A US I( AL
PROME MINISTER
FOR PRESS 25 APRIL 1977
HEADS OF GOVERNMENT AGREEMENT
PRICES AND INCOMES PAUSE
The Prime Minister today sent the following message to all
Premiers: On 13 April, the Heads of Government in Australia:
* agreed to call for a three month halt in price
and wage increases
* agreed that such restraint was urgently needed if
Australia is to overcome its current economic problems
* committed themselves to work for this voluntary pause.
We believed our agreement, with the backing of all seven
governments and the goodwill of all major parties for the
future well being of Australia, offered a chance to rE-solve
Australia's economic problems more rapidly. Our agreEtment was
unprecedented. We put aside political divisions in the
interests of the community as a whole.
All Heads of Government also agreed that this " vital endeavour
to help overcome inflation" could founder if steps for its
implemenitation were delayed. It was for this reason that we
all agreed that a national conference should not be
convened.
Despite this agreement, three State Governments saw fit in
proceedings before the Commission on 19 April, and without any
prior consultation with the other Heads of Government, to support
a trade union proposal for a national conference. Moreover,
that proposal was for a conference to discuss the state of the
economy, and not the implementation of the prices and wages
pause called by all Heads of Government. Indeed, the: total
proposal, incorporating as it did the concept of application of
the March Quarter CPI movement or equivalent direct tax cuts,
was a complete denial of the prices and incomes pause envisaged
under the Heads of Government agreement. / We made
-2
We made it clear from the outset, in discussions with employer
and employee groups, that agreement in principle with the Heads
of Government Agreement was vital if the prices and wages pause
on a voluntary basis is to be successful. Without that commitment
in principle to the objectives of the Agreement no pause could
work; no conference could have any hope of success. The unions
have specifically refused to give that agreement in principle.
Union leaders have refused to commit themselves to the principle
even on a personal basis.
It is a matter of extreme regret that the trade union proposaland
its endorsement by three State Governments followed upon
the union advocate's pouring scorn on the Heads of Government
Agreement and all who had signed it.
In their agreement, the Heads of Government also agreed:
" Governments would not expect either the business organisations
or the union organisations to agree to such voluntary restraint
arrangements without agreement by the others."
You are aware and indeed have stated the fact that a large
measure of business support has been shown for the voluntary
pause. Th'e Conciliation and Arbitration Commission itself
stated on 19 April: " Employers generally have agreed with the
Governments about prices"~ You will also appreciate that the
general support achieved for a prices pause can be eroded if
Governments' support for a wages pause is weak.
It is for this reason, and consistent with the Coimonwealth
Government's committing itself to working towards achievement of
the objective of the Heads of Government Agreement that I telexed
you on 20 April stating, inter alia:
" In view of unwillingness and inability of peak employee
councils to agree on wages pause, would you be prepared
to join in an approach to the Conciliation and Arbitration
Commission to use its good offices to assist in achieving
the prices and incomes pause envisaged by our agreement".
My intention here was to ask the Commission to use its good offices
to assist in obtaining union agreement, at least in principle, to
the initiative which you and all other Heads of Government in
Australia agreed was urgently needed if our current economic
problems were to be overcome. Without such agreement in principle
there would clearly be no chance of Heads of Governments Agreement
objective being achieved.
If we do not take this action, we will not, in my view, be carrying
out the commitment we freely made on l3-7-ril, and we will be
letting down those very substantial members in the community who
have responded positively to the initiative to which we all agreed.
The Commonwealth Government is not prepared to treat its commitment
lightly. It is not prepared to '-sregard the wide public support
already achieved.
I again ask you: would you please advise me urgently whether you
are prepared to join in an approach, as outlined, to the
Conciliation and Arbitration Commission.