The Australian Federal Cabinet confronted itself at the end of March with spending proposals for next year which would cost more than $29 billion — a 19.3% increase on the present financial year’s budget of $24.3 billion to add to Australia’s present inflationary problems.
This was proposed by a so-called “free enterprise” government which has been elected to office with a record majority, based on a platform of:
- reducing Government bureaucracies and spending, and reducing the Government deficit;
- reducing taxes to restore incentive, and thereby reducing inflation in order to get Australia’s economy back into a healthy condition.
None of this has been carried out, despite continuous reassurances from our politicians that they will do so. Some even profess that they HAVE done so!
At the same time, revenue, at prevailing tax rates and allowing for indexation, should rise from this financial year’s $21.7 billion to at most, only $25 billion — threatening a $4 billion deficit. That is virtually the record deficit which the Labor Government produced.
The present financial year is likely to produce a deficit — estimates vary between $2.8 billion and $6 billion, and that adds to inflationary financial problems.
The monetary experts say that in an economy of Australia’s size, the financing problems of any deficit much more than $2 billion are heavily inflationary. They say a deficit more than $3 billion would probably require increased interest rates — and would consequently lead to diminishing of business investment.
So the Government faces a major pruning exercise in the next three months in its preparation of the budget, if it is to tackle inflation seriously.
If budget spendings do not exceed some $27 billion, that, in turn will lower the deficit by about $2 billion without providing any scope for tax cuts, which are necessary if the Australian economy is to recover.
The restraint of spending to $27 billion will, itself, be a major feat for the pressured Treasurer. He has to cope with some influential Ministers who are just as enthusiastic “big spenders” as their counterparts in the Labor Government.
Social Security Minister, Margaret Guilefoyle is, this year, presiding over a Welfare Bill that is likely to run out at $6.4 billion (more than $200 million over the budget estimates) and no less than 28% greater than the Hayden (Labor) budget provision.
With immaculate timing, the Judiciary are putting in their bids — they are publicising the holdups in the courts and the supposed need for more “wigs for the boys”. Law, order and public safety, the financial category under which their worships are funded, is already running 29% up on last year — a rate of increase which even that radical Attorney-General Lionel Murphy, could not match. The chaos created in the Divorce Courts seems certain to be rewarded with another handsome increase in funding.
I do not wish to single out these as a prime example — they are many other Government departments and instrumentalities on the “massive splurge stampede”.
The AIDC, for example. This Australian Government instrument of nationalisation has achieved a remarkable 80% loss of all taxpayers’ funds which it has been able to “invest”. This body should be buried, and buried without any more Government funding.
Then there is the National Investment Fund — another nationalisation body similar to the above and another one requiring Government funding.
The Department of the Media. This entirely unnecessary department set up under the Labor banner still flourishes under the Liberal regime, although they have managed to change its name in an endeavour to disguise its presence. This whole department, under any name, requires elimination.
Not forgetting the Bureau of Mineral Resources and Department of Minerals and Energy. These departments, with their duplicates in every State, have never found a major mineral deposit, do not have the expertise to start, operate or finance a major mine, but what they have been able to do very successfully is delay every mining operation in Australia during its starting-up period.
During the Labor regime it was estimated that $6,000 million earmarked for investment, in revenue-earning projects was either abandoned or diverted to other countries. However, even the Labor Government in its most extreme moods did not close down an operating mine and break an approved contract as the Liberals recently did to Fraser Island.
This diabolical act had world repercussions — as Australia was previously looked upon as a relatively stable source of supply.
Then of course, if all this was not enough to deter most companies, there is the now somewhat famous West Australian State Minerals and Energy Department. This has received great notability for its confiscation of mining areas from the discoverer and awarding these areas to its friends.
In the January, 1977, West Australian (Liberal) Government allocation of mining leases, several were not allocated to the discoverers but were kept at the Minister’s discretion as “Ministerial Reserves”. These “Ministerial Reserves” entitle the Minister to dispose of them how and when he pleases.
The reason he gave for the “necessity” of such Governmental action was: “To earmark future iron ore discoveries in the Pilbara and West Pilbara for the establishment of a steel industry in WA.”
Considering the facts. There are an estimated 125 million million tonnes of iron ore in the Pilbara region alone, and if there was to be a local steel industry, all local iron ore producers would be trying their hardest to sell their ore to it, and thus obviously, saving on their transport to market costs.
For any mining Minister to seriously believe iron reserves must not be granted to some Australian companies in order to retain them for a local industry, shows that the Minister is even more ignorant on the subject of his portfolio than one would believe possible!
Back on the subject of Government departments, one mustn’t forget the Department of Productivity. Instead of eliminating and pruning their departments, the Liberal Government have turned around and created this new one, along with another Treasury Department:
This “Productivity” Department’s new minister (now with a bigger Government pay-packet) urges industries to increase their productivity and travels the country giving talks to various groups on the subject. And, on how to run their businesses more efficiently — presumably based on the Government’s own outstanding running of such things as the Post Office, which, unlike any other business, doesn’t have to pay taxes, and the railway lines (no taxes either).
The West Australian Government Railways only lost $3,040,813 in 1976, to add to their accumulated loss of $251,124,835 of taxpayers money. Whereas, the New South Wales Government Railways lost $79,600,000 in 1973 (more recent figures unavailable) to add to whatever their accumulated loss is!
But a stranger picture emerges when some of our business persons, instead of telling the Minister a few home truths such as the necessity for less bureaucratic red tape so that business may actually proceed and so on turn around and applaud the inexperienced Minister’s speech! If lily-livered business people aren’t enlightening the Minister on production, what chance is there that the Minister’s Public Service advisers will be able to do so?
So, instead of shifting resources from bureaucrats to business, Mr Fraser has been presiding over the shuffling of resources between one lot of bureaucrats to another lot of bureaucrats.
High tax rate
The Premiers’ Conference in June this year will see whether the P.M. is prepared to continue underwriting the Whitlam-style proliferation of bureaucracies in the State capitals as well.
The effect of all the above is that every two Australian workers have to support one non-productive person from the Public Service. This also means that the average worker, because he is paying some 47.5% of his wages to the Government in direct and indirect taxes and charges (Australia having one of the highest tax rates in the world), is also wasting nearly 50% of his time working indirectly for the Government. On top of all this, the good worker then has to waste his working (and recreational) time filling out form after form that some bureaucrat demands for his Department.
Where is the incentive to work? Especially when one considers the alternatives of a secure, responsibility-lacking, well-paid Government job, or of course, the dole!
How can the Australian economy support this Governmental load? Even the British economy has a better ratio of private enterprise employees to civil servants.
It is often difficult for overseas people to understand why Australia, with all its natural resources, remains in the stagnant, inflation-ridden position that it does. Especially when you consider that natural resource-lacking Japan has a G.N.P. of 6.3 per cent and Singapore a G.N.P. of approximately 10%, whereas we have a G.N.P. of only 2.2%.
On a recent overseas television interview, Mr Lang Hancock was asked: “Mr Hancock, as a man who obviously has great concern for your country, where do you see Australia heading?”
His reply was: “Downhill, and downhill fast.”
Bonus: Five Lang Hancock Quotes on the Liberal Party
I believe in the principles of the Liberal Party; I don’t believe in the practices, because they’re socialist.
[Source: 1971 Lang Hancock-Robert Moore Interview for Monday Conference. The transcript was also reprinted by Mrs Rinehart in her 2012 book Northern Australia and then some; the quoted passage is found on p. 43.]
With the greatest majority of our history, signifying the full support of the Australian nation to radically depart from the drastic practises of the Whitlam administration, [Prime Minister Fraser] had the greatest opportunity that has ever been given to any Prime Minister to put a check on government squandering and so stop the ever spiralling internal price structure in Australia which is rapidly pricing us out of world markets. Instead he has followed blindly in the Whitlam path.
There is nothing much wrong with planning. The question is who is doing it. Founders of the Liberal Party once believed that people should be free to plan their own lives. Our Federal Governments, Liberal and Labor, now believe they must plan your life for you.
Nearly all [socialism in Australia] grew under Liberal rule so if the Labor Party is genuine in its belief in socialisation of the industry, the best way to achieve it would be to hand over government to the so-called Liberal Party.
[Source: Lang Hancock, “How Lang Hancock would fix the economy,” The Bulletin, May 17, 1983, pp. 106-10.]
Even if the Liberals did win, however, it is certain they would not arrest the forward march to socialism because, of the two parties throughout their history, the Liberals have been the instigators of most of the socialist legislation with which we are today plagued.
[Source: Lang Hancock, “Lang: Why Joh should be PM,” Sunday Times (Perth), April 19, 1987, p. 9.]
- The section titled “The Liberal Party Is Socialist” in Benjamin Marks, “Gina Rinehart Is Our Friendly Voice of Moderation,” www.GinaRinehart.info, July 26, 2012. In that essay you’ll also find a link to what she listed as her occupation on her passport in 1975!
- And for proof that Mrs Rinehart is still directly active saying what she said over 37 years ago, check out www.andev-project.org.