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Wednesday, 21 August 1996
Page: 2825

Senator COOK(4.21 p.m.) —The Liberals are back in government and dishonesty is back in budgets. We have seen in the headline today of the Sydney Morning Herald a broken promise on taxation. One of the core promises that this government made to the electorate before the election was that there would be no new taxes, no increase in existing taxes and no changes in other taxes. According to the Sydney Morning Herald —they have done the sums and there is no reason to dispute them—there is a $6 billion tax slug which is new and which constitutes a broken promise by this government. This government therefore lied to the electorate.

It is not surprising that today's Bulletin magazine shows that most electors would not have voted for them if they knew the outcome of this budget. But this is in the fine tradition of the coalition because the now Prime Minister (Mr Howard) when Treasurer in the election of 1980 became infamous and got the tag `Honest John' as an ironic appellation because he promised a fistful of dollars to the Australian electorate and double-crossed it on every promise he came to after that in deliver ing the tax cuts that he then undertook to deliver.

So there should be no surprise now that the same pattern of deceit and dishonesty is in train here—cuts to the elderly, costs to higher education, greater health care costs, costs to students, costs to the unemployed, costs even to drive on Australian roads in prospect, and of course cuts to the ABC. That is what this budget amounts to—a rash of broken promises by the government.

There is a major statistic missing from this budget. It is not in the budget speech; it is not in the budget papers. The Treasurer, Mr Costello, and Mr Howard have not mentioned it. What is the missing statistic? The missing statistic is this: what will be the reduction in the level of unemployment in Australia because of this budget? There is no statistic to say what that figure will be. And the reason? Because the government does not believe in its heart of hearts that there will be in fact a reduction in unemployment in this country. In the budget speech there is an assertion that unemployment may in fact go up, but there is no figure, there is no forecast and there is no estimate.

And if you cannot judge a budget by what it does to the unemployed and offer hope to those who are now without work, how do you judge a budget in terms of its social standing and its moral efficacy? This budget does not give that figure. This budget, which is brought down by a government which promised the electorate before the election that it would restore hope and employment, and particularly for the young, has no idea of what the outcome of unemployment will be after this budgetary year and because of these settings—none whatsoever.

This government castigated us in government when we set a goal for ourselves of five per cent national unemployment by the year 2000. Have they set a goal for themselves on unemployment? No, they have not. Have they indicated what they think the outcome will be down the track? No, they have not. And have they set up a budget which will in fact grow the Australian economy and create jobs in industry? No, they have not.

The sad and sorry flaw in this budget is that it attacks the ability of Australian industry to take advantage of international growth and grow too. What this budget is predicated on is a contractionary domestic economy. That is not what the Treasurer said on budget night, but it is what the budget papers say when you go to the fine print of what the forecasts will be. Indeed, in the budget papers the forecast is given, and I read from Budget Paper No. 1, page 2-21:

. . . possible confidence effects, while significant, do not fully offset the direct short-term effects of the measures, resulting in—

and here is the point to note—

a small net contractionary impact on activity in 1996-97.

What does that mean? In plain English, it means business conditions will be worse next year. That is what it means. And business confidence, of course, is low now—it is at very low levels. Business confidence will be shattered by the budget cuts that have reduced consumer purchasing power as consumers have to foot higher bills for pharmaceuticals, taxes and charges levied on them by the states because of the actions taken by this federal government over state revenues as well. So the impact is, in a very low level of consumer confidence and business outlook for the future, to contract the Australian economy.

But how does this government say it will save the Australian economy? It points to high demand in the international economy—that is, `The rest of the world is doing all right; we will do worse but, if we trade with the rest of the world, we will lift our economy up by its bootstraps'—as this government infers in its budget documentation. How does it propose to do that? It slashed $500 million out of export promotion programs and it slashed $346 million out of manufacturing industry, so the two areas where you would expect to see some help to take advantage of buoyant international economic conditions for the Australian domestic economy—export and manufacturing—are gone.

And remember, one of the proudest records of growth in Australian exports is the growth of manufactured goods in this economy, averaging between 16 and 17 per cent a year over the last nine years, with the highest growth being from elaborately transformed manufactures, the goods that require the most sophisticated and skilled workers to manufacture. The supports that made that possible are now gone, and the supports that helped small business access international markets are now gone.

We hope to connect with the international economy. I will tell you what we will do, Mr Acting Deputy President: we will connect all right—we will connect in the traditional areas of mining and agriculture, and maybe we will sell a few places to tourists. Once again Australia will revert to being a mine and a farm and a tourist destination, but we will not be a highly skilled manufacturing economy creating smart jobs for intelligent, well-trained Australians, offering high pay and remuneration for the future. And we will not make the bridge into the international economy, either. You can sell so much iron ore and coal, and you can sell so much wheat and wool, but you cannot buy back the elaborately transformed and sophisticated manufactured goods that you need by just doing that; you have to export manufactured goods as well. This budget is deceitful because it undermines our ability to do that and, in domestic economic terms, it is a contractionary budget.

There are a number of areas where industry has been undermined. This budget is sold as a budget for small business. It is not; it is a budget that undermines small business. If you are a small business with a bright idea, then the R&D tax deductions which enable you to commercialise that bright idea have now been significantly reduced. If you are not in profit and therefore need access to a syndicate, forget it: you have not got that access any more, because it has been stamped out. Farewell to our smart ideas and intelligent science. That will now go overseas and be commercialised by foreigners and sold back to Australians at higher prices. That is what this budget does.

If you are a worker without the necessary skills to adapt to a modern economy, forget the opportunities of training, retraining and re-skilling, because what this budget does is put the axe through labour market programs and remove your opportunity to get out of the dole queue, to get some skills for yourself and to take a place in a high skilled economy. We are on the low skilled road now: we are de-skilling Australians and reducing the opportunities for Australian industry to have access to highly skilled labour that they will need if they are going to compete in the international marketplace. Forget those things because what this budget does is undermine those expectations for Australians.

Forget as well those industry sectors in the economy that have performed very well, those industry sectors that have made the harsh transition from being highly protected—sectors like the textile, clothing and footwear sector; the book publishing sector; the heavy engineering sector in the economy that requires access to modern machine tools; the shipbuilding sector in Australia; the information technology and telecommunications sector in Australia—because government supports that levelled the playing field a bit and helped those sectors grow and compete internationally are all removed.

If you are a shipbuilder in Australia, if you are a fast ferry manufacturer in this country, you are a world-class manufacturer; but do not think that you are going to get any help from the government as competitors with you will get from their governments, because you will not. That support goes—and that is where the jobs are too, and those jobs go with those industries.

My lower house colleague Simon Crean has put out today a list of several deceptions and betrayals of industry by this government. They range from the export market development grants right through to the R&D deduction changes, the undermining of Austrade and AusIndustry and a range of other things like computer bounty. They are deceptions, and this government is condemned.