EMBARGO: 5: 00PM
PRIME MINISTER
FOR MEDIA SUNDAY AUGUST 9 1981
ELECTORATE TALK
Di scussions which the Government is to hold this week with
representatives of employer groups and the ACTU on Wednesday,
followed by a special Premiers' Conference and Loan Council
meeting on Thursday, will help to decide the direction of the
Australian economy. For we stand at a critical point: In one
direction there is a path to sustained prosperity, continued
growth in employment opportunities and rising real living
standards. In the other direction is a path back to the
economic conditions we faced five or six years ago, with
rapidly growing prices, rising unemployment and economic
stagnation.
As a result of the Government's policies, pursued steadfastly
for nearly six years, the Australian economy now has an
underlying strength which is the envy of other major industrial
nations. In the yearto March, excluding the drought affected
farm sector, the economy grew at a real rate of 5.6 per cent,
a rate considerably higher than any of our major trading
partners were able to achieve, and a rate which the OECD has
predicted we can sustain or improve if our policies are
maintained. Employment has also been growing rapidly, particularly in the
last two years during which over 300,000 new jobs have been
created, and the unemployment rate on a month by month basis
has been lower throughout 1981 than in any of the previous
four years.
Our success in restoring the health of the economy has derived
primarily from the pursuit of policies which have restored
business confidence and our international competitiveness
by reducing the rate of inflation. Our inflation rate of 8.8%
in the year to June remains significantly below that of our
major trading partners, but it will have to be lowered still
further to keep us ahead, and the Government remains determined
that reducing inflation should have the highest priority. / 2
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One of the* many signs of the faith that now exists world-wide
in Australia's economic strength and prospects is the increasing
strength of the Australian dollar relative to the currencies
of the countries with which we trade. It is particularly interesting
to observe, for example, that the Canadian dollar is now worth
only 72 Australian cents. But the confidence that the world
has expressed in Australia's prospects, the real gains that we
have made in recent years, can so easily be frittered away.
It is the danger of that happening, particularly through a
renewed burst of inflation caused by a wages explosion, that
has led me to call for the top-level meetings during the coming
week. To some extent, the very success of our economic policies have
contributed to the wage pressures that exist, and the Governmenthas
acknowledged the need for flexibility in the wage
determination system. The Government is not against wage
* increases as such, but in the interests of all Australians
they. . have to be wage increases that industry can afford to
pay . fithout reducing employment. In all of this, we have to
think of those without jobs as well as those with them.
What we are concerned about is excessive wage increases that
can only harm other people.* The growth we now have in the
economy has established the circumstances in which some
employers feel they can give in to wage increases when
otherwise they would not and when some unions feel in a
strong position to bargain and demand more. But these pressures
should be resisted.
At the talks this week, the Government will be discussing
the options that are open to us to resist those pressures,
options which ultimately have to be argued out before the
Arbitration Commission. I have noted that the ACTU President,
Mr Dolan, has said he'" does not want wage earners to bear the
full brunt of economic stability. I agree with him on that,
but there are people at present without jobs who want to be
wage earners, and I am sure he would want more people to be
employed, as we would.
I also ' want to make the point that throughout last year, wages
increased by 13% to 14% while inflation was so quite
plainly there was a very real increase in wages and living
standards over the past 12 months. There are questions as
to whether that was fairly shared amongst the community, or
whether an undue proportion of it went to strong unions and their
members. What about the unions that have not been able to argue
their case so well because their bargaining power or ' clout' has
not been great? It is not a question of wanting Australian working
men and women to bear the brunt or pay the cost of economic stability,
it is a question of establishing circumstances which are fair
and reasonable, that will enable this country to capitalise
on the enormous advantages that Australia has, and on the
great gains that have been made since 1975. That is why an
orderly system of wage determination and less industrial disputation
is essential. / 3
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Too much should not be expected of the discussions this
week, for the history of industrial relations is a continuing
history of human relations, and dramatic answers are unlikely
to be found. What we can achieve is a clearer understanding
of the options facing the country, the mutual responsibilities
on all governments, on the ACTU, and on employers to make sure
that we all put Australia first, to make sure that we all
act as people belonging to one country which we are determined
to build and make a better place for our children.
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