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Thursday, 28 May 1987
Page: 3537

Mrs SULLIVAN(3.28) —I find it quite extraordinary that in a debate on the subject of the living standards of Australian families, the Minister for Social Security (Mr Howe), of all people, should spend only two minutes out of his 15 minutes actually talking about the Australian family. I find it doubly interesting that in those two minutes he referred to a family that had an annual income of $30,000 or higher and gave some examples. I dare say that the Minister was embarrassed by the fact that families on average weekly earnings or lower, families for which he has a primary responsibility, after four years of a Hawke government, are worse off than they were under a Liberal government. This matter of public importance refers to the threat to the living standards of all Australians, particularly families, posed by the Australian Labor Party's failed policies and its unwillingness to disclose the contents of the 1987 Hawke-Keating Budget. In the few minutes available to me, I hope to point out some of those areas where the living standards of all Australian families have fallen and to indicate that, without a doubt, the reason why the announcement was made yesterday concerning an early election is because this Government does not want to put the facts to the public and what will happen to it in future under a Labor Government. It was only 13 days ago that the Prime Minister (Mr Hawke) said:

I can't envisage any circumstances in which there would be such an early election.

In answer to a journalist's question, he said:

It can't be July in any circumstances I can imagine.

What has changed in the last 13 days? What has happened is that we have had a Premiers Conference and all the Labor Premiers advised the Prime Minister to go for an early election before the effects of the $1 billion cuts in grants to the States are felt by the people-before the hurt starts, as they said.

Plenty of hurt was inflicted by the Government's cuts in the economic statement, in its mini-Budget. But, when that is compounded after the States make their decisions, it will be all the more clear. In any event, the economic statement has returned Commonwealth expenditure to only the 1984-85 level. So, while Government members talk about fiscal or monetary-I am not sure which word it is these days-responsibility, they do not show any signs of it. As the Leader of the Opposition (Mr Howard) said, this is the highest taxing, highest spending government in Australia's history. Fifteen years ago public spending represented 32 per cent of gross domestic product. Today it represents 45 per cent. This Government has added $24 billion to our debt in four years. The last Fraser Government paid $3.3 billion in interest payments. The 1986-87 Budget will see $8 billion of the people's money paid in interest on the nation's debt. Who knows what the figure will be for 1987-88. We are in economic difficulties. If the Government is to continue on its high spending way, spending basically on itself and the Public Service, it will of course have to borrow more. Interest repayments are now the third highest item of expenditure in the annual Budget. That is the basic reason why we have higher taxes-not because of the social benefits to which the Minister referred ever so fleetingly.

The average family in Australia has experienced a fall of at least $31 a week in disposable income and a fall in its living standards. Low income families, about who the Minister should care and should have had something to say, are no better off. In fact there are more and more low income families and more people living in poverty. The middle income families are considerably worse off under the Labor Government. The Australian Labor Party has forgotten its roots and it is frightened of the effect that its policies will have in the next few months on the people most vulnerable to them. Nearly three and a half million people live on pensions or benefits in Australia today, including nearly 800,000 children-a figure which should dismay everyone. There are now 2.6 million people living in poverty. That is a rise of 700,000 people since March 1983.

Twenty years ago a middle income family could expect to retain 60 per cent of its income after paying its tax and paying for its housing. It now retains 40 per cent to 45 per cent of its income. Housing is one of the areas in which the effects of the Government's policies are most felt. I can only conclude that the Ministers of this Government are now so insulated from their constituents that they are not aware of the reality of the situation, which presents itself day after day in honourable members' offices as people, particularly low income people, are faced with an enormous dilemma in housing. They face higher rents, at least part of which are directly attributable to this Government's abolition of negative gearing and the capital gains tax. They face interest rates which have risen from 11 1/2 per cent, when the Hawke Government was first elected, to 15 1/2 per cent. In fact this week the Commonwealth Bank announced that for new customer housing loans the interest rate will go up to 16 1/2 per cent. But that is not a one per cent increase; it is a 6 per cent increase over time.

Of course, the middle income earner, who hopes to own a home, faces the fact that came out recently, namely, that home loan repayments, as a proportion of gross median family income, have risen in the 12 months from December 1985 to December 1986 from 23.1 per cent of gross family median income to 26.9 per cent. If we take after tax income figures, the result is even worse. In the last 20 years the amount spent by people earning one and a half times the average weekly earnings on home loan repayments, as a proportion of after tax income, has risen from 18.2 per cent to 32.7 per cent. They are not the $30,000 a year people that the Minister talked about. For people on average weekly earnings, the amount of their disposable income spent on housing has risen from 20.9 per cent to 37.1 per cent. To go a little further down the line, to the people in whom the Minister should be most keenly interested, the people on three-quarters of average weekly earnings-that accounts for many families in this country-the amount of their after tax income spent on housing has risen from 24.4 per cent to 43.5 per cent. They are blood-chilling figures. At the same time, according to the Housing Loans Insurance Corporation figures provided by the Minister for Housing and Construction (Mr West) to an honourable senator in answer to a question recently, in the 12 months from December 1985 to December 1986, the number of defaults on payments had doubled. Those are the facts as they present themselves in our parliamentary offices. Low income people walk in and say: `I took a loan and could afford it. Interest rate increases mean that I can no longer afford it. I have to walk out of my home and lose all of the equity that I have in it'.

We often hear people talk about how the interest rate on Bankcard has increased from 18 to 23 per cent under this Government. The Minister will be aware that bank interest rates are largely irrelevant to most low income people because they have to deal with the hire purchase companies. It is in the housing estates of this country that the hire purchase companies make their money. The low income earners are sent off to those companies and are paying interest rates in excess of 20 per cent just for consumer goods.

The Minister referred to the medical situation. These days a low income earner cannot afford health insurance after paying for housing and paying tax. But, into the bargain, as well as not being able to afford private health insurance, low income earners also have foisted upon them even lower standards of health care. Those people who previously had to stand in the queues for free hospital treatment are now in longer--

Mr Howe —Come on! That is the States.

Mrs SULLIVAN —Oh! The Minister refers to the States as though they are not affected by the Federal Government. We are still to find out what the cuts of $1 billion to the States will mean in terms of hospital queues, hospital manning and health treatment for low income people. Of course, for the middle income earner, the cost of private medical insurance is prohibitive.

Earlier today the Minister referred to the benefits in education for the low income earner. Two years ago this Government spread the expenditure on the participation and equity program for one year over two years; in other words, it halved that expenditure. In this economic statement it has reduced spending on technical and further education by $30m, at the same time as keeping young people in the education system because of the reduced payments to young unemployed people. The Government has reduced the forecasted expenditure on Austudy payments. The very people who need education and training, and who need financial support in order to afford it, have been the most hurt by this mini-Budget. If that is the much vaunted mini-Budget, heaven help us in the Budget.

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