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Thursday, 24 August 1972
Page: 719


Dr GUN (Kingston) - We have just listened to the honourable member lor Bradfield (Mr Turner) who, like the Keynesian economics he just espoused and like the Party he represents, is old hat. I agree with him on one thing, the attendance in the House, because it reminds me of the situation here when I spoke in the Budget debate last year. We are now talking about a Budget which provides for an overall deficit of $630m and a domestic deficit of $60m. The purpose of this deficit Budget is to correct the unemployment which was caused by the 1971-72 Budget. It was the cause of the present unemployment situation. When I spoke in the House last year in the Budget debate to an equally enthralled and packed House of Representatives, I predicted that precisely this situation would come about, that the result of the 1971-72 Budget would be that there would be no reduction in the rate of inflation but a great increase in unemployment in Australia. I said that other countries had tried surplus budgeting in order to overcome the problem of inflation but it had not worked in controlling inflation and had increased the level of unemployment. I feel vindicated now in having made that statement last year.

This points up a very vital difference between the attitudes of the Australian Labor Party and its opponents because at any time in the next year, if the worst comes to the worst and the LiberalCountry Party Government is re-elected, the Government is quite prepared to do anything to try to control inflation even if it means increasing the number of unemployed in Australia. That is something that the Australian Labor Party will not do. We are not prepared to increase the level of unemployment; unemployment is not an acceptable weapon against anything. Our present unemployment situation has been the precise effect of the 1971-72 Budget, but it is interesting that the Budget not only increased the level of unemployment but it also has not been effective in controlling the level of inflation. Last year the Government said that the rate of inflation over the previous year had been 6 per cent. In his Budget Speech the other night the Treasurer (Mr Snedden) pointed out that the rate of inflation was 6.1 per cent.

It is no accident that the rate of inflation is still high. What happened was that there was a surplus Budget, a Budget deliberately conceived to bring about a recession in the Australian economy last year. The immediate effect of it was a reduction in personal consumption expenditure. If we look at the Treasury White Paper on the Australian economy we can see that that is just what happened. In 1969-70 the percentage increase in personal consumption expenditure over the previous year was 5.5 per cent. By the time of the Budget of last year it can be seen that personal consumption expenditure was already on the way down because the increase in that expenditure had been only 2,5 per cent. Of course, it was given an almighty clout by the Budget last year, and so it went down even further. The rate of increase of personal expenditure went down to 1.8 per cent and it is just starting to pick up now.

If one looks at capital expenditure one will see that for the first time in some time there has been a very substantial decline in the rate of private gross fixed capital expenditure at constant prices. There was a fall of 10.6 per cent in the last financial year. With this reduction in consumption expenditure and capital expenditure there was decreased throughput in industry. This caused a lot of people to be laid off and a lot of idle capacity in factories. As a result1 of unit costs of goods going up, prices still kept going up. So it was no accident that the reduced demand and reduced employment were associated not with cost-push but with what has been called slumppush - I think it is a very fitting term - and costs continued to go up.

The increase in costs has often been blamed on high wages, but that is only a very small part of the story. In fact, I suspect that if wages had not gone up as much as they did last year we might have found that price rises were even worse. What happens when wages go up is that at least there is money in people's pockets and there is sufficient demand to enable the turnover and sale of goods. It is not productivity that determines prosperity as much as it is sales. If sales go down, unit costs go up and prices go up. In spite of this, one would have thought that the Government would have welcomed an increase in wages this year when things were going badly and there was not enough money in people's pockets. Yet when the Government went to the Conciliation and Arbitration Commission, it did not argue for just a small wage rise; it said that there should be no increase at all in the total wage this year. I suspect that if the Government had had its way and the Commission had not granted an increase in the national wage, things would have been even worse. Unemployment would have been worse. I suspect that, in spite of the increased wage costs that accrued from the national wage case, the increased demand might have been sufficient to offset that through the lower unit costs.

So I take the opposite view to that of the honourable member for Bradfield. Wages themselves are not entirely a costpush factor. Sometimes they help in a paradoxical way to reduce prices. A year ago in the Budget debate I predicted that there would be an increase in the rate of unemployment and a continued rise in the rate of inflation. Now we see a 2 per cent increase in inflation. Last December in this House I accurately predicted that if we tried to stimulate the economy again we would not necessarily find a reduction in unemployment. The balancing act that the honourable member for Bradfield talked about does not seem to work anymore. Earlier this year a mini Budget was brought down but it was not successful in getting people back to work. We still have a rate of 2 per cent unemployment and inflation is still continuing. I might have to eat my words next year, but I suspect that the often predicted effect of this Budget may not be quite what is commonly anticipated. Many people say that this Budget will cause inflation and that it will get people back to work. I wonder whether it will do that. 1 wonder whether the rate of inflation will not be as great as we might expect. I think we might find that it will just use up existing idle capacity, improve unit costs and perhaps help to lower prices somewhat. I feel, unfortunately, that it will not be as successful as we would all like in getting people back to work. The reason for this is increased productivity which the Government talks about so much. Increased productivity, if you have the same amount of output, will result in reduced employment. If manufacturers are investing more in plant, that might reduce the level of employment.

Let me quote an interesting passage from Robert Theobald on this subject. He said:

The process can be summarised as follows: Created demand will lead to purchases of highly efficient and productive machine systems that need few men to control them . . . Thus, in the relatively near future, a policy of forcing rapid growth in demand in order to increase employment opportunities will actually lead to the opposite result: It will raise unemployment rather than lower it.

The message I want to state is that pure budgetary and monetary policies are no longer sufficient for trying to achieve a full employment economy. Other measures are necessary. Let me mention just 2 that I feel are very important. The first is in relation to structural unemployment and retraining, and the second is in relation to immigration. This morning the Minister for Labour and National Service (Mr Lynch) introduced some further schemes for adult retraining. I suspect that they may not be any more successful than were the last ones. As we know, the last schemes that the Government introduced for workers replaced by technological change and automation were complete failures. Practically no workers knew anything about them or were able to avail themselves of the benefits. The same sort of thing could happen here because the Government does not go out and sell the scheme. I felt that many people who could have been helped by the previous schemes had never heard of them. The Government has to take over, lt must investigate every industry which is subject to the changes of automation and try to seek out those workers who are likely to be displaced by automation, and do its utmost to retrain them, rehouse them, even move them from one city to another if necessary. But it does not seem to be prepared to do this. Unless we have a major, radical overhaul of our approach to the problems of automation, I fear we will have a chronic problem of unemployment in this country.

The other matter to which I want to refer is immigration. I believe that at this stage it is reckless for the Government to embark on a programme of bringing 140,000 migrants here this year. I do not know whether Ministers ever attend their electorate offices. I think some have people standing in for them. However, most of us who attend our electorate offices have probably had people coming there saying that they had come out from Europe. They had seen advertisements telling them to come to Australia where they could get jobs but when they had come here the jobs were not available. It is not fair to the work force in Australia and it is not fair to those people who are being brought here. It is a confidence trick. I believe that the target figure of 140,000 for this year is completely unrealistic.

I would now like to refute a couple of things that have been said in the last few weeks by honourable members opposite. The honourable member for Bradfield said that one of the troubles with unemployment is high wages. Conservative governments have been saying for 50 years that the workers are pricing themselves out of a job. That is not so. It is only by increased wages that workers are ever able to buy things. If they do not buy things, people will not employ them to manufacture things. I believe that this is fundamental. Last week the honourable member for Wentworth (Mr Bury) asked a question of the Minister for Labour and National Service. This is another favourite old chestnut of the Minister. He said that the lion's share of loss of production in Australia is due to strikes. I have just taken out a few figures on this and I find that over the last year the loss of production in Australia due to industrial disputes was 0.24 per cent - less than one-quarter per cent of the gross national product - but the loss due to the Budget of 1971-72, where we had a growth rate of 3 per cent compared with a possible 5 per cent, was 10 times as much as from industrial disputes. Therefore, my point is that if strikes are a serious cause of loss of wages and loss of production in Australia the 1971-72 Budget, which caused 10 times the loss of production and 10 times the loss of wages, is 10 times as serious. If the workers are to blame - I do not believe they are - for the industrial disputes that have happened, the Government is 10 times more culpable.

Nobody likes strikes, least of all the strikers themselves. To hear LiberalCountry Party members speak, one would think that workers actually enjoy not working and not collecting their pay. It is the striker who is the first one to suffer because he suffers loss of take home pay. The trouble is that not enough sympathy is shown by members of the Liberal Party throughout Australia for the problems that lead to industrial disputes. The honourable member for Bradfield asked: 'What has the Labor Party to offer?' What we offer is sympathy for the people in their grievances. If the Liberal Party were prepared to show a bit of sympathy sometimes, there would be fewer disputes.

Let me talk about the much publicised dispute on Kangaroo Island. In spite of the fact that a Federal award was involved, representatives of the South Australian Government went to Kangaroo Island and did their best to reach a reasonable agreement with the farmers on the Island. However, this endeavour was undermined and I suspect - it is an open secret - that it was undermined by members of the Liberal and Country Parties, including some members of the Liberal Movement, who were deliberately trying to exploit the situation for cynical political advantage.


Mr Giles - They did not go over to the Island.


Dr GUN - They did all sorts of things. I will tell the House what else they did. They put out a bogus petition calling for a vote of no-confidence in the trade unions. What has the honourable member to say about the trade unionists who were intimidated into signing that petition? They were told that they would not get a job any more if they did not sign the petition. What did the Federal Government do about it? These workers were operating under a Federal award and the Federal Government did nothing, except try to keep the dispute going because it thought it would further its narrow political aims.

That is not the only thing that was done in the Kangaroo Island dispute. Evidence has been presented to me that victimisation occurred of at least one person who joined the Australian Workers Union on Kangaroo Island. He was intimidated and told that in future there would not be any job available for him. He was told this by one farmer there because he had informed on the non-union shearers so that the union organiser could go and hunt them up. He was told that his services would no longer be required and that he would be best off if he left the Island. This is the sort of victimisation that people on the opposite side of this Parliament revel in. In contrast, if a dispute is on, Labor governments always try to seek the cause of the problem. What happened in the rubber dispute last year in South Australia? There was what seemed to be an intractable dispute, but the South Australian Minister of Labour and Industry went and consulted the individual strikers to find out what their grievance was and in a very short space of time the whole problem was resolved.

What happened in the oil strike? The oil companies wanted to negotiate, but the Government would not let them. The Government leaned on them and said: 'We will not continue the agreement under which we feather-bed the oil cartels and prop them up at the expense of IOC Australia Pty Ltd and XL Petroleum Pty Ltd, the cut-price companies, unless you refuse to negotiate with the unions'. So, the protracted oil dispute was the fault of the Federal Government. It is the guilty one who caused the strike for political purposes. There is no question about that. I went down and spoke to some of the people on strike in my electorate. What did the Minister for Labour and National Service (Mr Lynch) do? I wonder whether, during the long weeks of that oil strike, he ever spoke to any of the unionists on strike and asked them what their grievance was. I wonder whether any honourable member opposite really knows what the reason was for the unionists refusing to accept the interim decision of Mr Justice Moore. I will bet that none of them has any idea. They are not even interested. All they were interested in was keeping the strike going and tormenting it for their own cynical, political purposes. They will get theirs when the election comes at the end of this year.


Mr Giles - That is unfair nonsense, Mr Deputy Speaker.







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