or I PRESS STATEMENT NO. 334'
September 1974
DEVALUATION STATEMENT BY THE PRIME MINISTER
This is the most important single economic decision
we have taken this year. Its main effect its basic purposeis
to mnake it easier to sell our goods overseas.
This means bigger markets abroad for our farm products
and minerals and manufactured goods.
It will make it easier for our exporters to compete
in overseas markets; it will make it easier for local
manufacturers to compete with imported goods.
I believe this decision will give an immediate boost
to general business confidence.
It will improve the prospects in our rural industrioe3-.
It will give added confidence to the motor industry,
textile manufacturers, and local manufacturers of appliances,
electronic goods and a whole range of other products.
It will safeguard the jobs of Australian workers who
may be threatened by import competition. It will reduce unemploymen~ t
our mining industries -copper, nickel, lead, zinc will
benefit from our action. The recent decline in their prices will
be cushioned by the new value of the dollar.
We have always been flexible in our approach to the exchange
rate. Along with most other countries we are prepared to vary
the exchange rate when economic conditions make it necessary to
do so.
OF -2-
Last year we twice increased the value of the dollar.
Our exports last year far exceeded our imports. Our reserves
were at record levels.
In that situation it mnade sense to appreciate the value
of the dollar. That policy succeeded completely.
Now it is appropriate to reduce the value of the dollar
and improve the prospects of our export industries.
Our decision means that we will also be cutting the fixed
link with the U. S. dollar.
This action means that the external value of our currency
will remain generally stable against that of our competitors
and trading partners overseas.
Unless we decide to change the rate of our dollar it will
now keep a stable value compared with other major currencies
such as the Japanese Yen, the German Mark and Sterling.
As a result of our decision I believe the whole community
unions, businessmen, farmers, manufacturers, exporters can look
forward to better markets, better trade, better business and more
secure employment.
CANBERRA, A. C. T.