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Tuesday, 29 November 1983
Page: 2956


Mr HOWARD(2.58) —As all members of the House will know, the most solemn duty imposed upon a Minister of the Crown in the Westminster system of government is to be truthful and candid to the Parliament of this country. For that reason I move:

That this House censures the Treasurer for having misled the House regarding the response of the Economic Planning and Advisory Committee to the latest economic projections of the Department of the Prime Minister and Cabinet.

It is worth taking the House back to the events of only last Friday morning, when there appeared in an issue of Business Review Weekly a very lengthy report from Stuart Simson which detailed the projections of a 55-page analysis of the Australian economy prepared by the Department of the Prime Minister and Cabinet. Even the most cursory reading of that analysis of the Australian economy indicated very clearly that it was starkly at odds with the representations the Government had been making about the Australian economy from almost the time the Hawke Government was elected in March of this year. The House will be aware that the National Economic Summit Conference adopted the policies put forward by the Government on a certain basis. It is therefore fundamental to the continuation of the Government's economic integrity and credibility that if there were any fundamental change in the basis of what was put to the Summit by the Government, the Australian people should be taken into the confidence of the Government.

So important was that that at the time of the national wage case the Government went to the Australian Conciliation and Arbritation Commission on behalf of the people of Australia, representing, as the Commonwealth Government does, the public interest at wage cases, and said: 'Don't worry, the Australian economy can afford an immediate return to full wage indexation'. As a result of that representation, that was noted by the Arbitration Commission itself, when it said that, amongst other things, one of the reasons it handed down the decision it did was that the Government had told it that there had been no material changes in the economic outlook from those presented at the time of the Economic Summit. That is a very important element, because what the Government was saying to the Arbitration Commission was, 'What we put to the Economic Summit has not materially changed', or in other words, 'Projections on which the decisions of the Economic Summit were made remain as true now as they were in April when they were put in the Economic Summit'. Yet at the very time those representations were made on behalf of the Commonwealth Government of this country to the Arbitration Commission, the Government must have had in its custody or must have had detailed knowledge of the 55-page projection on the Australian economy prepared by the Department of the Prime Minister and Cabinet.


Mr Willis —Rubbish!


Mr Keating —Lie!


Mr HOWARD —Honourable members opposite call out 'rubbish' and 'lie'. I will deal with rubbish and lies in a moment. Let me go to the statement of the Treasurer ( Mr Keating) issued on 25 November. This is what the Treasurer of Australia said only last Friday when talking about this economic projection, and I quote from his statement:

The projections do not have any particular status other than as a background paper for EPAC. At its meeting EPAC members criticised technical weaknesses in the paper and-

listen to this-

generally rejected it as inconsistent with likely future trends in the economy.

EPAC 'generally rejected' the document--


Mr Keating —That is right.


Mr HOWARD —And still the Treasurer misleads the Parliament by nodding assent to the statement he made last Friday. Still he nods assent. Still he asserts that the Economic Planning Advisory Council rejected the document at its meeting on 7 October. At the end of his statement, in criticising the very balanced and pungent comments made by the Leader of the Opposition (Mr Peacock) about the economic projections, the Treasurer said of the Leader of the Opposition:

He will need more than a rejected background paper to an EPAC meeting.

That is what he said-'a rejected background paper'. Let us have a look at the minutes of the EPAC meeting held on 7 October. Let us remember that this Economic Planning Advisory Council was set up by the Government to advise it about the last Budget. Of course EPAC did not meet until 25 July. By that time all the Budget decisions had been put to bed. A fat lot of use EPAC's advice was in the preparation of this year's Budget, but I will pass that over. EPAC, at its very first meeting, asked for an update of the material that had been put to the Economic Summit. Let there be no argument about it. The three scenarios put to the Economic Summit were not prepared by the Treasury, so the Treasurer cannot run around now and say: 'Look, do not take any notice of this latest survey because it was not a Treasury document', because the scenarios presented to the Summit were not Treasury projections either. They were projections of the Department of the Prime Minister and Cabinet. If it is good enough for those things to be recognised at the Summit, it is good enough for them to be recognised now. So the Treasurer cannot run around now and say: 'Forget about these projections because they are not Treasury projections'. The minutes of the EPAC meeting on 25 July record that these projections were asked for. It is very interesting to read from the minutes. They note, of course, that-and I do not dissent from this:

the projections were not forecasts of the future, but rather a tracing out of the possible implications . . .

The minutes went on to say:

. . . the projections were a useful tool in considering the consequences of various developments.

. . . All three projections produced a less favourable scenario for Australian economic prospects than did Summit Projection 'A'.

I repeat that all of them produced a less favourable projection for the Australian economy than did any of the scenarios presented at the Summit including, of course, projection A. In other words, the Department in its latest summary was saying to the Economic Planning Advisory Council: 'We, who gave you the Summit scenarios, now say to you that the outlook for the economy is worse than we thought it was at the time of the Economic Summit'. No wonder the Treasurer tried to suppress it. No wonder he tried to conceal it. No wonder he has tried to represent to the Australian people that EPAC rejected it. But, unfortunately for him, the truth is otherwise. EPAC did not reject it. So far from rejecting it, EPAC decided to set up a committee to examine the projections . Does the Treasurer seriously say that if a body sets up a committee to examine projections it is rejecting them? It gives a new meaning, a new contortion, a new tautology to the English language for anybody to suggest that if a body says 'We will set up a sub-committee to examine these projections' it is rejecting them. One has only to state that to realise how absurd it is. The Economic Planning Advisory Council-the body chosen by the Government to advise it--


Mr MacKellar —Chaired by whom?


Mr HOWARD —Chaired by none other than the Prime Minister of Australia (Mr Hawke) . This is the body that is supposed to have rejected these projections. It went on to say:

. . . the implications of the projections were disturbing.

Of course they were disturbing; they are disturbing. It is disturbing to know that a government essentially won an election because it was able to persuade people that it could do a better job with regard to unemployment than did the government it replaced. It is very distrubing that the Leader of that Government , the present Prime Minister, during the election campaign said 'If you elect the Fraser Government, unemployment will approach one million people in 12 months' time' and that now the economic projections of his own Department are that on one scenario, on one outcome, almost one million people will be unemployed by 1985. Of course EPAC regarded it as disturbing and the Australian people regard it as disturbing, but it was even more disturbing that the Treasurer sought to conceal from the Australian Parliament and from the Australian people the knowledge of this projection.

Over the months I have been berated in this Parliament by Government members because I did not mention a figure that had been given to me as a result of a 10 -minute phone conversation during the evening before the election. They have tried to hang me on that matter. But the Treasurer sits on a 55-page detailed analysis of the Australian economy and has the temerity to say that he has not misled the Parliament. It is an absolute double standard and it just shows how absolutely selective is the morality and the approach of the Government on these matters. It is very interesting that EPAC wanted to set up a committee comprising industry, the Australian Council of Trade Unions and State governments. It wanted that committee to examine these projections. So it is clear, on reading the minutes, that the Treasurer was not telling the truth when he issued this statement on 25 November. He can laugh, he can guffaw, he can fulminate as much as he likes, but nobody with the most elementary understanding of the English language can possibly deny that in his statement he said that the document was rejected. Yet when we read these minutes we find that, so far from rejecting the document, EPAC was disturbed by it and it decided to undertake further study. One can only contemplate what were the motives of the Treasurer and, indeed of the Government in this whole very sorry exercise.

No doubt in the cover-up the Treasurer will hide behind all sorts of explanations. One of those will probably be, when he replies to me: 'You don't want to take too much notice of what the Department of the Prime Minister and Cabinet says because the Treasury view of what will happen is different'. I say to the honourable gentleman and to the House that if the Treasury has a more optimistic outlook on the employment front than does the Department of the Prime Minister and Cabinet, it will be about the first time in 20 years that that has occurred, because normally the Treasury's outlook on the economy is infinitely more pessimistic. I know why the Treasurer will not come in here and tell us what the Treasury thinks will happen to unemployment. It is because he knows darn well that the Treasury, root and branch, is opposed to this crazy return to cenralised wage indexation. He knows as well as I do that what Max Corden wrote in the Australian Financial Review this morning about wage indexation locking the unemployed out is the truth about the economy. Forget about the beat-ups on the front page of the Melbourne Age about steel production; the real truth lies in the middle pages of the Australian Financial Review.

With chilling logic Max Corden spells out very clearly that full wage indexation is remorselessly locking the unemployed out of a future in Australia. That policy is being supported and encouraged by the present Government at the behest of the Australian trade union movement. That is one of the reasons why these scenarios have been suppressed. If honourable members opposite think that that is a little exaggerated, I will read from another section of the minutes of the meeting of 7 October. This is the meeting at which they did not reject the projections although they did reject them. They did not quite accept them so they decided to have an examination of them. That is what the Treasurer is trying to tell us really happened. It is very interesting that when one gets to the end of this extract from the minutes one comes across a statement which really gives a very interesting clue to one of the reasons why the Government should be adopting this course of action. The minutes state:

It was noted that while the ACTU--

that is the Australian Council of Trade Unions-

supported the further development of models, it considered that the Summit scenarios had been put to an inappropriate use by some parties in the National Wage Case.

Scenarios had been put to an inappropriate use. In other words, the truth hurt a little at the national wage case. When the truth hurts, in the eyes of the ACTU it is not the truth hurting; it is other wicked people putting something to an inappropriate use. The trade union representatives went on to say:

The trade union movement would not continue to support work in this area if it were to be misused.

In other words, if the work were to be made public the movement would not go on to support it. If one reads that statement one will get some idea as to why the Government has been so cravenly desperate to suppress knowledge of these projections. That is why when these projections became public the Treasurer could not get up and say: 'Here is a copy of the document. Of course these scenarios are more pessimistic. I do not accept them for the following reasons.' We all know how difficult economic forecasting is, but no, the Treasurer could not do that. He had to get on his high horse and try to discredit the projections. He had to try to misrepresent the position of EPAC. He had to try to prove that black was white. But in reality, far from rejecting these projections, the EPAC body has been very greatly disturbed by them. If one were to look at the beginning of the last paragraph of the extract of the minutes, which I invited the Treasurer to table, one would see that it states:

Although the results of the PM & C projections were considered disappointing, emphasis was given to the fact that certain policy approaches would produce better employment results than others.

Of course they would produce better results. A policy approach on wages less irresponsible than that followed by the present Government would produce better results. A continuation of the wages pause would have produced better results. So would a lower Budget deficit and a more responsible monetary policy than the present Government is now running. The money supply is already about 2 per cent above the projected target brought down in the last Budget. All those things certainly would have produced a far better policy outcome than have the policies which have been followed.

The fact of the matter is this: These projections are a chilling reminder of the absolute folly of the Government's policies, particularly in the wages area. What the projections do is to cut through the temporary light which we have seen at present, largely as a result of the breaking of the drought and the beneficial effects of the wages pause flowing through to our inflation and earning levels. I defy the Treasurer to say to me and to this House that the Treasury would take a more optimistic view of the employment outlook than that taken by the Department of the Prime Minister and Cabinet. These projections very starkly, very clearly and very chillingly say to the Australian people that when all the froth and bubble is past, when all this temporary aberrant upsurge is behind us, we will be locked into a much higher level of unemployment than we would have thought possible only a very short while ago.

So far from these projections supporting the belief and the commitment of the Government that it is going to create 500,000 new jobs in its first three years of office, they disprove it. One of the scenarios, and it is a very likely one, is that the prices and incomes accord will not hold together-unemployment in 1985 will be 50 per cent greater than it was during the last financial year of the Fraser Government's term of office. Yet the Australian Labor Party was elected to do something about unemployment. Its members were the people who said that we had failed on unemployment and that they had some kind of answer. These were the people who believed that through their special compact with the trade union movement they were going to rescue the unemployed of Australia. Of course the Labor Party has demonstrated that special compact. It has demonstrated a unique relationship. It has demonstrated that it will always do the bidding of the trade union movement. It is not only doing it over the unemployed-in the words of Max Corden through indexation it is locking the unemployed out of things-but also it is doing it over such things as the repeal of sections of the Trade Practices Act. Shamefully at the same time as fines on Australian businesses are being increased to half a million dollars the trade unions engaged in militant conduct are being let off altogether. That is the sort of double standard which time and again this Government is demonstrating.

However, far more serious than all of that is that having been caught out, having been shown that its policies would produce higher unemployment, as we said they would-from the time that the Government was elected we argued against its wages policy-we reminded the Australian people that if they went back to full wage indexation unemployment would go up and not down. But having been caught out on that, instead of coming clean, as the Treasurer is always exhorting other people to do, instead of being honest in the face of a 55-page document, and not some kind of oral advice, and being dinkum about it, what does he do? He remains silent. He tries to conceal the document. On Friday he publicly misled the Australian people by saying that the Economic Planning Advisory Council had rejected this document. But that is not enough. Worst of all, for a Minister of the Crown, the Treasurer comes into this Parliament and he misleads it. He confirms the accuracy of what was said last Friday in his Press statement. He demonstrated the sensitivity, the vulnerability and, by his disception of this Parliament, I believe he demonstrates an inability to hold the office he now has.


Mr SPEAKER —Order! Is the motion seconded?


Mr Peacock —I second the motion and reserve my right to speak later.