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Wednesday, 17 April 1985
Page: 1281

Mr SIMMONS(4.01) —Once more, it seems that the Deputy Leader of the Opposition (Mr Howard), in proposing and speaking to a matter of public importance in the House this afternoon, has displayed his regular mathematical gymnastics and some of his associated illogicality. To be fair to him, he is slowly beginning to get his propensity for illogical analysis under control. Informed sources have attested to the fact that he has come to the conclusion that if both a horse and a table have four legs, there must be a very definite connection. His essential difficulty now is to establish the exact nature of this connection. Given the fact that he and his Party will have a long time in opposition I am sure he will eventually get it right.

It is interesting that this afternoon there has not been a contribution to the debate on this matter of public importance from the National Party of Australia. That intrigues me to some extent. Having read today's edition of the Australian Financial Review, I am sure that many members of the National Party in this chamber would be somewhat embarrassed to contribute to this debate. One headline in the paper stated: 'Dollar's fall softens farm income drop'. This is very good news for the rural sector. It indicates that there will be a record level of farm export earning in 1984-85. There will be an increase of 9 per cent on the earnings of the previous financial year. The level of depreciation has added a projected $530m to rural Australia's net value of production, a not insignificant amount or benefit from the effect of devaluation. Taking into account the expected decline in farm income in Australia this year, which was predicted to be 17 per cent, the depreciating dollar has in fact reduced this rate of decline to 14 per cent. The basic reason for such a decline is not related at all to the economic performance of Australia but is a reflection of the market forces in world-wide commodity prices, as the Deputy Leader of the Opposition admitted during the course of his remarks.

I suggest that the record speaks for itself. The Treasurer (Mr Keating) enunciated some of the points on which we differ quite sharply from our conservative predecessors. We have gone from double digit inflation under the Deputy Leader's stewardship as Treasurer to a level commensurate with that of our Organisation for Economic Co-operation and Development trading partners. I am speaking of the previous Treasurer and the previous Government who talked about their 'Fight inflation first policy'. From skyrocketing unemployment, which was out of control at a level of 11 or 12 per cent, we have reduced the level considerably to a more acceptable figure of around 8.8 per cent. From negative economic growth, for the first time in 30 years, we have achieved a continuing, strong rate of economic growth. The previous Government said: 'Let us abandon a centralised wage fixation system; it does not work'. What did we have then? We had a wages explosion, as the Treasurer indicated in the debate today, approaching an annual rate of increase of 17 per cent. We now have a more responsible wages policy. We have an incomes policy that is embodied in the prices and incomes accord. A week ago, we saw the first rise in 12 months in wages in Australia of 2.6 per cent. Another sharp contrast between the Government of which the Deputy Leader of the Opposition was a senior member and our Government may be seen as its confrontationist approach versus our approach of consensus. We went from a high level of industrial disputation, encouraged by the sort of Darwinian approach of survival of the fittest in the industrial jungle, to the lowest level of industrial disputation since 1968.

During Question Time today, the Prime Minister (Mr Hawke) made a number of comments about the effects of the depreciation of the dollar. One of the points that he made was that the depreciation gives the Government an opportunity to correct current account balance problems as well as to assist in domestic job creation. I was pleased to see that the Opposition speakers referred to some of those points during their contribution to the debate today. At least they mentioned them even if they did not agree with the Prime Minister's assessment.

The framework of the accord allows us to adjust responsibly to changing circumstances as opposed to the wage spiral that characterised the period under the previous Government-the Fraser Government-in which the Deputy Leader of the Opposition served as Treasurer in 1981-82 during that incredible wage spiral period. The only approach available to the Fraser Government at that time was the hastily conceived and politically motivated wage freeze. The Opposition has criticised the accord in this chamber on countless occasions. The reason for that criticism is a very simple one. The Opposition has never had an incomes policy. From comments made today by Opposition speakers, I feel certain that it does not have an incomes policy that is least comparable with, if not better than, the accord which has operated so successfully.

I turn to some of the positive benefits of devaluation to the rural sector that I mentioned earlier. I referred to the article in today's edition of the Australian Financial Review. I now refer to some of the specific principal commodities that were mentioned in that article. In the case of wheat, more than half of the rise in the gross value of rural production in 1984-85 of $295m has been because of the depreciation of the Australian dollar. In the case of sugar, notwithstanding the problems of finding markets for our troubled sugar industry, the devaluation will result in an injection of an additional $5m in 1985-86, despite a fall in production. With respect to the important Australian wool industry, the Australian Wool Corporation has a stockpile of 300,000 bales of wool. The devaluation of the dollar will help at wool auctions to the tune of a price increase of 45c per kilogram of clean wool. In other words, the Bureau of Agricultural Economics has suggested that $60m will be added to the gross value of wool production in 1984-85.

I now turn to the beef industry. The average sale yard prices will increase by 10 per cent this year. This has been suggested by the Bureau of Agricultural Economics. A further rise of 11 per cent is predicted for 1985-86, bringing the gross value of beef exports next financial year to more than $1,266m. In other words, given that rural exports contribute to nearly 50 per cent of total export income for Australia, the depreciated dollar will assist in the process of continuing economic improvement under this Government.

I suggest that it can be assumed that the Opposition's approach is to have government intervention in the economy. Is this what it means by 'appropriate steps'? I believe that the Deputy Leader of the Opposition is on record for congratulating the Government for the courageous step it took in December 1983 in floating the Australian dollar. I suggest to the Opposition that it cannot have things both ways. We can either float the dollar or not float it. If we float it, we cannot have the sort of government intervention in the economy as was suggested by the Deputy Leader of the Opposition.

In the context of the discussions that have taken place in the dairy industry, it is interesting to note that the Executive Director of the Dairy Farmers Federation, Clay Manners, was reported as saying recently:

The devaluation will have a greater impact on the Dairy Industry than the Kerin Plan.

Despite all the recent controversy about the Kerin plan for the dairy industry, we have an industry spokesman commenting in a very positive way, recognising that the benefits of devaluation may help with the surplus of Australian manufactured milk products on the international market. At least there is a recognition within primary industry of the importance of the depreciated dollar. Hence, my comment this afternoon that I am totally amazed that the National Party, the so-called agrarian socialists in this chamber, has not been prepared to make a contribution. It has been prepared to let its coalition partners take all the running in this debate, yet clearly its so-called rural constituency would benefit from devaluation. Once more, the Opposition has demonstrated its extraordinary inability to learn from the lessons of its past economic mismanagement. This matter of public importance is a total sham, and the Deputy Leader of the Opposition knows it.

The National Party must be embarrassed by its submission for debate this afternoon. Although, to be fair, while in coalition government it was obviously happy to see its political bedfellows govern with a consistently overvalued dollar, that was a poor substitute indeed for any responsible monetary and/or fiscal alternatives for spiralling inflation. The result was reflected in the international uncompetitiveness for exporters, particularly in the mining and primary industry sectors.

The Hawke Government is not prepared at all to pull the economic wool over the eyes of Australians or, indeed, the world. The problem with the Deputy Leader of the Opposition is his Gillies-like similarity to Ronnie Corbett. When Ronnie comes on television he likes to think that there are lots of people watching and having a laugh. On the other hand, the honourable member for Bennelong is hoping that there are only a few people looking at him, when he is being funny, and hoping they will not laugh too much.

Mr DEPUTY SPEAKER (Mr Millar) —Order! The honourable member's time has expired. The discussion is concluded.