. AJAUSTRALIA PRESS RELEASE NO. 228
APRIL 1974
The Leader of the Opposition's confused and
confusing grab-bag of economic policies is a model of
irresponsibility and a receipe for inflation. It would
seem that the Opposition believes the economy is slack
rather than fully extended. If so, Opposition spokesmen
are the only individuals to make this claim for many months.
When the Labor Party was elected by the people
in December 1972, there was unemployment and there was a need
for stimulatory Government action. In the year 1972, the
growth rate of gross non-farm products was only 3 per cent.
Action by the Australian Labor Government increased the
growth rate in 1973 to 7 per cent and eliminated unemployment.
During the year 1973, male employment rose by 2.9 per cent and
female employment by 8.2 per cent more than double the rate
of growth in the previous twelve months. The Australian Labor
Government is not willing to fight inflation by deliberately
creating unemployment. In my Policy Speech of November 1972
I undertook that the restoration of genuine full employment
would be our first priority. We achieved this objective and
we do not regret it.
During the year, as inflationary forces gathered
momentum throughout the world, the Government took a series of
measures to restrain the forces of inflation. International
events ensured that inflation during the last year would be
greater than in the previous year. Nevertheless, they would
have been greater still if the Government had not taken these
measures each of which was caused by the Opposition at the
time. The best economic advice available to any Australian
government led to revaluations of the Australian dollar, the
per cent across-the-board tariff cut, the gradual tightening
of monetary policy and the significant cuts in public expenditure
from the recommendations of the Coombs' Task Force. This advice
had, in many cases, been tendered to the previous Liberal/ Country
Party Government but they did not have the political courage to
accept it. 2/
-2-
It is perhaps understandable why the Opposition
should, for short-term political reasons, have criticised each
and every one of these actions as they were made. However, it
is totally irresponsible for the Opposition to undertake to
reverse virtually all of these decisions at a time when they
seek to present themselves to the Australian people as a
credible, alternative government. The Opposition's policy
would constitute an act of vandalism against the economy from
which it would take many years to recover.
I completely reject the impression the Opposition
seems to convey that the growth of the Public Service has been
abnormally high. The rate of growth has in fact been lower than
in three of the last few years of Liberal/ Country Party government.
The Leader of the Opposition is simply misleading the Australian
people when he implies that there is significant scope for
economies in this area. If we set aside the people employed in
Defence and in the non budgetary expenditure of the Post Office,
the total amount to be spent in 1973/ 74 on salaries by the
Australian Government is only $ 782 million, and all other
administrative expenses only $ 358 million. If they slash the
Public Service by 25 per cent, they would still not be close
to their figure of $ 600 million, which has been plucked out of
the air as an electoral tax bribe.
I also reject Mr. Snedden's assertion that only the
private sector is ' productive". Public investment in roads,
schools and public transport is essential for the health of our
economy. Mr. Snedden' s unspecified cuts on " capital works" will
seriously inhibit economic development as well as social welfare.
The increase in interest rates was an effect of the
Government's decision to reduce excessive liquidity in the
economy one that will be reversed as soon as the threat of
excessive liquidity has disappeared. The Opposition's undertakings
to remove the variable deposit requirements will release
a flood of foreign money into this country which can only increase
inflation. To undertake to remove domestic monetary restrictions
at the same time can only be described as irresponsible. The
seeds of our present inflation were sown when the Liberals allowed
unprecedented growth in money at an annual rate of 34 per cent
in th1e last six months of 1972. We are only now beginning to
recover from their neglect.
At a time of inflation, a Government must take some
tough decisions. I believe our Government in its tariff cuts,
revaluations, interest rates and implementation of the Coombs'
Task Force recommendations has shown that it is capable of
taking tough decisions which offend powerful vested interests.
Mr. Snedden's extraordinary series of undertakings constitute
a sell-out to every vested interest that has been affected by
our decisions. We well remember how fundamentally Mr. Snedden's
economic policies changed when he moved from Minister for Labour
and National Service to the Treasury when he changed his advisers,
he changed his policieb. Now he has lost his advisers, he has
lost his policies. His confused series of undertakings are
completely negative. He simply wishes to reverse decisions the
Australian Labor Government has made. Australians may well ask
we know what Mr. Snedden is against -but what is he for? At a
time of iritlation, the Australian people need a Government with
political courage. At the very outset of this campaign, it is
clear that the Opposition has none.
CANBERRA. A. C. T._