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Government advisers question economic policy



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Peter Reith

DEPUTY LEADER of the OPPOSITION PRE S S RELEASE SHADOW TREASURER

GOVERNMENT ADVISERS QUESTION ECONOMIC POLICY

A Government is in desperate trouble when its own advisers start to publicly question policy.

And that's exactly what happened to the Hawke Government this morning.

At the end of the front page story in the Australian Financial Review one former Government economic adviser, and one current economic adviser in Treasurer, John Kerin's, own office seriously questioned key aspects of the Hawke Government's economic

settings.

Professor Barry Hughes, a former senior economic adviser to the former Treasurer, Paul Keating, is reported as arguing "that the wage outlook is inconsistent with keeping inflation around the 3.75 per cent rate, which Acting Treasurer, Ralph Willis this week nominated as the underlying pace of prices growth."

In the very next paragraph, Mr Kerin's new economic adviser, Professor Colm Kearney also questions whether the Hawke

Government has policies in place that will keep inflation down.

The Financial Review says Professor Kearney told the Australian Left Review in July that Australia has done "nothing to

restructure the economy into a low-inflation path."

Professor Kearney is further quoted as sayings

"It's poppycock to argue that, as a result of the

recession, we have managed to purchase a creed of low inflation. We haven't...."

Obviously, both men issued their criticisms when they were not employed by the Government.

But doesn't that give their comments more credibility?

18 October 1991 Melbourne D118/91 Contacts David Turnbull 06 277 4277

COMMONW EALTH PARLIAMENTARY LIBRARY MICAH