J~ AUSTRALIA
PRIME MINISTER PESS STATEMENT NO. 232
19 April 1974
MR SNEDDEN'S ECONOMIC POLICIES
Mr Snedden has now patched together another bewildering
instalment of the Opposition's economic policy.
From all the backtracking, confusion and deception
evident in his statement one thing stands out: The Opposition's
economic policies would give an intolerable boost to inflation.
Let it never be forgotten that my Government inherited
from the Liberals a sick economy with massive unemployment and
severe inflation. The seeds of that inflation were sown in Mr Snedden's
own disastrous Budgets of 1971 and 1972.
On top of that, in common with every major and trading
industrial nation, Australia last year faced an unprecedented
upsurge in world inflation.
The Government took a whole series of decisions last year
to restrain inflation, including tariff cuts, revaluations, monetary
measures and trade practices legislation.
Every one of those measures was opposed by Mr Snedden.
The Liberals in the Senate refused even to allow debate on the trade
practices bill. Now he puts forward a policy that would increase inflation
still further. He proposes to remove restrictions on the inflow of
capital and release a flood of foreign money into the country.
His proposed $ 600 million tax cut so strenuously resisted
by Mr Anthony is equally irresponsible at this time. It is contrary
to all economic practice and good sense. It is the opposite of
everything the Liberals themselves did to reduce inflation when they
were in office. / 2
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Naturally we are in favour of reducing taxation for those
who carry the most severe tax burden. We have pledged to restructure
the tax system to help those on low and middle incomes. We will do
it when the time is right, not as an ad hoc election gimmick but
only after thorough study.
Mr Snedden will create further confusion by his talk about
interest rates. For months he has been promising to cut interest
rates. He has now backtracked on his promise.
In effect, he now says that interest rates would be cut
when inflation is reduced. He has acknowledged that the Government's
interest rate policy is justified as an anti-inflationary measure.
Mr Snedden has also backtracked on his vague talk about
a pay and price freeze. He knows such a freeze would not work.
He has backtracked on the question of reducing Government
expenditure. He no longer says he would cut expenditure. He merely
says the rate of growth would be reduced.
He gives no clear indication of where reductions would be
made. The great welfare and education policies initiated by my
Government would be at risk.
Mr Snedden's only firm commitment is to hand the national
pipeline system over to private developers. This is a doctrinaire
concession to the Liberal Party's backers. It would make no
difference to inflation whether the pipeline was built with private
or public capital. The public will be left to speculate on which parts of
Mr Snedden's economic policies are approved by the Country Party and
the D. L. P. The chorus of confusion and contradiction on this subject
will further diminish public confidence in the Opposition's policies
and motives.
CANBERRA. A. C. T