PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 4119


Photo of Fraser, Malcolm

Fraser, Malcolm

Period of Service: 11/11/1975 to 11/03/1983

More information about Fraser, Malcolm on The National Archive website.

Release Date: 16/05/1976

Release Type: Media Release

Transcript ID: 4119

FOR PRESS MAY 16,1976/
Australia has aunique opportunity to again take its
place as a country with one of the healthiest economies
arnd highest living standards in the world.
We have vast potential. We have unrivalled natural resources,
a skilled workforce, stable democratic government, strong
currency, and a broad manufacturing base.
Against this we have severe inflation, which hits us hard
at home and abroad.
Japan, the United States of America, France, West Germanysome
of our major trading partners all have beaten
inflation. In some cases their inflation rates run at less
than half of ours.
Why do we still lag behind our trading partners in the control
of inflation?
There is not one single reason.. However, there is no doubt
that excess wage demands are the main cause of inflation today.
Wages make up the-vast majority of cost in any enterprise
whether it be a corner milk bar, an insurance company,
a car manufacturer or even a lcague football team.
All Australians know that money wages have gone up dramatically
ever-the past few years. / 2
aca 49

Australians generally have had more money to spend or to
That money has not just materialised from a giant cash
register. It has come from someories pocket.
Normally, wage increases can be financed by growth and
productivity. Recently, there has been no growth.
So these increases have simply had to come from someone's
hip pocket at the expense of jobs.
Most Australians work for ani employer. They get their
fortnightly pay packet from him. If his business is not
growing, he has less money to pay for all the wage increases..
Sooner or later there is not enough to go around and people
loose their jobs.
Some argue that prices have gone up too, and that the employer
is able to maintain his profit level. The plain fact is that
prices, have not gone up as much as wages.
This means-that profits are down. In many cases profits have
even turned to losses and companies have gone broke.
What is the solution? First, the employer the man who
takes risk with capital to make profit so he can employ more
and better trained people must be given a fair go at
recovering this profit.
One way of doing this is to reign in his greatest costthat
is, wages. / 3

a 3.
The Government has strongly argued this principle before
the Arbitration Commission.
We want to index the minimum wage. This protects
everyone from increases in the basic cost of living.
It gives relief to cost pressures on employers and takes,
the pressure off price rises. It hits directly at the/
core of inflation. It gives us a real chance to beat
Excessive wage increases lead to higher costs which
: leads to higher prices and then to continuing inflation. At the
same time this leads to loss of profit and eventually
to unemployment.
So constantly increasing wages are a vital factor'in the
inflation disease.
That is why the Government has argued for a modification
in wage indexation.
The Government is concerned about justice to all wage earners.
The Government is concerned about relations between
employers and employees. We want to increase national
productivity. We will fail if there is unrest in the workforce.
We want industrial peace, and wage justice to workers.
It is precisely for these reasons that we have sought
to slow down the rate of wage increases.
I feel sure that all wage earners would rather have a
lower rate of inflation in 12 months time at the price of
illusory money wage increases which do nothing more than
perpetuate existing rates of inflation.
At the same time, all those who have lost their jobs in~ recent
years will have a much better chance of getting them back.
And all those who may have lost their jobs in the next 12
/ 14

months. will have a much better chance of keeping them.
The Government is determined to reduce inflation. We are
determined to keep our word to the electorate who gave us
a massive mandate to beat inflation and unemployment. I/
We have pursued a consistent strategy to carry out our mandate.
Already, we have halted the massive growth of government that
took place over the past three years. We have made savings
: in administration and have cut out a great deal of waste.
The task is an on-going one.
The Government will do what it must, but it is also a task
for the whole nation, for businessmen, employers, employees,
trade unions and for everyone in this community. to recognise
the national obligation, we all have-to get Australia moving
We have given businessmen, manufacturers, farmers producers
of the nation's real wealth the incentive to expand and
start producing again.
We have set the wheels turning for a soundly based, strong
economic recovery. Already, there are encouraging signs
that our policies are starting to take effect.
We will not waiver or be distracted in our determination to
' turn Australia's great potential into reality.

Transcript 4119