U) ST ILAI A
PRIME~ MONISTER
FOR PRESS ELECTORATE TALK 17 JUNE 1979
There is no question no room for doubt that inflation
continues as the world's major economic illness. Inflation
respects no geographical or political boundaries. It hits
hard, fast and with constant pressure in every corner of
the globe with devastating effect. It is a disease that
not only retards the growth of markets at home and reduces
job opportunities it helps cripple world trade.
And it is this cumulative country-by-country and region-byregion
effect that leaves its imprint on the livelihood and
security of millions and millions of families.
Inflation is not just another economic statistic. It is a
burden inseparable from the daily and personal problems of
modern living. It is this issue of continuing inflation
that leaders of the world's major industrial nations again
will confront at the forthcoming economic summit in Tokyo.
Conferences of this magnitude regularly exaine the problems
of inflation. At the end of discussion, leaders generally
issue communiques. of course, communiques themselves are
simply words. Unfortunately, too often they remain just that
rather than a living document that lays the basis for firm
and concrete policy measures. The conference in Tokyo must
strive to produce a real hope and understanding that the large
and powerful nations will keep on with strong anti-inflation
policies. This time, what is said will have to be followed by government
action which is seen to get to the heart of the problem. If
it dosnot, it will be much harder for the community to believe
there is a real desire to win the fight against inflation.
I f= rvently believe that unless the great and powerful industrial
nat--4z--s give a more vigprou-s lead in_ the fight then we are going
to be in for a long decade-of difficulty. The picture is stark.
Since 1973-74 world trade has grown by only four per cent a year.
In the two decades before that it grew at eight per cent a year.
That four per cent trade growth has taken place during a period
of high inflation, high unemployment, and with activity,
investment and development at minimal levels. 2/
2
It will stay that way unless the major industrial countries
have the political determination and courage to overcome
inflation. What the major industrial nations do determines
much of what happens around the world.
But in Australia we are fortunate in having political and
economic stability. We have a lower rate of inflation than
North America and much of Europe. Therefore our industries
should continue to be more competitive thus gaining larger
shares of home and overseas markets.
We are also fortunate in having great mineral resources and
a strong rural base. Because of our lower inflation we will
attract investment from overseas at the expense of other
industrial nations.
Accordingly, because of these factors, we have a capacity to
cross these hurdles in a way that is not open to many countries.
The fight against inflation is at the core of our economic
policies policies endorsed strongly by the OECD and the GATT.
There is no easy way of restraining inflation.
But the crux of it is restraint on government expenditure.
We have to destroy the very false and shallow philosophy that
governments can provide all things that are asked of them.
What governments spend, they have to take from people. What
governments spend needs to be limited, needs to be responsible.
The recent economic package or mini budget introduced by
the Government, was not a device that added or sought to add
to the Government's popularity. But it was necessary to keep
up the fight against the ever present pressures of inflation.
It is sometimes said that in democracies where elections are
held every few years, it is difficult to persevere with firm
anti-inflationary policies. This is an opinion I do not share.
Governments committed to anti-inflationary policies show more
concern for the real well-being of people than those politicians
who glibly carry out short-term stimulatory policies.
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