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Monday, 2 December 1985
Page: 2694

Senator WALSH (Minister for Finance)(5.35) —I can only endorse Senator Siddons's final comments in drawing attention to the humbug and hypocrisy of the Opposition, which has decided on what it thinks is the opportunistic course of taking all the goodies in the tax package while rejecting all the nasties, to use Senator Messner's words. In other words, the Opposition is taking the cynical opportunistic approach against the advice that Senator Messner gave on 19 September when the tax policy was announced.

I understand that Senator Messner raised the question of privatisation, among other things. I will say a few words about that, although I do not intend to delay the passage of the States Grants (General Revenue) Bill 1985 for any significant time. Privatisation as proposed by the Liberal Party in South Australia amounts to no more than a bit of creative accounting, and illusory accounting at that. The privatisation proposal put forward by the South Australian Liberal Leader is to flog off 49 per cent of public equity in the South Australian Oil and Gas Corporation Pty Ltd. That money, so he says, along with a few other minor disposals of assets, will be used to reduce the public debt and therefore public debt interest payments. The tax cuts he proposes will be funded by the consequential lower payments on public debt interest. The document the South Australian Liberals prepared refers to the dividends that will accrue to the public because of the remaining 51 per cent equity in the South Australian Oil and Gas Corporation. However, it fails to mention the dividends forgone by the sale of the 49 per cent equity in that Corporation, which, according to Mr Olsen, is the basis on which the so-called tax cuts would be funded.

Without going into any ideological disputes about the merits or otherwise of public or private ownership, it is quite apparent, regardless of what one's views may be on this question, that the South Australian Opposition Leader is doing a bit of financial conjuring. He is cooking the books and claiming that he can fund tax cuts when, if his proposals are followed through, this cannot be done.

The second point which has direct relevance to this Bill-Senator Siddons has pointed this out-is that the legislation provides not only the level of general purpose payments to the States for this financial year but also a 2 per cent real increase in those general purpose payments for each of the next two succeeding years-that amounts to 4 per cent in the second year-adjusted for population movements and a few other factors. Given that the Liberal Party's shadow Treasurer has already said publicly that the Commonwealth should reduce its outlays by cancelling those 2 per cent real increases in general purpose payments to the States-that is, a 2 per cent real increase next year on this year's figure and a further 2 per cent real increase the year after on next year's figure-given that the Liberal Party is already publicly committed, through a statement of its shadow Treasurer, to cancelling that 2 per cent real increase, and given that the Liberal Party would have us believe it is a party of principle which consistently applies a rigorous attitude to economic policies, and particularly to matters of government expenditure, I wonder why the Opposition has not moved a request to this Bill in the Senate that the 2 per cent real increase for the next financial year be cancelled. It is, after all, Opposition policy. Opposition policy, as expounded by Mr Carlton, the shadow Treasurer, is that the 2 per cent real increase in general purpose payments to the States, which will be enacted by this legislation, should be cancelled. Given that it is Opposition policy to cancel that increase, I wonder why-I ask again-Senator Messner has not moved a request of the House of Representatives that the Bill be amended in order to accommodate that 2 per cent reduction in real payments to the States, which is Liberal Party policy.

Senator Maguire —Higher taxes in South Australia too.

Senator WALSH —Yes. I can only assume, as Senator Maguire reminds me, that the only reason that has not been done is that the Liberal Party knows that if such an amendment were to be successful South Australia, for example, would be denied $25m in the next financial year and to recover that amount of revenue would require an 80 per cent increase in third party insurance payments for vehicle owners. I must say that it would be extraordinary-more than extraordinary; incongruous-for the Opposition Leader, who is going to the election on a policy of lower taxes, to be simultaneously proposing a monstrous 80 per cent increase in third party insurance payments for vehicle owners.

I do not propose to say any more on this. The Bill has not been opposed even though it is clearly in conflict with Liberal Party policy, which is to reduce payments to the States. Whereas this legislation provides for a real increase in real payments to the States over the next two financial years, the Liberal Party has not had the courage actually to tack on a request to the Bill and thereby implement its policies, for the cynical reasons that I have already given; that is, the Bill has to be dealt with this week and the Opposition knows that there is a South Australian election on Saturday.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.