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Thursday, 11 November 1976
Page: 2594

Mr COHEN (ROBERTSON, NEW SOUTH WALES) -I ask the Treasurer Has yet another responsible body, namely, the Institute of Applied Economic and Social Research of the University of Melbourne, forecast that 1977 will see rising inflation, increased unemployment and a breakdown in wage indexation? Does the report claim that the economy has remained stagnant, that output has increased only marginally, that unemployment is rising and that the growth of real gross domestic product for 1976-77 will be only 1 per cent? In view of the constant and repeated claims by responsible economic analysts, such as this type of organisation, that the Government has missed the boat to economic recovery, will the Government review its policies to restore confidence?

Mr LYNCH - I am acquainted With the survey recently conducted by the Melbourne Institute of Applied Economic and Social Research. The House will recall that I have said on earlier occasions, going back to 1972, that I have a sense of muted enthusiasm for the recommendations which that body puts forward, and that attitude remains. The fact is that the Institute is perfectly entitled, as are others in the Australian community, to put forward its views on the direction which economic policy ought to take in this country. I simply make 2 quick points: Firstly, the forecast by the Institute of an inflation rate of 1 1 per cent during 1977 is clearly inconsistent with the most recent evidence about the rate of price increases, and I refer the House to what I said recently about the increase of 2.2 per cent in September. I am not sure that that information would have been available to the Institute at the time that it made its findings. Secondly, the investment forecast is seriously at odds with the latest survey results. As regards the particular points which the honourable gentleman made concerning a review of policies, it is my belief and that of the Government that our economic policies are working. Those policies, which resulted from our concern about the rate of inflation, are reflected in the most recent downturn in the consumer price index, as well as in the other factors to which I referred in the statement I issued last Sunday night.

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