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SPEECH BY THE PRIME MINISTER
ALP CENTENARY DINNER
CANBERRA 25 NOVEMBER 1991
In this remarkable year, there have been extraordinary
developments, in the world and in Australia, which have
given an added significance we might almost say, an
historic symmetry to the fact that we celebrate the
Centenary of our great Party in this year of 1991.
To grasp the significance, we should recall the real meaning
at the heart of the events we celebrate.
Central to everything is the commitment made by the trade
union movement one hundred years ago to advance its cause
the betterment of the condition of the working men and women
of Australia, their families and dependents through the
parliamentary system, through parliamentary democracy,
through the ballot box.
And in this year, around the world, but most of all in the
heartland of international communism itself, we have had an
epic vindication of the course our forebears chose, the
commitment they made, and which generations of Labor men anc
women have kept.
But at home, we are experiencing developments which
constitute no less a striking vindication of our cause, and
which underline the enduring relevance of our commitment, a!
we enter our second century as a party, and prepare our
nation f or the 21st century, as the Governent of Australia
And there has been no time in my own experience when the
fundamental values which we represent, and which we strive
to build into the Australian society, have been offered a
more complete or more direct challenge by our political
opponents. This is not something that occurred just last Thursday.
And nobody who has been listening, with even half an ear, t
my warnings throughout the past 18 months, should have been
remotely taken by surprise last Thursday either by the
thrust of the Leader of the Opposition's Statement, or by
its specifics.
I spelt it all out at the Centenary Conference in Hobart
last June.
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I said then that, beyond our tasks in government of
maximising, for the people of Australia, the gains which
will come with sustained low-inflation economic recovery,
our task of continuing to build a more competitive
Australia, we had, as a Party, another task.
I said that that task was to ensure that the Australian
people have no illusions or misunderstandings about the
fundamental choice they will have to make in 1993.
Because, I said,
" This Liberal opposition is unlike any that has
preceded it in the forty-odd years since the foundation
of that Party. Collectively in its leadership, it
represents the most ideological and the most divisive
alternative presented to the Australian people in the
post-War era. And in its program it is, more than any
before it, obsessively determined to entrench privilege
at the expense of fairness and compassion."
And later in that speech I came to the specifics. I said:
" Delegates, let me be quite blunt and to the point
this Opposition is planning the most concerted attack
in the history of this; nation on the living standards
of the poor, the underprivileged, the aged and low-and
middle-income families;. The centrepiece of this attack
is to be their broad-based consumption tax, a fifteen
per cent tax on all goods and services and it would
do so in a profoundly regressive way."
So there in June, I gave a perfectly accurate prediction of
their proposals.
This Opposition has embarked on an unprecedented onslaught
on the unemployed, upon the aged, upon the invalid, upon
Aboriginal Australians, upon the disadvantaged and upon
families in need.
This Opposition has committed itself to a new inflationary
course, to re-fuelling infl. ationary expectations and to
throwing away the historic gains against inflation, made
with so much pain and difficulty.
This Opposition has declared its determination to return to
confrontation and entrench privilege.
And this is what they call " fighting back'.
If those words mean anything, they have put them in the
wrong order.
Because they mean back to fighting, back to divisiveness,
back to polarisation of the community, back to industrial
confrontation. 3237
But certainly, friends, in the days and weeks and months to
come, we in the Government, all of us in the Labor Party,
will be working unrelentingly to expose this so-called
package, not only for its appalling inequities and the
dangers it poses for the Australian economy, but on the
grounds of the ideology of deliberate community division
which it embraces and promotes.
In the task of exposure, we will focus on what are supposed
to be its selling points the so-called compensation for
the tax on everything you buy, and the so-called income tax
cuts. I need hardly spell out that the whole question of
compensation arises only because of the loss, the hardship,
the sacrifice the community would be asked to bear, under
this utterly unnecessary tax on necessities.
When it is all stripped away, that is the bitter pill that
the Opposition is asking Australians to swallow and the.
so-called compensation is its coating.
Then, we are told that the Leader of the Opposition has run
us all through the computer, and come up with his model of
Australia. And he has claimed that he has targetted the tax
cuts to workers.
Well, let's take a look at it.
According to his own schedules, those earning up to S20,000
would receive a gain in after tax income of For those
on $ 30,000, or around average weekly earnings, the gain
would be For those on $ 50,000, a gain of 12.4%.
For those on S75,000, two and a half times average earnings,
the gain would peak at a massive 14.7%
In 1990-91, less than two per cent of Australians earned
S75,000 or more.
But, friends, how are these grossly inequitable tax cuts to
be paid for?
Not, it now appears, just from, or even mainly from the
consumption tax, this tax on everything you buy.
Delivery of the income tax cuts would depend upon
billion in spending cuts.
Now, the facts are that after nearly nine years of the most
rigorous reviews of public sector spending, our Labor
Government has made Australia one of the lowest taxing
countries in the OECD. We now have one of the leanest and
most efficient government sectors in the OECD.
We know after nearly nine years of the most stringent
reviews of government spending that there is no room for the
sort of massive attack on government spending that Dr Hewson
is now proposing, without seriously attacking people's
living standards.
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4
After nearly nine years of paring the public sector to the
bone, we know that further substantial cuts would mean
cutting into the bcne itself. And worst of all, it would
mean devastating cuts in the most essential services, the
area of greatest need, with the real burdens falling upon
the most vulnerable groups in our community.
Yet without this implausible S10 billion of further cuts,
there is simply no way these much-vaunted tax cuts could
ever be delivered.
Friends, tonight is not the occasion to examine the
Opposition's package in all its flawed detail.
But, just to give you the flavour of what we have in store
for them, and as an indication of how quickly gaping holes
will appear, let me just take the case of petrol prices.
There is a most serious flaw in Dr Hewson's figuring which
could mean that Australian motorists would save not the S12
per tankful he has dishonestly trumpeted to the electoratebut
something less than $ 2.
Motorists would see falls of no more than 2-3 cents a litre
the sort of price cut you can get during the regular
discounting wars.
Dr Hewson has chosen not to factor into his package the
effect on fuel prices of new road-user charges for road
funding. Yet he clearly commits himself to these new road
funding arrangements, and indeed is quite lyrical in the
package about the importance to Australia of an efficient
transport system.
Dr Hewson's failure to riake any such allowance for road-user
charges in his calculati. ons and in his policy design must
mean he cannot deliver on his promised petrol price cuts.
Nor can he, in this respect, deliver on significantly
reduced business costs in this area, which he made so
critically important in his presentation.
But even more serious are the ramifications of his flaw on
his CPI calculations and, indeed, on the fundamental
credibility of the whole package. Dr Hewson has a number of
choices if he wants to clear up this dilemma.
He can ditch the road-user charging concept and thus
abandon his professed commitment to micro-economic reform.
Or he can admit his error and thus admit that he can't
deliver o n big petrol price cuts, and that his CPI figure,
underpinning so much in his package, is plain wrong, which
in turn throws out all his calculations to compensate people
for the effects of his consumption tax.
We wait with interest.
But, friends, we will not be merely exposing the flaws,
inequities, contradiction and loopholes, in these proposals. 323 " 1
We will be opposing the whole concept of a new tax in terms
of the great priorities now on this nation's agenda the
priorities that we, the Labor Government, have set as our
agenda. And we will show how disastrously wrong the Opposition have
got their priorities.
A consumption tax would not help sustainable economic
growth; it would refuel inflation, and would
necessitate much tighter monetary policy and higher
interest rates
A consumption tax would not create jobs; it would cost
jobs A consumption tax would not help the elderly; it would
disadvantage them among the worst of any section of the
community A consumption tax would exacerbate the problems already
facing rural Australia
A consumption tax would be a massive disadvantage for
our fastest growing industry, the tourist industry,
with all its potential for job growth
A consumption tax would not protect Australian
families; its main burden would fall on the families of
Australia.
But, my friends, let me make this clear.
The task of demolition, necessary as it is, comprehensive as
it must be, will not be the single thrust of our response in
the weeks and months to come.
Our attack will be in the context of our forward program,
the unfinished business we have undertaken on behalf of the
people of Australia. It will be placed in the context of
the working through of the fundamental reforms initiated,
this year, by the March Statement, the Special Premiers
Conference, the Budget, and the November Statement.
And this is what Australians can look forward to from the
Government in the months ahead:
the implementation of recently announced decisions
which will generate sustainable jobs, in major resource
and manufacturing projects;
the announcement, and implementation, of details of
projects to improve Australian cities;
details of legislation to improve superannuation
coverage for all Australians;
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next year, the finalisation of the ecologically
sustainable development process, which will ensure that
soundly based environmental considerations become a
normal part of all government and private sector
decision-making;
the finalisation of the Government's industrial
relations reforms, to see Australia's industrial
culture re-oriented to increased productivity and
therefore prosperity as well as to underwrite our
long-established concern for equity in the wages
system; further developments in microeconomic reform, including
major initiatives in communications;
our commitment to move towards removing pensioners from
the personal income tax system;
finalising agreement with the States and Territories on
a major injection of funds into the TAFE system;
the $ 1 billion savings to business from taxation
measures announced earlier this month;
the continuing reforms in transport, especially on the
waterfront; the continuing pressure we are exerting internationally
to have other trading nations liberalise their trading
arrangements, to provide expanded markets for Australia
exports of goods and services.
Meanwhile, we will produce a detailed analysis of every
facet of the Opposition package.
And, above all, friends, above all for this Labor
Government, our response will be placed squarely in the
context of our continuing commitment to achieve sustained
growth with low inflation, and the restoration of job
growth. That will be our real reply to this meretricious public
relations exercise our opponents have launched. And that
will be our real message to the people of Australia, in the
first and second years of the second century of the great
Australian Labor Party, as we head towards the fifth term of
this great Labor Gover: nment.