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Wednesday, 23 August 1972
Page: 355


Senator CAVANAGH (South Australia) - Another Budget is before us. We meet here in August each year for the purpose of discussing the Budget prepared by the Government. I have been here for 10 years and unfortunately the Budget has been presented in each of them by the one Government. We are told with monotonous regularity what the Government proposes to do in the financial year. Each year we hear Senator Webster make a contribution to the Budget debate. Each year the honourable senator justifies everything in the Budget and tries to prove that things would be much worse if there were an alternative government. Every year he makes a strong plea for the primary producers. He shows how the Budget will benefit t'-.em, yet they become poorer than before. Apparently, this group in the community is not benefiting from the annual increases that are given to it. Therefore it seems there is justification for the case of the primary producers to be raised every time a budget is presented. (Quorum formed) I want very much to thank you, Senator Buttfield, for ensuring that I have an audience because I think that the contributions I make fully deserve one. For a long time there has existed a friendship between Senator Buttfield and myself and 1 am sure that she desired to assist me and tried to make restitution after the efforts of Senator Webster, who had driven everyone from the chamber. I am very appreciative of her assistance in this regard. I do not accept the suggestion that the quorum was called for the purpose of reducing the time available to me. I know that Senator Buttfield acted with the best intentions to ensure that 1 had an audience deserving of the speech which 1 intend to make.

I was drawing attention to the regularity with which Senator Webster points out the benefits that Budgets confer on primary producers. He then proceeds to indicate how the benefits given to them have been reduced. Senator Webster has made such a contribution tonight.

There is another benefit to be conferred by the Budget. It will be possible for a married couple, on reaching the age of retirement, to earn up to $40 a week without affecting their pension. Therefore one must consider their ability to earn $40 a week. This money plus the dual pension of husband and wife will be a pretty good income for elderly people in retirement. But surely when they reach the age of 65 they have earned their retirement and are deserving of retirement benefits. They should not be put in the position where, in order to have an adequate income, it is essential for them to continue in industry. There are 2 matters which should be considered here. First, where does one get a position that will attract a rate of $40 a week in what must be essentially a part time industry? Does the Department of Labour and National Service have such positions available? Secondly, what about the individual who is unable to work after the age of 65? While it may be possible for an individual to continue working after 65 years that person will soon reach an age at which industry will not employ him.

Government supporters seek to justify the unemployment situation in Australia today - and we hear this attempt at justification at every question time - by saying that the level of unemployment is not as severe in Australia as it is in other Western or developed nations. But the level of unemployment is more severe today than we have been accustomed to since the pre-war days, other than for a period in 1961. But someone finds consolation in the fact that we have not yet reached the rate of 6 per cent which applies in the United Kingdom or 8 per cent which applies in the United States, arguing that we should not squeal until we have reached such rates. Obviously these are the goals for which this Government aims. Senator Webster today finds satisfaction in the fact that we do not know the unemployment position in communist countries and argues therefore that we should not criticise unemployment in Australia. He said, in effect, we do not know whether unemployment figures in communist countries may be greater than our own. We must face the fact that a level of 2 per cent of unemployment is a level which we have not been used to in postwar years.

Over the years I have highly praised the competency and accuracy of Treasury officials in the preparation of the many White Papers and Budget Papers that we have received from them. Those papers have shown the intentions of Budgets to affect the economy in various ways from time to time in accordance with Government policy. The fact that the Opposition is expected to oppose the Budget from year to year is no reflection upon the accuracy of the White Papers those Treasury officials produce; rather it is a condemnation of the policies and priorities adopted by the Government. We have seen from time to time, following the presentation of the statistics, an overspending in one direction or another - in the public sector or in the private sector - and inflation and unemployment. The Government has sought by budgetary means, to rectify those situations and I would say has brought about the results which the Budgets sought to achieve. But if the policy a government is pursuing is incorrect, there must come a day of reckoning when the results of that incorrect policy would be beyond control and out of hand.

It could be said that this Government has ridden on the buoyancy of the econ. omy and has gloried in it, particularly following the 6 years of war when there was either no production or very little. This was a period of post-war rehabilitation during which there were acute shortages of goods in Australia, and any government that won election in 1949 was assured .of being returned because it was basking in the glory and the efficiency of a buoyant economy. This Government has accepted that glory and the praise which has followed, because the economy has moved satisfactorily for the entire community.

So have the economies of all nations of the Western world. Indeed, there has been extended prosperity even in countries which cannot be classified as part of the Western world. Those years were such that the economies were buoyant and full employment prevailed in more affluent societies. This state continued until 1961 - an election year when there were 135,000 unemployed in Australia. At that time the Government came within one seat of not being returned; in fact, 15 votes against the Government would have made the difference to its continuation in office. The Government realised therefore that it could not continue in this way. In 1963, however, the Government was saved by the United States of America entering the Vietnam war. Australia prepared for entry into the Vietnam war with the necessity of supplying war materials including those which are destroyed and must be replaced by further production. As a result we saw increased production, and this Government had the safeguard of a buoyant economy which reflected our military activities overseas.

We can see now that both this Government and this system have a vested interest in such policies. They argue , that if Australia is to have full employment, we must engage in war as a result of which the country can produce commodities which will be destroyed and must .be replaced. It is of no wonder that we . hear honourable senators mouthing patriotic' platitudes about the purposes of war. They have a vested interest in continued conflict. It is of no wonder that we hear of their desire to keep forces in Singapore and Malaysia. They want some of the energy of production in Australia to be utilised ,to supply our troops in those areas but without Australia actually being engaged .in a war and using the munitions of war. The situation today is that without war 'the .Government cannot continue in officer lt cannot continue because the buoyant /economy is no longer with us. Sound ' economic policies are the only policies which justify the existence of any government in office. '

In its 1970-71 Budget the Government recognised that while things - were going somewhat smoothly in the employment field, it had to curb spiralling inflation. Treasury officials worked' out how this could be done in accordance with Government policy. As a result, they produced last year's Budget. The purpose of this Budget was to curb what has been described as the wage demand upon industry. The method of stopping the wage demand on industry was to create a pool of unemployment - to implement a supply of labour greater than the demand. As a result of the curtailments imposed by the Budget in 19.70-71, no-one .was . surprised that in December 1971 the pool of unemployment increased to about 90,000. Noone was surprised either that there was no significant reduction in the inflationary trend. We saw an increase in the unemployment, figures of such an extent that the Treasurer in December last year was reported in the 'Australian' as saying of the increase: 'This is what we. set out to do in the Budget'. Thus unemployment today is a deliberate result of Government planning. The figures rose to such an extent that in April this year the Government sought to rectify them, knowing full well that defeat was imminent unless it did rectify them. The Government introduced proposals for the release of credit, grants to the States, increases in benefits and remission of the 2i per cent taxation surcharge. Of course, normally it should have increased the spending capacity of the public and have reduced unemployment.

But we had the position where there was no war in which the commodities which we produced could be used. We had the position where we could put money into the hands of the impoverished people so that they could buy foodstuffs and other essentials which, because of mechanisation, do not require a great deal of manpower to manufacture. We had the position where there was a lack of confidence by the public in the Government's .activities, and this resulted in the fact that people, instead of spending money, banked it, and there are record savings bank deposits at the present time. The Government never retrieved the position. Unemployment has grown until today there are 100,000 people - and possibly more - unemployed throughout Australia.

Of course, on this occasion the Government - assisted by the Treasury - introduced a Budget with 2 objectives in mind. It was a Budget designed to restore the economy and solve the unemployment position and to win an election. T think that was the desire. Despite what might be said. I do not think anyone disputes the fact that the general public believes that it is a Budget designed to win an election. In order to win an election there have been handouts to every section of the community. We must remember that possibly less than 10 per cent of the electors decide an election. One can say confidently that 80 per cent of electors vote according to their party allegiance or loyalties and that some 10 or 20 per cent of electors might change their voting pattern from time to time. The people comprising this percentage have not been identified, But whoever those people are, the Government was determined that they would get a handout, so there was an across the board handout, which resulted in the situation which 1 think Senator Wriedt described tonight.

Will the Budget have the effect which the Government desires? As I have said previously and as I will do in another exercise, because time will not permit me to do it tonight, I can produce figures to show that the increased production of essential goods, such as foodstuffs, clothing and shelter that we need in Australia, does not require additional employees under the technology that operates in Australia and other countries today. We find increased employment in the mining and minerals field and possibly in the production of machinery which is used to reduce the manpower required for the production of food and power.


Senator Jessop - I cannot understand that, senator. Would you mind repeating what you said? I could not quite follow what you were getting at.


Senator CAVANAGH - If the honourable senator would like to look at the 1971 Year Book*-


Senator Jessop - I have read that, but I could not quite understand what you were talking about.


Senator CAVANAGH - I know that the honourable senator would have read it. I do not doubt that he would read any publication that is put out by the Government. Whether he could understand it could well be another matter.


Senator Jessop - I can understand it by reading it, but I cannot understand your interpretation of it.


Senator CAVANAGH - The 1971 'Year Book' gives the figures relating to factory operations in Australia from 1964 until 1968. which is only a short period. The figures do not cover the period prior to 1964. But although they relate to a period of only 4 years, they show that the number of factories in Australia has decreased. Between 1930 and 1970 the number of factories in Australia has decreased, but factory employment has increased. The number of factories engaged in manufacturing foodstuffs, clothing and power has decreased over those 4 years, although there was a slight increase of 7.8 per cent in the number of people employed in those factories. There has been an increase of from 14 to 18 per cent in the number of people employed in areas such as mines and minerals, land agency and salesmanship. Therefore, in order to maintain full employment we have to put men into occupations in big selling staffs for the purpose of selling to the community the factory production of goods which the public does not need.

The increased pensions provided in the Budget will allow pensioners to buy bread, butter and jam. They will have a decent diet, which they were not able to have before the increases were granted, but it will not solve the unemployment problem. The other section of the people who will receive increased aid from the Budget and who previously had sufficient money to increase savings bank deposits will still continue to increase their savings bank deposits unless confidence is restored in the public mind, and that confidence can be restored only by leadership from a government which the people respects, and we do not have that today.

The Government is also giving aid to the wealthy section of the community which has no use for the extra money other than to invest it in further production that is not needed. This is the effect of trying to sell production that is not required in Australia. As we have no war in which to use the commodities which people could be employed in manufacturing and as we have no effective policy for allowing the public, rather than the Government, to decide how the money should be spent, we are not doing much for the employment position.

Turning to the question of the Budget winning votes, if the unemployment position was markedly reduced by the time of the election some people might accept the fact that the Government knew what it was doing. But no-one who has a knowledge of the employment trends today, noone who looks up the situations vacant columns in the newspapers and sees the increase in the number of people seeking employment opportunities, believes that there has been or will be any alteration in the employment position. There should be no unemployment in Australia at a time when we lack sufficient schools, hospitals and adequate roads and when we do not have proper public transport throughout Australia. So much in our urban development needs to be done. There is clearing and rebuilding. There is so much to be done in Australia that there should be full employment in Australia for many years to come. I say that this can be done only by directing public spending.

But if we spend money on schools and other buildings it does not give direct aid to the individual whom the Government hopes will vote for it. If it was essential to budget for a heavy deficit this year it was essential to budget for deficits in previous years in order to meet the shortcomings of previous Budgets.

As I said at the commencement of my speech, one expects the Opposition to oppose the Budget, to condemn it and to put up alternative proposals. It can readily be seen, as I have pointed out, that this whole system by which the Government offers protection to the wealthy of Australia cannot be sustained although it occurs in time of war when the economy is buoyant, but I am sure that everyone hopes that the war does not come. .. .

Now is the time for a public rethinking. One cannot deny the fact that a budget which hands out concessions to everyone must have some effect on the electoral thinking of the public. One cannot escape the fact that the Budget must have some beneficial effect, but one cannot get away from the fact that the prestige of this Government as shown by the Gallup polls - I believe that in the recent Gallup poll since the introduction of the Budget the Government's popularity has increased by 1 per cent - is so low that the public today is preparing for a change, and that industry today is preparing for a change.


Senator Wright - Say it quietly; you are wishing it fervently.


Senator CAVANAGH - I would say that the wish for the change is heard more loudly than the preparation for it. There is a recognition that now is the time for change. Confidence is not demonstrated even on the Government benches because of the Government's present leadership, its muddling of the economy and the panic Budget that it has introduced on this occasion. As our Leader, Mr. Whitlam, said last night: 'Do not think' that the Labor Party is inconvenienced by the prospect of an early election'. The sooner the election is held, the sooner the electors of Australia will express their judgment on the Budget. Their judgment will be more solid and more resounding than anything that I could say in a Budget debate.







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