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Thursday, 25 August 1983
Page: 339

Mr WHITE(9.27) —At the outset I congratuate the honourable member for Macarthur (Mr Hollis) on a very genuine speech. We all share his concern for the unemployed in his area in particular. As far as the Budget is concerned, there is no doubt that the public's first impression on hearing Tuesday night's Budget, was initially one of relief after the horror stories leaked by this Government. By the following morning leading commentators were saying that it was a steady Budget and no great damage had been done. However, the reality is that, as the days have passed, people are beginning to see the hidden implications of this Budget which poses a considerable danger to the economic recovery of this country.

I listened with interest to the Treasurer (Mr Keating) on Tuesday night as he rationalised the Labor Government's reasons for embarking on a massive spending spree with money that it does not have. He has, on his own admission, embarked on an expansionary course which will inevitably prove inflationary. The simple fact is that this is a socialist Budget giving massive support to the public sector of Australia and doing absolutely nothing to encourage the private sector . It is a savage assault on the private sector, despite the Treasurer's statements that the private sector is the key to long term recovery. In that at least we agree. But he is not backing his words with action and the Budget clearly shows it. The private sector creates the wealth of this country and provides employment. It is, therefore, reasonable to ask why this Government does everything in its power to make life difficult for those who constitute the private sector. Why does it continually bash business over the head. Why does it not give some incentive for the country to get out of this economic malaise in which we find ourselves?

Let me turn to the reasons I believe this Budget is dangerous. Firstly, there is a massive budgetary deficit of $8.3 billion. The Australian Labor Party has been extremely clever in conditioning the public to accept this deficit. Who would have ever thought just a few months ago that such a deficit could have been almost gratefully received by large sectors of the Australian population? We are tired of hearing this deficit blamed on the previous Government. The Treasurer boasted on Tuesday night that the Government, in arriving at its budgetary decisions, carefully combed through all the previous Government's programs and pruned them to the extent of $1.2 billion. It then put in place some $2.4 billion of its own programs and had the hide to blame the previous Government for the deficit. It just does not stand up.

The size of the deficit is clearly in the hands of the present Government. It is the left wing which ensured that the deficit was extended to the absolute limit in order to get its precious programs accommodated. The reason the deficit is so dangerous for the private sector is that it will inevitably put pressures on interest rates and costs. The fact is that this Government is the biggest spender of any Australian Government in our history. No amount of clever publicity will disguise this massive deficit. Certainly, the private sector will not be fooled when high interest rates start to bite.

The second major assault on the private sector is the blind Labor adherence to the so-called prices and incomes accord and to wage indexation. Again, there is absolutely no recognition of the cost pressures this will create on business and the subsequent unemployment that will be produced. The Government's encouragement for wage increases will create massive pressures on the private sector. It is an absolute joke to think that wages will be contained to an increase of about 7 per cent in the coming year. The Government is already advocating a rise of 4.3 per cent in the first quarter of this year, so what hope has it in trying to maintain a limit of 7 per cent for the total year? In addition, claims for increased wages outside the guidelines are already building up. I quote from today's Australian:

The president of the ACTU, Mr Dolan, said last night it would be a 'recipe for disaster' if workers allied to the building industry did not get a flow-on of the industry's new pay deal.

This deal is already outside the guidelines. The third but by no means the last assault on the private sector in this Budget is the blatant disregard for the election promises to reduce taxation. Far from not giving reductions, taxation has already been increased in this Budget by the indexation of prices. Inflation will certainly take care of the rest. There is more to come. I quote again from today's Australian an article headed: 'PM warns taxes may jump again next year':

The Prime Minister, Mr Hawke, indicated last night taxes might have to be increased again in next year's Budget if economic recovery was slower than expected.

What a prospect we all have to look forward to. Of all the incentives and promises which this Government has made, tax relief is one which would give the private sector the most hope that there would be some reward for its effort in very difficult times. That hope has now certainly been dashed. I quote from the election speech of the Prime Minister (Mr Hawke) of 16 February:

Increased growth will be restored by tax reductions for low and middle income earners.

That is not the end of it. I quote from the same speech:

Labor's program of tax relief and tax reform is a crucial element in our program for recovery.

. . . .

Its key elements include immediate reductions in income tax.

Mr Lusher —Who said that?

Mr WHITE —The Prime Minister. He went on:

A taxpayer without dependants earning $225 a week will get a tax cut of $4.75.

In February tax reductions were central to the Labor Party's platform. By August they have been abandoned. The reality is that none of these promises have been kept. Honourable members can rest assured that this lack of faith on the part of the Labor Government will not be forgotten.

I turn now to one or two items in the Budget where I believe the Government has its spending priorities completely wrong. The one that causes me most concern is the area of defence. In the last few months we have seen a continual and successful assault on the armed forces of Australia by the Government. I quote again from the Prime Minister's speech of 16 February:

The defence and security needs of Australia must remain paramount. Labor is committed to the re-establishment and maintenance of a well equipped highly trained and mobile defence force.

Quote that to someone in the Services. It is becoming something of a very sour joke. If honourable members need some more proof let us look at what has happened to the Forces since 11 March, just in the last few months. A decision was made not to replace the aircraft carrier Melbourne. The Fleet Air Arm has been abolished.

Mr Chynoworth-A good move.

Mr WHITE —Interjections such as that I welcome because I would like it to be widely known that at least some members on the other side of the House believe it was an excellent move to disband the Fleet Air Arm. I would not like that to go unnoticed. It is a tragedy of immense proportions compounded by the fact that many of the highly skilled personnel in that branch of the Services have either gone or are planning to go to join overseas forces. It is a tragedy to think that the Minister for Defence (Mr Scholes) said: 'Well, we will just transfer them to the Navy, the Air Force or the Army'. That is about the limit of the Government's imagination when it comes to dealing with the Forces. In addition to all this, fuel cuts to the Services have made a nonsense of reasonable exercises in Australia. We have only to see the cutback in the participation of the Forces in exercise Kangaroo 83 to see the effect this is having.

Mr Charles —The defence Budget went up 10 1/2 per cent.

Mr WHITE —I will get to that in a minute. I am glad the honourable member has raised it. The lack of consideration in superannuation matters is having a major effect on morale. The Budget allocates an extra $497m to defence, which is an increase of about 10 per cent. The honourable member for Isaacs (Mr Charles) is absolutely correct. The Government talks about a 4 per cent real increase, but the catch is that it has allowed an inflation factor of 6 per cent, an impossible figure. More to the point, most of that extra money will be spent on new equipment for the Navy and the Air Force. The Government was committed to the purchase of that equipment by the previous Government's decision. This means that there is virtually no increase in funding for the operation and maintenance of the armed forces.

With regard to Army mobility, from 16 February the Army was virtually confined to its barracks due to lack of money. With regard to personnel in the Services, the Government is planning to reduce the highly mobile Services by 700 people in the next 12 months, while an extra $3.9m has been allocated to increase the civilian component of the defence forces. It is madness. The reason for this policy escapes all of us. Who can follow such reasoning? I assure honourable members that the significance of those figures is not lost on uniformed personnel. The Army has been stretched to the point where it is seriously considering reducing our one division from three brigades to two.

The Budget decision to tax Army Reserve pay will obviously have widespread effects in the Reserve coupled with the stated intention to reduce even its training time. So much for the $14m recently spent on a most successful recruiting campaign which boosted the strength of the Reserve.

What is the Government's intention with regard to our forces? We have a population of 16 million and a huge country to defend. We now maintain in this country one under strength division. In a bipartisan way, I ask the House: What has happened to the dictum that a government's first responsibility is to protect its territory and its people? What sort of a country and what sort of a government would allow the state of our defences to run down to their present condition, in the sure knowledge that the day will come when they will have to be built up, and that will take years and years? The Government has learned nothing from the message of the Whitlam years. I was in the Services in those days. When I retired I immediately joined a political party so that I could do my bit to get rid of the previous Labor Prime Minister. I am very glad that I am here to do my bit to get rid of the present Government as well. The Government has no intention to understand the message from previous years. It does not understand the defence requirements of this country or the motivation of the men and women who serve in the forces.

I turn to another matter which may be more familiar to honourable members-that is, the coastal surveillance system in this country. According to the Budget Papers there will be an increase from $20.9m to $21.2m for coastal surveillance. Some increase! Coastal surveillance in the north of this country is nothing but a joke. It is manned by civilians in daylight with no radar. They report what they see and their position on the hour over an open air system. It is nothing but a joke. I say to those people who were keen to see the Fleet Air Arm run down that the tragedy is that many of those aircraft could well have been used in an effective surveillance system in the north of Australia.

I will refer to a few other Budget anomalies. The Prime Minister, on 16 February at the Sydney Opera House, stated:

Labor will reduce the price of petrol.

What have we seen in the Budget? The price of petrol went up and will continue to do so. In the area of health, this Labor Government has maintained a dogmatic approach to the introduction of Medicare. Again, this is an assault on the private sector which will destroy thousands of jobs in the private health fund area. Such is the price of blind dogma. With regard to Medibank and Medicare, the Prime Minister further stated:

The last thing the Labor Government wants to do is to create more unneccessary bureaucracy.

One wonders what it would be like if it did set out to create an unnecessary bureaucracy! In education, there have been cuts in funding to private schools, despite this pledge by the Prime Minister:

We will show that our national Government is concerned about the educational opportunities available to all children in all schools.

So what did the Government do? It immediately slashed funding to some of the private schools. Let no one be fooled that that is not the thin edge of the wedge.

Mr O'Neil —Extremely wealthy ones.

Mr WHITE —That is a very good comment. How does one judge a wealthy school? Is a school wealthy because it has saved some money for a building program, because someone has left it some money or because the school was careful with its money? How does one judge what is a wealthy school?

Mr Newman —Are there not any wealthy schools in Queensland?

Mr WHITE —The honourable member for Bass referred to Queensland schools. It is strange-I would appreciate an answer from a Government member-that no Queensland schools were listed among the schools which had cuts in their funding. An election is to be held in Queensland. Also, no Catholic schools have been disadvantaged at this stage. Government members should answer that if they can. Queensland schools, as honourable members know, will get the chop next year after the election, as will the Catholic schools, in this futile attempt to divide the educationalists in this country.

This Budget must be judged against what it set out to achieve: Firstly, a framework for economic recovery; secondly, increased employment opportunities; and, thirdly, containment of inflation. It will fail because it fails to support that sector of the economy which could make the objectives possible-that is, the private sector. By the Government's admission, unemployment and investment will be down in a year. It is a poor way to encourage Australians to get on with the job.

Mr DEPUTY SPEAKER (Hon. Les Johnson) —I remind the House that an honourable member is about to deliver a maiden speech and therefore should be afforded the usual courtesies. I call the honourable member for Maribyrnong.