Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Tuesday, 12 November 1974
Page: 2230

Senator YOUNG (South Australia) - It is interesting to recall that before this Government came to power its members and supporters were very critical of the Liberal-Country Party Government because of the high rate of inflation and the concern that was being expressed about unemployment in this country. When this Government took over a very short time ago inflation was running at about 4.6 per cent and falling, and unemployment was being reduced. We were again reaching the stage of full employment. Since then we have seen a complete reversal of the whole economy of this country. We see that inflation today is running well in excess of 20 per cent. In fact inflation in Australia, a major trading country, is running at one of the highest rates of any country. There are some countries with higher rates of inflation but they are smaller countries. Japan, a big trading country, has a higher rate of inflation.

We hear excuse after excuse from this Government for why we have inflation. It is easy to see that the reason we have this great rate of inflation is the economic management and instability of this Government in this country. This Government came to power hell bent, if I may put it that way, on forcing its socialistic policies upon the Australian community and the Australian way of life. These policies were first and foremost and economic logic took a secondary place. This Government has continued in that vein the whole way through. We have seen a stop-go situation. In fact it has been worse than that. It has been a stop and full acceleration situation. So often there has been merely a panic button operation. I could refer to such things as the 25 per cent cut across the board in tariffs which virtually was an economic time bomb. Nobody knew when or where it would go off. We have seen the great unemployment that that 25 per cent cut has brought to this country today. Our unemployment figure is the highest in the history of this country and I hope we will not see it again. Nobody wishes to see the great amount of unemployment that we have. I fear what the situation will be early next year when so many young people leave school and join the work force but are unable to get jobs.

It is no good the Government making excuses, as it has done. It says that Australia has imported a lot of this inflation. No doubt international inflation does have an effect upon any country but again I remind the Senate of what the situation was not so many years ago when inflation overseas was running extremely high. We saw high inflation in the United States of America and in England. We saw high inflation in France and the same in West Germany. What was our rate of inflation at that stage? At that time we had one of the lowest rates of inflation of any major trading company. The situation today is the reverse. We are one of the leaders in the field in the international inflationary race. It is no credit to this Government, nor is it any consolation to this country, that we should be in such an unfortunate situation, one which basically has been self inflicted by the policies of this Government.

The Government completely cast aside economic logic in formulating its policies and went straight down the hill with its socialistic ideals. One can say: 'OK, there is international inflation'. One can look to Japan where inflation is running much higher than it is in Australia. However the bulk of this inflation overseas is directly related to the energy crisis. Japan, for example, is one country which was solely dependent upon external supplies of crude oil. Hence she and many other countries were adversely affected by that situation. That did not affect Australia. We have been proudly boasting that we are 70 per cent self sufficient in oil in this country so this Government should not try to use the energy crisis as an excuse for the rate of inflation that we have today. In its first Budget, which was a disaster, the Government budgeted for a deficit to make sure that it would do the things it said it would do, irrespective of the economic situation. We saw the Government spending money like water and the well would never be pumped dry. But the well was pumped dry. Senior Ministers were themselves encouraging wage demands in this country and criticising the Opposition for daring to say on any occasion that excessive wage demands were adding to the cost push factors of inflation in this country. They tried to ridicule the Opposition for this criticism.

We noted Dr Cairns making statements implying that wage demands do not have any effect upon inflation. I wish to quote from an article in the 'Sydney Morning Herald' of 29 July this year. It said:

The Deputy Prime Minister, Dr Cairns, has called for substantial wage and salary increases for workers to meet the rising cost of living.

I repeat that the words 'called for substantial wage increases '. Dr Cairns said:

There must be substantial wage and salary increases to allow for cost-of-living increases and for the correction of anomalies in work values and relativities.

He made that statement to the Victorian Australian Labor Party Conference on 29 July. A few days later, on 12 August, there was suddenly a big change in the attitudes of our Deputy Prime Minister. On 12 August he called for unionists to modify wage and salary demands. He said that the power to halt inflation lies elsewhere than just in other fiscal policies; inflation in the next year would be caused by wage and salary demands. Dr Cairns said:

I have to say to unions across the nation: 'Go easy, mate.Think of those who are not as well organised as you are. Wage rises are not at the expense of the big employers but at the expense of the mothers and fathers of your comrades, and your own children. '

So he went on, completely contradicting what he had said a few days before and what he and other Ministers of this Government had been saying for months before. Let us turn to other areas in which this Government has completely disrupted the economy of this country by its philosophies and its attitudes. I refer to the area of overseas capital, which was regarded as dirty money. It is on record that many Ministers and supporters of the Government have condemned multi-national corporations and overseas capital for coming into this country. The Government brought in a policy of a 30 per cent freeze on overseas capital, making it at an absolute premium price for such money to come in. We have seen our wondrous Minister for Minerals and Energy (Mr Connor) with his policies which have done all they can not only to discourage but also to discredit overseas investors and overseas explorers who were prepared to come into this country and do what they could to assist us in our mineral and oil exploration and development. The tragic situation is that our oil exploration has slowed right down to a bare minimum and companies have turned their backs on Australia and have gone elsewhere, for the simple reason that this Government regarded them as sinners who should go out and risk millions of dollars worth of capital and expertise to find something. Having found it, this Government would step in, put the squeeze on them in many ways and virtually take it over. That is the situation we have reached. It will take a long time to restore confidence in this country.

The Government became conscious of this situation a short time ago and so we saw the freeze reduced to a token of some 5 per cent on overseas funds. But ironically the Deputy Prime Minister- the Treasurer to be, as one would anticipate from reports in the Press- is overseas at the present time, not concerned so much with overseas trade as with hawking around the money markets of the world to see what overseas capital he can encourage to come into this country. It is just not a case of reversal of attitudes; it is a case of sheer political hypocrisy. How can any Government and any Minister- particularly a Prime Minister- in the short space of a few weeks completely reverse attitudes and go cap in hand to the very people who were not just being asked to show moderation in investment in Australia but being condemned? Yet at the present time the Deputy Prime Minister is over there pleading with them to bring their finance into this country to try to get Australia moving again. We find the same situation with private enterprise which has nearly been killed in this country because of the Government's attitudes and policies. Liquidity has dried up to such an extent that many companies which should not have crashed have been starting to crash.

Senator Primmer - They were the spivs and the speculators.

Senator YOUNG - I take it that Senator Primmer refers to people who have invested in building societies as spivs and speculators.

Senator Primmer - On pretty shaky ground.

Senator YOUNG - There he goes. I ask him which people comprise a building society. The average citizen of this country, the multitudes are the ones who invest their money in building societies. Old people have put in their savings as well as young people wanting to build a home of their own. That is against the desires of this Government, which does not believe in private ownership of homes. It wants to force people to live in multi-storey flats and government-owned homes so that it can have control of their housing. Senator Primmer should not deny that because his Government's Minister for Housing had to concede the point due to the attitude of the Senate. He agreed to lift the proportion of freeholding in his Housing Bill last year after pressure from the Opposition and States. This Government does not believe in free enterprise and free ownership. It has done all it can to squeeze people.

The same situation applies to people who are trying to educate their children. The Government has aimed at what it terms and thinks are the moneyed people of this country. It has done all it can to erode and destroy our private schools. The reduction from $400 to $150 a student as a taxation deduction for educational expenses is a wonderful example. But the policy has misfired because the people who have been hit are the very people whom the Labor Party says at election times it is representing and will support. I would like to remind the Senate that the people who find it the hardest to dress their children and to provide them with text books and amenities they need for their education are the average working people of this country and not the wealthy people at whom the Government has been aiming. The wealthy people do not greatly feel the reduction to $150. Those who feel it are the families where the mother and father are working and have three or four children going to high school. This Government is trying to take away the right and ability of those parents to provide their children with a choice of school and school uniform, and thus seeks to destroy the pride of the children. All children in this country are equally entitled to wear their school uniform whichever school they attend. What the Government has done is make it jolly near impossible for parents to do that.

I defy any honourable senator on the other side of the chamber to tell me that it is possible to dress high school children in school uniforms, keep them in shoes, socks or stockings, provide them with school blazers and with their text books for $150. It cannot be done. If honourable senators are not prepared to take my word for it they can go into the electorate and ask the people of this country. It ever this Government made a great political mistake it made one over the reduction of the allowance from $400 to $150. But then we can look at what has happened in other areas. We can look at the great credit squeeze created by the Government and we can look at what this Government did not do when that was on. I must give credit here to the Premier of South Australia and the Leader of the Opposition in the South Australian Parliament.

One of our building societies in South Australia during the panic period a few weeks ago, brought on by the lack of leadership of this Government, had a great run on its funds. The Premier of South Australia spoke to the people and gave them a guarantee that the particular building society concerned would not go broke.

The Leader of the Opposition in South Australia did the same thing. Politics did not come into the matter. A State-national approach came into it. People who withdrew their money from the building society that day were the next morning putting their money back into the society because they had confidence. That confidence was given to them by the leadership of the Premier of South Australia and the Leader of the Opposition in South Australia. The panic was initially brought about because of the lack of leadership and the insecurity of the economic climate created by this Government because of the ridiculous credit squeeze which was imposed upon Australia.

When companies are starting to fall can honourable senators blame the people for wondering which will be the next company to fall? In those circumstances they cannot be blamed for taking their life savings and investments out of a building society. The situation which arose in South Australia should never have happened. It is all very well for honourable senators opposite to say that spivs and speculators were involved in this matter. I do not regard people who put their life savings into a building society as spivs, nor do I regard a young couple who are saving to build a home as spivs. It might be against the policy of this Government for young couples to own their own home and their own block of land. Good luck to them. The Opposition believes that they should be able to own their own home.

I turn now to what has happened at the present time. We find- if the Press reports today are correct- that after the short space of 7 weeks we will have a mini-budget introduced tonight. It will not be a budget brought down by our official Treasurer, Mr Crean, who I think has been one of the most unfortunate and one of the most denigrated politicians to come to Canberra. With all the criticism he has had the grates have come from his own Party and from within his own ranks. At the present time we are hearing all sorts of rumours about the Treasurer. It is not the Treasurer who will be introducing this minibudget tonight. As I understand it, it will be a statement from the Prime Minister. It will probably be made in the absence of the shadow treasurer. One wonders what we will see in this mini- budget. It is only 7 weeks since the Budget was introduced. It will be interesting to see just what will be in the so-called economic policy set down by the Prime Minister tonight. I will forecast that there will be a change of philosophies involved in this mini-budget.

At last this Government is starting to wake up to the fact that if a government wants to be a socialist government it can be that kind of government but there is only one way in which it will finish up and that is downhill economically. This is what has been happening to this country. We are going downhill rapidly and it will take a long time for this country to recover. It will take a terrific time because the people of Australia have lost confidence. The people overseas who have invested money in Australia have lost confidence. One only has to look at the Budget which was brought down 7 weeks ago to see why this has happened, let alone the previous period. If one examines the area of company taxation one can see the squeeze that was put upon companies which resulted in increased prices being charged by the companies. In Australia increased prices affect everybody in the consumer field.

If one turns to the area of capital gains tax one will realise that it is not a capital gains tax in the true sense of the word. It is a capital gains tax that was set to work to kill the property owner, large or small, in this country. It is a capital gains tax which was to do everything it possibly could to destroy the initiatives, the incentives and the preparedness to invest. We find the same thing applies with the 10 per cent premium on so called unearned income. I would like someone to define for me 'unearned income'. Are the benefits received by a person who invests his money in some society or company as risk capital to be regarded as receiving unearned income? I do not regard such benefits as unearned income. Again, what the Government has done in this area is to hurt the little people who have invested their money- the superannuitants who would like to see a little more cream on their jam. These are the people the Government is hurting. I anticipate that we might even expect something in this area tonight from the Prime Minister. I feel that this has been one of the most ridiculous policies that has been implemented in this country. The cost of collection alone would balance out a lot of the return which would be received. All the Government is doing is hurting people and killing incentives.

This Government, as Senator Carrick stated, in the short space of 2 years has had a great increase in revenue. It has doubled from some $800m to some $ 1 ,600m. This Government, during the last 2 years, has got fat on inflation because of the increase in revenue, particularly in the area of income tax. Taxation set at such levels today because of inflation has got completely out of hand and has helped to encourage wage demands in this country. The high rate of taxation proportionate to the great increases in wages is eroding much of the real income of people in Australia today. No doubt we will see something in this area announced by the Prime Minister tonight. This Government has got fat on the increased revenue. The States have got poorer and this Government has made sure that the States have got poorer and poorer for one reason- and one reason only: This Government still wishes to dominate the State scene. This Government is a centralist government and is hell bent on doing all it can to get centralism firmly established in Australia.

Senator McAuliffe - That is different from what the Premier of Queensland is telling the people up there. He says they have never been better off.

Senator YOUNG - I will mention Queensland in a minute. I will go one step further and refer to my State of South Australia in a few minutes. This Government has been giving money to the States but not by the normal type of grants. They have been making grants which are in the form of direct aid- the type of grants which the Government can push through under section 96 of the Constitution whereby the Federal Government can tell the State governments how much money they will get for their extras and how that money is to be spent. The Federal Governmentone can see this in so many of its policies- has been doing all it can to erode State authority and to bypass the State parliaments as much as possible to enable it to have total power in Canberra. This has been done by direct policies and indirectly- by the back door. It has applied section 96 of the Constitution which it has not used but rather has abused. That is the only way one can describe it. So many of the policies of this Government clearly have led to a policy of centralism and the destruction of State parliaments -not just to the erosion of State authority but to the long term destruction of the State parliaments.

Senator McAuliffe - I did not think that we would hear the honourable senator reflect on the Grants Commissioners.

Senator YOUNG - I am not reflecting on the Grants Commissioners. If Senator McAuliffe wants to misinterpret my words, he can. I am referring to section 96 of the Constitution and the way in which this Government operates under it without Grants Commissioners. If the honourable senator does not believe me he can ask some of the State Premiers. If he does not want to believe the non-Labor Premiers he can ask some of the Labor Premiers and they will give him the answers. I wish to quote what the Premier of

South Australia said on 23 October. He was referring to the Federal Labor Government and its attitude towards the States. He referred to the new taxes he had to implement- shocking taxes -such as the 6 cents service charge, as he called it, on petrol and other taxes which are all inflationary. These are the sorts of things Premiers did not want and which economists would never have done but which, by compulsion, the States have had to introduce in order to raise money. One can be critical perhaps of the States for implementing such forms of taxation but one, at the same time, has to be sympathetic because the States still have to run a budget. The States are left to administer much of this country. This Government is so miserly purely for one reason and that is to thrust its centralist policies upon the States which have no alternative but to go out into the area of revenue earning. Speaking on the implementation of certain taxes that are not good taxes, Mr Dunstan, the Premier of South Australia, said:

The taxes result from the direct and deliberate refusal of the Commonwealth Government to accept a co-ordinated policy to contain inflation.

Later Mr Dunstan stated in the Parliament:

It is important that people should feel that decisions which vitally affect them are taken close to home, where they can exercise influence, rather than thousands of miles away.

The newspaper article went on:

Like so many things that Mr Dunstan has said this week, his changing views of Australia 's parliamentary system will give Mr Whitlam something to think about.

This has been the change in the attitude of the Labor Premier of South Australia who can see what this centralist Government is trying to do and who has openly, on so many occasions, criticised this Government for its centralised approach and its miserly attitude towards the States.

One also has to look at what the Minister for Transport in South Australia, Mr Virgo, has said regarding grants to local councils. He has openly condemned the Federal Minister for Transport (Mr Charles Jones) and this Government for the way in which they are going about certain things in order to get control of what he considers should be a State authority. I was interested to read the headline in today's 'Australian' which states: 'Dunstan offers 'to drop new taxes'. The article states:

South Australia's planned consumer taxes on petrol and cigarettes to raise another $2 3 m a year will be dropped immediately if the Federal Government gives enough help to the States.

Here is one instance in which the Premier of South Australia himself is prepared to admit that the taxes that he proposes to implement are not good taxes but that he has no alternative to introducing them if the Federal Government will not give the States more money. So I hope that tonight in the mini-Budget that the Prime Minister (Mr Whitlam) brings down we may see a little more consideration given to the States and a little less emphasis placed upon the socialistic ideologies of this Government which have led Australia down the tragic road of high inflation and led to the creation of a state of insecurity in the Australian community. I hope that this Government will show enough common sense and responsibility to realise that for 23 years Australia was run on policies that developed this country. We had development and prosperity which were the envy of so many countries. But today, because of the socialist policies of this Government, we have reached the stage not simply of stagflation but of stagnation. It will take a long while to get Australia moving again. I hope that at least this Government will put aside its corny politics and get back to a bit of economic wit and wisdom and try to do something to lead Australia along the road which it should still be taking instead of the road it has been taking for the last 2 years.

Suggest corrections