EMBARGOED: AGAINST DELIVERY

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FRimE MINISTER

FOR PRESS SUNDAY OCTOBER 17.

THURSDAY OCTOBER 21

ELECTORAL TALK

The Federal Treasurer,  Phillip Lynch, renewed the Government's  offer of a fair and reasonable partnership for foreign investors  when he addressed a conference in Sydney this week.

He was careful to emphasise that the Government's priority  remains domestic economic policy.  There is good reason,  he  reported to the conference in Sydney,  for confidence in Australia’s  economic prospects. Ã¢ÂÂ

The Treasurer reminded the overseas businessmen that Australian  strategy is squarely in line with international views on  economic management.  He repeated the Government's resolve to  deal witjh the economic problems which we inherited.

For rural industry in Australia there is nothing new in the  message that the fight to control inflation and restore economic  stability must take priority. .

The last few years have been difficult ones for farmers. Yet  unless we successfully attack inflation there will not be the  jobs or the incentive to invest on which primary industry and  manufacturing industry both depend. ,

The Government has taken a series of major steps aimed at .   restoring profitability to industry.  To make more resources  available to the private sector,  some $2.6 million was sliced  off forward estimates for the.current, year,  thus holding growth  in the budget back to 11%.

We did that to make more money available to taxpayers and to  other spheres of Government.

This has been particularly important for Local Government,   which are now receiving a guaranteed share of national income  tax revenue.  .

Their proportion of the revenue this year will increase by  75 percent to 140 million dollars.

Legislation to give effect to this grant will be coming into  Parliament shortly. It will reach local governments, once  procedures are established, as an annual lump sum early in  each financial year. .

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Your Government has taken this action because we consider  that the burden on ratepayers in many parts of Australia  have been too heavy.

This is especially so in rural areas and we hope that  Shire and Municipal Authorities will now, with these  additional funds,  be able to hold rates steady, or even  reduce them. .

There are always requirements for more funds.  There are  always good uses to which Government authorities can put  extra dollars.

But when the Gross National Product is static or actually  declining, as it was for the last year or two of the last  government,  then all spheres of government must understand  that they cannot, go on taking more and more out of the ,   pockets of taxpayers and ratepayers. .

As well as the new level of assistance for local government,  we will be introducing in this session of Parliament,   legislation for an Income Equalization Deposit Scheme.

The scheme will be brought in to apply to income earned this  year.

The Income Equalization Deposit Scheme is a long term measure  designed to produce more equitable taxation for farmers whose  incomes fluctuate wildly because of weather,  or world commodity  prices.

It will not help those farmers this year who have little or  no income at all.. But it is evidence of the Government1  s . firm desire to see primary industry put back on a sound  footing.

Another long term reform will be the establishment of a rural  bank. This is going ahead. We hope that existing banks will  take part in it but if they do not wish to be involved the  rural bank will be established in any case.

As well as being , able to provide long term finance, the  Rural Bank will have funds available for the purchase of  equipment so that farmers do not have the burden of high  interest rates under hire purchase agreements.

Many other measures have been taken since the Government  came to office. Some of them short term, others long term.

None of these measures alter the fact that general economic  recovery is critical for a restoration of profitability for  rural industry.

That recovery has begun. It is clearly going to be slow  after the battering which the economy took under the former  administration. ,  .

We said before the last election that it would take a full  three years. However I would like to return to the words  of the Treasurer when he was speaking to international  investors in Sjfdney this week - there is now good reason for confidence in Australia's economic prospects.

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