PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 5771


Photo of Fraser, Malcolm

Fraser, Malcolm

Period of Service: 11/11/1975 to 11/03/1983

More information about Fraser, Malcolm on The National Archive website.

Release Date: 14/03/1982

Release Type: Media Release

Transcript ID: 5771

A few days aglo, in a speech to the Rarliament and to the
nation, I drew attention to the increasingly troubled and
uncertain worcld scene; to the tensions and threats to
international security that exist; and to the prolonged recession
in Europe and North America which has reduced world trade and
world growth to a virtual standstill.
We in Australia cannot ignore those developments. We live in
a world that is increasingly interdependent, and we are
inevitably affected by political and economic circumstances
overseas. But, while there is no denying that we cannot turn
our backs on developments elsewhere in the world, while there
is no denying that they have a significant impact on us, our
interdependea,, ce with the rest of the world does not make us
totally captive to those developments. Interdependence does
not imply: a complete loss of our independence. Rather it means
that there are challenges to be faced; it means that the
policies of Governments, and the attitudes and expectations
of people must be shaped to face realistically the circumstance! s
of the time.
For most of the post4kwar period, our increasing links with the
world economy and world financial markets have been positively
beneficial. Along with the rest of the world, Australia benefited
greatly from the significant growth of world trade and
investment that occurred in the period following the war until
the early 1970' s. Indeed because of our small domestic
market, and our relatively small domestic supply of capital
for investment, our ability to tap overseas markets is especiallyimportant
to the growth of our real incomes. We look to others
to provide markets for our products, and to enable our industries
to achieve the scal of operations that enable them to be
internationally competitive; we look to others to provide the
specialised imports we need for industrial and resource development;
and our real living standards have been raised by the willingness
of others -to invest in Australia's industries and resource
projects in co-operation with Australian capital and Australian
management. The first of the dramatic oil. nce increases in -1973 marked the
end of an era of rapid world growth, although the deterioration
in economic stability and the associated acceleration in

world inflation were clearly apparent before those price rises
occurred, and can be attributed in large part to excessive
growth of Government spending and inappropriate deficit
financing policies pursued by many countries. In Australia,
the big spending big deficit policies of the Labor Government
exacerbated problems that were already evident.
When the present Government took office in 1975 we put into place
policies designed to restore confidence, growth and prosperity
to Australia against the background of an already weak world
economic scene. We made the fight against inflation the
cornerstone of our policies; and through restraint of
Government spending, winding-back the budget deficit, and
control of the money supply; through the provision of
incentives to industry to invest, to undertake research and
development and seek our new and expanded export markets;
we succeeded in restoring confidence tothe private sector, and
we gave it the room it needed to once again become the mainspring
of growth and development. Moreover, through our decisive action
in introducing import parity pricing for oil, and associated
policies for old and new oil, we succeeded in revitalising the
petroleum exploration and development industry, providing
Australia with renewed activity and renewed security of supply.
That our policies were right, that the right policies and
attitudes can enable us to succeed against world trends, is
convincingly demonstrated by Australia' s economic performance
in recent years. For we have had economic growth at twice
the average of other major industrialised countries in recent
years, the highest rate of increase in business investment for
three decades last financial year, and substantial growth in
employment and in after tax real incomes over several years,
while most of the major industrialised countries in Europe and
North America have been struggling to maintain any growth at all.
Indeed, following further substantial oil price increases in
1978-79, their growth rates declined even more as they entered
the 1980' s, their unemployment rates are high and rising, and
because of high budget deficits and the associated need for
stringent monetary policies in some countries, interest rates
have risen to some of the highest levels the world has seen.
At the same time, depressed demand and high unemployment has
led their inflation rates to fall. Through trade and
international capital flows we have now begun to feel the effects
of these most recent developments, at a time when wage demands
in Australia. have been growi ng.
The current situation makes it all the more essential that the
broad thrust. of our economic policies be maintained. With a
weakened balance of payments and strong inflationary pressures,
there can be no thought of allowing the money supply to
expand to accommodate inflationary wage demands, and no thought
of abandoning our careful and non-disruptive management of the
/ 3

the exchange rate. With wage pressures and industrial disruption
already affecting employment prospects, our initiatives to
improve industrial relations and bring about a restructuring
of unions are all the more essential; and with the need to
seek lower taxation and a more balanced tax structure,
while making provision for the essential needs of defence, the
elderly and the disadvantaged, there can be no thought of
abandoning our policies of restraining government spending.
The objectives of the vast majority of Australians for
themselves and for their children are plain. We seek rising
living standards, and an increasingly compassionate and secure
society, but one in which individuals are free to develop
their talents and express their individuality in their own
way. In difficult times such as those we experience at present
we must accept that there are tighter limits on the rate at
which our aspirations can be fulfilled.
Above all we cannot, as a nation, afford to destroy the
conditions which foster economic growth, for it is economic
growth which makes it possible for us to satisfy our broader
goal of developing further a strong, civilised and humane

Transcript 5771