PM Transcripts

FORl PRESS PM No. 96/ 1971.
CONSUMER PRICE INDEX SEPTEMBER QUARTER 1971
Statement by the Prime " Linister, Mr. W. illiam MlcMahon
It is perfectly obvious that this further rise in the
Consumer Price Index is predominantly due to cost increases which
have been brought about, directly and indirectly, by very large wage
increases. For example, the big lift in the Index for Sydney largely
reflects increases m ade Lby the Government of New South Wales in fares,
hospital charges and the like. But these were rendered inescapable'by
steep preceding increases in wages and salaries to State employees.
The same sort of influence shows up in the rise of
1.6 per cent for the quarter in the housing component of the Index
for Australia as a whole. This reflects rising costs of building
labour and of building materials.
It is therefore plainly absurd for t--he Leader of the
Opposition to attribute the rise in consumer prices to the policies
of the Government. We have been doing everything in our power to
restrain the underlying forces which have caused these price movements.
In particular we have sought to induce both employers and employees
to observe greater moderation in wage settlements. I am certain that
the great majority of intelligent ' people in the community perceive
the connection between wage increases and price increases and appreciate
the futility of the reckless industrial policies advocated by Mr.
Whitlam and his industrial backers.
If they were genuinely concerned to bring about cost and
price stability in our economy they would be exerting themselves to
achieve the same sort of moderation as the Government has advocated.
This applies especially to the President of the Mr. Hawke.
It is along these lines that Mr. WAhitlam and he could malUng a re-4l
contribution to stability and thero fore to the wellbeing of the
Australian public. In the Budget we directed attention to the fact that
costs and prices were rising under the influence of excessive wage
increases and we shaped our Budget strategy to bring about greater
restraint on these and other cost factors. The rise in the Consumer
Price Index in the last quarter has proved that the diagnosis on which
our Budget was founded was entirely correct.
CANBERRA, October, 1971.