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Tuesday, 29 August 1972
Page: 797


Mr MAISEY (Moore) - Following his Budget address last week the Leader of the Opposition (Mr Whitlam) came out with a remarkable statement. He said that the Australian dollar should be revalued upwards. What he is doing, in effect, is putting Australian export industries - primary industry, secondary industry and mining - on notice that their financial returns would be less if the Labor Party were to win the next election. That the alternative Prime Minister of this country should make such a statement a few months before an election shows a complete lack of responsibility towards the economic wellbeing of Australia and its export industries. In the same statement he also said that Australian tariffs should be cut. Implicit in that statement is the obvious fact that the Australian Labor Party, if it should become the government, would take away the independence of the Tariff Board, and it would be a Labor government that would be making judgments on levels of tariff protection in Australia.

This Budget bears many similarities to the Budget brought down in August 1969. It is fitting, therefore, that I should build oh some of the propositions that I put forward on that occasion. The present Budget sheds a clear if indirect light on several fundamental flaws in the system of democracy in Australia. I will return to this connection between the 1972 and 1969 Budgets in a moment. To govern is to engage in a chain of events wherein what happens today is very much influenced by what happened yesterday. Yesterday's major event was the 1971 Budget. In speaking to it I said:

I believe that this Budget will put a brake on inflation, but I also believe that it will be electorally dangerous to hold the damper on the economy till the end of the financial year.

Later in the same speech I said:

There must be and there will be a boost before next August ... In one of the supplementary statements the Treasurer tells us all about the long delays before new tax measures start to make their presence felt. If it works one way it must also work the other way.

I take as my starting point these 2 propositions which I made 12 months ago. The first is that the economy would be stimulated before the 1972 Budget. The record is that economic measures take time to make their presence felt.

Let me recapitulate. On 26th October 1971 the Prime Minister (Mr McMahon) announced - No. 1 - an immigration cutback of 3,000 to be effective at Christmas time; No. 2 - trading banks to put an extra $5m per week into circulation and - No. 3 - falls in interest rates on some Commonwealth securities. On 1 1 th November 1971 the Treasurer (Mr Snedden) announced - No. 4 - substantial interest reductions on other Commonwealth securities; on 18th November 1971 the Treasurer announced - No. 5 - substantial interest reductions in semi-government securities. In late November-early December, unannounced, were the next measures - No. 6 - an instruction to Commonwealth departments to increase spending and - No. 7 - an instruction to Commonwealth departments to step up recruitment. On 19th November 1971 the Treasurer announced - No. 8 - $30m as agreed for a continuation of the reserve price scheme for wool. On 2nd December 1971 the Prime Minister announced - No. 9 - the non-metropolitan unemployment relief scheme to cost $2m per month; on 9th December 1971 the Prime Minister announced - No. 10 - an increase in grants to non-government schools of $15 per annum in the case of primary students and $18 per annum in the case of secondary students; and - No. 11- $20m for State school capital works.

On 12th December 1971 the Prime Minister announced - No. 12 - an extra $250,000 per month for non-metropolitan employment. On 13 th December 1971 the Reserve Bank announced - No. 13 - a reduction in reserve requirements permitting trading banks to increase lending by $132m. On 22nd December 1971 the Prime Minister announced - No. 14 - an overall devaluation of the Australian dollar by 1.75 per cent. On 6th January 1972 the Treasury announced - No. 15 - a further cut in interest on Commonwealth securities; on 3rd February 1972 the Reserve Bank announced - No. 16 - a reduction in interest rates charged by trading banks. On the same day the Treasurer announced - No. 17 - a lower interest rate on some Commonwealth securities. On 8th February 19 2 the Prime Minister announced - No. 18 - a 20 per cent increase in wheat quotas.

On 14th February 1972 the Prime Minister announced - No. 19 - a further $32m for State works and housing programmes; No. 20 - a further $10m for semi-governmental works programmes; No. 21 - a special grant of S15m to the States; No. 22 - a special loan of $ 17.5m to New South Wales; No. 23- a further $2.25m per month to be spent on the nonmetropolitan unemployment relief scheme. increasing the amount to $4.5m per month; No. 24 - restoration of the investment allowance; and No. 25 - an increase of 70 per cent in the unemployment benefit. On 5th April 1972 the Minister for Primary Industry (Mr Sinclair) announced - No. 26 - additional and accelerated expenditure on rural reconstruction, together with a relaxation of conditions. On 11th April 1972 the Treasurer announced the mini-Budget, which included in its provisions - No. 27 - a 2i per cent cut in income tax; No. 28 - an increase in basic rates of pensions and sickness benefits; and No. 29 - an alteration in the means test.

So, between 26th October 1971 and 11th April 1972 the Government engaged in no fewer than 29 separate stimulative acts. This brings me to the second and more important proposition that I made earlier and now repeat, namely, that economic measures take time to make their presence felt. I believe that the 29 acts of stimulation which preceded this Budget would, given the fullness of time, have reduced the level of unemployment in Australia. The reduction would have been from a level low by international standards to the still lower level acceptable by Australian standards. My belief is based on the fact that I can read Government documents. The Budget Speech and the statements supplementary to it make it abundantly clear that what I am saying is regarded by the Treasury as self-evident. Not only does the Treasury make this point overtly but also it displays remarkable reluctance in discussing the economics of the Budget. I invite everyone to compare the Treasurer's speech and supplementary statements of last year with those of this year. The Treasury's 1972 reticence can be ascribed to an unwillingness to enlarge upon, in rigorous exposition, that which it has overtly but briefly admitted. The admission is tersely put in the Budget Speech in these terms:

To summarise: the economy at present is moving in the right direction. A modest abatement of inflationary trends has been achieved. Demand, although patchy, is growing. Confidence generally has improved in recent months. There is, however, some slack in the economy and in the absence of further action it would be some time before it was fully taken up.

That last sentence in the 1972 Budget Speech is absolutely critical and I repeat it:

There is, however, some slack in the economy and in the absence of further action it would be some time before it was fully taken up.

What is said, of course, is that the preBudget stimuli would have proved sufficient in time, if this is so, the present Budget cannot be allowed to run its full course. Twenty-nine mini stimuli plus one maxi stimulus is clearly too much stimulation, eventually. But this is a Budget befitting the age of instant coffee and instant mashed potato. Presto, it will achieve instant full employment.

When a Government document looks at a future which is uncertain it says so. If, however, it looks at a future which is fairly certain, it says so a good deal more insistently. That is the position with the 1972 Budget documents. There is much more emphasis on policy reviews during the financial year and there is even a strong cautionary paragraph on the second page of Statement No. 2 which, incidentally, with remarkable foresight, extols the virtues of 'flexibility in economic policy'. All this adds up to the fact that, once this instant Budget does its job and full employment is restored, measures will be introduced to prevent it from adding to inflation. The reappearance of the stop-go policies is harmful to orderly economic development, yet its causes lie at the very heart of parliamentary democracy in Australia. Two related matters stand out here. The first concerns the difficulties of democratic governments in dealing with large scale lawlessness organised by tightly knit subversive minorities. The second relates to the frequency with which governments have to go to the people. The first problem is not confined to Australia; the second problem which is an aggravating one, is.

A democratic government is obliged, and rightly so, to abide by rules and regulations. This puts it at a distinct disadvantage when dealing with organised opponents who scoff at democracy and shrug off both laws and decency. The 'Economist' of 29th April 1972 described the universal problem as follows:

The reason for the dedin; of British trade unionism has not been any original sin among either ordinary or leading British trade unionists. It has come about because even a band of archangels and geniuses could not properly operate a supposedly democratic organisation if it is not subject to the checks and balances on which any effective democratic system must depend. In the lower ranks of 'elected' union officialdom (delegales to union conferences, shop stewards etc.) there is not a natural democratic check, because most people very sensibly do not want to spend their spare time on such chores. Anybody sufficiently ambitious to pick up local union power can therefore generally gel it. Politically, this leads to a heavy over-representation in shop stewards' committees of communists . . there is an over-representation of those who are willing to break their promises and their contracts without a moment's compunction, who resort to threats, force, bullying tacics and some individual intimidation in order to bolster protection rackets that are mainly in protection of their own power but are sometimes more corrupt even than that

So much for the 'Economist', lt is the Australian counterparts of these people who break the provisions of the Conciliation and Arbitration Act and provoke large scale confrontations between unions - which are composed, incidentally, in large part of decent men - and the Government, which naturally is hesitant as it knows that only a minority is guilty. It is the communists and fellow travellers who engineer the clashes within the arbitration system which result in the shameful backdowns by arbitration authorities. 1 refer to the well intentioned but utterly misguided fuzzing over of major issues by Mr Justice Moore in his precipitous ambition to settle a symptom. The Government has not yet learned to cope with industrial blackmail, and this is a major cause of inflationary propensity in Australia today. Yet there are several solutions to this problem. I will outline those that 1 know on some ether occasion. Suffice to say now that the necessary changes are fundamental and would take more than 3 years to implement; and 3 years is the maximum term that Australian governments have in office.

Let me make it clear that what is happening within the unions is an affront to all democratic parties, including the Australian Labor Party. Indeed, if elected to government, the Australian Labor Party would find the issue very divisive on account of its anti-democratic lunatic left which, mercifully, is only a small minority. On the other hand, I recall that the last Prime Minister to introduce emergency legislation with the sole and specific purpose of gaoling a small group of trade union officials was the late Ben Chifley.

Let me quote from an article on the front page of the 'Australian' of Tuesday, 22nd August 1972:

I appealed to one of the rank-and-file group's leaders, Mr Frank Ball, a member of the Communist Party of Australia to calm the men ... it could have led to a full scale brawl. Mr Ball . . . replied 'You can cop il the way il comes mate'.

The speaker is a prominent member of the Australian Labor Party; he is the assistant secretary of the New South Wales Labor Council. He was attacked and kicked by the lunatic Left. Despite the fact that the people behind the strikes are out to destroy or subvert the democratic majority within the ALP as much as they are out to confront arbitration and the Government, such is the influence on the Australian Labor Party of the lunatic Left - the Hartleys, the Browns, the Crawfords - 'that the Labor Party is forced to side with them in public. This is a disaster for democracy; it is also disastrously inflationary.

Just as it is very difficult for a government to reform a system of trade unionism within a 3 year term of office, so it is difficult to embark on many valuable projects, especially those that are unpopular in the short term. To remain in government a party or coalition must, by definition, be popular at least once every 3 years, but in practice more often than that. For example, there are Federal elections both this year and next year. So, on one side there are measures which are responsible but unpopular and on the other side there are frequent popularity contests. No wonder there is in this country a preponderance of ad hocery in Government policy. No wonder the public servants get the upper hand over Ministers who must, because the system forces them to do so, keep a sharp eye on popularity. This is basically undemocratic and disastrous for the country and 1 shall enlarge upon this in the debates on the Estimates.

To give democracy a chance, serious thought must be given to constitutional reform permitting governments to hold office for more than 3 years. 1 am not able to say what the best term of office would be. This is a matter for careful assessment by experts from various backgrounds. Someone - preferably the Government and Opposition acting jointly - should commission an evaluation of this matter. After all, sound government is something which we all believe in. or at least profess to believe in. I hasten to point out that lengthening the term of office is but one of a considerable number of measures needed to make democracy work. In my speech on the Budget of 21st August 1969 I outlined other changes. My burden on that occasion was principally to examine the proposition that 'our democracy is not getting the most out of the skilled manpower that sits on the back benches of the 2 chambers'. 1 advocated that back bench members be activated and given opportunities to acquire specialised knowledge in selected areas of government so that a better control could be exercised over public servants, so that future Ministers could be trained and furbished with administrative skills and so that the morale of back bench members could be maintained at the highest levels.

Since that speech in 1969, to my pleasant surprise, worthwhile moves have occurred in the right directions. The committee system which 1 strongly commended has grown enormously in influence, notably in the Senate. Even more gratifying was the appointment of trainee Ministers - something quite close to what 1 was advocating in 1969. 1 do nol review my 1969 remarks with the purpose of claiming credit; it would be improper to imply that my remarks and subsequent events were connected. But I want to register the fact that we are moving forward, not backward, so far as democracy in Australia is concerned. However, there is a long way still to go. For example there has been an incredible expansion in the Public Service. Money, which could and should stay with the taxpayers or go to the poor, the pensioners, the sick and the education of our children, is being wastefully sucked into the bottomless pit of the Public Service. Since I last spoke on this subject in 1969, the Commonwealth Budget has risen from $7,000m to $ 10,000m or by about 41 per cent. In the same period the cost of running departments has risen by 50 per cent. I support this Budget and oppose the amendment moved by the Leader of the Opposition but in doing so I register a plea that what I have said in support of the Budget be heeded by both the Government and the Opposition.


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







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