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Wednesday, 27 August 1969

Senator WILLESEE (Western Australia) started off by twitting the Leader of the Opposition (Senator Murphy) with reading a set piece. If ever I saw an exhibition of a Minister delivering a set piece, I saw it from the Leader of the Government here during the last 33 minutes when he read his speech in defiance of the Standing Orders. I noted with interest that a ruling was given by a Country Party Chairman in favour of the Leader of the Liberal Party.

The DEPUTY PRESIDENT (Senator Drake-Brockman - Order! I do not want you to canvass my ruling. If you want to oppose it, you must do so in the proper manner.

Senator WILLESEE - I am not opposing it; I am praising it. I am merely saying that I like to see this co-operation at long last between the two parties. The Leader of the Government then went on to claim that the Budget was a synopsis of what is happening in the economy. He asserted that it detailed the state of the economy and outlined the Government's policy for the future. What he should have said, if he wanted to be accurate, was that the Budget should have done those things.

But on this occasion, of course, with an election looming, all these things have been thrust to one side in order to bring down an electioneering Budget, despite what the economy demands as the correct policy for the future. It is interesting to note the way in which the Government, by endeavouring to refute the things that have been said, is desperately scrambling back into its crease before being stumped out.

Surely no-one will argue that prior to bringing down the Budget the Treasury, under the leadership of Mr McMahon, was issuing all sorts of warnings. Why, in his own paper, the Treasurer referred to the hypertension that was creeping into the inflationary situation in Australia. Yet, when he was interviewed on television, the Treasurer declined to say that this was a deflationary Budget. He also declined to say that it was an inflationary Budget. All he would say was that he could not tell at this stage what it was going to be.

The Prime Minister (Mr Gorton) adopted a different attitude when he spoke the other night. Senator Greenwood seeks to interject. He has twisted enough words in the last few days. I shall be referring to some instances of that shortly, and he can just sit and listen to it. I will not overlook him. The Prime Minister had no such inhibitions as Mr McMahon had. He said that this was a deflationary Budget. And I emphasise that he said this after his own Treasurer had declined to say that it was deflationary. I repeat that the Prime Minister said that it was deflationary, that in effect it flew in the face of all the warnings that had been given prior to its introduction.

There is no doubt that it is a peripheral type of Budget, which proposes the distribution of money to people on the periphery. The Leader of the Government underlined or emphasised this fact in the set piece he delivered a short while ago. There is no doubt that the money will be going into quick spending hands. If that does not make it an inflationary Budget, I do not know what does. The Government boasts about the amount of money that it proposes giving to people on the periphery of the Australian economy. I agree that these people need it, and we applaud this action, but we say that if the Government had just taken up the slack in the value of pensions as caused by inflation over the last 12 months, at least half of the money that is provided for in the Budget would have had to be paid out on that one thing alone. If it now gives the inflationary wheel another quick spin by injecting this extra amount of money into the economy, we shall find in a few short months - with or without another Budget in the early part of next year if the Government is re-elected - that most of this money will be eaten up by inflation.

The Treasurer then by implication, seeks to justify this Budget by saying that even if it does have an inflationary effect the

Government has already taken steps to counteract this in that, by adopting other monetary means, it has been able to dampen down the inflationary trend. He points out that the reserves of the banks have been tightened and that interest rates have been increased. The Leader of the Government said that the increase in interest rates will not affect those people who are trying to pay off homes. I submit that if we increase the amount of money owing on homes in Australia it must increase the cost of living and put people buying homes in an almost impossible position. And these are not the periphery people; they are the ordinary young married people who are trying to buy their own homes.

But if the Government really had adopted these measures as a means of damping down inflation, one would have expected to see a Budget that complemented these steps, not counteracted them. This Budget, however, counteracts them. It will be most interesting to hear what the employers have to say when the national wage case is being heard. No doubt they will be saying to the judges hearing the case: 'For goodness sake do not grant an increase in wages because that will add to the inflationary trend'. If an increase is granted, I do not want to see the Government crying on our shoulders and saying: 'Ah, well, it was the Commonwealth Conciliation and Arbitration Commission that was responsible. It granted an increase in the national wage case and that is the reason why inflation is getting out of hand'. Incidentally, we do not look like having the national wage case heard before the election takes place.

In this Budget we obviously have an example of politics versus the economy. Government members may argue as they will; I am certain that if there were not to be an election this year this type of Budget would not have been brought down. There certainly would not have been any cut in defence expenditure. The proposed increases in social service payments are good to the extent that they go, but, after having had no little experience in this place, I have developed a tremendous distrust of policies introduced on the eve of an election. We all well remember the policy relating to housing grants which was dreamed up suddenly during an election campaign. For months after the Government was re-elected it was sending for experts from the Reserve

Bank saying: 'For goodness sake work out what we meant. What can we do to carry out our election promise?' Finally the Government came up with this grant of S500 after not having had the faintest idea of how it proposed to carry out its promise. Everybody, including the members of the Government, knows quite well that if the proposition had been given more mature consideration a dozen better ways of helping the people in Australia who are trying to buy homes could have been found. The policy that was adopted did nothing more in my own State than merely push up the price of land to the extent of the grant provided.

Honourable senators will recall what happened with the FI 1 1 aircraft. The decision to purchase these aircraft was taken on the eve of an election. Six years have passed and Australia still has not taken delivery of them. I would say that the Government has got itself into a greater mess over the Fill aircraft than any other government over any other matter. Day after clay honourable senators on this side of the chamber have been asking questions about the FI 1 1 aircraft. We are told to control ourselves and to be patient, because somebody has gone over to the United States to investigate the matter and a report is expected in due course. I refer to these matters because I believe that the money of the taxpayers should not be spent merely to gain votes. This practice can be far too costly in the long run.

After being in office for 20 years the Government has decided to do something about the means test. There is to be what is called a tapering of the means test. I wonder where the Government got the idea from at this stage. Was it because the Australian Labor Party had grasped the nettle and said that it would introduce a national insurance scheme within the space of two parliaments? Why did it do so? The answer is that the policies the Government has followed over the last 20 years no longer have any relationship to the needs of today. The Government does not realise the tremendous progress that has been made and the tremendous changes that have occurred. There is no doubt that the policy decision and the statements of the Australian Labor Party forced the Government to make its very tentative approach. 1 am still not clear about what the Government means when it refers to a tapering of the means test. The means test has a Jong history. Mr Menzies, as he then was, once resigned from a Cabinet because he said a national insurance scheme was near and dear to his heart. The government of the day turned its back on it. As a result, he said that in all conscience he could no longer be a member of a Cabinet that turned away from this great plank of the old United Australia Party platform. One of the Government's main planks in 1949 was that it would introduce a national insurance scheme. It has now made a hurried and partial attempt to remove some of the means test restrictions. The Government has to face up to this fact. It is trying to chide the Australian Labor Party over this issue. The Prime Minister said that the Australian Labor Party was not worrying about the areas of real need. He said that under Labor's scheme a lot of money would go to areas other than the areas of real need. What has the Government done? It has increased some pensions by $1 a week and at the same time tapered the means test. It is inescapable that as long as it keeps fooling around with the means test it will come up against the problem of the 'haves' versus the 'have nots'.

There is only one answer to the problem and that is the one which has been grasped by Mr Whitlam and the Australian Labor Party - look after the people on the low incomes and introduce a national insurance scheme to which people will contribute out of their earnings during their working life. That is the only possible way to resolve the matter. As long as a means test is applied we will have the problem of the people who have nothing. If the Government is to match the amount of money that people with incomes will receive under the tapered means test with the pensions for others it will have to do a lot better than increase by Si the pensions of those people who do not have any income.

The Leader of the Government in the Senate referred to health insurance. My note of the words that he used to describe what he terms the Whitlam scheme ends: In contra distinction to this halfbaked not understood proposal.' That was the way he described the Australian Labor Party's scheme. That is his opinion. Let me quote to the Senate from the report of the Commonwealth Committee of Inquiry into Health Insurance, which is known as the Nimmo Committee. The Nimmo Committee made forty-nine recommendations, but the Government has grasped only one half of one of them. That is all it has done in its health scheme proposals. For 20 years the Opposition has been telling the Government that it is operating a scheme that will rattle to pieces under its own weight. Over the years the Minister for Health (Dr Forbes) has been saying that it is the best health scheme in the world. If it is the best in the world why is he now revising it? Why did the Government set up an independent committee under the chairmanship of a man of the stature of Mr Justice Nimmo to inquire into health insurance? The Nimmo Committee made forty-nine recommendations. Let us have a look at its first findings. The Committee reported that:

The operation of the health insurance scheme is unnecessarily complex and beyond the comprehension of many.

I repeat that the Committee reported that it was beyond the comprehension of many.

Senator Bishop - Who said that?

Senator WILLESEE - The Nimmo Committee when reporting upon the health scheme that has been operated by the Government over the years.

Senator Bishop - The Minister for Supply said that it is a good scheme.

Senator WILLESEE - The Minister for Supply said one thing and the Nimmo Committee reported another thing. Honourable senators can decide which one they prefer. Let me quote some of its other recommendations. The third recommendation states:

The contributions have increased to such an extent that they are beyond the capacity of some members of the community and involve considerable hardship for others.

The fifth recommendation states:

An unduly high proportion of the contributions received by some organisations is absorbed in operating expenses.

According to the Government it is the best scheme in the world. The Government has not done anything to improve the situation in the 20 years that it has been in office. Now we find that, as I have said, it has accepted one half of one of the forty-nine recommendations of the Nimmo Committee. Honourable senators opposite talk about taxation. Is the present scheme not taxation in another form? After people pay taxation the Government says: 'We will not do anything for the health of your family until you contribute to an insurance scheme'. The Government has realised after 20 years that some people cannot afford to contribute to such a scheme. But it is only scratching the surface. What about the people who are in receipt of more than the minimum wage, which is roughly the figure the Government has picked, who fall into hard times? What about the people who, for honest reasons or a lack of 'means, cannot at some time continue to contribute although they have been contributing for a number of years. I have a letter on my desk at the moment from a person who was unable to insure himself during one year and, as fate would have it, that was the time he suffered serious illness.

A lot has been said about defence. I cannot follow the Government's thinking. In previous election years it said that it wanted to fight the Australian Labor Party on defence and foreign policy. On this occasion the Government reduces the defence expenditure. Somebody said that the reduction was a quirk of accounting. If honourable senators have 'a look at the Budget speech of the Treasurer I have no doubt that they will find that the defence expenditure has been reduced this year for no other reason but the forthcoming election. The Treasurer said:

The Army will be authorised to enter into forward commitments this year with the object of acquiring additional arms and armaments. This authorisation could involve expenditure of up to $60m next year. . . .

The sum of S60m a year is a large amount for capital equipment. If that sum is a down payment it is very obvious that a lot of money will be spent over the next 5 years. I cannot follow the Government's idea of a 3-year defence plan, a 1-year defence plan, a 'we are continually looking at it' plan or a 'we are having a rolling look at it' and so on. It becomes perfectly obvious that if it believes all of the things it has been saying about the downward thrust of Communism, the domino theory and the hungry hordes waiting to tear in upon us it should not be reducing its defence expenditure this year. Obviously it is reducing expenditure for election purposes.

The very thing the Government should be dodging is a stop-go defence policy. That should be avoided at all costs, lt fell into a trap with the Fill aircraft because of such a policy. Defence expenditure was pinned to $200m a year over the years. The Government tried to hold that down. Then it started to believe its own propaganda about Australia being ripe for invasion. On the eve of an election it rushed in to change to 'Go' the signal that had been 'Stop' for so long, and fell into this tremendous imbroglio of the Fill. One would have thought that if it wanted to taper off its defence expenditure it would have found plenty of other ways to do so. If one examines the Government's thinking one will see that there are tremendous gaps in its defence policy. I do not want to keep repeating it, because it is so obvious, but surely to goodness a defence base should be established at Cockburn Sound. A lot has been said about the presence of Russia in the Indian Ocean. The coastline of Western Australia is one of the longest in the world. It stands out as plain as can be that Cockburn Sound is the obvious place for the establishment of defence facilities. Here is an opportunity to begin this project. There have been feasibility tests lo enable us to go ahead and do it. The Government says that it proposes to do something at Learmonth on the central Western Australian coast, but it docs not make any provision for it in this Budget. Why mention it if the Government does not intend to do anything about it under this Budget? Here is an opportunity to develop projects such as that. If the Government believes all the things that it has been saying, that we are not ripe for invasion and that there is no immediate threat to Australia, that we are going to become friendly and quite cuddly with the Russians, here is the opportunity to spend money on these projects.

While referring to the defence statement I come back again to what I said - that Ministers have been making statements which have created quite a furore in the chicken patch. Backbenchers are running about now trying to get the chickens back into position because they do not want to have to use the old Com bogy. But because of the defence statement they are in a little trouble. Mr Freeth said something and a few days later on a television programme he changed it and said that he would not say the Labor Party is a bunch of Corns. A couple of days later still he said: 'I did not quite mean that. After all there are some, because they are ex-trade unionists and, of course, everyone knows that the trade unions are riddled with Corns from top to bottom'. At least that is the situation according to the Liberal Party. Senator Greenwood asked a question yesterday of which this was part:

Is it not a fact that, far from the Minister inviting Russia to join with Australia in a security pact or welcoming Russian activity to that end, the Minister has stressed that Australia's policy is and has been to promote co-operation and collective security among countries of South East Asia, of which Russia clearly is not part?

In a very brilliant answer Senator Anderson replied:

What the honourable senator says is undoubtedly true.

That was a set piece with plenty of research behind it. In the course of his speech Senator Anderson said: 'If words mean what they mean to the ordinary person', and so on and so forth. Let us take the words used by Mr Freeth and consider Senator Greenwood's interpretation of what is Australia's defence policy. We will take the words to mean what they mean to normal people. Mr Freeth said:

If co-operation can be maintained and strengthened among countries of the region -

He was speaking of South East Asia - including, of course, Australia - we will have made important advances towards ensuring that South East Asia will not be a source of weakness in the total pattern of world security. If the Russian proposals prove to be in line with these general objectives, and would assist to facilitate their achievement, we would naturally consider them with close interest.

Giving words their normal value, does that seem to anybody to mean that they do not want to enter into an agreement with Russia on South East Asia?

Senator Greenwood - The honourable senator cannot read that into the words on any interpretation. Try to justify it.

Senator WILLESEE - Try to justify it? They were the words used by the Minister. But as Senator Greenwood is trying to justify the statement that he made, let us go back a little farther and quote a few more words. The Minister said:

In principle, it is natural that a world power such as the Soviet Union should seek to promote a presence and a national influence in important regions of the world such as the Indian Ocean area.

The proposals of Mr Brezhnev for collective security in Asia have not been set out in any detail. It appears that at this stage the Soviet Union itself is exploring reactions of other countries before trying to convert the idea into any firm or detailed proposal.

The objective which Australia has been working for over a period of time has been, as I said earlier, the development of regional co-operation to promote and sustain the security and economic advancement of all the countries of the region.

He finished by saying:

If the Russian proposals prove to be in line with these general objectives, and would assist to facilitate their achievement, we would naturally consider them with close interest

This statement was a bit controversial. Some people did not like it and some people did like it. But in this situation we find Government supporters suddenly trying to scramble back into the crease because there is an election in the offing and thinking they will not be able to throw out the Com bogy and use the Com smear against the Labor Party in the forthcoming election.

Much has been said about taxation. Senator Anderson set out to prove that we were going to reduce taxation. But again, giving words their normal meaning, I cannot quite follow this. What we have said and what the Treasurer has said over a period of time is that the middle income taxpayers in Australia - to which I would add the lower income tax payers in Australia - have been hard hit by inflation and there has been nothing to adjust that period of inflation over the last 20 years. When this Government first came into office 20 years ago 5% of the taxpayers were earning more than $2,000, but today more than two-thirds of the taxpayers earn more than that amount. Does that not mean that these people are paying a greater proportion of their salaries in taxation? At $3,600 a year - very few Liberals would be down to that level - the tax on each $1 is 33c. The Treasurer has been pointing this out for a long time and finally, since presenting the Budget, he has been pushed into saying that he will set up a committee to look into this question to see what can be done about it. But this is a trend that we see right through the whole of the economy.

There is a very great slug on people who do not have much money over and above the ordinary amount they need to enable them to eat, clothe themselves and educate their children. These conditions provoke a clamour for higher wages. It does not matter very much whether the people lose out by way of taxation or through increased costs; the fact is that the money comes from the family budget. The only answer that they can see is to develop a clamour for higher wages. As a result the Government has got itself into a mess. It does nothing about those places from where money comes to the pockets of the people but goes into the arbitration court and tries to oppose the trade union movement when it carries out its responsibility by trying to correct the situation in the only way that it knows and the only way open to it. There is no doubt that this has been a peripheral Budget. It has looked at these things to which I have referred, but after 20 years there is no doubt that great new measures are needed. We are no longer living in the horse and buggy era, a term which could be applied to the turn of the century. Modern economics and modern sciences move so quickly today that we cannot wait for 20 years, 10 years or even 5 years to move with the times.

There is no doubt that the things that the Government is doing in defence could lead to a fatal situation. On the eve of an election the Government should be saying that there is a steady growth and development of Australia which can be part of the defence set-up. But this is something against which the Government has resolutely turned its back over the years. In the field of social services the giving of a dollar here and fifty cents there will not cure anything because in a system of uncontrolled inflation the increase will be eaten away before it is received in the pension packet. After much research, many heartaches and a lot of debate at all levels of the Australian Labor Party, we say that the only approach that can cure this situation is a national insurance scheme under which people will pay for the insurance over the course of their working lives. This would protect those little people who, because of sickness, incapacity and all the rest of it, are unable to do very much about their situation.

The Treasurer concluded his remarks on the Budget by talking about its taking us over the threshold of the 1970s. As he said that it struck me very forcibly that over the threshold of the 1960s - all honourable senators will remember the 1961 credit squeeze - we came in with a stop-go economy which would be belted up on the eve of an election only to have something done about it after the election. Businessmen were unsure, nobody was borrowing and no-one knew where he was going from one year to the next. That situation settled down over a period of time. By bringing in a Budget like this the Government is moving out of the 1960s in exactly the same way as it came into the 1960s. We will continue to have a stop-go economy which will infiltrate such things as defence. The Government will keep on budgeting and trying to darn the moth-eaten old garments of health, social services and alt the rest of it. It just is not good enough to begin the 1970s in this way. If the Government is starting to believe its reverse propaganda, that Australia is not now under threat of invasion, this is the time to build up our economy.

May I say one more thing about the defence statement. We cannot go into it fully - there should be a full debate on this subject - but it strikes me that again the Government is making exactly the same error as it has made all along the tine. For years we were attached to Britain. Everybody believed that if there was any trouble the big British gunboats would come out here and we would be safe from invasion. On two occasions we sent soldiers away to world wars. I wonder how many people have grasped what World War I cost us - 60,000 dead out of a population of about 5 million people. In World War II we lost about half that number out of a population of about 8 million people. We have since joined with the United States and have said: 'Well, for as long as we are tied up with the Americans everything will be O.K. We will have no worries about invasion'. Exactly the same situation could be reached as occurred in two world wars. We have troops in Vietnam today because the Americans want us to have them there. In such alliances small nations like Australia can give far more than they insure themselves against. It seems to me that the United States will get out of this area and Britain is as good as gone from the area. So too the Government's new found friends the Russians, when they want to do so, will roll up their swags and go. They can do exactly the same thing but we have to stay here.

Communist China and the other Asian nations are here for all time. A permanent peaceful solution in South East Asia does not involve entry of the itinerant nations of the world into the Pacific and Indian Ocean areas. Peace must be made with the people who are residents of the area, just as we are. Not only is the Budget political in the extreme; even now, Government supporters are scrambling around to deny or half deny the things they have already laid down by rote in the 1969 Budget.

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