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Wednesday, 1 April 1987
Page: 1907

Mr JENKINS(6.10) —Appropriation Bill (No. 3) 1986-87, Appropriation Bill (No. 4) 1986-87, and the Appropriation (Parliamentary Departments) Bill (No. 2) 1986-87 give us a chance to review the Government's performance in displaying compassion and in working towards bringing social justice to Australians in this time of difficult economic conditions. It also gives us an opportunity to consider the prospects, the many proposals and policy alternatives under consideration by the coalition parties. I was interested to hear the honourable member for Lyne (Mr Cowan) admit that the coalition parties are being given an opportunity to get their act in order, that they need to be seen as a united front and perhaps therefore as an alternative government. But the question one must ask is: What have they been doing for the last four years? It is an admission by the honourable member that the coalition parties have not displayed a constructive role as is their proper role as an Opposition.

Let us see how they are going about, scratching around and trying to find policies. On Monday, 23 March we had revealed what was called the Liberal Party's secret agenda. It is not so secret any more because it has been given good media coverage. Let us look at some of the proposals under consideration. One is to cut pensions and tighten eligibility-not what one would assume to be a very compassionate way to look at the plight of the needy. Another suggestion is to abolish all employment programs, programs that have been quite successful in giving the long term unemployed skills which have enabled them more adequately to go back into the work force. Then we have the big items such as the proposal to abolish the fringe benefits tax and the capital gains tax. These measures will be directed towards assisting the friends of the coalition parties-the rich. It will put the tax load back on to the poor in our society. Another proposal is to increase charges for pharmaceutical benefits. What does it mean? Will the safety net provisions that were put in late last year by this Government continue? We do not know. The Opposition parties are silent on such issues.

We see a proposal to cut out the participation and equity program, a very successful education program which has tried to combat the inequities in our education system. It has tried to reverse the figures which show that those schools in the higher socio-economic areas have better entrance rates into tertiary institutions. What do we see from the Liberal Party in this secret agenda? We see that it has turned its back on people in those conditions. We also see on the secret agenda a proposal to privatise certain public concerns. There is a suggestion that the coalition parties would look at, as privatisation targets, the Commonwealth Bank and Qantas Airways Ltd, Telecom Australia, and Medibank Private. We have had these threats from the Opposition for a number of years. In fact, there was a threat in September 1985 to put Telecom on the `Sale of the Century' list.

We have to ask the dries in the Liberal Party whether they have consulted their colleagues in the National Party. The National Party is yet another little faction ridden group. Have they considered the opinions of the coalition? What would the National Party say about the fate of cross-subsidies which are so welcomed by rural subscribers to Telecom? Can they suggest that if Telecom were to be privatised those sorts of cross-subsidies would continue? I doubt very much whether that would be a prospect. We also have a number of faceless men in groups outside the main stream of the Liberal and National parties, those who have their close ties with the New Right. They have come up with suggestions about how the Australian economy should be run. The Business Council of Australia last month suggested cuts of about $4 billion. It suggested cuts in education of $290m, cuts in health of $805m, cuts in social security of $1.14 billion and cuts in housing of $120m. Cuts in these areas would certainly affect those in most need. We have no suggestions about how it would display the compassion that many back benchers of the Liberal and National parties claim that their parties have.

People such as Ian McLachlan of the National Farmers Federation suggested expenditure cuts of $10 billion. That would not leave much for the Government to be involved in. It certainly would not be in the best interests of those most in need. I am sorry that the honourable member for Higgins (Mr Shipton) has left the chamber because I do not wish to be too painful when I also add John Elliott's proposals to the long list.

Mr Gear —That is why he is not here. He has gone to see John.

Mr JENKINS —He must be working on his numbers. Albeit for me to suggest that he get help with preselection matters, he will be doing his own thing. In an interview in the Age on 9 March John Elliott, when asked what steps are necessary, said:

I think we've got to take five or $6 billion (out of the 1987 Budget).

That is tough medicine. There is no suggestion that those on the opposite side of this House have considered how they would lessen the effect on the needy.

Next I come to the proposal by the National Party-or should I more correctly say the Queensland National Party? Its proposal is to have a flat tax-a bonanza for the super rich. The Nationals of the extreme right have proposed a 25 per cent flat tax with marginally increased overall tax revenue. The burden would be dramatically shifted. Let us look at the top end of the scale. On 1984-85 figures those who earned $100,000 per annum or more numbered 5,893. They paid $612m in taxes. Under the 25 per cent flat tax proposal the level of taxation for those people would be reduced to $287m. Under the flat tax proposal it is the low and middle income earners who would have to pay. Those on incomes of up to $22,000-or $437 per week-would have to pay an additional $4.6 billion in taxes, an increase from 44 per cent to 61 per cent of the tax bill.

In summary, about five million Australians, 76 per cent of all taxpayers, would have to pay an average increase of $18 per week under the 25 per cent flat tax-they are all in the lower scale of income. Today, we have the news on the front page of the Melbourne Herald that the former Secretary to the Treasury, a prominent member of the H. R. Nicholls Society, one John Stone, has joined the `Joh for PM' campaign. He is proposing to flesh out Sir Joh's single rate tax proposal. The article states:

. . . Sir Joh's proposal for a single-rate system of personal income tax at a rate of 25 per cent would `provide a massive improvement in incentives to work, to save, and to create jobs, and disincentives to cheat on paying tax.'

I do not know how he comes to that conclusion, but it is interesting to note the comments of that distinguished economist John Kenneth Galbraith when he recently visited Australia and stated his absolute opposition to a flat tax. He went on to make a statement that represents a comprehensive indictment of the economic blarney offered by those opposite. Galbraith had this to say:

When you hear all these suggestions as something that are to stimulate the economy, provide incentives, or whenever you hear the word incentives, always sharpen your ears because you know that somebody is making an argument for more money for himself after taxes.

Indeed, that is the problem. We have to look, with great caution, at some of the proposals that are being offered by the multitude of factions and different groups that are represented either here in this House or in outside bodies behind the two coalition parties.

Let us briefly have a look at the achievements of this Government. I just want to dwell on a couple of areas. Since April 1983 this Government has assisted in the creation of 772,000 jobs. It has enabled a large number of Australians to get back into the work force and, importantly, it has enabled many females to re-enter the work force. Another area where we can look at this Government's achievements is the area of pensions. The standard pension has increased by more than 6 per cent in real terms compared with a real increase of only 1.5 per cent over the seven years of the previous Government. In March 1983 the pension was 22.7 per cent of average weekly earnings and by December 1986 it had increased to 24.1 per cent. That is not to say that our task is finished. We must continue to strive to improve that percentage, but we need to recognise that that must be done now in times of difficult economic circumstances.

There have been achievements in welfare payments. Rent assistance has been increased by 50 per cent. The separate income test for rent assistance is to be abolished in July this year. That will give about 300,000 people up to $15 extra a week. As we all know, on 1 July 1987 the poverty trap reduction measures will be put into place. The free area of income will be increased from $30 to $40 for single people and from $50 to $70 for married couples, with an additional $6 to $12 per child. This is important because, while real pensions will have increased by approximately 6 per cent, the cut-off income for receipt of a pension will have been raised by more than 20 per cent in real terms. That is really important.

All the Opposition does is to come up with incredible nonsense such as the so-called work for the dole scheme which was promoted by the Opposition during the matter of public importance debate today. This concept is rejected absolutely by the Government. The Opposition scheme, as far as we can tell, is something like a work for the dole lottery, a conscription scheme for work gangs. As the Minister for Social Security (Mr Howe) said during the matter of public importance debate, it is nothing more than a smoke-screen for an attack on the unemployed, an attempt to prey on perceived prejudice in the community, a substitute to cover the absence of policies. It is unfortunate that it does reflect the attack which the Opposition and coalition parties from time to time make on the unemployed and welfare beneficiaries.

The Opposition parties are not gracious enough to recognise the improvements that have been made in the administration of welfare payments in an attempt to ensure that only those who are deserving of the payments are the ones who receive them. They are not gracious enough to acknowledge the good work that has been done by the social security review. There has been a genuine attempt to ensure that those in greatest need are the ones that are the targets for welfare payments.

Good work has been done by the Government, but that is not to say that more work should not be done. There is a need to look at the distribution of wealth in Australia and a need to try to bring greater equity to Australia. I think that that is something that I touched on in my maiden speech some 12 months ago when speaking on Appropriation Bill (No. 3) and Appropriation Bill (No. 4) last year. I urged the Australian Labor Party to adopt a national social justice strategy. I was very pleased that at the Hobart conference such a strategy was adopted. I feel that by working within that strategy a great deal of good work will be done that will enable the objectives of such a strategy to be achieved. Hopefully, it will bring about a greater fairness in the distribution of our economic resources and there will be greater acceptance of the notion of the need for equal, effective and comprehensive civic, legal and industrial rights for people.

There is an important need to ensure that Australians have fair and equal access to essential services such as health, education and housing. I am afraid that, on the evidence of leaked Opposition documents and the official policy documents that have been released, I do not think that we could ever see that from coalition parties. I instance the Opposition proposal to scrap the education participation and equity program. It would also scrap the Commonwealth-State Housing Agreement and things such as that.

The social justice strategy should ensure that there is an opportunity for Australians to participate more fully in their personal development, social and community life and decision making that affects them. They are important aspects that I hope we will see more work towards. I look forward to a continuing political climate, in tandem with an improvement in economic performance, in which this Government continues to fight the policies of greed and to improve the plight of the needy.