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EMBARGO: Not for publication or broadcast before 7.15 n. L1. June 8.
A TALK TO THE NATION
Telecast and Broadcast by the Prime Minister, the
Rt. Hon. R. G. Menzies.. on 8th June, 1961
Ladies and Gentlemen:
For once in my life, as you might say, I'm going to talk
about politics not about party politics, but about the policies
of the Nation, the policics that you have been rc ading about,
hearing about and many of you, I've no doubt, have been
criticising most heartily.
Political policies of these large proportions have a
great effect on your job, on your income, on your whole standard
of life, and therefore you have a perfect right to be told
occasionally by those whom you have elected to Governm-ent what it
is they are doing; and how itts going on.
Therefore in the first place I would just like to say to
you, because I haven't very much time, I would just like to say
something to you about the policy: what is the basic objective
that we are after? After ten years, I think you will agree, of
unexampled prosperityin 1960 we ran into a bom, a boom that was
large and threatening. We all felt, no doubt, very happy about
I it except those who were contemplating what would occur when it
burst. And what we have been setting out to do in these last 12
months is to quell that boom to bring it down to a normal state
of prosperity and advancerien not an inflationary condition that
hurts so many people, but a slable condition
Now stability doesn't mecan that you are just going to
get down to a dead level and stay there. Stability, by itself,
is no good to Australia. Our population is going up; we have an
enormous territory; year by year all sorts of new things are
being discovered. This is really the most exciting country in the
world. And people overseas, more and more, think so. Thcrefore
when I say " stability" Itm talking about stability as the
foundation for a tremendous growth and expansion. But we believe,
p atnhda t wet het hiinnkf lraitgihotnl yi, s ntohta t ruunnlneisnsg aywoauy hwaivte h sytoaub ilsoi tyt haitn tthhee wsheonlsee
value of money changes all the time, unless you have that, you
will never attract the investment that you need, you will never
have the confidence that you need for developing the country.
Now that is what the policy has been in the broad. That
policy, of course, has to vary in its application because
circumstances change so frequently, particularly in the case of
Australia. Here we are, an exporting country, with exports that
are primarily the products of the land. If there is a drought,
our income falls; if the price of wool goes down, our income
falls. We are very very subject to fluctuations of this kind and
therefore the Governm-ent has the immensely complicated task I
think more complicated than most people realise of doing what
it can in its own fashion to stabilise conditions.
Now we have applied this policy in various ways. I
won't go into them tonight because you are familiar with them.
But perhaps I should say something to you about, first of all,
why I believe that it is essential to get rid of the boom because
and here are my reasons as quickly as possible in a boom
costs rise, prices rise. This is all right for people who can
stand it; it's no good to people on fixed inco. es; it's no good
to people on social sorvices; it's no good to the savings that
you have in so many hundreds of millions in the Savings Banks, and
otherwise invested. And, above all, it's no good to our export
industries, because when the cost of their production goes up they
can't pass it on to somebody else. Their price is what the world
will give them; just as it is in the case of wool.
Because of that, it is essential from our point of view
that we should keep the inflatio) nary processes under control. It
would be a terrible thing for Australia and a very bad thing for
our future if some day we found that wool itself had been priced
out of the world's market; or that the taxpayers in a~ ustralia had
to subsidise the production of wo. ol. This would be a deplorable
state of affairs. Well we have applied these anti-inflationary measures,
and, I think, with some result.
First of all our overseas funds were running down. Now
those overseas funds sound a little mysterious, but in reality
they are substantially what has been paid for our exports
overseas, less what has been paid out for the imports that cone
into Australia. You always have to preserve some sort of'
substantial balance overseas. Some people think you ought to have
the cost of six months' imaports; some may put it a little lower.
But at any rate you can't afford to have your overseas funds
running down so fast that overseas people lose their confidence;
or you are not able to pay for your imports. So that it is very
important that the overseas funds should be maintained, themselves,
in a stable position.
Well, at the beginning of November when the last
measures were announced we were quite apprehensive about what was
happening to the balance of funds.
But as a result of the various measures, as a result of'
the effectiveness of the credit restrictions as the greatest antiinflationary
measure, our reserves have not been running down to
the extent that we feared, and will, in fact, end the financial
year in a healthy state. So that that particular danger has, I
think I can say quite cinfidently, been averted.
In the second place we th:) ught that the most effective
fairest way of reducing an excess of imports, particularly of
consumer goods, was credit restriction in Australia. And that has
proved to be right because in the month of May that vie have just
concluded there has been quite a notable " turn down" in the
volume of imports into Australia.
Now you may say, " Well all this business in Aiustralia
has created great trouble; there's a little unemployment;
there's some less of confidence" and I'll say something about
that in a moment " Isn't this a great price to pay for
controlling your overseas funds, and controlling the inflation?"
Well it isn't a great price to pay. Do you know this: are
here or I'm here and you're there I'm available to be
criticised, I don't mind it, I'ri usod to it, we have a lot of
critics from time to time in Alustralia. But the people outside
Australia who are shrewd, hard-bitten investors, who are looking
for a country in which they see oppirtunities for expansion and
development, these people, so far frema being frightened off by
our policies, have come in more and more. Do you know that in
1959/ 60, the previous financial year, the investment of overseas
capital in Australian business -I dintt nean borrowed by
Governnients but actually in hiustralian factories, businesses
was an all-time record? It ran into hundreds of millions. This
year, in spite of the events, in spite of the criticisms there
is such approval of policies of stability and development in
Australia, that the investmient of funds is larger than it was last
year,
3.
Quite frankly I didn't expect that. I thought that with
the inevitable arount of dislocatioDn that must occur when you are
dealing with a boom because you have otto hit something if you
arc going to deal with a boom I thought " Well, this may nako
people a little wary outside". On the contrary! Obvi:) usly our
credit in the rest of the world has never stood higher.
Now the only other thing that I want to say to you in
the time that I have is this. Don't let people persuade you,
don't let anybody persuade you that you are living in danger of a
depression. If the boon had been allowed to on it could easily
have produced a burst. Our grandfathers could have told us about
that in the nineties, in the great land boon and bank smash. The
right way to deal with these matters is to avoid the excess of the
boom, press it down to get it back on to an even keel. Aind if we
do that, as we are doing, then of course we are not g; oing to have
a depression. We won't have a depression unless the people of
Australia lose faith in themselves. Now I don't. mind you losing
faith in me you've been very k'ind to me; you've had some faith
in tie for a long time. But whatever you do don't lose faith in
yourselves. Every material element in Aiustralia marks us for
another 10 years of the most remarkable national 1growth. These
troubles are passing troubles. I'm not denying that there has
been some lack of confidence. We're conscious of that. That,
indeed, has been one of the real reasons why some productive
industries in the manufacturing side in Australia have had orders
falling off. Not because people are unable to buy, but because
there is a little hesitation: " I wonder what is going to happen:
I wonder how long this is ,-oing on".
Now, ladies and gentlemen, I tell you I understand that
feeling. I don't think it is well-founded. I beg, of you, go
about your affairs in a normal fashion, do your spending in a
normal way, because these policies are temaporary policies. Its we
recover from the inflationary pressures, sowill all these policies
be diminished. They are not put on forever; they are not put on
for fun. They are put on for a purpose, and as the purpose is
achieved so they become no longer necessary.
Now I am a complete optimist about our future. I under.-
take to say that by this time next year many thousands of people
in Australia will wonder what they were worried about, because I
believe that the maladjustmients, the little bits of difficulty
that occur here and here, the amiount of unemployment that exists,
and which nobody likes, these are temporary things. The permanent
thing in Australia is that we have a remarkable country, a rich
country it's going to be increasin'gly rich as we work at it.
But the g reat elements that we need are a good foundatian
to build on that's stability, that's cutting out booms a clear
vision of growth and expansion in the future, and in the individu.
heart a decent confidence in your own country. Aill I can say is
I have an unlimited confidence in an unlimited future for our
country. Goodnight ladies and gentlemen.