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Thursday, 8 September 1983
Page: 627

Mr O'KEEFE(9.30) —As expected, the 1983 Budget is the usual social mess-up of big spending and big deficits. This Budget takes an enormous risk with the Australian economy. Its very foundation, the prices and incomes accord, is already falling apart. The first Australian Labor Party Budget of this Government has used the traditional Labor philosophy: If you do not know how to deal with the problems, then spend. Overall expenditure in the Budget has increased by a massive 15.8 per cent. The deficit is estimated at $8.3 billion, a cost which is not being borne by the Government now but is shelved for future taxpayers to deal with. It is very doubtful whether this Labor Government's first Budget will achieve what it sets out to do; that is, to stimulate the economy and provide jobs. This depends on a most important factor, that is, wage restraint.

Unless the Government can contain its industrial wing and unless the trade unions moderate their wage demands the Budget will fall apart. The problem is immediate. Many wage settlements are being negotiated at present. Some of them involve amounts of $15 to $20 per week, particularly in the building and food processing industries. Unless the Government can contain these huge demands the Budget prediction will fall to pieces. There is little doubt that unemployment will continue to rise in the coming year. An examination of the Budget clearly indicates that this Government has no plan to change the economic strategy. In Budget Statement No. 2, the Department of the Treasury forecasts that compared with 540,000 dole recipients in 1982-83 the estimate for this financial year is of the order of 600,000. Indeed, this figure could even be exceeded.

This is tragic, and the latest General Motors-Holden's Ltd lay-off will exacerbate the situation. With this state of affairs the only sensible strategy is to restrain the Budget deficit and, as stated previously, to contain wage claims. Certainly the Government has a number of proposals to help the unemployed, but these are only of a temporary nature and will ultimately expire. The wage pause funds have not been given real value. For instance, in my electorate of Paterson, as in other electorates, costly programs employing few people for short periods have been implemented. The wage pause funds have not provided the assistance which the Government thought they would. These have been band-aid measures, as indeed is the case with most of the Government's aid in this field.

The only real way in which the unemployment problem will be solved is by an improvement in the economy, in industry, business and in the commercial world. There is evidence at present that an improvement is under way in this country and in the nations with which Australia is a trading partner, for instance the United States of America. We rely very much indeed on the economic situation in that country. It is improving; so the benefits should flow on to us-perhaps not immediately but as time goes on.

This Budget will provide the biggest increase in spending since the Whitlam years. Of course excise and sales tax are to go up immediately and in future will be automatically indexed every six months. This is inflation by legislation . I repeat: This is inflation by legislation. There will be an assets test on pensions, which is causing great concern amongst pensioners. This has yet to be finalised. This is a very emotive issue, and immediate attention must be given to it.

Another item which requires attention concerns the many interested Australians and institutions which are anxious to secure the Budget Papers printed and distributed after the Treasurer's Budget Speech in the Parliament. These papers contain much finer print and information than is given in the Budget Speech. The papers can be purchased by the public from Government Bookshops, but at what price? The Budget Speech costs $2. That is a small cost. Budget Paper No. 1 costs $17.80 and a full set of Budget Papers-the 11 papers-will set the purchaser back $58.60. I ask: $58 for a complete set? These prices seem to be excessive and outrageous. Budget Papers have to be prepared and printed for the Government's internal use, and the cost of running off a few thousand extra copies for the public would be quite modest. To charge private citizens more than the marginal cost is to subsidise the general costs of government which should be borne by the general taxpayer. I request that the Government review these charges for the important Budget Papers which are required by many universities and institutions, apart from private citizens, throughout Australia .

There is a big increase in welfare spending which now takes 30 per cent of the Federal Budget. This Budget will have a very serious effect on the economy and it is very doubtful whether it will help economic recovery. It will lead to higher interest rates; inflation will still be at least twice that of our overseas competitors. As mentioned previously, unemployment levels will rise even further. The deficit is too high. Government spending is up by 16 per cent. The Government is now taking 32 per cent of the gross domestic product. The initial assessment of the Budget was that it was mild mannered. This feeling has subsided, and analysts are now taking a dimmer view of the contents. Most people throughout Australia are having second thoughts about the Budget.

It is quite obvious that the Government has aimed at gaining maximum mileage in terms of popularity by not increasing income taxes but by taking the other option of increasing indirect taxes which, on the surface, does not appear to help the average taxpayer substantially.

This Budget has failed to keep a number of election promises concerning the family. In particular, promises by the Prime Minister (Mr Hawke) to allocate an extra $20m for child care in the Government's first Budget were not fulfilled. The Budget Papers stated that the Government would allocate $10m in 1983-84 for high priority new and expanded projects and initiatives under the children's services program. That is a far cry from the promise made during the election campaign which, of course, won the Government many votes. The Government is sidestepping its responsibility to Australian families.

The great rural industries are the backbone of Australia, and this Labor Government has decimated assistance to primary producers. This action, coming after a period of drought, floods and the May mini-Budget, has caused considerable dismay and concern to primary producers. They are the people who give this country the export income which is so necessary for our development and for our economy. Some of the measures-there is an amazing number of them- taken by the Government, which are having a serious effect on primary industry, can be summarised as follows: Lower depreciation rates; the abolition of the income equalisation deposits scheme; an amount of $8m less for wool promotion, our great export earner; the abolition of land clearing and drainage concessions ; meat inspection costs trebled, to 300 per cent-this is causing the meat industry and the meat producers a great problem-higher petrol and diesel prices; the imposition of a sales tax on all oils, lubricants and piping of 20 per cent.

As mentioned in this debate tonight the increased cost to the primary producer of a 250 litre drum of oil is something like $60. That is absolutely exorbitant. The subsidy on petroleum products freight is to end; the special depreciation allowance for petrol storage is to be scrapped; general depreciation allowances are to be reduced; the automatic in-out opting provisions of the tax averaging scheme, which is estimated to cost $15m this financial year, will be abolished; the bicentenary water resources program is to be cancelled; the home deposit scheme and the housing interest income tax rebate scheme are to be terminated; parts of the local aerodrome ownership plan are to be suspended; and the increased interest payments on Telecom Australia's borrowing, which will directly cause increases in telephone rentals and call charges, will come into effect on 1 October.

The Government has broken just about every promise which it has made in relation to drought aid. In the election campaign Labor promised to maintain existing drought arrangements, provide additional measures to ensure that all types of farmers receive equitable treatment instead of drought aid after drought breaking rain. None of these promises has been honoured. The number of farm employees and jobs in country towns around the nation has fallen by about 100,000. What is the Government doing? It offers massive assistance to other industries but appears to neglect primary industry, the backbone of the nation.

One of the most important projects for the development of Australia is the provision of adequate water supplies and it has been very disappointing indeed to see the miserable funds that are being made available by this Government in this area. The Budget Speech by the Treasurer (Mr Keating) tells us that total funds made available for water resources in 1983-84 provide for expenditure of $ 46m right across Australia, which means that no more major dams or water storages will be commenced in this period. Our policy was to provide $70m a year but this, of course, was cancelled by the Labor Government. The worst drought recorded in history surely brought to the attention of governments the need for more storage facilities. This is a very important matter and it is hoped that some action will be taken to provide the necessary water storage not only for our primary producers but also for industry and the inland towns which rely on water for their domestic supplies.

The average Australian family is hard hit by the increase in excise and sales taxes. This is on top of the $8 a week burden imposed by the mini-Budget and the huge increases in State and local taxes and charges since the present Government 's election in March. The chaotic and insensitive approach to policy making is again seen in the assets test for pensioners. This is an emotive issue and is causing Australians right across the country great pain. Australians have a right to expect that if they have a go and save they will be better off as they get older. This Government has no idea of the real world and how it is getting harder and harder for an average family to cope in a competitive world.

While the Government has protected its Budget by introducing excise duties to take account of inflation, it has not similarly protected the family budget by indexing income tax thresholds. Effectively, it has increased income tax. As a result of indexation of exise duties the Government has institutionalised inflation. Families will be hit again every February and August by the boomerang effect. With the levels of inflation predicted by the Government it can be expected that the duty will rise over the year by another 7.5 per cent on items such as petrol, spirits, cigarettes and beer. Members who hold country electorates depend very much on fuel because it is essential for traveling about and working the farm properties. All this is to be added to the cost of the average family, together with the tax increases announced in the May mini-Budget and the high interest rates which could result from a massive increase in the deficit-a total of about $15 a week. The Government has not reformed the taxation system as it promised. Instead it has adopted a piecemeal approach and increased taxes all round. It has not moved away from direct to indirect taxes or broadened the tax base. It has merely increased taxes, both indirect and direct.

Since the last Budget education costs in Australia have risen by around 11 per cent. Any Budget allocation with less than this level of increase is false in real terms. Labor's pre-Budget promises on education have all been broken. That must cause concern to parents who are making every effort to give their children every opportunity of a decent education. Labor made many pre-Budget promises in this field and has broken them over a very wide area. Indeed, the Government has been elected to govern this country on deceitful promises made prior to the election and not carried out afterwards. It promised to progressively increase student assistance through the tertiary education assistance scheme until it equated the single unemployment benefit and then maintain the nexus. It promised to raise the TEAS means test until it equated with average weekly earnings. It promised to establish an emergency student loans scheme to replace the present scheme. It promised to institute a new program for primary schools at a level of $9m per annum. It promised to provide an additional $37m in the first year of government for recurrent resources in government schools. It promised to provide an additional $16m in the first year of its program for needy non-government schools. All of these pre-Budget promises have been broken by the Government. It has reduced funding to 41 non-government schools which of course is causing concern to parents of children attending those schools.

I turn to technical and further education. A special triennial program to cost $30m to upgrade equipment and facilities for the latest technologies and to stimulate employment in Australian manufacturing has not been honoured. An immediate boosting of $15m in capital and recurrent funding to the States has not been honoured. These are important areas of education. Clearly, the Labor Party's action in the education portfolio has not matched its rhetoric. The number of promises not honoured is substantial and will be important to a wide section of the community. It is quite apparent that Labor's disregard in the important field of education is abysmal.

The Government's deception and its bungling of its new withholding tax are causing great concern and cost to small businesses and their employees. It is doubtful whether any other piece of legislation has met with such an outcry and opposition right across Australia. The Government's objective to stamp out tax evasion in the cash economy is worthy of everyone's support but the implementation of the scheme is causing considerable increases in costs to small business by way of documentation which is required to satisfy the legislation. The relevant forms required to be filled out are not available at any of the post offices in my electorate, and this is causing great concern. Investigation has found that the distribution of the necessary forms to post offices is non- existent. This is causing frustration and problems for everyone liable to make application for an exemption certificate or liable for tax under the withholding legislation. Indeed, these forms require many personal details. The form asks such questions as: 'How much rent do you pay? How is your household financed? What rates do you pay? What are your telephone and electricity bills? What are your car expenses and personal living expenses?' They want to know everything about a person.

Mr McGauran —It is called socialism.

Mr O'KEEFE —It is a socialistic piece of legislation in a virulent form. It is understood that the legislation has been referred to a Senate select committee for examination and report. It is a hastily prepared Bill that will reduce the working capital of many businesses and yet miss some of the largest sections of the cash economy. This legislation is obnoxious and requires immediate investigation and change to a sensible set of rules. It has been hastily drawn up and is an administrative nightmare.

The Budget provides an additional $4.2m for expanded trade promotion activities , including the upgrading of trade promotion programs in Australia's major export markets and the provision of a market research fund. Overseas trade is the backbone of Australia's economy. Coal, iron ore, uranium yellowcake, nickel, copper, lead and zinc are all great export earners. Our great rural industries of wool, wheat, coarse grains, beef, lamb, sugar and livestock are all important export earners. These markets are very competitive and Australia has to be extremely active in keeping up with world demands and finding new markets. With improving economies our near neighbours the Philippines, Indonesia, Thailand and South Korea all offer opportunities for increased trade, apart from our established markets in the Asian area. Every effort must be made to improve our trade with the European Economic Community. This is a difficult task; nevertheless it should not be lost sight of. Australia's trade commissioners, serving throughout the world, must be given encouragement and assistance to advance our trade.

For many years we have endeavoured to bring into operation a single meat inspection system. This has been achieved but our problem now is that we are faced with a 300 per cent rise in inspection fees. The Budget provided for an increase in the proportion of meat and livestock inspection charges. Recovery from the industry will be 50 per cent from 1 October. Cattle in excess of 90 kilograms.--

Mr SPEAKER —Order! The honourable member's time has expired.