BROADCAST: 3HA 27 MARCH
Jj 3YB 31 MARCH
PRIME MINISTER
FOR P~ RESS 27 MARCH 1977
ELECTORATE TALK
Although the presentation of this year's Federal Budget is still
five months away, the Government has already begun to tackle the job.
One of the central issues again facing the Government in the
framJJ-ng of the Budget will be the level of Government spending.
Clearly, as we continue our fight against inflation, it will be
absolutely"-critical that the Government succeeds in curbing
i ts own expenditure. It will be critical that the deficit be
tigThi: ly controlled.
Last year in our first year in office we were confronted by a
rmass:. ve deficit that was approaching $ 4,000 million. Immediately
we took steps to substantially rein back the deficit through a
rigorous restraint on Government spending. We moved to cut
unnec: essary programmes and to make existing programmes more
effective. We have continued to exercise -restraint in spending. We have continue!
to seek to get the maximum possible value from the taxpayers dollar.
Thi-s year, as the Treasurer has indicated, the closest examination
will again be made in every area of Government spending.. This
de-ta-. led process has started. It will be an exhaustive examination.
No e--fort will be spared in making sure that the Budget is
responsible and responsive to Australia's needs.
The Budget will demonstrate that our priorities are to p~ rotect the
disadvantaged and to beat inflation so that economic recovery can
contiLnue. It will not be an easy task. It is never easy for
responsible Governments to hold back on some programme, or even
reduce programmes. Of course, it is easy for Governments to take
money from people and throw it around and then claim credit for
thei:-generosity with taxpayers funds.
As Australia has found to its cost, that kind of approach does not
solve problems it creates problems. It's the kind of approach
that brought the national economy to its knees. and caused
immeasurable and lasting harm to hundreds of thousands of Australian
f am i li e s.
As we have demonstrated, our approach is the reverse of the Labor
Partv. We'have sought get the most effective distribution of
Government programmes irid not just simply throw cash at a
problem and hope it goes away. W~ e have sought to give individuals
the chance to make their own decisions, their own choices / 2
and not just to impose Canberra-controlled and directed programmes.
Labor's centralist programmes were financed out of high taxation
that was fuelled from rampant inflation. Our introduction of
personal tax indexation last year stopped this unlegislated tax
drain to Canberra.
In just over three month's time, from July 1, personal income
tax indexation will come into effect for the second year. It will
reduce our taxation revenues by $ 1,000 million tax. that would
have come direct from pay packets without indexation.
Those w., ho still call for tax cuts forget that the decisions of this
Government have resulted in a tax saving of $ 3,000 million over our
first two years. Of this, personal tax indexation accounts for
over $ 2,000 million of the total. It is a tax reform unparalleled
in our history. It deserves wider recognition for the relief it
has given to thousands of individuals and companies.
By the second year it will be worth nearly $ 500 for the average famiily.
Against this background the Government has been encouraged by
trends in our fight against inflation and in our efforts to restore
our country to full economic health. Inflation is coming down.
Both the deflator for major components of the gross national
expenditure probably the best measure of the inflation rate and
the C. P. I. clearly demonstrate that the underlying rate of inflation
is steadily coming down.
Confidence has returned to important sections of industry. To
illustrate: company profits were around a third higher in the
December quarter last year than they were a year earlier;
investment in plant and equipment by private enterprise increased by
over 31% last year; real private investment in dwellings increased
by over S% in the second half of last year 24% up on the same
period a year earlier; dwelling approvals, registrations of new
motor vehicles, real private consumption, real gross non-farm
product, and new capital raisings by listed companies, all markedly
improved last year. There are other signs that are encouraging.
The only business survey available for the March quarter of this
year showed that manufacturers were more optimistic about the
general business situation in the next six months than they were
three months ago.
This kind of confidence is apparent among consumers too. The January
survey of consumer attitudes by the Melbourne Institute of Np~ plied
Economic and Social Research shows that consumer confidence was at
the highest level in over 12 months.
Unemployment is still far too high. We have taken a great number of
measures to help the unemployed, particularly the young. This week
for instance, the Minister for Employment and Industrial Relations
announced a special after-hours programme that will give both
employers and employees an opportunity to discuss employment problems
with senior officers of the Commonwealth Employment Service. Parents
of unemployed you. ng people wouldI be especially welc:)' ne to take
advantage of thiis particular offer. Howrever, as I and my Ministers ha,
frequently pointed out, the sustained reduction in unemployment will
only-o-cur-f-om--rhpea-licies
onlDyolcicrc efsom hat edue iflaton. Ourfight against
1. nflatiOnl iS a1 Fight ag-ainst unemiploymient. Thc Governiniemrt has
pursued its Ifight against Inflation with full zeal during the past
months. 11. e will not slacken in our desire to continue this task
during this year. We will not be sidetracked in our fight
agai1nst inflation.