F76/ 15
PRIME MINISTER
FOR PRESS 2 February 1976
PUTTING JOBS FIRST
The Government's paramount responsibility is to overcome
inflation, so that th~ ere will be jobs for all those who want
to work.
While inflation remains at high levels, individuals do not
have the confidence to spend, and businesses, small or large,
do not have the confidence to invest in the future of their
-industries. A 63.4 percent increase in wages and salaries would increase
unemployment and inflation, and undermine the confidence necessary
for economic recovery. This large increase would quickly lead
to price rises. These in turn would lead to further wage
claims. The vicious cycle has to be broken.
In the present circumstances, we had to place the highest
importance in fighting inflation and in creating jobs.
We have placed jobs first. We have placed Australia first.
I believe the great majority of Australians now recognise
that high wage increases result in higher prices and the loss
of jobs by tens of thousands of Australians.
our responsibility in managing the nation is to break the
inflationary spiral. If the Government is not prepared to tackle
this task, no one else will do so. And thus we made the decision
that we did. ./ 2
2.
It would have been easy to take the other path and fail
to oppose passing on the C. P. I. increase in full. It
would have been irresponsible, and it would have been paid
for by * nigher unemployment and inflation.
Australia c-nnot afLford continued inflation, continued unemploymnent.
I can understand the disappointment that some people may feel,
but the Govern~ ment has had to choose between jobs and illusory
wage increases. That choice may nct be popular in the
short-term. But for the good of the Australian economy,
for the employment of Australian people, for young men and women
seeking their first job, there is no question that the choice
we have made is the only responsible one.
Earlier we indicated a willingness to listen to other
people's views concerning the P. J. T. A conference is
being organized to discuss its future in March. That has been
welcomed. Now with the fullest knowledge available to us from Government
departiaents, with more recent knowledge concerning the
economy, we believe that earlier views on implementing wage
indexation to the fullest extent of the C. P. I. have to be
modified if Australia's inflation and unemployment is to
be overcome.
I have al-raady said there are no soft options left for
Australians. There is no quick way out of our economic
problems. The Federal Government must do what it believes
to be right to overcome inflation and to restore employment.
A -further-statemenyt will be made later this week concerning,
economies in the Federal Government's own Budget.