Embargo until delivery 7pm
FOR PRESS 5 MARCH 1978
ELECTORATE TALK
This year promises sianrificant progress in the Australian
economy. The results of the Covernment's firm and responsible economic
management in the last two years will become even more evident.
It will al -o be a year when the most dramatic tax cuts in
Australia's history take direct effect throughout the economy.
They will lift spending which will, in turn, assist industrial
production and stimulate economic activity. They will help
create jobs.
The Government's economic strategy has been clear. For a long
term and sustained reduction in the number of men and women
seeking jobs, inflation had to be reduced.
Inflation has been making Australian industry uncompetitive.
This meant t-hat jobs were lost and opportunities for new jobs
were squandered.
our success in the fight against inflation is now without
challenge it is under 10% for the first time since 1972.
Inflation is still too high but the rate will fall even
further this year.
It is timely that with this succes * s the Government has already
in operation policies that will help create more jobs without
fuelling inflation.
The point that needs to be made is the February tax cuts alone
will put almost $ 1 billion into the hands of Australian families
this year.
This extra money can now be spent on things we need for ourselves
and our families. That will mean more jobs for Australians.
Of course, unless Government policies continue to bear down
on inflation the additional benefits from the tax cuts will be
eroded, and job opportunitles lost. That fight to beat inflation
will go on as strongly as ever.
In terms of their impact on the economy, the Government's tax
cuts are comparable to the measures which other countries have
taken to stimulate their economies. \ t / 2
6 2.
But the key point is that in Australia the stimulus is a
responsible one. The growth in the money supply is being
kept under proper control.
In other words, the stimulus from these tax cuts will not
push inflation up.
It is worth recalling that these tax cuts have been made
possible by control7ling Government spending. We have been
prudent with taxpayers dollars, and are returning taxes to
all Australians.
While the Government in~ troduced its tax cuts arnd tax indexation
in part as a stimulus the economy, we brought about these
changes for another reason: we believed simply that Australians
were paying too much tax. Until we acted, our tax system took
away the incentive to work, the incentive to earn.
Now, with inflation comi-ng down and with anti-inflationary
pressures at-work in the economy, the Government's tax reforms
are in place to provide a stimulus to the economy.
They can create increased demand for porducts and services
which will lead'. industry and business to create new jobs.
The Australian economy is recovering. Government policies
are working to create a climate of stability and certainty
for private industry, which employs three out of every four
Australians.
As inflation continues to fall, as interest rates fall, and
as the effects of almost $ 1 billion worth of the February tax
cuts for this year alon3 take effect in the marketplace,
unemployment will steadily fall.
These are the powerful forces that will open up new job
opportunities for Australia.
Any attempt at the alternative the " quick fix" or return
to the " one stroke of the pen" approach would be disastrous
for Australia. The Government rejects that course.