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Tuesday, 8 October 1985
Page: 779

Senator PETER RAE —Is the Minister representing the Treasurer aware that restaurants around Australia are already dismissing staff as a result of the loss of trade following the Government's announcement of its taxation proposals and, further, that a group of management consultants has predicted that at least 10,000 jobs will ultimately disappear from the restaurant industry? What is the Government's own estimate of job losses in the restaurant and catering industry? What can the Government offer to the thousands of workers who will be laid off as a direct result of the Government's attack on one of the very few sectors of the economy which had been enjoying rapid employment growth, in particular in the employment of young job seekers, during recent years?

Senator WALSH —As Senator Grimes just indicated, I tend to concur with one of the judgments made by the present Leader of the Opposition. After hearing that question I tend to concur with his judgment; that is, to move Senator Rae back a bit further from the front table than he was before. I recall that in 1983 the Government was being lobbied by the breweries. Although I do not recall the exact figures, we received literature with assertions of the employment effects of a 10 per cent increase in the excise on alcohol. If the same proportions were applied backwards, the result of a fairly simple calculation was that all we had to do to abolish unemployment was to abolish the excise on beer. All governments are subject to that sort of propaganda and they take it with a grain of salt. I take the propaganda from the restaurateurs, which has just been regurgitated by Senator Rae, with the same grain of salt. I find it astonishing that a party which purports to believe in the free market complains when a particular industry is exposed to market forces; that is, required to compete with other industries without the benefit of a tax shelter.

Senator Messner —Restaurants pay tax the same as everybody else.

Senator WALSH —It is possible-indeed, I would say probable-that the restaurant industry is somewhat larger than it would have been had it not been a tax shelter, enjoying tax shelter status, in order to indulge those bludgers who had free lunches at the expense of people who took their lunches to work in brown paper bags. To the extent that the restaurant industry does contract because it will no longer be a tax shelter, that will reflect a vote by the public that they do not want the services provided by that industry in the volume in which they had previously been provided when it had the benefit of tax shelter status. I would have thought that anyone who believed in market forces and consumer choice would support a policy which had that effect.

Senator Messner —It is going to lose jobs.

The PRESIDENT —Senator Messner, you asked a question and a supplementary question. I ask you to give everyone a fair go.

Senator WALSH —I think it likely that there will be some contraction of the restaurant industry and some reduction in employment although, as I said before, the wild figures quoted by Senator Rae and others should be viewed with a great deal of scepticism.

Senator Rae asked about employment opportunities. What he seems to have forgotten is that the money previously spent on business lunches for the self-indulgent at the expense of ordinary people and ordinary taxpayers will be spent somewhere else, resulting in increased demand for goods or services from other industries, with a concomitant increase in employment in those industries. So, while it is probable that there will be some reduction in employment in the restaurant industry, that reflects consumer choice undistorted by tax lurks and tax havens. There will also be increased employment in other areas as expenditure patterns change. How that works out on balance is something that cannot be calculated with any precision either now or afterwards.

Senator PETER RAE —Mr President, I ask a supplementary question. The matter upon which my question was based was a reference to the Australian newspaper of 25 September. Does the Minister regard the management consultants of Horwarth and Horwarth Services Pty to be people who are untrustworthy, unreliable and all the other names which he attributed to them or does he accept that if they made an assessment as management consultants of a loss of 10,000 jobs it was based on some reasonable basis or hypothesis?

Senator WALSH —No, I do not accept that at all. They were hired guns for a particular vested interest. If one wants to use the emotive terms that Senate Rae used, the liquor industry propaganda to which I referred a while ago came from Carlton and United Breweries Ltd. I wonder whether Senate Rae would like to put on to Carlton and United Breweries all the epithets that he says I am putting on to some other firm. It is a fact of life that vested interests and those guns which are hired by vested interests habitually exaggerate the effects of whatever policies they do not like; this will have some adverse effect on the vested interest, though not necessarily an adverse effect on the community as a whole.