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Monday, 6 December 1976

Mr LYNCH - The Government remains determined to bring down the overall rate of inflation in order to provide the basis for a sustained lift in employment and activity. With regard to devaluation, the overall price effects are, of course, determined by the circumstances in which the decision to devalue occurs. Devaluation necessarily has a lesser impact at the early stages of recovery than it has when activity is at full swing. When demand is still short of capacity, as it is at the present time, there is scope and incentive for business to increase output rather than to increase prices. This means that the achievement of lower unit costs in a number of industries will be possible.

I remind the House of the offsetting adjustments which the Government has made to fiscal, wages and monetary policies. The Government will use every endeavour within the ambit of the Conciliation and Arbitration Commission to seek the restraint in relation to wages and salaries which, in the Government's view, is obviously required at the present time to get the overall rate of price inflation down. On the question of tariffs, Ministers have made it clear that this matter is before them at the present time and that an announcement will be made at the appropriate time.

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