L'UN1CWI'IM-P, RALLY, SY1DNBY 2' 3 NOVEMDE 9T 7
Since we Were elected, every effort of this Government has been
diretted at bringing growth and prozperity back to Australia. There
has been no easy way out of the crisis which Labor had pulled Australia
into. Tough and sometimes unpopular decisions had to be made. We have
had the couxrage a-nd determination to inake them, Australia has now been
tai-en to the point ofl takeoff -Australia is just a step away from major
gxow-th and development. Confidence is returning; Australi a is ready to
go with billions of dollars of new development projects.
This election presents the people of Australia with a clear choice. A
choice between the coherent economic strategy we have been successfully
pursuing, and Labor's disastrous combination of dogma and political
opportunism a combination which is t,-otally incoherent, totally
inconsistent, totally at odds with its announced aims. A policy whi ch
would halt recovery in its tracks which would destroy Australia' s
prospects of growth and development.
This recovery is under way because our strategy is working; because we ' ye
controlled government spending and had some success in qain-. ing wage
restraint inflation is now running4 at interest rates have come down.-'
and tax reforms have been made a reality. I
Labor is in total disarray over economic policy the Federal Party and thQ
N. S. W. Party for instancv are raylinq totally different things. Mrc Wran hat.
publicly acknowledged the vital importance of our tax reforms. Hie thought
them so vital that he urged us to introduce them sooner than February. lie
said they were " l~ ong overdue". These vital tax cuts arce the very tax
reforms that Mr Whitlam now wants to take away. Mr Wran has cooperated witf
our programmue '. getting interest rates down indeed he has urged other
premiers to use their influ4tnce on rates within their states. By contrast
bir Hayden attacked -as when we recently reduced the rate on the Australian
Savings Bond. a
Mr Wran has recognised our success in gettinc. inflation down. As early s
last May, he publicly acknowledged that inflation was down to 10% -I
effectively putting the lie to the spurious figures bandied arouytd by Mx
IWhitlain and Mr Hayden.
We have pursued an economic strategly designed to stop indireot taxes
inr-reasing. Mr Wran did the same, as did all the other premiers. Thig
stands in stark contrast to the stated intentions of M~ r Burford who told
us in June that Labor would seek, to find fuxther revenue from indirect
taxes.
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Mr Wran has made it clear that lie intends to follow onez of our major
new initiatives the abolition of estate duty, and that he will do the
same with state duties. Mr Wran is not alone in finding it hard to keep..
in step with the stumbles of his party's economic policy.
on Sunday morning, Mr Whitlam began by saying that Labor would merely
postpone the tax cuts coming in on February first. Sunday lunchtime he
said " he had made a mistake" -that Labor would never bring in those tax
Cuts. Sunday afternoon, he said tax indexation would be UpoFtponedfI
until income tax receipts rise sufficiently to offset the cost of payroll
tax. Bly Sunday night, he was sayinq perhaps he'd" expressed himself
wrongly". Mr Whitlam now says he would " expect" full tax indexation
somietime soon, but Mr Hurford it checking it. Poor bir Hurford
he's already been thrown out as Labor's economic spokesman, and now
lie's been sent scurrying off to try to deal with Labor's great gaffe.
The second plank of Labor's economic programme is its wage policy.
in his policy speech, Mz Whitlam commiitted Labor to " restore integrity
to the wage indexationi guidelines." That; speech was only hours old when
Mr Hlayden said that meant support for full wage index-ation but only
for people on less than average weekly earnings.
By Sunday Mr Whitlamn was saying that Labor wanted full wage indexation
for everyone. Mr Iayd-n confesse3 he might be wrong. " I feel I'm on Sha
ground", he said.
He said questions on wage indexation should be directed to Mr Willis-
" I work in the economic area" " it's a demarcation problem".
So imtich for Mr Hayden as an economic manager.
if he believes wages policy is outside the economic area, he certainly
is ort shaky ground. Labor has so many economic managers that there's
always a threat of a demarcation dispute.-The way all the Labor Party.
economic managers are carryinq~ on should not surprise anyone.
It is typical of the way they carridd on in government.
The basic reason for Labor's confusion iB. that they are distressed
by the certain knowledge that our econmic policies are workingbecause
we'vye ended the big tax ripoff and cut taxes for every
Australian taxpayer from February first. They know that because
of our tax r-eforms, 225,000 more Australians on low incomes
will no longer pay tax. N~ o one pays tax on the first
$ 3,750 of income over $ 5000 with a dependent spouse.
They recognise the strength of our reformns whi. ch have meant
of Australia's taxpayers pay the same rate of tax. And manY people
will be paying 32 cents in the dollar on overtime instead of
cents up to $ 16,000
Our tax reforms accord with the view of most. taxation experts they
are overwhelmingly supported by the reports of the Committees of
Inquiry Labor set up when they were in government. The Asprey Committee
the most comprehensive review of Australia's tax system for forty years
concluded that the Australian tax system relies too heavily on
personal income tax. The Mathews Committee concluded that recent high
marginal tax rates encouraged tax avoidance and evasion. The Jackson
Committee warned that " we have a general imprssion that the reward
differentials after tax are decreasing and may no longer be ! sufficient
to encourage individual enterprise and effort ind1industry".
mr jjawke you might remember was on that Committee. Perhaps he's
forgotten. Our tax reforms haVe faced these problems head on...
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They restore the-incentive to succeed, to make it worthwhile to
wrvke rtme aain, to reward -he drive and initiative hcha
clot this great Country as far-as it has, They give people a greater
say over how their own money is spent.
In two years, our tax cuts have saved individuals $ 3,300 million.
in additon, we have extended vital tax concessions to business
and to mnining companies to provide incentive to invest, explore
and develop. if these are added, total tax saved to individuals
and corporate tax~ payers~ in two years is $ 4,300 million.
Now we will buiild on this. Jveryone knoviz of families who have be
harrassed an~ d puit through great distress by death duties.
Businesses have been broken up; widows have had to struggle along
with less; families have had no choice but to sink, thernselve deep
into debt.
w-e have decided that this distxess and worry ffo the ber'eaved MuOst
csase. As frow Monday, all estates passing between man and wil. Ee,
narent and child, will be totally free of federal estate
and qift duty. Further we shall see to It that over the life
of the next Parliament, all estate duty and gift duty is entirely
abolished. Yesterday kir Whitlam attacked this decision by claiming
that it would not benefits many people.
lie said " Batate duty is paid on a person's estate if it is worth
more than. $ 90,000". He was clearly imnplying that no duty is
payable for an estate of any lesser value. This claim is utterly false.;
The $ 90,000 mininmim only applies to estates passing to a surviving
spouse. Apart from primaiy producers, for estates passin g to a child
or grandchbild, the minimum is $ 40,000; for all other estates, the
mtinimnum is only $ 20,000,
Vw liitlam is a Quean's Counsel. He obviously knew the truith;
hieobviously chose to conceal it. He knows this timely reform
will reliev much inequity and sooial distress. So he deliberately
tried to migie-ad the Australian public,
Every year, about 13,000 estates have to pay estate duty, mjany having
several beneficiaries.-That means that tens of thousands of people
are affected each year by estate duty, many of them entirely
dependent on the deceased's estate for support. But it seems all
this means " nothing" to fix Whitlam.
While we are reducing the personal tax barden on the Australian
taxpayer, Mr Whitlam would inCrease it massively. M4r Whitlam has
said quite clearly that he wants to pay for the abolition of payroll
tax by increasing the burden of personal income tax on Australian
taxpayers.
Let us look at the implications of what he has in mind. V'irst,
consider the present financial year. Mr whitlain has gaid that he would
repeal the law which provides for tax cuts in the first half of 1978
and for the introduction of the standard tax rate System.
1n1977/ 78 that repeal would increase government tax collections by
about $ 400 million. But that would not be enough. He would still
be left viitb a very large sum~ to find to meet the cost of about $ 850M
for removing payroll tax over the first half of 1978. Whe-re would he
find that? His alternatives would be to let the government deficit
expand even faster than he has already proposed, and remember hie
has already stated he would increase government spending by $ 800Mi
in that period, or to raise even more fro-m personal income tax by
increasinAg the rates of tax.
Either course would be bad news indeed for economiic recovery,
for infaltion, and for employment. B3ut until Mr Whitlam comes
clean with what lie proposes, taxpayers must assumie that they
would be asked to pay even more tax, arid to pay in the
first half of next year.
Let's look at the next financial year 1978/ 79. Labor would
need $] 900M to compensate the States for abolishing payroll tax
in 1978/ 79. By repeal of the standard tax rate system, Labor
would get an estimated $ 1470M from increased taxes. Again
there is a significant short fall to make up. A short fall of
about $ 430M.
it is not Surprising therefore, that 14r Whitlam has said that tax
indexation. would be postponed until income tax receipts rise
sufficiently to coverthe cost of compensating the S. tates for
abolition of payroll tax-By abandoning tax indexation in addition
to the repeal of the standard tax rate-system, Mx~ hitlam would
increase tax collections by all estimated $ 1900M which would
approximiately meet his target to coverpayroll tax.
There can be no doubt about it Mr Whitlarn is planning a massive
increase in personal tax. The arithmetic is crystal clear.
An increase which would leave every taxpayer whatever his earnings9,
a lot woirse off. -Aii increase which would force 225,000 low income
earners and pensioners to Xeep on paying tax from February lot.
IEf Mr Whitlam has some other " grand design" let him ntate it.
Until he does, taxpayers must assume the worst and that is why
I say that those on average weekly earnings stand to lost $ 6 a
week under Mr Whitlam's proposals.
rMr Whitlam, always has been a man who believed in big government.
By abolishing payroll tax, the States would surrender their
major independent source of revenue. A source of revenue which
after much hard bargaining they managed to extract from the
Commonwealth less than ten years ago.
Our tax policies have increased people's freedom to spend thei * r
own income, have restored incentives, have eased the pressure
on wages, have helped to halve inflation, and will be an important
element in the recovery of employment.
They are an essential part of a responsible striategy for economic
recovery. Mr Whitlam would destroy this aspect of the economic
strategy that has got Australia moving again. Just as he would
undermine every other aspect of that strategy. Particularly
through Labor's extravagant promises $ 800 million expenditure
in the first six months and ant array of other costly programmes
six of which alone would cost $ 3,000 million.
This huge 13ift in government spending would fuel inflation,
crodh-confidence, stop growith and increase anemployment. Massive
governmenft expenditure is Mr Whitlarn's answer to unemployment.
But in the circumstances which via face today, such expenditure
schemes would worsen the prospecits of achieving sutained
reductions in unemployment. i-r TV. hitlaH proposed an. ex. pensive job
sbusidy scheme. This qoverumeit has ex; haustively examined every
possible option with respect to unemployment,
The plain fnct is thnt inassive job subsidy or make -work zchlernes do
rnot work, Labor knows this t-hey tried it when they were in,
government and they failed. They themselves abandoned their
disastrous R. E. D. scheme. The Labor Party scheime to subsidise
employers wages is riddled with faults and contradictions.
It will involve paying ouit very large sums indeed to mta-, y emiployers
without them increasing the number of people in jobs above what
would would have happened anyway. Busi-nesses who are going to
increase t11-heir employment anyway will merely be subsidi * sed by
the goverment. That is,. wasteful expenditure going to increase
-profits of companies who are already most probably _ in a healthy
fanancial position.
Our forecasts are that dinployment will grow in the nextA 6/ 7 m~ onths
the period when Labor proposes to operate the scheme.
Tens of thousands of people, who would be taken into jobs anyway
will now be subsidised at great expense to the Australian
taxpayer. It Tnust also be understood that this job subsidy scheme would mean
the government would be paying out large sums even if total
employment were not increasing. m~ y reason for saying this is
that it is quit-e normal, to ex-pect t~ hat sorte stront: er firma
would be expanding jobs and some contracting. Those expanding
will get a wasteful subsidy the others will be vnaffected.
This normal turnover of staff can proceed with no imrpact on
unemployment
For this reason alone it is quite flase for Mr Whitlat to claim
tha~ t the cost of his scheme would be slight. It is in fact
an ex pensive scheine and in costing his proposed spending for
the second half of this financial year, he should be honest and
add a substa-ntial sum to his $ 800 million.
A fur-ther problem wi th such a scheme is that'it is op~ en. to abu: e
For example, what procedures would work to stop some grou3ps
deliberately running down their employment in one subsidiary,
anid expanding it in another, with subsidised labour. The
contradictions i-n Labor's thinking are well shown out with this
Although Labor is prepared to admit wage costs are too high for
people to be employed, they are persisting with a policy of
increasing wages more rapidly.
Thei-r policy on full wage indeXation worsens the chances of people
look~ ing f or a job. A wage subsidy scheme is not and cannot provide
a sustainable solution to unemployment problems. There is no
answer to be found in wishful thinking or blatant political.
opportunism. The real answer is growth and development.
It's creating new jobs real jobs. Not job. s artifically created
for only six nmonths, thxough a great expansion of government spending.
It's having a responsible wages policy. it's being willing to stand
by a fair and just industrial relations policy.
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The policies Hr Whitlan outlined last week are the direct opposite
o' those Australia now requires. It is vital in the battle against
unemployment that wage and salary restraint be continued.
Labor's policy of full wage index~ ation would increase wagesand
-fuel unemployment. The extreme left wing unionS who
dominated the Labor Party Conference this year have forced
Mr Whitlam to come out for full wage indexation.
As in 1974, M~ r W'itlam wants the government to take the side
of those who want to accelerate the wage piral again. This will be
disastrous for small business all around Australia. It will dest_ roy
thousands of jobs. it is the opposite of what Australia needs.
The pr ogram-uno which the government has developed over the past two
years and the new initiatives which I announced on Monday do
meet Australia's needs. Several of the programmues I announced
are of direct benefit:. to the city and suburbs of Sydney,
Let me brief ul niention Just a few. I do not have to tell you about
the deficiencies in Sydney's public txangport. the life of a I
commuter is not a happy one. We have decided to continue and expand
an existing programme by paying the States a total of
million a year for five years, to help inprove the standards
of our trains and bus services.
VWe have also decided to contribute some $ 70 million over five years
to upgrade critical -sections of mainline railways. For this modest
outlay, many interstate services will be significantly~ improved.
For example, the fast goods capacity between Sydney and Melbourne
will be doubled. Our new national waver resources programme will make
available funds to improve city and country water supplies and such ott
vital projects as the mnitigation--of floods.
Tphe inner-city area-will be helped by our emphasis on providing
' first class technical colleges. Some inner-city colleges are of a
standard whi-ch simply is not acceptable to this government. They will
be modernised or completely replaced.
E~ veryone will be helped by many of our other programmes, such as the
reduction of off peak long distance telephone charges to 40 perceptv
of the normal rate.
Considerable progress has been made over the last two years in resfbti
Australia to economic health. TowardS inaking Australia a more just
and more aqfaitable society. it's been hard work and there are still
problems to be overcome. But-we are seeing the Itangible results
of that work. -Australia is ready to stride into a new era of
prosperity and development. The fundamental question which this
election will decide, is whether we will build on the achievements
which we have made, or whether Labor will be allowed to throw it away.
Seeing how peoplehave been working hard forthe government across
Australia, there is no doubt that we'll be doing the job in 1978
and beyond.