JAkt EMBARGO: 7.00 p. m.
IJ US LI(
PRIME MINISTER
FOR PRESS 30 JULY 19789
ELECTORATE. TALK
The Government is encouraged by the latest Consumer Price
Index figures, which show that inflation in Australia is continuing
to fall steadily. The CPI increase of 2.1 percent which has
just been announced was the lowest for any June quiarter since 1972.
Inflation for the 12 months to December last was 9.3 percent;
for the 12 months to March, it was 8.2 percent; and it is now
down to 7.9 percent, the lowest for any period of 12 months
since 1973.
This is a reaffirmation that the Government's anti-inflationary
policies are working. The result shows that the efforts of the last
2k years the fiscal restraint, and monetary control, the
control of expenditure -are paying off.
The Government's budget -finalised this week will set the scene for
a further fall in Australia's inflation rate. We are determined
to press on with our anti-inflation programme. The Budget will leave
no doubt at all that we are sincere in this resolve.
Inflation is a deep-seated disease which destroys jobs, hits hard
and direct at the underprivileged and needy, and erods confidence
throughout business, manufacturing and rural industry. Inflation
is the enemy of any healthy, stable economy, the enemy of
families everywhere.
The fight against inflation is a fight for investment and for jobs.
If a Government neglects chronic inflation and high interest rates,
then the unemployment situation will deteriorate. It is a fact
of life that high inflation and rising interest rates are a deterrent
for investors and that new job opportunities are lost.
There is no alternative in Australia to pressing on with policies
that bear down on inflation and encourage confidence and expansion
in the domestic economy. These same policies are essential for the
improvement of our trading position and thus for further growth at
home generated by trading activity.
Australia is showing the world that we have the will to pursue sound
economic policies. We are determined to place our economy in a
favoured position for a fair share of world investment. Because the
Budget will continue to demonstrate that we are serious about our
determination in overcoming inflation, Australia will1 benefit. 2
The Government is disappointed at the continuing high level of
unemployment. We have given a good deal of attention to this problem.
However, a number of events have occured which have given less
assistance to the Australian economy than was originally hoped.
There has been less growth in the world economy than one might have
expected a year ago. In some countries inflation has begun to increase
again, which will mean a further tightening of economic policies
overseas. Accordingly, we see no prospect of any dramatic increase in world
trade, or dramatic expansion of world markets. This means Australia
must win a better share of our own domestic markets, and increase
our share of world trade. The latest CPI result is a timely
reminder that while we continue to bring inflation down, we are well
placed to do just this. Whatever the state of world demand or
world trade, countries neect many of Australia's great natural
resources. That is why it is vital that we put ourselves in
a favoured position compared with other supplier countries.
By carrying out responsible economic management policies, by being
active in trade, your Government can create the climate where
permanent job opportunities are made.
However, the Government cannot achieve this alone. We all have
a role to play. We all need to understand that we must work together
to achieve this goal. Grossly excessive and selfish wage demands,
disputes and bans over wage demands these are the kind of
selfish activities that hamper and retard recovery and lead to
continuing high unemployment.
A series of recent disputes show a pattern of trade union activity
which strikes at the economy and at the unemployed. With the support
of the ACTU, trade unions are campaigning for higher wages for
those with jobs at the expense of those without jobs. These union
campaigns contravene the Arbitration Commission indexation
guidelines across a wide range of industries.
Commronwealth Government Shop Stewards in the Department of
productivity have drawn up a log of claims which exceed the
guidelines. So has the Australian, Postal and Telecommunications Union,
which has served a catch-up claim on Australia Post. The Combined
Mining" Unions are reported to have reached an agreement with Utah
which puts at risk indexation guidelines throughout that industry.
Transport and Railway industry unions have decided on a campaign
to overturn Arbitration Commission awards. The Storemen and Packers
Union are pursuing a campaign against chain stores, emptying
supermarket shelves throughout News South Wales. The Vehicle
Builders Employees Federation has imposed national overtime bans at
six motor vehicle plants, despite the difficulties which this
industry is having in its competition with imported cars. There has
been a concerted guerilla campaign of industrial action by the
Builders Labourers Federation, which is halting projects in Victoria
and costing people their jobs. It is preventing project starting.
There are strikes, overtime bans, and work to rule campaigns
in the printing industry in New South Wales.
This wave of industrial action is taking place although earnings have
more than kept pace with inflation. All the figures so far
available show that over the past year, the rise in wages has been
9 percent of higher compared with the latest Consumer Price Index
increase of less than 8 percent. 3
It is therefore all the more irresponsible that these strikes
and bans are taking place for increases in wages outside the
guidelines with the support of the Australian Council of Trade
Unions. In that respect, the ACTU is supporting higher wages for
those in jobs at the expense of those without jobs.
It is basically supporting a campaign that will maintain high
unemp l oyment.
Because of the importance of these issues, where it is appropriate,
the Government will ask the Prices Justification Tribunal to
inquire into the pricing policies of companies that accept wage
demands outside indexation guidelines.
Unfortunately, because Utah coal is largely exported such an
inquiry is not appropriate in that case. Otherwise, it would have
been announced forthwith, because the Government regards the
settlement that Utah agreed to as outrageous.
Australia today is recovering from the near economic ruin of
the Labor years. Progress is being made in the right direction.
The basic imbalances in the economy that we inherited are being
corrected. Confidence is returning and investors are turning to
Australia. Our next Budget will build on that recovery. It will keep us
on the right path.
It would be a tragedy for Australia if progress were jeopardised
by the self-centered activities of a few union leaders who place
higher wages for those in work ahead of the interests of Australia,
and ahead of the interests of those who are, at the moment,
unemp l oy e d.