EMBARGO: 5.00 pm

PRIME MINISTER

FOR MEDIA SUNDAY, 18 JULY 1982

ELECTORATE TALK

In the last two weeks,  the Labor Party has shown plainly that it  lacks the stability which Australia wants,  and the policies  which Australia needs.  Our job is to face squarely the economic  difficulties the world is experiencing and which are now .

hitting Australia hard. .  .

The Government's policies are right for Australia's circumstances.  The Australian community wants the Government to tackle economic  problems realistically. Our policies have helped cushion the .  .   impact of the world economic downturn on Australia. What  Australia needs above all is a willingness to work together

at all levels, for it is by working together, by making  the most of our advantages, and by encouraging the initiative  of Australians, that we will achieve our economic goals.

The policies which Labor has adopted would take Australia  down the wrong road entirely. At a time of real difficulty for  the mining industry, the Labor Party would inflict a resources  tax. Surely we want to, encourage investment in the mining

industry, so that Australia will be in a position to take  advantage of any upturn in the world economy. .

Labor's extra resource tax can only discourage mining investment,  especially when miners generally are not making substantial  profits. It is naive to think the new tax resource would  replace state taxes, it would be additional because the

state premiers would not be willing to give up their taxes  to the Commonwealth.

Or take Labor’s uranium policy, they want to shut the industry  down.  It is all very well for people in a country like Australia  rich in natural resources, with no foreseeable need for  nuclear power, to talk about leaving uranium in the ground. But there are countries which need the uranium which we can

supply to meet their energy requirements. Labor's amended .. policy nowhere says that existing contracts will be worked ’  out. Mr Hayden has said that any suggestion that Labor  has abandoned its opposition to uranium is a "travesty of the '

facts". In seeking to close down the uranium industry, Labor  policy ignores our responsibilities to others, and denies  jobs to Australians and export income to Australia.

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Take capital gains taxes. Labor wants to strengthen an existing  section of the' Income Amendment Act to make it work as an  "effective tax on realized capital gains and profits." But  we are not told what the changes would be. Senator Evans has said

he said he has a secret draft of "a rewritten Section 26(a) . which will do the job which we want to do", and we are entitled  to believe it will be a capital gains tax by stealth.  At: a . time when most people think the burden of personal income tax

is too high, Labor is also committed to reducing the incidence  of indirect taxes, which could only mean higher income taxes under  Labor. By favouring increased progressivity of the personal  income tax supply, Labor' wants to push the higher tax rates still  higher. That would reduce incentive, it would reduce productivity,

and increase the anti-social tendency towards tax avoidance. *

The Labor Party has declared its socialist commitment to  redistributing income in Australia but its factions disagree  profoundly on the means.  Probate tax is one means favoured by  by Mr Cain in Victoria. Mr Cain was proclaiming the virtues  of probate for Victoria at the time when Mr Wran was boasting

of abolishing it in NSW. Mr Cain's probate tax - at 39ÃÂ¦ in  the dollar - will be a cruel expropriation from hundreds of  people who had worked hard to secure their own,  and their  children's future. The limit of $200,000 is not high enough to

protect many ordinary people with normal,  suburban homes, people  with small, businesses, and those with a home and superannuation.

People who want to start a business will leave Victoria. The . value of houses will fall.  There will be more and more empty  houses as people who are retiring leave for other states. There will be less work in the building industry. There will  be fewer jobs. Mr Cain's probate will damage Victoria's economy

by turning away investment, and cause an exodus of Victorians.

The substance of Labor's National Conference was summed up in  the attitudes on-wage indexation. The: Conference firstly Â· .   voted to reject a proposal for full quarterly wage indexation  in its economic platform. By itself, that would seem like a

rejection of a dangerously inflationary wage policy. But.then  two days later, in its industrial relations platform., the .  ; Conference made a commitment to work towards automatic full  quarterly indexation. I suppose that when Labor spokesmen

talk to business groups they give them the first version, and  when speaking to trade unions they use the second version.

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