) 7'  ' % Office of the Leader of the Opposition

PRESS STATEMENT BY BILL HAYDEN, MP

The A u stra lian  economy i s  facing a bad y e ar.

This i s  the d is tu r b in g  t r u t h  t h a t  Mr F r a s e r 's  i n t e r n a t i o n a l

machinations and e la b o r a te  manipulations o f  the Olympic boycott  issues are designed to conceal.

The Government's p a s t economic mistakes w ill guarantee a marked surge  in  i n f l a t i o n ,  i n t e r e s t  r a t e s  and unemployment in the months ahead. .

I t s  present mix o f  monetary and f i s c a l  p o l i c i e s  i s  se v e re ly  damaging

to  any prospects o f a s u sta in e d  economic recovery. .

I t  w ill f u r t h e r  undermine the d e c lin in g  re a l l i v i n g  standards o f

A u stra lian  fa m ilie s  and th re a te n  the s e c u r i t y  o f people in the

workforce and e s p e c i a l l y  small b u s in e s s .

By the end o f 1980, i n f l a t i o n  w ill probably exceed 11 percent - -  much

worse than f o r  1979, which was almost 30 percent higher than the

previous year.

3

I n t e r e s t  r a te s  fo r Government s e c u r i t i e s  a re  a lre a d y  1 /4  percent higher

than they were a y e a r e a r l i e r .

Overdraft r a t e s  are climbing and t h i s  must soon flow through to

mortgage r a t e s .

The temporary easing in the r a te  o f  in c re a s e  in the number of

r e g i s t e r e d  unemployed w ill d is so lv e  as the Government's a r t i f i c i a l l y   contrived and unsustainable weak economic pick-up f a l t e r s  during  the f i r s t  h a l f  of 1980.

Over 1979, a f a l s e l y  depressed A u s tra lia n  d o l l a r  and c o ntracted  domestic economy, plus w in d -fa ll advantages in the farm s e c t o r ,   allowed some pick-up in export a c t i v i t y .

By conscious d ir e c tio n  of Government p o l i c y , however, domestic  demand has not moved in real terms in the p a s t twelve months.

Retail sa le s  have been s ta g n a n t, a c t i v i t y  in the motor vehicle

in d u s try  is  near c o lla p s e , and the l a t e s t  fig u r e s  f o r  i n d u s t r i a l

production show a weakening tre n d .

As in 1976, the Fraser Government has f a i l e d  to s u s t a i n  the

o p p o rtu n itie s  for economic re c o v e ry .

I n f l a t i o n  is  s u b s t a n t i a l l y  aggravated by Government p ric in g  policies.

S u b sta n tia l increases in p e tro l p ric e s  and h e alth insurance by the

Government mean le ss spending power f o r  A u stra lia n  fa m ilie s  and  aggravate cost push i n f l a t i o n .

P a r l i a me n t  Hous e .  Ca nbe r r a  A C T  2 6 ÃÂ¿ o

2.

X-'" .. U

As i n f l a t i o n  c l i m b s ,  i n t e r e s t  r a t e s  move up.

I n e v i t a b l y  t h e  Government then r e s o r t s  o f  l a r g e r  doses o f  economic

c o n t r a c t i o n  and h i g h e r  unemployment.

No Prime M i n i s t e r  i n  A u s t r a l i a ' s  p o s t - w a r  h i s t o r y ,  e x c e p t  t h e  l a t e

S i r  Robert Menzies, has had as much t im e  a v a i l a b l e  t o  remedy economic

problems as M r F r a s e r :  Â· . ...

No Prime M i n i s t e r  has f a i l e d  so d i s m a l l y .

There i s  a moderate and s u c c e s s f u l  way o f  responding t o  o u r  economic

problems, b ut i t  i s  u n a cc e p tab le  to  Mr F r a s e r ,  because i t  c a l l s  f o r

a l e v e l  o f  Government r e s p o n s i b i l i t y  and involvement in  s u p p o r t  of

A u s t r a l i a n  f a m i l i e s .

The Government must amend i t s  p r e s e n t  p o l i c i e s  and adopt th e fo ll o w i n g

m e as u re s ;

. S u b s t a n t i a l  d i r e c t  and i n d i r e c t  t a x  c u ts  designed to  i n c r e a s e

th e r e a l spending power o f  A u s t r a l i a n  f a m i l i e s ,  c r e a t e  more

e f f e c t i v e  demand, and s i m u l t a n e o u s l y  reduce i n f l a t i o n a r y   c o s t  push p r e s s u r e s ; .

. implement a genuine job c r e a t i o n  program, e s p e c i a l l y  f o r  th e

i n c r e a s i n g l y  d i s a f f e c t e d  young p e o p le;

. implement fa m il y w e l f a r e  programs, such as chea per h e a l t h

i n s u r a n c e ,  f i n a n c i a l  s u p p o rt f o r  home b u y e r s , fa mily  income

supplements and b e t t e r  e d u c a t i o n a l  s e r v i c e s  so t h a t  th e  re a l

l i v i n g  s t a n d a r d s  and a s p i r a t i o n s  o f  A u s t r a l i a n  f a m i l i e s  a r e

e l e v a t e d ;  .

. implement j u s t  w a g e s / p r i c e s  p o l i c i e s  t h a t  are tough on ta x

a v o id e r s  and which t r a d e  o f f  d i r e c t  and i n d i r e c t  ta x  c u t s ,

and improved s o c i a l  w e l f a r e  programs, a g a i n s t  wage i n c r e a s e s ;

. end the r i p  o f f  o f  A u s t r a l i a n  m o t o r i s t s  through i t s  r e g r e s s i v e

p e t r o l  p r i c i n g  p o l i c i e s .

CANBERRA

10 February 1980

