FOR PRESS 29 NOVEMBER 1977
ADDRESS AT BARTON LUNCH
This election confronts the Australian people with a choice of the
utmost significance. It is a choice between two completely different
approaches to Government, between two completely different
philosophies of Government.
The Government stands for responsible management of government and
responsible control over the spending of taxpayers money, responsble
reductions in the crushing tax burden imposed by Labor. Every
encouragement to growth and development which will create more jobs,
wage restraint, reductions in interest rates and firm and fair
industrial relations policies.
The Labor Opposition stands against all these things. That is why
they are going to remain in Opposition.
Our consistent and coherent economic policies are succeeding in
restoring our country to economic health. Australia is ready to
break through into a new period of growth and prosperity. Inflation
is down to 9% and falling. Interest rates are coming down.
We have supported responsile wage restraint. Income taxes at last
are coming down. The crushing tax burden which increased 125% under
Mr. Whitlam, is being relieved at last.
These achievements have had a major impact in restoring business
confidence. Plans for job-creating industrial developments which
were shelved under Labor are now being put into effect. $ 6 billion
of development projects in every part of Australia are now
underway or ready to go. And this sum does not even include the
magnificent North West Shelf Development which is a bigger project
than the Snowy Mountains Scheme itself.
All our economic policies are aimed at promoting greater growth and
development, and thus more jobs. Labor slashed tariffs across the
board even though they knew that this would throw tens of thousands
out of work. Mr. Whitlam. is still saying that the problem with
Australian manufacturing industry is over-protection. We have
been prepared to give Australian industry the protection it needs.
The major forecasts that the Government has before it show that
with the continuation of the Government's policies, work opportunities
will expand. The first of February tax cuts, just two months away,
will increase household income and spending power injecting an
extra $ 26.7 million a week into the economy. 2/
-2-
Because inflation is falling, the tax cut will have a positive impact
on jobs. Our factories will get larger orders, and start working
at higher levels of capacity. As that development gets under way,
there will be a demand for more employees.
The February tax cuts are a part of a whole approach by the
Government to reduce taxation in the interests of economic
recovery. Tax indexation is another part of that programme. And
we will abolish probate and gift duties.
Our February tax cut greatly simplifies the tax scale and completely
releases 225,000-' low income earners from paying any tax at all.
These people, including tens of thousands of pensioners, widows,
and students, would have paid $ 45 million in tax this year. For
many of them our tax reform will mean a saving of a significant
proportion of their earnings.
Labor's callous scheme would immediately reimpose income tax on
these low income earners. Mr. Whitlam would reimpose tax on these
peojie.
Our tax cuts provide a new incentive to work by putting 90% of
taxpayers on the same marginal rate.
Under the Hayden tax scale of 1975, once a person's income reached
$ 10,000 a year he paid tax of 45 cents from each extra dollar of
earnings. If Mr. Hayden's tax rates were still in force, a person
on average weekly earnings would be losing 45 cents in tax from
each extra dollar of earnings.
Compare this with our new standard rate system of tax. Taxpayers
on $ 10,000 a year will pay a marginal rate of only 32 cents. And
they can increase their income up to $ 16,000 a year without moving
on to a higher marginal rate of tax.
The combined effects of tax indexation and the new tax scales are
a major breakthrough in incentives for people whose income earnirg
capacity is about the level of average weekly earnings. And within
the next twelve months I expect that falls in important interest rates
could add up to This will have significant beneficial effects
for the housing industry. On an average new building society loan,
of $ 26,000 a 2% reduction in interest is a saving of $ 520 a year.
That is $ 10 per week for young people starting their new home. Nothir
can demonstrate the importance of interest rates more than that.
Mr. Whitlam's policy speech could not have presented a greater
contrast with our policies for growth and prosperity. Instead of
further reductions in the tax burden he proposed a massive increase
in personal income tax, a return to the old scales, a return to the
old high marginal tax rates, a " crash" programme of government
spending of $ 800 million and billions of dollars of further projects
after that, and full wage indexation.
He proposed no policy whatever which would have any realistic hope of
reducing inflation. His big spending, high tax, high wage approach
would pump.. up interest rates again. The effect of Labor's
extravagance on inflation, would by like petrol on a fire and
this would have a catastrophic effect on employment. 3/
-3-
Mr. Whitlam's Labor Party stands irrevocably for higher taxes. It
would be impossible to pay for his programmes without a very large
increase in the personal tax burden. To pay for Mr. Whitlan's
proposal to abolish payroll tax alone a proposal costing
$ 850 million in the first half of 1978 and $ 1900 million in
1978/ 79. Mr. Whitlam would have to rip $ 2,750 million off the
people of Australia, $ 6 a week off the average wage earner.
Mr. Whitlam. wculd remove the incentive we have given people to
work overtime.
Mr. Whitlam has said that he would repeal the law legislating
for our February 1 tax cuts and it is clear that he would end
tax indexation as well. Mr. Whitlam, would remove the incentive
we have given people to 1ork overtime.
. He would increasa tax rates from 32% to 45% and the money he ripped
out of the hands of the Australian people he would give to big
and profitable companies. Just to take a few examples. Utah
would get a windfall of $ 2 million, CRA $ 10 million, BHP
$ 33 million, MIM million, CSR million, Bank of NSW
$ 11 million, Ford million, ACI -$ 11 million, Dunlop $ 11-13 mi
and General Motores $ 10 million.
He would give these companies a windfall benefit at the expense of
the working men and women of Australia despite the fact that
abolishing payroll tax would not increase employment?
Mr. Dunstan know-that'and has conceded that:
" The Government has already tried a payroll tax remission
scheme and found that it does not create employment."
A recent survey of large employers revealed that not one company
surveyed was prepared to forecast any increase in their own
employment levels, if payroll tax were abolished.
Labor's scheme would hurt the self-emlkoyed and many small businessmen,
who are already exempt from payroll tax, but would be burdened with
higher wage costs and higher personal tax commitments.
The experience of Mr. Whitlam's policy speech over the last week
shows more clearly than anything else that the Labor Party is still
incapable of producing a stable and responsible economic policy.
Labor has been in utter confusion since Mr. Whitlam's policy speech.
For this last week and a half Labor's many spokesman have been trying
vainly to come to some agreement on what Labor's policy should be in
the vital areas of wages and taxes.
The Labor's Opposition's leading members have resorted to all sorts
of experiments to try to paper over these differences. They've had
telephone hook-ups, they've had press conferences, and some of them
have resorted to reading the newspapers to see what their colleagues
are saying. Out of this massive effort has come even more massive
confusion. The Labor Opposition is behaving just as they did when
they were in government, they are indulging in a spate of
uncoordinated, contradictory actions.
Nothing has changed since the last time. Labor is still divided,
conflict ridden and incompetent. Australia could not survive
another three years of that kind of behaviour. Inflation would go
through the roof, the growing confidence in the economy would
vanish, the destruct. Ion of job opportunities would begin again.
Nothing has changed since the last time. Labor is
still divided, conflict ridden and incompetent.
Labor's confusion on wage indexation was such that Mr Hawke
in desperation had a phone hook-up with Mr Willis, Mr Hayden
Mr Hurford and Mr Combe apparently Mr Whitlam was excluded
because his opinion was not considered important enough.
As a result of that conference, Mr Hawke appointed himself
spokesman and outlined what he termed the " absolute consensus"
of the five spokesmen. The degree of consensus reached can
be measured by the fact that Mr Hawke then proceeded to
contradict himself three times within the space of a one page
statement. First, he said Labor would have wage indexation
up to average weekly earnings. Second, he said Labor might not
advocate indexation above that level. Third, by the end
of the statement, he was asserting that " a Labor government
would be arguing quite clearly before the Arbitration Commission
that its general principle was for full and automatic
indexation for eveyone."
If that's a consensus I would hate to see Labor disagreeing.
Australia could not survive another three years of that kind of
behaviour. Inflation would go through the roof, the growing
confidence in the economy would vanish, the destruction of job
opportunities would begin again. / 4
-4-
Mr. Whitlam, and the Labor Party have no constructive proposals
on trade unions. How could they? The left wing unions pay
money to the Labor Party. They have a large voice in determining
official ALP policy.
Labor's policy of letting the trade unions have their head,
resulted in a record period of strikes and industrial lawlessness
when they were in office. We have shown that a government prepared
to take a firm and fair stand can protect the public. We have shown
this in the air controllers strike, in the postal workers' dispute,
in the case of the ACTU's uranium moratorium they backed down.
And in the Victorian power dispute, it was our move to deregister
the unions involved that led to the strikers returning to work.
Of course, Mr. Hawke claims the credit for being the great peace-make
in that dispute. Perhaps you have seen Labor's commercial in
which he is in a motel room hurriedly packing his bags to go out
and resolve yet another of his industrial disputes.
Well in the case of the power dispute, it took Mr. Hawke nine weeks
to finish packing his bags, get out of his motel room and take a
hand. Unlike the Labor Party, we have taken the view that no one can be
agove the law, that individual unionists have a right to be heard,
and to be protected from intimidation. That it is the responsibility
of the Government to protect the interests of the whole community.
We have passed laws protecting individual unionists and given
responsible rank and file unionists the chance to make their
voices heard. Secret postal ballots for union elections are now
compulsory; we have set up the Industrial Relations Bureau, to
protect the public interest and also to act as an individual
ombudsman; unions are now required to tell their members how
union dues are spent. We are protecting individuals against being
forced to join unions against their will and damaging secondary
boycotts have been banned.
All this adds up to a firm and responsible policy which has the
support of all responsible unionists, and which protects the
rights of the individual unionist and the public. Mr. Willis,
the Labor spokesman on industrial legislation, confirmed yesterday
that Labor would abolish all the Government's vital forms of
industrial relations laws. Labor would repeal postal ballots.
Labor would repeal our laws to protect the public from industrial
disruption. Labor would repeal our laws which let unionists know
how their union's funds are being spent. Labor would exempt
unions from the provisions of the Trade Practices Act; Labor would
repeal all penalties for strikes against Arbitration Commission
decisions; Labor would exempt unions and their members from civil
actions in respect of other wise actionable activities committed
during industrial disputes.
Australia has reached the stage where positive and constructive
action is required in the trade union area. The Labor Party's
attitude of complete laissez faire is quite inappropriate to
Australia's needs. Some unions receive as much as $ 8 million in
fees each year. They are too powerful for the good of our society
to be placed beyond the reach of the law. We will continue to
take the fair and firm approach in industrial relations which
has proven to be successful.
In every area, the Government has laid firm foundations for
national recovery. Our assistance to low income families through
the family allowances has helped 300,000 poor families with
800,000 children. As a result of our legislation, pensions are
now increased automatically to keep up with inflation.
The Government has been very conscious of the great contribution
our migrant communities have made to Australia. Australia is
proud of its place in the world as a country which offers people
from around the world the opportunity to build an independent
life for themselves and their families. our economic policies
are designed to secure this kind of Australia for everyone. As
an indication of the importance we place on the contribution of
migrants to Australia we established a separate department of
Immigration and Ethnic Affiars. We will establish ethnic
television. We have put ethnic broadcasting on a secure long term
basis. In the next three years, we will concentrate on overcoming
the language barriers in our society both by expanding
the teaching of English and the teaching in our schools of
ethnic languages and cultures.
Government Departments will have ethnic liaison officers. We will
provide more interpreters, translators, more migrant resources
centres. The Government has decided that the age service pension
should, and will be, paid to non-British members of the allied
forces.
The way ahead for Australia is clear. We must work to lighten the
tax burden, lower interest rates, and keep the pressure on inflation
so new jobs can be created. Above all, we must work together to
build this magnificent country. In the last two years, we have laid
strong foundations for full economic recovery. It is vital for
Australia that these policies be continued.
If we stand by the great ideals of freedom, respect and concern for
the individual, the ideals for which our party has always stood,
Australia will release its magnificent promise, and we can show
the way to the world.