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Wednesday, 25 September 1974
Page: 1418


Senator CHANEY (Western Australia) - I rise with some trepidation to clamber over the hurdle that was effortlessly soared by Senator Martin less than half an hour ago. I join with Senator Button in paying tribute to her contribution but I differ from him in not being surprised. I had on an earlier occasion heard the tongue behind the pretty face. That was in Queensland. I expected that her contribution to this debate would be the sort of contribution that it was. I know that it is but the first of many such contributions.

For me, this is a long awaited opportunity. For many years as a schoolboy and as a student I came to this place with my father who was the member for Perth from 1955 to 1969. During those years I developed a respect and an affection for the institution of Parliament. I also developed an affection and respect for the practice of politics. For that, I thank my father and his colleagues at that time who taught me that politics could be an honourable profession, something that I think is not known to the general populace. At the time I was more conscious of the virtues of the other place than of this chamber, although I remember the late Sir Shane Paltridge proselytising me about the virtues of the Senate. I would say in thanking honourable senators, the President of the Senate and the officers of the Senate who have taught me a great deal in the last few months, that they have demonstrated to me the validity of the late Sir Shane Paltridge 's arguments.

I would say also to honourable senators that at the same time as I developed a respect and affection for Parliament, I developed the same feeling for the principles of liberalism. In particular I came to believe that good communities are based on the strivings of free individuals and not just on good programs.

In my view, it is not a particularly easy time to enter Parliament. I recall the 1950s and 1960s as being decades of relative certainty about our national direction and future. Critics, of whom there were many, including me from time to time, complained that we moved too slowly on matters of real community concern. But there was seemingly boundless optimism about Australia's future. The present pessimism and gloom are very different. The bright promise of Labor in 1972 is dead, and it died very early. It was briefly revived under the campaign conditions in May 1974. I regret to say that it has died again. Labor benefited in 1972 and again in 1974 from what we Liberals had become by the end of our 23 years when it seemed we had no ability to transmit our ideals to the public. We have still to learn to use the right rhetoric for the 70s, the words that will inspire people. Perhaps we will not ever learn to use that rhetoric. I hope that the people of Australia are becoming suspicious of rhetoric and clever debating, and that in the next election there will be a more realistic assessment of what is being offered to the Australian people.

Mr Acting Deputy President,in a number of respects I am disturbed at the direction this country is taking. The Budget represents a firm step in a direction about which I am concerned and so I am pleased to open my parliamentary innings with an opportunity to speak on it.

In one particular respect, I approve of the Budget. It represents what the Government promised the people of Australia and what the people of Australia narrowly voted for. At election time, we, the Opposition, campaigned on the need for Government restraint. We made it clear that we would not expand Government spending in the way the present Budget does expand Government spending. The Government promised a vastly expanded program of expenditure on what might be called the areas of social concern- health, education and so on. In this Budget it has met its commitments. The narrow majority of electors who voted for Labor can now see what they voted for.

Unfortunately, the Budget must result in inflation and, in the ultimate, the dishonouring of Labor's promises. This is so for a number of reasons, not the least because the Government has not made it clear to the people that the increases in social expenditure the Government wants are increases that go beyond merely utilising growth in productivity and hence real wealth in the community. They go beyond merely using up unused resources of labour and material. The Government is, in fact, diverting resources into these fields of social concern. There are statements by Government Ministers and by supporters of the Government which make it clear that a diversion of resources is contemplated. But I suggest that the implications of this are not understood or accepted by the people, nor are they understood by that section of the people we call the trade union movement.

Everyone in Australia from the worker to the chairman of the board has to understand that what the Government really intends is that the individual is to have less freedom of choice on how he or she spends his or her income. The choice is being made more and more by the Government. More of that income will be taken and devoted to spending on education, health, Aborigines and so on. It is a corollary that less of the income can be available for expenditure on other items of personal consumption. The steady improvements that individuals have come to expect in their living standards have to be looked for in such things as better schools and hospitals rather than more cash in the pocket. Unless the community accepts those facts it will be living in a world of make-believe. In that make-believe world the individuals will try to keep up their standards of personal consumption and the unions will continue to chase the higher wages that will succeed in giving to their members the standard of living to which they aspire. If people think they can get increased Government services without forgoing other consumption, rampant inflation is a certainty.

The Government has shown the courage of only half of its convictions. It has put forward the social policy in which it believes. It has not had the courage to admit that its program requires more taxation- not less. Its token tax cuts have been made in the knowledge that inflation will cause higher rates of tax to prevail. The Budget depends on continued inflation to cover its imbalance. Under this Budget, more taxation will be paid- not less. Of course, it does contain a soak-the-rich element with its capital gains tax and property income tax surcharge. These new taxes represent a more honest approach than what has been done by the Government in its use of inflation.

But there are 2 preliminary points to be noted with respect to these taxes. Firstly, one cannot finance big government merely by taking from the rich. In this country, the great bulk of income earners have a taxable income of less than $6,000 a year. If honourable senators look at the figures for the last financial year, they will see that approximately 85 per cent of the population earned $6,000 or less. When we get up into the league of the Ministers who sit opposite- the $20,000 a year and up men- we are dealing with a category that contains less than half of 1 per cent of the population. So there are simply too few rich to pay for the many. Secondly, if we remove the incentives to invest and profit, we will destroy the foundation of the growing economy that can finance the sort of social program the electorate so clearly wants. These higher taxation aspects of the Budget are self defeating and will give rise to great problems for the Government. The greatest of these problems will be growing unemployment which is chiefly the result of a complete lack of confidence in the private sector. The recently reported figures showing unemployment growing at 1,000 a day are a tragic reminder to the Government of the direction in which it is pushing the economy. I remind the Senate of Bill Snedden 's caution before the May election and his refusal to promise increases in social programs until inflation was brought under control. That caution was not the caution of a mean mind or spirit. It was the caution of a realist.

There will be many speakers on the specific proposals that are contained in the Budget. What I would like to refer to is a particular problem which I see as having serious implications for the country in the long term, just as serious as the inflation about which everybody is so concerned at the moment. I refer to the acceleration of the Commonwealth takeover of State functions, to the growing power of central bureaucracy and to the destruction of local initiative in so many fields. The process of growth of central power is well known. It was documented by Sir Robert Menzies in his lectures at the University of Virginia and published as 'Central Power in the Australian Commonwealth'. But what was a drift has become a flood. The acceleration of the process is most simply demonstrated by an analysis of the changes in payments to the States over the 3 financial years up to the present.

I refer honourable senators to Budget paper No. 7, page 5, table 1. It sets out the payments to or for the States and State Government Loan Council programs from 1972-73 to 1974-75. 1 direct the attention of honourable senators to the fact that in the area of general revenue assistance and in the area of general purpose capital funds there is a pattern of slow increase in the payments made to the States. But in the area of the section 96 grants, the area in which the Commonwealth basically controls what the States do with the money, we find that there is a massive increase in the payments made to the States. I refer to just a few of the figures given in that table. In the field of general revenue assistance, there has been an increase in funds provided from $ 1,700.9m to $2,375.9m over the 3-year period. When we turn to the specific purpose payments, the section 96 payments, we see an increase from $389m to $ 1,078m, an increase in the first instance of about 30 per cent and in the second instance of more than 250 per cent. The anomaly is even greater in the field of loans or capital funds. We find there an increase of only 5 per cent in the amount going to the States where the States have control of what is done with the money. In the funds made available under section 96 we find an increase of more like 300 per cent. This pattern has serious implications for Australia.

I am opposed to the drift which is occurring, and I believe that most Western Australians are opposed to it. It is not fashionable at the moment to come out as a defender of the Federal system. People who regard themselves as politically progressive tend to label those who seek to defend the continued existence of the States and their independent power and authority as conservatives trying to turn back to the nineteenth century. In fact, I think history will show that those who are seeking to maintain the Federal system and the decentralised power structure that we have are the progressives. In the long term the threat to freedom in Australia is much greater if a centralised bureaucracy is established having control of all facets of government than if the principle is followed- it was the principle to which Senator Martin referred in her speechthat power should rest as nearly as possible with the people who are directly affected by the decisions that are being made by government.

There have been many examples in the short life of this Parliament of legislation which is based on the premise that the central government knows best and that because rather similar problems occur all round Australia these problems can best be dealt with at a national level. The urban roads Bill and the rest of the roads legislation are classic examples of taking to the centre decisions which could just as easily be left to people who have to live with the decisions.

There is of course a philosophic difference dividing us from the Government in this area. I recall Senator Button, in his maiden speech, referring to the difference between us. He referred to his puzzlement at the argument put forward by people that the Constitution provided a framework for government which was a bulwark for the freedom of the individual. I think the question raised by Senator Button, which is reported at page 50 of the Senate Hansard of 10 July last, points up the fundamental difference between Opposition senators and Government senators. It is one of those areas where attitudes seem to count for more than argument.

In my view, it is self evident that the centralised bureaucracy must, if not initially, in time become unresponsive to the grass roots desires of the people. It ought to be a fundamental principle of administration- to repeat myself- that as far as possible the persons making the decisions have to face the people affected by the decisions. It is perhaps worth noting that 2 members of the Public Service here in Canberra who have had the fortunate experience of working in some of the more far-flung colonies of the Canberra complex drew to my attention the personal difference there was for them when they were out and had to face the people who were affected by their decision making. I believe that this is a simple fact and one of which we ought to be conscious at all times.

Honourable senators opposite who cannot see the dangers inherent in centralised government in a country as large as Australia might usefully study the conclusions of their British counterparts which were published last week in a White Paper entitled 'Democracy and Devolution Proposals for Scotland and Wales'. In that small island of Great Britain we find the Labour Government proposing regional legislaturesnot just administrative bodies, but legislatures that will 'foster democratic control over the increasingly complex processes of modern government'. I do not have time to quote extensively from the report, but I commend it to honourable senators. I refer only to the conclusion. In paragraph 37, on page 10, it states:

In its approach to devolution the Government is concerned to foster democratic control over the increasingly complex processes of modem government and to bring government closer to the people. The people and their representatives must have a full share in the decision-making process. This is the main objective- to make a reality of the principle of democratic accountability. The Government has now decided in principle the way in which this should be accomplished in Scotland and Wales.

The first part of paragraph 38 states:

The Government intends to legislate for the establishment of Scottish and Welsh assemblies as soon as possible.

So England moves to decentralise legislative and administrative power as this inexperienced if idealistic Government tries to pull everything to the centre.

An interesting example will be the Government's program on child care to which reference has already been made in this debate this evening- the child care program that appears, disappears and appears again. The Social Welfare Commission, at the direction of this Government, produced a report which basically recommended a program which is consistent with the principles that I have put forward. That program envisaged the child care scheme being run by local authorities as bodies which were closest to the people and hence capable of meeting the diversity of needs that exist in that area. But we find that very quickly the Government's Priorities Review Staff steps in and says: 'Caution hold'. The Priorities Review Staff argues against local control- another example, in my view, of not trusting those stupid people out there with their own destinies. It will be interesting to see who wins that little argument when the child care program is introduced shortly.

I have said that there are philosophic differences between the Government and the Opposition on this point. But it is not just philosophy to me. As one who has recently come to Canberra from the very edge of the continent, I am continually depressed by the remoteness of this place. It seems to be quite unrepresentative of Australia. People are more affluent here than in the rest of Australia. Canberra does not have the problems that are suffered by the rest of Australia. It obtains its affluence and freedom from problems on the back of the rest of Australia. I regard it as a most unfortunate environment for our Public Service. It is too late now to undo what has been done, but I think that the only solution lies in making Canberra a more representative city by making it a city of industry as well as a city of government. The public servant of Canberra should live with the problems that are invariably brought to a city by those industries which produce the physical needs of the community.

I return to the problem of who has the right answers for Australia. The fact of the matter is that if you want quality of life you have to start at the ground and work up; you do not start up in the clouds and work down. That, I think, is the tendency of the present Government. I believe that this bureaucracy in Canberra, which is so remote from the rest of Australia in its daily experience, and this inexperienced Government complement each other in devising schemes which are composed of dreams at the top and very little acceptance at the bottom. From the complaints I have heard about the administration of the Australian assistance plan in Western Australia it may well be our next great example of an apparently good idea suffocating in a bureaucratic noose.

In making a plea for decentralised government I would not want to put across the idea that Western Australians are bad Australians, but the fact of the matter is that there is a vast physical distance between Western Australia and the rest of the States of Australia which it lumps together under the title 'the eastern States'. This physical barrier is matched by a psychological barrier and a strong belief in Western Australia that the people of the eastern States do not fully understand our problems. It is matched by an economy which differs from that of the eastern States. It is in this context that the people in my Party who selected me and the people who elected me in Western Australia would expect me to make judgments on matters which affect Western Australia and to exercise the power which has been vested in me as a member of the Senate. In saying this I am in no way suggesting that one can look at issues other than in an Australian context. It cannot, however, be in the interests of Australia that the western third should feel neglected and uncared for. I draw to the attention of the Senate the fact that in the recent Senate election there were secession candidates in Western Australia. I was grateful that they received only about 1.1 per cent of the vote, but I would caution the Senate against accepting that vote as a measure of the feeling in Western Australia about the desirability of the State managing its own affairs.

A great deal of legislation which comes before this chamber significantly reduces the freedom of action of the States. The roads legislation which we recently dealt with is a good example, and the amendments which were put forward by the Opposition and ultimately accepted by the Government were amendments which were consistent with the principles that I have already mentioned. The Opposition is not always as successful, and indeed there is a great deal that the Opposition cannot do to protect the States. The States also have a responsiblity in preserving their own position, and perhaps their responsibility is the greatest. It is not possible for the Senate to do much about a Bill like the States Grants (Urban Public Transport) Bill when the agreement approved by the Bill is signed by each of the State Premiers. Too often the history of CommonwealthState relations shows the States retreating without a fight, the retreat often sweetened by a few extra million dollars from the Commonwealth. The strong stand by the States on the road Bills made our action in the Senate practicable. The States are to be commended for the recognition of their own interests in that instance. They are also to be commended for their attempt on 10 July last to work out a common approach to the Commonwealth both with respect to inflation and financial relations. Unless State governments realise that whatever their political colours they have common interests and unless they make common cause I doubt whether they can survive. July 10 was in that sense historic. It will have been pointless if it turns out to be a unique occasion. In addition to the responsibilities of this chamber and the States, the Australian Government has great responsibility in this area.

I remind the Senate of an answer which was given to me some time ago in reply to a question about the transfer of responsibility for State railways to the Commonwealth. I wanted to know what adjustments would be made to general purpose and specific purpose grants to any State which transferred responsibility for its railway system to the Australian Government. The reply from the Prime Minister was that the matter was under active consideration. I refer honourable senators to the Budget papers because whether or not there is to be active consideration the answer is, in fact, contained in Budget Paper No. 7 at page 13 under the heading 'Adjustments to General Purpose Funds to Offset Financial Effects of Shifts in Responsibilities Between Australian and State Governments'. In his speech at the June 1973 Premiers Conference the Prime Minister said:

Where the national government undertakes new or additional commitments which relieve the States or their authorities of the need to allocate funds for expenditures at present being carried by them, there should be adjustments in the financial arrangements between us to take account of the shift of new financial responsibilities.

I draw the attention of honourable senators to the rest of that quotation. It makes it quite clear that in this takeover of State responsibilities we may well see a continuing squeeze on the financial resources of the States, not an easing of them as might have been expected. I believe that the Government has made it clear to the States that it will squeeze them until they are squeezed out of existence.

The answer also is instructive in another sense because it referred to a letter written by the Prime Minister to the Premier of Western Australia in response to a request from that Premier for assistance to build a railroad from Eneabba to Geraldton. I will paraphrase the answer given by the Prime Minister. The answer simply says that until the State was prepared to re-open negotiations for the transfer of responsibility for State railways to the Commonwealth the Commonwealth was not prepared to talk about the possibility of providing any financial assistance for that railroad. In my view that is an odious way for the Government of the Commonwealth to behave. It is certainly a long way from the sort of co-operative federalism that I and my Party believe in. This sort of government will and ought to be resisted by this Senate. I shall certainly exercise my vote to resist it.

Even if the Government had governed well over the last 2 years its commitment to expansion of Canberra control would have caused strong reaction, particularly in Western Australia and Queensland for reasons which I hope by now are apparent. When that expansion of government control is coupled with gross mismanagement of the economy the reaction had to be even greater. What these 2 factors coming together have done is to hold out the promise to the few extremists of the Left and of the Right in Australia that they might foresake the great system of responsible democratic government in favour of some extremist solution. I am sure that all honourable senators reject non constitutional solutions to our problems. But I remind honourable senators that on 9 July last Professor Downing, whom I had always looked on as a supporter of this Government, said in an address:

The ultimate outcome of accelerating inflation is likely to be political revolution. I think democracy in Australia is at stake.

It is in this context that the lunatic fringes of politics in this country are becoming respectable. At least they are prepared publicly to state their commitment to the destruction of the economy on the one hand and constitutional government on the other hand. If the Government permits the present instability to last it will carry a heavy responsibility. If Ministers hide from their responsibility by blaming the system they abet those who are preaching that the system should be destroyed.

I conclude by saying that I realise that the silence that has greeted my words does not indicate assent by Government supporters. I think that the Government is beyond conversion and indeed, the next elections will show, beyond redemption. But I say to my electors that what we have to retain and perhaps in some cases regain in Australia is a sense that the individual is responsible for his own life, its quality, its level of achievement and the sort of country he lives in. We have got to get away from the ridiculous fiction that social welfare and education are obtained at no cost to the individual. There is a cost for every government program. We have to learn to relate our payment of taxes or charges to the services we actually receive. There is a fiction abroad that government revenues expand mightily each year without taking anything from the people and that, of course, is nonsense. It is the central nonsense of a bad Budget.







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