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Wednesday, 1 December 1976
Page: 3020

Mr McLEAN (PERTH, WESTERN AUSTRALIA) - I address my question to the Prime Minister. How can the Government prevent the advantages that devaluation brings to the Australian economy being dissipated, particularly with regard to wages policy, control of the money supply and possible short term profiteering by those Australian companies now enjoying higher rates of protection?

Mr MALCOLM FRASER -The honourable gentleman has raised matters that very obviously were in the Government's mind when it made the decision concerning devaluation. At the same time as announcing devaluation the Treasurer announced action in 3 other areas of policy. One concerned the deferment of certain Commonwealth expenditures throughout the rest of this year into next year. Another concerned action in relation to the money supply- honourable members will agree, with regret, that this is necessary in inflationary circumstances- which involves some increase in interest rates. I think that by the end of this week necessary action will be taken so that people can judge the extent and the impact of it. When they do judge it, I believe that no one will be able to give any credit to the somewhat wilder allegations that have been made over the last day or so in relation to action in that area. The action which was proposed to the Government and which has been accepted is reasonable and moderate, and it will be judged to be reasonable and moderate.

In addition, the Government will be reaffirming the view that it has taken on the wages front. We have said on a number of occasions that we regret that there has not been a greater opportunity to test the general common sense of the average Australian rather than paying too much credence to the views of some leaders in this area who I believe do not exemplify the views of the great majority of the people whom they purport to represent. There are other areas also which I believe people have not looked at adequately. One of the reasons why costs in Australian industry are high is that many industries are operating at 60 per cent or 70 per cent of capacity. As we get the inevitable transfer from imported goods to Australian produced goods under the circumstances of devaluation, production runs in Australia should increase. That in itself should give manufacturers an opportunity to contain costs. Any manufacturer with a sense of responsibility certainly ought to do his utmost to do just that. Indeed, one major manufacturer which believes that its production will be able to increase very greatly, not only for domestic markets but also through renewed and greater access to export markets, has indicated that the price of its products should be held now for a considerable period. It makes a particular product that should have flow through effects into many different industries.

Mr Hurford - Which manufacturer is that?

Mr MALCOLM FRASER - I have no intention of naming particular manufacturers in this House. The effects should flow through into a number of different industries. One of the things that people need to understand is that, while there will be some people, as there always are, who will take advantage of an opportunity that is given to them to act in a selfish way rather than in the national interest, I believe that they will be in the minority. I would believe that at this time we are coming to a stage where a great majority of Australians are recognising that there is a national task that involves all Australianswhether they are management or labour- no matter where they come from. In defence of some people who might be accused of speculating, let me point out to the House that there are people who have imported goods from overseas, who have bought on traders' credit and who will be paying in 6 to 8 weeks time at the different rate of" currency. People who have bought goods from overseas on that basis obviously have strong grounds for changing a particular price but people who paid on the old oasis obviously have not and should clear their stocks at the old price. If they have any sense of national responsibility that is precisely what they will do. In other words, there are many things that the Government can do in this particular matter but there are also many things which involve a cooperative effort by people right around Australia in many different activities. The Government, for its part, will continue to explore every avenue open to it so as to be successful in the objectives that it has set itself.

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