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Monday, 25 March 1985
Page: 865

Mr MOUNTFORD(9.24) —I speak this evening in response to the Governor-General's Speech delivered at the opening of the Thirty-fourth Parliament just over four weeks ago. Many of the matters raised in that Speech could well do with further elucidation so that the record of this Labor Government is further illustrated for the benefit of honourable members. Might I at this stage, however, congratulate all of those new members who came into this place at the beginning of the Thirty-fourth Parliament on their election to the Parliament and on the manner in which they delivered their maiden speeches. Despite our philosophical differences-the differences that will exist between each of those new members-I believe all those honourable members have come here with one major overriding thought and theme, that is, to do their best for the people of Australia.

It is well to remember the situation in Australia prior to March 1983 and what has happened since Labor came to office at that time. It is hard to believe that just two years ago the Australian economy was in recession and the loss of jobs each year was running at 200,000. When the Labor Government came to office the inflation rate was running at 11.5 per cent and the gross domestic product, or growth rate, was crawling along at minus 2 per cent with a forthcoming deficit of $9.6 million. That was the state of the economy which confronted this Government just two years ago.

Most of the matters that were raised by the previous speaker, the honourable member for Dawson (Mr Braithwaite), have not occurred just over those previous two years. Indeed, most of the problems besetting this nation were in existence prior to those two years. A lot of the blame for those shortcomings must be sheeted home to the former Government. Hard decisions were needed at that time so that the downward slide into economic chaos would be arrested and new policies put in place so that the economy could start the slow upward movement towards recovery. This Labor Government took those hard decisions and set into place new policies and new initiatives which have brought about the fastest and most dramatic economic recovery of any country in the world.

In that first term of office the Government sought and received the support and co-operation of the trade union movement and the Australian people in embarking on a course never before attempted during peacetime. This was a course of national reconciliation, recovery and reconstruction. The success of receiving that support and co-operation was achieved through the forging of the historic prices and incomes accord with the Australian Council of Trade Unions and the process of discussion and consensus at the National Economic Summit Conference attended by business and community leaders.

We tend to accept far too blandly that our economic recovery occurred just as night follows day, without any assistance from the Government. We must not forget that this Labor Government was able to achieve the remarkable economic recovery we have in Australia today. That is something no conservative government has been able to do. The people of Australia need to be reminded time and time again that any return to conservative government in Australia would turn back the economic recovery clock to pre-1983.

When one listens to the speeches of honourable members opposite in this debate it is easy to realise just how short their memories are. This is particularly so when we heard what the new conservative members had to say in their maiden speeches. They talked of the policies that the Liberal Party had for achieving economic recovery, for taxation equity, for industry revitalisation and for providing jobs for so many people presently unemployed. Those new members have learned nothing from the past because it was the party to which they belong and which they now represent that brought economic ruin and despair to the people of Australia during the period from 1975 to 1983 when their party was in government. Theirs is a party whose policies were proved unworkable, yet, they have the hide and audacity to criticise the policies of the present Government which have achieved the economic miracle we have today. If nothing else, I appeal to those new members opposite to learn from the mistakes of history.

I have no doubt that every honourable member of this House desires a continuation of economic recovery and full employment, but this is not possible without a realisation that past policies enunciated by the Opposition parties have not and will not work. We need the co-operation of Opposition members in sustaining our nation's economic recovery-not confrontation. We need their help, and not their hindrance. For the sake of our fellow Australians let us all work together in promoting recovery and building a better future for our citizens.

I now come to some of the other matters which I believe need some mention and which have been referred to in the Governor-General's Speech. Housing has always been referred to as the great Australian dream. Not only do Australians want a roof over their heads but most of them ultimately want to own their own home. For those unable to achieve home ownership welfare housing through the States' housing authorities forms a large and important sector of the housing industry. Housing is a very good barometer of the nation's economy because the housing industry is usually the first to suffer in a recession.

Before outlining the Government's achievements in respect of the housing industry, let me quote from two articles which appeared in daily papers one year apart. The first article appeared in the Australian on 10 August 1982 and was headed 'New home approvals down 32 per cent'. It stated:

Approvals for new homes were at their lowest in eight years during June, leaving 1981-82 as one of the bleakest years on record for the housing sector.

The influence of record interest rates and falling economic activity reduced the number of new dwellings approved by 18,000 to 138,504 during 1981-82-32 per cent since last June.

According to the Housing Industry Association, the slump will last through this year, costing about $1250 million in investment and the loss of about 40,000 jobs in the building and related industries.

Bureau of Statistics figures issued yesterday show there were 9255 new private sector homes approved in June-3.4 per cent lower than May.

The figures indicate the Federal Government's latest housing package, announced in March, has done little to halt the flow of funds away from home lending.


This has had disastrous effects on building activity.

The national executive director of the Housing Industry Association, Mr Bill Kirkby Jones, said the recession inflation and high interest rates had brought about the situation.

''Frequent increases in housing interest rates, the prospect of further increases, and marked uncertainty about security of employment have combined to seriously erode the confidence of potential buyers,'' he said.

The association, a major party to the March housing agreement, has put before the Government a seven-point submission aimed at improving the flow of home finance without the need for higher interest rates.

Mr Kirkby Jones said research by the association had shown that higher interest rates, designed to improve the lending capacity of banks and building societies, would only push the industry deeper into recession.

The second article appeared in the Sydney Morning Herald dated 20 September 1983 and is headed 'Housing Emerges from Slump'. It reads:

It is now official-the housing industry has emerged from recession.

A spokesman for the Housing Industry Association, Dr Ron Silberberg, said there was now ''no question'' that the home building sector had come out of the recession ''and it has come out very fast''.

Dr Silberberg said a recent HIA estimate of 122,000 commencements this financial year (in 1982-83 commencements slumped to a 20 year low of 105,000) could now prove ''a little conservative''.

He was commenting on Bureau of Statistics figures for the June quarter, which showed that in seasonally adjusted terms, home building commencements had reached their highest level since the first three months of 1982.

Yesterday's figures showed that seasonally adjusted private sector commencements increased by 8 per cent to 19,600 between the March and June quarters. The actual number of commencements increased from 16,500 to 19,800.

Other statistics from the bureau brought good news for individual home buyers. The price index of house building materials continued to record very moderate increases, with a rise of only 0.4 per cent in July.

In the 12 months to July, the index increased by only 6.7 per cent, significantly below the latest annual Consumer Price Index inflation rate figure of 11 per cent.

The significant increase in housing in those 12 months was brought about by the increase in confidence of potential home buyers following the election of a Labor Government in March 1983. It was a firm indication of consumer confidence which had come about before the commencement of the Government's first home owners scheme which did not come into operation until 1 October 1983.

Government incentives and consumer confidence have resulted in 135,000 homes being commenced in 1983-84 and the estimate of 145,000 in the current financial year is well on target. The January 1985 commencements of almost 14,000 represent an increase of 12 per cent over January 1984, and the 12 months housing commencements to January this year are up 18 per cent over the same period to January 1984. The first home owners scheme has been a great success in enabling first home buyers to achieve the great Australian dream of owning their own home. Since the scheme began over $321m has been paid to 106,000 households, and by the end of this financial year approximately 142,000 households will have benefited from the scheme. In less than 18 months this Government has provided more in direct assistance to first home buyers than the previous Government did during its whole tenure of office.

I turn briefly to the Government's involvement in the provision of public housing in conjunction with the States. The new housing agreement, providing a record $1,580m in Federal and State funds for public housing in this financial year, was a firm indication that the Government had every intention of continuing to provide an increased amount of money towards the provision of accommodation to those unable to provide for their own housing needs. Under the agreement the Commonwealth provides funds to the States for public rental housing and home ownership assistance. The Federal contribution of $623m to the agreement this financial year is 60 per cent higher than funds provided in the last year of the Fraser Government. A minimum $510m will be provided by the Commonwealth to the States for each of the next two financial years, a marked improvement on the $200m base level funding provided under the 1981 agreement of the previous Government.

The agreement contains specific programs for rental housing assistance to pensioners and Aboriginals. The special problems of youth have also been addressed in that all States must now accept applications for public housing from youth. The new crisis accommodation program includes special provision for capital funds to be directed to youth refuges. Special allocations in the agreement for 1984-85 include $52m for rental housing for Aboriginals; $35m for pensioner rental housing; $27m over three years for a new local government and community housing program to enable local government and community groups to provide innovative low cost rental housing-for example, hostels and boarding houses; $13m for a new short term crisis accommodation program covering accommodation for youth and women's refuges; $22m for mortgage and rent relief to home buyers and renters experiencing short term financial difficulty. The new agreement reaffirms this Government's commitment to ensuring that all Australians have access to adequate and affordable housing. It also provides for a new system of low start loans administered by the States with repayments geared to income. Applicants will be able to combine this assistance with benefits under the Government's first home owners scheme. This will enable a family earning as little as $175 a week to repay a loan of up to $40,000 in just over 20 years without permitting more than 25 per cent of income in repayments. Eligibility will be determined on the basis of need.

The most rewarding aspect of the Labor Government's initiatives in getting the economy working again, including the stimulus to the housing sector, has been the increases achieved in the creation of additional employment opportunities. Soon after achieving office the Government set about creating 500,000 new jobs in its first three years of office in accordance with its election promise. At that time of course many considered such a promise to be an impossible task incapable of achievement. Opposition members particularly have been the most vocal critics of the Government's proposals in this regard. Their remarks have done nothing to engender business confidence or to induce business to expand operations to create new job opportunities.

The achievement of the 500,000 new jobs target is well in hand as to date 360,000 new jobs have been created since May 1983. This financial year alone to the end of February 110,000 new jobs have created. In February itself employment rose by 45,200, the third highest monthly increase on record. Just as important of course is the fact that this increase in employment has been associated with a significant fall in the level of unemployment from 10 per cent to 8.3 per cent. In the area of youth unemployment there has been a fall of four percentage points. This is very good news for young people. As the House will be aware, there has been a long term decline in employment prospects for young people from the mid-1960s to the early 1980s, during which period the number of full time jobs for young people declined considerably. This occurred in an almost constant wave for teenage girls and in two bursts for teenage boys. Fortunately, because of the Government's policies, this trend appears to be reversing, and in the last 12 months growth in full time employment for teenagers has increased by 3.8 per cent with the creation of 16,500 new jobs. We have had a decline of 22,000 in the unemployment figures for those teenagers seeking full time work, a reduction of 12 per cent. The teenage unemployment rate, as I mentioned earlier, has declined by 4 per centage points from 27 per cent to 23 per cent.

We do not, however, intend to let the matter rest there. We realise that special action needs to be taken to ensure that a greater number of job opportunities are created for the youth of our nation. On the basis of recommendations received from the independent Committee of Inquiry into Labour Market Programs, chaired by Mr Peter Kirby, the Government intends reforming labour market programs to give greater emphasis to improved training and work skills development. Particular emphasis will be given to providing broad skill-based training as one way to improve the opportunities open to young people, especially for those who have been unemployed for a long time. In recent months discussions have been undertaken with State governments and with education authorities so that the recommendations can be further progressed as a matter of urgency. The community employment program, which was launched in August 1983 and had created 57,000 jobs by the end of 1984, will also be responsible for assisting a further 65,000 people during the current financial year.

I shall now speak briefly about industry development. Australia is involved in an ever-changing world. We are dependent upon trade for our prosperity and, as a result, in order to remain competitive we must adapt to changes in the world and its markets. Industry in Australia should be as responsive as primary production is to world change. The policies from the 1950s to the 1980s have been to make industry inward looking and essentially reliant on a small and fragmented market. As well, past policies have resulted in a dependence, at least in the psychological sense, on government support and industry laziness in addressing issues such as management and marketing skills, product quality and design, research and development, and technology transfers. This is not an argument for the removal of protective banners for Australian industry. Rather, what I am saying is that protection can no longer be looked upon as a saviour for industry as it has become too burdensome on the Australian community. In any case, protective measures are largely offset by movements in the exchange rates.

Australian industry needs a more deliberately export-based policy and much greater investment in research and development and modern plant. Our existing export industries are under pressure as our traditional export markets are diversifying to rival sources. Thus the creation of a competitive manufacturing sector to pick up additional exports, or at least to be more competitive, must be a major objective of the Government. Means other than the tariffs can be used in restructuring Australian industry. There are more systematic ways of restructuring sections of industries. The Government's car and steel industry plans are good examples of this more positive approach to industry restructuring. The Opposition has often stated that to achieve effective restructuring Australia would need to have a wage structure competitive with that of other countries and that Australian wages are too high. However, a country such as Sweden, which has a higher wage structure than ours, is a great exporting nation simply because its products are advanced and highly innovative.

Mr DEPUTY SPEAKER (Mr Keogh) —Order! The honourable member's time has expired.