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Transcripts from the Prime Ministers of Australia

Transcript 2589

MACQUARIE NETWORK WEEKLY BROADCAST BY THE PRIME MINSITER, THE RT HON WILLIAM MCMAHON CH MP - 19 MAY 1972 - WAGES, PRICES AND INFLATION

Photo of McMahon, William

McMahon, William

Period of Service: 10/03/1971 to 05/12/1972

More information about McMahon, William on The National Archive website.

Release Date: 10/05/1972

Release Type: Speech

Transcript ID: 2589

E: BARGO. NOT FOR RELEAS2 BEFO-RE 6. 3 " 1 m. ( EAS1')
PRIME MINISTER
MACQUARIE NETWORK WEEKLY BROADCAST
BY THE PRIME MINISTERr THE RT HON.
WILLIAM McPIAHON, CH, MP. MAY 1972
W A G E S, P R I C E S A N D INFLATION
Last week I spoke to you about our arbitration system.
Tonight i want to soeak, to you about a related problem.
We have now reached a crucial point in our campaign to
dampen down the inflationary pressures in the national economy. The
decisions of the Arbitration Commission in the National Wage Case
which was made public only last Friday, was a balanced and sensible
decision. On the one hand the National Wage decision gave a sizeable
increase in the wages of those members of the work force who have been
left furthest behind in the race for higher and higher wages. I am
referring to the increase for people on the minimum wage. The Arbitration
Commission gave this section of the community the greatest assistance.
The National Wage decision is consistent with the submissions
made by the Australian Govern-ent to the Arbitration Commission. I am
glad the Commission adopted the needs approach to these people on the
minimum wage. On the other hand, the Commission came down on the
side of moderation and restraint in its general wage decision. So the
Commission has set us a national example, and it has also given us the
chance to place some brake on inflationary forces.
Let me emphasise there can be absolutely no doubt whatsoever
that wage costs are the biggest factor in the inflationary process. In
the twelve months up till last Christmas, wages went up by an average
of about eleven per cent. We got the inevitable and inescapable result.
Inflationary pressures broke out in a rash of increased prices. In
the twelve months to the end of March this year, the official figures
show that prices went u by seven per cent. This was alright for the
big unions using industrial muscle and strikes to force big wage increases
at the expense of other ' people. And it was at the expense of people on
fixed incomes and people on low incomes who do not have a great influence
over the level of their wages. These sort of excessive and unremitting
demands for higher and higher wages are one of the root causes of.
inflation and in turn high prices. ./ 2

The other root cause is closely linked to it. And I refer
to the industrial trouble that goes with itese wage demands. In the
last two or three years some trade unionists have got so involved in
their own power and political struggles that they seem to have
forgotten the main interests of their own nimbers lies in curbing
inflation. And in legitimately obtaining through arbitration,
improvements in : ages and conditions in proportion to the'actual and
real increase in production of the national economy. This is the
familiar story of trying to squeeze a quart out of a pint pot. It
just won't work.
In facing up to these causes of inflation, we in the
Government have been determined to put a stop to this sort of thing
in four ways. We have made the biggest changes in the industrial laws
since 1947 to blunt the militant use of union power and to democratise
the unions. The debate on these changes is going on in the National
Parliament today.
We will also promote more competition between businesses by
making the restrictive trade practices laws stronger and by overhauling
the levels of tariffs. The Attorney-General is now preparing
a statement for the Parliament on restrictive trade practices.
I have told you what the Government is doing in the fight
against inflation. I appeal to both union leaders and employers to
show restraint and comnionsense. Union leaders know that the best
interests of their members lie in curbing inflation. And employers,
too, must not use this National Wage decision as an excuse for
further price rises.
I can assure you that inflation works against your best
interests. That is why we in the Government are taking the leadership
to control it and are taking the decisive action to ensure sound
development and rogress in Australia.

Transcript 2589