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Thursday, 24 February 1977

Mr LYNCH (FLINDERS, VICTORIA) (Treasurer) - I can understand why the honourable gentleman does not appreciate the reasons for this Government's seeking, since its electon to office, maximum restraint in the wage and salary area because of its direct impact upon the inflationary spiral. The honourable gentleman has asked me where consumption spending comes from if one seeks maximum wage and salary restraint. I remind the honourable gentleman of the proposition that we have been arguing before the Australian Conciliation and Arbitration Commission and in this House on a number of occasions.

Mr Bryant - I take your point, Mr Speakerthat my question was too long. Is it the Government 's policy to reduce the level of real wages?

Mr SPEAKER -Order! The honourable gentleman will resume his seat.

Mr LYNCH -One of the points raised by the honourable member related to where consumption growth would come from. I remind the honourable gentleman of the concept of household disposable income which probably he does not quite understand. He may be interested to know that household disposable income in fact increased by 5.6 per cent in the September quarter. My recollection is that it increased by about 4 per cent in real terms. We have also said to this House, as we have said to the Australian community, that the key to consumption-that is spending by people in the community as well as by business investment-is the rate of inflation which has seen a significant moderation during the course of the past year. We will seek to build on that progress during the course of 1 977.

As to detailed comments which relate to the Commonwealth's submission to the Conciliation and Arbitration Commission, the honourable gentleman ought to be very much aware that the national wage case opens on Tuesday next week and the details of the Commonwealth's submission will be included therein.

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