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Thursday, 7 November 1985
Page: 1695

Senator Sir JOHN CARRICK(10.34) —This debate takes place against a background in Australia of a continuing significant fall in the value of the Australian dollar, significantly rising rates of inflation, record interest rates, a very serious adverse balance of payments situation, a record overseas debt requiring very heavy servicing to finance and a continuous chronic unemployment situation. On top of this the Government has brought in a tax package which will impact very seriously upon the business community and therefore tend to cause the shedding of labour. What has happened is that not just the American world but all the money markets of the world have looked at Australia, have looked at the management by this Government and have said, through the value they have put on the currency, that they believe that there is very bad management by this Government. The Government claims a tremendous success but all the factors here and overseas and the factors measured by objective judges condemn the Government and its policies. This led the Confederation of Australian Industry in its industrial review in August of this year to say:

What now confronts this community is the distinct prospect of a continuing saga of devaluation leading to price increases leading to wage increases leading to further devaluation.

In fact, that has gone on since that statement was made. The Economic Planning Advisory Council which advises that Government has said that Australia will have to learn to live with unemployment levels of 8 to 9 per cent over the next 10 years; not 10 months, but 10 years. The predictions under this Government are that the young will not be able to plan their careers and that the 20 per cent or more of the young who cannot get jobs must remain chronically unemployed.

It is against this background that I want to make some very serious comments. There is a general projection by the Government of an argument that all this will be over, that somehow or other we will come out of the trough and we will all be right again. The fact of the matter is that Australia is being outcompeted right throughout the world. Australia today is in a situation where other nations are passing us by. Unless we do something, and do something quickly about it, and unless we take the people of Australia into our confidence and tell them what the problems are and seek their co-operation, their living standards will continue to decline and, indeed, unemployment will continue to rise. The fundamental thing is that the people of Australia have to understand that the world is passing us by, that we are being costed out of markets and that the very policies of the Hawke Government are doing this. The indexing of inflation by the support for the arbitration system is simply keeping us at a significant margin above the rest of the world. The Hawke Government has been posed as being the government that knows how to manage. I thought, therefore, I would refresh myself about Labor's economic statement contained in its policy speech of 1983. It stated:

To ensure that recovery does not provoke any problem for the balance of payments by leading to growth of imports unmatched by increases in the value of exports, Labor will take action to maintain balance of payments equilibrium and exchange rate stability. The present system of determining the exchange rate will be maintained.

Where is this balance of exchange payments equilibrium? Where is this exchange rates stability and where is the maintenance of the pre-existing system of fixing the exchange rate? All that has gone out the window. The policy speech states further:

If at some point the balance of payments showed signs of deteriorating, Labor would initiate a program of public borrowing overseas, both by the Commonwealth Government and by public authorities.

The simple fact is that the borrowing overseas and the borrowing generally is creating the very circumstances that we are now facing. The Hawke Government and particularly the Prime Minister (Mr Hawke) posed as the managers who could in fact control costs, keep them down, keep inflation down and keep wages moderate.

Senator Button —Compared with you.

Senator Sir JOHN CARRICK —Senator Button said compared with Liberal governments. I am delighted to compare the Labor Government with Liberal governments. We will take the Liberal governments for the first three years of the 1970s where in fact the consumer price index was 4.8 per cent, 6.8 per cent and 6 per cent. The consumer price index, under the Whitlam Government, was 13 per cent, 16.8 per cent, 12.9 per cent and 13.9 per cent.

Senator Button —No, your Government.

Senator Sir JOHN CARRICK —I will repeat that. Under the Whitlam Government the consumer price index was 13 per cent, 16.8 per cent, 12.9 per cent and 13.9 per cent. Under the Liberal Government of which I was a member the consumer price index was 9.5 per cent, 8.2 per cent and 10.1 per cent. Does the honourable senator want me to go on? Does he want me to compare the figures with those of his Government? What about reminding ourselves of the then President of the Australian Council of Trade Unions, the then Federal Leader of the Labor Party, Mr Hawke-no wonder Senator Button retires on hearing this-who in 1974, at the peak of inflation, said:

We know inflation is at 16 per cent and we believe it's quite likely to reach 20 per cent in the next two quarters. But we will not indulge in a trade-off in wages for some conjectural reduction in inflation.

That is the man who poses as the manager. What was the result of his actions? In 1973, 1974 and 1975 there was the greatest wage explosion ever in Australian history. This occurred at a time of a Labor Government, at a time when Mr Hawke was Federal President--

Senator Button —Tell us about your Government in 1982.

Senator Sir JOHN CARRICK —Yes, I will. I will tell the honourable senator about our Government. I will give the honourable senator the figures. I am delighted that Senator Button has woken up. He has been hibernating in his portfolio and as Leader of the Government in the Senate for week after week and he cannot take it when I remind him--

Senator Button —You can't take it. You can't talk about your Government.

Senator Sir JOHN CARRICK —I will talk about my Government. I will talk about it now. I hope the honourable senator continues to interject because, by contrast, my Government reduced inflation and, indeed, reduced the rate of increase of average weekly earnings. Under the Labor Government, with Mr Hawke in two positions of authority, there was the greatest wage explosion ever. Average weekly earnings increased by 15.9 per cent in the first year; 25.6 per cent in the second year and 13.7 per cent in the following year. The honourable senator wants some comparisons. Under the Liberal Government, average weekly earnings increased by 13 per cent, 9.6 per cent, 8.1 per cent and 9.7 per cent. The honourable senator has asked for it; he gets it. In 1973-74--

Senator Button —Ha, ha!

Senator Sir JOHN CARRICK —The honourable senator grins. A 37 per cent wage increase in that time put 130,000-odd people out of employment in the manufacturing industry.

Senator Button —Just half as many as you put out in 1982.

Senator Sir JOHN CARRICK —This is an industry that the present Minister for Industry, Technology and Commerce (Senator Button), who is interjecting, presides over. He presides over its demise. In the last year 32,000 more people have gone out of the industry and the Minister is trying to make comparisons. Again, the Federal President of the ACTU, Mr Hawke, was the motivator of the wage upsurge in 1981-82. He was the great arguer then that wages should go up. It is astonishing that in 1982 the Labor Party emphatically opposed the Fraser Government's wage freeze. This was the only thing that has steadied inflation and that is demonstrable. The Labor Party, Mr Hawke and Senator Button said there must not be a wage freeze, it would be a terrible thing. What are they trying to do now? They are caught; they are hooked on this. They know that if wages simply go up by indexation, the dollar will go down. It has been said on the world scene in the last few days that Australia will devalue itself if this situation continues. The picture is very serious. The Whitlam Government and the present Government have built into the system record inflation, record increases in nominal wages and record shedding of labour. How can the Minister sit at the table and take any pride in his portfolio when he knows that, for the three years he has presided over that portfolio, manufacturing industry has continually shed labour?

Senator Button —Don't be silly.

Senator Sir JOHN CARRICK —I invite the Minister to give me the figures for employment in manufacturing industry for the three years he has presided over his portfolio.

Senator Button —Tell me the year in which there was the greatest shedding of manufacturing employment.

Senator Sir JOHN CARRICK —The greatest shedding of employment in any one year was in 1973-74, when 138,000 people went out of employment. It is interesting that the Minister has run away from what I asked him, which was to tell us what were the levels of employment, year by year, over the three years of his portfolio. The fact is that the real crisis that confronts Australia today-manufacturing is the one area in which labour is intensive-started in the Whitlam era under the great pressure of Mr Hawke and the Labor Government, when prices were built into the system in an inflationary way and wages experienced a record upsurge. The Government is now caught by this. It talks about the Fraser Government, but it is very careful to talk only about the last year of the Fraser Government, 1982-83. By any kind of comparison at all the Fraser Government had a magnificent record of performance compared with the past and present situations.

Senator Button —Tell us about the growth rates you attained.

Senator Sir JOHN CARRICK —The Minister is interjecting again. I am glad he is alive. I am glad he has some adrenalin. Let us consider the unemployment figures, for example. Under the seven years of the Liberal Government the average rate of unemployment was 5.8 per cent. Under the three years of the Labor Government the average rate of unemployment has been 9.1 per cent. The Minister asked for comparisons. He will get them. He asked for comparisons of consumer price indexes. I read them out to him. There was a continuing fall in the CPI until the last year of the Fraser Government, compared with an absolute upsurge to nearly 20 per cent, on Mr Hawke's figures, under the Labor Government. What more tests does the Minister want on the question of management? What more tests does he want on the breach of promises?

Does the Government argue that the Confederation of Australian Industry is wrong in seeing as a tragedy what is happening to Australia? Does the Government say that the world is wrong in its judgment of Australia at the moment? What kind of apologies can the Government have for a situation where day by day the money markets of the world are writing down Australia? Indeed, the Australian Financial Review is now talking about the Paris option. I commend it to the Minister, except that it is pretty tough on Paris. The fact is that this country is in a critical economic condition and that condition is directly related to the actions and inaction of the Hawke Labor Government.