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Wednesday, 30 August 1972
Page: 965


Mr LLOYD (Murray10.7) - In this debate the honourable member for Bendigo (Mr Kennedy) has spoken basically on rural credit and rural unemployment relief. He presented a mass of statistics in his best educationist style but he should realise that they are no substitute for an understanding of the rural problem. If rural credit is so important to the Labor Party why has the alternative Prime Minister, the Leader of the Labor Party and Leader of the Opposition (Mr Whitlam), failed to mention it at all in his Budget speech? The honourable member for Bendigo also criticised the rural unemployment relief programme because it was being used to employ people in country towns when it should have been going, he said, to the farmers. I am sure that many people in the country cities and towns would be very pleased to hear of that lack of concern by the Labor Party for their welfare. The Opposition believed until the revaluation blunder of last week that it would form the next government of Australia. Therefore its criticism of this Budget and more importantly its alternative proposals should be of considerable interest to the people of Australia.

In the Budget the Government has clearly stated to the Australian public its priorities of expenditure. It has indicated its intention to tax people as lightly as possible and to maintain and to encourage the federalist system, as is shown by the large increases in revenue grants to the States. The Australian people have every right to ask what are the priorities of the Opposition. Prior to the Budget the public would have been confused by the numerous and often contradictory statements about what Labor would do, made by the various shadow Ministers or by Opposition members competing for possible ministerial positions. In the speech of the alternative Prime Minister on the provisions of the Budget the least that Parliament and the Australian public could expect was to hear specific proposals in priority areas. But what did we hear? I do not ask honourable members to take my word for it. An article in the 'Australian' of 23rd August stated:

It is a pity that Mr Whitlam's Budget speech to the national Parliament last night was practically devoid of economic content. . . . Mr Whitlam presents a grand vision of increased public spending over a wide range of areas which are highly desirable.

However he does not give any indication of priorities except to agree with the Government that the means test should be abolished over three years and 'in future Labor Budgets the education sector will be the area of greatest growth*.

If honourable members do not like the Australian' I shall quote an article written by Maximilian Walsh which appeared in the

Australian Financial Review' on 23rd August. The article stated:

Opposition leader Gough Whitlam's Budgetcumelectioncampaign speech to Parliament last night failed to stir either his supporters or opponents.

Written in classical Whitlam-esque style - a mixture of pedagoguery and secular evangelism - the speech was delivered with a metronomic precision.

For different reasons, both sides of the House appeared to see it as bland and bordering on the irrelevant.

The Leader of the Opposition was not specific. He gave no order of priorities and said nothing to bring order to the uncoordinated statements of the shadow Ministers. Nothing was said either about financing the lavish promises. Sales tax cannot be increased by a future Labor government because his speech contained a commitment to lower sales tax. As one newspaper said, soaking the rich' will not provide the necessary extra income; there are not enough of them.

Therefore, the taxes paid by the average income earners will have to be increased it a Labor government is ever in power. These are the very people - the average people of Australia, the average income earners in the metropolitan seats - that the Labor Party hopes to seduce. And what a seduction this would be when the Budget provides at least a 10 per cent tax cut for these people. Labor's proposals, if logically sorted out, would necessitate a tax increase of at least 10 per cent not on the new Budget proposals, but on the tax scale operating prior to these Budget cuts. In other words, under a Labor government there will be an increase of approximately 20 per cent in taxation. Once again, there is no need to believe me on this matter. The editorial of the 'Australian' of 24th August 1972 states:

If Mr Whitlam is elected to office and keeps all his promises, he will have to find finance for boosting pensions to 25 per cent of average earnings; ending the means test; handing out an immediate $100 million to pensioners and unemployed; reducing sales tax; raising unemployment benefits; extra spending on schools and hospitals; pre-school education; free university education; a national insurance schema; and regenerating urban public transport The inescapable conclusion is that Mr Whitlam will not be cutting income tax; he will be raising it, by 10 per cent or even more.

If one does not want to believe the Australian' one has to turn only to the This Day Tonight' programme of 7th August in which Labor's Shadow Treasurer, the honourable member for Melbourne Ports (Mr Crean), indicated in an interview that Labor's idea of somebody whose taxes would be increased is somebody earning about $90 a week or more - in other words, barely the average income earner of Australia.

Above all this criticism of taxation is the irony that the alternative Prime Minister criticised the tax cuts to be introduced by the Government in the following way:

Taxation is not down. The rate of tax increases has merely been taken down a notch. The process of pushing the low and middle income earners into ever higher tax brackets by leaving the tax schedules fundamentally unchanged is to continue as damagingly as ever.

His criticism was that the tax cuts of 10 per cent on average were not meaningful when it is obvious that, if the Labor Party were in power, ft would have to increase taxation by about 20 per cent. The Leader of the Opposition criticised these tax cuts in a way that precludes Labor, if it is ever successful at an election, from taking advantage of the natural growth in tax revenue.

So, if Labor is successful and is to carry out any of its promises, taxation will have to be increased markedly, unless of course present Government expenditure as outlined in the Budget is significantly reduced in certain areas. However, nobody on the Opposition side has said that Labor is prepared to reduce expenditure on any of the Budget items. But perhaps if one listens to the shadow Ministers, who may be better called the sparring partners fighting over the monetary cake, certain clues emerge. Anyone who listened to the honourable member for Oxley (Mr Hayden) and the honourable member for Dawson (Dr Patterson) at and after the Launceston Conference would realise that rural support will suffer. But the honourable member for Dawson also weakens in his concern for rural industries when the going really gets tough. I quote from the speech made by the honourable member on 17th March 1971 in relation to the wool situation. He said:

The Australian Wool Commission has panicked because of its failure to bludgeon the wool market into accepting higher prices. Grave fears are now arising that the Commission's activities could wreck the entire economic foundation of the wool industry.

This speech was made at a time when the underpinning of the activities of the Australian Wool Commission by this Govern ment was the cornerstone that brought about a resurgence of confidence in the wool industry and higher wool prices. Yet at the height of this crisis we heard the great spokesman for the rural wing or rump, as it is sometimes called, of the Labor Party preparing to scuttle the ship.

The alternative Prime Minister does not actually mention any primary industry in his speech so, in a negative way, he appears to confirm what the honourable member for Oxley believes, namely, that too much is being spent on rural matters. But how happy can the honourable member for Oxley be when his diligent preparation of a national superannuation scheme in conjunction with the abolition of the means test, which was costed over 6 years and which required an increase in taxation of 2.73 per cent to finance it, was overnight reduced from 6 years to 3 years? If honourable members do not believe what I say about the cost of the scheme I shall quote from the speech of the honourable member for Oxley on the Budget last year. It appears in Hansard of 9th November. He was talking about introducing a superannuation scheme. The Minister for Social Services (Mr Wentworth) had interjected to correct a figures and the honourable member for Oxley said:

Yes, $l,800m. We are already providing something over $700m in current outlays and the extra cost is only about $l,000m.

Of course, that is about 10 per cent of the total Budget expenditure. The honourable member for Oxley continued:

Let us weigh this up against the fact that insurance claims for income tax deductions in 1966-67 exceeded $565m.

I think that to be fair I should include the remark about income tax deductions for life insurance because it also confirms another suspicion that is gaining credibility, namely, that if the Labor Party is elected to office, it will cut out the tax deductibility of life insurance premiums. If the Labor Party intends to do this it should let the people of Australia hear about it.

However, overnight this diligently worked out proposal of the honourable member for Oxley which was costed over 6 years has been altered by his Leader to 3 years to match the Government's proposals. No reference was made to the shadow Minister or to Caucus or, more importantly, to the Federal Labor Executive by the

Leader of the Opposition before altering these figures. Incidentally, where does this leave Labor's superannuation scheme, which was an integral part of the abolition of the means test? Does it mean that it now has been dropped or does it mean that, in view of the fact that the scheme has been reduced from 6 years to 3 years, we will have to double the extra tax level to implement the scheme to over 5 per cent for that matter alone? Perhaps the alterative Prime Minister was only expressing his personal opinion and was not expressing the policy of the Labor Party when he spoke about abolishing the means test in 3 years.

What about Labor's national health scheme which, on present costing, will require an increase in income tax of 1.35 per cent? What about the $100m direct grant promised in the speech on the Budget by the Leader of the Opposition? Is this $100m to be in addition to the increases in age pensions to 25 per cent of the average income? This proposal would cost about an extra $120m. The alternative Prime Minister also hinted at massive finance for the cities and local government but again nothing specific was said. He also gave a very strong hint of increased Commonwealth control in the dread field of centralism. The Leader of the Opposition stated:

Any function of our society will grow in strength, quality and equality to the extent that the Commonwealth involves itself. But if Commonwealth involvement is limited just to providing cash, then there is no true national commitment at all to promoting the quality and equality of that community service. It is not enough for the national government to help in paying fees for doctors, for hospitals or for schools. That does nothing to reduce costs or to improve equality. The national government must involve itself in planning the service, and in the services themselves, not merely the costs.

In other words he is talking about taking over the role of State and local governments. Perhaps the desire of the Opposition to extend Commonwealth control in these fields can be explained by another article in the 'Australian' of 25th August which is headed: 'A.L.P. money man out of the shadows' and which is an interview with the ALP shadow Treasurer. I quote from the article in which the shadow Treasurer is reported to have said:

Of course it is a different matter with local government. Many of these people could not run a school pie stall efficiently and it is obvious that there is a need for new administrative arrangements here.

If the Labor Party believes that local government could not run a school pie stall efficiently why does not it say so? Perhaps that is just the personal opinion of the shadow Treasurer and not Labor Party policy at all.

These free wheeling statements are not restricted to finance either. What about censorship? The shadow Minister sees no need for censorship at all. Has anybody contradicted him? Does that mean it is Labor Party policy or is it his personal opinion? Last weekend we had an interesting exchange on Scientology. The shadow Attorney-General wants it; the Opposition Whip does not want it. Are both these views personal opinions or Labor Party policy? But the greatest inconsistency of all these things is not as between the alternative Prime Minister and his shadow Ministers, but in the speech on the Budget by the alternative Prime Minister himself. He was very critical of the present level of unemployment but he implied in his speech that our currency should be appreciated, and he has confirmed this on several occasions since. Everyone, including the honourable member for Dawson, agrees that this would lead to increased unemployment. Only the alternative Prime Minister's parallel initiative on tariff cuts by government action in place of Tariff Board recommendations could increase unemployment more rapidly. Not only would this mean massive unemployment but a direct contradiction of the increasingly super protectionist policy of his shadow Minister for Trade. Are these personal opinions or policy?

The Australian public has 2 choices when looking at these series of proposals in the speech of the alternative Prime Minister: Either to accept all these propositions at face value - I am sure that he would want them to do that - but with them accept increased taxation, increased unemployment and a real drop in the living standard of Australians; or to believe, justifiably, that the things proposed, like revaluation, and the whole Budget speech of the alternative Prime Minister and the promises of shadow Ministers are only personal opinions and not to be taken seriously at all. I support the Budget.







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