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Thursday, 24 August 1972
Page: 672

Mr DRURY (Ryan) - The honourable member for Adelaide (Mr Hurford) referred to co-operation and economic planning, but it is significant that neither he nor anyone else on the Opposition side of the chamber has attempted to reply to or rebut the charges made last night by the Minister for the Navy (Dr Mackay) in respect of what the Australian Labor Party's programme for Australia would be. They have not denied, for example, the Minister's charge that they would nationalise the banks, insurance companies, hire purchase companies and so on. They have not denied the Minister's charge that the Labor Party would wipe out all taxation deductions other than family allowances. In other words they would wipe out deductions for education, life assurance, medical allowances and expenses incurred in earning income. If this is to be denied, let us hear the denial. They have not denied the Minister's charge in relation to the radical resealing of income tax. The Minister said that the Australian Labor Party would radically rescale income tax so that it would be, in the words of the honourable member for Lalor (Dr J. F. Cairns), a means of enforcing a restructuring of society. If that is not true, let them deny it. The Minister said also that businesses would be radically reconstructed. If that is not true, let it be denied by honourable members opposite.

The honourable member for Adelaide referred to only one plank of the Australian Labor Party's platform under the heading of 'economic planning'. As I see it, quite frankly, it seems that honourable members opposite are deliberately avoiding reference to the unpopular planks under the heading of 'economic planning'. I have already referred to two of them. We seldom hear anything about the nationalisation plank except from the more frank and more outspoken members of the left wing of the Labor movement. Nor do we hear anything about what they would do in relation to the re-defining of 'income'. It is clearly set out under the heading of 'economic planning' that the Labor Party would re-define income'. As far as 1 know in the course of this debate nobody opposite has said anything about the Labor Party's plan to redefine 'income'. The purpose of that redefinition of 'income', if one analyses the Labor Party's platform, is that they clearly intend to impose a capital gains tax. This has been referred to on earlier occasions. If honourable members opposite want to deny the truth of what I am saying they have every opportunity to do so.

It has been very disappointing indeed to hear another dreary denunciation of the Budget such as we just heard from the honourable member for Adelaide, rather than a constructive alternative conception. Surely that should be within the ability of the range of thinking of honourable members opposite who hold themselves out to be the alternative Government of Australia. They refer to growth but they put forward no plan for improving it. They refer to productivity but they put forward no plan for increasing productivity. They put forward no plan for containing inflation. These are very important matters for the economy. As the aspiring alternative Government, this is a golden opportunity for honourable members opposite to tell the people of Australia exactly what they would do to remedy the present situation and put things right, instead of roundly condemning the Budget presented by this Government. For the most part, they avoid reference to political strikes, despite the fact that some leading members of the labour movement have been, through political strikes, robbing Australians of some of their money, undermining the standard of living of the Australian people and adding to the unemployment pool, lt is true that the honourable member for Adelaide referred to unemployment. So did the Leader of the Opposition (Mr Whitlam) and so have some other honourable members opposite.

Dr Gun - What about nuclear fallout?

Mr DRURY - I know that what I am saying is hurting the honourable member and that he does not like listening to it. He has no solution to the unemployment problem. AH honourable members opposite do is weep crocodile tears and hope that the unemployment pool will grow larger because they see in it some political advantage for themselves. I leave the Australian Labor Party now and come back to the Budget. The 1972-73 Budget has been widely acclaimed throughout Australia, and rightly so. The Treasury White Paper published in July indicated the need to pump some $400m into the private sector of the economy in order to boost consumer demand and restore growth. I believe that the Budget will do this. Growth with stability is still the basic approach of the Government. It is undeniable, as the honourable member for Adelaide has pointed out, that the recent growth rate of 3 per cent is just not good enough, but let us find a solution to it. We have to approach this problem in a positive frame of mind. I do not think anyone would deny that this rate needs to be at least doubled to give real strength to the economy.

Another worrying factor, of course, is inflation. It is not unique to Australia; it is common to many countries throughout the world. The only good feature about inflation at the moment, as the Treasurer (Mr Snedden) pointed out in his Bud-et Speech, is that there has been some decrease in the rate of the inflationary spiral in recent times. Let us hope that that trend will continue. Chapter 2 of the Treasury White Paper of July gives a detailed analysis of what is described as the intractable problem of inflation. It deals with the complex of factors involved and argues that the dominant exacerbating factor in Australia's recent experience has been excessive wage settlements. There is no doubt in the minds of many that this is correct. The position has been aggravated by a series of industrial stoppages which have caused loss and hardship to many thousands of families and have, as a result, retarded our economic development.

I feel that the Institute of Public Affairs and the Productivity Promotion Council of Australia should be commended publicly for the excellent job they are doing in endeavouring to spotlight the need for higher productivity. An excellent little booklet entitled 'Better Living - the Key is Productivity', which was produced jointly by these 2 bodies, in my view should be read by every household in Australia. It points out that productivity - in other words, production per person - is important because our standards of living depend upon it; that only by raising productivity can the purchasing power of pay envelopes be increased, and that productivity is not rising rapidly enough compared with the growth of money incomes in Australia. In other words, the cost of production is rising too fast. Over recent years productivity has risen at approximately one-third of the rate of rises in salaries and wages, and one of our major aims economically must be steadily to close this gap. This does not simply mean that the employee should work harder. Let me be quite clear on this. As I see it, it means that management and labour must aim to produce more efficiently and to work more closely together for the common good.

The continuing pressure for a 35-hour week, which is supported by honourable members opposite in their policies, means, if granted across the board, that the cost of production will continue to rise and our prospect of containing inflation will steadily become dimmer. The principle of a fair day's work for a fair day's pay is still an essential basis for a thriving, prosperous nation. We live in a keenly competitive world, and if we are to retain our place among the top 12 trading nations and maintain decent living standards we must ensure that our production costs do not rise faster than those of other countries with which we are competing. Bulletin No. 233, issued by the Australian Industries Development Association this month, strikes a hopeful note when it states:

While many important areas of industrial production are still languishing, a closer analysis of the latest indicators does suggest that the overall trend in industrial activity may be turning upwards.

It proceeds to give figures covering a wide range of commodities to demonstrate that during the period from January to June 1972 a greater number of items showed a rise in production and a smaller number of items showed a fall in production. Under the caption 'Recovery on the Way?' the bulletin continues:

This analysis of recent production statistics, although admittedly based on relatively short term trends, does give some indication that industrial production may indeed be picking up and that the economy is showing a greater degree of confidence, along with some increase in consumer spending.

Returning to the actual provisions of the Budget, I think we were all struck by the Treasurer's pithy summing up when he said:

Taxes down; pensions up; and growth decisively strengthened.

For the first time Commonwealth expenditure will reach - indeed exceed - $ 10,000m in a 12-month period. This is not, as alleged by honourable members opposite, a rich man's Budget. This can be clearly seen by anyone who reads it objectively and fairly. Virtually every section of the community will benefit from the proposals now before the House, with the greatest benefits going to those most in need of relief.

Slightly more than one-third of the Commonwealth's estimated outlay in the current financial year will go to the State governments. I have said on other occasions, and I say again, that I believe that the States should be enabled to raise a higher proportion of their own revenues than they do at present. If it were not for a High Court ruling that sales tax is in the nature of an excise tax and therefore under section 90 of the Constitution must remain with the Commonwealth, I for one would favour the Commonwealth vacating this field of taxation in favour of the States. I am particularly pleased that the Government has decided to appoint an independent expert committee under Mr

Justice Asprey to inquire into and report on the overall tax structure within the Commonwealth's jurisdiction. This committee, needless to say, has a very big task ahead of it, and its report and recommendations will be awaited with great interest. In the meantime, as the Treasurer intimated last May, the Government has decided to make such adjustments as it considers necessary in the field of taxation.

The incidence of Federal estate duty and Federal gift duty will be greatly reduced when this Budget takes effect. The proposal to double all statutory exemptions means that approximately half of all estates that would be subject to Federal estate duty will be exempt in future. There is no gainsaying that the present rates of death duties throughout Australia are too high and cause hardships to many families. Another pleasing provision of the Budget is the decision to allow a deduction for income tax purposes of up to $400 in respect of expenditure by a taxpayer on his own education where the expenditure is related to his career. This is something for which many of us have been pressing for quite some time, and it is indeed welcome. Most welcome of all is the proposal to reduce personal income tax rates by an average of 10 per cent. Present rates are most certainly too high and have been acting as a disincentive to many people. The plan to restructure the tax scale to ensure maximum percentage reductions on lower and middle incomes is, I believe, proper and equitable. In future those with a taxable income less than $1,041 will be exempt from income tax and, as the Treasurer pointed out in his Budget Speech, the proposal will exempt from tax liability altogether about 600,000 taxpayers - among them part time employees, including married women and students working in vacations.

Income tax at present rates has been placing too heavy a burden on the family man, but under this Budget the family man will benefit very considerably in a variety of ways. Time will not permit me to mention all of them. Let me mention a few. All taxation allowances for dependants are to be increased by $52. Families throughout the country will be greatly helped by the provisions of this Budget not only in regard to taxation but in the whole field of social welfare. Increased financial assistance for education will he'p schools, technical colleges, teachers colleges, universities and colleges of advanced education. The very substantial increase in Commonwealth scholarships of all kinds will help many thousands of students. There are major improvements also in relation to health, housing, child care, social services and repatriation.

The most spectacular feature of all, of course, is the Government's promise to abolish the means test within the next 3 years. It is right, I believe - I think we all are of one mind on this point - that this penalty on thrift should be removed as soon as possible and that, in the meantime, the application of the means test should be further liberalised. I remind the House that it has been Government policy for a number of years to liberalise the means test year by year. I believe it is also right and equitable to provide that pensions shall be subject to taxation, otherwise people on higher incomes would, as the Treasurer has said, benefit disproportionately and this would be unfair to everyone else. The Treasurer mentioned that the Government is currently reviewing policies in regard to capital inflow into Australia and I believe that this need for review is in line with the general feeling in the community. Most people, I think, agree that overseas capital is necessary for our national development but feel that appropriate steps should be taken to preserve an Australian equity. I am confident that the Government recognises this fully and that it will act accordingly. I oppose the amendment moved on behalf of the Opposition and I have very much pleasure in supporting the Bill now before the House.

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