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Thursday, 7 November 1985
Page: 1784

Senator MacGIBBON(8.53) —Before the debate was interrupted earlier in the day I was talking about the faults of this Government, and what it had done wrong in a financial sense. I instanced four key things. The first was that it had overspent wildly; secondly, it had failed to make Australia competitive by freeing up the labour market and doing something about our high labour costs; thirdly, it had taken a soft and easy way out by the devaluation; and, fourthly, it had not provided any incentive to business. I said in relation to overspending that it had given us a huge deficit this year of $5 billion, that it had borrowed a great deal of money overseas and that a third of our export earnings this year, calculated on a higher exchange rate than we have at present, will go to pay interest on overseas borrowings.

When the debate was interrupted I was talking about the Government's failure to make Australia competitive. I had said that the present Government believes in a holy trinity of big government, big business and big unions. I was interested to hear Senator Siddons take the Australian Democrats down precisely the same path during the debate on the matter of public importance this afternoon. He linked the Democrats with the big business, big government, big union thinking of the present Government when he refused to co-operate with the Liberal Party and the National Party in agreeing to their motion against the prices and incomes accord.

I hope that we will be able to reduce the size of government in the years ahead. But we must look at the big unions. I see the labour force in Australia falling into three categories. There is the union movement that is formed by the Public Service, the union movement that serves big business, and the union movement which serves the small business community. Big business likes big unions. They like dealing with one another. I am quite sure that big unions like big business. It has been very clear in the history of Australia that unions do not like dealing with small businesses and individuals. I think it will be a fact of life for as far as we can see ahead that we will always have big unions that are related to the Public Service and to big business. I do not mind terribly much about that because I think they deserve one another and they certainly get on very well together.

From a legislative point of view we have to bring all unions under the rule of law. We simply cannot tolerate a situation where we have laws for all the ordinary taxpayers, citizens and residents of the country, laws to which everyone is compelled to conform, yet have no legislation at all with respect to union members and unions. Unions can break contracts willy-nilly, contracts they have freely entered into in good faith, without any recourse whatsoever to penalties. That is clearly wrong and it is clearly something Australia cannot sustain in the future.

For the third sector in the union field, that part of the labour force that serves the small business community and the individual entrepreneurs and is the creative force financially in the Australian commercial world, we need to introduce the right for individuals to negotiate their own terms of employment, subject to a realistic minimal wage. In this country it should be possible to unleash the great human resources we have by taking the dead and restrictive hand of unionism off that segment of the community. There is no reason at all why people cannot have, as an exercise of their basic human rights, the ability to set a mutually agreeable contract between employer and employee, provided that there is a genuine minimal wage-I do not mean an artificially high one-underpinning the whole. I cannot emphasise strongly enough that one of the key failings of this Government has been its inability to tackle the inflexibility in the Australian market that comes from our union system.

People often think that unions only set wages. They do not do only that; they do a lot more. The unions dictate how many personnel will work on a job, or in an aircraft or in any sort of operation. They dictate for how long and under what conditions those people will work. Then they dictate what they will be paid. In other words, they tie up the whole in a monopoly on the supply of labour. They leave no flexibility, no opportunity to exploit circumstances as commercial opportunities arise. The tragedy is that under the Australian Labor Party we will never see any control of the union movement because the unions control this Government. The Australian Council of Trade Unions writes the Government's policy and it believes that what is good for the ACTU and the big unions is good for Australia. All of us know very well that nothing could be further from the truth. The unfortunate fact of life is that the unions are greedy and selfish. One has only to consider the way in which they do not spend five seconds thinking about the unemployment they have caused through excessive wage hikes in this country to see the truth of that point.

The third thing the Government failed to tackle was the problems that come from devaluation. By floating the dollar the Government thought it could slip easily into a situation where it could knock down imports, drive up exports, and get out of the mess it got into through not being able to control labour costs. That did not work but, even worse, we ended up a lot worse off because the currency rate went down about 20 or 30 per cent, and it has not stopped falling yet. Given the fact that we have borrowed such a huge amount of money, we are in a very difficult position with respect to repaying. The floating of the dollar did not work because the Government did not break the rigidities in the Australian labour market. The overseas judgment on this is absolutely devastating. The overseas judgment is the reason we have a 65c dollar today.

The overseas hard-heads in the money market see Mr Keating, the Treasurer of Australia, as a boy on a man's errand. They see him as just a mouthpiece for the union movement. There is justification for that. We are in the situation where we have lived beyond our means. The only way we will get out of it is by hard work and by taking a cut in our standard of living. Put in its bluntest terms, this means that everyone in the country has to accept less in wages to pay off the debt we have. But what does this Government do?

Senator Georges —Everyone?

Senator MacGIBBON —Yes, everyone, Senator Georges; the whole lot.

Senator Georges —Profits as well?

Senator MacGIBBON —Yes. The profit side of commerce has certainly been knocked about very severely in the last two or three years or longer. We have to take this cut in spending to get out of the mess we are in; there is simply no other way. But what does this Government do? It gets on the merry-go-round and indexes incomes and wages to the inflation rate. So we have this absurd situation of the cat chasing its tail round and round, locked into a perpetual spiral. As wages go up the inflation rate goes up. As wages go up people overseas look at us and will not have a bar of us; they will not buy our currency. That is one of the reasons why our currency is devalued in the way it is. Yet the donkeys on the other side come into this chamber on matters of public importance and things like this, braying and braying about how good the accord is and how great this unionised Government is. Why do they not start to look at Australia in the way people overseas look at it? If they do so maybe they will learn a little.

The fourth area where this Government went wrong is that in no way at all has it understood the business community. It has provided no incentive for people to invest and take the risks that are an inherent part of business life. The cost of doing business has gone up right across the country ever since this Government got into power. We see that most acutely, of course, with respect to rural Australia. People have to sell on international markets, yet all their cost inputs have gone up many more times than the recovery value of the products they are producing. Fuel taxes, wages rises, the payments on cessation of employment and, finally, the new tax proposals that the Government has dropped on us-all these things operate against the business community of Australia. They do not encourage people to generate the wealth that we must have to get out of the mess we are in.

What must be done? Legislatively, above all, we must free up the labour market. We must be able to unlock the great human resources we have in this country in the ways that I indicated earlier. Financially, since this is a Budget Bill, it is relevant to look at a few things that this Government should do as a matter of priority. It should cut the size of government. It should set priorities on its expenditure. It should cut duplication and improve efficiency. The size of government--

Senator Georges —Start with the Queensland Government. I am all for it.

Senator MacGIBBON —Senator Georges's Government has boosted the expense of government administration by 37.3 per cent since it got in. It will have put 14,500 more public servants-as if Australia needs more public servants-on to the payroll by next year, an increase of 8 per cent on an already bloated contingent. Australia already has one of the highest percentages of public servants-9.83 per 100 head of population; I guess that 0.031 per cent is as good as one. It is one of the highest ratios in the world. We have to cut the size of government.

The second thing that the Government might do is to look at priorities. It is a basic fact of economic life that, no matter how strong our interests or desires for something, we have to recognise that we cannot afford to buy everything. This Government has never recognised that first fundamental rule. If we accept that rule, we have to set priorities on our expenditure. A whole host of things that this Government is doing, has started and has inherited could well be dispensed with. One of the problems with government in Australia is that, once a program gets funded, it automatically keeps on being funded year after year and no one ever looks at it objectively. There is a whole bunch of demonstrably useless bodies in this country that we could knock out overnight to help our balance of payments and improve the life of the community. The Economic Planning Advisory Council could go, the Independent Air Fares Committee could go and the Human Rights Commission could go-just for starters. After that we could start to reassess the importance of all other agencies in the Government.

I move to the matter of duplication. We duplicate a lot of functions federally and at the State level, and the fault lies on both sides. The Commonwealth Health Department vote is $6.7 billion, a bigger vote than for Defence. Yet, all States are very heavily involved in health. There are big savings to be made if the States and the Commonwealth co-operated. Education is another category.

Senator Georges —I agree with you, for once.

Senator MacGIBBON —I am talking only about named departments. When one gets into individual departments one finds that the picture is even more complex and more multiplied. Many functions carried out within departments and not identified by name are duplicated in the States. One good example is the Division of National Mapping which comes within the portfolio of the Minister for Resources and Energy (Senator Gareth Evans) and which is duplicated in all the States. I find it a nonsense that the various States are trying to run their own foreign services and maintain their own trade offices overseas. There is no point in that at all. Admittedly, the Federal Foreign Affairs Department is not perfect but our task should be to improve the Department to enable it to cater for the needs of the States.

Another example of duplication, of course, is the Australian Broadcasting Corporation and the Special Broadcasting Service. No other country in the world runs two publicly funded broadcasting services. Some countries, like the United States of America, get by very well without any public broadcasting funding.

Senator Georges —Keep the SBS and get rid of the ABC.

Senator MacGIBBON —But we happen to run two of them. We will fund them this year to the tune of $395m for the ABC and $45.8m for the SBS. $1m a day. I remind Senator Georges that over $1m a day is spent on public broadcasting in this country. I see no reason why those two bodies cannot be combined and made a lot more efficient. The fourth point I wish to make refers to the efficiency of administration. The examples of inefficiency in the form of late replies from departments and, in many cases, an inability to get any reply at all, are too numerous to need expansion.

In summary, these Bills characterise a Labor government-it is a big spending, big taxing government. It is a product of union thought; it is a product of a Treasurer who does not understand how to handle finance. The tragedy is that we no longer have the financial reserves in this country to underwrite this sort of deficit financing. The debts we have run up are enormous. The ability we have to repay them is very limited and is diminishing day by day. It is time the Government took cognisance of the very difficult financial position it has put Australia in.