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Thursday, 17 October 1985
Page: 1377

Senator WALSH (Minister for Finance)(11.08) —In replying I intend to break my speech into two parts. The first part will deal with the substance of the Loans Bill proper and the proposed amendments to be moved by the Opposition; the second will deal with some of the peripheral matters which the Opposition raised. The proposed amendments are important for one reason only. They are important because they demonstrate that under the new leadership of the Liberal Party the Leader of the Opposition, Mr Howard, in his first confrontation with the fanatics faction of the Party, backed down. The Liberal Party Leader, in the first test of real leadership, when there was a requirement for him to show some leadership, backed down and succumbed to the pressures of the fanatics faction. Only last Monday in the House of Representatives Mr Carlton, the shadow Treasurer chosen by Mr Howard, said:

This Bill makes arrangements for the Government to borrow. Previously there used to be an annual Loan Bill to handle this situation for all circumstances arising during a financial year. This Bill has been drafted as standing legislation rather than annual legislation to remove the necessity to pass legislation annually. As the Bill does not itself authorise expenditure-

I repeat, `as the Bill does not itself authorise expenditure'-

but merely creates a mechanism whereby expenditures authorised by other legislation can be made, the Opposition does not object to the concept of standing legislation. It merely improves the efficiency of the Parliament. We therefore support the Bill.

If I may say so, that is a very accurate and succinct assessment of the Government's Loans Bill. But, three days later, because the fanatics faction in the Liberal Party put the heat on the new Leader, we find that wholly accurate and sensible assessment by Mr Carlton being overturned, being junked, being put through the shredder. The fanatics in this place, who represent the fanatics faction in the Liberal Party, are being allowed because of the weak, puerile Liberal Party leadership, to move the absurd amendments which are about to be moved.

Senator Peter Rae —Tell us about Khemlani. You were around at the time.

Senator WALSH —I will refer Senator Peter Rae to a couple of quotations from 1975 in a minute. We hear a lot of pompous humbug about parliamentary scrutiny from the very same people who, with the exception of Senator Peter Rae, for five years allowed the present Leader of the Opposition, when he was Treasurer, to bypass parliament completely in making unauthorised loans to Telecom Australia for the purpose and effect of cosmetically reducing the Budget deficit and the public sector borrowing requirement; loans for which Telecom had no formal obligation to make repayment, nor was Telecom obliged to pay any interest. For five years the former Treasurer cooked the books in that way, without a whimper from any member of the Liberal Party in the Senate with, as I said, the exception of Senator Peter Rae.

This craven, abject surrender by the Liberal Party's new Leader in the first test of strength with the fanatics faction in the Liberal Party, demonstrates, if any further demonstration were needed, that this man could never be trusted to be Prime Minister because he would be too big a risk. The crazies faction would be the de facto government of the country if Mr Howard were ever to be Prime Minister. None of the fanatics who have spoken on this Bill has attempted to deal with the statement by their shadow Treasurer that the Bill does not itself authorise expenditure. That is a simple and accurate statement of fact. By contrast, we get newspeak, we get plain, false assertion by several members of the Liberal Party and also- although I suspect more in ignorance than in malice-by Senator Siddons.

The plain fact-and I know that at least some members of the Opposition have been briefed by officials on this question-is that this Bill does not authorise expenditure, whether it is an annual appropriation or a standing appropriation, any more than any loans Bill which has ever been passed by this Parliament authorises expenditure. Expenditure must be authorised by the appropriation Bills or by other standing appropriations. The Parliament has the chance to scrutinise those Bills-in the case of the annual appropriations, every year, and in the case of the standing appropriations, at the time they are introduced. This Bill does not authorise one cent of expenditure. Moreover, on 19 June I wrote to the Joint Committee of Public Accounts concerning the proposal for a standing appropriation instead of the annual appropriation.

Senator Walters —Mr Deputy President, I take a point of order. I was in my room when I heard the atrocious behaviour of Senator Walsh. I ask him to withdraw the comments he made about a member of the other place-that is, the Leader of the Opposition. His language was most immoderate. I ask him to withdraw his description of the Leader.

The DEPUTY PRESIDENT —Senator Walters, an objection on those grounds must be taken at the time the remark is made. You cannot listen to it in your room and then come into the chamber. You must be present at the time that the remark is made.

Senator WALSH —I am not sure what Senator Walters was objecting to, Mr Deputy President. I referred to the craven, abject surrender in the first confrontation with the fanatics faction of the Liberal Party.

Senator Walters —I now take a point of order, Mr Deputy President, in regard to the description that the Minister has just used of a member of the other place.

The DEPUTY PRESIDENT —Senator Walters, you are objecting to the reference to craven, abject behaviour, as I understand it?

Senator Walters —That is right.

The DEPUTY PRESIDENT —I think it would facilitate things, Senator Walsh, if you withdrew that and went on with your speech.

Senator WALSH —Very well, Mr Deputy President. As always, I am happy to oblige and to conform with your wishes. The substance of this Bill, of course, lies in two key phrases which were accurately and adequately presented by Mr Carlton when he said:

. . . the Bill does not itself authorise expenditure . . .

In respect of making it a standing appropriation instead of an annual appropriation, he said:

It merely improves the efficiency of the Parliament.

His second comment is as correct as his first comment, that is, it improves the efficiency of parliament. A measure which is really a mere formality, if the Government's Bill were accepted, would no longer have to come before the Senate each year. No longer would it have to be printed and occupy or waste parliamentary debating time.

It has been put to me by some members of the Opposition that they are reluctant to forgo an opportunity to debate government expenditure or government economic policies in general. That, of course, is another specious reason. If the Opposition wants to debate public expenditure or general economic policy, it has the opportunity to do so almost every day, if it chooses, by proposing for discussion a matter of public importance, apart from all the other legislation which provides an opportunity to debate that policy.

Senator Messner —Where is your tax legislation then?

Senator WALSH —Senator Messner knows that Mr Carlton was correct in his description of the Bill and in his support of it. But the fanatics faction of the Liberal Party has now taken it over. The fanatics faction has taken over the Liberal Party as far as this legislation is concerned. The present Leader of the Liberal Party has rolled over for it. It is an ominous sign, should he ever become Prime Minister, that the fanatics faction would run the country.

Senator Messner —Mr Deputy President, I take a point of order. The Minister is going on with a lot of tedious repitition. He is repeating the same point over and over. I call on him now to make quite clear the point he is trying to make in respect of this Bill. We want to hear clearly his justification for implementing this Bill in its present form.

Senator WALSH —I endorse entirely the assessment of the Liberal Party's shadow Treasurer-that is, that the Bill in this form improves the efficiency of parliament. I do not think it can be put more accurately or more succinctly than that. It improves the efficiency of parliament, a view which the joint Public Accounts Committee implicity accepted as of 19 June, when I wrote to it, and which the shadow Treasurer explicitly stated only last Monday. But suddenly, it is all turned around.

Senator Watson —What does the Auditor- General say about it?

Senator WALSH —I do not have an opinion from the Auditor-General, Senator. But I do have a letter from the Attorney-General's Department dated 30 July which states, amongst other things:

I confirm that in my view there are no constitutional problems with the Bill insofar as it will provide standing authority to borrow for defence purposes up to the limit of the amounts appropriated for defence purposes in any year and to supplement deficiencies in the Consolidated Revenue Fund. The Bill will have an adequate constitutional basis in section 51 (iv) of the Constitution. I do not consider that any constitutional difficulty arises from the fact that the Bill will provide standing borrowing authority. The Bill, of course, largely follows the format of the previous Loans Act which had been passed to provide borrowing authority on an annual basis.

That is a letter from the Attorney-General's Department. The Auditor-General audits the use of moneys raised pursuant to Commonwealth Acts. But it is not otherwise a matter for him; that is, the Loans Bill is not a matter for the Auditor-General. This is an absurd piece of opposition, late in the day, which is diametrically opposed to the view of the Liberal Party which was very well expressed-I always give credit where it is due-by Mr Carlton three days ago. I am not sure how long the Parliament has been passing Loan Bills but certainly for several decades governments of all persuasions have used the Loan Bill as an expeditious financing device, not, of course, I say again, to appropriate money. The current Bill patently does not do that.

An honourable senator referred to 1975 a while ago. After a couple of decades of Loan Bills going through Parliament each year in a rather boring way, this is what Senator Sir John Carrick said, I think on 1 October 1975:

What is the result of an analysis of this simple little machinery Loan Bill? First, it is a device, and a corrupt device.

That is what he said in 1975. We have never heard that sort of poppycock from anybody, of course, since then. That was done for what was a perceived politically expedient reason. Senator Peter Baume, on 14 October 1975 of the Loan Bill 1975, said:

This question of loans is no routine matter. It is at the very heart of this Government's incompetence and dishonesty.

We are not hearing that sort of nonsense today, but that was the sort of misdescription and the sort of blatant misrepresentation in which the Opposition of 1975 indulged on this same piece of legislation. We are seeing today merely a variant of that.

The other matters raised by the Opposition which have a peripheral relationship to this Bill concerned the level of government expenditure and so on. The plain facts are that when the previous Government was ignominiously put out of office in 1983 it had managed the nation's finances so irresponsibly that not only were we facing a prospective deficit of $9.6 billion in the financial year 1983-84 but also the then Prime Minister and the then Treasurer, who is now the Leader of the Opposition (Mr Howard), had deliberately chosen to withhold the truth from the public. When advised by the Treasury of the prospective deficit for the following year the present Leader of the Opposition and the then Prime Minister continued to misrepresent the truth by saying publicly that the prospective deficit was $6 billion, when in truth it was $9.6 billion. That is the sort of ethical standard which was practised by the present Opposition Leader when he was in government.

Outlays as a proportion of gross domestic product in this financial year have increased by only 1.3 per cent-less than the population growth and about one-third of the GDP growth. As a consequence of that, outlays as a proportion of GDP in this financial year have declined by one per cent. This Government has imposed upon itself more fiscal discipline than any government in history. No previous government has committed itself in advance for the period of a whole Parliament to the discipline of the trilogy. The Opposition always commends expenditure cuts in the abstract. When Senator Messner was speaking, I invited him to give a guarantee that the Opposition would not oppose the Government's decision announced in the May statement to increase charges for non-Australian Development Assistance Bureau foreign students at Australian tertiary institutions. I have been hearing rumours that the Opposition has said it is going to knock that proposition off when the legislation comes before the Senate. Senator Messner at that time ducked an opportunity to give a guarantee that the Opposition would support the Government's expenditure reduction. I give Senator Messner an opportunity again to give that guarantee that the Opposition will support Government legislation which will reduce public expenditure. I give him an opportunity to say so.

Senator Messner —Stop stunting and get on with it.

Senator WALSH —Senator Messner will give no such guarantee, which illustrates plainly the humbug and hypocrisy of this Opposition. While at all times it supports reductions in government expenditure in the abstract, when it comes to the specifics it will not support them. Even worse, of course, is the fact that the Opposition runs around wildly promising to increase expenditure. I will give a not exhaustive list of the expenditure increases promised by this Opposition.

Senator Watson —I raise a point of order. I accepted a point of order in relation to matters in my contribution to the debate when I was talking about the problems of expenditure. I hope that Senator Walsh will acknowledge this point of order that he is departing from the Bill and talking about expenditure.

The DEPUTY PRESIDENT —We are debating the Loans Bill. I understand that the Minister has to bring in the purpose for which the Loans Bill is required, but I ask him to keep his remarks as close as possible to the Bill itself.

Senator WALSH —Certainly, Mr Deputy President. It was previously ruled that Senator Watson's comments were relevant to this Bill, although acknowledged by the then occupant of the chair as being of marginal relevance. Given that that ruling has been given, I think I am entitled to reply to Senator Watson. Not only does the Opposition in some instances refuse to allow this Government to make the expenditure cuts which its plans; it runs around quite irresponsibly promising large increases in expenditure. I will give a non-exhaustive list: The abolition of the assets test, about $140m; the Darwin-Alice Springs railway, for one year only, $78m; construction of a parallel runway at Sydney (Kingsford-Smith) Airport, $157m; additional spending on defence, $210m; additional spending on health, $150m; the abolition of export inspection charges promised by Senator Boswell the other day, confirmed by Senator Collard and not contradicted by any member of the Liberal Party, another $52m; and, of course, the Leader of the Opposition's proposal to make tertiary education for two or three days a week a precondition for young people receiving unemployment benefits. That is another $600m.

This is about $1,373m in firm promises for increased expenditure which either the present Leader of the Opposition has given or to which the previous Leader of the Opposition committed a future Liberal government and which the present Leader of the Opposition has not repudiated. Humbug! Humbug! The greatest humbug of all is the proposition or the promise to repeal the capital gains tax. Senator Messner only last month wrote a minute which was then thoughtfully leaked by someone in that unhappy little coalition which temporarily is being held together in the Liberal Party. In that minute Senator Messner said: `We cannot even hold our own numbers in the Senate on this question. There are people in the Liberal Party, Liberal Party senators, who, if they thought there was any chance of the Government's capital gains legislation being defeated, would vote for it'. The same honourable senator who wrote and signed that minute goes around the countryside promising that a future Liberal Government will repeal the capital gains tax when he knows and has committed to paper the knowledge that Liberal Party Senate numbers will not even hold together on the question. That is apart from the fact that the possibility of any party having a clear majority in the Senate under the present electoral system is highly remote. So the Liberal Party gives that undertaking secure in the knowledge that it will never be able to deliver on it.

The Government will not accept the proposed amendments although I acknowledge that it is not a matter of fundamental importance. As Mr Carlton said, the Bill in the form that has been proposed by the Government merely improves the efficiency of Parliament. For that reason it should be passed in that form. That is the view of the Public Accounts Committee and it is a view certainly shared by the Liberal Party shadow Treasurer and put on the record only three days ago. As I said, the Leader of the Liberal Party, in his first confrontation with the fanatics faction of the Liberal Party, rolled over and decided to accommodate them.

Question resolved in the affirmative.

Bill read a second time.