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Wednesday, 21 September 1983
Page: 1110

Mr BRAITHWAITE(5.57) —I remind members of the Government that this is their Budget, as was the mini-Budget in May. It is not good enough for them not to defend the Budget but to attack the manner in which government changed hands on 5 March. I think that in 12 months time honourable members opposite will realise better than they do now that they are the ones who will be called to account to the Australian people for the success or otherwise of this Budget, to which they are giving limited support because their time is taken up by attacks on the Opposition. There is criticism of the reaction of back bench Government members to this Budget as they follow blindly the attitude of their Ministers, who have as much economic ability as they have. I warn them that in 12 months time they will be called to account for everything that is said in this Budget debate.

I must comment particularly on the manner in which the Budget was approached. I have heard it said on many platforms and in many forums that the Australian people were subject to massive preconditioning with respect to the amount of the deficit and increases in taxes. For some strange reason, through that preconditioning, the Government was able to demonstrate incorrectly to the Australian people that a big Budget is not necessarily wrong, and in actual fact the increases in tax have basically gone unnoticed. I suppose that the Government has done remarkably well in promoting the Budget and its effect. But I return to the reality of the situation. This deficit of 4.7 per cent of the gross national product is the second largest deficit in Australia's parliamentary history. One might ask what was the largest deficit on record. That occurred during the era of the previous Labour Government in 1974-75. That Budget deficit gained the reputation of being the largest recorded in Australia' s history.

We were preconditioned to believe that taxes would rise in a horror budget and there has since been an assumption that this did not occur. If this Budget is taken in conjunction with the mini-Budget, we find that direct taxation did increase because there was no indexation on the ceiling given to a normal wage earner, there has been a tax on superannuation and also the elimination of tax rebates. All of those measures, in their own way, mean that a single or married pay-as-you-earn taxpayer in Australia does pay now a higher percentage of his total income in tax than he did under the previous Government. Yet basically those facts are not mentioned and certainly are not given the publicity that they deserve. That is the preconditioning that occurred in the matter of direct taxation.

The other aspect was the massive increase in indirect taxation-which the Government, when in opposition, said that it would not increase. In fact, we have had displayed in this House letters from the Prime Minister (Mr Hawke), then a back bencher, saying the he would not agree to increases in excise on tobacco, fuel, or cigarettes because that would affect the lower and middle income earners.

Mr Cowan —This is another promise going down the drain.

Mr BRAITHWAITE —This is just another promise which has gone down the drain. I will now deal with another aspect of the Budget. The discredited claims by the Labor Party that they were left with a record deficit have been noted, particularly in the Press. Prior to the election, as early as December of last year, in preparation for I believe the Premiers Conference, the then Treasurer, Mr Howard, indicated that the deficit had blown out to about $4 billion. There was no secret in that regard. That was not a bad prediction at the time when we consider the actual result, the $4.5 billion deficit blowout as at the end of June-four months of the period involved being while Labor was in Government. So there could be no suggestion that the Treasurer of the day was hiding the facts. The $9.6 billion figure was a Treasury estimate. In due course-the Labor Party could not avoid rubbing a little extra salt in the wound-the Budget Papers showed that this figure had risen to $10.4 billion for some unrecognised reason. This shows the transparency of the economic policy of the Government. The whole thing was a cosmetic application to try to avoid facing the public with what has turned out to be, as I said, the second largest deficit on record. I suggest that the Prime Minister, when he was in opposition, would have known what the effects would be; I am sure he would not have been so ignorant of the facts. I am pretty sure that the Labor Party, in making those massive promises in order to win government, knew exactly what was the situation with regard to estimates. I repeat that they were only estimates. I am sure that the Treasurer (Mr Keating ), in applying himself to the 1983-84 Budget, could have made sure that such a deficit would not have been forthcoming.

What are the alternative programs of the Government? I sat on the Government benches for seven years. I have been disgusted to hear policies and programs espoused by the Government when it was in opposition, knowing that those policies and programs would never come to fruition if it gained office. I am not here to suggest what were the alternative programs, except to say that, on our record, I am sure that the figure of $9.6 billion, which was later blown out to $10.4 billion, would not have occurred; that it would have been some billions of dollars less.

It is important to look at the effects of the deficit not only in terms of the present but also of the future. I referred to the fact that the record deficit occurred in 1974-75. This Budget and the actual expenditure last year indicate the effects of deficit budgeting on the economy of Australia. In 1982-83, $3, 378m, or 6.9 per cent of expenditure was expended on servicing the interest on the national debt. In 1983-84 that amount has increased to $4,133m, 7.3 per cent . Those figures are significant because such expenditures from Commonwealth revenue have no direct bearing on placing people in jobs and implementing capital works. It is money that actually goes down the drain. Worse that that, next year's figures will be greater because they will service the debt that has been created this year. The public debt-the value of securities on issue-as at 30 June 1983 was on my understanding, $22,859m for the Commonwealth and $16,269m for the States, giving a total public debt at that stage of $39,128m. That figure does not include the debt of local government or semi-governmental bodies . If we were to look at the total amount involved, in actual fact I am fairly sure we would find that the national debt of this country would equal the amount expended in one Budget. That is a horrifying situation for the future generations who will be called to account for the excesses of this Government. All of those matters are relevant.

The Budget stands on some fairly doubtful estimates. For instance, I refer to the containment of increases in wages to seven per cent, already a higher figure than was promised at the National Economic Summit Conference-three per cent to four per cent in the next financial year. But the Economic Summit was a closed book except for the open cheque that was given with regard to wage increases. Everybody was required to pull down prices and services without taking into account the wages factor. So this Budget relies on increases in wages being restrained to seven per cent. We will see on Friday how successful that restraint has been in the current round of negotiations. If the figure does not remain at seven per cent, this will result in a blowout in expenditure, a blowout in the deficit and also an increase in the consumer price index.

I mention in particular the inflation figure of 7.5 per cent. I do not know how the Labor Party will explain this to the workers of Australia. They may have been paying $8 per week out of their wages through a health insurance plan but I do not know how that is any different from a levy of $8 which will be taken by way of taxation. The CPI is to be artificially decreased because of the influence of the Medicare levy. The Medicare levy, as I understand it, will account for about a three per cent reduction in the CPI figure. That is important. Keeping that figure down to 7.5 per cent would be a massive task. In actual fact we are looking at an increased cost of living for the person in the street-the wage earner, the businessperson, the housewife-of 10.5 per cent. How will the Government obtain a recovery through this Budget?

Mr Fisher —They are losing both ways.

Mr BRAITHWAITE —They are losing both ways, as my friend the honourable member for Mallee says. The Government has a very slender hold on this Budget with regard to the CPI figure and the wages figure. In addition, a blowout in expenditure might result as the level of unemployment has not decreased, as has been suggested. I believe that the Budget can be taken as a tribute to the broken promises of the Labor Party. I wish to place on the record of this House some of the promises that were made prior to the election and what the reality has been. While the Budget deficit is to be the second highest on record, it stands as a record of broken promises by the Hawke Government.

Mr Wells —Give us another $4m and we will fulfil them all.

Mr BRAITHWAITE —Somebody suggested that I should give the figures to the House. Honourable members can have them. The promise was that there would be income tax cuts for six million workers. Reality: No tax cuts but progressive increases as wages rise and also as the block concessional rebate level moved from $1,590 to $2,000. Another promise: To increase the tax threshold to $5,000. Reality: There is no change; the threshold is still at $4,462. Promise: To increase the pensioner tax threshold to $5,893. Reality: There has been no change. Promise: To increase the spouse rebate and the sole parent rebate to help the family. Reality: There has been no change. Promise: No new capital gains tax. Reality: There has been a tax on lump sum superannuation payments and that could be interpreted as a capital gains tax. Promise: Cheaper petrol, a reduction of 3c a litre. Reality: There has been dearer petrol. As a result of this Budget the price of petrol will increase by 2c a litre and, worse still, that figure will be indexed every six months.

Mr Cowan —And Mr Wran put it up last night.

Mr BRAITHWAITE —Mr Wran aggravated that situation last night by increasing it in the New South Wales Budget. Another promise: There will be no devaluation. Within a week of the election there was a devaluation of 10 per cent. I understand that has stablised at about 6 or 7 per cent at the moment. There was a definite promise, even after the election, that there would be no change to superannuation. Reality: There has been an increase in the taxation on lump sum superannuation payments. We will bear the brunt of that with air flights within a week or so.

Mr Cowan —Labor always knocks the working man.

Mr BRAITHWAITE —As my friend said, they are always knocking the working man. There was a promise to raise the pension to 25 per cent of the average wage over a three-year period. The reality is that it is still at 22.9 per cent and also it will be affected by the artificial reduction in the consumer price index by the Medicare levy, as I mentioned before. Also, there was a promise that fringe benefit income levels would be indexed. The reality is that fringe benefits are to be indexed but means tested on an assets basis.

I have a lot more instances here and I intend to put them into the Hansard record. Promise: Double the current expenditure on tourism. Reality: The prices of Avgas and Avtur have increased by 6c a litre since the Labor Party has been in government. Promise: To extend the tender for five additional patrol boats to north Queensland engeering agents. Reality: No such order has been given. Promise: Five hundred thousand people will be put back to work. Reality: In the first six months, to August, I believe there were 1,000 extra; there are 499,000 to come. Promise: The north Queensland Australian Broadcasting Commission was to be given $250,000 to upgrade services. Reality: The Labor Party has put a Government Press agent in Townsville to promote government policies. I wish it would promote the Government's broken promises.

A promise was given to underwrite the 1982 sugar crop for the Queensland farmers. Reality: There has been no underwriting but a cost increase to the farmers has been imposed by the additional fuel costs I mentioned earlier. Promise: To maintain the real value of local government general purpose grants. Reality: In 1983-84 local government has been underpaid by $15m on these general purpose grants. There was a promise by the Minister for Employment and Industrial Relations (Mr Willis) to restore the previous taxation position on retreaded tyres. Reality: The retreads are still sales taxed. Promise: To increase growth through undertaking desperately needed public capital works. Reality: The Labor Party has scrapped the Alice Springs-Darwin railway, it has reduced expenditure on the Brisbane Airport and it has cancelled the bicentennial water resources program. They are not all the promises that have been broken. I am sure my colleagues will be able to mention more of them. As I said, this Budget stands as a testimony to the greatest number of broken promises ever. The promises were made by a party that was determined to win government one way or another.

Under this Budget and the earlier mini-Budget some sectors of the community are being called upon to make a greater sacrifice than others. The country, rural and northern Australians have been taken to the cleaners by this Budget. The honourable member for Fadden (Mr Beddall) mentioned something about the three Rs . He was meaning that the three Rs stood for 'rip-off', 'ruin' and probably ' recovery' from the rural sector.

I shall mention some of the decisions that will affect the rural sector. I have already mentioned the Alice Springs-Darwin railway project that effectively has been scrapped, in spite of the very definite undertaking to continue it. Taxation alterations have been made which affect the rural area. The accelerated depreciation write-offs introduced in the previous Budget are not extended and there is great confusion in the taxation area. There has been a neutralisation of the income equalisation deposits. The land clearing and drainage concessions have been taken away so there is no encouragement for development. Taxation has been imposed on fortified wines, in spite of very definite undertakings that that would not happen. The deductibility for on-farm fuel and hay storage costs has been removed.

The bicentennial water resources program that would have assisted the rural people more than anyone else has been cancelled. The accelerated tuberculosis and brucellosis campaign has been restricted, in spite of an undertaking to the contrary and the fact that many people throughout northern Australia have destocked in preparation for this accelerated program. The sugar underwriting has been taken off. The rural people will be asked to pay for the protection of the steel industry that has been afforded the Broken Hill Proprietary Co. Ltd, but no such underwriting or assistance is contemplated for rural industries. As I have mentioned, the cost of fuel has increased, not only because of the price increase but also because of the fact that excise is no longer rebatable and there has been a widening of the gap as far as fuel freight is concerned.

Oils and lubricants probably get one of the smallest mentions in the Budget. Nobody is expected to notice them. Sales tax on these commodities will be increased by 20 per cent. Who does that affect? It affects the rural people, the country people, the people who are out there determined to try to make a living in spite of the intervention of this Federal Government in Canberra. Of course, we had the wonderful election promise that the Labor Party would look at and fix up the anomaly of sales tax being imposed on the freight component of costs for goods. What has happened? Absolutely nothing has happened; it still obtains.

Northern Australia has been given one Minister from Queensland but none actually from northern Australia itself, above the twenty-sixth parallel. That area provides the major coal resources. It provides about 50 per cent of coal exports. About 90 per cent of the sugar grown in Australia is grown in that region. We have the mighty mines of Mt Isa in that region. We have tourist potential. All of these are producing income for the Commonwealth, yet so little is given back.

Mr Cowan —And there is a vacancy in the Ministry and they will not give it to a Queenslander.

Mr BRAITHWAITE —There is a vacancy in the Ministry, but worse than that of course is the fact that the Government has a Minister for Primary Industry, a Minister for the country, who is not even party to the inner decisions of the Cabinet. That is the contempt with which this Labor Government and this Budget is treating rural Australia.

Madam DEPUTY SPEAKER (Mrs Child) —Order! The honourable member's time has expired.