P. M. No. 58/ l96l
OPPOSITION ELECTION PROMISES ANALYSED
Statement by the Prime Minister, the Rt. Hon. R. G. Menzies
I take first the specific proposals made by Mr.
Calwell proposals on which he has made estimates of cost and
put beside them the departmental estimates. Calwell Departmental
: Cn. œ iu.
Social Servi -es 93. 83.5 223.
Heal'-h and Medical Benefits 30 33
Housilg 5 15-25
Local Government and Full
Petrol Tax 14.5 19
Smaller proposals 10 11
152.5 161.5 311.5
The higher figure reflects the estimated cost of
complete abolition of the means test for age
pension purposes.
But this is only part of the story.
Mr. Calwell's Education proposals
will cost
His Sales Tax proposals will cost
His proposal to allow travelling costs
as income-tax deductions will cost œ 28.5m.
The new totals are, at this point
Calwell œ 152.5m. Departmental œ 24Qm.-œ 39Om.
The story does not end even there.
It is clear that there are other very large items
involved in Mr. Calwell's Policy Speech. For example, if
proper estimates are made, establishment of a Conservation
Authority for Northern Developmnt similar to the Snowy
Mountains Authority may involve œ 25m. a year.
The proposal to charter ships for international trade
is equally clearly one which could not be performed except by
the outlay of many millions.
The vagueness of so many of his proposals makes cost
calculation very difficult. How much will it cost to give, as
he says, assistance to manufacturers to re-equip with the
latest machinery? An initial depreciation allowance at the
rate of 40% would cost annually some œ 70m. The introduction
of investment allowances at the rate of 20% would cost about
per year. How much to extend the Colombo Plan? How much to
establish an Export Credit Bank? How much to establish a
Commonwealth Insurance Corporation in the field cf external
trade? Mr. Calwell gives no answer to these and many other
questions.
2.
It is clear from objective calculations that the
estimates he offers are far removed from the facts. I said in
Adelaide that the total costs would be of the order of œ E300n.
That was an underestimate. I am satisfied that to give effect
to the promises he has so freely made would cost the Australian
people considerably more than this figure and that these costs
could only be met either by widespread and severe increases in
taxation, or by a most inflationary call upon Central Bank
Credit. Everything that I have set out is, of course, over
and above the normal and inevitable annual increase in
Commonwealth expenditure on such items as Financial Assistance
Grants to the States,' Commonwealth aid for roads, and Social
Services, including health and medical benefits.
This year the increases in Social Service and health
and medical payments due solely to population growth will.
amount to about œ l15m, Financial Assistance Grants to the States
and aid fo-roads this year will increase by about œ C28m.
W~ hatever government is in office will have to meet
such increased expenditures as these.
Mr. Calwell's promises are therefore additional.
CANBERRA, November, 1961.
W