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Thursday, 11 October 1984
Page: 2186

Mr PEACOCK (Leader of the Opposition)(5.50) —The Opposition has proposed the following matter of public importance for discussion today:

The Government's failure to address the fundamental economic and social challenges facing Australia.

We have proposed this matter of public importance because in the forthcoming election, for which honourable members opposite ought to leave the chamber and start preparing, the overriding issue at stake is the direction that this nation will take not for some months to come but for years to come. It will be an election about people and their future security.

Several questions will be in the forefront of the minds of the men and women of Australia throughout the coming election campaign. The first question relates to the immediate and longer term future of the economy. At a time when we all fervently hope that the economic recovery will gather force and reach all Australians, new figures and new forecasts of independent experts raise serious concerns about such vital matters as employment, investment and the competitiveness of business and industry. The latest manufacturing industry production statistics show a distinct slow-down in the rates of growth experienced a few months ago. The sharp growth characteristic of early emergence from recession is now flattening out and the indications are, according to the National Institute of Economic Research, that this trend will intensify as we move towards the end of this financial year. The Institute has forecast an unwelcome rise in unemployment to a level above 10 per cent. The authoritative Syntec economic report states:

The longer term attractiveness of this economy is in the balance.

The September issue of the Westpac Review puts its finger on the major reason why there is genuine concern about the economy for 1985. In regard to Labor's second Budget strategy the Review states:

Its overtones of short term expediency are disturbing.

The fact is that at a time when Australia has a rare opportunity to chart a course into a new decade of prosperity, when we all want to be more optimistic, unnecessary risks have been placed in the way of sustaining the recovery, risks taken for immediate electoral gain. The short term expediency which has dictated this Government's economic policy is typified by its second Budget. By squandering the windfall receipts enjoyed largely due to non-recurrent factors, such as the growth in farm products, the unique opportunity to the Government to restrain growth in the deficit was lost and we are living on more and more borrowed money; yet high Government deficits push up interest rates, hold back exports, retard investment, keep unemployment up, stop growth and close off our prospects for the future.

The Government's economic policies are not the policies we need to sustain recovery. They are creating a massive problem for the future, and that future is not just ours but that of our children. By taking a short-sighted view, based on calling an early election, the Hawke Government has set the scene for further increases in taxes and in the public debt next year and thereafter. In contrast, the policies set out in the coalition's economic statement are the right policies for today. They are policies of control, policies of restraint in public spending, winding back the tax burden and the nation's indebtedness, policies to increase the flexibility in the Budget and in labour markets. We need these policies now, and we will have them in a matter of a few months.

I mentioned the importance to economic recovery of reducing the tax burden. There is general agreement in our nation that Australians pay too much tax and that the tax system should be fundamentally reformed. What happened at Question Time today? The Prime Minister (Mr Hawke) would not deny that a capital gains tax and death duties would be imposed after the next election. Yet we have the situation in Australia today wherein people are overtaxed and their income tax cannot be increased any further. Being a Labor government it is a big spending government. That is why it is now the biggest taxing government in Australia's peacetime history. It is squeezing the resources of the great majority of the people. It cannot increase income tax any more. So what is it intent on doing after this election should it be returned? I will tell honourable members what the Government will do. All honourable members found out at Question Time today. It will tax people's savings and assets and it will tax them to the grave and after the grave because a capital gains tax and death duties, judging by the Prime Minister's answer, are on should Labor be returned.

Let no one in this nation have any doubt. The Government will move beyond income tax and beyond the extensive indirect taxes which will be brought down as a reform measure-there is no disagreement with the need to reform the income tax system-to a direct assault on the assets and savings of individual Australians. We have said unequivocally that we are in favour of a restructuring of the tax system but we are committed to restoring individual incentive and to letting men and women work to get ahead.

The other day when speaking in the assets test debate I said, when I reminded the people of Australia that we would revoke the assets test, that by implementing that measure the Government is not just taxing the assets of so many people; it is attacking a deep seated belief of generations of Australians that they should save for a rainy day. Many of these people have found it has been raining like hell, but they have still kept that nest egg for use in their retirement. The Government attacks that fundamental notion of generations of Australians when it brings in an assets test and clearly moves on a capital gains tax and death duties. That is why I say the Government is taxing these people to the grave and beyond.

We are committed to encouraging families through tax incentives. I say ' families' because that word is not in the Prime Minister's vocabulary. When did honourable members opposite last hear him talk about families and what this Government would do for them? They have not heard him because he does not use or comprehend the term. What about ordinary Australians? I am not talking about big business, big unions or big government, which this Government is all about; I am talking about ordinary Australians. We never hear the Prime Minister talk about workers. We never hear him talk about small shopkeepers. We never hear him talk about the small farmers. It just does not happen.

What do ordinary Australians have after two Labor Budgets and 19 months of the Hawke Government? Fact one is that the Labor Government is the highest taxing peacetime government in Australia's history. Fact two is that the Government has failed to address itself to the need for desired tax reform, not reform involving a capital gains tax and death duties, as it is considering now. Fact three is that average wage earners are now paying 46c in tax for every extra dollar earned.

I say to honourable members opposite that they should go out in the community and talk with some ordinary Australians for a change instead of talking to the proletarians and ideologues with whom they associate. They should go and talk to some ordinary people and ask them what they got for a tax refund. One half of them will tell them they got much less than they did last year and the other half will say: 'We did not get a refund. We got a bill'. Honourable members opposite should go out and ask that question. As we have said time and again, high taxes penalise people for their hard work. Australians have a very clear choice as to the future direction of taxation at this coming election. It is a choice between Labor's continued high levels of personal tax compounded by its intention to introduce a range of new taxes including a capital gains tax, gift duties and death duties--

Government members interjecting-

Mr PEACOCK —I know because the honourable member for Casey is on the record in favour of all those. He has confirmed it on every occasion that I have asked in this Parliament.

Mr Steedman —I raise a point of order, Mr Deputy Speaker. The Leader of the Opposition has just made certain accusations. If he reads the Business Review Weekly of three weeks ago, he will find my statements in full which will contradict what he said.

Mr DEPUTY SPEAKER (Mr Keogh) —Order! The honourable member for Casey will resume his seat. There is no point of order. Before I call the Leader of the Opposition , I remind all honourable members, particularly a section of honourable members on my right, that all interjections are out of order. I am sure that it would be in their own interests, if they are not prepared to accept that, to withdraw from the chamber. I call the Leader of the Opposition.

Mr PEACOCK —I said that Australians have a clear choice at the next election on taxation matters and that it is a choice between Labor's continued high levels of personal tax, compounded by its intention to introduce a range of new taxes, including capital gains tax, gift tax and death duties. On the other hand, the coalition program offers genuine tax reform with lower income tax levels, immediate action to scrap Labor's 31 per cent tax on lump sum superannuation payments and the scrapping of the assets test on pensions.

We have heard a lot about the so-called tax cuts in the Budget but, as we have shown even before the Treasurer (Mr Keating) brought down the Budget, the so- called $7.60 tax cut comes after months of Labor taking an extra $22 a week from ordinary Australians. Some tax cut!

Mr Howard —Twenty-two?

Mr PEACOCK —Yes. It took $22 a week and then offered people less than $8 back. That is no tax cut. It is an absolute fraud and the Government will be revealed for what it is. It is not fair dinkum about tax reform. It is not fair dinkum about tax cuts. It is determined to impose further taxes on savings and assets of Australians.

This brings me to how the tax levels in the Budget were arrived at, to the Government's much vaunted consensus approach, if one likes, to decision making. As I have indicated, the coalition supports the broadest consultation with community representatives on government decisions. That is our approach. It is our method of achieving genuine agreement, of reaching sound decisions which reflect the views of the community. That is not the meaning of consensus with this Government. It consults but one group. It brings that group into the Cabinet room and takes directions from it. That group is the Australian Council of Trade Unions. Was anybody else brought in to determine the nature of the Budget? No. Were the unemployed brought in? No. Was small business brought in? No. Were the pensioners in the electorate of the honourable member for Casey brought in? No. It was the ACTU officials who were brought in. In preparing the Budget, the Government gave the ACTU documents which it is not prepared to give to the rest of the public. It took one interest group only into consideration.

Honourable members should not think this is an isolated incident. The Government even brought in the ACTU when making the decision on which helicopter to buy for the defence forces. As the Deputy Leader of the Opposition (Mr Howard ) pointed out the other day, the Government, in discussions with bank unions, was prepared to make confidential material available when determining which foreign banks could come into Australia. What Australians have seen is a succession of big government and big union deals which do not take into account the interests of other groups in the community. We will bring millions of Australians back into the consultation process.

I mention again some of those groups of forgotten Australians. We will open up new opportunities for small business through a flexible industrial relations policy and less Federal red tape. We will meet the hopes and protect the rights of the elderly. They were not consulted on a means test or the assets test. On the fourth occasion, through a panel, they were consulted. They were not consulted on the 31 per cent tax on lump sum superannuation payments. This Government imposed those measures without thinking through the consequences of its actions. Australians have a very clear choice on this matter and others.

The Liberal Party of Australia and the National Party of Australia, and the overwhelming majority of Australians, reject the actions of this Government which says to those people who have worked and saved to put aside a nest egg for retirement: 'We are changing the rules overnight. You are to be penalised for your foresight'. We believe that to be totally wrong. That is why we will scrap Labor's assets test and the 31 per cent tax on lump sum superannuation payments.

We will put families first. We will bring families back into the mainstream of government consideration through real tax incentives and allowances. The unemployed have to be given hope. We categorically reject the defeatist attitude of our opponents to the unemployment problem.

The greatest goal before us today-the goal which Australia should set for 1988- and not just for the ceremonies relating to the bicentenary-is a return to full employment. We can achieve it through positive policies and programs-programs which free up the private sector. It is private enterprise, not governments, which generates wealth, growth and development and creates the jobs necessary to put Australians back to work. Whether it be the assets test--

Mr DEPUTY SPEAKER (Mr Keogh) —Order! The Leader of the Opposition's time has expired.