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Thursday, 11 November 1976

Mr MALCOLM FRASER - I think the honourable gentleman ought to know that the Government's policy lines in this area are quite clear. Until inflation is overcome there is not going to be full confidence throughout the Australian community for businessmen to invest and to create jobs and at the same time for consumers to spend. In countries around the world there is continuing concern at the rate of inflation. When people say we should take some specific action to overcome unemployment I would reply by saying that the most specific and most effective action to overcome unemployment is action which will overcome inflation. There is no other course to pursue.

The honourable gentleman would wish to return to the days of wild extravangance that existed two or three years ago. That kind of pump priming has been shown to be quite inapplicable in a period of high inflation and high interest rates which are a consequence of high inflation. The honourable gentleman ought to recollect that in one year government expenditure went up by 46 per cent and that in that same year unemployment went up by about 200 000. If my memory is correct, throughout the whole period of office of the previous Administration, something approaching 400 000 people entered the workforce, or the workforce expanded by that amount, none of the additional people entering the workforce were taken up by private enterprise- by business employment. What expansion there was occurred merely in the government sector. Under those circumstances we had a situation in which the Government was continually squeezing the private sector and making economic recovery impossible. Indeed, it was shoving us further over the cliff. The policy guidelines we have endorsed will be successful, as they have been in countries such as Germany. We are going to make certain they have a chance to be successful in Australia.

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