PRIME MINISTER
FOR MEDIA SUNDAY, 10 AUGUST, 1980
ELECTORATE TALK
Both the world economy and the Australian economy have been
through a difficult period since the first energy crisis in
the early ' 70s. All of the Western industrialised countries
felt these pressures. But the response in Australia by the
Whitlam Government was in itself a transparent crisis of
management and policy because in many ways Australia had
been in a more fortunate position than other countries.
Our natural resources, our great endowment of energy, our
long record of low inflation these should have provided
the basis for relative improvement in Australia during
those testing and difficult years. Yet we lost ground.
Australia suffered a severe loss of international
competitiveness. Our industry lost export markets. It
faced increasing competition from importers and as a result
had to really battle just to survive. Now, five years later
as a result of policies that have at their heart the
reduction of inflation forces are at work in our economy
and our industries which give us cause for optimism.
There is no doubt we faced a formidable task in restoring
the conditions on which Australia's future wealth and welfare
depend and in many ways the job has been much more
difficult than many people believed. But we have achieved
success because of our commitment to overcoming inflation and
responsibly restoring a stable economic climate in which
business can make decisions.
In essence, what we have been about has been to rein-in
the demands of Government and to reduce what is called the
Budget defi ' cit. Last financial year the Budget deficit was
reduced to just over $ 2,000 million well below the deficit
'-of $ 3.4 ' million in the previous year. That deficit was
equivalent to substantially less than 2 per cent of the
Gross Domestic Product, which is in marked contrast to the
per cent recorded in 1975-76 when Australia was counting
the cost of the Whitlam Government's spending binge,
There is no doubt that in difficult world conditions our
policies have had encouraging success. / 2
2-
The economy has been steadily growing in strength during
the past few years and our relative position in the world has
substantially improved. ' Inflation in Australia has been
below that for major industrial countries since 1978 and
that margin has widened in our favour to about 3 percentage
points. In other words, during the Labor years Australia lost
ground, slipped behind the rest of the world, because of
the policies followed by the Government of the day.
But today the position is reversed. We have pulled ahead of
our competitors because we have been willing to take the
necessary tough decisions., As a result, our competitive
position has returned to levels that were last achieved in
Australia in the very early 1970s. Our exports have greatly
expanded, having risen by 33 per cent last financial year.
And our balance of payments position has strengthened
accordingly. Continued strength is in prospect in 1980-81 despite the
gloomy economic conditions facing many countries. Of course,
the good news is not confined to exports. The Australian
Bureau of Statistics' Survey of Investment suggests that a
surge in capital spending will take place this year with gains
in all parts of the economy.
The Government also knows of at least $ 29 billion worth of
investment in the 1980s that is firmly committed or ready to
go ahead. Employment growth has also been strong during the
last year. The number of people employed has risen by
175,000 while this week's figures show that total unemployment
in July fell by 21,000 from the previous month. The figures
showed that the unemployment rate, although too high, is
below that at this time last year.
Australians do not need reminding that irresponsibility will
certainly sweep aside these hard-won gains, That irresponsibility
is already stalking the stage in wage demands and in
confidence-shattering spending and tax proposals. If it is
allowed to persist without challenge, faith and optimism for
the future will be eroded and improvements in wealth and
incomes forestalled.
Like Mr. Whitlam before him, Mr. Hayden clearly has thrown
away any vestige of the essential commitment and sense of
duty required of government leaders to strive for the best
for all Australians. His commitment is to big spending.
His** faith is in an open-ended cheque book that bears the
* name " Australian taxpayer".
The ALP has already committed itself to $ 2,000 million a year
extra expenditure and that in only about five areas of
government. When all the other Shadow Ministers put in their
bids and all the other commitments are met the additional
spending under Labor will be-much more than the taxpayers of
Australia could ever afford.
3
Without exception, each of Labor's so-called policy
initiatives that Mr. Hayden trots out comes with thepromise
to spend up big. It is all trussed up to look moderate and
reasonable. But beneath the word games, Mr. Hayden's answer
in every policy area is simple spend, spend, spend.
Australians were conned once by Mr. Whitlam's big spending.
They won't be caught again. The plain truth is that sound
and stable economic management is what is required the
type of management that my Government has undertaken
in the last five years.
The Budget to be brought down in just over a week's time
will demonstrate our continuing and unyielding commitment
to sound and responsible economic policies. For without
this we can never hope to control inflation, increase
employment, encourage investment and development and secure
a future for all Australians. Certainly many challenges lie
ahead of us. We are determined to play our role with
responsible economic decision-making as we move through
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