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Wednesday, 24 May 1989
Page: 2601

Senator AULICH(5.16) —Again we have had a debate today based on a discussion, if I can call it that, about the economy. I am giving it a high sounding name to describe what, in effect, has been a series of prejudices running across the chamber at the Government. Obviously, there is real value in this Parliament year by year becoming much more interested in the whole question of economics. It has not always been so, and I think it is important to look at things in the historical sense from time to time. It is laudable, essential and valuable that this Parliament spend more time debating economics, what can be done, what people ought to be doing and what governments ought to be doing. At the same time, it is easy to fall into the trap, as I have noticed here today-Senator Stone has opened that trap for people to fall into, and I think he has been a victim of that trap himself-of forgetting that economics is basically an art, not a science.

We cannot talk about the economy as if it is some form of well oiled machine that requires an appropriate pressing of the right buttons or a pulling of the right lever to get the right results. In the end we are talking about people. We are talking about the way people spend money, the way they feel about themselves and how confident they feel about their future. We are talking about how they feel about being employed or unemployed. We are talking about their whole view of themselves, not just a question of sums and figures that can be moved one way or another by appropriate government action. What we can do is try to set a pattern or framework within which the economy can move in certain directions and provide certain benefits to Australian society as a whole.

Obviously, Senator Stone brings to this chamber-he has done so today through his urgency motion-a certain view about the way economies should work. It is a Treasury mandarin's view, honed after years of working in that castle, giving advice to various Prime Ministers, which on many occasions was ignored. Sometimes he was right; on many occasions he was wrong. This is a person who spent his whole life analysing the way economies work and advising the government of the day. For example, his views about the floating of the dollar were not heeded by two Treasurers. They have proved over time to be wrong. His views about restructuring the Australian economy and the removal of protectionism in this country did not cut much ice with at least one Prime Minister that he had to work under. I say all of that by way of introduction, because it is Senator Stone who has raised this issue today. It is important to remind him that this is a Labor Government.

Senator Stone —We don't need reminding of that.

Senator AULICH —Good. If the honourable senator remembers that he will remember that we are here for a particular purpose. That purpose is to try to bring forward the principles that underpin Australian Labor Party philosophy. That underpinning of our philosophy is also the underpinning of this economy. For example, we set out to create growth and at the same time to defeat the scourge of unemployment in this country. We do not see the labour force as some cannon fodder to be moved in and out of unemployment to satisfy neat academic views about the way an economy should be run. We as a government tried as realistically as possible, and at a pace that was appropriate or at least acceptable to the Australian population, to make Australia outward-looking and competitive. We sought to do it in a way which caused as little human misery as possible where that restructuring affected people's working lives. I will address those fundamental issues of growth and employment and the restructuring of the economy and of industry in general.

We have to look at how things have moved in history. When this Government took over in 1983 the Australian economy had stalled. Senator Stone I think recognises that. Inflation and unemployment stood at more than 11 per cent; the training of our work force, especially our young skilled tradesmen, had virtually stopped; Australian manufacturing had declined and had already shed 250,000 jobs over the previous 10 years; strikes were endemic and damaging to Australia's trading reputation; and wages, especially in the metal trades industry, had blown out to an insupportable level. Again, Senator Stone had looked at that period and he was concerned about the industrial relations policy that was being pursued at the time by Malcolm Fraser. It was a total disaster and it was threatening to blow this economy out of the water.

I might also add that when we came into government in 1983 borrowing by semi-governmental institutions such as water boards, hydro-electric commissions, energy authorities, and State governments had already been established in such a way that there was going to be an increase in the total debt of this country due, primarily, to Malcolm Fraser's irresponsible false selling of the resources boom that was going to follow upon appropriate infrastructure development. Again, Senator Stone knew that was wrong at the time. He knew that it was political opportunism to win another election. And Malcolm Fraser was certainly good at winning elections; he was not very good, in the long term, at managing the economy.

So this new Labor Government had a number of goals when it came into power. The first was to fix the economy, especially those outstanding issues which had been sitting around for many years and had never been addressed by previous governments including, I might say, the Whitlam Government. But, of course, very few governments were threatened with the rejection of Supply by the Senate twice in three years. So there was a sense of haste in the Whitlam Government which may appear, in retrospect, to have been a bit unseemly. There is an excuse for it but there certainly is no excuse for the Liberal Party which governed this country for more than 29 years with little fear, except on one occasion, of actually being thrown out of office. First of all this Government had to fix the economy, but not at the expense of ordinary workers. It carried out its own reforms of the social welfare system to make sure that the needy actually got the benefits and that those who were bludging on the system missed out. Brian Howe, in particular, has been very good in that area; he has been better than any other Social Security Minister we have had in this country in the last 20 or 30 years.

Our other aim was to restructure the economy-to restructure industry in particular and to make it competitive. Of course the final goal, as part of the process, was to bring the representatives of the Australian work force-that is, the union movement-into genuine consultation with the Labor Government, to set direction for industrial relations and the economy in general. What has been achieved? Inflation has gone down from 11 1/2 per cent under Malcolm Fraser to 6.7 per cent now. In fact, it is lower than the rate in Margaret Thatcher's Britain. I notice that Britain has been taken off the comparative figures list which the Liberal Party passes out to the media. When the United Kingdom inflation rate fell below ours, it was always mentioned in a comparison of the economies of the world. Now that it is at 8 per cent, nearly 1.3 per cent above that which prevails in Australia, the Thatcher comparison has mysteriously disappeared from all the pronunciations about the economy by shadow Treasurers.

The unemployment rate was 11 per cent under Fraser and it is now down to 7 per cent. If anything makes me proud of being a member of this Government-and all of us have our own criticisms of policies here and there-it is this Government's record of creating employment, of driving unemployment down from 11 per cent to 7 per cent and of being responsible for setting the pattern for the creation of 1.4 million new jobs in this country, the vast majority of which are in the private sector.

It is easy to forget, when we talk about economics, that in the long term the effect of unemployment is gross, disturbing, ugly, and damaging to the welfare of all of us, even those who are employed. If the mean duration of unemployment in this community is 26 weeks, it means that those people who are unemployed are, on average, more likely to lose the respect of their families and of people around them, to lose their own self-respect and to suffer from psychoses and psychiatric disorders which do not affect the rest of the community to the same degree. For example, a Commonwealth Employment Service study in Canberra recently showed that in the 16- to 24-year-old age group, 49 per cent of young people looked at had severe psychiatric disorders, three-quarters of those disorders taking the form of severe depression. Seventy per cent of those illnesses followed the onset of unemployment. We have restructured this economy not on the basis of satisfying Treasury mandarins, the high flying young men sitting behind computers in lovely offices in Sydney or smart operators in Tokyo or New York, but on the basis of bringing growth into the economy, creating jobs so that a much larger percentage, 1.4 million people, could get self-respect and a new place in the sun. That is one of the great achievements of the Hawke Labor Government. I will stand here until the cows come home and praise that achievement which has been brought about despite a great deal of criticism from people who have probably never been unemployed in their life.

The second achievement of this Government relates to training. When this Government came to power it had to overcome the problem of a dearth of trained people in the community, particularly apprentices. In 1982-83 the apprenticeship intake had bottomed out to a mere 35,000 young people. Now, as a result of Labor Government intervention at the macro-economic level of rearrangements and at the industry and training level, the number of apprentices has risen to 54,000-a 60 per cent increase over that which applied when we first took office. If the Fraser Government left us with a shortage of skilled labour, that legacy is on the conscience of everyone who was a member of that Government.

I refer to the restructuring of industry. I have already referred to the run-down of the manufacturing sector and the loss of 250,000 jobs over a decade. Our manufacturing industry, as we all know, was protected by high tariffs, quotas, and an overvalued Australian dollar. It was taking in its own washing. Despite all that, it was declining year by year. Australia is in the middle of a most dynamic region of the world which includes countries such as Taiwan and Japan and South East Asian nations. Over the next 10 years Australia will have available to it markets in such countries as China. Senator Button took on the reorganisation of those industries in an intelligent and long term way that was predictable to both industry and unions. He toughed out criticism from industry and unions and some people within the Labor Party in a way that the previous Government was not able to do.

The Fraser Government had 13 car plans in as many years. Senator Button said that there will be one car plan which will be reviewable at the end of four years. He said that we will try to overcome problems such as the invasion of foreign imports, lack of reliability and relative high prices. He said that this will not happen overnight. The actions of Senator Button in relation to the steel industry, the pharmaceutical industry and the textile industry have to be praised. But he is not there to hold the hands of industry. He does not act on behalf of the car industry on the Windsor Road or to tell people on television that he will do a deal for them, that he `will do it right for you' as Tony Packard says. He is not there to jump in the air like a Toyota salesman. He has set the framework and industry and the unions have to respond. That framework is an intelligent one and will bear fruit in the long term.

Finally, there is the question underpinning most of the reforms of this Government-the reform of industrial relations. When we came to power, this country was beset with strikes and with runaway, wages-caused inflation. Is it wrong to bring unions and the work force into active discussion with government? Is it wrong to wean workers away from an inflationary reliance on ever-increasing wages? Is it wrong to guarantee Australian families support through social welfare system subsidiary payments which make it unnecessary for them to go out into the marketplace and force their wages up? They can do that if they happen to be in a strategically important industry, but if they are not, they lose out. This Government's record on management of the economy and of industry is something that we on this side of the House are proud of. Under no circumstances do we accept the macho view that the value of the dollar is the most important thing in the world or that, somehow or other, the current account deficit, as Senator Macklin said, is the only measure of whether or not we are succeeding. We are succeeding. It will take a long time, and governments, when they are honest enough to say that the road to Argentina takes 30 years, are deluding the public.

The ACTING DEPUTY PRESIDENT (Senator Bjelke-Petersen) —Order! The honourable senator's time has expired.