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Thursday, 28 August 1980
Page: 921

Mr MALCOLM FRASER (Wannon) (Prime Minister) - The Deputy Leader of the Opposition (Mr Lionel Bowen) really did not entirely do himself justice. He spoke a few moments ago about roads. He ignored the fact that we have begun the largest ever five-year program of assistance for roads - an amount of $3,650m over a five-year period - which will enable longterm planning to take place. We have increased the funds available for local roads and for national highways. This will be a very considerable advance.

The honourable gentleman went on to say that he would again try to promise cheaper petrol to the consumers of Australia. But he did not say - one could expect him to try to hide it- that cheaper petrol now would be about the most selfish policy that this generation of Australians could possibly embark upon. It would be very easy to use up all the Bass Strait reserves now. That would make life easy for us. But what about our kids in 10 years' time or 20 years' time as those Bass Strait reserves start to run down? They would then have to go through an adjustment process infinitely harder than anything being asked of the honourable gentleman today. In his heart he knows it. He is too decent a bloke not to know that he is doing nothing other than playing politics with this issue. In his heart he knows that our policies are not only right but also very necessary for the people of Australia. In his heart he also knows- because he has a good heart- that it is our policies which will bring on the Rundle shale oil deposits with a pilot plant worth $300m or $400m which, if successful, will come on stream as the Bass Strait reserves start to run over the edge of the cliff. In those circumstances we will have a situation in which there will be security and independence for Australia in the future and we will be making a decision- we have made decisions- which will make this country a better and more secure place for our children. The honourable gentleman should be supporting us in it.

Today at Question Time I said something about Vietnam and Kampuchea. I do not wish to add to that except to say that it is ironic and odd that the honourable gentleman was taking a stance - I know that he did not mean it because he was just being political - which could only give comfort to Heng Samrin and to Vietnam and its invading armies in Kampuchea. What really is the point of Australian taxpayers providing aid for Vietnam itself when, if Vietnam stopped its aggression and turned those 220,000 soldiers in Kampuchea to tilling the fields and growing rice, it would need no damned aid? But the honourable gentleman would not suggest that. We tried earlier to give aid to Vietnam and many other parts of the world did. Vietnam rewarded us all with an invasion of Kampuchea and further suppression of a people who had been treated in a dastardly, terrible and brutal way by Pol Pot. The honourable gentleman owes it to himself, if he does not owe it to the Australian Labor Party, to put those issues in the course of this debate.

I really want to speak about the Budget, which is the subject of this debate. Twelve months ago the Leader of the Opposition (Mr Hayden) described last year's Budget as without doubt the most contractionary in the 1 8 years he had been a member of the Parliament. Perhaps the first thing I should do is to welcome his declaration that this Budget is also a contractionary Budget. If he is as wrong about this year's Budget as he clearly was about last year's, we can look forward to another very good year indeed. His outdated and discredited diagnosis on Tuesday evening ignored the fact that in circumstances of continuing inflation the key elements of the Government's Budget- limiting the growth of the Commonwealth Budget outlays and, through the further substantial reduction in our deficit, reining in the public sector borrowing requirement- not only allow the expansion of the private sector but also offer the only chance for sustainable economic growth in the 1980s. That is the choice before us. Do we want sustainable economic growth, through the containment of inflation, that has been secured by the Liberal-National Country Party Government or do we squander our hardwon gains through big spending, big deficits and high inflation which Labor guaranteed us on Tuesday evening?

The year 1979-80 brought Australia further along the road to national economic recovery with a Budget which, by the Leader of the Opposition's standards, was much more contractionary than this year's Budget. Yet for the second year in a row, in 1979-80, growth accelerated notwithstanding the adverse effects of industrial disputes on output in the second half of the year. The public sector contributed less than one-quarter of one per cent to the growth in non-farm product of over 3 per cent. Even that cartoon figure Blind Freddy- a character not unknown to the Leader of the Opposition- could not have failed to see the strengthening of the economy last year. Let me remind the Leader of the Opposition that at the time of last year's Budget he said:

If my assessment of economic growth is correct- it was last year- there will be less than 2 per cent growth for the year in the non-farm sector.

How does what the Leader of the Opposition said then tally with the facts today? The increase of 3.1 per cent in non-farm growth - not the 2 per cent predicted by the doom mongers of the Labor Party- was one percentage point more than in 1978-79. Employment in the 12 months to July this year rose by 212,000, the highest annual increase for 10 years. The Leader of the Opposition promises an increase in some policies of 50,000. In other policies he promises a growth in employment of 100,000 over the year. We have provided a growth of 212,000 through our policies. That is real job creation, real growth and real wealth instead of the phony programs which would be a charge on the taxpayer, which would increase inflation and which, thereby, would increase unemployment. Real private investment in dwellings was over 10 per cent higher last year. Consumer spending strengthened over the course of the year, rising in real terms at an annual rate of 2.9 per cent in the second half. Exports increased in real terms by no less than 14.5 per cent for the year as a whole. Private sector external transactions recorded the largest surplus since 1 972-73.

Just as important as this strengthening year by year was the strengthening in the course of the year when internally generated demand took over from exports as the major impetus to growth. These are unchallengeable achievements. What the Leader of the Opposition did not say on Tuesday evening was that the interdepartmental committee on economic strategy recorded:

There is general agreement about the appropriateness of the overall economic strategy. It is agreed that no substantially different alternatives are available.

As a nation we have come a long way since 1975, the Hayden days, when total economic disorder and investment decay were created through the same economic prescription that was paraded before us on Tuesday evening. Labor in the 1980s is Labor in the 1970s recycled. This Government has laid sound foundations for the economy in the face of a difficult and demanding legacy. As a result we are on the edge of what is potentially one of the most exciting eras of economic development in Australia's history. Certainly there will be difficulties in realising that potential. Above all, we will need a continuation of the right policies. In particular, we will need a continuation of a firm policy stance from government to make sure that inflationary pressures are contained, for the containment of inflation must remain the principal economic priority of government if the well being of all Australians is to be secured.

The Labor years taught us bitterly what many economies throughout the world are now learning, that inflation has the capacity to destroy our living standards; that inflation will destroy our national confidence, our capacity and our will; that inflation strikes at those least able to defend themselves- the old, the sick, the disadvantaged and the low income earners; that inflation - as it did in the mid 1970s- cripples investment, development and business expansion on which our national wealth depends. The interdepartmental committee report on economic strategy further confirms our policies when it says:

Realisation of the investment potential depends most importantly on maintenance of a stable economic environment through firm anti-inflationary policies conducive to foreign as well as domestic investment.

That is why the first priority of economic management of the 1980s, ignored on Tuesday evening by the Leader of the Opposition, must remain the containment of inflation. A political party which does not attack the source of inflation is little better than a political party which ignores breaches of the law. Inflation robs people of their freedom and their security. Our success in the fight against inflation, in absolute and relative terms, is the cornerstone of the economic recovery that is now under way in Australia. The last thing we need in the period ahead is the so-called stimulatory policies of the Opposition which could lead only to a disastrous acceleration of inflation. The Leader of the Opposition has forgotten that, as Treasurer, in his own Budget in 1 975 he firmly declared: . . it is inflation itself which is the central policy problem. More inflation simply leads to more unemployment.

That was precisely the result of Labor's disastrous years. On Tuesday evening, Mr Hayden demonstrated that he does not even believe now what was written for him then. During his reply to the Budget he boasted that the cost of his programs had been hidden from no one. Let us just examine his statement 'hidden from no one' for a moment. He announced that five of the Labor programs, and a tax cut in one full year, would cost no less than SI, 435m on his own costings. Honourable members should remember that figure. But what he had hidden from everyone was the commitment he made on the radio program AM. What a wonderful way to make policies! It is the most expensive show on earth now.

The commitment he made on AM on 20 August was to raise pensions to 25 per cent of average weekly earnings with a further commitment in the longer term to increase them to 30 per cent of average weekly earnings. The total immediate cost of this to taxpayers - about $500m- was hidden from us in his reply to the Budget Speech. So that is one count. On the most conservative of estimates, Mr Hayden should have been talking last Tuesday evening of $2,000m and not the lesser figure. That hides from us the cost of all the other 250 Labor programs, and not one of them has been costed. Yet yesterday morning on radio Mr Hayden announced that the cost of the programs would be $835m. Of course, this is sheer myth.

The man who said that the cost of his programs would be hidden from no one conveniently hid from a national radio audience the cost of the tax cut, the cost of the commitment to increase pensions, and the cost of more than 250 other Labor programs. Which Mr Hayden are we to believe? Can the Labor Party believe that he is still committed to the 250 programs? Even without these do we believe the 20 August Mr Hayden, the $2,000m man, or do we believe the last Tuesday evening Mr Hayden, the $ 1,435m man? Or do we believe the last Wednesday morning Mr Hayden, the $835m man? Which is the real Mr Hayden? Which Mr Hayden are we being asked to afford and what confusion will the Labor Party try next? What deception will next be tried on the Australian taxpayer?

Let us take the figure of $ 1,435m which can be deduced from his speech in the House last Tuesday evening. One of the items listed in that speech was $180m for new jobs. Yet Labor's job opportunities program, announced in March this year, contains the following commitments:

The community service corps . . . $200m a year; The work program . . . $110m a year; private sector employment . . . $20m.

That is a total of $330m a year. Which Mr Hayden do we believe? The March $330m Mr Hayden, or the last Tuesday evening $180m Mr Hayden? But there is another Mr Hayden - the August 1977 Mr Hayden. On 1 1 August 1977 the now Leader of the Opposition, in company with Mr Whitlam - who I sometimes wish would return to this Parliament - announced a plan to place more than 50,000 people in work in a full year - not the 100,000 positions being promised now. Both those figures are much less than the 2 1 2,000 jobs we provided through our policies last year. But now we have 50,000 jobs rather than the 100,000 being promised now. Mr Hayden gave us some selections of cost in 1977. In a full year these costs were $800m gross and $550m net. That is only for 50,000 jobs. Yet in March of this year he was going to create 100,000 jobs at a cost of $330m. On Tuesday he was going to do it for $180m. No wonder one of his colleagues in the Labor Party in Queensland who love him so much was prompted to remark recently:

Bill Hayden I think is a confused man.

We will allow him his confusion. That is no justification for perpetrating this kind of deception on the working men and women of Australia at their expense. It is these people who have to pay for these promises. It is every taxpayer who has to pay for these promises. It is an expense which, on our costings, is $2,500m in only six areas of expenditure, with the cost of the tax cut to be thrown in on top of that and also the cost of 250 other uncosted programs. But we know how members of the Labor Party put their hands into the till.

The statement by the Leader of the Opposition last Tuesday evening was a statement of selective ommission. There is no mention of more than 250 programs to which that Party is committed. That commitment has been clearly enunciated by the Leader of the Opposition. In June this year he was unapologetic when he said:

What I do say is that we have the sanction of our platform to devise policies . . . and we are prepared to implement them as a government.

The platform and subsequent policy releases for over 250 programs involved massive spending of taxpayers' money. Aware of the overwhelming electoral opposition by taxpayers to having their money wasted on socialist planning, in a tape recording to Australian Labor Party members in

March this year the Leader of the Opposition said:

We have to present our policies in an attractive and digestable form . . .

Now this requires us to be selective.

Does this mean that Mr Hayden is going to hide some of his commitments from the electorate because he knows how unpopular they would be? How much of the taxpayers' money would be involved in the hydrocarbon corporation drilling dry holes? The fuel and energy commission again represents big money. The national superannuation scheme represents even bigger money and so does Medibank and a national investment fund. I could go on and on and big money is involved in every item. Where have we been given the costs of any of these commitments? Does this mean that because the Leader of the Opposition is afraid of losing votes certain policies will be ignored in an attempt to deceive the taxpayers of Australia? Does this mean that Mr Hayden is aware that if he announced all his spending programs together he would lose massive electoral support? Does this mean that he recognises the impossibility, the recklessness and the irresponsibility of the totality of the Labor package? Is this what Mr Hayden means when he says that he must be selective? The simple truth is that he has not costed the programs; he cannot cost them and, because of his fear of the electoral reaction, he will not cost them. This Government and this Parliament will not allow the Leader of the Opposition or his party the latitude of such selectivity. Let them stand up and be costed. They would not be worth much.

But the backdowns and the omissions from the Leader of the Opposition's statement do not end there. Less than two weeks ago, on 1 3 August, the Leader of the Opposition was reported as saying categorically: 'A Federal Labor Government would offer cheaper health insurance and lower petrol prices and sales tax' and 'Labor would also consider lowering income tax'. In the ultimate flight of fancy, the Leader of the Opposition said that these aims could be achieved in a 'trade-off with the union movement. What happened on Tuesday evening? The commitment of 13 August - about two weeks earlier- had evaporated. We were given no commitment, only options; and then only one of the three that had been promised only 1 3 days before. The Leader of the Opposition has no doubt awoken to the opposition within the electorate to his big spending proposals, but he is bound by the left wing of his party and the resolutions of its conference. He may seek to avoid mentioning Australian Labor Party commitments, but he will not be allowed to ignore them by his back bench, his shadow Ministry, the rank and file or the union movement. The consequences for Australia must not be taken lightly by this Parliament or by the Australian people.

The economic prescription outlined by the Leader of the Opposition on Tuesday evening is rejected by major industrialised countries; rejected by academics; rejected by the metropolitan Press; rejected by businessmen; rejected by the Organisation for Economic Co-operation and Development; rejected by the International Monetary Fund; rejected even by the Democratic Party of the United States of America; and, as the Leader of the Opposition should now know, rejected by the report of the Interdepartmental Committee on Economic Strategy. But it was once rejected by the Leader of the Opposition himself when he said:

Some might argue that a large deficit could be offset by a tough monetary policy - but this would mean greatly increased interest rates, disruption in financial markets, further depression of business confidence and serious company failures. That is an unacceptable option.

And again:

It is not possible to provide more and more Government services or transfer payments from the Budget without ultimately having to pay for them through cutting back after tax earnings via increased taxes . . . It is not possible to get quarts out of pint pots.

He is now trying to get gallons out of a thimble. Yet now the Leader of the Opposition says that he can increase expenditure and reduce taxes. How is he going to manage this? He told us on AM on Wednesday morning that deficits can be funded by an increase in the money supply' - in other words, go to the printing press. What great selfconfessed economic wizardry is this? It is no wonder that Clem Jones, the former Lord Mayor of Brisbane and one of the more successful Labor Party administrators in recent years, remarked:

It is recognised that Bill Hayden has admitted he cannot read a balance sheet.

The Leader of the Opposition wants three-yearly Budgets so that he can get Bill Hartley to tell him what the red figures mean.

The other significant omission from the statement by the Leader of the Opposition in his reply to the Budget Speech was the promise to increase taxes dramatically - a good promise. In December last year he reminded us that his revenue raising programs were 'somewhat more radical than had been outlined up to 1972'. He warned us then about our taxation future under Labor when he said:

.   . I have committed my organisation to a capital gains tax, a resource rental tax, a levy on domestic oil producers, a number of initiatives in the tax area -

That is a bit vague - and other measures of that nature . . .

In what constitutes an elaboration of the 'other measures' the Opposition's frankest spokesman on economic affairs has said that it is 'wrong' that we do not havesome form of tax on capital, be it death duties, capital gains tax, wealth tax or perhaps some kind of combination of those, or all three'. We have had it and we have been warned.

The Labor Party is now enjoying a renewed fascination with the concept of a capital gains tax. I recall the announcement by the then Government in 1 974 to introduce a capital gains tax, just as I recall the announcement of the abandonment of that intention five months later. The fascination with this general topic seems to be based on an unproven belief that there is a large number of relatively very wealthy people in the community; so much so that Mr Willis believes that $700m will accrue annually from this tax. That ought to be warning enough. What is one to make of such illusory revenue sources?

The so-called social contract promised a royal commission into income and wealth which 'would not be frustrated in its endeavours by uncooperative attitudes from those with something to hide'. There is no doubt that the fires of envy still burn very brightly in the Labor Party. But such taxation threats will not escape the attention of hard-working Australians for they would sound the death knell of enterprise, initiative and reward for effort and risk taking. They would put an immense and enormous burden on the working men and women of Australia. They would destroy economic freedom.

To complete Labor's picture of economic incredibility, the Leader of the Opposition announced that he and the union movement had achieved:

For the first time in this country ... a politicalindustrial agreement on procedures for an effective and economically sound policy covering prices, wages and non-wage incomes.

Hisstatement to the Parliament was not 24 hours old when the newspapers carried details of Australian Council of Trade Unions demands - in accordance with the agreement, of course- made before the President of the Conciliation and Arbitration Commission, demands which bore no resemblance to restraint but which obviously had the total endorsement of the Leader of the Opposition. After all, he had come to an agreement about it. As reported in the Press, they included demands for regular automatic wage adjustments based on movements in the consumer price index; on top of that, the right to collective bargaining; on top of that, the use of national productivity increases to further wage demands; and, on top of that, the pursuit of the 35-hour week on an industry after industry basis to be spearheaded in 22 industries around Australia. What disaster would that be? What disaster is the Leader of the Opposition supporting? This is presumably what the Leader of the Opposition calls 'effective and economically sound policy'. It was not surprising to read today that the ACTU senior vice-president, Cliff Dolan, has said:

.   . there is no social contract on wages between the ACTU and the Labor Party.

And he made it plain in the same report that there was no agreement.

It is perfectly clear that the union movement will not accept any limitations on its freedoms for the sake of Bill Hayden's social advancement. When to this lack of restraint by the union movement we add those provisions in Labor's policies which grant immunity to unions from penalties for strike action- actions that would place the union movement above the law- we have a clear picture of the nature of the special relationship that the Leader of the Opposition says he has with the union movement, lt was that relationship which led to award wages rising by 40 per cent and, in some cases, by more than 40 per cent in the year to March 1975. It was that relationship that forced unemployment to double under that Administration. I think that relationship between the Leader of the Opposition and the union movement is like the special relationship, and it is a good one, that exists between a ventiloquist and his doll - a slight twist from the left wrist and Bill's head nods up and down.

This Government will continue to work to reduce further both the share of resources taken by Commonwealth Budget outlays and the Budget deficit itself because we remain firmly committed to winding back inflation. Economic responsibility will continue to be our watchword. Strengthening private sector demand and pressure of rising prices from overseas over the last 18 months call for continuing firm fiscal and monetary policies in the period ahead if inflation pressures are to be contained and our inflation rate is again to resume its downward trend. We will be aiming, in particular, to secure a lower growth in the money supply this year with monetary policy playing an enhanced role. The 1980-81 Budget, in association with an appropriate monetary policy and with the co-operation of the great majority of Australians, is directed to making sure that this nation can realise the bright economic future that is now before us. Under this Government, under these parties, those prospects and Australia's potential will be realised in the 1980s in a way which will be the envy of nearly every other country.

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