PRIME MINISTER
FOR PRESSNOVEMBER 17, 1975
ADDRESS TO THE NATION
Since coming to office last week as Caretaker Government
we have been fully advised by-depar. tments on the state of the
Australian economy.
Jobs, prices, prosperity are matters that concern us all.
In fulfilling our pledge to provide Australia With'sound
management until the election, we have given special emphasis
to our duty to be informed on the economy.
During-the last week, certain facts have come to light which*
we have a responsibility to place before you.
They are not pleasant facts.
They are not welcome facts.
They show that, as a result of past policies, Australia will
face very severe problems of economic management next year.
These are the facts.
The budget deficit will not be $ 2,800 million as planaed.
We-will be about $ 4,000 million in the red by the eniiiof
the year. In two years Australia will have spent $ 6,500 million
more than we have got over $ 500 for every Australian. In
August the former Treasurer said this kind of deficit would
lead to " roaring inflation" and require " devastating monetary
measures". The rate of price increases in the December quarter will be
about 5% one of the highest on record one of the highest
rates in the western world.
This year our national production will be $ 500 million less
than estimated in the last budget.
Unemployment is now estimated to rise to over' 400,000 early in
the new year. Tens of thousands of school leavers will start
life on the dole. Where is the recovery we have been told
about? / 2
F75/ 248 12
PRIME MINISTER -2-
Latest statistics show that consumer spending is not recovering
as we were told it would.
We now know that the political events of the last few weeks
have had no effect on official statistics and forecasts.
As a result of the materialonow available, in our view, under-.
Labor s policies no real.. recovery-was& possib-le., The recovery
is a myth. The economy is not coming out of its recession.
The facts ware all available to the former government.
They are facts that should have been available to the Parliament@
They support the view that the former government at best did
not understand the extent of the damage caused by its incompetence,
and that its economic policies had failed.
Despite the fact that the government knew that investment had
fallen last year and would fall again this year, it did nothing.
New jobs depend on investment. Without investment there will
be no new jobs.
SThe budget deficit, declining investment, slower than expected
growth, low confidence these all mean that next year Australia.
will be facing more inflation, and the highest unemployment
since the. great depression.
In fact, official information only completed in the last few
days, indicates that-there-could be-80,000 more people out of-
Swork by the middle: of next year than expected. This shows
unmistakably that talk of a recovery is quite wrong.
The previous government was told the situation by its own.
expert committees, especially-the Mathews Committtee. a They
warned how serious--the-situation was.:
SThey warned that. unless reforms were introduced the very survivaL.
of private enterprise-wa threatened,-
It is worth remembering that private enterprise provides three
out of every four jobs in Australia.
PRIME MINISTER -3-
The previous Labor Government ignored the recommendations.
It was not prepared to exercise any of the necessary restraints
on its own spending. In light of the facts I have given
Government will continue to get bigger, leaving no room for new
jobs in private enterprise.
If the Australian people approve our policies at the election,
we will take action to introduce the recommended . reforms as
soon as practicable we have-long supported them. They will
form part of our full three-year-programme to get Australia
moving ahead.
The reforms will mean that. for the-first time,. wage and salary
increases due solely to inflation-will not lead to heavier-taxes.
They will mean that business will not be paying away in taxes the
money it needs to create jobs.
These reforms, supported by the trade union movement, together
with other policies to be announced in the policy speech will
provide a solid basis for the recovery of business confidence,
for co-operation between all sections of the community for
restraint in government spending.
Under the terms of our commission from the Governor-General the
Liberal and National Country Parties are pledged not to change
any government policies before the election on December 13.
Our respo'nsibility is to manage-Australia to the best of our
ability, without changing policies, until that time.
The last three years have-hurt many people. Those who are
worse--off are:-
The weak and unorganised
The poor, the retired:.
The-small businessman and. the farmer
The school leaver
The family man who is paying more of his wages in tax than
ever-before-in-our-. hisry.
The first essential step on-the road to prospe-rity is tobe-hone-st
with ourselves about what h& s happened, to recognise the-problems
for what they are immensely tough problems we can solve if we
are prepared to work together as a people. / 4
PRIME MINISTER -4-
I regret that this is a gloomy report. It is not going to be a
quick and easy task to overcome the difficulties created by past
policies. Australia has had three dark years.
We are like a family that-has-greatly overspent-its income:.
our house is mortgaged
we have debts-to pay witrr: basically the same reaL: income
It takes more than a year or-two to pay off these debts.
I have the greatest confidence that Australians working , together
can resolve their present problems. But it won't be-easy.. It wil
require work. It will require determination. It will require---
effort, it will require the co-operation of all Australians.
Our policies will be directed to working with all of you to give
Australia a responsible government, and one that you can trust.
I I: l.. I.
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