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Tuesday, 9 October 1973
Page: 1771

Mr DEPUTY SPEAKER -I point out to the honourable member for Blaxland that if he looks at the speech of the honourable member for Berowra I think he will find that the honourable member for Berowra did not transgress perhaps quite as much as the honourable member for Blaxland has done. I suggest to the honourable member that he concentrate on the provisions of the Bill.

Mr KEATING - Let me say in defence of the argument that I have put forward that I was answering what I considered to be charges made by the honourable member for Berowra on the overall strategy of the Budget. In considering these matters and acknowledging the fact that they are part of the Budget, I think I am entitled to defend our Budget on that basis in terms of these different taxes. Anyway, I was starting to deal with the fuel tax. We looked at the fuel tax. If the fact is accepted that receipts must be obtained from areas other than personal income tax, excise on fuel was one of the taxes that the Government decided it could afford to increase.

I did not hear the honourable member for Berowra mention the fact that, for instance, a petrol price war has been going on in Victoria for 2 years now. A reduction of 7c a gallon has applied right across the city of Melbourne and in some parts of Sydney for that period. Even a person like the honourable member for Berowra must come to the conclusion that perhaps the petroleum industry can afford not to pass on the excise increases. The Government believed, as it had intended to set up a royal commission into the price of fuel - it has done so since the Budget was introduced - that some of the additional receipts that it was raising from diesel fuel might be recovered as a result of the findings of that royal commission. We will be most interested to see the result of that inquiry. One thing is sure: If the oil companies can sustain a price cut of 7c a gallon in Melbourne and Sydney for such a long period, one would think that the increases of 4.9c a gallon on diesel fuel and Se a gallon on motor spirit could be covered by the companies themselves.

While the imposition of any excises or any indirect taxes is a distasteful action for any government to take, the fact of the matter is that additional amounts cannot be spent on education, welfare and in other areas without making an additional collection to see that there is not any more net amount of money moving into the economy to aggravate the inflationary situation and by that factor in fact very much diminishing the value of money going into the pockets of working people throughout the length and breadth of Australia. We were left in the horrible position of making choices in regard to areas from which additional money ought to be collected. One method of collection was on the basis of an increase in the excise on liquor and cigarettes. Again, this is an indirect tax and the Government Party does not like indirect taxes. But we gave an undertaking that there would be no increase in personal income tax and there was no other area in which money could be raised. We could not chop back expenditure on education, social welfare and all those other things. So the excise on liquor and cigarettes was increased.

All along the Government has been conscious of the need to introduce a Budget that did not aggravate the inflationary situation and every measure that it has taken has been taken in the light of that consideration. We have raised the statutory reserve deposits with the savings banks in order to take money out of the economy. We have twice revalued the Australian dollar to make imports more competitive. We have cut the tariff on imports by 25 per cent in order to make the goods more competitive, to ensure that more goods were put on the Australian market and to ensure that a few goods were not being chased by a lot of money. All those things were designed to deal with the question of inflation. We have raised interest on the bond rate. If people can secure a better rate of interest for their money they are more inclined to leave it on deposit, rather than have their money chasing a block of land as a hedge against inflation. Everything that the Government has done has been on the basis that it needs to take cognisance of the economic situation.

The Budget in fiscal terms was a very responsible document. When we look at the massive additional expenditure on health, social welfare, housing and all these other things, I think that for the man in the street the increased fuel charges, which probably could be absorbed by the petrol companies anyway, and the increase on spirits and cigarettes is only a very small price to pay for the additional services given to him through health services, to his children through better education and all the other facets of Government expenditure in the way that they affect people. I think that the amendment moved by the Oppostion does not deserve the support of the House. I commend the Bills to the House.

Mr EDWARDS(Berowra)- Mr Deputy Speaker, I wish to make a personal explanation.

Mr DEPUTY SPEAKER (Mr Lucock)Doesthe honourable member claim to have been misrepresented?

Mr EDWARDS - Yes. I claim that I was not canvassing the whole Budget situation generally. The point of my remarks was that the direct inflationary impact of these duties was clear. I was trying to assess whether the indirect effect of these measures was worthwhile as a means of curtailing inflation, and I judged that they were not.

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