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Wednesday, 16 September 1987
Page: 137

Mr GRIFFITHS —I ask the Treasurer: Can he inform the House of the policies of the Government since 1983 which have contributed to a balanced Budget for 1987?

Mr Chynoweth —Nearly balanced.

Mr GRIFFITHS —Well, there is only $27m in it and Peter McGauran could fix that up on his Bankcard.

Mr KEATING —This Government inherited the largest fiscal imbalance in the nation's history and has had to apply itself rigorously since 1983 with reviews of outlays and discretionary decision making in order to reduce the size of the Commonwealth Budget deficit. This was so particularly in 1983 and 1984, and more intensively in 1986 and for the May statement and Budget of 1987. The result is that the fall in outlays in this Budget of minus 2.4 per cent is the largest fall in the 35 years for which data has been kept. As I said last night, this Budget relies principally on cuts to outlays for the great fall in the burden of the deficit.

Mr Beale —What about the 8.5 per cent increase in revenue?

Mr KEATING —I observe only that that is down from 12.5 per cent last year and just running over the inflation rate. The reason that is so is the base-broadening measures which honourable members opposite opposed. I refer to fringe benefits, capital gains, substantiation and all of the other measures-the equitable measures-which they stand against. That 8.5 per cent, that jot over the inflation rate, is there simply because the system is more decent and more fair; not because we are pulling more tax from the average taxpayers. The Opposition fails to remember that the Government has given $4.5 billion of tax cuts in the last 12 months. Those $4.5 billion in tax cuts mean that pay as you earn tax receipts are moving at about 6 1/2 per cent less than the inflation rate. That is as a result of the tax reform of this Government. We have brought the deficit down from the $10,000m which we inherited from our predecessors to zero.

Opposition members interjecting-

Madam SPEAKER —Order! The honourable member for Mackellar will withdraw that comment.

Mr Carlton —Which comment, Madam Speaker?

Madam SPEAKER —Order! The comment you made before the second one. The honourable member knows the comment I mean. I ask him to withdraw.

Mr Carlton —Madam Speaker, I said, `That is rubbish'. I said nothing else.

Madam SPEAKER —Order! In that case I apologise to the honourable member for Mackellar. I cannot identify where the comment came from but I ask the honourable member concerned not to say it again. I will listen for it next time and I will identify the honourable member. I call the Treasurer.

Mr KEATING —Madam Speaker, the word `liar' does not faze me. My Opposition colleagues always attack the Prime Minister and me, and anyone else who refers to the $10,000m inheritance. In the election campaign I referred to the document which was prepared by the Treasury in 1983 for both the Liberal and National parties and, in that case, what was intended to be an incoming coalition government. I would be quite happy to table that document. The document is headed `Secret: Current Fiscal Situation and Outlook (L-NP Version)'. It stated:

When the estimated cost in 1983-84 of the new policy proposal announced in the policy speech is added, the prospect is for a Budget deficit of almost $10,000m. Such a deficit would be equivalent to 5 1/2 per cent of projected GDP-the highest in Australian post-war history.

Mr Hawke —Who wrote it?

Mr KEATING —The Treasury. The document continued:

The magnitude of the fiscal imbalance is unprecedented in Australia during peacetime, as is the level of Government spending.

It continues-I ask honourable members opposite to listen to this:

When Government expenditure increases are of the `structural' variety, there is no automatic mechanism for such a winding back. Moreover, the experience of the past decade (both in Australia and many overseas countries) is that Governments have found the decisions necessary to significantly reduce aggregate public sector spending to be extremely difficult.

Mr Sinclair —You had better produce the letter that they would have given us if we had won government this time. It would be more relevant.

Mr KEATING —The one the Treasury would have had for honourable members opposite this time would have been a lalapalooza. It would have been a corker because it would have torn the Opposition tax policy to shreds. Such a letter was presented to the Prime Minister and me in 1983. An equivalent letter was written for the Australian Labor Party. This document refers to the massive runaway in fiscal policy over 1982-83 and the projected Budget deficit of almost $10 billion; it is signed off by the Treasury dated 28 February 1983. Of course that would have had a covering letter from the now shadow Finance Minister. So we know what the situation would have been had the coalition won that election. So do not hee haw about the $10,000m; that is what the previous Government left us and we had to get it down. I table the document.