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Government should bring forward economic statement

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L,°e,"meows°onn M eDIA RELEASE


15 December 1991


The leadership battle last week has left financial markets confused and nervous about the future direction of economic policy in Australia.

Those fears have been compounded by reports today that challenger Keating is prepared to pander to populist calls by the left wing of his Party for the abolition of the Medicare co-payment.

Clearly, Keating is prepared to sacrifice anything including fiscal and monetary policy discipline to fulfil his ambitions.

Unless the Government can act quickly and decisively to restore confidence, there is a great risk that foreign investors will reduce their exposure to an already vulnerable Australian economy. A sudden and precipitous fall in the exchange rate would rekindle inflationary expectations and damage the prospect

of an early and sustainable real interest rate relief to hard pressed business and farming sectors.

It is imperative, therefore, that the Government bring forward next week an honest and comprehensive assessment of the economy, incorporating the substantially revised OECD estimates for the world outlook. We simply can't wait to mid-January for such a

statement. The necessary policy actions must then be implemented as soon as possible.

The House of Representatives is resuming on Thursday and the Government should bring down its statement then, allowing a full Parliamentary debate.


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