PM Transcripts

MEDIA RELEASE T -C-DES7 RATECUT
Sta-. 2: ent by the ActingC7 _-rime M4inister, Rt ? ion. J. D. Anthcny, M. P.
A reduction in interest rates would be one of the best
things that could happen for the economy and for people in'the
community The Government wants to see a reduction in interest rates,
but is aware of the economic reality that this will only be
possible when the inflation rate is brought down.
That is why the Government is dedicated to the fight
against inflation. A further rise in interest rates which are already very
high would further aggravate our economic problems and affect
confidence. Young people buying homes, primary producers, peop le
trying to run all kinds of businesses both large and small, would
all be hurt by higher interest rates.
The Government's objective is to get interest rates down.
Lower interest rates would have a very beneficial effect
on the economy. But if the Government starts borrowing large sums of
money, interest rates will be pushed up and everyone will suffer.
If we were to do what many people are asking for and cut
taxes now while the budget deficit is still far too high, we would
only be asking for trouble.
While a large budget deficit exists, tax cuts could be
paid for in only two ways: by printing extra money, which is
h2. ghly inflationary, or by the Government's borrowing money in
competition with everyone else, thus lifting interest rates.
Tax changes need to be looked at in the overall context
o. 4t: a xation reform, and that is what the Government is doing.
We know that taxation is too big a burden on many people,
ands we want to reduce that burden and we will as soon as it
4sensible to do so.
Released in Hurwillunbah,
9th February, 1977