Embargoed until 7.00 p. m. F77/ 288
AUSALI( A
PRIME MINISTER
FOR PRESS 4 DECEMBER 1977
ELECTORATE TALK
As a principal part of our economic policy the Government is
creating conditions for a fall in interest rates. We believe
it is essential that interest rates fall so that Australia's
economic recovery continues.
It is vital for many reasons. It is vital for the build up of
business investment for the re-equipment of our factories
and for the building of new plant. That will create jobs.
A fall in interest rates would also be reflected in a stronger
stock exchange which will help in the raising of new share
capital. It will lower thcostof new fixed interest capital borrowings
and thus encourage businesses to borrow more so that their
operations can be expanded. That will create new jobs.
As lower interest rates help to improve the investment outlook
there will be a greater willingness for overseas investors to
provide capital to-Australian industry. This will lead to a
further strengthening of our dollar.
For hundreds of thousands of Australians, a fall in interest rates
will have immediate and direct impact. Lower interest rates will
reduce the cost of buying or building a new home the cost of
mortgage finance will be lower up to $ 10 a week on an average
building society loan for a new home.
The effect of lower interest rates on existing mortgages will be
even more widely felt. Lower interest rates will mean even more
young people will be able to buy or build. That will quickly lead
to increased demand for furniture and household goods and
appliances. As a consequence factories will run at a higher level of
capacity that will create jobs.
Lower interest rates improve standards of living in many direct
and indirect ways. It will mean low cost of bank finance,
personal loans and consumer credit; thus assisting families
to buy consumer goods from retailers.
Lower interest rates help to raise share prices that benefits
Australians whose savings, particularly for-retirement, are
invested directly and indirectly through the stock exchange, / All these
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All these rewards can begin to be realised over the next twelve
months, only if current economic policies are maintained.
Now compare Labor's stated economic plans. Its commitment to
increase Government spending and a much larger Government
deficit does not mean lower interest rates nor does it mean
a continuation of existing levels of interest rates.
A Labor Government would mean higher and rising interest rates.
Their spending and wage policies will increase inflationary
expectations and, inevitably, lead to higher interest rates.
Clearly that would damage business investment and consumer confidence.
It is notable that Mr. Whitlam, Mr. Hurford,. Mr. Willis, Mr. Hdyden
and Mr. Hawke the men who make economic policy pronouncements for
Labor haven't told us their interest rate policy.
Mr. Hayden challenges the Government's expectations of a 2%
reduction in interest rates over the next twelve months. He
fails to grasp, or does not want to grasp, that interest rates
will come down because inflation is coming down.
Again, over the last few weeks, major companies in Australia,
together-with their underwriters, have expressed their confidence
in this outlook by continuing to ' lower the interest rates on
medium and long term debentures.
When a Government pursues economic policies that get inflation
down and strengthen the economy, interest rates will fall.
In the United States, in.-the twelve months from December 1974, the
*.. bank lending rates-for top industrial companies fell by 3%.
In Britain, in the nine months to September this year, the
equivalent rate fell from 15% to 8%.
Mr. Hayden says it cannot be done. What'he means is that under-
K. * his-policies it could not be'done..
our-policies are putting. Australians-in-jobs.
We have stopped the massive rate of increase in unemployment.
because we are encouraging industry to increase employment
opportunities. Lower interest rates' will give even more'
incentive.
* We are protecting industry-and saving-jobs.
Labor has refused to guarantee to protect tens of thousands of
jobs in the apparel industry. Labor wants to pursue free trade
policies. They know this will throw workers out of their jobs.
We are reducing inflation, encouraging development that will
make new jobs.
Labor will again stifle development increase inflation at the
expense of jobs. / We are
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We are reducing interest rates that will encourage
activity throughout the community and provide more jobs.
Labor's big spending policies will increase interest rates
and add to unemployment.
Sadly, Mr. Whitlam's Labor Party no longer represents the
working men and women of Australia and he knows it.
His economic policies will not reduce unemployment -they
will add to it.
His tariff policies will again create another pool of
jobless. His wage policies regrettably mean prolonged
unemployment. His tax policies will penalise hundreds
of thousands of trade unionists.
Mr. Whitlam's Labor Party the Party that increased
unemployment by 192,000 in-one year alone, precisely because
of these policies is a sad and sorry shadow of the Party
of Chifley, of Curtin and of Caiwell.
It is out of touch with today's realities.
It is out of touch with Australia's working men and women.
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