CHECK AGAINST DELTIVERY PRIME MINISTER
SPEECH BY THE PRIME MINISTER HOBART CHAMBER OF COMMERCE
31 AUGUST 1983
MR PRESIDENT,-THE AUSTRALIAN LABOR GOVERNMENT CAME TO OFFICE WITH
THE ECONOMY UNDERGOING ITS WORST RECESSION IN FIFTY YEARS.
UNEMPLOYMENT HAD RISEN By 263,000 DURING THE PREVIOUS TWELVE
MONTHS AND INFLATION STOOD AT 11.5 PER CENT DOUBLE THE
0. E. C. D. AVERAGE. INTEREST RATES REMAINED UNACCEPTABLY HIGH
AND THE HEARTLESS, UNCARING APPLICATION BY OUR PREDECESSORS
OF A 11FIGHT INFLATION FIRST" APPROACH HAD LAID WASTE TO
LARGE AREAS OF THE AUSTRALIAN ECONOMY.
My GOVERNMENT WAS ELECTED TO GET AUSTRALIA BACK TO
WORK, TO REDRESS* THE RAMPANT INEQUALITIES ENGENDERED BY THE
PREVIOUS SEVEN YEARS OF NEGLECT AND INDIFFERENCE, AND TO
BRING AUSTRALIANS TOGETHER AGAINTHE
BUDGET WE BROUGHT DOWN LAST WEEK EMBODIES THESE
OBJECTIVES-IT REORDERS PRIORITIES IN THE WAY YOU WOULD
EXPECT OF A REFORMIST GOVERNMENT DEDICATED TO RESTORING
EQUITY AND FAIRNESS To AUSTRALIAN SOCIETY-IMPORTANTLY IT
ALSO SOUGHT TO NURTURE AND DEVELOP THE ECOINOMY TO THE POINT
2.
WHERE CONSUMER SPENDING AND BUSINESS INVESTMENT MIGHT REGAIN
THEIR APPROPRIATE MOMENTUM. BY ESTABLISHING THE BASIS FOR A
SUSTAINED RECOVERY WE AIM TO WHITTLE AWAY THE QUEUES OF THE
UNEMPLOYEDTHE TASK WE CONFRONTED IN PREPARING THE BUDGET WAS
DAUNTING-IN THE FACE OF LARGE INCREASES IN DOMESTIC COSTS,
INTERNATIONAL RECESSION, AND HIGH DOMESTIC AND OVERSEAS
INTERE ST RATES, PRIVATE INVESTMEN4T DURING 1982-83 HAD FALLEN
SHARPLY AND PRIVATE CONSUMPTION SPENDING WEAKENED.
UNEMPLOYMENT HAD SPIRALLED TO RATES NOT EXPERIE-NCED SINCE
THE 1930' S AS BUSINESS RESPONDED TO HIGH LABOUR COSTS, A
SLUMP IN PROFITABILITY AND WEAKENING DEMAND. GROSS DOMESTIC
PRODUCT WAS ALSO FALLING AT AN ALARMING RATE -DROPPING BY
3.9 PER CENT IN REAL TERMS IN THE YEAR TO THE JUNE QUARTER
OF 1982/ 83. TASMANIA WAS NOT IMMUNE FROM THE DOWNTURN. INDEED
ADVERSE CONDITIONS IN MARKETS FOR A NUMBER OF TASMANIA's
MAIN PRODUCTS MEANT THAT TASMANIA SUFFERED THE EFFECTS OF
THE INTERNATIONAL RECESSION EARLIER THAN DID THE REST OF
AUSTRALIA. A YEAR AGO TASMANIA HAD' BY FAR THE HIGHEST
UNEMPLOYMENT RATE OF ALL AUSTRALIAN STATES; ITS LEVEL OF
EMPLOYMENT WAS FALLING. DURING 1981/ 82 THERE WAS ALSO A
PARTICULARLY SHARP DECLINE IN HOUSING ACTIVITY IN TASMANIAMORE
SEVERE THAN THE GENERAL DECLINE THROUGHOUT AUSTRALIA.
As WELL, TASMANIA IN THE PERIOD MARCH QUARTER 1982 TO MARCH
QUARTER 1983 EXPERIENCED THE SHARPEST FALL IN PRIVATE NEW
FIXED CAPITAL EXPENDITURE OF ANY AUSTRALIAN STATE.
THE SITUATION FOR TASMANIA HAS IMPROVED A LITTLE IN
RECENT MONTHS-OVER THE LAST YEAR TASMANIA' S UNEMPLOYMENT
RATE. HAS DETERIORATED THE LEAST AMONG AUSTRALIAN STATEHOUSING
ACTIVITY HAS BEEN PICKING UP IN RECENT MONTHS, AS IT
H AS ELSEWHERE IN AUSTRALIA. THE FALL IN PRIVATE NEW FIXED
CAPITAL EXPENDITURE IN TASMANIA WAS LESS IN THE LAST QUARTER
THAN IN OTHER STATES AND IS EXPECTED TO BE LESS OVER THE
COMING YEAR. TASMANIA'S ECONOMIC SITUATION IS DIFFICULT, BUT NO
MORE THAN THE REST OF AUSTRALIA AT PRESENT. THERE ARE GOOD
REASONS TO EXPECT TASMANIA TO SHARE IN THE EXPANSION OF
GROWTH OVER THE NEXT YEAR THAT THE BUDGET PREDICTS FOR
AUSTRALIA AS A WHOLE-NEVERTHELESS THE SERIOUSNESS OF
TASMANIA'S PROBLEMS PROVIDE AMPLE JUSTIFICATION FOR THE
SUBSTANTIAL INCREASES IN FEDERAL GOVERNMENT SPENDING
DIRECTED To TASMANIA IN THE LAST BUDGET.
COMMONWEALTH GRANTS To TASMANIA FOR HOUSING WILL
RISE BY NEARLY 38% IN 1983-84 TO $ 24 MILLION. EXPENDITURE
ON ROADS UNDER THE ROAD GRANTS ACT,' THE BICENTENNIAL PROGRAM
AND THE JOBS 0ON LOCAL ROADS PROGRAM WILL RISE By 40% IN
1983-84 TO OVER $ 50 MILLION. EXPENDITURE UNDER THE
COMMUNITY EMPLOYMENT PROGRAM AND THE WAGE PAUSE PROGRAM WILL
TOTAL OVER $ 10 MILLION-IN TOTAL COMMONWEALTH PAYMENTS TO
TASMANIA ( INCLUDING BORROWINGS SUBJECT OT LOAN COUNCIL
APPROVAL) WILL RISE BY 1' 4.6% A VERY SUBSTANTIAL RISE IN
REAL TERMSMy GOVERNMENT HAS PROMISED THAT No TASMANIAN WOULDBE
DISADVANTAGED OR BE OUT OF WORK AS A RESULT OF THE
STOPPING OF THE GORDON BELOW FRANKLIN DAM AND THAT
TASMANIA's POWER NEEDS-WOULD BE TAKEN CARE OF-WE WILL
STAND BY THAT PLEDGEALREADY WE HAVE UNDERTAKEN TO PROVIDE-FINANCIAL
ASSISTANCE To TASMANIA IN RESPECT-OF ALTERNATIVE EMPLOYMENT
PROJECTS AND FINANCIAL SUPPORT FOR EMPLOYEES AND
CONTRACTORS WHO CANNOT BE REDEPLOYED TO ALTERNATIVE PROJECTS
IN THE SHORT TERM. DISCUSSIONS AT OFFICIAL LEVEL ON FURTHER
ARRANGEMENTS FOR FINANCIAL ASSISTANCE ARE TO TAKE PLACE IN
HOBART LATER THIS WEEK. To COVER THE IMMEDIATE REQUIREMENTS
AN AMOUNT OF $ 30 MILLION IS PROVIDIED FOR PAYMENTS TO THE
STATE I* N 1983-84 FOR THESE PURPOSESOTHER
ISSUES ARISING FROM 1-HE TERMINATION OF THE
POWER DEVELOPMENT, INCLUDING THAT . or TASMANIA's FUTURE
ELECTRICITY REQUIREMENTS, WILL BE THE SUBJECT OF FURTHER
DISCUSSIONS WITH THE TASMANIAN STATE GOVERNMENT. As You
WOULD ALL APPRECIATE, A FULL, LONG-TERM PLAN FOR TASMANIA'S
POWER NEEDS PROPERLY CONCEIVED AND COSTED -CANNOT BE PUT
TOGETHER IN A MA* TTER OF WEEKS. A STARTING POINT MUST BE THE
TASMANIAN GOVERNMENT GRANTING COMPLETE ACCESS TO THE HEC's
FORECAST OF FUTURE POWER NEEDS. As WITH ANY FORECAST, IT
WILL HAVE TO BE THOROUGHLY TESTED AND THAT CAN ONLY BE DONE
IN CO-OPERATION WITH THE STATE GOVERNMENT. BUT THIS MATTER
HAS HIGH PRIORITY-WE ARE SEEKING A RESULT THAT MAKES SENSE
FOR AUSTRALIA AS A WHOLE AT THE SAME TIME AS IT SUPPORTS
TASMANIA'S LEGITIMATE DEVELOPMENT NEEDS AND EXPECTATIONS.
THE AUSTRALIAN LABOR GOVERNMENT IS A GOVERNMENT FOR
ALL AUSTRALIANS. WE AIM TO BUILD A BETTER, MORE EQUITABLE
AND MORE PROSPEROUS AUSTRALIA.
OUR FIRST BUDGET WAS A RESPONSIBLE STEP IN THIS
DIRECTION. IT GAVE SUBSTANTIAL EFFECT TO OUR MAJOR PROMISES
OF GETTING A FIRM CONTEXT FOR NON-INFLATIONARY GROWTH. AT
THE SAME TIME A SUBSTANTIAL REORDERING OF THE REGRESSIVE
POLICIES OF THE PREVIOUS GOVERNMENT HAS BEEN ACHIEVED AND
MORE ASSISTANCE HAS BEEN PROVIDED TO THOSE SECTORS AND
PEOPLE IN THE COMMUNITY MOST IN NEED.
THE NEW PROGRAMS PUT IN PLACE BY THIS BUDGET ARE
VERY SPECIFICALLY ORIENTED TO GIVING MOST ASSISTANCE TO
THOSE IN THE COMMUNITY MOST IN NEED. ABOVE ALL THOSE MOST
IN NEED ARE THE UNEMPLOYED. HENCE THE EMPHASIS IN THE
BUDGET ON MEASURES TO-PROMOTE EMPLOYMENT DIRECTLY. THE
COMMUNITY EMPLOYMENT PROGRAM ADDRESSES THE SPECIAL PROBLEMS
OF THE LONG-TERM UNEMPLOYED, WHILE CREATING OR IMPROVING
ASSETS OF PERMANENT VALUE TO LOCAL COMMUNITIES. THE
EXPANSION OF CAPITAL WORKS AND MAINTENANCE EXPENDITURE, AND
THE MEASURES TO ASSIST THE HOUSING INDUSTRY, WILL MAKE
SUBSTANTIAL DIRECT CONTRIBUTIONS TO EMPLOYMENT-OVERALL,
THE BUDGET PAPERS ANTICIPATE A REVERSAL OF THE DECLINE IN
EMPLOYMENT OVER THE LAST FINANCIAL YEAR ( CONTINUING THE MORE
FAVOURABLE PATTERN SINCE APRIL), WITH EMPLOYMENT EXPANDING
BY ONE AND A HALF PER * CENT THROUGH THE YEAR-WE HOPE WE CAN
DO EVEN BETTER, AND WILL DO WHAT WE CAN TO ENSURE A BETTER
RESULT. BUT AT LEAST THIS OUTCOM E WOULD BE A SUBSTANTIAL
STEP FORWARD AFTER THE REVERSALS OF THE PAST TWO YEARSTHE
INCREASE IN EMPLOYMENT EXPECTED OVER THE NEXT
YEAR IS ONLY A BEGINNING-MANY OF OUR POLICIES ARE DIRECTED
AT ENSURING THE DURABILITY OF RECOVERY INTO THE NEXT
FINANCIAL YEAR AND WELL BEYOND-STRONG GROWTH OVER SEVERAL
YEARS IS REQUIRED TO MAKE ADEQUATE HEADWAY INTO OUR
DISASTROUS INHERITANCE OF HIGH UNEMPLOYMENTBEYdND
THE EMPHASIS ON EMPLOYMENT, THE BUDGET
EFFECTS A SUBSTANTIAL RE-ORDERIJG OF PRIORITIES IN THE
DIRECTION OF PROVIDING FOR THOSE IN GREATEST NEED. THE
ESTABLISHMENT NEXT YEAR OF MEDICARE WILL SEE THE RETURN OF
UNIVERSAL, EQUITABLE HEALTH COVER. A SIGNIFICANT REAL
INCREASE OF RESOURCES -TO BE PROVIDED ON A NEEDS BASIS
HAS ALSO BEEN ALLOCATED FOR EDUCATION. REAL INCREA SES HAVE
ALSO BEEN MADE AVAILABLE TO SOCIAL SECURITY BENEFICIARIES
MOST IN NEED-
7.
PROGRAMS OF THIS KIND HAVE ONLY BEEN MADE POSSIBLE
BY A QUITE FAR-REACHING REORDERING OF FEDERAL GOVERNMENT
EXPENDITURE PRIORITIES. THEY ALSO CRUCIALLY DEPEND ON
S. UCCESSFUL RESTORATION OF THE ECONOMY TO THE PATH OF GROWTH
WITH LOWER INFLATION. THIS IN TURN HINGES ON THE CREATION
OF AN. ENVIRONMENT CONDUCIVE TO SUSTAINED GROWTH AND
CONFIDENCE IN THE PRIVATE SECTOR.
OUR BUDGET SHOULD CONTRIBUTE SUBSTANTIALLY TO REAL
GROWTH OVER 1983-84. WE EXPECT THE ECONOMY TO GROW IN
1983-84 BY 3 PER CENT AS COMPARED WITH A DECLINE OF 2 PER
CENT IN 1982-83. BECAUSE ACTIVITY WILL CONTINUALLY PICK UP
PACE THROUGH THE YEAR, GROWTH AS MEASURED FROM THE JUNE 1983
QUARTER TO THE JUNE 1984 QUARTER IS LIKELY TO BE AN EVEN
MORE IMPRESSIVE 5 PER CENT FOR NON-FARM GDP AND OVER 6 PER
CENT FOR TOTAL GDP. THIS PICK UP IN ACTIVITY IS EXPECTED TO
BE ACCOMPANIED BY CONTINUED STRONG GROWTH IN PUBLIC SECTOR
FINAL DEMAND, CONTINUED WEAK PRIVATE SECTOR FINAL DEMAND, A
MODEST RISE IN EXPORTS, A FURTHER SIGNIFICANT DECLINE IN
IMPORTS, A REBOUND IN FARM OUTPUT, AND MODERATE GROWTH IN
REAL NON-FARM PRODUCT.
IMPORTANTLY THE APPROACH ADOPTED BY MY GOVERNMENT
HAS SOUGHT TO COMBINE AN ADEQUATE, BUT NOT EXCESSIVE PUBLIC
BOOST TO ACTIVITY WITH STIMULUS FOR NECESSARY PRIVATE SECTOR
EXPANSION. IN CIRCUMSTANCES OF LOW DEMAND AND CAPACITY
UNDERUTILIZATION THE GOVERNMENT AT THIS STAGE MUST HELP
MAINTAIN THE LEVEL OF DEMAND. BUT IT HAS DONE SO IN THE
FIRM EXPECTATION THAT, AS THE RECOVERY GATHERS STRENGTH, ITS
OWN RATE OF INCREASE IN OUTLAYS WILL HAVE TO BE REDUCED
CONSIDERABLY. A DURABLE ECONOMIC RECOVERY REQUIRES, AS ESSENTIAL
PREREQUISITES, BOTH CONTINUING WAGE MODERATION IN THE PERIOD
IMMEDIATELY AHEAD AND AN ON-GOING EFFORT TO REDUCE
STRUCTURAL PUBLIC SECTOR DEFICITS AND BORROWING REQUIREMENTS
AS RECOVERY PROCEEDS. THE POLICY FRAMEWORK NOW ESTABLISHED
BY MY GOVERNMENT ENSURES THAT EACH OF THESE ASPECTS IS NOT
ONLY FULLY APPRECIATED BUT ALSO EFFECTIVELY ADDRESSED.
THE DIFFICULTIES INVOLVED IN MEETING THESE
PREREQUISITIES ARE NOT UNDERESTIMATED. THEY ARE ONLY
MATCHED BY MY GOVERNMENT'S DETERMINATION TO SEE THAT THEY
ARE MET. LET ME TAKE EACH IN TURN.,
FIRST, WAGE RESTRAINT. THE BUDGET ASSUMES THAT FOR
1983-84 AVERAGE WEEKLY EARNINGS WILL INCREASE BY ABOUT 7 PER
CENT. THIS REPRESENTS A MARKED SLOWING FROM THE INCREASE OF
ELEVEN AND A QUARTER PER CENT IN 1982-83, BUT IS IN LINE
WITH THE ANTICIPATED CONSUMER PRICE INDEX RISE OF ABOUT
SEVEN AND A HALF PER CENT FOR THE PERIOD. THESE ASSUMPTIONS
PRESUME THAT THE AUSTRALIAN UNION MOVEMENT WILL ADHERE, AS I
BELIEVE IT WILL, TO THE PRICES AND INCOMES ACCORD.
THE ACCORD RECOGNISED THE CRUCIAL NEXUS BETWEEN
WAGE MODERATION, INFLATION AND EMPLOYMENT GROWTH. IF
UNSUSTAINABLE INFLATIONARY PRESSURES ARE NOT TO BE IMPOSED
ON THE ECONOMY, IT IS VITAL THAT WAGE INCREASES ONLY BE
THROUGH THE CENTRAL WAGE FIXATION DETERMINATIONS WHICH
RELATE TO PRICE MOVEMENTS AT SIX MONTHLY INTERVALS. THERE
SHOULD BE NO PLACE FOR ADDITIONAL WAGE INCREASES BASED
SIMPLY ON THE INDUSTRIAL MUSCLE ENJOYED BY PARTICULAR,
CLAIMANTS. IF EXCESSIVE DEMANDS ARE FORCED, THE GOVERNMENT
MAY HAVE LITTLE CHOICE BUT TO REVERT TO THE BLUNT,
TRADITIONAL INSTRUMENTS OF TIGHTER MONETARY AND FISCAL
POLICY TO RESTRAIN INFLATION. THE COST IN TERMS OF REDUCED
ACTIVITY AND INCREASED UNEMPLOYMENT WOULD BE INTOLERABLY
HIGH. WAGE AND PRICE DEVELOPMENTS MUST BE CONSTRAINED
WITHIN THE BROAD GUIDELINES SET BY THE PRICES AND INCOMES
ACCORD IF THE GOVERNMENT IS TO BE ABLE TO PERSIST WITH ITS
EXPANSIONARY FISCAL POLICY. IT MUST, BE RECOGNISED THAT IT
IS IN THE INTERESTS OF BOTH WORKERS AND THE UNEMPLOYED TO
ENSURE THAT THERE IS RESTRAINED GROWTH IN NOMINAL WAGES,
ALONG WITH HIGHER PRODUCTIVITY AND PRODUCTION, SO THAT
COMMUNITY LIVING STANDARDS CAN RISE' IN REAL TERMS.
IT IS ALSO IMPORTANT TO RECOGNISE THAT CONTINUING
STIMULUS TO ECONOMIC ACTIVITY CANNOT BE PROVIDED BY
SUCCESSIVE INCREASES IN BUDGET DEFICITS.
THIS YEAR'S BUDGET DEFICIT HAS BEEN PITCHED AT A
LEVEL WHICH WILL PROVIDE A SUBSTAN4TIAL DIRECT STIMULUS TO
ECONOMIC ACTIVITY, WHILE AVOIDING EXCESSIVE PRESSURES ON
FINANCIAL MARKETS. IT NOW ACCOUNTS FOR NEARLY 5 PER CENT OF
FORECAST GDP.
MANY OF THE DECISIONS WE MADE IN THE MAY STATEMENT
AND IN THIS BUDGET WILL HAVE THE EFFECT OF SIGNIFICA. NTLY
REDUCING THE STRUCTURAL COMPONENT OF THE DEFICIT. THE
TAXATION OF SUPERANNUATION, THE RE-IMPOSITION OF AN INCOME
TEST ON OVER-7O's PENSIONS, THE REINTRODUCTION. OF AN ASSETS
TEST ON PENSIONS, AND INDEXATION Of TRADITIONAL EXCISES
SHOULD TOGETHER MAKE AN IMPORTANT CONTRIBUTION TO REDUCING
THE STRUCTURAL DEFICIT IN FUTURE YEARS. THE CYCLICAL
COMPONENT OF THE DEFICIT CAN ALSO BE EXPECTED TO FALL AS
ACTIVITY INCREASES-INCREASED ECONOMIC ACTIVITY WILL SEE
GOVERNMENT REVENUES RISE AND SHOULD CAUSE DEMANDS ON THE
OUTLAYS SIDE FOR UNEMPLOYMENT BENEFITS TO DECLINEACCORDINGLY
BOTH THE OPERATION OF TH ! E STRUCTURAL COMPONENT
. OF THE DEFICIT FLOWING FROM THE DELIBERATE DECISIONS OF MY
GOVERNMENT AND THE WORKING OUT OF THE CYCLICAL COMPONENTS
POINT TO THE POSSIBILITY OF SIGNIFICANT REDUCTIONS IN THE
DEFICIT AS WE GO OUT OF 1983-84 AND INTO 1984/ 85.
FINANCING THE DEFICIT WILL BE HANDLED WITH
PARTICULAR CARE. WHILE WE CANNOT INSULATE OURSELVES
COMPLETELY FROM FINANCIAL PRESSURES ABROAD AND IT IS QUITE
11.
POSSIBLE THERE WILL BE SUCH PRESSURES -WE MUST DO WHAT WE
CAN WITHIN OUR OWN FINANCIAL MARKETS TO AVOID EXACERBATING
PRESSURES ON INTEREST RATES.
THE PROBLEM IS MANAGEABLE OVER 1983-84 AS NET
CORPORATE BORROWING IS EXPECTED TO DECLINE, INCREASED PUBLIC
SECTOR BORROWING CAN BE SUSTAINED IN SUCH CIRCUMSTANCES.
THE* RESULTS ANNOUNCED LAST NIGHT OF THE LATEST $ 1500 MILLION
BOND TENDER DEMONSTRATED THIS. IT PRODUCED YIELDS SOMEWHAT
BELOW-THOSE OF THE LAST MUCH SMALLER TENDER AND MUCH LOWER THAN
THOSE PREVAILING THIS TIME LAST YEAR, BIDDING ON THIS LATEST
TENDER EASILY COVERED THE STOCK AVAILABLE, BUT AS PRIVATE
INVESTMENT INCREASES WITH RECOVERY THE COMMONWEALTH WILL HAVE
TO ADJUST ITS DEMANDS AND MAKE ROOM. IN THIS WAY WE AIM TO
ENSURE THAT, AS FAR As POSSIBLE, UPWARD PRESSURE WOULD BE
AGAINST THE INTERESTS OF THE PRIVATE SECTOR, THE PUBLIC SECTOR
AND THE COMMUNITY AS A WHOLE AND WOULD JEOPARDISE THE RECOVERY
WE NOW SEE BEGINNING.
A NOTEABLE FEATURE OF my GOVER1NMENT'IS BUDGET WAS
THE MANNER IN WHICH WE WERE ABLE TO IMPLEMENT NEW HIGH
PRIORITY PROGRAMS WITHOUT MAJOR GENERAL TAX INCREASES-IN
PART THIS WAS DUE TO AN APPROACH WHICH SOUGHT TO ENSURE THAT
THOSE WHO HAD NOT BEEN PAYING THEIfA FAIR SHARE OF TAX BEGAN
TO DO So. HENCE THE EMPHASIS ON RECOUPING THE REVENUE OWED
BY THOSE INDULGING IN TAX AVOIDANCE PRACTICES, THE
COLLECTION OF TAX FROM THOSE EVADING IT, LIMITING THE
POTENTIAL FOR TAX AVOIDANCE BY CONVERSION OF INCOME TO
CAPITAL GAINS, AND REMOVING MORE OF THE SPECIAL CONCESSIONS
TO SPECIAL INTEREST GROUPS. THE VERY SIZEABLE BURDEN
ALREADY IMPOSED BY DIRECT TAXATION WAS NOT ADDED TO. RATHER
AN APPROACH GUIDED BY CONSIDERATIONS OF EFFICIENCY AND
EQUITY PREVAILEDA VERY CLEAR EXAMPLE OF ECONOMIC RATIONALITY AT
WORK WAS THE DECISION TO INDEX EXCISE RATES. DURING THE
PAST DECADE THE PROPORTION PROVIDED BY EXCISE TO THE GENERAL
REVENUE DECLINED FROM 13% To THROUGH INDEXATION WE HAVE
MADE SURE THAT OVER TIME THEY MAINTAIN THEIR REAL VALUE AND
ARE NOT ERODED BY THE PROCESSES OF INFLATION-WE HAVE PUT
ASIDE THE DESTABILISING AND OFTEN ARBITARY PATTERN OF LARGE
DISCRETIONARY INCREASES WHICH WAS THE WAY IN THE PAST. WHAT
WE HAVE-DONE SHOULD HAVE-BEEN DONE MUCH EARLIERTHE
ALTERNATIVE TO MOVING TO MAINTAIN THE REAL
VALUE OF THE EXCISE, WOULD HAVE BEEN TO LAY GREATER DEMANDS
ON OTHER FORMS OF TAXATION. THE IMPACT COULD HAVE BEEN
QUITE DISTORTIONARY. THE POSITION NOW REACHED POINTS TO THE NEED FOR
DETAILED EXAMINATION OF THE ACTUAL AND POTENTIAL NATIONAL
REVENUE BASE. WIDELY BASED COMMUNITY CONSIDERATION OF WHAT
IS APPROPRIATE IN TERMS OF ECONOMIC EFFICIENCY AND EQUITY
WOULD BE TIMELY. THIS MIGHT ENABLE' SENSIBLE AND FAIR
CHANGES TO BE MOUNTED, NOT IN A PIECEMEAL FASHION, BUT AS
PART OF A WELL-CONSIDERED, PROPERLY INTEGRATED PACKAGE-
13.
IN THE MEANTIME MY GOVERNMENT IS DETERMINED TO
PRESS AHEAD WITH ITS EFFORTS TO ENSURE THAT WHERE BENEFITS
ARE PAID TO THE NEEDY, IT IS IN FACT THE NEEDY WHO RECEIVE
THEM. THIS IS THE POINT OF THE PROPOSED PENSION ASSETS
TEST. THE ALARM ENGENDERED BY THAT IS UNFOUNDED.
APART FROM HOME, CAR, BOAT, CARAVAN, JEWELLERY,
FURNITURE AND OTHER PERSONAL EFFECTS, A SINGLE PENSIONER CAN
HAVE $ 17,000 AND STILL RECEIVE THE FULL PENSION AND UP TO
$ 106,000 AND STILL RECEIVE A PART-PENSION. A MARRIED COUPLE
CAN HAVE $ 28,000 AND STILL RECEIVE THE FULL PENSION AND UP
TO $ 177,000 AND STILL RECEIVE PART-PENSION. MOST PENSIONERS
WILL NOT BE AFFECTED AT. ALL. SOME WILL ACTUALLY GAIN. ONLY
THOSE PENSIONERS WITH SUBSTANTIAL ASSETS, WHO ARE
ARTIFICIALLY AVOIDING THE CURRENT INCOME TEST FOR PENSIONS,
WILL BE AFFECTED IN ANY SIGNIFICANT WAY.
WHERE THE GOVERNMENT IS PAYING OUT TO THE ELDERLY
AND OTHERS IN NEED, THE PAYMENT MUST BE RELATED TO NEEDOTHERWISE
THE WHOLE OF OUR RESOURCES ARE GOING TO BE
DISTORTED AND THE INTERESTS OF ALL'AUSTRALIANS PERVERTEDTHERE
ARE STILL TOO MANY AUSTRALIANS FORCED TO
LIVE AT AN UNACCEPTABLY LOW STANDARD. THEIR SITUATION MUST
BE ADDRESSED. WE SIMPLY CANNOT AFFORD TO DIRECT WELFARE
PAYMENTS TO PEOPLE WHO ARE NOT GENUINELY IN NEED. TO DO
SO REDUCES THE RESOURCES AVAILABLE TO HELP THE TRULY
UNDERPRIVILEGED.
14.
MY GOVERNMENT IS ABSOLUTELY FIRM ON THIS POINT. WE
WERE ELECTED TO ARREST THE DECLINE IN THE AUSTRALIAN
ECONOMY, TO REVERSE THE TREND TOWARDS GREATER INEQUALITY IN
AUSTRALIAN SOCIETY AND TO BRING AUSTRALIANS TOGETHER AGAINTHE
MANDATE WAS CLEAR AND WE HAVE MADE MAJOR STRIDES TOWARDS
ITS REALIZATION. A GREATER SENSE OF NATIONAL PURPOSE AROUND THE
RESTORATION OF GROWTH IS NEVERTHELESS STILL NEEDED. THIS
WILL ONLY BE POSSIBLE IF THE BENEFITS OF GROWTH, AND THE
INEVITABLE COSTS, ARE SHARED EQUITABLY.
* s