PRIMESHMIN ISTE
FOR PRESS 17 SEPTEMBER, 1978
ELE CTORATE TALK
The decision of the Conciliation and Arbitration Commission
to replace quarterly national wage increases with six-monthly
hearings is heartening news for Australia.
I believe the decision which comes at a time when
Australia' s rate of inflation is heading towards the five
percent mark--will certainly add to confidence and
economic stability. Less frequent hearings give us greater
opportunity to moderate wage increases. Another piece in
the econom,-ic Jig-saw is falling back into place. It is
good news for business, for manufacturers, for exporters,
for farmers and for Australia's great rural industries.
Moderation in wage increases is critical in the fight against
inflation. It is critical in the restoration of the
profitability of business and industry. But on top of that,
it is fundamental to any g-overnment's attempts to create
new job opportunities and to reduce unemployment.
This decision should mean that companies will be able to
budget ahead with greater confidence in the stability of
business conditions and in the reliability of their forecasts.
Wages are a key and central factor in the control of
inflation. We have only to look back to 1974 and 1975 when
wages went up by 50 percent. In that period, inflation
rocketed and unemployment grew with it. Excessive wage
increases, excessive inflation, cost jobs that's the
experience in Australia and around the world.
Just recently the world's largest trade group, G. A. T. T.
said in its annual report on international trade:
" The inescapable conclusion is that the industrial countries
can only move towards increased growth and employment,
sustainable payments processes and more stable exchange
rates, by reducing their inflation to levels of the
" Inflation does not reduce unemployment, on the contrary, it
is one of the main causes". Clearly, Australia's strong
stand in its fight against inflation is the only responsible
course if we are to bring unemployment down. / 2
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Although the Government would have much preferred and
argued for annual wage hearings, the unanimous decisior.
of the Commission is encouraging. I hope that all
governments, employers, and unions will meet the decision
with full and sincere support.
If we continue to restore the economy back to health and
put the jig-saw pieces back in place Australia can
expect an improvement in growth, welfare and job opportunities.
Overseas and local investors can see this happening and
are demonstrating their confidence in Australia. I have no
doubt that this confidence will continue and that after
many years of fighting our way out of near economic chaos,
Australians will see a return to real and sustainable
prosperity. The Australian economy has been given greater breathing space.
We accept and welcome the decision of the Conciliation and
Arbitration Comnmiss ion.
However, all Australians have a part to play in our return
to full economic health. The Government certainly has a role.
We have demonstrated through our determination to press on
with the fight against inflation that we are prepared to
accept our responsibilities. We have been unswerving in our
commitment to get the economy right.
The Arbitration Commission, too, has a key role. Its decision
to replace quarterly hearings with six-monthly hearings
is perhaps the best indication that it accepts its
important role.
We have stressed that employees and employers both have their
part to play.' Employers have a clear responsibility not to
seek unreasonable price increases for their products and
services. Employees have a responsibility not to push
outside the Arbitration Commission for higher wage increases.
Labor Treasurer Frank Crean once said: " One man's wage increase
is another man's job". That remains true today. The more
wages can be restrained, the greater the opportunity
Australian industry will have to find a larger domestic market
and compete more successfully on world markets. That can only
lead to greater job opportunities.
The Government is giving industry this opportunity to develop.
Inflation is falling, interest rates are falling, imbalances
in the economy are being put right, and business investment
is rising. But the recovery process would be quicker if wage
increases were more restrained.
The Government is not in the business of hitting the pockets
of the working men and women of Australia. The figures show that
over the last few years average weekly earnings increased at
a greater rate than inflation as measured by the
Consumer Price Index. I believe the overwhelming majority of
Australians know the damage caused by excessive wage increases.
They sill remember what happened to jobs when wages soared
in 1974 and 1975. 3
3
The trade union movement know that by pursuing higher and
higher wages they are putting their workers' jobs in
jeopardy. There is an opportunity for us all to work together with
a sense of national purpose to help this great country
move forward into the exciting decade that lies ahead.
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