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Tuesday, 26 August 1980
Page: 737

Mr SINCLAIR (New England) (Minister for Special Trade Representations) - Mr Speaker, 'inconsistent', 'inadequate' and 'incompetent' are the best words to describe that repetition by the third Labor Treasurer of those three disastrous Labor years. His speech contained personal abuse, empty epithets and hollow phrases.

Mr Dawkins - At least he didn't pocket $300,000. Pay back the money. Pay back the $300,000.

Mr SPEAKER - Order! The right honourable gentleman will resume his seat. I warn the honourable member for Fremantle to cease interjecting.

Mr SINCLAIR - Lest anyone listening to Parliament tonight should forget it, 1 think it is worth reminding them that the Leader of the Opposition (Mr Hayden) has just demonstrated not only that he is incompetent in most things but also that, were he in government, he would lead Australia to a situation of even worse inflation than that into which he helped to lead Australia during those three years of Labor government. He has tonight demonstrated that Labor remains a high taxation party - a party committed to higher deficits than this country has known previously. Lest anyone should forget it, let us just turn back to the headlines of the Sydney Morning Herald of 20 August 1975, the morning after the presentation of that last Hayden Budget. Do honourable members remember? I quote:

Duty on beer up 4c a middy, about 10c a bottle. Duty on brandy up He a nip, about 39c a bottle, other spirits up . . . 26c a bottle. Cigarettes: Duty up 6c on a packet of 20 (likely retail rise 8c) , other tobacco products up 6c on a packet of 20 likely. Petrol: Duty up by about 6c a gallon. Airlines: Dearer airfares likely as a result of greatly increased air navigation and other charges.

Tonight the Leader of the Opposition has demonstrated again that he is moving into that same category of economic management. We all recall so well how the Australian economy was in tatters in 1975. Within two years of Labor gaining office, inflation leapt from less than 5 per cent to 1 7.6 per cent. So much for the comparisons the Leader of the Opposition tried to make with the Budget that has been brought down by my colleague, the Treasurer (Mr Howard). In various 12-month periods, the Government of which the Leader of the Opposition was a part saw unemployment grow by 177,600, a rise of 114 per cent. It saw government spending grow by 46 per cent in 1974-75.

The Leader of the Opposition talked of generating opportunities for new jobs. Where but, of course, in the public sector? Yet he was one of those people instrumental in a government policy which saw 1 23,800 jobs lost in the manufacturing sector alone in the 12 months from June 1974 to June 1975. Over his period, average weekly earnings rose by 28.2 per cent, putting thousands out of work and forgetting the admonition of an earlier Labor Treasurer who mentioned that one man's pay increase is another man's job. In the year to March 1975, we saw a 38 per cent increase in federal award wages. The money supply grew by 23 per cent in the 1 2 months from September 1974 to September 1975. The Leader of the Opposition was one of those who was involved in a government under which personal tax collections rose by 125 per cent over three years and under which industrial strikes reached record levels with over six million working days lost in 1 974 alone.

So much for that supposed paper on industrial compromise, a paper which fascinatingly the Leader of the Opposition referred to tonight. Of course, it is not a social contract. It has apparently been entitled: 'The Relationship Between the Australian Labor Party and the Trade Unions'. It contains no conclusions, just a reference to a number of areas in which there is a recognition that the Labor Party would remain subservient to the dictates of its trade union masters. Company profitability is a fact to which the Leader of the Opposition gave little mention tonight other than in debasing form. He knows that in that period it collapsed, as did business and consumer confidence. Government spending jumped by 20 per cent, 46 per cent and 23 per cent in those three consecutive years. Of course, more dramatically, overseas markets were lost and imports replaced Australian-made goods. Farm costs soared, foreign investment dried up and, above all, mineral and oil exploration stopped dead in its tracks.

Labor's economic vandalism continues. It hurt in those days those people whom the Labor Party claims to care most about - the poor, the disadvantaged, the sick and the newly-arrived immigrants. What chance is there under the program which the Leader of the Opposition has outlined tonight to see any different pattern?

This Government, on the other hand, has launched a program which does not bring about changing headlines year by year in the contents of the Budget. It is a program designed to ensure continuity and economic management, to sustain real economic growth in the nation, to underpin the growth and development of Australia's vast mineral and energy resources, to sustain a healthy and competitive manufacturing sector and, above all, to promote the creation of new and secure job opportunities for all of those willing and able to work. It has provided responsible management for the national economy through appropriate fiscal, monetary and external policies. It has encouraged wage and salary restraint in order to boost employment and to improve the competitiveness of Australian industry and agriculture. It has ensured the minimum level of taxation consistent with responsible budgetary policy.

I think it is necessary to look at the positive program of this Government as the Leader of the Opposition spent so much time attacking what he saw as the personalities of the Government rather than their real achievements. Let us look at some of those achievements. Australia's inflation rate has been dramatically reduced. In particular, if we look at the world-wide resurgence of inflation, Australia's record can be assessed only as admirable. It has been substantially below the average of the Organisation for Economic Co-operation and Development. At the moment it is about 3 percentage points below the average of the OECD group of countries.

I wish to say a few words about taxation. The Leader of the Opposition started to talk about some of the developments, as he sees them, in a Labor-induced taxation program. I believe this is the area of most concern to the Australian people. To me the Labor Party's system of tax introduced by the Leader of the Opposition was a vehicle by which the Labor Party directly placed a restraint on individual initiative and endeavour. Tonight in his speech on the Budget he demonstrated yet again that he is going to continue in that vein. Let us make no mistake about it: Tonight's speech on the Budget is the opening of the Labor Party's 1980 election campaign. He has laid down a few ground rules which I think we need to take note of. He has talked about a resource tax and an excess profits tax, but then he talked about what he sees as some of the regressive effects of indirect taxation in our community. I have already referred to the category of those that he introduced in his last Budget. Let us look at this list of taxes to which he and his colleagues are already committed. In the Age of 31 December 1979 the Leader of the Opposition said:

I have committed my organisation to a capital gains tax, a resource rental tax, a levy on domestic oil producers, a number of initiatives in the tax area and other measures of that nature.

In what constitutes an elaboration of those other measures one of his colleagues - the shadow Minister for Economic Affairs; he is never likely to advance beyond that status - said:

It is wrong that we do not have some form of tax on capital, be it death duties, capital gains tax or wealth tax or perhaps some of those or all three.

It is interesting to note that in his analysis tonight the Leader of the Opposition has looked at what he asserts to be the high taxation policies of this Government. What utter nonsense! The Leader of the Opposition has already accepted, as recorded in Hansard of 29 March 1979 on page 1294, that if his own tax scales were to have applied at that date - that is nearly 18 months ago - people would be paying more in taxation. He said:

The Prime Minister is constantly asserting that if the tax scales which I introduced as Treasurer in 1975 applied today people would be paying S3,000m more in taxation than they are actually paying. I do not dispute that assertion.

Here we have this low tax advocate acknowledging that his own tax scale would have generated $3,000m more in taxation a year than the Australian people are now paying, and that figure is 1 8 months old. I do not doubt that in the course of that period at least $ 1,000m could be added to those figures. The Leader of the Opposition continues:

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.

The difficulty is that the Leader of the Opposition fails to recall those commitments and comments that he has made in other places. Not that long ago - on 10 June 1980 - he addressed the Sydney Chamber of Commerce. Let me quote what was said then about mining by the Leader of the Opposition - the man who a few moments ago told us that mining is capital intensive and creates few jobs directly or indirectly. He said:

Mineral development can create the wealth needed to generate the industrial renaissance Australia so urgently requires, and, with it the jobs our people so pressingly want.

All things for all people. So be it. The Leader of the Opposition is not the only one who should be quoted. One finds that the shadow Minister for Industry, Commerce and Business Affairs produced on an occasion not that distant - in April 1980- what he called a progressive industry policy for the 1980s, a green paper on industry. Let us hear what he said about the prospects for employment in the mining area. He said:

The scope for investment in this area needs no further elaboration. It is a mistake to think that this investment--

Energy and minerals - does not lead to many jobs. Although highly capital intensive, about three quarters of the outlay on resource projects is spent in Australia on locally produced materials and the spin-off on other production and maintenance is large. It is also a mistake to consider the investment in these pursuits substituting for investment in more labour intensive areas. The one stimulates the other.

It is about that sector that the Leader of the Opposition has stated tonight that he believes it creates new jobs and has deliberately asserted that he is going to introduce a resource tax or excess profits tax designed to limit future exploration, future development and, of course, overseas investment. As if he were not content enough with that, he continued with talk about what he calls the necessity to restore increased powers to the Prices Justification Tribunal and the Trade Practices Commission and to establish an agency to break up the cartelised power of the oil companies.

Most of the members of this House have had an opportunity to read a very well informed and well documented analysis prepared by the Confederation of Australian Industry of the costs of regulations. This analysis illustrates that we are already over-regulated. What would happen under Labor's alternative proposal? The Labor Party would augment the machinery of intervention. It would restore many of those interventionary socialistic practices which its left wing tends to impose on any Labor program. The three points identified by the Labor leader tonight ensure that Australia would have even greater intervention at the Federal level, to the point of completely denying initiatives, investment and employment.

Mr Kevin Cairns - What about the hydrocarbon corporation?

Mr SINCLAIR - And then there is, as my friend and colleague from Lilley mentions, the proposed hydrocarbon corporation. One thing of which members of this House are only too well aware - I wonder whether even the people who have not pursued the theory are not by now beginning to recognise it - is that from the hydrocarbon corporation through to the program announced by the Leader of the Opposition tonight with respect to this freeze on oil prices for 1 2 months we have a totally unreal energy policy from the Opposition. It is a policy which would cost more, which would ensure that there would be less exploration and, thirdly, which would not maintain the flow of energy, particularly of petroleum products, to the Australian consumer. We have already had an illustration of that as a result of the programs followed by the Labor Party over those three disastrous years when it was in government. There is nothing in the speech tonight of the Leader of the Opposition that can give anyone any confidence but that the Labor Party will continue with the same disastrous trait.

On the other hand, as far as the Government is concerned, let us analyse some of the achievements that have been laid down by the Treasurer and where we are going. I refer firstly to taxation. Our simplified three-step system of personal income tax has produced a tremendous incentive to individuals. The 90 per cent of wage and salary earners on a standard rate of tax demonstrates the alternative. After all, the seven-phase tax system of the Labor Party did provide uncertainty and it was directly regressive in its application to the citizen. This Budget, moreover, has provided selectively in areas of human need and care. The amount of money allocated to health, social welfare and education has increased significantly over the preceding period. Contrast our approach to the needs of people to the Opposition's approach. Our approach has been to provide according to need, whereas the Labor Party's approach provides irrespective of need and in a way that places too great a burden on the productive sector of the economy.

The cost of all the proposals that the Labor Party has outlined tonight are to the cost of industry, business, agriculture and individual initiative. The cost of the Labor Party's socialistic program is beyond the capacity of Australia to bear. The names might have changed, but the Leader of the Opposition remains as one of the principal figures during those three years that are not so far distant. The fascinating thing about the program tonight is that the one name that was outlined by the Leader of the Opposition in his speech as being that of the man to whom all things are to be referred is a man who at this stage is not even a member of this Parliament. I think the people of Australia need to remember that the former President of the Australian Council of Trade Unions is obviously in the wings, presumably still able to exercise the influence of the trade unions over whose affairs he has been a guide and mentor for so many years. It will mean that to an even greater degree in any future Labor programs we will see the intrusion of trade union policy.

That without doubt is the only conclusion that the people of Australia can reach with respect to the paper that has been produced on the relationship between the ALP and the trade union movement. That indicates that the Leader of the Opposition and Mr Hawke have now entered into an agreement under which the trade union movement will continue to dictate to any future Labor program. It would be a program that would be set by the democratically elected members of this Parliament. It would be a program determined by those who are ideologically committed within trade union movements and who are in no way answerable to the people of Australia. Labor's economic policies would spell disaster for this country. There is no overall plan, except vastly increased public expenditure. To promote its socialist and interventionist objectives Labor would lay the dead hand of bureaucracy on the economy and industry. It would establish an economic planning advisory council as a major arm of government - shades of 1984. It would initiate democratic national planning in order to relate activities of both the public and private sectors to the goals of society.

Mr Baillieu - What does that mean?

Mr SINCLAIR - It is all words. What does it mean? It would influence the allocation of resources between the various sectors of the economy in accordance with priorities set by the national economic and social strategy. It is an interventionist program, not attuned to the economic realities of today but attuned to the ideologies that will be set by a trade union dominated Labor alternative. The Leader of the Opposition will intervene where necessary on both the demand and supply side of the economy to achieve national objectives; establish or extend public enterprise where necessary to combat antisocial monopoly; maintain and extend essential economic activity; and facilitate the restructuring of industry. Again, we see the heavy hand of bureaucracy. Labor's program will limit foreign investment by developing a public sector capacity to undertake investment in industry. Labor proposes to introduce a wealth tax to impose crippling rates of tax on higher income earners. It will introduce a secondary profits-related resource tax. It will threaten oil exploration and other major energy policies. Labor's economic package and its big spending programs are more than Australia can afford. They are nothing more than a proposed rerun of failed Whitlam policies. Big spending and big government, the hallmark of Labor, will be a disaster for this country. It was before, and it would be again. No wonder the Leader of the Opposition admits that considerable suspicion of the Labor Party and all Labor Party governments remains in the electorate. So it should.

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