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Thursday, 22 August 1985
Page: 170

Senator FOREMAN —My question is to the Minister for Finance. I refer to the $4.9 billion deficit in the Budget and the 1.3 per cent real growth in government spending. Can the Minister inform the Senate of the benefits this restraint can be expected to bring to Australians?

Senator WALSH —I think the benefits that Australians can expect from the Budget will be sustained high economic growth and, as a corollary of that, a further reduction in the level of unemployment which, at just above 8 per cent at present, is higher than anybody would like it to be. However, it should be noted that it is appreciably lower than the 10 1/2 per cent unemployment rate which this Government inherited from our discredited predecessors. As a result of the very large reduction in the Budget deficit in real terms-a fall of 34 per cent, or 36 per cent as a proportion of gross domestic product, if one wishes to put it that way-obviously there will be substantially less pressure on financial markets and interest rates arising from the government sector. The reduction in the deficit has been achieved by a combination of expenditure restraint and the automatic benefits from both expenditure and revenue that flow from the sustained higher growth rate.

It is a matter of record that the Opposition continually calls for large reductions in government expenditure and always declines to name the areas in which the reductions should be made. I have noted that at its last meeting the Federal Council of the Liberal Party, carried a motion calling for a 4 per cent reduction, as a proportion of GDP, in government outlays, which amounts to about $9 billion. I have written to the Leader of the Opposition and the shadow Treasurer inviting them to nominate where the $9 billion should be cut from the 1984-85 expenditure figures. They have not responded and I do not expect they will. I notice that the Sydney Morning Herald of 5 August stated, in the context of the Liberal Party's call for a reduction in outlays of 4 per cent of GDP, or $9 billion:

The Deputy Opposition Leader said he and Mr Peacock did not support the resolution when it was raised at the meeting but neither did they oppose it.

So it seems that the Deputy Leader of the Opposition and shadow Treasurer has a similar view on government expenditure to his view on changes in the Liberal Party leadership; that is, he is neither for it nor against it.