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Wednesday, 24 May 1989
Page: 2554

Senator LEWIS(11.10) —The Senate is debating the Appropriation and Supply Bills. Senator Stone, on behalf of the Opposition, has foreshadowed an amendment which, in part, states:

. . . but the Senate condemns the Government for its failure to pursue policies which will address the twin evils of a dangerous level of foreign debt and declining living standards, leading to a growing loss of control over the future of Australia . . .

The amendment goes on to particularise the details of the Government's failure in seven paragraphs. I propose to address a part of this amendment. I refer to the clear ministerial and administrative incompetence of a tired and blundering government. Any listener who likes to pick up any of today's newspapers will find stories of ministerial and administrative incompetence. I picked the Australian Financial Review to look at today because it is not known as a paper which supports the Liberal and National parties. For many years it has clearly been a great supporter of the Hawke Government. I will refer to two stories in today's Financial Review. One story reads:

Tax man gets it wrong: The Australian Taxation Office has said there are too many errors in the advice it gives in response to inquiries from taxpayers.

The article quotes Mr Brian Nolan as saying:

We have found that the error rate is very high but we still get more right than we get wrong.

That is marvellous, is it not? The quote continues:

working very hard to upgrade the standard of the inquiry people generally.

That same newspaper carried a story about the Australian Customs Service. The article states:

The National Crime Authority will examine the effectiveness of the Australian Customs Service in stopping the smuggling of drugs . . . Customs staffing had been static for the past three years and the numbers involved in barrier duty had declined.

They are two stories of administrative incompetence by this Government. That is just an introduction to what I propose to say about this tired, blundering Government. As I said, if we pick up any newspaper anywhere in Australia today we will find such stories. In yesterday's Australian Financial Review there was a story about the Senate rejecting an Opposition copyright move. Both the Opposition and the Australian Democrats moved amendments to the Copyright Amendment Bill. The story states:

A Government spokesman said that it had not supported either amendment because of the complexity of the issue. Insufficient time had been allowed for proper debate to take place, he said.

The Government, not the Opposition, controls the debate in this chamber. This is another example of this Government's administrative incompetence. The Government did not support either of the two amendments that were before this place because it needed to apply its mind to these complex issues. I thought that was what governments were all about. But it did not have time to do so and it rejected the amendments. As I said, the Government controls the time for debate in this chamber.

The front page of an edition of the Melbourne Sun published last week carried the headline `We got it wrong'. That article referred to the speech by the retiring Governor of the Reserve Bank of Australia in which he acknowledged that the Government has got its economic policy wrong and that Australians will have to face falling living standards because of these economic disasters. That is all coming about because this Government is tired, worn out and its Ministers have run out of steam. Its Ministers no longer can come up with the ideas that are needed to generate the process of making decisions. This process started during the last Australian Labor Party election campaign when the Prime Minister (Mr Hawke) got it desperately wrong. On 23 June 1987 he said:

Interest rates are falling and under Labor will continue to fall. Labor will continue to pursue policies which will allow interest rates to fall further.

He told the people of Australia absolute nonsense in order to get the Labor Party re-elected. The Treasurer (Mr Keating) and the Minister for Finance (Senator Walsh) both acknowledged in the Parliament yesterday that the only way the Government can stem the demand in the economy at present-demand which the Government intends to feed by a tax cut of $30 and which the Labor Party is claiming is not a bribe for the purpose of an election-and retain the value of the Australian dollar overseas is by further increases in interest rates. The Government is predicting further increases. Yet back in the election campaign of 1987 the Prime Minister conned the people of this nation and told them an absolute lie. I am sorry, Madam Acting Deputy President, I think I have to withdraw that word.

Senator Cook —You do have to withdraw it.

Senator LEWIS —I withdraw. The Prime Minister told them something which the Government has not followed and that is that Labor would pursue policies which would allow interest rates to fall. He added the word `further'. It was a disgraceful speech and the people of Australia should punish him for what he said. Australians should acknowledge that they were misled totally by him in the course of the campaign.

The Minister for Finance, who, in many ways, has been the only person on the Government side with the courage and the determination to try to make changes in the economy which need to be made, is tired, worn out and, unfortunately, is now making mistakes. Yesterday in this place he had to acknowledge that he had made a mistake last October when he said that the current account deficit would not exceed 4 per cent in the first 10 months of the financial year. Of course, it has exceeded that. The Government's prediction that the deficit would not be in excess of $9.5 billion is absolutely wrong. That was its Budget figure. We now know that the deficit is currently over $14 billion and that at the end of the year it will clearly be around $17 billion. Imagine what would happen if the budget figure of a public company were so far out, if it had a budget deficit of $9.5 billion and the end result was a deficit of about $17 billion. This is a clear indication that the Minister for Finance is worn out and tired and has lost his drive. Clearly, the Treasurer is in the same boat.

Senator Walsh and I served on a Senate committee together for a period of time. As members of that committee, he and I grew to respect each other. Back in the middle of March Senator Walsh flew to Canberra with his wife, having made up his mind to get out of Cabinet. Apparently he brought his wife here so that they could say their farewells. He had deliberately decided that he wanted to retire from the Parliament because he was tired, burned out and thoroughly fed up. The Sydney Morning Herald states that Senator Walsh was:

. . . utterly fed up with the way the Cabinet was behaving. He had run out of both energy and patience.

Why was he fed up? He was fed up because Cabinet was trying to cope with a decision about a third runway at Sydney (Kingsford-Smith) Airport-a problem which has beset this Government for about six years. The Government failed to take up the decision which the Liberal and National parties made in their last year of office in 1982, which was to build the third runway at Sydney. Yet Senator Walsh, six years down the track, was unable to persuade this Government to make that decision. The Prime Minister and the Treasurer talked him out of resigning. An article in the Australian Financial Review of 23 March said:

. . . they told him his departure would be a terrible blow for the Government because it would be seen as a vote of no confidence in its economic management and a symptom of a Government in decline.

The Prime Minister and the Treasurer recognised how symbolic Senator Walsh's departure would be. The honourable senator was talked out of taking that action because it would have been seen as a symbol of a government in decline.

Let me remind the Senate what the Government did about Sydney Airport: it made the Clayton's decision. It decided that a third runway would be built if the environmental impact statement, which it was about to put into motion and the results of which it expected to receive in 18 months' time, said that it was all right. Have honourable senators ever heard a decision which is not a decision expressed in such terms? That is exactly what the Government said: `We will have an environmental impact statement. We look forward to receiving it in 18 months'-by which time, it knew, it would probably be out of office-`and then we will decide whether or not to build the third runway'. In the meantime we have the crisis of people trying to fly into this country. At present, one of our greatest revenue earners is tourism, yet people are unable to get into Sydney because of the absolute mess at that terminal. If the Government had taken up the decision made by us in our last year of office, the third runway would by now be completed, and the mess would not exist.

The Government tried to con the people of Australia into believing that calling for an environmental impact statement-a report to be made in 18 months' time, followed by a decision-was a decision. Did the Government believe that Mr Hawke's credibility with the Australian people was such that they could be conned into believing that that was a decision? Of course, Senator Walsh knew that that was nonsense, and he decided that it was time to get out. However, out of loyalty to his party, he stayed.

But he is now making mistakes. Yesterday he acknowledged that he had been mistaken in his prediction, in percentage terms, of the current account deficit. Let me relate another mistake that he has made within the last couple of days. I refer to the cutting of Austel's budget by 20 per cent before the body actually gets established. Let me tell the Senate about Austel. As Mr Hawke acknowledged in the course of the 1987 campaign, there is a desperate need in this country for micro-economic reform-fixing up things so that they work better; trying to introduce some competition so that people work harder for better results; trying to improve productivity and quality; trying to do things more cheaply; trying to reduce the cost of shipping goods around Australia; trying to fix up the problems of transport.

We spend an absolute fortune importing communications equipment. Here, the Government said that it would do something about micro-economic reform. It decided to create a body, called Austel, to regulate that reform. The coalition parties say that in this area the Government has not gone far enough, and in that regard we have major criticisms of the Government. But at least it was doing something. It said, `We will create Austel to regulate this industry, instead of allowing Telecom to be both the regulator and one of the participants'. But before Austel starts operating on 1 July the Government has slashed its budget by $1m. In its first year Austel was to have $5m to enable it to get established, but that figure has been cut by 20 per cent, and, as a result, its staff will be reduced from 70 to 58. I say to Senator Walsh, who has talked long, in this Parliament and in public statements, about the need for micro-economic reform, that this is another example of a government blundering from mistake to mistake as it continues down the path of failing to address the real issues of the nation, failing to take the necessary action to bring about some competition in this country.

As I said earlier, we are facing a deficit for this year of nearly $17,000m. We need to take steps to overcome that. The Government has its difficulties in the macro-economy. It has difficulty with interest rates. If interest rates are lowered, the value of the Australian dollar will collapse, and the Government will have great difficulty in paying the interest on its borrowings. In the past 10 days the Australian dollar has fallen by about 5c, resulting in an increase of about $2m in the amount of money that the country needs to earn in order to make those payments. That is what a simple fall can do. It is the sort of problem that the Government is facing in what is called the macro-economy-holding the dollar up with interest rates, while hoping and praying that commodity prices will not fall, hoping and praying that the prices we get for our wheat, our wool and our coal will not fall. It is the good prices that we are getting for those products that currently are keeping our deficit at what the Government is apparently satisfied is a modest figure-$17,000m.

If the value of our wool clip or of wheat or of coal on the world market falls drastically, the bottom will fall out of the value of the Australian dollar. Similarly, if the Government lowers interest rates, the value of the Australian dollar will fall drastically. So the Government is locked into high interest rates. It is locked into trying to knock the demand out of the market-and it is doing just that. Talking to business people around the country at present, I get the impression that the retailers have reduced their buying considerably. No doubt, in due course the Bureau of Statistics will tell us that this happened in May, but I am telling honourable senators now that it is happening already. As a result of this Government's policies, demand is falling considerably.

As I have said, the Government is therefore locked into these policies in the macro-economy. However, it could do something about the micro-economy. But what has it done? It has put Mr Willis in charge of the Department of Transport and Communications, and micro-economic reform in that Department has stopped dead because Mr Willis is not prepared to take the tough decisions that need to be taken. That is why Senator Walsh is worn out. That is why Senator Walsh is tired. He is sick of hammering Cabinet Ministers about the need for these reforms.

This Government has lost its vision totally. It is floundering in a hopeless morass of indecision. It is unable to make the important decisions, unable to govern, and the sooner we throw it out, the better. The Governor of the Reserve Bank has made it perfectly clear that the Government has made terrible mistakes during the last 12 months. In a recent speech to the National Farmers Federation, he said:

How fast can you expand the economy without running your head into inflation and running your head into balance of payments problems? The answer is most times not very far, and at the present juncture is zero.

He then went on to say that we are overdoing it, that we have to cut back. The Governor of the Reserve Bank is saying that the future under this Government will bring negative growth. We are talking about a recession. We may be talking about far more than a recession because of the way this Government is governing, or not governing, this country. Is it any wonder that the Prime Minister and the Treasurer can think of only one thing, that is, to get the next election over with as quickly as they possibly can? If there is a window of opportunity, the Prime Minister and the Treasurer will be through it and into an election campaign in a flash. The window of opportunity opens on 1 July this year when a half-Senate election becomes an option.

Let us see whether the Prime Minister and the Treasurer can con the people once again that interest rates may fall for a very short period, or whether they can con the people into believing that they are going down the right path. If they can, the Prime Minister and the Treasurer will be through the window of opportunity and into an election campaign in a flash. We understand why. It is because the Governor of the Reserve Bank has told us that we are looking at negative growth-that is, a recession-next year.

The Treasurer has acknowledged the mistakes that he has made. He recently said that the Government would have no hesitation in tightening policy-that means all arms of policy, including interest rates. Notwithstanding the present high interest rates, the Treasurer as recently as last week said that they will have to be tightened further. When one economic journalist asked the Treasurer, `Are you talking also about wages policy?', the Treasurer said, `No, wages policy is as tight as a drum'. What nonsense that is! What the Treasurer meant was that the Government was tightly locked into a deal with the Australian Council of Trade Unions and that it was not game to break the deal to give a tax rebate of $30 and a wage increase because it knows that that will destroy the accord and there will be a wages breakout, the likes of which we have not seen for a long time.

As I said, the Treasurer said last week that wages policy was as tight as a drum. But what did the Prime Minister say last night? When asked about economic policy last night the Prime Minister said, `We are looking at the way in which all the arms of policy are operating'. When asked whether that included monetary and fiscal policy, the Prime Minister replied, `And wages policy, too'. The Prime Minister contradicted the Treasurer. Is any further evidence needed that this Government is blundering from indecision to indecision to the detriment of this nation?

We know that the Government knows what ought to be done. We know that the Government knows we ought to be looking at some form of wage pause or wage freeze. That is the thing, together with the breaking of the drought and the recovery from the world recession, which fixed the economy in 1983. This Government has benefited from the Fraser Government's wage pause-not from anything that the Labor Party did when it was elected in 1983. It benefited from those three factors over which it had no control. The Government goes on blundering from one thing to another. As I said earlier, the Governor of the Reserve Bank made the position clear when he said:

The major miscalculation that we all made, including myself, was to underestimate the power of the economy.

He also admitted that the Government had not properly thought out the impact on demand of its April wage-tax deal. I have been talking about incompetence. The Governor of the Reserve Bank has acknowledged the Government's incompetence by saying that the Government had not properly thought out the impact on demand of its April wage-tax deal.

This Government has run out of steam. I can recall at one stage of this Government's term of office someone saying that it was the best Liberal government the nation ever had. I totally disagreed with that; nevertheless, people on the Labor side of politics were saying that it was the best Liberal government the nation had ever had. This Government has now run into a brick wall. Government members were saying that it was a time when the Government was showing initiative, bringing about change and demonstrating that there were things that could be done. We have been talking now for five or six years about the desperate need to change activities so as to take the country forward into a productive, competitive economy which will keep down prices to the benefit of the people-an economy under which we stop taxing people to their death, so that it is not necessary to tax ordinary wage earners at the rate of 40c in the dollar, and so that it is not necessary for a married couple with a couple of little children to have an income of over $623 a week in order to survive. That is what has happened under the Labor Government. To live in, say, Sydney, a young couple needs $623 a week to survive, which forces the wife to work, notwithstanding the number and age of her children.

This Government has done absolutely nothing worthwhile for this country since the election in July 1987. The last two years have been totally wasted as it has blundered from one incompetent indecision to another incompetent indecision. It is time the people of Australia threw the Hawke Labor Government out and put in a government which has the determination to make the necessary changes to bring about the reform that this country needs. (Quorum formed)