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Thursday, 17 October 1985
Page: 1402

Senator SHEIL —My question is directed to the Minister representing the Treasurer. I refer to the repeated claims by the Government that it has achieved record economic growth. In view of the Treasurer's admission in his Budget Speech that over a third of last year's record growth came from public sector spending-compare the 4.46 per cent growth in gross non-farm product, which includes record government spending, with the 3.7 per cent growth in gross non-farm product in the typical coalition government years-does this not suggest that this Government has not created a spectacular recovery but is trying, yet again, to juggle statistics? Will the Minister clarify this?

Senator WALSH —Of course it is patently untrue to say that this Government has not engineered the most dramatic economic recovery Australia has had and the highest sustained growth rates-that is, sustained over a three year period-that we have seen since the 1950s. Senator Sheil quoted something, which I did not have time to write down, about the contribution in the last financial year of public sector expenditure to the total growth which had been achieved, which was, I think he said, in the order of one-third of that figure. I did not hear the figure distinctly but it sounds that it could well be right. I remind Senator Sheil that, whether that piece of partly out of date information that he gave was correct or not, the employment statistics which were released, I think, today show that 86 per cent of employment growth in the year ended August 1985 was in industries which operate overwhelmingly in the private sector. So in the last 12 months employment growth has been predominantly in the private sector. That is in line with the Government's expectation and economic strategy. At the time we came to office, when we were facing an economy which was more depressed than it had been at any other stage since the 1930s, which had not only double figure unemployment but also double figure inflation, it was necessary to control inflation through the prices and incomes accord. That is a policy which has been spectacularly successful. It was necessary also to stimulate the economy and initiate growth through increases initially in public sector outlays. That measure has been equally spectacularly successful. Almost half a million jobs have been created in the 2 1/2 years that the Government has been in office.

Finally, I remind Senator Sheil that the growth forecast for this financial year is on track. The indications at this stage probably suggest that the forecast growth rate will be exceeded. Even if it is equalled it will mean that over a three-year period the average growth rate under this Government has been in excess of 4 1/2 per cent. For the seven years of the Fraser Government we had the miserable average growth rate of 2.1 per cent, less than half the growth rates which have been achieved by this Government. Of course, that culminated in the last disastrous year of the Fraser Government in an absolute loss of 186,000 jobs. Unemployment rose above 10 per cent in association with inflation, which peaked at something over 11 per cent. That was the end product of many years of economic mismanagement but, in particular, the intensity of that recession and associated inflation was, to a very large degree, attributable to the Fraser Government's first flirtation with a deregulated labour market, commencing from mid-1981. This produced the wages explosion and the subsequent recession and double digit inflation late in 1982 and early in 1983.

I understand that most of the higher primates have a capacity for trial and error learning. One would have thought that a chimpanzee might have understood from that that experimantations with deregulated labour markets have not been terribly successful and might have learnt not to repeat them. Apparently the capacity for trial and error learning which the Liberal Party of Australia has is somewhat less than that of a chimpanzee. The Liberal Party if it ever gets back into government--

Senator Chaney —Mr President, I raise a point of order. You would be showing more application than most of us could muster if you were listening to the Minister. I suggest that he is debating the question and should be asked to draw his remarks to a close.

The PRESIDENT —I thought that the Minister was rounding off his answer and that was why I allowed him to conclude it.

Senator WALSH —I was indeed, Mr President. I was just about to say that the Liberal Party, like the Bourbons, has learnt nothing from that. If it gets back into government it plans to repeat that policy. It gleefully anticipates, in association with it, five years of industrial warfare.