Whitlam, Hon. E.G.

Mr PICTON (Kaurna) (15:34): On 21 October, Australia sadly lost former prime minister Edward Gough Whitlam, a man who helped transform our country from a closed, conservative nation to a progressive, fair nation, ushering in more reforms in the first few weeks than most governments could achieve in the first few years. Our house obviously has had a condolence motion already, which was time limited, so I was keen to make some remarks about Gough during this grievance debate.

Following the passing of Gough, I was brought to some bedtime reading of some of his important speeches. Given the great orator he was, there are many, but I came across the following passage in his 1972 'It's Time' speech that still rings true today, as it did then. No, I will not be attempting the voice, but I would like to quote the following passage:

If Australia is ever to have decent schools and equal opportunities, if we are ever to have decent hospitals where they are needed, if we are ever to have decent cities and public transport, the national government must be directly involved. For too long the federal system has been used as an alibi. Our national government is less involved in the great national matters than the national government of any other federal system, and yet our national government has a greater share of national finances and resources than that of any other federal government. In Australia the federal government raises 77% of public revenues, in the United States 64% and in Canada and West Germany 50%. My basic proposition is this: that any basic service or function of our community which can be hitched to the star of the Commonwealth grows in quality and affluence. Any function or activity which is financially limited to the States will grow slowly or even decline. Further, a function will be fairly financed to the extent that the Commonwealth finds the money for it. A function will be unfairly and inadequately financed if the whole burden falls upon the States.

I think that passage has the same currency today as it did 42 years ago. Take the figure Mr Whitlam used, that in 1972 77 per cent of public revenue went to the federal government. If you compare that figure to now, some 84 per cent of revenue goes to the federal government. If you take out the federal tax of GST from their ledger and put it onto the states' ledger, the federal government percentage still stands at 72 per cent.

That is a huge percentage for one level of government, when a much larger percentage of the services are actually provided through states and territories than that figure would suggest. This puts a huge reliance on both the GST, which is obviously a tax that relies heavily on consumer sentiment and so can go up and down unpredictably, and on grants from the federal government through special purpose payments and national partnership agreements.

In the past year, we have seen some dramatic threats to this already precarious federal-state funding balance. Firstly, the federal government has ripped up the federal health reform agreement, cutting $50 billion over 10 years from state finances and from our public hospitals. This agreement sought to address the imbalance between funding sources, as Whitlam referred to, and to help public hospitals meet the growing demand for services due to the ageing of the population. Under this agreement, the commonwealth would have funded 50 per cent of the growth funding. Hospitals, of course, are the largest growing area of expenditure across all levels of government.

Therefore, it was incredible to hear the federal Treasurer on ABC radio this week saying that the federal Liberal Party had only committed to increasing funding for four years, not for the whole agreement, when in fact the policy they released, as I have previously said to the house, said that they committed to reaching that 50 per cent goal of their share of increased funding, which they are absolutely not going to do; in fact, their share is going to continue to fall as a proportion of hospital funding over time.

The second issue that has happened recently is that the Prime Minister has also started, as he says, a conversation about the federation and the GST, both increasing the GST and separating areas of responsibility of federal and state governments. In fact, he even insultingly said that he is 'inviting the Labor Party, the state governments to join Team Australia and think of our country and not just the next election'.

Firstly, it is completely derogatory to the states to suggest that, if they do not want to increase the GST, then somehow they are un-Australian. It also does not address the fact that the states face an issue of a heavy reliance upon one particular tax, not a broad range of taxes such as the commonwealth has at its disposal. Of course, the Prime Minister does not seem to care that an increase in GST would hit low-income earners the hardest since they spend the largest percentage of their income and have little ability to evade tax, unlike higher-income earners.

As the Premier has said, it is not as easy as the commonwealth getting out of each other's way. All of our public services are linked. Taking health, for instance, GPs, hospitals and aged care are all connected; and with schools, universities, TAFE and jobs are all connected. I think it is as true now as it was in Whitlam's time that to properly improve services the commonwealth needs to play a role.

The Hon. T.R. KENYON: Madam Deputy Speaker, I draw your attention to the state of the house.

A quorum having been formed: