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Tuesday, 23 October 1973
Page: 2500

Mr LYNCH (Flinders) - The irresponsible approach of the Prime Minister (Mr Whitlam) to this censure motion is a clear reflection of his total inability to command effective national leadership in this country. He spoke in this House not as a great Prime Minister concerned with the basic problems facing Australia but rather as a man devoured by his own vanity and arrogance - a man whose vaudeville performance in this House is one of contempt for the Parliament and contempt for the people at large. His was the approach of a cheap demagogue, not of a national leader. This man sought to clown his way through the debate by using personal insult and cheap political diatribe.

Whatever factors foreshadow the demise of this Government in the short period ahead - and there are many of them - the Prime Minister's vanity, conceit and absolute preoccupation with his own sense of self-importance will undoubtedly be to the forefront. He clowns in this Parliament while, outside, significant groups of the Australian community are being hurt very badly indeed. They are hurt by the hapless failure of the Prime Minister and the Government to provide solutions to the major problems facing Australia. He struts on the national stage like a popinjay, prepared to evade, to ignore and to avoid the real issues of concern. The only major difference between the speech made by the Prime Minister and that made by his Treasurer (Mr Crean) was that it was obvious that the Prime Minister does not really care and that his Treasurer, his chief economic adviser, does not know. The speech made by the Treasurer must go down as a pathetic apology for the Governments total mismanagement of the nation, lacking one single initiative as to what this Government is prepared to do to solve these problems. If there is one fact which this Government is apparently prepared to ignore, it is that the Government has the responsibility, because it is the government, to provide solutions.

It is clear that this Government has lost the confidence of the Australian electorate. That loss of confidence is demonstrable not simply in the form of national opinion polls, of which the Treasurer spoke, but also in the results of State and Federal by-elections in recent months and in the increasingly hostile comments of organised groups in the Australian community. No government which, by its own direct actions, causes such economic dislocation can legitimately expect popular support. This Government, in a short period of 10 months, has created a massive erosion of confidence in the Australian economy; has allowed inflation to reach levels unprecedented in the past 20 years; has generated the highest level of interest rates for the past 100 years; has allowed industrial unrest and turmoil in the industrial jurisdiction to reach intolerable proportions; has dishonoured a series of major promises; has deserted disadvantaged groups in the Australian community; has destroyed the future development of the mineral and mining industries; has sought to squeeze the private sector and the State governments and, to compound those felonies, has run this Parliament in a manner contemptuous of all its forms, all its precedents and its effective functioning.

The Australian economy is now threatened by super inflation of a magnitude which has not been equalled throughout 2 decades of government. The level of inflation calculated to the 12 months ended last September equals almost 11 per cent. An assessment based more closely on the indexed movements of the past 6 months, and taking account of the huge accelerative movement in the consumer price index, clearly demonstrates that the notional rate of inflation is now in excess of 14 per cent per annum. This assessment is made with the full knowledge that the effects of the recent Budget have yet to become apparent. In this Parliament or throughout this country there should be no doubting the seriousness of Australia's inflationary difficulties for which this Government stands indicted. However, it is a matter of absolute concern that the Government, at a time when inflation has assumed such tragic proportions, has not only failed to take corrective action but has sought to understate the seriousness of the problem. Even worse, it has deliberately contrived to claim that the major causes of inflation are beyond the control of domestic economic policies. This cynical misrepresentation is surely beyond all the limits of Government responsibility and integrity.

The Prime Minister has consistently misled the Australian public by claiming that the Government has adopted effective antiinflationary policies and that further action is largely dependent on the success of the prices and incomes referenda. The Treasurer and the Minister for Overseas Trade (Dr J. F. Cairns) have consistently misled the Australian public by asserting that inflation is primarily caused by external economic influences.

Sitting suspended from 1 to 2.15 p.m.

Mr LYNCH - As I emphasised before the suspension of the sitting, the cynical misrepresentation by this Government is surely beyond all limits of government responsibility and integrity. The Minister for Labour (Mr Clyde Cameron) has consistently misled the Australian public by stating that the massive increase in strike activity and industrial unrest is attributable to the Commonwealth Conciliation and Arbitration Act and not to his administration. The Minister for Immigration (Mr Grassby) has consistently misled the Australian public by claiming that there is no shortage of skilled labour as a result of the immigration cutback. The Australian public has been subjected to a form of collective apologia by these Ministers who share the major responsibility for economic decision making.

This is a government which has contrived to lay the blame for economic mismanagement everywhere except where it really lies - with the Government itself. No amount of pretence and evasion by the present Prime Minister can hide this simple fact. The Government .must accept the responsibility. It is clear that the Australian public is not prepared to tolerate anything less. If the Government continues to abrogate its responsibility it will be dealt a salutary lesson by the electorate at large. Yet, incomprehensibly the Prime Minister is not prepared to grapple with the problems before him. What the Australian people want from their Prime Minister is not simply purple prose and rhetoric, not personal abuse and diatribe, not a vaudeville performance in this Parliament, but a serious attempt to come to grips with the problems facing Australia, and this he has been unprepared to do.

This country is now experiencing super inflation. This has severe and adverse effects on many sections of the community, particularly on those persons who are already subject to comparative economic disadvantage. These effects are direct and immediate. However, it should be made absolutely clear that inflation is an economic malaise which carries with it long term economic consequences. In the absence of effective action by the Government we can expect the following direct consequences: First, a decline in the community's propensity to save and incentive to produce; second, a consequential slowing down in the real growth rate, which means a diminution in the growth of real per capital income for fixed income earners, pensioners and lower wage earners; thirdly, a transfer of resources away from growth industries to those industries serving current consumption; fourth, an intensification of industrial unrest as labour and capital compete for a national income which in total falls far short of total aspirations.

These factors will exacerbate the current economic disequilibrium and give rise to an increased level of economic instability. Already economists have predicted medium term recessionary tendencies. These tendencies, which would make the economy vulnerable to downward external shocks, could arise from a falling demand in investment in capital goods industries since a transfer of resources to meet current consumption cannot practicably be made in such a way as to ensure the continued full employment of resources; a falling demand for consumption goods as in the face of declining real income, people exhaust their savings, and a transfer of all their foregone consumption cannot in practice be made to higher income groups; Community uncertainty which could further curtail real investment expenditure already depressed through Government policies. Whether Australia continues with the present rate of super inflation, coupled with excess aggregate demand, or whether current circumstances foreshadow a medium term recessionary period, urgent action can no longer be avoided. The response of the Treasurer (Mr Crean) has been nothing less than pathetic. He said: 'We have to acknowledge that there is unlikely to be any substantial fall in prices. What we have got to do is to abate the rate at which inflation increases - and that certainly does not look likely to happen very quickly'.

This is a truism which is hardly an adequate response from a Federal Treasurer. The Opposition Parties consistently have called upon the Government to adopt a multi-policy approach to combat inflation; that is, the utilisation of all the available economic policy instruments which are at the disposal of the central government. The Government just as consistently has avoided the adoption of a multi-policy approach and has continued with a series of ad hoc initiatives. The initiatives have been largely ineffectual, piecemeal and fragmented.

The Government's principal economic adviser, Dr Coombs, has foreshadowed fiscal action by the Government. A reasonable expectation of new fiscal measures would entail a long awaited reduction in Government expenditure proposals. But, as has been indicated by the Prime Minister, fiscal initiatives mean increases in personal taxation to be announced in conjunction with a mini-Budget. Thus the Government's anti-inflation policies will take the form of a further squeeze on the middle income earner. The middle income earner, already seriously affected by rising interest rates, is to be further disadvantaged by increases in personal income tax. This foreshadowed policy is a logical result of a Government which obdurately refuses to accept that its own expenditure has placed an intolerable strain on domestic resources. The Government has shown clearly its incapacity to manage the Australian economy. It has failed to exercise proper demand control measures; its own spending has placed an intolerable strain on domestic resources; it has deliberately sought to repress the private sector and to expand non-productive segments of the public sector; it has caused a massive loss of confidence in the economy; and it has refused to take effective corrective economic measures in the face of runaway inflation.

The Government's industrial relations policies have been totally counter-productive to the national interest. The promised era of industrial peace under Labor has turned out to be a myth. Instead of providing industrial peace, this Government has generated industrial confrontation. Wages lost through industrial disputes were a record $23.7m during the first 6 months of this year - a full 80 per cent higher than for the same period in the previous year. Quite simply, the Government has failed to provide effective national leadership to curb industrial unrest. The Prime Minister has sought to blame the existing industrial legislation for the increase in strikes by his totally misleading statements that most disputes arise from demarcation issues. The simple fact is that such disputes accounted for significantly less than 10 per cent of all disputes in the June quarter. The legislation is the same this year as it was last year. The difference lies in the administration of that legislation.

The Government itself has been the prime mover in the wage and salary pressures which are having such direct and severe effects on cost pressures throughout the community. The Minister for Labour in particular - by his personal endorsement of major strikes, the pacesetter principle for the Commonwealth Public Service, flat rate wage increases, the 35-hour week and the claims put by the Australian Council of Trade Unions in the national wage case - has contibuted personally to the accelerating rate of inflation in this country. Instead of calling, with a sense of national responsibility, for that type of restraint which is essential in a full employment economy, he has provided a direct impetus to the build-up of inflationary psychology.

Australia's natural resource industries, of course, have suffered a series of severe shocks at the hands of the Minister for Minerals and Energy (Mr Connor). His failure to articulate detailed policies and his ideological commitment to the principle of government exploration, production-

Mr Mathews - Australian ownership.

Mr LYNCH - . . . and ownership of the Australian oil and minerals industry have caused a massive loss of confidence. The honourable member for Casey might well dwell on the impact which that loss of confidence has had on the total Australian community. The Government apparently has planned to spend at least $5,000m of taxpayers' funds without any detailed financial analysis. Export contracts and exploration and mining leases have been subject to the capricious veto of the Minister without proper public explanation. The forward investment plans of many exploration and mining companies have been either substantially curtailed or shelved. A significant downturn in investment will have serious long term implications for the real growth of the Australian economy. The great irony of this Minister's frenetic activity and personally hostile attitude to this industry has been the severe damage and losses caused to Australian owned companies and their Australian shareholders. It is quite clear that this Minister no longer has the confidence of the industry, the House or the Australian people and in the interests of this country's future development clearly he should resign.

I turn now to the manner in which the Government has clearly abused Australia's federal system of government. State governments have been denied .an adequate level of funds with which effectively to carry out programs in their constitutional areas of responsibility. The Government has sought to interfere in an unprecedented way with the conduct of State administrations. This is a centralist government which plainly does not believe in a federal system and by its policies is intent on paving the way for a unitary system of government. This is not the responsible path of constitutional alteration but the irresponsible and dictatorial method of duress. In the field of defence the Government has deliberately dishonoured its pre-election commitment to maintain Australia's defence expenditure above 3.5 per cent of the gross national product. In fact, defence expenditure has been reduced to 2.9 per cent of the gross national product. The Labor Party's expenditure commitment was so consistently emphasised in the pre-election period that defence was not a major issue at that election.

Mr Katter - Utterly dishonest.

Mr LYNCH - It was totally dishonest. The electorate was satisfied that a Labor government would adequately maintain our armed forces. Indeed, that now discredited election pamphlet 'It's Time' stated this:

An Australian Labor Government would allocate not less than 3.5 per cent of Australia's national product for defence in each annual Budget.

Of course, that promise has been totally dishonoured and the Opposition has on other occasions detailed the dramatic cutbacks in Service equipment, training and manpower. The severity of these cutbacks has caused a massive drop in the morale of the Services. The number of resignations and the low enlistment figures demonstrate the seriousness of the morale problem throughout the 3 Services. The Government has tried to buy loyalty and high morale by increasing Service pensions. This clearly has failed and it is quite clear from the number of leaks and direct information coming from senior officers in all of the 3 Services that morale is at a very seriously low ebb.

I say finally, Mr Speaker, because this is a point that will not be lost on you, that this Government has treated the national Parliament with a degree of contempt not seen in recent parliamentary history in this country. This House has not been able to operate according to its prescribed constitutional and democratic functions as a forum of legislative review. The Australian Labor Party in fact has demonstrated the underlying authoritarianism of its ideology in the conduct of the Parliament. The Government has introduced 77 Bills into this House during the session and 66 of those have been passed. A total of 200 Bills has been foreshadowed for the session, as if this Government believes that the concept of volume of legislation in the House is one that will persuade people outside the House that this is a government that is legislating in a responsible fashion. But the Australian people will not be fooled by the anti-democratic procedures which have been adopted. I instance the number of guillotines which have been moved consistently in every major and significant debate in this House. It is pertinent to remind the House that prior to this Government, the last guillotine moved was as long ago as 4 May 1971. Not one guillotine was moved during the whole of 1972. In short, this is a government which no longer has a mandate to govern. That mandate has been effectively withdrawn by the electorate. This is a government which the nation can no longer afford.

Mr SPEAKER -Order! The honourable member's time has expired.

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