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FOR PRESS 5 MARCH 1978

ELECTORATE TALK

This year promises significant progress in the Australian  economy.

The results of the Government's firm and responsible economic  management in the last two" years will become even more evident.

It will also be a year when the most dramatic tax cuts in  Australia's history take direct effect throughout the economy. They will lift spending which will, in turn, assist industrial  production and stimulate economic activity. They will help

create jobs.

The Government's economic strategy has been clear. For a long  term and sustained reduction in the number of men. and women  seeking jobs, inflation had to be reduced.

Inflation has been making Australian industry uncompetitive. This 'meant that jobs were lost and opportunities for new jobs  were squandered.

Our success in the fight against inflation is now without  challenge - it is under 10% for the first time since 1972.

Inflation is still too high - but the rate will fall even  further this year.

It is timely that with this success the Government has already  in operation policies that will help create more jobs - without  fuelling inflation. '  -

The point that needs to be made is the February tax cuts alone  will put almost $1 billion into the hands of Australian families  this year. .

This extra money can now be spent on things we need'- for ourÂ­ selves and our families. That will mean more jobs for Australians

Of course,  unless Government policies continue to bear down  on inflation the additional benefits from the tax cuts will be  eroded, and job opportunities lost.  That fight to beat inflation  will go on as strongly as ever.

In terms of their impact on the economy, the Government's tax  cuts are comparable to the measures which other countries have  taken to stimulate their economies. Â·  Ã¢ÂÂ

But the key point  responsible one.   kept under proper

is that in Australia the stimulus is a  The growth in the money supply is being  control.

In other words, the stimulus from these tax cuts will not  push inflation up.

It is worth recalling that these tax cuts have been made  possible by controlling Government spending. We have been  prudent with taxpayers dollars - and are returning taxes to  all Australians. ,

While the Government introduced its tax cuts and tax indexation  in part as a stimulus to the economy, we brought about these  changes for another reason: we believed simply that Australians

were paying too much tax. Until we acted, our tax system took  away the incentive to work, the incentive to earn.

Now, with inflation coming down and with anti-inflationary  pressures at work in the economy, the Government's tax reforms  are in place to provide el stimulus to tha economy.

They can create increased demand for porducts and services  which will lead industry and business to create new jobs.

The Australian economy is recovering. Government' policies  are working to create a climate of stability and certainty  for private industry, which employs three out of every four  Australians.

As inflation continues to fall, as interest rates fall, and  as the effects of almost $1 billion worth of the February tax  cuts for this year alone take effect in the marketplace,  unemployment will steadily fall. .  Â·  .

These are the pov/erful forces that will open up new job  opportunities for Australia. .

Any attempt at the alternative - the "quick fix" or return  to the "one stroke of the pen" approach - would be disastrous  for Australia. The Government rejects that course.

