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Thursday, 24 August 1972
Page: 723


Mr IRWIN (Mitchell) - I trust that the honourable member for Kingston (Dr Gun) does not get his patients as mixed up as he gets his economics. We have been showered with high-flown cliches by the Leader of the Opposition (Mr Whitlam) and members of his Party, but this method has never fooled anybody, for 3 reasons. Firstly, economics has never been the Leader of the Opposition's strength and never will be. His representation was pitiful to behold and most members of his own Party fell asleep. Secondly, neither the Labor Party nor any member of it is free to speak on economic matters because the Party is dominated by the interests of its trade union power base and is controlled by the Federal Executive. (Quorum formed.) Thirdly, there is little substance of any significance that the Leader of the Opposition could find to enable him to attack the the Budget. He has ignored economic issues and has given us the familiar rendition of that old song: spend more, soak the rich, and be damned to the inflationary consequences*.

The Labor Opposition condemns this Budget. The Government parties applaud it. The people want it. There is no doubt that the people of Australia have welcomed and want this Budget. They will make their attitudes clear on polling day. We have heard a lot of words about national goals. The Leader of the Opposition tells us that we need more planning in order to reach national goals. And what are the national goals he talks of? They are broad and windy generalisations. Who could disagree with them? Everyone is on the side of the angels. But the art of government is not the art of Madison Avenue. Slogans are not policies. Words are not deeds. We have goals, but they are not goals we impose on the Australian people. That is not our concept of democracy. The Budget is aimed at goals we impose on the Australian people. That is not our concept of democracy. The Budget is aimed at goals of importance to all Australians - growth and development; the adequate defence of our nation; the fostering of industry; the expansion of educational opportunity; and the continued betterment and extension of our social welfare system.

Last week after the Budget all the Leader of the Opposition and Mr Hawke could talk about was last year's Budget. They could find nothing critical to say about this year's Budget. What they said about that of last year was fanciful. Look ing back we all know about the international monetary crisis which erupted soon after last year's Budget was brought down. Hindsight is a great wisdom builder. That crisis had rapid and drastic effects on our trading partners, with severe economic consequences. This country did very well to come out of it with the economy growing by 3 per cent - real, not just in money terms. Of course the Opposition does not acknowledge world economic problems and their effects on Australia. Its members cannot understand that we are an integral part of the whole. They are either ignorant of their real meaning or sidestep them in a one-sided portrayal of our current circumstances. They want it both ways.

The Leader of the Opposition then talked about how Budgets should be framed - about forward planning and the like. The Treasurer (Mr Snedden) said in the Budget Speech that we have been aided this year in our decisions on. expenditures by the 3-year forward estimates which the Treasury Department has been collating. Perhaps he missed the point. We heard also from the Leader of the Opposition that there was nothing in the Budget about incomes and prices policies. Our income tax measures are directly aimed at increasing incomes without adding to costs and, overall, we have carefully weighed our Budget measures in terms of their inflationary impact. The Budget is designed to stimulate the economy without adding to inflationary measures.

But, we are told, there is no incomes and prices policy. We are told that other nations have such a policy. We are not told how our rate of inflation compares with that in other countries. There is a reason for this. The fact is that, taking the last 5 years, countries in the Organisation for Economic Co-operation and Development not following what are fashionably termed incomes and prices policies have on the whole tended to have less inflation than those which have. But it is trendy to talk of incomes and prices policies these days - so we are criticised for not following them. We do know, however, that the Labor Party, further showing its incapacity to be objective in economic management, has stated that it would have an arbitrary control of prices, but would not do anything to control maximum incomes. We certainly would have a one-sided system under Labor. But this is just one example of where it would be driven by trade union dominance. Just what sort of a prices policy the Labor Party would implement and how it would work in detail is something that Labor has not tried to tell us.

The Leader of the Opposition did, in the end, come to talk about this Budget. He tried to say that it was an electioneering Budget - to hint that it was not a responsible Budget. But his effort was half-hearted and he was heard in deadly silence. We heard a lot before the Budget was brought down about how we, as a Government, would be irresponsible, for electoral purposes. We have never been that and the commentators and the Press, perhaps with some surprise, have acknowledged that we have brought down both a good and a responsible Budget based on sound economic judgment. That such a Budget should also be popular is, of course, a fact which pleases all on this side of the House. One reason for its popularity is that it is economically responsible. But, as to the Press, look what some leading newspapers had to say: 'A combination of political allure and fiscal responsibility', the Financial Review'; 'A vigorous Budget . . . that steers an intelligent course between generosity and responsibility', the Melbourne 'Sun'; 'A many faceted Budget of some sophistication', the Australian'; and 'A responsible Budget', the 'Age'. Members of the Opposition should read the 'Australian' today and see where their Leader is leading them. How does the Leader of the Opposition's assessment of the Budget stack up against those verdicts of "responsible', 'vigorous', 'intelligent', 'generous', 'sophisticated', and so on. lt does not stack up very well.

The Leader of the Opposition dealt for some time with unemployment. This is a bit rich coming from the leader of a Party which is struck into paralysed silence on each occasion a major strike breaks out. The economy has been ruthlessly battered by industrial turbulence in the past year and it has been impossible to get a long enough respite to get recruiting back to normal. But the Leader of the Opposition has no stomach for action. This is blatantly clear and is summed up in Pickering's cartoon.

The Labor Party has desperately and cynically attempted to exploit the employment issue for electoral purposes; it seems almost as if it wishes greater unemployment. We have said we are determined to get unemployment down and the Budget is aimed at doing so. Their wish will not be our command. The Leader of the Opposition's most trusted of colleagues are saying that unemployment will rise further. They wallow in it and are desirious of its escalation. The honourable member for Hindmarsh (Mr Clyde Cameron) has said that the Budget provides for only a 2 per cent growth in employment this year. He says that there is a need to find 190,000 new jobs each year and that 2 per cent growth is equivalent to only 90,000.

This is a case of a deliberate scare campaign based on false arithmetic, spurious reasoning and tearing out of context a figure from the Budget documents. As to the arithmetic, the normal growth in jobs is 170,000, not 190,000 and the 2 per cent growth in the work force is 115,000, not 90,000. So the alleged gap is 55,000, not 100,000. But that is not the end of it. The 2 per cent that has been quoted comes from Statement No. 1 attached to the Budget Speech, lt is explicitly stated there that the 2 per cent estimate relates 'to year on year comparisons - that is 1972-73 on 1971-72'. The Statement then goes on to say:

During 1972-73, however, growth in employment ... is expected to be greater than suggested by the foregoing-

That is 2 per cent - figure.

In simple terms what this means is that the rate of growth in employment from now on will be faster than the rate of growth in employment in 1972-73 as a whole compared with 1971-72 as a whole. The fact is that the Budget Estimates are consistent with unemployment being significantly lower at the end of the current year than at the start. The Australian Labor Party, in handling the question of employment, shows at best ignorance and misunderstanding, and at worst misrepresentation. Everyone knows that this Budget will bring unemployment down. One of its basic economic purposes is to create circumstances which will attack unemployment. Those who do not agree must be saying that an even more stimulatory budget was necessary. But we got no clear message from the Leader of the Opposition on that aspect. That is in the 'too hard' basket. The attitude is: Best blur the criticism and try, without being too explicit, to have it both ways. We believe, however, that the Budget is directed towards stimulating activity where it is needed - at the consumer level. We believe that conditions are right for an early resumption of strong growth in activity and that the short term difficulties with employment will pass and we in Australia will return to the full employment situation which has been the envy of the world.

Let us look at some other alleged facts presented to us by the Leader of the Opposition. He said that the pension increases simply return pensioners to the position they were at before inflation eroded the purchasing power of their pension. I challenge him to take any past year he chooses and show that the standard rate pension today has not risen faster than prices. Of course, the claim is nonsense. And if we are talking about the recent past, in the past 18 months we have increased the standard rate pension by 29 per cent. Over that period the consumer price index rose by 9 per cent. Those are the facts.

In addition we have in this Budget doubled supplementary assistance to pensioners paying rent and have extended eligibility to married pensioner couples. So a single pensioner paying rent will receive an increase of $3.75; a married couple paying rent will receive $6.50; a single pensioner paying rent will receive $24; a married pensioner couple paying rent will receive $38.50 per week; and in addition each will receive fringe benefits. The Leader of the Opposition also claimed that the increase in the free income limits simply restored them to earlier real levels which had been eroded by inflation. Again he was ignorant or was deliberately distorting the facts. He was so wrong that I will not bother to cite the figures beyond pointing out that we have increased the free income limits in this Budget by 100 per cent. Why cannot the Leader of the Opposition get his facts right? He finds it so much easier to speak in generalities.

We are dedicated to the eradication of relative poverty in this country and to the raising of the living standards of all citi zens, particularly those who are in difficult circumstances. In the difficult process of determining spending priorities, our welfare programme shows how highly we regard the need to achieve an equitable distribution to upgrade the living standards of those who most need it.

What does the Leader of the Opposition say about our tax measures? He gives a grudging welcome to the increase in the minimum taxable income though he falls into the trap of claiming that we have merely abolished a tax that costs more to collect than it is worth. Actually, only a moderate reduction in administrative costs results from the raising of the exemption limit. On the restructuring of the scale we have heard some rather forced complaints. It has been said, for example, that more should have gone to lower income earners. Of the total amount of tax forgone by the restructuring of the scale and the raising of the minimum taxable income, 57 per cent goes to persons with taxable incomes below $4,800 and three-quarters - or 75 per cent - to persons with taxable incomes below $6,400. Less than 10 per cent goes to persons with taxable incomes above $12,000. Those figures may dispose of some of the more fanciful comments made by the Leader of the Opposition.

We do not believe that the modest amount of revenue which might be gained if the marginal progression were steepened beyond, say, $8,000 a year in order to limit the benefits of tax reductions to higher income earners would be either fair - remembering the level of those marginal rates now - or productive, given the impact on incentives. The new scale provides for a marginal rate of tax of 54.6c in the $1 at $12,000. If the Leader of the Opposition thinks that this marginal rate is much too low let him say so.

In regard to dependants' allowances, we have heard the same old story that one man's wife is worth more than another. This is a superficial argument, like so many others. Let me quote from the Canadian Royal Commission on Taxation:

Equity has 2 dimensions. Horizontal equity requires that individuals and families in similar circumstances bear the same taxes. Vertical equity requires that those in different circumstances bear appropriately different taxes.

The fact is that it is the income tax scale which is designed to ensure equity as between higher and lower income groups - that is, vertical equity. Dependants' allowances are a means we use to make more equitable the tax burden as between persons on the same income but in different family circumstances. Ability to pay is not merely measured by gross income but also by how many are dependent on it. Concessional deductions go some way towards bringing persons in similar economic circumstances back to a similar tax position - to recognise the principle of horizontal equity about which the Leader of the Opposition chooses to know nothing.

We believe that the increase in dependants' allowances will be widely welcomed and will help particularly the single income family with children. The great bulk of the benefits will go to people on lower and medium incomes. What would Mr and Mrs Everybody say if asked individually?


Mr DEPUTY SPEAKER (Mr Scholes - Order! The honourable member's time has expired.







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