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Thursday, 9 December 1976

Mr Kevin Cairns (LILLEY, QUEENSLAND) - My question is directed to the Prime Minister and it concerns the totally misleading statements that equate devaluation with the permanence of changes to tariffs and quotas. Is it not correct that, since World War II, the speed of response of domestic economic changes to significant currency alterations has increased? Does this not mean therefore that the quickness of response of domestic and export industries to the devaluation changes will all the more rapidly neutralise the so-called equivalent permanent tariff inflationary effects and increase the balance of payments? So, I ask: Can the speed of this response be accommodated by the new managed float arrangements to be determined by the Exchange Rate Review Committee? Finally, since when has it represented good economic analysis to ignore the most pervasive and consistent factor of all economic and financial experience- the speed of responsiveness of the economic community and the time scale of events?

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