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BROADCAST:  3 HA' - 27 MARCH

jr^Mv) \  3YB - 31 MARCH

P R I M E  MINISTER

FOR PRESS .  '  2.7 MARCH 197 7

ELECTORATE TALK

Although the presentation of this year's Federal Budget is still  five months away, the Government has already begun to tackle the job.  One of the central issues again facing the Government in the  framing of the Budget will be the level of Government spending.  .

Clearly, as we continue our fight against inflation, it will be  absolutely-critical that the Government succeeds in curbing  its own expenditure.  It will be critical that the deficit be  tightly controlled. -

Last year - in our first year in office - we were confronted by a  massive deficit that was approaching $4,000 million. Immediately  we took steps to substantially rein back the deficit through a

rigorous restraint on Government spending. We moved to cut  unnecessary programmes and to make existing programmes more  effective.

We have continued to exercise restraint in spending.  We have continue  to seek to get the maximum possible value from the taxpayers dollar.  This year, as the Treasurer has indicated, the closest examination  will again be made in every area of Government spending. This

detailed process has started. It will be an exhaustive examination.   No effort will be spared in making sure that the Budget is .   responsible and responsive to Australia’s needs. _ .

Tjie Budget will demonstrate that our priorities are to protect the  disadvantaged and to beat inflation so that economic recovery can  continue.  It will not be an easy task.  It is never easy for

responsible Governments to hold back on some programme,  or even  reduce programmes.  Of course, it is easy for Governments to take  money from people and throw it around - and then claim credit for  their generosity with taxpayers funds.

As Australia has found to its cost, that kind of approach does not  solve problems - it creates problems. It's the kind of approach  that brought the national economy to its knees and.caused  immeasurable and lasting harm to hundreds of thousands of Australian

families. Â·' . .

As we have demonstrated,  our approach is the reverse of the Labor  Party.  We have sought to get the most effective d*istribution of  Government programmes.- and not just simply throw cash at a  problem and hope it goes away. We have sought to give individuals

the chance to make their own decisions, their own choices - ,

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and not just to impose Canberra-controlled and directed programmes.

Labor's centralist programmes were financed out of high taxation  that was fuelled from rampant inflation. Our introduction of  personal tax indexation last year stopped this unlegislated tax  drain to Canberra. Ã¢ÂÂ

In just over three month's time, fr6m July 1, personal income  tax indexation will come into effect for the second year. It. will  reduce our taxation revenues by $1,000 million - tax. that would  have come direct from pay packets without indexation. Those who still call for tax cuts forget that the decisions of this  Government have resulted in a tax saving of $3,000 million over our

first two years. Of this, personal tax indexation accounts for  over $2,000 million of the total. It is a tax reform unparalleled  in our history. It deserves wider recognition for the relief it  has given to thousands of individuals and companies.

By the second year it will be worth nearly $500 for the average family  Against this background the Government has been encouraged by  trends in our fight against inflation and in our efforts to restÂ°"dij||  our country to full economic health. Inflation is coming down.

Both the deflator for major components of the gross national  expenditure - probably the best measure of the inflation rate - and  the C.P.I. clearly demonstrate that the underlying rate of inf1 at H |   is steadily coming down. w

Confidence has returned to important sections of industry. To  illustrate: company profits were around a third higher in the December quarter last year than they were a year earlier;  investment in plant and equipment by private enterprise increased by  over 311 last year; real private investment in dwellings increased  by over 5% in the second half of last year - 24% up on the same

period a year earlier; dwelling approvals, registrations of new  motor vehicles, real private consumption, real gross non-farm  product, and new capital raisings by listed companies, all markedgÂ®|  improved last year. There are other signs that are encouraging. V | Â®Â®?

The only business survey available for the March quarter of this  year showed that manufacturers were more optimistic about the  general business situation in the next six months than they were  three months ago. ..

This kind of confidence is apparent among consumers too. The January  survey of consumer attitudes by the Melbourne Institute of Â·\pplied  Economic and Social Research shows that consumer confidence was at  the highest level in over 12 months.

Unemployment is still far too high. We have taken a great number of  measures to help the unemployed, particularly the young. This week  for instance, the Minister for Employment and Industrial Relations  announced a special after-hours programme that will give both

employers and employees an opportunity to discuss employment problems  with senior officers of the Commonwealth Employment Service. Parents  of unemployed young people would be especially.welcome to take  advantage of this particular offer. However, as I and my Ministers ha

frequently pointed out, the sustained reduction in unemployment will  only occur from policies that reduce inflation. Our fight against  inflation" is a fight against unemployment.  The Governmemt Irli  pursued its fight against inflation with full zeal during the past

15 months. W'e will not slacken in our desire to continue this1 task  during this year. We will not be sidetracked in our fioht  against inflation. ^

