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Tuesday, 31 March 1987
Page: 1777

Mr BRAITHWAITE —(Dawson) (4.03)-It is great to come into this chamber and be lectured by the economic giants of the Australian Labor Party. I might remind you, Mr Deputy Speaker, who those economic giants are: The man who presided over the Bourke's store's failure and the Australian Council of Trade Unions in the 1970s--

Mr Hurford —You're getting personal.

Mr BRAITHWAITE —No, I am not being personal. I am talking about the economic giants. After all, the Minister for Community Services (Mr Hurford) made a similar comment a few moments ago. The economic giants include a person who cannot even lodge his own income tax return on time.

Mr Hurford —You are being personal now.

Mr BRAITHWAITE —I am not being personal. This is the type of thing that we are addressing today-the standards of living of every Australian and why the Government fails to address itself to the problems of the person in the street, such as the school-children and the people who are in the gallery-whose standard of living is declining day by day as costs spiral above after-tax take home funds. The Minister for Community Services, who is at the table, has been described as a person who signs all the fringe benefits taxation letters. It must offend the professional ethics of any accountant to put his name to the fringe benefits tax, which I believe to be the most unfair, anti-business and inequitable tax.

We are being asked to come to terms with the realisation that our problem is somehow imported because of the international competitive situation. At no time has the Opposition denied that that is a major cause of Australia's problem. However, we say that it is not the only cause. If the international situation cannot be changed, it is up to the Government to take in hand the elements of the economy that it can change. The Minister blamed our interest rates problem on international forces without having any realisation of what affects interest rates in this country. Interest rates in this country are not affected by international competition to the extent that he suggested. I shall compare interest rates later.

This matter of public importance is about high interest rates, high inflation and high taxation, and how they affect every Australian-not the global lot of Australians about whom the Labor Government is so fond of talking, the vast number of families and workers, but the individual person and how he faces his day to day life. The effect of interest rates on the rental market has already been mentioned, as well as, more importantly, the effect on a person repaying a loan acquired through a bank. The interest rate comparisons are rather interesting. During the time the Labor Government has been in office, the past four years, the housing loan interest rate for savings banks has increased from 13.5 per cent in 1982-83, to 15.5 per cent, and for the permanent building societies, it has increased to 15.63 per cent. One might think that to be a modest change, but one must think in terms of a person having to service his debt with the declining pay packet that is rendered after the taxation and fiscal creep. In addition, that person must absorb an inflation rate of 10 per cent this year, as a result of rising prices. At the end of that list, he has to pay for rates and electricity. Prices of all such items are going up. Finally, he is asked to service a debt to which he did not agree at the beginning but which has been imposed on him by the Government's policies. How can the Labor Government say to us that it has a concern for the family when it does not even know, because it is in some ivory tower in Canberra, the feelings of the people out there?

I turn now to the effect of high interest rates on business. During the term of the Labor Government, the rate has gone from about 14 per cent to 18.25 per cent today. We realise that the rate has shot over the barrier many times and that it is the highest, in real terms, since the Great Depression. I stress the words `in real terms'. I hope that those people who are listening in this afternoon-family people, people who are on a wage, people in business-will appreciate exactly what this Government is doing to their standards of living. I have two reports of today's date in front of me which are important in terms of this debate. An Australian Associated Press report states that the chief of the National Australia Bank Ltd said:

Homeowners could still be in for a significant lift in monthly home loan interest repayments, despite Government moves yesterday to keep the lid on interest rate levels.

It is significant that the Minister for Housing and Construction (Mr West), who is now at the table, did not mention the National Australia Bank's comments when he spoke about interest rates earlier today. The report continued:

. . . Mr Clark said that there was a likelihood of banks lifting their mortgage rates on home loans taken out after April 2 last year to 16 per cent.

What a great future there is for the home owner in Australia. The proud tradition of Australians being home owners has been smashed. The second report concerns the Organisation for Economic Co-operation and Development:

In its annual assessments of the Western World's major economies, the Paris-based organisation said the Australian economy had deteriorated considerably in the past 18 months and needed a major readjustment in the medium term.

It warned Australians to expect a lengthy and relatively painful process with lower living standards and urged the Government to continue to make its overriding priority the reduction of the current account deficit and the external debt.

Where was that mentioned in the speech by the Minister for Community Services when he replied to this matter of public importance? I infer that he knows nothing about the aspects of government and the manner in which they can control these things.

Mr Hunt —They couldn't care less.

Mr BRAITHWAITE —That is right. The Minister read from a speech that I am sure I heard him deliver in an address to the Australia-Japan Society some time last year. That shows how much out of touch he is. The average decent Australian is concerned about how much money he can spend after he pays his tax. Interest rates and inflation are very important to the average person. We are told, at this stage, that that has nothing to do with us. I suggest that it has everything to do with the Government. I begin with the deficit, which members of the Government are so fond of talking about, but about which they are determined to do nothing. Since 1982-83 the Government's Budget expenditure has increased in real terms by nearly $6 billion. We can really say that that is the cost of the deficits that have been occasioned over the last four years of this Government. The honourable member for Mackellar (Mr Carlton) indicated this.

What effect does this expenditure and our deficit have on interest rates? We have heard of the pathetic attempt by the Treasurer (Mr Keating) to wipe $2 billion off the deficit in a May statement. I say it is pathetic because it will go nowhere near addressing the problem of the $5.9 billion increase I have just mentioned. Of course when expenditure is not matched with revenue it means that we have to borrow, so interest rates are pushed up. It is interesting to note in terms of international competition and the force on our dollar that under this Labor Administration our exchange rate has fallen considerably, from 82.4 on the trade weighted index to 54.1 in four years. The dollar was worth 204.68 yen in 1983, as against 100.61 yen today-a decrease of 50 per cent. That itself is a reflection of the state of the economy. That is how the rest of the world passes judgment on us on a daily basis. Who could be proud of the dollar's record? However, the value of the dollar should be lower. We know that this Government is deliberately using interest rates to keep up the dollar. One can only ask why when we bear in mind the international competition we have.

I mentioned interest rates and the effect they are having in Australia on businessmen and on people with a housing loan. Japan presently has an interest rate of about 4.22 per cent. In the United Kingdom it is 11.1 per cent; in France, 7.98 per cent; and in West Germany, 4.54 per cent. Families in Australia face an inflation push of 10 per cent. If they lived in Japan it would be minus 0.2 per cent, and in West Germany minus 1.1 per cent. If we want to look at the middle of the road countries, Italy has an inflation rate of 4.7 per cent. All those are Organisation for Economic Co-operation and Development countries, countries with which we compete. Our interest rates and our inflation are things that the Australian businessperson and the Australian householder have to fight.

I repeat that it is because the Government has not addressed these problems that we have raised this matter of public importance, and the manner in which the Government has responded gives me no hope that it will come within a bull's roar of getting these matters into trim, as it is required to do. I just mention this in connection with the expenditure cuts that are about to be made.

Mr DEPUTY SPEAKER (Mr Leo McLeay) -Order! The honourable member's time has expired.