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Thursday, 28 August 1980
Page: 940

Mr Barry Jones (LALOR, VICTORIA) - This is the last Budget ever, I believe, of the Fraser Government and certainly the last before the 1980 election. This election will obviously be fought in presidential style. Over the past few years elections in Australia have been increasingly presidential rather than parliamentary in nature. That is greatly to be deplored. It is impossible to distinguish between the credibility of this Budget and the credibility of the Prime Minister (Mr

Malcolm Fraser) who leads the Government. In the election contest coming up the Prime Minister utterly lacks personal credibility with the electorate. His assurances simply cannot be believed. In fact, his accuracy is in inverse proportion to the vehemence with which he makes promises. He is recklessly indifferent to the truth, callous in his attitude to the poor and the weak and committed to the philosophy of winning at any cost.

The Prime Minister refers sometimes to the democratic processes and speaks, as he spoke today when talking about the revolt of trade unionists in Poland, as if he is in favour of working people being able to protest; but in fact he talks cant and humbug. He is the most arrogant and the most confrontationist Prime Minister in our history. This is the political leader who won supreme power in his own party by his use of the knife. He knifed John Gorton in 1971. He was of little help to the right honourable member for Lowe (Sir William McMahon) in 1972-73. He sandbagged and knifed Billy Snedden, as he then was, just as he later knifed Sir John Kerr and Reg Withers, both of whom had helped him claw his way to the top. He is the politician who tore up 75 years of constitutional usage in persuading the Senate to block the passage of the Budget. He created a situation in which political stability was to be put at risk every time that one party had a majority in the House of Representatives and another party had a majority in the Senate or there was an even division. Malcolm Fraser was a consenting adult in the perversion of vice-regal power in a way that was never contemplated by the founders of the Constitution.

In his pragmatic but unprincipled party, the right honourable gentleman not only survived but also appeared to prosper for the most pragmatic of all reasons - he was a winner. He had the killer instinct and after every crunch so far he has won. But mounting unemployment, the senseless rigidity of the pension policy he has pursued, his failure to provide properly co-ordinated services in cities, the gross and growing inequality of wealth, the mounting tax burden in the community and the elitist nature of our education system which perpetuates poverty and incapacity among the poor all add up to a terrible indictment of this Government and this Prime Minister. I know what the verdict of history will be.

Mr Cohen - Give us his bad points now.

Mr Barry Jones (LALOR, VICTORIA) - The best thing that can be said about him is that he is coming to the end of his term. I expect that the voters of 1980 will take the same view.

I want to make some reference to the taxation philosophy that goes through the current Budget. There are four outstanding myths about taxation in Australia which must be dispelled. Myth No. 1 is the idea that Australia's taxes are among the world's highest. The reality is that in comparison with other economically advanced nations, such as the members of the Organisation for Economic Co-operation and Development, Australia's taxes are at the low end of the scale. Myth No. 2 is the idea that the Fraser Government is committed to tax reduction. The reality is that tax rates have been higher under the Fraser Government than under any other government in Australia's history, both absolutely and relatively. Specifically, they are far higher than they were under the Whitlam Government. Myth No. 3 is that Australia takes excessive amounts from the productive sector of society and redirects them towards welfare recipients. The reality is that Australia is the meanest affluent white capitalist country in the world, devoting only 1 2.8 per cent of output to welfare - far below that of the United States, the United Kingdom, the Scandinavian countries, the Netherlands and Belgium, West Germany and France; although we are fractionally ahead of Spain and Portugal. In Japan, many welfare schemes are paid for directly from the private sector.

Mr Cohen - And Haiti and the Dominican Republic.

Mr Barry Jones (LALOR, VICTORIA) - One could hardly describe them as white capitalist countries. Myth No. 4 is that high taxes cripple initiative and that tax reductions lead automatically to stimulus of business activities. This is a very widely held myth but there is really very little evidence to support it. The reality is that Australia, internationally, has low taxes, but it also has a very low level of initiative, creativity and enterprise. That suggests that our failures in that area are due to factors other than the tax rates.

I draw attention to the very valuable report of the Senate Standing Committee on Science and the Environment on industrial research and development in Australia. The Committee reported that, while our overall expenditure on research and development is comparatively low among Organisation for Economic Co-operation and Development nations, it is not at the bottom of the scale. Figures 5.1 and 5.2 in the Committee's report contain graphs and I regret that this material cannot be incorporated in Hansard in that form. Figure 5.1 shows that in respect of patents granted world wide in 1975 per million population Australia ranks eighteenth out of 24 nations in the survey. Whereas Switzerland, for example, has something like 2,500 patents granted world wide per million population, so far as one can judge from the graph Australia appears to have about 1 50 or 200. Figure 5.2 shows the number of patents granted world wide in 1975 in thousand millions of United States dollars of gross domestic product. In this case Australia ranks twenty-first out of 24. Whereas Switzerland again has 300 patents per $ 1,000m, Australia has approximately 30.

Mr Cohen - What about energy research?

Mr Barry Jones (LALOR, VICTORIA) - Our performance in energy research- in almost any area of research that one cares to name- has been pathetic. What this reflects is a certain recessive quality in Australia which makes us reluctant to seize initiatives.

It is appalling when we reflect on the extent to which the commanding heights of our economy are in fact controlled overseas. It is astonishing to compare Australia's performance with that of Sweden, with a population of only eight million, not much more than half, of ours. Sweden has an apparent disadvantage which, paradoxically, is an advantage. Sweden has its own cultural tradition; its people have grown up with their own language, and have developed a degree of cultural intensity. They also do a great deal of research which we should emulate. Australia is in a curious position. We are part of the richest world market. We make up only four per cent of the English speaking world. That means that whilst theoretically we have access to this enormous market, the contrary is also true. We can be swamped, we can be overwhelmed, by that 96 per cent of English speaking people outside Australia.

Think of these Swedish names which are famous through the world, Electrolux, SKF, Bofors, Volvo, Saab and L. M. Ericsson. These are Swedish multinational companies, from a country with only eight million people. I once did a trot around Parliament House to count the number of Volvos and Saabs that were parked outside here. I counted 35 in the parking area.

Mr Leo McLeay (GRAYNDLER, NEW SOUTH WALES) - I have a Falcon.

Mr Barry Jones (LALOR, VICTORIA) - The honourable member of Grayndler would be disappointed to know that if one goes outside the Riksdag in Stockholm one cannot find even a single Holden.

Mr Cohen - Did you trot around the Riksdag?

Mr Barry Jones (LALOR, VICTORIA) - It is one of my favourite parliamentary buildings. In Australia the commanding heights in our economy have been sold out. The commanding heights of the Australian economy - coal, copper, aluminium, uranium, motor manufacturing, food processing, advertising, computers, drugs, chemicals, plastics and petrol- all have one thing in common: We have lost national control over them. That is not to deny that there are obviously some advantages in terms of technology transfer that we receive when foreign capital comes in. But we have manifestly lost the capacity to make decisions over our own economic destiny.

Just as there are advantages in the concept of moving more and more into a global economy with an international division of labour there are also dangers. There appear to be enormous advantages. But there is also great risk that we will lose control of our national destiny. There was a very significant example of that recently in the closure of the Pagewood plant of General MotorHolden's Ltd. That decision was not made by the Australian Government. It was not made by the New South Wales Government. It was a decision made in Detroit and that information was simply passed over to us by telephone.

I refer just for a minute to the amount of gross national product taken in taxation. It is very striking that in Australia 29.5 per cent of gross domestic product is taken up in taxes. In Sweden, the comparable figure is 53 per cent. Nevertheless the Swedes are able to penetrate world markets. For capital the Swedes have been very careful about excluding foreign investment. The greater social instrument used in Sweden is the national superannuation fund. Very little of its economy is nationalised, run by government departments, by government corporations or qangos.

In Sweden, characteristically, all contributors to the national superannuation fund have sums deducted from their salary each week which go into the largest single investment fund in Sweden. It is one of the largest investment funds in the world. The fund buys shares in all the Swedish corporations, but it does not hold a controlling interest. I do not think it has anything like a controlling share. The proportion is generally about 1 5 per cent to 20 per cent. But that does give it the right to elect someone on the board of these companies. It means, of course, that trustees acting for the contributors to the fund and the management of the fund have a great thing in common. They want to maximise profitability to provide the greatest possible return to contributors and investors. That is something we need to look at very seriously in Australia. Some constitutional problems would have to be overcome. We have to think very carefully about how we are to provide for the citizens of Australia, particularly the aged, those forced into retirement or those who retire voluntarily. We need to examine whether it is possible to follow the Swedish model to avoid inordinately high taxation rates.

In Sweden, 53 per cent of gross domestic product goes to taxation. In Holland the figure is over 46 per cent, in France and Germany about 39 per cent each and in the United Kingdom over 36 per cent. I repeat that the Australian figure is 29.5 per cent. Among the relatively industrialised countries only the poorest - Greece, Portugal, Turkey and Spain plus Japan, where many of the welfare services are provided by private firms, rank behind us.

Mr Cohen - The Treasurer has been going round saying that we are a low tax country.

Mr Barry Jones (LALOR, VICTORIA) - Relatively speaking, we are a low tax country compared to the industrialised Western world. In terms of our Australia, this is the highest taxing government in the history of the Commonwealth. The legend that was propagated was that the Whitlam Government was an extraordinarily high tax government and this Government was pledged to reduce taxation. The reality is quite the reverse. I would like to quote again from Hugh Stretton, who was quoted earlier in the debate by the Deputy Leader of the Opposition (Mr Lionel Bowen). Hugh Stretton refers to backlash against high tax which he points out is highly mythological. He comments: . . look at the latest OECD table of welfare spenders. At the top are Scandinavia, the Low Countries, West Germany and France - the whole of north-western Europe - all using more than 20 per cent of national output for welfare purposes, and all but Denmark effectively free of backlash. Next, but some way behind, comes the United Kingdom at 16.7 per cent, with some recent backlash and tax revolt signified in the election and the reactionary policies of the Thatcher government. Drop a bit further to the rather meaner 1S.7 per cent that the United States devote to welfare, and you find that the backlash has been running for two or three years, since the Californian Proposition 13.

I might add to that that some of the more recent referenda that have been conducted in the United States have indicated a defeat for Proposition 1 3-type referenda because voters recognise what that proposition means. If taxes are cut back it means that the people do not get their garbage collected, they do not get their streets cleaned and they do not have buses for their children to go to school. That is the reality. Stretton goes on:

Get right to the bottom, to the meanest affluent white capitalist country in the world, which is Australia devoting 12.8 per cent of output to welfare, and you find, as you might expect, that the meanest country effectively invented the welfare backlash and pioneered the reactionary shift in the pattern of taxation. Both movements have been led by the Fraser government for four years now.

So the myth that tax revolts are caused by 'welfare overload' is obvious rubbish. The opposite is nearer the truth - the generous countries do not have backlashes, the mean countries do.

I want to draw attention to the reality of what unemployment and cutbacks on welfare mean when we look at specific electorates in Australia. When we talk about the economy we often aggregate figures, running them together instead of disaggregating them. If we look at unemployment for example, the real point where suffering is experienced is not in the broad. It is experienced in individual electorates. I seek leave of the House to incorporate two tables in Hansard. I spoke earlier to the Minister for--

Mr Hodges - The Minister for Health.

Mr Barry Jones (LALOR, VICTORIA) - I spoke to the Minister for Health earlier and sought his approval to incorporate two tables.

Mr MacKellar - You did not, you know.

Mr Barry Jones (LALOR, VICTORIA) - I spoke to the Minister for--

Mr Hodges - The Minister for Primary Industry.

Mr Barry Jones (LALOR, VICTORIA) - I sought approval from the Minister for Primary Industry to incorporate two tables.

Mr Hodges - You would not have won PickaBox on that.

Mr Barry Jones (LALOR, VICTORIA) - I have the flu, like everybody else.

Mr Hodges - Surely that does not affect your thinking.

Mr Barry Jones (LALOR, VICTORIA) - Yes it does. I seek leave to incorporate in Hansard a table of figures taken from the 1976 census, corrected to 1977 boundaries, giving profiles comparing Kooyong, one of the prosperous Liberal electorates in the eastern suburbs of Melbourne, and Lalor, one of the electorates in the deprived west of Melbourne.

Leave granted.

The tables read as follows -

The 1976 Census figures (corrected to 1977 boundaries) give the following electorate profiles:



Mr Barry Jones (LALOR, VICTORIA) - I thank the House. When honourable members pore over these figures tomorrow when they get Hansard, they will see the nature of the problem. Lalor illustrates the problems that arise by failure to adjust to structural change and the inevitable limitations of a restricted educational base. If it is taken for granted that boys leaving school will work in factories and girls will work in supermarkets- jobs in both areas are being cut back by new technology - then youth unemployment must increase. Figures released by the Commonwealth Employment Service understate the extent of unemployment in Lalor. Unemployed women whose husbands are working may not register with the CES. Girls from ethnic families who cannot find work often are absorbed within the family and do not register. In February 1980 the CES branches in Lalor reported 5,828 registered unemployed with only 86 vacancies. The only CES branch in Kooyong, at Camberwell, serviced a very large catchment area in the eastern suburbs. In February 1980 it reported 2,713 registered unemployed with 107 vacancies of which about two-thirds could be attributed to Kooyong. This illustrates the class and regional basis of unemployment in Australia. That fact has to be grasped in our social planning.

Mr DEPUTY SPEAKER -(Hon.Ian Robinson) - Order! The honourable member's time has expired.

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