FOR PRESS PfRIME-MINISR~ CANBE= RRA
Noemer 25, 1975
AUSTRALIA' S INFLATION RATE
The Prime Minister, Ur Fraser, said today he had receivedI
official information which forecast that Australia during 1976
will suffer the second highest rate of inflatI.-on amongst the
major western nations.
Mr Fraser said the forecast indicated that Australia's rate of'
inflation during next year would be at a level more than three
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The Prime Minister stressed that because the information relating
to forecasts of the level of inflation in other countries was
confidential to OECD nations no statistical details could be given
at this stage.
. He expected that statistical' information would be released in
mid-December.
In the case of Australia, however, the forecast was highly relevant
to the state of the Australian economy at the present time.
He said the forecast confirmed his statement in an address to the
nation eight days ago that the factors of the budget deficit,
declining investment, slower than expected growth and low confidence
all meant that next year Australia would be facing more inflation
and the highest unemployment since the great depression. / 2
-2-
It was further confirmation that under Labor's policies the
Seconomy is not coming out of its recession-.
The Prime Minister reiterated that in fulfilling Its pledge to
provide Australia with sound management until the election, the
Caretaker Goverrnent had given special emphasis to its duty to be
fully informed on the state of the economy and its future outlook.
The unpleasant facts that had come to light showed that, as a result
of past policies, Australia would face very severe problems of
economi~ c management in 1976.
These facts included the liklihood that the budget deficit will not
be $ 2,800 million as planned but about $ 4,000 million. As well,
the rate of price increase in the December quarter would be-about0
per cent -one of the highest rates in the western world.
Mr Fraser said the new forecast of 1976 inflation in Australia
together with recent official statistics on the food price index
and industrial production further supported these facts.
They were further evidence of the extev-t of the damage caused by
the incompetence of the former Labor government and the de gree
of failure of its economic policies.
It was essential as a first step'to prosperity that Australians 0
be honest with themselves about what has happened in the past three
years and to recognise the immensely tough problems that could be
solved, if we are prepared to work together as a people. 0
The principal objective of the incoming Liberal National Country
Party Governmen b, would be to revive the basic health and strength
of the-Australian economy so that Australians could once again
* look ahead with. confidence and security confidence in themselves
and in their country.
This would be achieved through a full three-year programme to get
Australia moving ahead, combining the taxation reforms recommended
by the Math ews Committee together with the further policies which
will be announced in -the Policy Speech on Thursday night.
Mr Fraser said these policies would provide a sound basis for
the rapid rec , viry f Mnia ce d fTb7
between all sections of the community for restraint in government
spending.