EMARGO NOT FO IRNRISR D-TEI n P
PRIME MINISTER
MACOUAP. IE NFORK WPEKLY BROADCAST
BY THE PRICE . MINISTER, THE RT. HON.
WILLIAM McMAHON, CH, MP. 16 AUGUST 1972
THE BUDGCT
Interviewer Paul Lynch
Q. Prime Minister, first of all, the Budget that was
brought down by Mr Snedden last night obviously not in any
sense a revolutionary Budget. It is pretty much the mixture
as before with some taxes raised, others lowered. What would
you say in response to this assessment of the Budget?
PM I don't think that is the correct assessment.
But naturally enough, the basic needs of life have to be
treated in the Budget first, such as pensions, and similar
types of matters. On this occasion, not only have we
introduced a number of novel features but they have all been
important. You rightly mentioned our proposals relating to the
abolition of the means test, but we have also introduced childminding
centres for those people who have to go to work and
can't have their kiddies looked after. We have introduced' for
the first time a totally new idea relating to the wives of
pensioners, the wives of invalids and of certain types of
beneficiaries of repatriation. They will now get pensions
even though they are not eligible at the present time. We
have introduced a very substantial change relating to payment
of estate duty. So, too, have we introduced a change of another
kind that I think will be invaluable to oeonle on superannuation
because we have introduced a means by which they will not only
get a greater pension but, as they get older, the pension or
their right to pension will increase. So these are all new,
and in addition, I think I should make one other comment to you,
and it relates to our National Health Scheme. Because we have
now adopted a practice by which we can ensure that to whatever
extent it is practicable, the neonle who go into a nursing home,
or who get nursing attention at home, or whose relatives are
willing to look after them, will receive ? ssistance of a kind
that has never been done in Australian history before. Now I
could go on like this for a considerable time, but I think that
is a big enough series of issues on which I can emphatically / 2
-2
( PM Contd.)
state that I think there are more revolutionary changes in this
Budget than you mentioned and I think more revolutionary
changes than I have known in any other Budget for the twenty-two
years I have been in Parliament.
Q. Prime Minister, you have been talking very largely
in terms of benefits which will accrue as a result of this Budget,
that is the outgo side of the Commonwealth Government's
finances. on the incoming side of your finances, with this
ten per cent cut in personal income tax, do you feel there is
any risk you won't be able to pay the larger social service
bills?
PM: No risk whatsoever because the Commonwealth always
has the power to be able to pay for the promises it makes and
the legislation it introduces. But I think you do open up one
other subject that in time has to be answered, and that is whether
or not this could create what is called inflation by demand.
I. don't think so. The simple fact is that today the economy
is not ticking over as rapidly or as well as we want it to do,
and consequently this is an occasion when we should have
internal deficit financing even of a substantial kind. It is
my belief as one who has had a pretty good record for economic
management as the Treasurer, I believe what we have done is
just about right, and I think it will turn out to be right in the
long run too.
Q. Prime Minister, have you a figure for this internal
deficit that you were talking about?
PM: Yes, I believe it is about $ 60 million.
Q. So obviously you think this is sound economically,
the whole Budget picture. I would ask you, Sir, whether you
consider it sound in political terms. You have heard the
reactions or read the reactions of Mr Whitlam. and of Mr Hawke
and of other critics of the Budget. What do you have to say
about the points they have made?
PM: Well, I have answered the question already about
economic problems and whether I think this is sound economic
management from a national point of view. I know it is, on
the facts as we know them at present. But as to the political
items that arise by Mr Hawke who seems now to have assumed the
role of the titular leader of the Labor Party, and Mr Whitlam,
I have this to say. Mr Hawke is talking about everything, and
I do not believe that he has a proper understanding of the
problems that are involved and what should be done. But if you
saw him on television last night, I think he created the impression
that there should have been a greater deficit than the one
that we have agreed to. Our attitude has been flexibility, and
if we felt we were not doing enough, of course we could do more
I It.
3
( PPI Contd.)
on a subsequent occasion. But as I spid, on the facts as
we know them at the moment, we think ~ ehavea done exactly
what is right, and those viewas are supporteO. by the
financial authorities, those who give us the advice on
which the Budget is drafted. As to M-r Whitlam, quite
frankly, and I don't lik; saying thisr-too rpuch, blit Mr
Wqhitl-Yn k-nows nothing at all about economics or finance,
and those who listen to him in the H-ouse will know just how
barren of economic and financlal % nowledge hz is. He is
playing politics, he doe'-7n't care what the inipact of h.-is
statements might be. rWe have to take our action. We must
be responsible for what h'an
Q. Turning to w. 7-on's issue-s this year, thore have
been two leading issues that womien have been pressing for
this year so far asking for relief in the :, 3udqret in two
forms. One is child-minding centres, and the ot Lhor is the
reduction or the abolition of the salc! 3 tax on contraceptives
of 27 txor cant sales tax. You havno indeed entered the field
of Commonealth-funded child-minding centres. FWhy did you
not tacklle the iA* ssue of contraceptives?
PM: We didn't tacklc any of th-issu associated
with oales tax on any type of goods, or for that matter on
Motor vcehicles. ntd de-id not lookV at the question of
the abolition of sales ax on contraeceptives.
Q. Two ancillary poi , nts, Sir. FirstI of all, outside
the Budget tslyou IhFav announced that your Government's
policy on the povorty is.-uo h;: s changed and you are appointing
a national encuirY inti-novart". Why this change, Sir?
I perscmally acccp-ted the vi-ew1, -ind I have
said it over and over again, that TI believe it is the
responsibility of eve-ry Government to find out where the poverty
line is, and t-hen to make adequate provisi-on in the
Budget or outside the Bhudget if necessary in order to,
ensure that the pnverty line is at least cove-: red with.-something
to snare for the beneficiaries. Now wIe have had thIe
advantage in recent years of a Fo~ ndorsnn Group ' Report on
Poverty in Melb-ourne an invaluable document. a study in
dpth by pople wIho knrow, what they are talking a) bout. A-nd
in our Budget or -prior to the 3ud'-get I had decidod that
this would be our guideline to de-cide whe-: re reform should
take place; as for exaimple in the case of pensions, in the
case of widow),-s, in the case of invalids,, and also, a--s I
have mentioned before, in the case of hiealth, that is in the
nursing homes and home nursing attenticn. Now,%, my colleague
-4
( PM Contd.)
the Minister of Social Services will, during the course of the
next few days, show exactly what we have done, and I think in
every case, with two or probably three exceptions, you will see
that the benefits we have given take t,. he people involved above
the pcverty line. Now, therefore, this is a remarkably good
achievement and one of which I happen to be proud. So this is
not a bad time in which a poverty enquiry can a new poverty
enquiry can be carried out. That is why I decided, because
the churches were pressing so strongly, and others were pressing
so strongly that against the background that we have created
or the foundations we have created, that I was willing once
again to look at the problem of whether we would have a poverty
enquiry, and we decided that we would do so, and I announced
it yesterday.
Q. And the other ancillary point, Sir, it struck some
people as curious that the day before the bringing down of the
Budget that the Treasurer would announce the terms of his
enquiry into income tax and other taxation reforms. Will it bc
a year before the results of these enquiries can be reflected
in any future Budget or Government fisacl policies?
PM: Longer than that, I believe, unless the Commissioner
in his wisdom desires, or intends to make preliminary or
reports from time to time. That is up to him. I have not
given it very great thought as to whether he should do so, but
I hope he does. But the report will take some considerable time.
I doubt whether we will be able to get the final report within
a period of one or two years. But we haven't waited for that.
In fact, on the average, we reduced income tax by ten per cent.
and we gave the greatest benefits to those on the smaller
incomes. And people on $ 20 or less per week will not be
required to put in income tax returns unless special
circumstances exist. So we haven't waited until this report
has been fully completed. As we believe the need or the
necessity arises, we will tcae action. We have already taken
action in fact, and if we have to take action in the future,
we will do so. Prime Minister, thank you.