r f{ Y BD 3YB 2.2Q4Letober
PRIMES MAINISTE
FOR PRESS 24 OCTOBER 1976
ELECTORATE TALK
This week's announcement of a 2.2. percent increase in the
Consumer Price Index for the September quarter is welcome
news for Australia.
The figures mean that our annual rate of inflation is coming
down steadily.
Looking at the trend since the beginning of the year, the
figures present a clear perspective of how the government's
economic policies are working in the continuing fight
against inflation.
The 2.2. percent increase in the September quarter compares
with a 2.5 percent increase in the previous quarter and a
percent increase for the March quarter.
Leaving aside the effects of Medibank on the index for the
September quarter last year, the figures show that the 2.2
percent increase in the lowest for 3 years.
This is an encouraging trend. It must be seen, however,
as only a trend.
Inflation still is far too high. Reduction of inflation
still is at the core of our economic recovery. We still have
a long and hard road ahead before inflation is beaten.
I do not want to over-play the significance of the latest
Consumer Price Index figures. I do believe, however, that
they show to the electorate that our strategy we have
consistently pursued is right for Australia.
One aspect of this quarter's CPI which is especially significant
is the sharp reduction in non-food prices.
Prices in this area dropped from 3.3. percent to 1.9 percent
in the three month period.
This move in the non-food area is important as it is this
index that generally retards any reduction in the CPI. / 2
In many ways, the moves in the non-food area are
a more accurate measure of the inflationary pressures
in the economy as food prices tend to be cyclical
and are frequently at the mercy of seasonal conditions.
Clearly then, this quite sharp reduction in the non-food
price index is unmistakable evidence of what happens
to prices during periods of wage moderation and
wage stability.
This move helps to highlight the point that our arguments
to the Conciliation and Arbitration Commission and also
to the ' trade union movement on the need for wage restraint
are the right arguments. They are working.
I1 believe our stand on this crucial question of wages
has been completely central to this down-ward move in the
overall annual rate of inflation in Australia.
I believe that the foundations for a sound, sustainable
recovery in Australia's economic climate and for a recovery
in the unemployment situation are now emerging.
The task ahead, however, is still considerable.
For instance,, the Consumer Price Index for the December
quarter will be affected by the inclusion of non-recurring
Medibank costs.
There will be some people who will argue for short-term
political reasons that this December quarter figure means
that the Government's strategy will be failing.
This view will not be accepted by Australians who can now judge
for themselves that our measures are working, and that our fight
against inflation is moving strongly forward.
Australians know that our policies to combat inflation have
been carried out with strength and resolve.
Our policies have been planned and implemented over the past
ten months in a consistent and coherent manner. We have not
strayed from the course we believe to be right. We will not.
falter in our resolve to maintain our promise to the
Australian people to beat inflation and to get the country
moving forward again. 000000000