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Thursday, 25 August 1983
Page: 322

Mr DAWKINS (Minister for Finance)(5.53) —We have just seen an example of desperation politics at its worst. Let me just take up one of the most recent points that the Leader of the Opposition (Mr Peacock) made when he said that what this Government was on about was taxing enthusiasm, initiative, excitement and enterprise. If we were interested in taxing those particular commodities and if we applied that tax to the people who sit behind the Leader of the Opposition , we would have to give them all a rebate. Indeed, the desperation of the Leader of the Opposition's speech was matched only by the dispirited appearances on the faces of those-in those non-seried-ranks that sit behind him. But, of course, unlike most of his colleagues, he is very practised in recent times at criticising Budgets. This is the second Budget in three years that this man has taken to task. This is the second Budget in three years that this man has tried to attack and demolish. On the first occasion a couple of years ago it was because he was interested in scurrying into the office of the Leader of his Party. He wanted to become Prime Minister without any concern at all for the fortunes or unity of his own party or, indeed, for the fortunes of the Government of which he was often a member. Now he is trying to demolish this Budget at a time which is calculated to destroy the emerging recovery which is so apparent within the economy, and which this Leader of the Opposition so dislikes, because he knows that as this Government will bring about a recovery he and his colleagus will spend an increasing amount of time on the Opposition benches.

Of course, this is the man who has the support of 25 per cent of the Australian people. One in four Australians believe that this man ought to be the Prime Minister. That is hardly even a pig in a poke. This man has no credibility. The reason he has no credibility is that he is seen by everyone in Australia as nothing but a political butterfly. He has dabbled in one area or another. He spent years dabbling in foreign affairs. More recently he decided to dabble briefly in industrial relations until he was out of the Government altogether. He then came back to dabble briefly in industry and commerce. Tonight we have seen him dabbling unconvincingly in economic policy, in fiscal policy, which underlies this Budget.

What one has to remember is that the Leader of the Opposition's former dabbling , his former flitting from policy area to policy area and his history over the last seven years, has meant that during those seven years he was either not in the Government or not in the country. He has had very little to do with the important task of putting Budgets together. In fact, his most distinguished contribution to the Budgets of his own party was, in fact, to attack its penultimate Budget. In the context of attacking that Budget one of the points which he made repeatedly was that there was a need to introduce a means test on welfare entitlements. What a conversion we have seen in the last two years. Two years ago he was urging upon his party-the Government of which he had more or less been a member from time to time-the need to introduce means tests on welfare benefits. But tonight he spent an inordinate amount of his speech attacking the fact that this Government has had the political courage and the commitment to social equity and economic responsibility to move in the direction which a couple of years ago he thought was so commendable-that is, to ensure that where the Government is involved in extensive and increasingly large payments of welfare benefits, those benefits go to the areas of greatest need.

It is not a question of taking away benefits from those who do not need them, although we have done that and will continue to do so. If people do not need the welfare benefits they should not get them. But more importantly, the Government has moved in a very decisive and significant way to increase the benefits of those who desperately need them-the ranks of the unemployed, which swelled so alarmingly and monstrously under the policies of the former Government. They are in greatest need and are to be the first recipients of the reallocation of priorities by this Government. The unemployed will receive the first substantial increases in welfare payments under this Government. One of the very first acts of this Government was to increase the payments to single, unemployed people. In November we will do it again. Indeed, that is one of the hallmarks of this Budget. We are involved in a very serious re-ordering of priorities to ensure that where there is a need for governments to provide assistance to those in need we will provide it.

Mr Hodgman —What about what you have done to superannuation for airline pilots.

Mr DAWKINS —The honourable member for Denison apparently seems to have some hang up about airline pilots. He apparently wants to cosset the airline pilots, one of the most privileged groups in the community. This one-in-four leader of the Opposition realises, of course, that he is no longer directly able to wreak the sort of havoc which he and his colleagues were able to bring about in the economic destruction of this country over the last seven years. So he has decided to embark on a policy of economic scare tactics. We saw it before the election, when he started predicting a devaluation. One of the most economically irresponsible acts of anyone involved in public life is to predict a devaluation under circumstances where there was already a run on the dollar, when there was already a massive outflow of foreign transactions and when our overseas reserves were being plundered. Yet at that time, when what was needed was a period of political stability and calm, it was the Leader of the Opposition no less who was exciting anticipation of a devaluation. Of course, we saw what happened as a result of his actions. Tonight we see him making other predictions about what will happen in the future. He is predicting higher inflation, unemployment and interest rates. What that can only be designated to do-the only aim is those sorts of predictions-is to abort the emerging recovery which is occurring in this country. This Leader of the Opposition has absolutely no commitment to this country or to its economic welfare. Of course, the major reason for that is that he does not understand the first thing about it. In making those predictions about higher inflation rates, he said:

The Budget Papers state that 'the consumer price index could rise by about 7.5 per cent'. That is after the effects of the Medicare scheme are taken in account , which on the Government's own figuring, will artificially reduce the CPI by 3 per cent. By anyone's arithmetic that means an underlying rate of inflation of around 10 per cent.

I do not know whose arithmetic it is. The former member for Macarthur must have had a part in putting together those particular statistics. They are about as shonky as his own record in Sydney business. The point is that the Leader of the Opposition has a fundamental misunderstanding about the effects on the consumer price index of the Medicare changes. Those changes to Medicare will impact so late in this financial year that the cost will not be anything like that predicted. Instead of being 3 per cent-as he added on to the consumer price index implicit in the Budget Papers-it will be something like 0.5 per cent. That was only one of his grosser inaccuracies.

He also talked about defence spending and how the real rate of defence spending would not be as high as had been indicated in the Budget Papers. What he fails to understand is that of course there is a different inflation rate and deflator used in relation to defence spending. Because our defence spending is mainly on overseas purchases, the prices of which are affected by inflation rates overseas , of course a different deflator will have to be used. In relation to his predictions about growth, the honourable member said at the time of the Economic Summit that a 0.5 per cent growth rate was predicted. The Economic Summit scenario which the Government favoured at that time predicted a growth rate of about 2.7 per cent. Now we are predicting a growth rate of about 3 per cent. The Leader of the Opposition seems to have a fundamental incapacity for grasping the most simple economic realities. But, of course, he is undeniably desperate. He has had to contend with the crescendo of accolades which have screeched from the headlines of major newspapers, from comments by business, unions and so on. This Budget has been acclaimed overwhelmingly as appropriate for the circumstances of the Australian economy and the sort of Budget which is most likely to lead to the economic recovery which we all-except apparently the Leader of the Opposition-so desperately seek.

The one discordant note upon which he was able to grasp in order to criticise the Budget was that of Eric Risstrom. Eric Risstrom has built up in years gone by a very distinguished reputation as a commentator, particularly on taxation matters. Unfortunately on this occasion Eric Risstrom got it wrong. But Eric Risstrom remains the one source of authentic critique upon which the Leader of the Opposition was able to rely in relation to his attack on the Budget. Apparently he had not realised that at 1.17 this afternoon Eric Risstrom ate crow by stating:

I did calculate incorrectly a 16 per cent increase for a particular man on $15, 000, the example I homed in on . . . I am extraordinarily sorry about it.

It is a pity that he has apparently been so busy since he discovered his computing error that he was not able to call the Leader of the Opposition and say: 'Hang on a minute, I would not rely on my assessment of the facts of this Budget if I were you, beause I have had to climb down; I have had to admit I was wrong'. Despite that, Eric Risstrom remains the one authentic, although, unfortunately on this occasion wrong, source of support for the Leader of the Opposition in his attack on the Budget.

We would have thought that the Leader of the Opposition would have spent some time telling us how he would have put together this Budget. He spent a lot of time telling us that we did not consult with the business community. I must say that that is a bit of a joke. Never in the history of this country have so many people been assembled in this chamber who were representative of all aspects of the Australian community. In fact, the report of the National Economic Summit Conference was debated in this place this afternoon. Never has there been such a systematic, effective and acclaimed attempt by any government to consult with all interested areas of the economy before putting together a Budget. Not only do we have the advantage of the advice we received from the National Economic Summit; we now as well have in place the Economic Planning Advisory Council which provides a permanent source of advice to the Government from the very areas of the economy which the Leader of the Opposition said we had spurned on this occasion. It is just as well that we did not ask him for his advice on how to put together this Budget because he is bereft of ideas, as was amply demonstrated by his speech today. At no point in his speech was an indication given of the alternative policies which he thought should be pursued in relation to the dificulties which confront the Government.

He seems to have an extraordinarily selective memory. He was able to remember what happened in the Whitlam days. He was able to search his memory and grasp a more or less irrelevant statistic from the collection of spaghetti which exists in his head in order to make an apparently unfavourable comparison about the outlay side of this Budget. The Leader of the Opposition must realise that many honourable members, and many people in Australia, have a much better short term recall with regard to the economic fortunes and the performance of government in this country. The people of Australia know what a hopeless inheritance we accepted at the time of the election in March this year. We were prepared to take up the challenge which was presented to us on that occasion. The inheritance was dishonestly portrayed before the election by the now discredited former Treasurer who stated that the projected deficit for 1983-84 would be about $6 billion. In fact, the most recent estimate of what that deficit would have been, had no changes been made by this Government, was a figure of over $10 billion. That was the inheritance of this Government; an inheritance which had seen the economy going backwards; an inheritance which had seen unemployment and inflation growing and government spending ballooning out of control.

I will give an example of what happened in the last Budget-a Budget for which the present Opposition is totally responsible. On Budget night 12 months ago the projected deficit for 1982-83 was a little over $1,600m. By the end of 1982-83 it had grown to $4 1/2 billion. Defence outlays increased by $160m, unemployment benefits increased by a staggering $680m, and public debt interest payments increased by $130m. Pay-as-you-earn tax payments fell by $130m on the estimated figures. Attempts to recoup evaded tax had fallen by $175m on the estimates that were made in the context of that Budget or shortly thereafter. That Budget fell to pieces before it had even passed through the Houses of this Parliament. We had to pick up and run with that inheritance. Somehow or other we had to hone it into a form which would do something useful for this country and which would bring about the sort of recovery which we sought. In fact, notwithstanding a deficit of over $10 billion staring us in the face, we were able to introduce programs of our own worth nearly $2 1/2 billion-programs which were a direct result of the policies we had made at the time of the election, the implementation of which we knew was crucial to the fortunes of economic development in the ensuing 12 months.

In the short time we have been in government we have been able to put into effect our employment creation scheme. We have been able to put into effect a greatly expanded spur to the housing industry by supporting first home owners and by directly providing additional funds to the home building industry through the States and in other areas. We have been able to put into place our Medicare arrangements which will come into effect on 1 February next year. Those are three major commitments, all crucial to the objectives of this Government and the Australian people and all absolutely in line with the promises and undertaking we made at the time of the election. We were able to do so by re- ordering the shabby priorities of the former Government.

We were able to cut $1.8 billion out of the former Government's expenditure in order to make room for our own programs. Therefore, for a net increase in total outlays of a little over $600m, we were able to bring into effect those very important-crucially important-reforms in the areas of job creation, housing and the provision of health care. As well, in the Budget context, we have been able to provide substantial additional support for those people who are so desperately in need, the real victims of the seven years of Fraser-the unemployed-who for the first time for a long time will receive a real increase in payments.

Mr DEPUTY SPEAKER (Hon. Les Johnson) —Order! The Minister's time has expired.