PROME MIMSTER
FOR PRESS 17 APRIL 1977
ELECTORATE TALK
In an historic move, the Federal Government and every state
government, has agreed to work together to break the wage
and price merry go round -one of the central causes of
inflation. Premiers from every state -both Labor and non-Labor
and the Federal Government, unanimously agreed to put t'. aeir
weight behind the call for a three month pause in price rises
and wage increases.
We have called for manufacturers, wholesalers, retailers, professional
bodies and business firms to voluntarily hold prices at
existing levels.
Already, a reference has been made to the Prices Justification
Tribunal a body that can help contain prices.
The PJT is a body of considerable influence and its influence
will be used.
There has not yet been one company that has gone outside its
general recommendations. Some firms have reduced prices and
charges as a result of the PJT's recommendations.
So clearly it will continue to carry great weight in the move to
keep prices down. It will survey the prices htfl. and-report
on its findings.
We have also called on employees to agree to a voluntary wage
pause at the same time.
In these endeavours, we are seeking the closest co-operation of
employer organisations and trade unions and already the signs
of co= operation are most encouraging.
our call to all Australians is a call to put aside sectional
interests for the good of the nation. We have not sought to
coerce or force any group into any course of action. Wie have
simply appealed to the good sense of men and women running
business and to the men and women heading trade unions. Our
-2
our message is plain. Hold off increases in prices and wages
for three months. Hold off seeking personal gain at the expense
of someone else. Give it a fair go, and put Australia first.
There is no doubt that if Austr alians give this a fair chance
to work, then we can break the back of inflation. I want Australians
to understand clearly that this is a wonderful opportunity to break
the link in the ever-revolving and vicious wage/ price spiral.
It is a wonderful opportunity to consolidate on the good start
we have already made in beating inflation.
I think we are all now too well aware that excessive wage increases
and its consequences have been the central cause of our high
inflation over the last few years.
We know that higher wages lead to higher prices. This in turn
leads to our products pricing themselves out of the market here
and overseas. The inevitable result has been increased unemployment
It is for this very reason that the Government has been arguing
strongly for wage restraint ever since we were elected.
This call for a wage and price pause comes at an opportune time.
Australians have just received a wage increase from the last
Arbitration Commission hearing. Additionally, from July 1, wage
earners will benefit again from tax indexation which will put
about $ 4.50 a week extra into the pay packet of an average family
of four on average earnings.
I am absolutely certain that trade unionists see the benefits in a
voluntary wage and price patise. Wives of unionists know too the
exasperating experience of receiving extra cash, only to see it
evaporate because of monotonously increasing prices at the
supermarket.
I want to make the point that businessmen do have a special
responsibility in this call for a voluntary pause in prices and
wages. If they do not conscientiously keep prices at present levels, then
the call will have been of little avail.
It is precisely because of its voluntary nature that I expect every
businessman in Australia from the largest manufacturer to the
smallest corner store to keep faith.
If a business says it must pass on cost increases already in the
pipeline, he has perhaps misunderstood, or misinterpreted the
proposal. / Of
-3
Of course, wages are a major component of cost and the 5.70
increase from the last wage case will be concerning some
businesses. However, with a commitment from business to
hold prices, then a significant benefit will flow through to them.
This is because it will be infinitely easier to command wide
support for the wage pause in the next three months. That would
mean a halt to increases in major costs of businesses.
The Government is pleased at the response to the wage and price
halt.
Many comapnies, many employer organisations, have indicated firm
agreement with the plan.
The Prices Justification Tribunal was immediately asked to monitor
and report on price movements and to defer decisions on -price
applications before it.
Some companies have agreed not to implement price increases already
approved by the PJT before last Thursday.
All this means that recent wage increases will be absorbed by
companies at this time and not passed on in the form of higher
prices. In addition, the Government now proposes that in the event of
broad agreement from the union movement on the wage/ price halt,
a special group comprising representatives of employers, unions,
and the PJT, will be formed to advise Government on the overall
progress of the wage/ price halt.
Such a group would also be able to advise whether or not further
amendments to the Prices Justification Tribunal Act should be
introduced to lend support to the implementation of the wage/ price
halt. Such a body could also act in a general advisory way to the Government
in implementing the wage/ price halt.
With all these developments what happens within the Arbitration
Commission and the response of the union movement will of course
be critical.
With the pause in wages and gices, at the end of three months we
would be better off as a nation. Better off because inflation could
be lower and still coming down, and better off because t~ he repetitive
wage/ price spiral will have been broken.
Business would know that wages -their major cost would not be
going up for three months. That is a great incentive. Wage earners
and trade unionists would get the relief from price increases. / Everyone
4
Everyone business and trade union, employers and employees
have a clear obligation to play the game.
Clearly, however, no single decision of the Prices Justification
Tribunal or the Arbitration Commission will ensure the success of
this call.
For success there must be a total commitment from all organisations
and all people to make it work to put Australia first.
Australia now has a unique opportunity to demonstrate just how
much we really want to beat inflation.
The opportunity is in our hands. I am confident that Australians
will want to get behind their Governments and make it work.