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Monday, 21 September 1987
Page: 385

Mr DAWKINS (Minister for Employment, Education and Training)(3.24) —What staggers the Opposition is that this Government has been so extraordinarily successful in turning round the fortunes of this country which was left in such a godforsaken position by those opposite including, I might say, the Deputy Leader of the Opposition (Mr Peacock), who in the dying, last, hopeless days of the Fraser Government was the Minister for Industry and Commerce. What he has to contend with is that, at that stage, we had unemployment at the rate of 10 per cent, inflation around 10 per cent and fiscal policy wildly out of control all as a result of flagrantly irresponsible policies pursued in the Budget a few months before which were all designed to produce electoral victory before Christmas. We all know that that strategy was wrecked and we all know that as a result of that electoral strategy being wrecked Australia was left wrecked with it and we, the Australian Labor Party, had to come in and attempt the great task of cleaning up the mess. Members of the Opposition cannot understand why and how we have been so extraordinarily successful. The fact is that we have been able to produce a balance Budget on this occasion, something which they, even in their wildest dreams, only promised they could do three years down the track. That is only if one believes some of the wild fantasies which they put into their pre-election figures on fiscal policy. Three years down the track they were going to balance the Budget; this Government produced it this year at once.

I think there has been a lot of scurrilous abuse of my colleague and, I might say, good friend the Minister for Finance (Senator Walsh). I would be staggered to find anyone in this country-anyone certainly on this side of the House-who would agree that Senator Walsh lacks guts. They might say lots of things about Senator Walsh, but one of the things they will not say about Senator Walsh is that he lacks guts. Senator Walsh has been the Minister for Finance since the 1984 election. This is not necessarily an easy thing for me to say, but I would say that Senator Walsh has been the best of the Finance Ministers this country has had. During the period that he has been Finance Minister, he has been absolutely resolute about two things; that is, forcing Ministers and the Government collectively to justify, line by line, every item of expenditure. It may well be that on some issues he would challenge a particular expenditure; that, after all, is his role. A good Minister for Finance will always-indeed, in my view-challenge every line of expenditure. Whether or not this can be justified in the context of the Expenditure Review Committee, or in the context of the Cabinet is a matter for collective decision-making and, of course, takes into account certain political considerations as well as those in broader fiscal policy or other particular criteria that one might want to apply to any particular line of expenditure. But it is his task to challenge expenditures of Ministers individually and of the Government collectively. Having been involved in this process for all of the time that this Government has been in office along with him, I might say that Senator Walsh has done that in a painstaking way which has required a great amount of discipline upon all Ministers in this Government. We go through a very exacting process as we make our decisions about expenditure. There has been absolutely no lack of political courage as we have undertaken that task.

Just to give honourable members an example of the way in which the Deputy Leader of the Opposition has quite outrageously taken out of context what Senator Walsh said or was purported to have said over the weekend, let me just put this in the context of the time at which the anecdote was made and where we are at the moment. The anecdote that he referred to was made by him or recalled by him at the time of the Labor Party conference in June 1986. Since that time we have had two Budgets and one expenditure statement in May this year. In June 1986 the prospective deficit for the forthcoming year was in excess of $8 billion. That is what we had to look at when we sat down to finalise the 1986-87 Budget-$8 billion. What have we produced? Two years later we produced a deficit of zero. There is $8 billion of accountable, absolute political courage. Not only did we do it, but we also got re-elected on the basis of the political courage that we demonstrated in producing that astonishing result. That is the greatest turnaround in fiscal policy that has ever been seen in this country and, I dare say, has been rarely paralleled in any other country of our kind anywhere around the world.

Mr Peacock —Why does Walsh disagree with you?

Mr DAWKINS —Because he made the statement two years ago, you dummy.

Mr DEPUTY SPEAKER (Mr Leo McLeay) —Order! The Minister should not refer to other members in such a provocative approach and tone.

Mr DAWKINS —He was recalling an anecdote he gave two years ago.

Mr Peacock —I thought he said it at the weekend.

Mr DEPUTY SPEAKER —Order! The Deputy Leader of the Opposition will cease interjecting. The honourable member for O'Connor might resume his seat unless he is raising a point of order.

Mr Tuckey —I just came in to sit down.

Mr DEPUTY SPEAKER —The honourable member will resume his seat.

Mr DAWKINS —The central tenet of the position of the Deputy Leader of the Opposition is that there are 200 programs about which we lack the political courage to do anything. The statement about 200 programs goes back to two years ago when there were perhaps 200 items of expenditure or savings options which the Government had to look at. We have looked at them, we have dealt with them and they add up to $8 billion. That is to be put in sharp contrast.

Mr DEPUTY SPEAKER —Order! The honourable member for O'Connor shall not interject that these are lies and he should withdraw that comment.

Mr Tuckey —I did not say that. I said it is up from $5 billion this morning.

Mr DEPUTY SPEAKER —That is what it sounded like. I apologise.

Mr DAWKINS —Let me explain that. The honourable member for O'Connor was not in the House when I first made that remark. What I was referring to was that when we sat down to finalise the 1986-87 Budget the prospective deficit was in excess of $8 billion. The prospective deficit now is zero. There has been a $8 billion turnaround. That is $8 billion worth of courage, courage that can be added up, courage that has actually been rewarded by an electorate which understood what needed to be done and which appreciated the courage and the dedication that we-and might I say, Senator Walsh-were prepared to bring to this question.

In terms of recurrent expenditure-that is where the $5 billion comes from-$5 billion worth of expenditure has been taken out of recurrent outlays during that two-year period. That has happened because the Minister for Finance, the Treasurer (Mr Keating) and I and other members of the Expenditure Review Committee have painstakingly gone through our expenditures line by line, added them up and made a judgment as to whether those programs were justifiable. We made the judgment that there was $5 billion worth of additional expenditure there which the country could well do without if it was going to make the adjustment which was necessary in our current circumstances. In order to get to the $8 billion there are, again, the base broadening measures in the taxation system.

Let us recall that almost all of those base- broadening measures, which now account for some $2 1/2 billion of additional revenue, were opposed by Opposition members not because they did not agree with them but because they lacked political guts to support them. We know that if John Howard had his way he would embrace nearly all of those option A tax measures. He used to advocate half of them publicly and God knows what he believed privately. Of course when it suited him, when there was the prospect of an election looming, he abandoned them all because he thought he might be able to grease his way to power by offering some superficial attraction to populism. That was not the course for us; it was not the course for the Treasurer; it was not the course for the Minister for Finance. We decided to take the tough options and I reject out of hand any suggestion that we have lacked the political courage to address the circumstances of our times.

I said at the beginning of my speech that the Deputy Leader of the Opposition at the time of the changeover in 1983 was the Minister for Industry and Commerce. He more than anyone should know the devastation that was wrought by our predecessor's industry policy. Our manufacturing industry had become woefully uncompetitive internationally and he knows it. In the last several years, under the guidance of policies pursued particularly by Senator Button, we have had to turn that situation around. So rather than losing hundreds of thousands of jobs in manufacturing industry we are now increasing jobs and with those jobs we are picking up markets not only in Australia but also overseas. That is the task we have set ourselves and from which we will not be deflected by any beat up from the Deputy Leader of the Opposition or anyone else.

When an election looms it is always easy to pad out Budget figuring in order to make the situation look better than it is. I raise this matter in answer to the suggestion by the Deputy Leader of the Opposition that this Budget is not what it purports to be. Let me take him back just a few short years to 1982-83 when there was a $2 billion difference between the outlays predicted at the time of the Budget in late 1982 and that which actually occurred in the middle of 1983. There was a $2 billion discrepancy in the outlays of the last Budget of the Fraser-Howard Government. As well, revenue was understated by some $0.8 billion, with the result that we had a massive deficit blowout of $2.8 billion in the last Budget that Mr Howard was responsible for under the Fraser prime ministership. That has to be seen in the context of the Deputy Leader's suggestion that our Budget does not add up and will not add up. Our record of accurately projecting Budget outlays, revenue and deficit size is unrivalled. Indeed, in only one year was there a discrepancy and that was a direct result of the massive collapse in the terms of trade which confronted Australia during 1985-86. As a result of that we embarked upon the scrutiny of taxation and Government outlays in order to ensure that that would never again happen to Australia, that Australia would face up to and go through the adjustment process which we are now going through.

If there is anything about what Senator Walsh has said that I would like to make much of, it is that what he is drawing attention to and what I think the Government as a whole wishes to draw the country's attention to is that the task is not over and we have to continue to be as resolute as this Government has been in the course of its term in office, most particularly over the last two years, if we are to work our way through these problems. There is no suggestion that people can lie back in the traces as a result of the progress we have made to this point. Australia still has a task to confront and this Government will do everything it can to ensure that circumstances exist in which that can be confronted. That is the reason why I have been engaged in looking at the whole question of properly preparing the work force in terms of skills for the challenge that exists. Despite having an unemployment rate of around 8.1 per cent, about two percentage points lower than when we came to office, there are still skills shortages because our predecessors were totally negligent in the way in which they dealt with these questions. They did not care whether there were skilled workers to undertake the tasks which Australia could and now will undertake in order to work our way out of the difficulties in which we find ourselves.

I conclude on a final point. On the matter of political courage, I take honourable members back to the circumstances of the last election. All of our expenditure cuts and our taxation propositions were laid out for the electorate to judge. What did we get from Johnny Howard? We got only promises to get rid of those taxation measures which now bring in $2 1/2 billion. He thought they might have been a bit unpopular. Not only that, there was another $2 1/2 billion worth of unspecified spending cuts. If ever one wanted an example of absolute, unqualified, political gutlessness or lack of courage it was that, going to the electorate and saying, `Here are the cuts but I will not tell you where they are because you might not like them'.

Mr DEPUTY SPEAKER (Mr Leo McLeay) —Order! The Minister's time has expired. Before I call the honourable member for Richmond I mention to honourable members on both sides that members are expected to refer to other members, Ministers and office holders by their title rather than their name. In the last two contributions there was a tendency to refer to individuals by name rather than by title. I trust the honourable member for Richmond will not continue in that vein.