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Monday, 6 March 1989
Page: 452

Mr RONALD EDWARDS(4.35) —Today's matter of public importance from the Opposition challenges the Government to talk about the living standards of ordinary people. It also mentions economic management and how that economic management affects living standards. The Opposition has argued that there has been a decline in living standards under the Labor Government. At the outset we say that that is not the case, and we can talk about statistics in a minute to show that. But what we also ought to say is that I and others on my side of the House are quite happy to oblige the Opposition with a debate about economic management. When we reflect back over the seven sorry years that preceded us, we realise that there was a record of economic mismanagement. We have only to reflect back to the time when we took office in 1983 to see that high inflation was common in Australia-for example, 11 per cent-coupled with what is really a very sorry record in unemployment, which was rising. In fact we had a condition known as stagflation. People such as the Minister at the table, the Minister for Land Transport and Shipping Support (Mr Robert Brown), are familiar with it. It takes an extraordinary economic inability to get into that combined condition of high unemployment and high inflation, but the Opposition managed to do that. It even reinforced it by ensuring that in its last year in office it put an extra quarter of a million people on the unemployment list. That was an extraordinary achievement. In the context of an expanding Budget deficit, in Keynesian terms, it ought to have been soaking up unemployment-but it was not. So we had a prospective Budget deficit of $9.6 billion under the present Opposition-it was already running a high deficit anyway-and it was not eating into unemployment, but those high rates of unemployment were not eating into inflation either. So we had this paradoxical situation in terms of the tests of economic management: high inflation, high unemployment and a high deficit.

But the story went on. We thought that as they messed it up in terms of unemployment policy and fiscal policy, they might get it right in terms of monetary policy. But they did not. Despite their best efforts, the inflation rate and interest rates, which at one stage reached 22 per cent, ran away from them. We have to remember that these were the four major achievements that they could go out on. As the lights went out on Malcolm Fraser and John Howard, they also took out with them some extraordinary economic statistics-high inflation, high unemployment, a very high deficit and high interest rates. We might have thought that the tale would have ended there, but it did not, because they also took out with them high tax rates. They managed at the same time to leave in place the 60 per cent marginal tax rate. So one can count their five extraordinary achievements--

Mr Robert Brown —And negative growth.

Mr RONALD EDWARDS —I was going to turn to negative economic growth. For the first time in 20 years we had negative economic growth. It was an extraordinary achievement. I find it unusual for the Opposition to come in here on an anniversary, if we can call it that, and say, `Let us look back at what has been achieved'. We are happy to do that, but when we do, the first thing we are forced to do is reflect upon the economic mismanagement that preceded us. We are happy to oblige the Opposition on this, but it is fair to say that we should look at the tax policies and the policy options that have been explored by us and the Opposition.

I said that the 60c in the dollar rate of tax was still in place when the Opposition was in power, and we brought it down to 49c. But we also did a number of other things in terms of tax reform, most of which Opposition members did not like. They did not like them because they affected people whom they were happy to protect, particularly those engaged in tax avoidance and evasion practices. More than that, they were not happy to tackle the issue of the capital gains tax; they did not want to. They were also happy to keep the free lunches in place. I find it extraordinary that Opposition members have backed off addressing the many opportunities that we have put in front of the Australian public in the past six years. They are still the defenders of the free lunch. We have learnt in the last couple of days that they have finally managed to renege on the assets test in terms of a social welfare policy.

I wish that at some stage members of the National Party of Australia would challenge members of the Liberal Party of Australia. I know the Nationals are challenging the Liberals on the Kerin wheat marketing plan. But the previous Government-and members of the Opposition should reflect upon this because it has had very serious long term implications-overvalued the Australian dollar over a long period and thereby gave no help to our export industries. It was the decision of this Government to float the Australian dollar that corrected those problems. It is all very well for members of the Opposition to talk about market outcomes. But they were not willing to let market outcomes prevail. They wanted to disguise those outcomes with what amounted to a managed exchange rate. People in the export market will tell members of the Opposition that that is not the way to conduct an economy that is growing and vibrant. We have had to change one of those fundamentals and allow the Australian dollar to float. The previous Government never met that challenge. The Australian public knew that it would not meet that challenge. The interesting thing is that the Australian public know that the Opposition, even though it has had six years cooling down on the opposition benches, will still not meet the challenge. Opposition members still react to the sectional interest groups, as they always have.

I have found it very interesting-as I am sure my colleague the Minister for Land Transport and Shipping Support has-to watch Opposition members over the last six years. We realise that it is a bit difficult being in opposition because a lot of the time one has to counterpunch, react to Government initiatives and try to put a reasonable positive gloss on what otherwise is a difficult job. We accept that, and the Australian public accepts that. But one would have thought that, having done that counterpunching exercise, members of the Opposition would have sat back and said, `Let us put together a policy framework that is designed to project Australia into the future'. We thought that the Opposition, after six years, would have produced such a framework. We thought that Future Directions would be it; but it is not. It is a look back into the past. No one is rejecting the past; what we are asking is, `What is the promise for tomorrow? What chances and opportunities can you put in the way of the Australian public?'. The sad thing about Future Directions is that it does not do that. It is a `look back over your shoulder' approach.

Some of us have been quiet over the past six years and have been willing to listen very carefully to try to see what policy prescriptions might be presented by the Opposition. But none have been presented. One can understand that because being in opposition is often very difficult. But the other side of that is that the Opposition has not been prepared to do the hard work of putting the policies together. Where is the wages policy? Where is the industry policy? Where is the exchange rate policy? Where is the tax policy? Where is the employment policy? They are important questions; I think they are fair questions. They certainly get asked in here and they are also asked in the community.

The Opposition would do itself and those who seek to vote for it a lot of good if it had alternative policies that were thought through in terms of projections down the track. I accept that Opposition members want to look back to the past because the past was successful. But the problem is that it has not learnt enough from the past. All the Opposition has done is focus on knee-jerk prejudices that make it feel comfortable. But that approach does not equip it for dealing with what is down the track tomorrow. It is a bit like having a football team. The other Minister at the table, the Minister for Trade Negotiations (Mr Duffy), knows that Essendon has to recruit new players if it wants to be competitive. The problem is that those opposite have not followed that line. They have not recruited new players. They have simply said, `We have a couple of premiership trophies on the shelf from a few years back'. They may have the premiership trophies from a few years back, but the public is asking, `What are you offering us this season? What is the new coaching strategy and who are the new players?'.

Sadly, I have to say that I never come here with any sense of excitement in that sense. I never wonder what the Opposition's policies will be because all we ever hear is the short term fix or a quick comment. Again, to be fair, that is reasonable because there are people in the press gallery who want a daily feed. But the larger Australian community wants a more substantial meal. They want to know what is the Opposition's strategy. The Opposition has to address some taxing and very serious questions.

We have a joint responsibility to inspire the Australian community with a belief that this country has policies and projections for the future. It is my view that the Government has done a lot of that work. We can talk about the public sector borrowing requirement and the reduction of a deficit into a surplus. We have done all those things and met those challenges. But the challenge is not over. We have to do a lot more on restructuring. We have to do a lot more for our export industries and import competing industries. Those challenges are still before us. We on this side of the House would be crazy to say that those challenges do not exist; they do. But, in facing those challenges, one has to make sure that one has addressed the other things. We will not have the support of the Australian public if we are not doing something about job creation, taxes and attitudes towards the training and education of young people. If we fail those tests, the public will say, `It is no good your going out into the wider world until you have met our requirements at home'. I say to those opposite that over the past six years that has been done. But there is a lot more to be done. I am confident that, with the policies we have put in place so far, we are in a position to do that. The Opposition faces the challenge of getting that hard work done. The evidence so far is that it has not done it. I am happy to reject the matter of public importance put forward by the Opposition.