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PRIIV1E M I N I S T E R

FOR PRESS 9 OCTOBER 1977

ELECTORATE TALK

Australia today is back on the road to economic health. . The three years that devastated our country - and almost brought  us to our knees - are behind us.

We are pulling out of the mess that went a long way to destroying  city and country, and harming millions. Australia is back in the race largely because of one simple fact -  the government recognised that above all else, inflation had

to be beaten. Until that happened, we knew there would be no  proper recovery, no prospect of expanding opportunities for  jobs, no sustained security and not much hope.

We are beating inflation. We have not yet finished the job - but  our record so far in reducing inflation is unmatched in the  western, world. Â·

Let's look at facts. Inflation - as measured by what is  technically called the implicit price deflator - was reduced to  just over a 9 percent annual rate through the year to last June. That is 7 percentage points better than it was through the previous  year. Looked at another way,  over the same period and on the  same basis, the percentage reduction in Australia’s inflation  was better than that of practically all the seven major OECD

countries. Those countries are: Japan, Germany, the United States. Britain, France, Italy and Canada.  In fact, Australia's  performance was matched only by that of Canada. .  Ã¢ÂÂ

Inflation of course is commonly measured by an index of consumer  price. We are doing much better with this index too. In the  first half of this year, inflation as measured by the consumer  price index, was also running at an annual rate of around 9 percent.

This is lower than the average increase recorded by our major  trading partners - and a far cry from the 17, 18 and 19 percent  levels under Labor.  So whichever way you look at it, Australia  is getting on top of inflation.

Australia's current inflation rate figures are not Liberal Party  figures, not political - but figures produced by the OECD and by  Australia's independent statistician. What do they mean for  Australia?

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First, they mean, that our economic strategy - a strategy consistent]  applied from day one - has been the right strategy for Australia  at this time. They mean we are doing the job the community asked  us to do. They mean that we will continue with our policies  that keep bearing down on inflation. There is no way - having  worked so hard and having come this far - that we will slacken

in our efforts to beat inflation. But above all, the reduction  in Australia's rate of inflation means we are ridding the  community of a real and tangible social evil.

Make no mistake about the deadliness of inflation. Inflation  harms every Australian. It harms every family, every business,  every farm, every school. It hits hard and direct at the young,   the old and the defenceless. It is for that reason - and for

that reason alone - that my government pledged to beat infaltion.

As we continue with this fight, it is becoming increasingly clear  that key ingredients in the national economy are responding positive  to our policies. The signs are emerging. There has been a solid  sad steady recovery in production.  In the last financial year,  production increased by 3.5 percent. Just two years earlier -

in the middle of the Labor experiment - production actually  decreased by 0.2 percent. There has been a very good recovery  in company profits.  That recovery will continue through this  year..  Consumers, too are gaining confidence and are willing to

spend more of their incomes.

In simple terms, in the first quarter of 1977 Australian consumers  were saving 12.5 percent of their pay cheque, while in the last  quarter of 1974, they were saving more than 19 percent of their mom  What all this means is that Australia is back firmly on the road

tÂ© recovery.

We all know,  however, that not everything is as it should be - or a;  the government xvants.  Unemployment, although slightly improving  over the last couple of months, remains too high. The Government  knows this.  That is why we have developed a number of programmes

that either have helped or are currently helping more than 100,000  young men and women. We have removed all financial restrictions  on the various training programmes and employment assistance  programmes.  No-one will be denied training opportunities because  Â©f lack of finance. These however, are essentially short term  measures, short term assistance for the unemployed.

It is only when inflation is further reduced, and when production a  profits! further improve that business and industry will seek to  increase its workforce.  For a long term and sustained reduction

in unemployment, there is no alternative but to keep the battle  against inflation at full pitch.

lie must never forget what happened to jobs, to business, to farmers  to migrants, to fixed income earners when Labor refused to face  reality, when Labor refused to accept what inflation was doing to

Australia. We must never forget what happened to Australia. We could never survive that kind of experiment again.

