of the Opposition will recall that I applied that term against him. He asked me to withdraw; I now ask him to withdraw.


Mr HAYDEN - I withdraw. I think the honourable member for St George -


Mr SPEAKER - The honourable gentleman will withdraw unqualifiedly.


Mr HAYDEN - I do, but I think the honourable member for St George is the authentic representative of the demi-monde of extreme right wing politics in this establishment. Let me continue my speech. During this difficult exercise, the Prime Minister said this:

I think honourable gentlemen sometimes forget that there have in fact been two tax cuts within twelve months.

And then a bit later, he added:

This Government, during its period of office, has introduced substantial tax reforms.

The two tax cuts to which the Prime Minister refers were: One, the elimination in November last year of the tax levy which this Government imposed after the 1977 elections and which eliminated, for 55 per cent of all taxpayers, the modest benefit of the Government's previous socalled tax cut which lasted only five months. Two, the miserable 90 cents a week tax benefit handed out to four in every five taxpayers from 1 July this year. As for the general proposition that the Fraser Government is responsible for substantial tax reforms during the last five years, the Prime Minister last week was at his mendacious best.


Mr SPEAKER - Order! The honourable gentleman is not able to use that word. He will withdraw.


Mr HAYDEN - I withdraw. To rebut this claim for the absurdity that it is, the House does not have to rely on our word. Instead - and I trust honourable members will listen - I will quote to honourable members opposite from the most recent report of an inter-departmental committee on economic strategy, the Government's most senior source of departmental advice on economic management. The House will quickly understand why the Government insisted that the report, dated May this year, has been classified confidential and restricted to senior departmental officers. I quote in part from a section of the report entitled Fiscal Outlook, which says: 'Since 197S-76 there has been some success in reducing the ratios of Budget outlays and the deficit to GDP, but the overall burden of taxation (as a proportion of GDP) has increased. Indeed, the increase in the burden of taxation was the most important factor underlying the reduction of the deficit achieved in 1979-80.

Government advisers are there advising the Government that every time it comes into this House and claims otherwise it is being dishonest. I will quote from the report again:

On balance, the most important factor underlying the increase in taxation relative to GDP has been the rapid growth in oil revenue.

Total individual income tax receipts have increased as a proportion of GDP since 1975-76, but their share of total revenues has not changed much.

The burden has fallen increasingly on PA YE taxpayers.

There has not been any reduction in average tax rates since 1975-76.

Suddenly we find that Government members are silent, embarrassed. Let them rebut the evidence of the official advisers of the Government, the highest taxing government in the history of the nation.


Mr SPEAKER - Order! I ask the Leader of the Opposition not to invite interjection from the right.


Mr Dawkins - You tell them to be quiet!


Mr Cohen - Why don't you tell them to be quiet, Mr Speaker.


Mr SPEAKER - Order! The Leader of the Opposition will resume his seat. The honourable member for Fremantle will cease his outbursts. Is that a member of the National Country Party or the honourable member for Robertson who was interjecting?


Mr HAYDEN - For the record, let me contribute some more quotes from the inter departmental committee report:

Average rates of tax for average earnings have increased slightly over the period, but have fallen for non-wage and salary income . . . because of increased tax avoidance. 'Company tax receipts have declined both as a proportion of total taxation receipts and relative to GDP,'

And finally:

Abolition of the Stock Valuation Adjustment will sharply raise receipts in 1 980-8 1 but company tax will contribute proportionately less to total tax revenue than in 1975-76.

I trust honourable members opposite enjoyed those quotations. They had better get used to them. They will hear them repeated a lot in the weeks to come.

Government members interjecting -


Mr SPEAKER - Order! The honourable gentleman will resume his seat. The honourable members for Macarthur, Kingston and Canberra will cease their continual interjection.


Mr HAYDEN - I advise the Prime Minister that every time he gets up in this House, as he did last week, and tries to peddle the fiction that his Government has been responsible for so-called substantial tax reforms, he will have this report quoted at him to prove the dishonesty of his claims. Taxes have not fallen under the Fraser Government. They have gone through the roof. Total tax receipts have almost doubled since this Government came to office. More taxes have been collected in the last four years under this Government's policies than the combined total of all taxes collected in the previous eleven years by the Menzies Government, the Holt Government, the Gorton Government, the McMahon Government, and the Whitlam Government. What a record of tax achievement that is! Eighty per cent of all income tax payers now pay more tax in both actual and real terms than they did five years ago under the last Budget of the Whitlam

Government- the Hayden Budget. That is another statistic that honourable members opposite will get sick of hearing in the weeks ahead. They will be fully tested in defending themselves against the fiction that they are a low tax government. They are a big tax government, a big brother government. Ask the invalid pensioners who find their pensions are being whipped off them; ask the Greeks in Sydney what they feel; ask the Aboriginal people at Noonkanbah what they believe of this Government.

Just in case the point has not been quite understood by members opposite, let me emphasise it. Income tax paid by wage and salary earners last year jumped 1 H per cent and this year W1 go up another 13+ per cent- a total increase in two years of 31 per cent. I trust that all Government backbenchers will pass that information on to their constituents. Let me assure them that if they do not, we certainly will, just as we will tell them that four in every five working Australians now pay out a bigger share of the weekly pay packet in income tax than they ever did under the Whitlam Government. Let me remind honourable members opposite of the boast of the former Treasurer- rubbery Phil- who told this House in his last Budget in 1977, before he got caught up with his--


Mr Killen - I raise a point of order.


Mr SPEAKER - Order!

Opposition members interjecting-


Mr SPEAKER - The Minister for Defence will resume his seat. I ask honourable members on Opposition benches to remain silent so that I may hear the point of order.


Mr Innes - Can't you cop it? You will not be here for long.


Mr SPEAKER - The honourable member for Melbourne will remain silent.


Mr Killen - On my point of order, I have spent a long time in this place, longer than the majority of members opposite. That is a disgraceful comment.


Mr Innes - You won't be here for much longer.


Mr Killen - I have heard that threat for 25 years. The remark made by the Leader of the Opposition is disgraceful and should be withdrawn.


Mr SPEAKER - Order! I heard the remark to which I think the Minister is referring. I do not intend to repeat it, nor do I intend to ask him to repeat it. It was not an unparliamentary expression. It was an offensive expression as interpreted by some but it was not unparliamentary.


Mr HAYDEN - The previous Treasurer attracted the sobriquet -


Mr SPEAKER - The honourable gentleman should not refer to it again.


Mr HAYDEN - He attracted the sobriquet by claiming his own figures were rubbery. No one else said that; he initiated it. I remind honourable members opposite of the boast of that former Treasurer - rubbery Phil - who told this House in his last Budget in 1977, before he got caught up in his Melbourne land dealings:

We have ended the big tax rip-off.


Mr SPEAKER - Order! The Leader of the Opposition has been offensive to the honourable gentleman. I ask him to withdraw that last statement.


Mr HAYDEN - I withdraw it. To his credit, his successor has never repeated the fiction. The present Treasurer has more respect for his personal credibility, a quality not shared by most of his colleagues. I also find it significant that it is the Prime Minister, and not the Treasurer, who these days has to trumpet the distortions of the Government's tax relief policies. The Treasurer knows that the idle boasts have no basis in fact. On the other hand, the Prime Minister, who, despite his usual outwardly smug appearance, is now showing the first indications of electoral panic, simply does not care. It is a clear sign of what Senator Withers would describe as a communications problem. To quote the honourable senator in full once again - and I quote him exactly:

There's all this bullshit about that the Government's got a communications problem. Ill say it has. It can't even talk to itself sensibly.

It is on the record.


Honourable members Honourable members interjecting.


Mr SPEAKER - Order! The Leader of the Opposition will resume his seat. No point of order has been taken by honourable members on the Government side. However, obviously offence was taken at the word used. I permitted the Leader of the Opposition to use the word as he was quoting. However, I want him and all other honourable members to understand that the level at which I will permit quoting depends on the circumstances. I find that word offensive but I do not require it to be withdrawn.


Mr HAYDEN - Mr Speaker,if there is any quibbling as to the accuracy of the record, I will arrange for a full transcript of the honourable senator's remarks to be made available. Those remarks about his leader, the Prime Minister, were to the point, if somewhat searing. I am sure the transcript would read well in the electorate newspapers of back benchers on the Government side.

The Labor Party does not run away from the fact that economic conditions for the first half of the 1980's will be difficult; nor do we excuse the fact that the Government's strategy is making them even more difficult. But difficult conditions are no excuse for meanly conceived and unfairly applied policies. The people of this country expect and deserve a better future than what is offered by the economic management of this Government. Australia needs policies that will rekindle enthusiasm about what this great and rich country can achieve. It needs policies which fairly share our national wealth among all Australians. Soaring boardroom profits and plunging job prospects are the symptoms of an unjust society. They are symptoms existing today in this society under this Government. Average family living standards have fallen by $1 6 a week in real terms while the stock exchange index is now going through the ceiling. These are the elements of an unfair society. They are elements of our society today.

An income tax system that plunders four out of five modest to middle income earners but is most lenient on the top 20 per cent is the sort of privilege that operates today because this Prime Minister allows it to operate. A few years ago, Australia had a Treasurer who spoke constantly about how the four arms of economic policy all had to work together if low inflation and full employment were to be achieved. The right honourable member for Flinders, in his first year as Treasurer talked incessantly about how fiscal policy, monetary policy, wages policy and external policy had to operate in harness. He is right in his diagnosis, even if he is hopeless in effecting a cure. We have not heard much about the four arms of economic policy since the external policy arm dropped off with the November 1976 devaluation. Since then, two of the other arms- monetary policy and wages policy - have vanished, leaving nothing of economic policy, except a domestic budget surplus. Unfortunately for Australia, a one-armed policy cannot solve any of the great problems facing this country - even inflation, which the Government still insists is its main concern even if it is doing nothing about it.

Tight Budget policy without appropriate monetary policy can inflict great damage on many Australians who must look to the national Government to secure their interests, but it will not arrest inflation. Tight Budget policy without appropriate wages policy can keep unemployment rising, as it has in the past five years, but it will not stop inflation. Tight Budget policy without appropriate external policy is completely self-defeating.

A small cosmetic domestic surplus in itself will achieve nothing. The last' time we had a domestic surplus in Australia was seven years ago in 1973-74. The surplus that year was five times as large as the surplus this year. The overall deficit also was a modest $293m, compared with the overall deficit of $l,566m this year. It is history that the domestic surplus of 1973-74 did nothing to lower inflation, because it was not supported then by a wages policy that had wide union and community support.

History is now about to repeat itself. The Budget Papers make it clear that the Treasury, expects a wages explosion in the coming year. It is right to expect it because the Government has no wages policy at all, except the arid and divisive policy of bullying and abusing the Australian Conciliation and Arbitration Commission. It is also right to expect it because the ordinary wage and salary earner simply will not go on copping the depression of real wages, the erosion of living standards, that this Government has enforced as economic policy for the last five years. The unions certainly will not tolerate any further depressions of wages when they see corporate profits booming as they have done in the last two years. There is no way of preventing a general explosion of wages without community acceptance of wage restraint in the context of Government measures to ensure equitable distribution of incomes and wealth. That is where this Government has neither the wit nor the nous to negotiate with the unions. It would rather brandish the big stick than seek to discuss sharing the carrot.

Elsewhere the Government seems to accept that it has no credibility left on monetary policy. Last year it forecast a 10 per cent growth of money supply and actually achieved 1 3 per cent. This year it has not even tried to come up with believable figures. It forecasts a 9 per cent to 1 1 per cent growth of money supply, inflation of 10 per cent or more, and real growth of 3 per cent. Now, that is sheer nonsense. The numbers simply do not add up. Something will have to give somewhere. Either there will be a much higher growth of money supply or there will be no real economic growth.

In any case, it is again a blatant falsehood for the Government to attempt to slide away from its economic failures by lamely asserting that Australia is doing better than other Western industrialised nations. It is not and it certainly has not done so based on annual average performance for the four years from January 1976, two months after this Government came to office, to December 1979. On this basis, we have done much worse than the average of the other nine Organisation for Economic Co-operation and Development countries, among them the United States of America, Japan, Canada, Britain, France, West Germany and Sweden. Our economic growth has been lower, and our inflation and unemployment much higher, while the size of our work force has grown much more slowly.

To bolster that view, on the basis of the official statistical evidence available, I seek leave to incorporate a table in Hansard.

Leave granted.

The table read as follows -

 


Mr HAYDEN - There are two other general areas of economic policy I want to deal with tonight. One is the broad thrust of what will be the economic strategy introduced by the Hayden Labor Government in the new year. It is a shame that so few of our good friends on the opposite side of the House will be able to enjoy the delivery of that by Ralph Willis. The other is its cost.


Mr Anthony - Now we'll hear the alternative Bob Hawke.


Mr HAYDEN - The hardboiled Deputy Prime Minister! He proves the truth of the old maxim: Hardboiled people are always half baked. Before I do so, however, there are several comments I want to make about defence spending in this Budget. The first is that the Opposition welcomes the significant increase in defence expenditure. It has been a long time coming, given the noisy posturing of our Prime Minister on this issue for so much of his political career. At the same time, I would like to acknowledge the weekend comments of the Liberal Party's Senator Puplick who told a teachers conference in Sydney that the Government had allocated more funds to defence than to education this year because it believed defence was more politically popular.

We on this side of the House are gratified to be reassured that the Prime Minister's renewed interest in defence spending springs from a real concern for this country's security and not simply from the base motives of political expediency in an election year. After all, there has been some suspicion among the more cynical in the community that the rapid process of decay in defence spending under this Government had only been arrested by the Prime Minister's wish to exploit the Soviet invasion of Afghanistan as an electoral smokescreen for his mishandling of the economy. We are grateful to Senator Puplick for removing any misunderstanding on this question. At this point I should like also to remind the House of the Prime Minister's shattering silence on Afghanistan since our Olympic athletes attended the Moscow Games. We are into our second week and there was not one dire warning of the impending peril that we heard day after day, hour after hour, on every other sitting day in the last session. Then the Afghanistan issue was so grave that the Prime Minister claimed in February, that World War III could break out in three days. Later he amended this to three years. Now he says nothing. The Olympic Games are over.

The Prime Minister's silence on Afghanistan is astonishing. In its capacity for astonishment it is similar to the total absence of accompanying hysterical headlines in the newspapers of his media acolyte, Mr Rupert Murdoch. Like the Prime Minister's rhetoric, the interest of the Murdoch press in Afghanistan evaporated the instant our athletes arrived in Moscow. Perhaps the Prime Minister could explain this curious coincidence if and when he takes part in this debate. Perhaps he could tell the House also who or what he now intends to boycott to get the Soviet troops out of Afghanistan or if, indeed, he now has any policy at all. In international affairs he is a man to be recognised in humanitarian endeavour. As he leaves this country next week - once again - to receive his award, he will do so to the acclaim of Pol Pot and to the bewilderment of the Noonkanbah Aboriginal people.

My colleague, the honourable member for Corio (Mr Scholes), will develop the attitude of the Opposition to defence more fully at a later stage of the Budget debate. It should be pointed out, however, that while the proposed increase on defence spending is impressive, a large part of the increase is a consequence of inflation and does not represent any addition to our defence capabilities. The increase of $533m in this Budget -

A Government member - Rubbish!


Mr HAYDEN - If we are to talk about rubbish I will have to give the floor to the honourable member for Denison (Mr Hodgman) who interjects. Of the increase of $533m in this Budget, some $290m, or 54.4 per cent, is directly attributable to inflation. Only 45.6 per cent, or $243m, of the extra funds, will flow directly to improving our defence forces. The Budget also points out the lamentable failure of the Government to maintain an orderly flow of new equipment orders. In a Budget which reflects the priorities for higher defence spending resulting from dramatic changes in strategic circumstances, it is worth noting that in two key equipment areas, the Budget provision is actually lower. Naval construction drops by $18.8m, or 7.7 per cent, and the category of armoured and combat vehicles, artillery, et cetera, drops by $4.7m, or 16.4 per cent. So the self-appointed major of Dad's Army, the honourable member for St George (Mr Neil), may cogitate on that.

This illustrates the impact of lead times on the ability of the Government to make short term orders for new equipment. It also demonstrates in a most telling way the failures of recent years in ensuring the orderly process of necessary reequipment. Little progress has been made in attaining the Government's often professed aim of reversing the balance of defence spending from manpower, stores and maintenance to new capital equipment. Superficially, there is a perceptible improvement, with a smaller proportion to be spent on wages and salaries in particular. However, if we include the allowance of $110m for prospective wage increases, then the share of manpower costs rises to 51.7 per cent of total expenditure, which is little different from 1 979-80. Even with 1 7.2 per cent of funds going to new capital equipment, the Government still is a long way of short of bringing this share up to its objective of 25 per cent.

I now want to outline what we regard as a fair and practical economic strategy for Australia at this time. We would argue that it is the only appropriate strategy in the circumstances we face. Unlike the Government, we will forsake the levitation school of economics. Our proposals will come as no surprise to the Parliament. I have advocated these policies for each of the last two years. The pity is that the Government did not adopt them. In general, we will apply policies that generate economic growth, create jobs, wind down inflation, and improve the real level of family living standards.

Without an economic growth of 5 per cent a year there can be no sustained reduction in unemployment. The national Government must intervene, and intervene helpfully, to ensure the economy achieves this sort of growth. By careful and controlled stimulus, it must lift the spending power of Australian families so as to increase effective demand. This, in turn, will boost productive output and generate new jobs. At the same time, the high and inflationary fixed costs of under-utilised productive capacity in industry would be steadily reduced. We are committed to the principle of restoring the right of every Australian to a job. We commit ourselves firmly to full employment in Australia. As a first step, and at a modest cost the economy can afford, we propose a program to create 100,000 new jobs in our first 1 2 months of office. Such a program will convert unproductive people wanting jobs into productive employees earning wages, paying taxes instead of receiving unemployment benefits, buying more goods and services, stimulating business activity and, in turn, generating more jobs. We will introduce a program to extend free medical care to all children and to expectant mothers, and impose a freeze on the local crude oil levy to moderate petrol price rises. Both initiatives will increase the real spending power of the family pay packet, while at the same time, with judicious reductions in the cost of essential commodities, such as health insurance and transport, restrain inflation.

We will establish a sensible wages and prices policy that recognises that we must have cooperation and consultation between Government and the union movement; not confrontation and disputation. Such a policy, by direct Government action, would be directed at improving real living standards, curbing inflation, and establishing processes for Government negotiation with the unions to ensure that the potential for wage push in the 1 980s can be contained.

Finally, in supporting increased resource development, we will introduce a resource tax - or excess profits tax - to ensure that more of the great chunks of wealth generated by mining stays in Australia to regenerate our manufacturing industry and create jobs where they are needed most. Mining is capital intensive and creates few jobs, directly or indirectly. The benefits of resource development will not come through increased employment, except for a skilled minority. Does anyone on the Government side dispute that? Even the Government's senior advisors acknowledge that the benefits to Australia from resource investment must be maximised.

The IDC report on economic strategy that I quoted from earlier urges greater income gains from mining development for all Australians, a cutback in tax concessions for particular projects or types of activity and suggests that the Government may have to consider the sort of excess profits tax - resource rental tax - that we intend to introduce. So the Government's advisers recognise the virtue and the pertinacity of what we propose. Only the Government shirks the responsibility it should discharge to the Australian people. In passing, I should note that the IDC report has very clear and firm reservations about the alleged extent of resources projects that are to get under way during the 1980s. The Prime Minister and his Liberal Party Deputy, old rubbery Phil-


Mr SPEAKER - Order! The honourable gentleman, in identifying the person to whom he is referring, may give him his title - the right honourable the Minister for Industry and Commerce or the right honourable member for Flinders.


Mr HAYDEN - Mr Speaker,I accept that. The two have been insisting in recent weeks that projects worth $29 billion are now committed for development. Not surprisingly, given the credibility of these two gentlemen, the IDC is nowhere near as positive. I think we can rely on the veracity of the IDC rather than the fantasy of the Prime Minister. The IDC report states:

Great caution is necessary in interpreting any aggregation of individual projects, particularly as regards timing. The coverage of the estimates also defers from ABS estimates of past investment, particularly in resource-based manufacturing, for these reasons, neither precise comparisons with past trends nor confident pictures of the future are practicable.

That is a vast difference from what the Government is proposing. That is not quite what the Prime Minister, the Deputy Prime Minister (Mr

Anthony) or the Minister for Industry and Commerce (Mr Lynch) have been telling the Australian people for the last two months. They have been trying to engage in saloon bar solutions to very serious problems which face the community.

We also have firmly announced our intention to restore increased powers to the Prices Justification Tribunal, the Trade Practices Commission, and to establish an Agency to break up the Cartelised power of the oil companies. All three initiatives will assist in stabilising prices in key sections of the economy and thus further restraining inflation. Continued foreign investment is needed by Australia but not at any price. This Government insists on selling out our country, including our great energy resources, to any and all foreign buyers. The Hayden Labor Government in the new year will not be anywhere near so lenient.

Wages policy over the next two years is going to be crucial to economic management. I freely acknowledge this, though for reasons vastly different from those paraded by the Government. As the IDC report makes clear, the Prime Minister and his Cabinet colleagues are on the threshold of abandoning wage indexation, in defiance of the benefits indexation has brought to economic management since it was introduced under the Whitlam Government in 1975. It is also a move that would ignore the enormous clout it would give to a number of large and powerful unions throughout the country. By the same token, it displays a naive disregard for the structure and interrelated strength of the trade union movement, factors that guarantee, as surely as night follows day, a full flow-on to even the industrially weakest unions of any wage benefits gained by individual application. The fact remains that wages until this year have lagged well behind cost of living increases. Even this year they have not matched the joint mix of improved productivity and higher cost of living.

In the years ahead, there will have to be a general improvement in wage justice. And if Government does not provide that justice by a judicious blend of social wage measures, then it will be achieved by the unions in direct wage initiatives. That stark, unavoidable fact must be acknowledged by any government in office if we are to avoid perhaps the greatest industrial upheaval to be experienced for many years. I repeat: The ordinary wage and salary earners of this country are no longer going to put up with the wage and salary compression, and depressed living standards, that have taken place in the last five years. Certainly they will not do so at a time when the profit levels of so many large and powerful corporations continue to soar as they have done in recent times.

They will not pay the slightest heed to Government calls for restraint when that Government has been increasing their tax burden by the stealth of inflation at the same time as it has been handing out some $2,500m in tax concessions to industry.

This Government, of course, by its attitude and actions in recent years, has utterly destroyed any trust or credibility it might have held with the trade union movement. The average Australian worker no longer trusts this Prime Minister to give the wage and salary earner a fair go, to treat Australian families with decency and respect, which is why this Government is in such a panic over the agreement reached between the Federal parliamentary Labor Party and the Australian Council of Trade Unions last week on the framework for a prices and incomes policy. I have endorsed the agreement and so has Bob Hawke. What we have achieved, for the first time in this country, is a political-industrial agreement on procedures for an effective and economically sound policy covering prices, wages and non-wage incomes. It is an agreement reached by co-operation, understanding and goodwill. It will bring a Labor Government and the trade union movement into consultation on some of the most sensitive economic issues facing this country. It is endorsed by people on both sides who look for more from industrial relations than union bashing and heavy-handed strike action. It is supported by people who put Australia first and the best interests of Australian families ahead of the crude, and often callous, division generated by the Prime Minister. It is a vast improvement on anything this Government has been able to achieve in five years of big stick policies. It will be implemented by Bob Hawke--


Mr Chapman - The new Leader of the Opposition.


Mr HAYDEN - I constantly hear references being made to the relationship between myself and my colleagues. I merely invite the House to consider the front bench of the Government. It is a clutch of wealthy subsidy-grabbing graziers, an international playboy, a sports store operator, a former goldfish salesman as Treasurer and a born again funeral parlour proprietor. Let me repeat--


Mr SPEAKER - Order! The House will come to order. I remind the honourable Leader of the Opposition that this is the national Parliament. Those references to honourable members of this Parliament, while not strictly unparliamentary, are quite clearly a departure from reasonable standards of debate in this place. I call upon the Leader of the Opposition to continue his speech.


Mr HAYDEN - It almost seems that there are two editions of the Standing Orders that apply in this House.


Mr SPEAKER - Order! The honourable Leader of the Opposition will resume his seat. I will ignore the reflection made against the Chair. I ask the honourable gentleman to proceed with his speech.


Mr HAYDEN - Let me repeat that this policy will be implemented by Bob Hawke as Minister for Industrial Relations in the new Labor Government - that is, by the man universally acknowledged as the most experienced and successful industrial negotiator for at least the last 30 years. Let me now move on. Our announced policies on family health care, family allowances, petrol prices and housing have potential benefits for a couple with three children on a weekly income between $190 and $250 of between $20 and $25 a week. That is a substantial contribution to shoring up and restoring the living standards of the men, women and children of this country, living standards that have been deplorably depressed by the conscious policies of this Government. What has happened to families in this country? The way in which taxation has been aggravated by the Government's pricing policies is not the product of some sort of accidental incident, some sort of equivalent of a natural disaster like a cloud burst over north Queensland. They are the product of consciously applied deliberate Government policies. They can be as easily reversed. That is what we are talking about. We are now considering a range of tax options. One of these options - I repeat one - will be announced in the detailed launch of our economic policy next month or whenever it is appropriate. The options under consideration are:

(a)   a cut of 3c a litre, or 1 3.5c a gallon, in the excise on petroleum products. This would cost $300m in a half year, and would come into effect from 1 January next, in tandem with a price freeze on domestically produced petroleum throughout the following 12 months. It would reduce the CPI by almost one per cent, and would save about $2 on every tank of petrol for the average six-cylinder car;

(b)   alternatively, a cut in income tax from 1 February costing $300m for the five months to the end of June. It offers an average benefit of $3 a week, with those on lower incomes gaining the proportionately greatest benefit; or

(c)   an equivalent cut in sales tax from 1 February.

Before the Prime Minister runs those all together, multiplies by four, adds $ 1,000m for good measure, and then rushes into print shouting, 'We're all going bankrupt', I repeat that only one of those options will be adopted. The proposals do, however, add to the substance of our attempts to improve family living standards in real terms. Whichever of these measures is adopted, the resultant tax deduction will clearly be of assistance in obtaining co-operation on the wages front from the trade unions.

Our broad policy represents a modest set of proposals - too modest for some, no doubt, but almost as much as can be achieved within the limits of sound economic management. It is a package of proposals that will ease the tax burden, improve family spending power, bring down inflation, provide for a workable prices-incomes policy, save on government outlays on unemployment benefits, generate more national wealth, and bring about economic recovery. It is a healthy contrast to this last Budget of the Fraser Government - the document of a bankrupt organisation that freely confesses that higher inflation, higher unemployment, and higher interest rates are all it has to offer Australia this fiscal year. In total, it represents a modest domestic deficit and will allow a needed, controlled, and manageable expansion of the economy to take place. The marginal additions to money supply and non-bank sales of securities will be such as to avoid pressure on interest rates or inflation.

Finally, there is the matter of cost. For one thing, the Government has no credibility when it comes to cost, even for its own programs. In the last four Budgets, its costings of a number of programs, predominantly for unemployment benefits, have been wrong to the accumulated extent of $875m. Yet it asks to be taken seriously in this area. More pertinently, we knew that the Prime Minister had seen the two latest opinion polls when he began his exaggerated hysteria last week, saying that our programs for health care, family allowances, housing, education, and jobs would cost variously between $2,000m and $4,000m, depending on which news bulletin one listened to and at what time of the day. Both opinion polls suggest that the Prime Minister's term of residence in the Lodge is about to come to an abrupt end.

As in his claims about tax reform, the Prime Minister's only real alternative was to initiate an immediate and massive campaign of misrepresentation of the costs of our programs. Not to put too fine a point on it, he misrepresented the issue, and he will continue to do so until polling day. He began on the early morning news bulletins last

Thursday with a cost of $2 billion; by the lunchtime bulletins it was up to $2.5 billion; and by the time of the 1 1 p.m. Australian Broacasting Commission news that night, the Prime Minister had the cost up to $4 billion. It was a superb example of Fraser economics - $2 billion increase in less than 24 hours. That is inflation really at work. The whole exercise is just as transparent as the Government's progressive escalation of development projects from $6 billion at the end of 1977 to $29 billion today. As I pointed out, by reference to the interdepartmental committee report it can be seen that the Government's own advisers do not believe the Government. Why should Australians believe it? All this is from a Government whose sole contribution to development to date has been to close down the central Queensland coalfields in pursuit of more tax from the miners there. What a magnificent struggle of principle! Each week the Government is prepared to forgo $30m in lost export income, to forgo $13m each week in lost revenue to State and Federal Governments in a dispute over a small beer tax that will gain no more than about $20,000 to $25,000 a week. Already more than $240m has been lost in export income and more than $100m has been lost in revenue to the Government. That is sheer stupidity.

The costs of our programs have been hidden from no one. We have released our costing for each program, and justified it under questioning, as each policy has been announced since November last year. Our jobs program was announced in March. The Minister for Employment and Youth Affairs (Mr Viner) initially claimed it would cost $300m, until the Prime Minister upped the ante a week later to $600m. At least they are imaginative. Now the Prime Minister has put it up to $1 billion. The total cost of these five programs in the first full year will be $835m. This total is made up of $1 50m for housing, $1 30m for health, $275m for family allowances, $l80m for new jobs, and $100m for education. All these details have been announced progressively over the last eight months. I repeat: It will be the total additional cost in their first full year of operation.


Mr Donald Cameron (FADDEN, QUEENSLAND) - What about the Tasmanian air fares you are to reduce?


Mr HAYDEN - If it looked like keeping the honourable member there I would cancel the undertaking. So far as this Budget is concerned, the additional cost will be a maximum of $250m, given that we will not be able to start gearing up the new programs until the new year. By then, no more than four or five months of the current fiscal year will remain, and not all our programs will be capable of being implemented before 30 June. I am overwhelmed by the optimistic assessment of our capacities on the part of the Government. 1 am certain, however, that it is not altruistically motivated. The facts are that there will be limits to the rate at which we can implement the programs and the time from which they can commence.

Our revenue proposals will be set out in detail in next month's policy launch. Broadly, they involve the resource tax that all the Government's advisers - Treasury, Reserve Bank, Prime Minister and Cabinet, Finance, and Trade and Industry - have recommended. The resource rental tax would net upwards of $100m a year, while we estimate to gain a conservative $500m to $600m a year with retrospective legislation to close off the tax avoidance industry. That is, there will be fair dinkum action against an industry that nourishes under this Government. The increase in the number of tax avoidance practices identified by the Taxation Commissioner so far has been 1,300 per cent under the Fraser Government. It cannot be fair dinkum.

There is one very relevant example that puts the Prime Minister's cost hysteria into perspective. Page 87 of the Budget attachments discloses that government spending on student assistance this year will increase by $5m for a half year, or $10m on a full year basis. Included in this amount is a 10 per cent increase in the Tertiary Education Assistance Scheme allowance for tertiary students. I would like honourable members, especially members of the Government, to absorb this. It is further evidence of the total fabrication which goes into the Government's exercises in costing our programs. I repeat: Page 87 of the attachments to the Budget Papers shows that on a full year basis the cost of the 10 per cent increase proposed in the TEAS allowance is $10m. Our education program proposes a 20 per cent increase in the TEAS allowance. Yet, while the Government can accommodate a 10 per cent increase within $10m it is claiming that a 20 per cent increase in our program will cost $8 5m. It is not on this side of the House that the eyes are speckled green. That illustrates better than anything I can say just how absurd and dishonest the Government's claims are.

Mr Speaker,this Government scatters deceit like confetti at a wedding. It distorts and misrepresents its own actions and policies just as readily as it maligns and misrepresents those of its opponents. It fabricates arguments against the Australian Labor Party in exactly the same way that it fabricates the supposed virtues of its Budget. The extent of this exercise borders on the grotesque. This Government has rigged its Budgets year after year to make them conform more with the image it seeks to propagate. Items have been dropped from the Budget, juggled between accounts and accounting periods - the proprieties of proper presentation- have come to mean nothing. Standards have been demolished under the Fraser Government.

We have heard the Prime Minister and his Treasurer lecture this House and the community on their good housekeeping. They have had the gall to claim that they have paid off the debts of Labor's period of government. Yet this same duo has increased the debt burden of this nation sixfold compared with the Labor years. The last Labor Government increased Commonwealth debt by less than $2 billion. The present Fraser Government has increased that debt by more than SI 2 billion. That is its idea of good housekeeping. It is typical of all its propaganda about its expertise and success. It is a testament to its failure and soon will become its epitaph. This Government stands condemned by this Budget - the outstanding example in its outstanding record of failure. We reject it and on behalf of Australia we repudiate it.







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