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Tuesday, 7 December 1976

Mr HAYDEN (OXLEY, QUEENSLAND) -I direct my question to the Treasurer. Does he remember stating on a number of occasions that the level of consumption in the economy was too low for the health of the economy because the savings ratio was too high? Specifically, does he recall stating in statement No. 2 of the Budget that 'inflation and inflationary expectations . . . caused consumers to save more, and spend less, or current incomes.'? In view of the fact that the devaluation recently announced will lead to some rather fierce increases in the rate of inflation in the country, if his assumptions about household savings ratios being affected by inflation are correct can we expect that the savings ratio will further increase and consumption become even more severely contracted? If this is so what sort of measures has he in mind to offset it in the interests of a healthier economy?

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