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Jj. A U S T H A L I A , . L1 -

PRIME MINISTER

FOR PRESS 17 APRIL 1977

ELECTORATE TALK

In an historic mov e ,  the Federal Government and every state  government,  has agreed to work together to break the wage  and price merry go round - one of the central causes of  inflation.

Premiers from every state - both Labor and non-Labor -and the Federal Government,  unanimously agreed to put their Â» weight behind the call for a three month pause in price rises and wage increases.

We have called for manufacturers,  wholesalers,  retailers, profesÂ­ sional bodies and business firms'to voluntarily hold prices at  existing levels.

Already,  a reference has been made to the Prices Justification  Tribunal - a body that can help contain prices.

The PJT is a body of considerable influence - and its influence  will be used.

There has not yet been one company that has gone outside its  general recommendations.  Some firms have reduced prices and  charges as a result of the P JT1s recommendations.

So clearly it will continue to carry great weight in the move to  keep prices down. It will survey the prices halt:/ and: >report  on its findings.

We have also called on employees to agree to a voluntary wage  pause at the same time.

In these endeavours,  we are seeking the closest co-operation of  employer organisations and trade unions - and already the signs  of co=operation are most encouraging.

Our call to all Australians is a call to put aside sectional  interests for the good of the nation. We have not sought to  coerce or force any group into any course of action. We have  simply appealed to the good sense of men and women running  business and to the men and women heading trade unions.

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Our message is plain.  Hold off increases in prices and wages ‘

for three months.  Hold off seeking personal gain at -  the expense  of someone else. Give it a fair go, and put Australia first.

There is no doubt that if Austr alians give this a fair chance  to work, then we can break the back of inflation. I want Australians  to understand clearly that this is a wonderful opportunity to break  the link in the ever-revolving and vicious wage/price spiral. 1 It is a wonderful opportunity to consolidate on the good start  we have already made in beating inflation.

I think we are all now too well aware that excessive wage increases -  and its consequences - have been the central cause of our high '

inflation over the last few years,

We know that higher wages lead to higher prices.  This in turn  leads to our products pricing themselves out of the market here  and overseas.  The inevitable result has been increased.unemployment’

It is for this very reason that the Government has been arguing  strongly for wage restraint ever since we were elected.

This call for a wage and price pause comes at an opportune time.

Australians have just received a wage increase from the last  Arbitration Commission hearing. Additionally, from July 1, wage  earners will benefit again from tax indexation which.will put  about $4.50 a week extra into the pay packet of an average family

of four on average earnings. .

I am absolutely certain that trade unionists see the benefits in a '   voluntary wage and price pause. Wives of unionists know too the  exasperating experience of receiving extra cash, only to see it  evaporate because of monotonously increasing prices at the

supermarket.  \

I want to make the point that businessmen do have a special  responsibility in this call for a voluntary pause in prices and  wages.  \ ,

If they do not conscientiously keep prices at present levels, then '   the call will have been of little avail.

It is precisely because of its voluntary nature that I expect every  businessman in Australia - from the largest manufacturer to the  smallest c o m e r  store - to keep faith.

If a business says it must pass on cost increases already in the  pipeline, he has perhaps misunderstood, or misinterpreted the  proposal.

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Of course,  wages are a major component of cost and the $5.70 ;

increase from the last wage case will be concerning some  businesses.  However,  with a commitment from business to  hold prices,  then a significant benefit will flow through to them. This is because it will be infinitely easier to command wide

support for the wage pause in the next three months. That would  mean a halt to increases in major costs of businesses.

The Government is pleased at the response to the wage and price  halt.

Many comapnies,  many employer organisations, have indicated firm  agreement with the plan.

The Prices Justification Tribunal was immediately asked to monitor  and report on price movements and to defer decisions on price  applications before it.

Some companies have agreed not to implement price increases already  approved by the PJT before last Thursday.

All this means that recent wage increases will be absorbed by  companies at this time - and not passed on in the form of higher  prices.

In addition, the Government now proposes that in the event of  broad agreement from the union movement on the wage/price halt,  a special group comprising representatives of employers, unions,  and the PJ T ,  will be formed to advise Government on the overall  progress of the wage/price halt.

Such a group would also be pble to advise whether or not further  amendments to the Prices Justification Tribunal Act should be  introduced to lend support to the implementation of the wage/price  halt.

Such a body could also act in a general advisory way to the Government  in implementing the wage/price halt.

With all these developments what happens within.the Arbitration  Commission and the response of the union movement will of course  be critical.

With the pause in wages and prices, at the end of three months we  would be better off as a nation. Better off because inflation could  be lower and still coming down, and better off because the repetitive  wage/price spiral will have been broken.  .

Business would know that wages -their major cost - would not be  going up for three months.  That is a great incentive. Wage earners  and trade unionists would get the relief from price increases.

/Everyone

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Everyone - business and trade union, employers and employees -  have a clear obligation to play the game.

Clearly,  however,  no single decision of the Prices Justification  Tribunal or the Arbitration Commission will ensure the success of  this call.

For success there must be a total commitment from all organisations  and all people to make it work - to put Australia first.

Australia now has a unique opportunity to demonstrate just how  much we really want to beat inflation.

The opportunity is in our hands.  I am confident that Australians  will want to get behind their.Governments and make it work.

