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Thursday, 26 February 1987
Page: 815

Mr HURFORD (Minister for Community Services and Minister Assisting the Treasurer)(3.45) —The Opposition's motion is nothing more than a smokescreen to try to take people's attention away from the real issues facing this country today. Of course, one of those issues is the Opposition's own problems. It is significant that we have just heard from the Leader of the National Party of Australia, the right honourable member for New England (Mr Sinclair), seconding the motion moved by the Leader of the Opposition (Mr Howard). Here is another attempt to shore up this dying coalition. Of course, it is also significant that the Opposition is trying to take the attention of this House and the people of this country away from the real and immediate issue of today. What about a condemnation from the Opposition of what the National Party Premier of Queensland had to say which has undermined our relationship with Japan? When will we hear from the Opposition about that real issue of today? Is that not something that should be worthy of immediate mention in this charade that is going on in relation to the leadership of this country? What about the tale the Minister for Foreign Affairs (Mr Hayden) had to tell us in Question Time today? Where was the loyalty of this National Party Premier of Queensland when we see what he has done to the relationship between Australia and Japan? That is the issue of today. That is what this House ought to be debating right now. Of course, what we have is a smokescreen from the Opposition to take our attention away from that real issue.

As for the tabling of documents, let this be said: This Government will table the information that governments have always tabled in this House. The report of the Indicative Planning Council for the Housing Industry has always been made known in the past and it will be made known when it is ready, probably next month. Honourable members opposite have the latest report of the Indicative Planning Council that is ready for publishing and they will get the next report of the Indicative Planning Council. As I have said, this tabling nonsense is nothing more than a smokescreen seeking to take our attention away from the double standards and the duplicity of this Opposition. The real issue that it wants to raise is the issue of interest rates. The Prime Minister (Mr Hawke) said earlier today that every politician wants interest rates as low as they can possibly be. The question we ought to be addressing in this House is how that can be achieved. In one breath the Opposition sheds crocodile tears for borrowers and in the next breath it advocates a policy which would inevitably lead to a huge blowout in the deficit and, in turn, a huge jump in interest rates.

The attention of this House should be focused on those sorts of double standards that are leading the Opposition to advocate policies which would result in even higher interest rates. In other words, in both cases, the Opposition pursues the cheap populist course. That is what this Opposition is about. It has no realistic analysis of Australia's balance of payments difficulties and how these affect interest rates. It has no credible alternatives to the comprehensive and effective economic strategy of the Government. Instead, the Opposition goes for the lowest common denominator, seeking to bribe its way into power, which has led to that duplicity and those double standards to which I have just referred. The Opposition seeks, by motions such as this, to divert attention from its own shortcomings.

I reject this motion and I believe that the people of Australia will see it for what it is. But it is clear what the Opposition is up to and I want to illustrate that further. It has put on record and it has documented $14.7 billion worth of tax promises. Without a consumption tax it has no means of paying for those promises. If only a fraction of its wish list of promises were implemented it would result in a severe blowout in the Budget deficit and a big hike in interest rates. Today, because the Leader of the Opposition wished to attack the Government on the subject of interest rates by this bogus motion, he has tried to hide that fact and he has not made any reference to his own policies. One would think that, instead of the Leader of the Opposition making only destructive comments, we would have heard something constructive about what the so-called alternative government of this country would do-heaven forbid!-if it ever came to power.

The reality is that the Opposition has shown exactly the same weak, irresponsible approach today that it showed while it was in government in the 1970s and early 1980s. It is indeed fortunate that a responsible, credible government is in power to cope with Australia's biggest trading crisis since the Great Depression, a trading crisis which was imposed on us by overseas factors. If it had been left in the hands of this Opposition we would have ended up in a sorry state. As it is, we are not pretending that there are not grave problems for this country which have to be addressed. The majority of people in this country realise that they have a responsible government that is addressing those problems.

It is very appropriate in a debate such as this that we look at the Opposition's record of weakness. Throughout the 1970s the Opposition left John Stone in the Treasury to run the exchange rate. As a blunt anti-inflation policy our exchange rate was overvalued and this led to the dismembering of our manufacturing industry, among other things. The results greatly contributed to our current trade problems because the overvalued rate ripped to shreds the returns of our exporters, including farmers, and a flood of cheap imports destroyed the manufacturing industry, as I have just indicated.

Despite the fact that this Opposition had nothing like the 30 per cent depreciation of our currency to deal with-the Government allowed this to occur in order to make Australia more competitive-inflation was running at 12 per cent, ripping apart Australia's competitiveness. That is what this Labor Government inherited and it was because the Opposition had no workable wages policy. It thought that abuse of the trade unions was the substitute for policy and this resulted in a huge wages explosion. When the going got a little tough in 1982 the Opposition dropped the ball on fiscal policy. It let its then leader, Malcolm Fraser, write the Budget and blow out the deficit.

This is the Opposition's record. We have a duty to point out to the Australian people that they should reject the sort of rhetoric we hear in debates such as this one and look at the record of these same people. The Leader of the National Party, who is at the table, was a senior Minister in that discredited Government. The Leader of the Opposition was the Treasurer in that discredited Government. If the coalition parties had been in power in 1985 when the huge slump in our terms of trade struck there is no doubt that once again they would have resorted to weakness and squabbling and left this country in a far more parlous state than it is in at the present time.

The Hawke Labor Government has taken the right steps to restructure and to refurbish the Australian economy so that we can trade our way out of our difficulty. We have a balanced credible policy. Of course monetary policy plays a part in that balanced credible policy. If we are running a balance of payments deficit we must borrow from overseas to fund the gap and that is one of the reasons for higher interest rates. Of course we are sorry that has to be so but it is one of the inevitable results that have been imposed on us as a result of the depreciation of our export prices. There will be no premature relaxation of monetary policy because the country has a responsible government. At the same time we have established, as the Prime Minister has said, the climate for interest rates to fall. Fiscal policy remains firm. Our commitment to this has been reaffirmed with the announcement of a statement of spending savings, to be made on 14 May next.

Wages policy also remains effective with the Australian work force very responsibly accepting the need for wage restraint. All of this is a credible, workable policy, the best possible policy in the circumstances that this country could have at the present time. In contrast, let me go back to the little we know about the Opposition's policies. It is giving us very little in the way of details but let us look at what they are. There would be a deficit blowout which would result in a very high interest rate. If the Opposition slashed government spending, as it has been suggesting it will, it is likely that there would be a severe recession. There is likely to be a wages explosion because the Opposition talks about leaving the determination of wages policy to the market-place where the rich would get richer and those this Government seeks to protect would get poorer and poorer. A resurgence in inflation would be another result of the half-baked policies the Opposition is putting to this country. It has no fundamental long term cure for the trade imbalance, the great problem that has to be addressed by the Government. In short, the Opposition is putting to us a policy for disaster.

The Opposition is full of empty rhetoric about how interest rates are too high, about how it would reduce interest rates if it were in government, but let us look again at its policies and some of the other details. Let us examine the effect that its policies would have on interest rates; let us return to what I said earlier and not just take the rhetoric that we hear in a debate such as this; let us look at the Opposition's record and try to put some clothes on the pegs that it has given us so far about what its policy would be if it took over the government of this country.

The Leader of the Opposition has been critical of the Queensland Premier's flat tax proposals. I would be the first to agree that the Queensland Premier's policies, as I have already indicated in this debate, are the height of economic irresponsibility. However, the failed Leader of the Opposition, who moved this motion today, has a battery of promises that are equally outrageous. As the Treasurer (Mr Keating) noted in debates in this Parliament last week, the Opposition has been running around the country making all sorts of promises. It is worth repeating some of those pegs about which more details have been sought. First of all the Opposition has said that it would repeal many of the tax reforms that have been implemented by this Government, reforms that have put equity and fairness back into the tax system. It has said that it would remove the fringe benefits tax and substantiation at a cost to revenue of $900m in 1987-88 prices. It would remove the capital gains tax at a cost of $25m, the tax on lump sum superannuation at a cost of $85m and the assets test at a cost of $160m. All of these measures would lead to greater inequity in our society. The Opposition would introduce many of the tax lurks and rorts that flourished when it was in government. The tax deductibility of entertainment expenses, which was one of those great holes through which people drove horses and carts, would cost $320m. The Opposition would remove negative gearing for property investment at a cost of $100m. This is not all the Opposition has promised. It would implement income splitting at a cost of $2,850m, provide cuts in personal income tax at a cost of $6,650m, reduce the company tax rate at a cost of $2,220m. These measures are just a small sample of the promises the Opposition has made. This is why the Government is so clear in putting to the people the irresponsibility of this so-called alternative government. These promises show the Opposition's total incompetence as an economic manager.

The promises that I have outlined would cost more than $10.9 billion to implement. They would increase the Budget deficit by $10.9 billion unless we hear of the cuts that the Opposition would put into place. When will we hear of the cuts that it would put into place? Of course it seeks to deny the Australian people that basic information. If the Opposition did not introduce a consumption tax the $10.9 billion would increase to $14.7 billion. Yet the former failed Treasurer has the gall to come into this House today and criticise the Government's economic policy.

It is not just the Opposition's budgetary policies that would be disastrous. It would do away with the Government's wages policy, a policy based on consensus and one that has served Australia so well over the last four years. As I have indicated, it would introduce rorts and rip-offs into the tax system-the same rorts and rip-offs that characterised the tax system when it was under the stewardship of the current Leader of the Opposition. What kind of effect would these measures have on interest rates, the balance of payments, inflation and the level of foreign debt? There is only one word for it; they would have a disastrous effect. Let us get on with the business of governing this country; let us reject this stupid motion that is nothing more than a smokescreen. I therefore move:

That the question be put.

Question resolved in the affirmative.

Original question put:

That the motion (Mr Howard's) be agreed to.