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FEBRUARY 3, 1976 7/ 2
Jj AUSTRALIA . LPRIME
MINISTER
REVIEW OF GOVERNMENT SPENDING
IN THE PAST TWO WEEKS, THE GOVERNMlENT HAS UNDERTAKEN A SEARCHING
REVIEW OF ALL ITS SPENDING PROGRAMMES.
I CAN NOW ANNOUNCE THAT THE GOVERNMENT HAS MADE DECISIONS WHICH
WILL REDUCE GOVERNMENT EXPENDITURE BY ABOUT $ 300 MILLION IN 1975/ 76.
SAVINGS IN LATER YEARS WILL BE CONSIDERABLY GREATER.
TEE GOVERNMENT IS COMPELLED TO MAKE THESE CUTS BECAUSE IT INHERITED
FROM LABOR AN ABYSMAL ECONOMIC SITUATION. INFLATION WAS RAMPANT
AS THE RECENT DECEMBER QUARTER CONSUMER PRICE INCREASE RISE SO
FORCIBLY REMINDS US: UNEMPLOYMENT WAS AT RECORD LEVELS; THE
MONEY SUPPLY WAS RISING AT A RATE WHICH FOSTERED CONTINUED INFLATION
BUSINESS AND CONSUMER CONFIDENCE WAS AT AN ALL-TIME LOW.
THIS SITUATION HAS LARGELY BEEN BROUGHT ABOUT BY THE LABOR GOVERNMENT
BUDGETARY IRRESPONSIBILITY.
UNDER LABOR GOVERNMENT EXPENDITURE ROSE MASSIVELY. IN 1972/ 73
THE TOTAL BUDGET OUTLAYS WERE 10.2 BILLION. THIS YEAR THE LABOR
GOVERNMENT BUDGETTED OUTLAYS WERE 21.9 BILLION, A RISE OF 115%
IN THREE YEARS. DESPITE MASSIVE INCREASES IN TAX RECEIPTS A
GROSSLY INFLATIONARY DEFICIT EMERGED. BUSINESS AND CONSUMER
CONFIDENCE WAS TUDERMINED. INVESTMENT AND CONSUER DEMAND FELL
AWAY AND TH E RESULTING FALL LN PRODUJCION CAUSED
INCREASES IN UNEMPLOYMENT.
THE GOVERNMENT IS DETERMINED TO MANAGE AUSTRALIA'S FISCAL AFFAIRS
PROPERLY. IT IS DETERMINED TO TACKLE INFLATION AND UNEMPLOYMENT
FIRMLY.
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WE HAVE ALREADY TAKEN DECISIVE POLICY ACTION TO THESE ENDS.
THE 40% INVESTMENT ALLOWANCE HAS BEEN INITIATED. THIS IS
DESIGNED TO STIMULATE INVESTMENT, BOOST AUSTRALIA'S PRODUCTIVE
CAPACITY AND ASSIST WITH JOB OPPORTUNITIES.
A COMPREHENSIVE MONETARY PROGRAMME TO CONTROL THE INFLATIONARY
GROWTH IN THE MONEY SUPPLY AND PROTECT SAVINGS HAS BEEN IMPLEMENNTED.
IT WILL ALSO ASSIST IN FINANCING THE DEFICIT.
WE HAVE SOUGHT TO REDUCE INFLATION AND CREATE EMPLOYMENT
OPPORTUNITIES BY OPPOSING THE PASSING OF THE FULL C. P. I. INCREASE
INTO WAGES.
ALL THESE MEASURES ARE PART OF OUR PROGRAMME TO REDUCE INFLATION
AND PROVIDE JOBS FOR ALL WHO WANT TO WORK.
TO SUPPORT THESE MEASURES, WE AIM TO CUT BACK THE UNNECESSARY
GROWTH IN GOVERNMENT AND THE EXCESSIVE DEFICIT WHICH HAS
ACCOMPANIED IT.
SOME SPENDING CUTS PREVIOUSLY'ANNOUNCED HAVE ALREADY BEEN PUT
INTO EFFECT.
STAFF CEILINGS HAVE BEEN IMPOSED ON THE COMMONWEALTH PUBLIC
SERVICE INVOLVING A SAVING OF UP TO $ 30 MILLION; THE REMAINING
PUBLIC SERVICE OVERTIME VOTE HAS BEEN REDUCED BY 50%, SAVING
UP TO $ 10 MILLION IN 1975/ 76.
SPENDING ON TRAVEL HAS BEEN CUT BY $ 20 MILLION IN THE REMAINDER
OF 1975/ 76. ADVERTISING HAS BEEN RESTRICTED TO THE ABSOLUTELY
ESSENTIAL. THE TREASURER MUST NOW APPROVE ALL NEW ElPLOYMENT
OF CONSULTANTS AND ALL RENEWALS AN EXAMINATION IS ALSO BEING
MADE OF EXISTING ARRANGEMENTS.
THE ADMINISTRATIVE REVIEW COMMITTEE HAS BEEN ESTABLISHED UNDER
THE CHAIRMANSHIP OF SIR HENRY BLAND TO'RECONMEND WAYS OF
ACHIEVING MAXIMUM ADMINISTRATIVE EFFICIENCY AND OF ELIMINATING
WASTE AND DUPLICATION WITHIN AND BETWEEN GOVERNMENT-DEPARTMENTS,
AND BETWEEN COMMONWEALTH AND STATE GOVERNMENT DEPARTMENTS.
THERE HAS BEEN* A RATIONALISATION OF COMMISSIONS, BOARDS OF INQUIRY,
AND OTHER ADVISORY BODIES AS ANNOUNCED YESTERDAY.
THiESE MEASUIRES WILL REDUCE SPENDING IN 1975/ 76 BY UP TO $ 60 . MILLION.
THE NEW DECISIONS TAKEN TODAY WILL REDUCE SPENDING IN 1975/ 76
BY ABOUT $ 300 MILLION, THIS BRINGS THE TOTAL SAVINGS MADE IN THE
YEAR TO A FIGURE OF UP TO $ 360 MILLION.
CABINET HAD BEFORE IT A REPnsRT FROM AN OFFICIALS' COMMITTEE ON
THE SPENDING PROGRAMMES OF EVERY DEPARTMENT FEXCEPT. DEFENCE. A
TOTAL OF NO LESS THAN 230 EXPENDITURE ITEMS WAS INDIVIDUALLY
EXAMINED. DECISIONS WERE MADE TO END, REDUCE OR DEFER SPENDING
ON MOST OF THESE ITEMS.
MANY OF THE ITEMS INVOLVED TENS OF THOUSANDS OF DOLLARS; OTHERS,
HUNDREDS OF THOUSANDS OF DOLLARS; OTHERS, MILLIONS OF DOLLARS.
IN TAKING ITS DECISIONS THE GOVERNMENT HAS NOT CUT BACK ON ANY
ESSENTIAL PROGRAMMES WHICH IT UNDERTOOK TO PRESERVE.
MINISTERS WILL FILL IN DETAILS ON THE DECISIONS RELATING TO THEIR
PORTFOLIOS WHEN IT IS PRACTICABLE TO DO SO.
HOWEVER A GENERAL INDICATION OF WHAT HAS BEEN DECIDED CAN BE GIVEN.
THE MAIN AREAS IN WHICH SAVINGS HAVE BEEN ACHIEVED ARE SET OUT
BELOW. HEALTHACTION IS BEING TAKEN TO EFFECT SAVINGS IN THE~ PHARMACEUTICAL
BENEFITS SCHEME REDUCING THE COST TO THE BUDGET BY
AT LEAST $ 34 MILLION IN A FULL YEAR AND $ 7 MILLION ! N 1975/ 76.
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IT HAS BEEN DECIDED THAT THE COMMO'NWEALTH WILL NOT
PROVIDE AN ADDITIONAL $ 10 MILLION IN 1975/ 76 IN RESPECT
OF COST ESCALATION IN THE HOSPITAL DEVELOPMENT PROGRAMME.
IT IS PROPOSED TO NEGOTIATE THE SALE OF THE FAWNMAC GROUP
OF COMPANIES ( PURCHASE PRICE WAS $ 8.4 MILLION).
ENVIRONMENT, HOUSING AND COMMUNITY DEVELOPMENT
THE AUSTRALIAN HOUSING CORPORATION IS BEING ABOLISHED
SAVINGS IN 1975/ 76 $ 29 MILLION.
SOCIAL SECURITY AND REPATRIATIONTHE
NEW TIMING OF'HALF-YEARLY SOC . IAL SECURITY AND REPATRIATIO*
PENSION INCREASES INITIATED IN THE SPRING OF 1975 BY OUR
PREDECESSORS WILL CONTINUE WITH THE NEXT INCREASE TAKING
EFFECT FROM MAY 1976
SAVINGS IN 1975/ 76 WILL BE $ 29 MILLION.
FOREIGN AFFAIRSSAVINGS AND DEFERRALS IN THE FOREIGN AFFAIRS AND AID AREA
WILL AMOUNT TO $ 24 MILLION IN 1975/ 76 ECONOMIES IN
FOREIGN POSTS ARE EXPECTED TO YIELD SIGNIFICANT ECONOMIES
IN FUTURE YEARS.
PRIME MINISTER AND CABINETREDUCED
PURCHASES OVERSEAS BY THE NATIONAL GALLERY
WILL SAVE OVER $ 3 MILLION IN 1975/ 76:
SOME SPREADING OUT OF THE ACTIVITIES OF THE CHILDREN'S
COMMISSION WILL YIELD SAVINGS OF ABOUT $ 9 MILLION
IN 1975/ 76.
TELECOMMUNICATIONS AND POSTAL COMMISSIONS
SAVINGS OF OVER $ 4 MILLION IN THE POSTAL COMMISSION AND
$ 11 MILLION IN THE TELECOMMUNICATIONS COMMISSION IN 1975/ 76
ARE TO BE ACHIEVED.
AUSTRALIAN BROADCASTING COMMISSION
ECONOMIES WILL*. BE MADE IN THE OPERATION OF THE ABC
AND WILL YIELD SAVINGS OF ABOUT $ 8.4 MILLION IN 1975/ 76.
IN ADDITION, AFTER REVIEWING ITS POSITION, THE AUSTRALIAN
INDUSTRY DEVELOPMENT CORPORATION HAS ADVISED THAT THE ALLOCATION OF
MILLION IN THE BUDGET IS NOT REQUIRED.
OTHER DEPARTMENTS IN WHICH SIZEABLE SAVINGS HAVE BEEN EFFECTED ARE
CAPITAL TERRITORY, CONSTRUCTION, NORTHERN TERRITORY, PRIMARY
INDUSTRY AND TRANSPORT. HOWEVER AS I NOTED EARLIER SAVINGS
HAVE BEEN ACHIEVED IN ALL DEPARTMENTS EXCEPT DEFENCE.
I SHOULD STRESS THAT THE REVIEW OF SPENDING PROGRAMMES WILL
CONTINUE. MINISTERS AND THE OFFICIALS' COMMITTEE HAVE BEEN
DIRECTED TO REPORT ON A VARIETY OF OUTSTANDING MATTERS AND,
AS ANNOUNCED LAST MONTH, A FULL-SCALE REVIEW OF MEDIBANK IS
IN HAND.
THE ACTIONS TAKEN AND THE CONTINUING REVIEW ARE DIRECTED TO
CLEARING THE GROUND FOR A FISCALLY RESPONSIBLE BUDGET IN 1976/ 77.
SOME HARD DECISIONS HAVE BEEN TAKEN. THERE WILL BE MORE. BUT,
ALONG WI-TH TLE GOVERTNMENT'S OTHER ECONOMIC POLICY ACTIONS, THEY
MUST BE TAKEN IF THE ECONOMY IS TO REGAIN HEALTH AND EMPLOYMENT
OPPORTUNITIES ARE TO BE CREATED.
3/ 2/ 76
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