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PRIME MINISTER

FOR MEDIA SUNDAY AUGUST 23 1981

ELECTORATE TALK

The budget introduced into Parliament last week by the  Treasurer, John Howard, represents the clearest possible  statement of the Government's intention to maintain the  priority we have always placed on providing a better life

for individual Australians and their families. For the budget  will strengthen prosperity, maintain confidence and provide  the creation of yet more new jobs in the private sector by

further restraining Government spending and continuing the  thrust towards smaller government, and by bearing down on  interest rates and inflationary pressures,

At the same time, it is a budget which increases assistance  to a large number of people in the community who are in particular  need, which strengthens our national security and which lays a  basis for sustainable reductions in the tax burden on individuals

and families.  It is a budget which will strengthen the revival  of Australia's economy that has come about as a result of the  policies consistently pursued by the Government since 1975. Ã¢ÂÂ   -These policies have led to higher employment, .  better wages and

living standards and lower inflation. .  Â·

In considering a budget, we need to realise that the most  fundamental requirement ÃÂÃÂ­"; to achieve overall economic stability,  for only in this way can we secure the opportunties and improve  standards of living which everyone wants. If the basic policy  approach established in the budget is not right, no other policies  can be effectively implemented.

It was this important fact that the Labor Government ignored  between 1972 and 1975, to the lasting cost of all Australians,  and theircurrent policies and attitudes make clear they have  still not learned this lesson. .

There has been much comment on the decisions we have made on  sales taxes.  But let me put these decisions into perspective.  During the last year, there has been a real increase in wages  of some 4%. This means that up to $3,000 million has been added

to real living standards. By comparison, the sales tax decisions  will raise a total of about $550 million this year, and by enabling  us to bring the budget almost into balance, that extra revenue  v/ill enable Australian families to enjoy continued increases in  prosperity.

The most, basic objective of all our policies has been, and remains,   to reduce the overall burden of taxation on families.  The budget  has made a valuable step towards shifting the balance of taxes  away from direct on to indirect taxes.  As the Treasurer has pointed

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out, one of the consequences of this is that it increases  the potential for desirable reductions in direct taxes and  particulary personal income tax as economic and budgetary  conditions permit.

I might also remind you that earlier this year in July, '

we introduced income tax cuts that will leave some $500 million  more in tax payers' pockets, and they have started to do so  already. The new tax rebate of 32 cents in the dollar for  basic health insurance will return a further $600 million

to individual income tax payers. That just shows we are  concerned very much about reducing the tax burden.

Since we first took office nearly 6 years ago, the  Government has stressed that there is only one way to lower  the tax burden in a real and sustainable way, and that is by  holding down government spending. In this year's budget,  after allowing for meeting the extra expense of an extra  pay period for pension, benefit and salary payments, a  phenomenon which occurs only once in every 12 years or so,  budget outlays increased by less than 1% in real terms.

We have now cut back government spending to only about  27% cents in every dollar produced in Australia, compared  with over 30 cents in every dollar taken by government in  1975/76, and under Labor, the proportion was rising rapidly.

Our objective remains to cut it back still further.

We have also in this budget virtually eliminated the huge . budget deficit inherited from the disastrous Labor years,  and by doing so we have not only laid the foundations for  reducing the tax burden, but we have also reduced claims for

capital funds to ease pressure on interest rates.

In all these ways, our concern for Australians and their  well-being is clearly expressed. Moreover, in our expenditure  decisions we have given further emphasis to the needs of groups  which include those most in need in the community.

Spending on social welfare and security will rise significantly  in real terms because of continued automatic indexation of pensions  and benefits, because of increased family allowances for larger  families, a group which includes many of the poorest,  because we have begun a programme of crisis accommodation

with special emphasis on families in distress, and because we  have redirected and increased the programme of rental assistance  to pensioners and long term sickness beneficiaries.

The 1981/82 budget is one that looks to the immediate problems  of needy,  groups,  but also to the long term interests of all  Australians and their families.

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