EMBARGOED Not for
publication before
MEDIA RELEASE 8.00 pm 16th June 1976
AUSTRALIAN SOCIETY OF SENIOR EXECUTIVES
Extract from an address by the Acting Prime Minister, Minister
for National Resources and Overseas Trade, the Rt. Hon. J. D.
Anthony, Dinner, Lazar's Restaurant, Melbourne, 16th June 1976.
It is important that people understand the purpose of
the Government's actions.
Why is the Government cutting back so strongly on
spending? Why are we reducing numbers in the Public Service?
Why are so many good and worthwhile programs and projects being
slowed down, delayed and deferred? Why are we now asking those
who can afford to do so to make a bigger contribution to the
cost of their health insurance?
We are doing these things, as unpopular as they are, so
that we can regain control of the country's finances control
which our predecessors went perilously close to losing, if they
hadn't in fact lost it.
We are doing things so that we can begin to bring the
massive budget deficit we inherited back to more manageable
proportions. We want to do that so we can get inflation under control.
And we must get inflation under control because it is the
economic and social disease whose symptoms we see in massive
unemployment, stagnation in industry and the most hurtful burdcuii
being placed on our pensioners, our small businesses, our farmers
and, most significantly, our exporters.
I believe we are now seeing early yet clear signs of
economic recovery.
I also believe there is wide acceptance in the community
of the need for the kind of firm action the Government is taking.
We were elected to do the job of pulling the economy
back into shape, and people expect us to do what is necessary
to achieve that objective.
No doubt some elements in the unions will try to frustrate
our efforts, but I am sure the great majority of people are
prepared to have the patience and to accept the discipline nceedc
_ o get the economic situation under control. / 2
2.
The Government believes that the connection between
excessive wage rises and inflation and unemployment is becoming
much better understood throughout the community.
We have recently had very useful discussions with the
p ACTU, and I think we can all be very encouraged by the
constructive and positive atmosphere in which that meeting took
place. What the discussions should have made clear to the whole
community is that we are all in this fight together. If we're
not, we might as well give it away now.
I think too that the community is now more aware of the
fact that a Government that tries to spend its way out of
economic problems only drags the country deeper into trouble.
Our experience of the last two years should have shown
us that. In the task we have set ourselves of reducing the very
bloated budget deficit, we have to remember that there are
really only two ways of doing it by cutting back on government
spending, or by imposing higher taxes.
But taxation in Australia is already too high.
Our predecessors were not prepared, or did not appreciate
the need, to take substantial steps to relieve the tax burden.
In fact, they needed inflation to produce the revenue
to pay for their generosity.
By holding down government spending, we have been able to
bring in one of the most far-reaching taxation reforms ever seen
in this country tax indexation. This will give people greater
opportunity to look after themselves.
But, while this is a major step, I believe there is a
need for considerable amount of further reform when we are in
a position to do it.
For example, the tax scales need adjustment to remove
anomalies. They will, o. f course, be adjusted for indexation purposes,
but the basic income groupings also need revisic,-.
Company taxation needs to be reviewed, an& we will be
reviewing-it.
The present stock valuation system and de--re-ciation
allowances need to be revised so that bezter-account can be
taken of inflation.
3.
Private comnanies are at a grave disadvantage beside
public companies i-raising funds for new investment because
of the existing t res relating to retention of profits.
The Treas-. urer has already said that we will give private
companies the option of being taxed as partnerships.
But the burden placed on private companies by the
retention allowance provision must be eased.
In the field in which I have special responsibilities,
-he. r is great need for a fresh look at the taxation arrangements
cplying to mining exploration and development.
I think it is quite unrealistic to fail to see mining
tLhse utilisation of a resource that has a limited life.
The tax laws should take account of that fact as they
i. until three years ago.
These are all matters which need to be locked at
when, I repeat, the economic situation allows us to do so.
Bringing about that fundamental improvement by getting
inflation under control must remain our prime cbjective for
the immediate future.
If the economic recovery now beginning to take shape
is to. be a lasting one, inflation must be brought back to a
level we can cope with.
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