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Thursday, 17 September 1987
Page: 242

Mr HOLDING (Minister for Employment Services and Youth Affairs and Minister Assisting the Treasurer)(3.12) —I suppose that it is inevitable in a parliament in which an Opposition is forced perpetually into an adversary situation that when the Treasurer (Mr Keating) actually achieved a balanced Budget the Opposition, in order to fulfil its adversary role, had to seek any kind of argument to decry the level of that achievement, although prior to the Budget we heard the Leader of the Opposition (Mr Howard) saying that he felt what the Government should be aiming for was a balanced Budget. Yesterday the shadow Treasurer, the honourable member for Kooyong (Mr Peacock), was doing his best to do so as was the honourable member for Ryan (Mr Moore). But what does this come down to?

How is it that this Budget has been universally acclaimed by editorial writer after writer and by the international stock exchanges? The Treasurer gave a word of caution. The very success of the achievement poses new problems and new challenges-which will be met. The Leader of the Opposition, the shadow Treasurer and the honourable member for Ryan know that financial commentators throughout Australia, many of whom are not complimentary generally about this Government, gave, I believe, nothing but proper balanced praise for the efforts of the Treasurer. The honourable member for Ryan introduced this matter of public importance, which was inaccurate:

The increased tax burden on Australian individuals, families and businesses resulting from the 1987 Budget.

That is wrong. This Opposition can never get anything right. This Budget, as promised in the election campaign by the Treasurer and the Prime Minister (Mr Hawke) introduces no major new taxes, nor does it increase tax rates. That is the simple fact. Neither the fact that tax as a proportion of gross domestic product (GDP) in 1987-88 is 24.5 per cent nor the personal tax cuts flowing from the May statement were mentioned. Those tax cuts amounted to $4.5 billion. As a result of those decreases and the economic policies of this Government the average pay as you earn taxpayer is in the situation that what he is paying in tax in proportion to GDP and the rate of inflation is low.

I state the simple fact that as a result of those tax cuts the average taxpayer is operating at a level about 6 1/2 per cent lower than the inflation rate. How was this result brought about? Was it brought about by taxing or slugging the wage earner? No, it was brought about by this Government having the credibility and courage to produce an assets test and a tax on fringe benefits and capital gains. It was that decision which caused the increase in revenue. Those people who follow this economic debate will recall that on every one of those issues the gentlemen opposite mounted a campaign which was designed to produce fear throughout Australia. They said that the capital gains tax, although it exists in other parts of the world, was going to destroy the income level of the average Australian. They were talking about the tax dodgers and their mates about whom they did nothing for years.

What an imposition the fringe benefits tax was going to be. Again we were told that all the gentlemen with whom those opposite used to have free lunches could no longer buy those free lunches. What shock horror that was. Then there was the assets test. We were told week after week and month after month that as a result of those decisions the Hawke Government would be swept from office and there would be a new regime led by the present Leader of the Opposition. The fact is that the Opposition went into the election less than 10 weeks ago. Those opposite could not get their figures right. Never before was a sleazier bunch of tax proposals put to the Australian people. Those opposite said, `We will abolish the fringe benefits tax. We will abolish the capital gains tax. Trust us. The assets test will be destroyed. We will make cutbacks at every level of the public sector but do not ask us where we will make the cuts'.

Never was a more cynical or dishonest economic fiscal proposal put to the people. The people made their decision. They rejected the sleazy proposal because they knew it was intrinsically dishonest. They knew it would not work and ultimately they were not prepared to trust a former Treasurer who, as he went from office ignominiously, left this nation with a record deficit. It took this Treasurer and Government years of hard decisions to restore us to the position where for the first time in many years we have a balanced Budget. When one looks at what has occurred one sees of course that there have been increases in tax revenue but they occurred from the broadening of the tax base. There is now greater fairness and equity in our taxation system than ever before in our history. The smart money friends, the white shoe brigade who stood behind the purported alternative Leader of the National Party, the people who have been making the smart money and not paying tax for years now have to make a proper, just and appropriate payment to accept their share of the burden.

It is because of that increased tax revenue base and the determination of the Treasurer and the Government to see that those who have been rorting the system will not continue to do so, that the collections, as a result of those policies, exceeded the initial estimates. That is why tax revenue is high. But it is not because of increased impositions on the average Australian; it is because those who should have been paying in the past are, as a result of the Government's policies, paying now. I and this Government make no apology for the fact that it took some time to inject some justice and equity into the taxation system. In introducing that justice and equity, this Government has made certain that Australia can go forward on the basis of starting to meet some of our overseas debts. We have produced a balanced Budget.

The demands which were made by the Leader of the Opposition less than a week ago are now met by the mealy-mouthed proposition that comes into this House as a so-called matter of public importance. The fact of the matter is that this subject matter does nothing for the Opposition's credibility. Opposition members in this Parliament are what they were before the election-a bunch of individuals with confused and conflicting policies and no long term coherent strategy. I will say this of the shadow Treasurer who replaced the former shadow Treasurer: He has had the foresight at least to say, `We have to get off the track that we are on; we must stop trying to buy our way into office'. He has indicated that if he is given time, he will try to come up with something that looks like an alternative economic policy, not a grab-bag of political propositions which could not work and which, as they were mounted, honourable members opposite knew could not work. What is worse, they could not even get the arithmetic right. That is the story. We all know it. I will listen, as I think many people in Australia will listen, with interest, to what the Leader of the Opposition has to say later this evening. However, this matter of public importance is an indigestible entree to what, I suspect, will be a fairly foul feed from the leader of the Opposition later tonight.

The 1987-88 Budget outcome reflects major cuts in outlays. The measures taken in the May economic statement and in the Budget reduce the prospective deficit by $3.5 billion net in both 1987-88 and 1988-89. Tax measures reduced it by only $0.4 billion. That is the simple economic statistic. In 1987-88 outlays will decline by 2.4 per cent in real terms. That is the largest real decline in the 35 years for which we have comparable data, and it follows the decline of 0.8 per cent last year, making it the only case of two consecutive falls over the whole period. The achievements of the Treasurer and the Government in making the hard economic decisions that had to be made to bring this nation back from the brink of bankruptcy to which it had almost been brought in the last years of the Fraser Government were subjected to misrepresentation and distortion by those who had rorted the tax system in Australia for years. Their mealy-mouthed apologists opposite, endeavouring to strike fear into the heart of the average Australian, compounded their actions during the election.

Less than 10 weeks ago the Australian people were given the opportunity of casting their judgment about the future economic management of this country. They had clear alternatives and they voted for a continuation of the economic management of this Treasurer and this Government. In so doing, I believe that they showed correct judgment and correct decision-making. The Budget which was introduced into the House this week will fully justify that judgment. As I said at the outset, in producing a balanced economic statement, the Treasurer deserves the praise of every honourable member. More importantly, he has given us an economic base from which we can build. It does not mean that there are no challenges in the future; there are many. But it means that if this Government is prepared to meet those challenges with the courage and the fortitude that it has shown in the light of the carping criticism of honourable gentlemen opposite, those challenges will be overcome. This matter of public importance is one further discredited political exercise by an opposition that has entirely lost any credibility with the Australian people and which lacks faith in itself and the courage to face up to the great issues that face this nation.

Mr DEPUTY SPEAKER (Mr Leo McLeay) —Order! The Minister's time has expired.