BROADCAST: 3HA - 24 October  3YB - 28 October

FOR PRESS 24 OCTOBER 1976

ELECTORATE TALK

This xveek' s announcement of a 2.2 percent increase in the  Consumer Price Index for the September quarter is welcome  news for Australia. .  .

The figures mean that our annual rate of inflation is coming '   down steadily. .  '  .  .

Looking at the trend since the beginning of the year, the  figures present a clear perspective of how the government's  economic policies are working in the continuing fight  against inflation. .  '  .  Ã¢ÂÂ

The 2.2.percent increase in the September quarter compares ' with a 2.5 percent increase in the previous quarter and a 3.0 percent increase for the March quarter. .  .

Leaving aside the effects of Medibank on the index for the  September quarter last year, the figures shoxv that the 2.2  percent increase in the lowest for 3% years. .  .  .  Ã¢ÂÂ

This is an encouraging trend. It . .  must beÂ· seen,  however,  . as only a trend.

Inflation still is far too high. Reduction of inflation  still is at the core .of our economic recovery. We still have  a long and hard road ahead before inflation is beaten.

I do not want to over-play the significance of the latest  Consumer Price Index figures.  I do believe, however, that .   they shoxv to the electorate that our strategy xve have .   consistently pursued is right for Australia.

One aspect of this quarter's CPI xvhich is especially significant  is the sharp reduction in non-food prices.

Prices in this area dropped from 3.3. percent to 1.9 percent  in the three month period.

This move in the non-food area is important as it is this " index that generally retards any reduction in the CPI.

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In many ways, the moves in the non-food area are a more accurate measure of the inflationary pressures ' in the economy as food prices tend to be cyclical and are frequently at the mercy of seasonal conditions.

Clearly then, this quite sharp reduction in the non-food . price index is unmistakable evidence of what happens  to prices during periods of wage moderation and  wage stability. '  .  .

This move helps to highlight the point that our arguments  to the Conciliation and Arbitration Commission - and also  to the trade union movement - on the need for wage restraint  are the right arguments.  They are working.  .

1 believe our stand on this crucial question of wages .

has been completely central to this down-ward move in the  overall annual rate of inflation in Australia. .

I believe that the foundations for a sound, sustainable  recovery in Australia’s economic climate and for a recovery  in the unemployment situation are now emerging.  .

The task ahead, however, is still considerable. .

For instance, the Consumer. Price Index for the December  quarter will be affected by the inclusion of non recurring  Medibank costs. Â·

There will be some people who will argue - for short-term  political reasons - that this December quarter figure means  that the Government's strategy will be failing.

This view will not be accepted by Australians who can now judge  for themselves that our measures are working, and that our fight  against inflation is moving strongly forward.

Australians know that our policies to combat inflation have  been carried out with strength and resolve.

Our policies have been planned and implemented over the past  ten months in a consistent and coherent manner.  We have not  strayed from the course we believe to be right.  We will not  falter in our resolve to maintain our promise to the  Australian people - to beat inflation and to get the country  moving forward again. Â·

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