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Tuesday, 6 March 1973
Page: 249

Mr WILLIS (Gellibrand) - Firstly, may I say how proud I am to represent in this House the people in the electorate of Gellibrand. They have consistently returned Labor members to this Parliament and no doubt they have great hopes that this Labor Government will provide for them a more humane, secure and just society than that which they have known for the past 23 years. Pensioners and people of low income families make up a considerable proportion of my electorate and for both of these groups poverty, or the threat of poverty, is an ever present reality. I am sure that if this Government is allowed to carry out its mandate then these abhorrent current realities will be effectively eliminated. This will be so because this Government is motivated by egalitarian values without which poverty will never be eliminated and economic security never assured. The previous Government, by shunning those egalitarian values throughout its 23 years of office, has created a situation in which many Australians live in poverty. The Melbourne Institute of Applied Economic Research found in its poverty study in Melbourne in 1966 that 7.7 per cent of the population was living in poverty and another 5.2 per cent was living in marginal poverty. Thus about 13 per cent of the population of Melbourne was found to be living in poverty or near poverty at that time, and that was a conservative estimate because, as those who conducted the survey stressed in their publication, the poverty line they drew at that time was 'austere' and 'stringent', to use their words.

After that information became available the previous Government made some perfunctory efforts to alleviate the situation, but it achieved very little and this was inevitable given its apparent refusal to face up to the fact that poverty is a relative not an absolute concept. Whether or not we are poor depends not on our actual income alone but on that income compared to the incomes of other people in the community. For instance, in Indonesia the average income per head of the population in 1969 was $US100, and a person earning 5 times that amount would be well off by Indonesian standards. But in the same year Australia's average income per head was SUS2.300, so that $US500, which was a good average income in Indonesia, would certainly be a poverty income in Australia.

Poverty then is indisputably a relative concept. It follows that its elimination can only be achieved by a concerted attempt to ensure, firstly, that those at the bottom of the income ladder are not so far below the average income level that their incomes could not be regarded as reasonable by general community standards, and, secondly, to ensure that that continues to be the situation by providing that those lowest incomes increase in step with those of the community generally. Unless we take both of these steps we will not eliminate poverty in Australia. I am immensely pleased to be a supporter of a government which intends to take both those steps. Already there is before the Parliament a Bill to increase the rates of various social service benefits as part of the process of establishing acceptable minimum income levels in our society.

In passing may I refer to one very commendable feature of that Bill. As well as increasing the various levels of social service benefits the Bill also eliminates the totally unjustifiable and deplorable differential system which previously applied as between various benefits implying as they did that one condition of need was more respectable or less respectable than another. For instance, a man with a dependent wife and 2 children who was out of work for more than 6 weeks because he could not get a job currently receives $34 a week, but a man with the same sized family who was out of work because he was sick for that period of time receives $37 that is, S3 more. The need is the same but apparently the previous Government considered that being unemployed was somehow not respectable or the individual was to blame to some extent. Perhaps the unemployed man was penalised for being a politically embarrassing statistic. Such differentials have no place in a social welfare system which is based on compassion. It is indeed gratifying that the Social Services Bill now before the House will eliminate those differentials and provide for the needy simply because they are needy and will not involve implied value judgments about the morality of the circumstances which brought about the need. I should add that the actual benefit set out in the Bill for the unemployed and sick will provide a family of 4 with $46.50 a week which is a very considerable increase over the levels of $34 and $37 that previously applied.

The Social Services Bill is, of course, only the first step in raising the levels of benefits to equitable levels and it is intended that when those levels have been reached they will be kept in step with community standards by moving them in accordance with the general index of wages as represented by the average weekly earnings index. In this way, their value relative to other incomes in the community will be retained, and that is basic to the elimination of poverty. Of course, a government which is concerned to eliminate poverty must do more than provide adequate social services, lt must also endeavour to ensure that the lowest wage is such that no man can work for a full week and then take home an income that would leave an average family living in poverty. The previous Government's record in this regard is appalling. In 1966 the Commonwealth Conciliation and Arbitration Commission introduced the minimum wage concept for adult males and although it was initially above the poverty line as set by the Melbourne Institute of Applied Economic Research it later fell below that level for a family of 4 and is still below that level. Since 1966 the unions have taken a number of cases to substantially increase the level of that minimum wage. But although the Commonwealth Government intervened in those cases, supposedly in the public interest, it did not make any submission of substance in support of those union applications nor did it attempt to assist the Commission in any way by providing background material that would have been helpful to the Commission in its task of setting an adequate minimum wage. I have every confidence that, in contrast to this obvious lack of concern for the lower wage earner displayed by the previous Government, the present Government will support a substantial increase in the minimum wage in the coming national wage case.

Whilst on this matter of national wage cases I would like to refer to the claim made earlier in this debate by the Deputy Leader of the Opposition (Mr Lynch) that his Party was not anti-union or pro-employer. One can only say in relation to that assertion that it was hardly supported by the performance of the Opposition Parties when they were in office. There were 20 major wage cases involving union claims for general wage increases in the 23 years in which the Liberal and Country Parties were the Government of this country. These were basic wage, margins and national wage cases. The Commonwealth intervened in all of them. On only 2 out of those 20 occasions did the Commonwealth support any increase in wages at all. Once it suggested that a small increase would not be outside the capacity of the economy and once it said that it supported a moderate increase. Of the other 18 cases it flatly opposed any increase in 9 cases, including 7 out of the last 9, and although it did not specifically oppose any increase in wages in the other 9 cases the general tenor of its remarks in most of them was to emphasise the dangers of a wage increase.

In the light of that performance by the previous Government, we on this side of the House will take a lot of convincing that the Opposition Parties are not anti-union. This is especially so when we recall that they also supported the retention of penal clauses in the Conciliation and Arbitration Act. Resort to those clauses by employers cost the trade union movement about $500,000 in fines and costs between the early 1950s and late 1960s. I am pleased to be part of a Government which genuinely supports the legitimate aims and aspirations of the trade union movement and which will prove that by its actions in the Arbitration Commission and by abolishing the iniquitous penal clauses.

Let me return to the general theme of my address. There are many other important ways in which action can and must be taken to eliminate poverty and to provide economic security to all. The program of this Government as outlined in the Governor-General's Speech is full of such action. An important part of that platform is a pledge to restore full employment. The previous Government, whether through incompetence or deliberate intention, periodically allowed unemployment to reach alarming levels and in so doing destroyed the economic wellbeing - such as it was - of many thousands of Australians. A government which is concerned to maintain the economic security of its people must give the highest priority to full employment. This Government is pledged to do that.

The national compensation scheme will prevent an injury at work or leisure from dragging a family into penury, as will the scheme for universal health insurance which will guarantee all citizens freedom from fear of mammoth hospital bills and other medical expenses. The channelling of funds into schools and pre-schools on the basis of need will do much to ensure that equality of educational opportunity becomes a reality. All these measures and others like them will play an important part in bringing about the goals of the Government to which I have alluded. But there is one other aspect of the Government's program which has important egalitarian connotations to which I have not yet referred, and that is its intention to put pressure on prices or perhaps I should say on the price fixers. For the past 23 years the Government of this country fought inflation in 2 ways - by stop-go policies of deflation and reflation thereby causing substantial periodic unemployment, and by attacking wage claims. Never could it have been accused of putting real pressure on price fixers to reduce their prices or even to reduce the size of a proposed price rise. Had it done so, it could well have had more effect in reducing the rate of inflation and in the process it could have saved the consumers of Australia many millions of dollars.

Let me refer to one specific example. The Holden car came into full production at roughly the same time as the Liberal-Country Party took office 23 years ago. At no time in the period since then did the previous Government attempt to reduce the price of the Holden, despite the enormous profits it was making for General Motors Corporation which wholly owns General Motors-Holden's Pty Ltd. To prove this let me point out that the original investment from General Motors Corporation in America amounted to $1,931,600. That is the total amount of American money that has been put into General Motors-Holden's Pty Ltd. That money had been well and truly repatriated a number of times over prior to the Holden project even beginning. But since the Holden project began enormous profits have been made. Between 1951 and 1972, excluding the 2 years 1960 and 1961 for which no profit figures are available, the profits made by General MotorsHolden's were $461. 6m and $246.6m was repatriated in dividends. In relation to the amount of money which came from the United States of America to finance General MotorsHolden's in the early stages, the profits amount to 239 times the original investment and the dividends amount to 128 times the original investment. Clearly this was a case where the price of the product was not only too high but also was in fact totally exorbitant. The operations of a prices justification tribunal which could have exposed this situation and brought about a lower level of Holden prices over the years would have had immense benefits for the people of Australia.

Of course, pressure on price fixing can be achieved in other ways - for instance, through tough legislation for the control of monopolies and restrictive practices. In this regard it is relevant to note that in the United States a government survey recently found that if monopoly industries in the United States were to be broken up, prices could be reduced by 25 per cent or more. That was an internal report of the United States Federal Trade Commission. It is referred to in Ralph Nader's study group report on anti-trust enforcement which has been produced as a book entitled 'The Closed Enterprise System'. This is not to say that exactly the same situation would apply in Australia but it indicates what we all know to be the fact, and that is that monopoly and oligopoly go hand with administered prices and high profits. Action to control monopoly and to achieve a more competitive environment than currently applies in this country will be undertaken by this Government. It will result in a lower price level than would otherwise apply and in increased economic welfare for the ordinary people of Australia.

There are other ways of putting pressure on prices and restricting their freedom to go to any level the price fixers choose. These involve our external trade position. The considerable importance of exchange revaluation as an anti-inflationary measure is only just being realised in economic circles as a more complete understanding of the inflationary process is achieved. Increasingly in economic circles the simple wage-push explanation of the cause of inflation, so beloved by employers and the previous Government, is being replaced by a realisation of the very important role played by external factors in the economy. Inflation has become much more severe throughout the world, including Australia, since the mid 1960s. Those who see union militancy as its basic cause must explain how unions all over the world suddenly became more militant in the late 1960s. They must also explain why inflation is exceptionally high in some countries such as Spain which do not have a strong trade union movement, if they have a trade union movement at all, and in which worker militancy is rare.

Clearly, other factors are in operation. Those other factors have been spelt out convincingly by the world famous economist, Professor Harry Johnson of the University of Chicago and the London School of Economics. His thesis, in minute summary, is that high inflation which has affected the whole of the Western capitalist world in the last few years is traceable to the actions of the United States Government in the mid 1960s when it massively increased its military involvement in Vietnam without increasing taxes. The result was a substantial increase in inflation in the United States of the conventional excess demand kind, and this inflation has been exported around the world due to the dominant position of the United States in world trade and the practice of countries tying their currencies to the United States dollar, as they almost all did until the curency upheavals of the last couple of years.

The process of transmitting inflation works through capital movements and, importantly, through increasing prices in world trade, enabling import-competing industries to raise prices to the extent of the increases in import prices without losing sales to imports. This can be shown to have operated in Australia today with price rises in a number of industries matching increased import prices. Examples of 2 such industries, which I do not have time to pursue, are the steel and motor vehicle industries. This theory is, as I have said, increasingly accepted in world economic circles. The only way to protect the country from inflation in this situation is through either direct price controls or action to lower the level of import prices, which means either exchange revaluation or reduced tariffs. This Government, as distinct from the previous Government, has shown its willingness to revalue, and this action must help to protect Australia from the rampant world inflation. Associated with policies to put pressure on prices through the establishment of a prices justification trubunal and stronger controls on the existence of monopoly power, this Government will be placing the emphasis on inflation control where it should be - on those who set the prices of commodities and services in this community and not on those who have to pay them.

May I conclude by saying that the program outlined by the Governor-General will clearly lead to the eventual abolition of poverty in our society and a more secure and just society for the vast majority of Australians. But in achieving this we should not lose sight of our wider responsibility, and that is to be concerned with the poor people not only of this country but of the whole world. The economic disparities between the richest and the poorest countries in the world are enormous and getting larger. The gross national product per capita for the United States of America in 1969 was 40 times higher than that of India and growing 4 times as fast. The relative nature of poverty to which I alluded earlier applies as between nations as well as within them, and drastic action on a world level is necessary if the great majority of the people of the world are not to become even more poverty-stricken in the future. In the world councils, in our trade policies and in our aid policies we must endeavour to assist the underdeveloped countries to increase their rates of growth. To do so is not only the decent and humane thing to do; it could also represent a very rewarding investment in our future national security.

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