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Tuesday, 20 September 1983
Page: 994

Mr PORTER(4.58) —In looking at the repeal of the wages pause legislation by way of this Salaries and Wages Pause Act Repeal Bill, I think it is worth looking at some of the objectives of the wages pause. Firstly, there was the objective to slow the huge blowout in wage increases which occurred late in 1981 and throughout 1982. Also, one of the objectives was to restore the viability of the private sector which, according to the Budget just brought down by the Government, suffered a 17 per cent fall in profits in calendar year 1982. Another objective was to restore our international competitiveness, where our labour costs and our inflation rate were running at rates far in advance of those of our overseas trading partners. Fourthly, we had the objective of restoring the prospect of creating new job opportunites. There is no doubt that the wages pause was welcomed by the Australian people. The Government admits this. It admits the success of the wages pause program. At page 25 of Budget Paper No. 1 referring to the period between January and June 1983, it states:

. . . the 'wages pause' was effective during this period.

This Bill will repeal that program. In so doing, I believe we must look to see what the Government has done, is doing and has predicted for the future. It has abandoned the wages pause. I believe that two areas need to be considered-the alternative program, the prices and incomes accord, and the impact of the Budget and its effect on jobs.

I refer firstly to the prices and incomes accord. The Government has argued for indexation through half-yearly wage increases in line with the consumer price index. A decision from the Australian Conciliation and Arbitration Commission is likely within the next couple of weeks in relation to the Government's proposal for a catch-up for the period covered by the wages pause. The likely effect of the Government's case is for a 4 per cent to 4.3 per cent increase for the half year covered by the wages pause. Early next year the Government will argue for another round of wage increases for the latter half of 1983. So, in effect, the wages pause lasted from 23 December to 31 December-a period of 8 days. The wages pause has been abandoned. Indexation has been proposed at a time when the Budget , at page 47 of Budget Paper No. 1-the Government's document-states:

. . . wage and price increases during 1982-83 were more than double those of our major trading partners . . .

Those are the Government's words, not my words. So the Government is repealing the wages pause, with the objectives to which I referred. Those objectives were to slow the huge blow-out in wage increases, to restore the viability of the private sector, to restore our international competitiveness, and to restore the prospect of creating new job opportunities in Australia. We abandon the wages pause at a time when the Government says that wage and price increases for the financial year just completed were more than double those of our major trading partners. The Government has blown the lot. The hard-earned gains to ensure economic recovery have been dissipated in one fell swoop. Our international competitiveness will be further eroded and more jobs will be lost. This is hardly consistent with a government which pretends to be concerned about jobs.

Mr Burr —They are not.

Mr PORTER —The honourable member for Wilmot is right. This Budget is a big- spending Budget. It has all the hallmarks of a socialist Budget which fails to address the real economic problems of high unemployment and high inflation. It is a big-spending Budget. But where was the spending? Was it in areas which will assist economic recovery and long term job opportunities?

Mr Hodgman —No.

Mr PORTER —The honourable member for Denison says 'No'. He is right. In fact, the opposite is the case. I refer to the three areas in which there were the greatest increases in spending. The first area is health.

Mr Burr —Medicare.

Mr PORTER —Medicare, as the honourable member for Wilmot rightly says. The increase in spending under the Health portfolio to introduce socialist Medicare is 25 per cent. Will it create jobs? No, it will cost 2,500 jobs.

Mr Burr —How many jobs?

Mr PORTER —Some 2,500 jobs will be lost as a result of the introduction of Medicare. There is no benefit to the private sector. Another area with a large increase is housing. That will create some jobs. It is doubtful whether they will be permanent jobs. The other large increase in this Budget-a 22 per cent increase-is to service the debts of this Government, public debt interest, the third biggest increase in expenditure under this Budget. So we have three areas of increased spending. One will cost jobs and the funding of public debt interest is certainly likely to reduce job opportunities in the private sector.

In this expansionary Budget not all sectors had an increase in funds. Some sectors suffered a cut in funds. Honourable members might ask which sectors suffered cuts. The sector that lost around 10 per cent of the funds allocated was the agricultural and pastoral industry sector. Great socialist philosophy! Take away funds from the sector that is actually maintaining jobs and exporting goods in fact is creating jobs for this country. It has suffered a 10 per cent decline. The transport and communications area-infrastructure for the private sector-has suffered a cut in funds of 3.1 per cent. If the Government really cared about jobs it would want to help industry and development, but instead this area has suffered a cut in funds of 0.5 per cent.

Clearly, the Budget strategy does not look to assist the private sector, the sector which provides jobs for three out of four people employed in Australia. Instead, the Government has pumped money into the public sector. That would not be so bad if the money were to be used to reduce costs for Australian industry through spending on infrastructure, such as better transport and communications, increasing the incentive for our entrepreneurs to go into the market and expand or start new industries and so create new and permanent jobs. It is clear that the only way to achieve real and sustained growth in employment is to get the economy right so that the private sector can start to grow again, but the underlying trends in this Budget are to the contrary. Budget Paper No. 1, at page 65, refers to 'a further marketed fall in private business fixed investment '. That is the prospect for this year, and that prospect is likely to be achieved. The Australian Federation of Construction Contractors, in a pamphlet put out in August of this year after the Budget was presented, agreed with the Budget forecast of a fall in business investment. It said that over 24,000 construction jobs are expected to be lost over the next 12 months. Not only will there be a fall in private fixed investment; there will also be a fall in that sector of employment. What does the Budget say about employment? It says that there will be 'an edging up in the rate of unemployment'. This Government keeps telling us that it is concerned about employment, at a time when it is scrapping the wages pause program, one of the main objectives of which was to ensure that jobs were maintained and new jobs created. This Government scraps it.

The Government's answer to unemployment is not to opt through the Budget for policies which will assist in correcting the imbalances in our economy and improve prospects for the private sector to increase employment. Instead, it has opted for short term palliatives. It has undertaken a job creation project, the CEP, the Commonwealth employment program. Some $300m will be allocated for short term, make work programs. These programs will not lead to a job at the end of the project. They will not assist the private sector by reducing internal costs in this country; rather, they are short term palliatives. This Government has abandoned medium to long term economic planning.

Mr Burr —It has sold out to the unions.

Mr PORTER —It has sold out. This Budget shows clearly the short-sighted approach of the Government. As I have said, instead of these short term employment creation programs we had programs with some long term goals. If this Government had some long term goals one might appraise its approach a little differently.

Let me just refer to the previous Government's programs which were announced last year. They were projects which would create employment but at the same time would greatly assist Australia in the long term. This Government has scrapped those programs. What were they? Let me refer to the water resources program. Under that program the previous Government was to spend money to create jobs whilst at the same time improving the long term viability of our primary industries and helping to ensure that people such as those who come from my State of South Australia had greater prospects of receiving good quality water, especially during periods of drought, for both our domestic and industry consumption. But that was not the only project the Government abandoned. It also abandoned the project which was to link Darwin to the Adelaide-Alice Springs railway. That project has been indefinitely deferred by this Government. It would have greatly assisted the development of the Northern Territory. It would have helped the manufacturing and primary industries in the rest of Australia, and in particular South Australia, by reducing transport costs to our north. It would have provided a valuable defence link to our north. As many Labor members have already pointed out to their Government, it would have created many jobs, not only on the construction of the rail link itself but also in the downline construction-the making of sleepers in South Australia and so on. Instead, I reiterate: This Government has gone for short term, make work schemes reflecting its total lack of vision and its bias against the private sector of our economy.