PRIME MINISTER
FOR MEDIA SUNDAY AUGUST 23 1981
ELECTORATE TALK
The budget introduced into Parliament last week by the
Treasurer, John Howard, represents the clearest possible
statement of the Government's intention to maintain the
priority we have always placed on providing a better life.
for individual Australians and their families. For the budget
will strengthen prosperity, maintain confidence and provide
the creation of yet more new jobs in the private sector by
further restraining Government spending and continuing the
thrust towards smaller government, and by bearing down on
interest rates and inflationary pressures.
At the same time, it is a budget which increases assistance
to a large number of people in the community who are in particular
need, which strengthens our national security and which lays a
basis for sustainable reductions in the tax burden on individuals
and families. It is a budget which will strengthen the revival
of Australia's economy that has come about as a result of the
policies consistently pursued by the Government since 1975.
These policies have led to higher employment, bctter wages and
living standards and lower inflation.
In considering a budget, we need to realise that the most
fundamental requirement it-to achieve overall-economic stability,
for only in this way can we secure the opportunties and improve
standards of living. which everyone wants. If the basic policy
approach established in the budget is not right, no other policies
can be effectively implemented.
It was this important fact that the Labor Government ignored
between 1972 and 1975, to the lasting cost of alli Australians,
and theircurrent policies and attitudes make clear they have
still not learned this lesson.
There has been much comment on the decisions we have made on
sales taxes. But let me put these decisions into perspective.
During the last year, there has been a real increase in wages
of some This means that up to $ 3,000 million has been added
to real living standards. By comparison, the sa). es tax decisions
will. raise a total of about $ 550 milIlion. this ye. tr,* and by enabling
us to bring the budget almost into balance, that extra revenue
will enable Australian families to enjoy continuo,. d increases : in
prosperity. The most basic objective of all our policies has been, and remains,
to reduce the overall burden of taxation on families. The budget
has made a valuable step towards shifting the balance of taxes
away from directon to indirect taxes. As the Treasurer has pointed / 2
-2
out, one of the consequences of this is that it increases
* the potential for desirable reductions in direct taxes and
particulary personal income tax as economic and budgetary
conditions permit.
I might also remind you that earlier this year in July,
we introduced income tax cuts that will leave some $ 500 million
more in tax payers' pockets, and they have started to do so
already. The new tax rebate of 32 cents in the dollar for
basic health insurance will return a further $ 600 million
to individual income tax payers. That just shows we are
concerned very much about reducing the tax burden.
Since we first took office nearly 6 years ago, the
Government has stressed that ther'e is only one way to lower
the tax burden in a real and sustainable way, and that is by
holding down government spending. In this year's budget,
after allowing for meeting the extra expen . se of an extra
pay period for pension, benefit and salary payments, a
phenomenon which occurs only once in every 12 years or so,
budget outlays increased by less than-1% in real terms.
We have now cut back government spending to only about
27 cents in every dollar produced in Australia, compared
with over 30 cents in every dollar taken by government in
1975/ 76, and under Labor, the proportion was rising rapidly.
Our objective remains to cut it back still further.
We have also in this budget virtually eliminated the huge'
budget deficit inherited from the disastrous Labor years,
and by doing so we have not only laid the foundations for
reducing the tax burden, but we have also reduced claims for
capital funds to ease pressure on interest rates.
In all these ways, our concern for Australians and their
well-being is clearly expressed. Moreover, in our expendituxe
decisions we have given further emphasis to the needs of groups
which include those most in need in the community.
Spending on social welfare and security will rise significantly
in real terms because of continued automatic indexation of pensions
and benefits, because of increased family allowances for larger
families, a group which includes many of the poorest,
because we have begun a programme of crisis accommodation
with special emphasis on families in distress, and because we:
have redirected and increased the programme of rental assistance
to pensioners and long term sickness beneficiaries.
The 1981/ 82 budget is one that looks to the immediate problems
of needy. groups, but also to the long term interests of all
Australians and their families.