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The predictable result of scorched earth policies



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Peter Reith

DEPUTY LEADER of the OPPOSITION PRE S S RELEASE SHADOW TREASURER

THE PREDICTABLE RESULT OF SCORCHED EARTH POLICIES

Today's consumer price index result is the best for nearly 30 years as a result of the worst recession for sixty years.

Taken on face value alone, the 1.5 per cent (December 1990 to December 1991) CPI outcome is welcome.

But Australians have paid dearly for Mr Keating's scorched earth policy. The issue now is whether or not the Government will fritter away low inflation in a pump priming exercise to try and save some seats in the next election.

The cost of this inflation outcome, in human terms, has been horrific-the highest unemployment since the Great Depression.

For Prime Minister Keating the 1.5 per cent inflation is a

pyrrhic victory: his policies have got inflation down, but he has burnt the economy to the ground in doing i t .

And even now, serious questions remain about the future for inflation.

The key issue is whether the CPI can be kept down, and Labor has no strategy in place to keep inflation under control-they have refused to nominate a target for inflation.

It is disturbing to note that the 0.9 per cent CPI recorded in the December quarter 1991 was the highest quarterly inflation outcome since December 1990.

In its "Fightback" program the Coalition has presented a detailed strategy to revive the Australian economy and keep inflation under control.

An anti-inflation strategy should include a commitment to a independent Reserve Bank and a medium-term goal of price

stability.

D6/92

29 January 1992

Hastings

contact: 06 277 4277

COMMONWEALTH PARLIAMENTARY LIBRARY MICAH