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Wednesday, 10 October 1984
Page: 2021

Mr PUNCH —My question is addressed to the Prime Minister. In the Government's experience, is it possible to increase outlays, cut taxes overall, and reduce the deficit?

Mr HAWKE —This answer will take a little longer than the last one, Mr Speaker. The Government's economic policies and management reflect on our part a very clear understanding of the basic economic reality that it is not possible to increase outlays, reduce taxes overall and reduce the deficit, all at the same time. I have already said in speeches to the Confederation of Australian Industry and the Business Council of Australia that in this Government's next Budget, which will be brought down by us next year, there will be no overall increase in the level of taxes, but the deficit will be further reduced by ensuring that the rate of growth in outlays is less than the rate of economic growth. The Leader of the Opposition and his colleagues fail to understand these basic elementary economic maxims. Their failure to understand them was reflected , of course, in their appalling record of economic management. It is no wonder that their incompetence is now universally recognised by the business community not only here but also overseas.

It is not only the business community which recognises their incompetence. It is interesting to look at the Age poll published today which shows that the general public shares the business community's view of the economic incompetence of the Opposition and the far greater competence of this Government compared with the Liberal Party alternative. In the Age poll published today, when the people of Australia were asked which party was the relatively more competent in economic management, we out-polled the Opposition by more than two to one-54 per cent to 25 per cent. So the business community knows how incompetent it is and the Australian community at large knows that the Australian Labor Party is an infinitely more competent party in government than is the Opposition. The failure of the Leader of the Opposition to appreciate these elementary economic maxims is perhaps understandable but not excusable because in his very long period in the Parliament he never occupied a portfolio which required hard economic decision-making for longer than the briefest of periods. So we can understand but not excuse the Leader of the Opposition. But we cannot say the same thing about the pretender to the throne, the honourable member for Bennelong, because he knows better but he does not have the courage to say so.

Mr Speaker, you have heard from some of my Ministers in answers to questions so far an outline of some of the incredible additional spending that has been proposed by those opposite. It is a matter of very great importance to the people of this country, I suggest, that the Government's costing of the firm and unequivocal additional expenditure and tax expenditure commitments made by the Leader of the Opposition and others amounts to about $2.5 billion.

Government members-How much?

Mr HAWKE —About $2.5 billion. That is firm and unequivocal. But if we add to the firm and unequivocal commitments also the indicative commitments, they add up to about $7 billion in additional outlays. May I say parenthetically that that, of course, does not include any outlays for what they would say is owed to the people of this country for the $22 a week--

Mr Goodluck —Mr Speaker, I raise a point of order. For one year I have been trying to ask a question and every time it comes to my turn the Prime Minister rants and raves. He is just taking up my time each time.

Mr SPEAKER —Order! There is no point of order.

Mr HAWKE —It is very strange that the Opposition has been attempting to paint this Government, with its great record of economic achievement, as a high spending, high taxing government. When-and we are all waiting for it-in the next week or so the Opposition releases its tax policies, it will no doubt attempt to claim that all it has to cover is the existing level of outlays. I have shown that that is not the case, that it is committed to an infinitely greater amount- perhaps up to $7 billion-in additional outlays. The key question that members of the Opposition will need to answer, and which we will be asking them every day of every week until 1 December, is a very simple question which has echoed around the political corridors of Australia in previous years: Where is the money coming from?

In order to show them a little understanding, I will give them a simple economic exposition. The reality is that the only ways in which the Leader of the Opposition would be able to honour the various commitments that he and others have made all over the country would be by increasing taxes, or by running the risk of having higher interest rates by making the deficit blow out further or, of course, by reducing outlays by the amount of additional spending promises that he makes. We will be very interested to hear which of the $7 billion of existing outlays the Opposition proposes to cut out. In the weeks ahead the Leader of the Opposition and his colleagues will rue the loose promises they have been making all over the country. They have been able to make loose promises, knowing that they will never have to bear the responsibility in office of giving effect to them.