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"The Hawke government's economic performance"



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Deputy Leader of the Opposition

D99/83

ADDRESS BY THE HON JOHN HOWARD HP

TO THE

CO-OPERATIVE HOUSING S O C IE T IE S ASSOCIATION

OF NEW SOUTH WALES

WENTWORTH HOTEL; SYDNEY

1 2 DECEMBER 1 9 8 3

"THE HAWKE GOVERNMENT'S ECONOMIC PERFORMANCE"

Parliament House, Canberra, A,C,T. 2600

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YOU HAVE ASKED ME TODAY TO M AIN LY TA LK ABOUT

THE ECONOMIC PERFORMANCE OF THE HAWKE GOVERNMENT,

I T IS VERY APPROPRIATE THAT I DO T H IS AFTER .

SUCH AN EVENTFUL WEEK, A WEEK WHICH HAS BEEN

MARKED BY TWO MAJOR D E C IS IO N S OF THE GOVERNMENT, -

ONE OF WHICH I FULLY SUPPORT AND THE OTHER I

BE LIEVE TO BE WORTHY OF THE STRONGEST CONDEMNATION, .

THE GOVERNMENT'S D E C IS IO N TO FLOAT THE AUSTRALIAN

DOLLAR IS VERY WELCOME INDEED AND DESERVES THE

FULL SUPPORT OF THE AUSTRALIAN COMMUNITY,

I T REPRESENTS A D E C IS IV E BREAK WITH THE INTE RVE NTIO NIST

AND REGULATORY SENTIMENTS ABOUT THE F IN A N C IA L SYSTEM

EXPRESSED BY THE LABOR PARTY WHEN IN O P P O S IT IO N ,

THE PROCESS OF DEREGULATING THE F IN A N C IA L SYSTEM

WAS COMMENCED BY THE PREVIOUS GOVERNMENT WHEN I T

ESTABLISHED THE CAMPBELL IN Q UIRY AND PROCEEDED

TO IMPLEMENT A NUMBER OF THE MAJOR RECOMMENDATIONS

OF THAT INQUIRY SUCH AS THE BOND TENDER SYSTEM,

THE L I F T I N G OF CERTAIN BANK R E STR IC TIO N S AND THE

DECISION ANNOUNCED IN JANUARY OF T H IS YEAR TO ADMIT

AND CALL FOR AP PLICATIO N S FROM FOREIGN BANKS,

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2,

I VERY WARMLY WELCOME THE FACT THAT T H IS GOVERNMENT

APPEARS TO BE CONTINUING THAT PROCESS IN EARNEST".

IT WOULD APPEAR ONLY A MATTER OF TIME BEFORE THE.

GOVERNMENT ADOPTS THE DECISION OF THE FORMER

GOVERNMENT TO ADMIT FOREIGN BANKS. - .

I ALSO BELIEVE THAT THE ECONOMIC FORCES THEN AT

WORK TO REMOVE THE FINAL CONTROLS ON DOMESTIC

INTEREST RATES W ILL BECOME IR R E S IS T IB L E .

AS I SAID SEVERAL WEEKS AGO; I BELIEVE THE TIME

HAS NEVER BEEN MORE OPPORTUNE FOR AUSTRALIA TO

BECOME A MAJOR WORLD FINANCIAL CENTRE. F R ID A Y 'S

DECISION IS A MAJOR STEP IN TH IS DIRECTIO N.

THE GOVERNMENT MAY BE ASSURED THAT IT W IL L HAVE

THE SUPPORT OF THE LIBERAL PARTY IF IT CONTINUES

TO MOVE ALONG TH IS PATH.

IT IS A REMARKABLE AND WELL DESERVED TRIBUTE TO

THE WORK OF THE LATE SIR KEITH CAMPBELL AND H IS

COMMITTEE THAT HIS REPORT SHOULD HAVE GATHERED UP

SUCH B I-P A R TIS A N SUPPORT.

ON THE OTHER HAND; THE DECISION OF MR HAWKE TO

SPONSOR MR YOUNG'S RETURN TO FEDERAL CABINET IS A

DECISION OF A VERY DIFFERENT QUALITY AND SHOULD

ATTRACT UNRESERVED CONDEMNATION. .

3.

FACED WITH H IS FIR S T CLEAR CHOICE BETWEEN DUTY AND

POPULARITY THE PRIME M IN ISTER HAS CHOSEN THE LATTER.

MR HAWKE-KNOWS FULL WELL THAT MR YOUNG SHOULD NOT BE

, - . RETURN IMG TO THE M IN IS T R Y .

MR HAWKE KNOWS THAT A PERSON WHO HAS IMPROPERLY AND

WITHOUT AUTHORITY DISCLOSED SUCH S E N S IT IV E INFORMATION

IS NOT F IT TO RETURN TO A CABINET P O S IT IO N .

THE PRIME M IN IS TER W ILL UNDOUBTEDLY ESCAPE ANY SHORT

TERM P O L IT IC A L DAMAGE - BUT THE LONG TERM COST TO

H IS STANDING AND AUTHORITY IS GREAT INDEED.

THE POPULAR NOTION IS THAT THE HAWKE GOVERNMENT HAS

DONE A BETTER JOB OF MANAGING THE AUSTRALIAN ECONOMY

THAN WAS EXPECTED AT THE TIME OF IT S ELECTION.

IR O N IC ALLY, T H IS B E LIE F HAS ARISEN BECAUSE THE

GOVERNMENT HAS REPUDIATED SO MANY OF THE ECONOMIC

P O LIC IE S FOR WHICH IT STOOD AND ON WHICH I T WAS

ELECTED.

IN FACT THE DECISION TO FLOAT THE DOLLAR SYMBOLISES

T H IS PROCESS MORE STARKLY THAN ANY OTHER D E C IS IO N .

W illi 1 11 V

FAR FROM REVERSING MANY OF THE ECONOMIC P O L IC IE S OF

THE FORMER GOVERNMENT, WHICH WERE' BLAMED BY THE LABOR

O PPO SITION FOR A U S T R A L IA 'S ECONOMIC D I F F I C U L T I E S ,

THE HAWKE GOVERNMENT IN OFFICE HAS WARMLY EMBRACED

A NUMBER OF THEM, .

T H IS DEVELOPMENT HAS OBVIOUS IM P LIC A T IO N S FOR THE

O PPO S ITIO N ,

I T IS IMPORTANT THAT IN THE FACT OF SOME S E N S IB LE .

ECONOMIC DECISIONS BY THE HAWKE GOVERNMENT, THE

L IB E R A L PARTY SHOULD NOT SEEK REFUGE IN AUTHOMATIC

O PPO SITION .

THE PROCESS OF R E -E S T A B LIS H IN G THE C R E D IB IL IT Y

OF THE LIB E R A L PARTY AS AN ALTERNATIVE GOVERNMENT

INVOLVES THE DEVELOPMENT AND ADHERENCE TO A

CONSISTENT APPROACH TO THE ISSUES - PARTICULARLY

ECONOMIC - FACING AUSTR ALIA AT PRESENT,

I F T H IS INVOLVES PERIODIC PRAISE OF THE PRESENT

GOVERNMENT, THEN SO BE I T .

T H IS SHOULD NOT CONCERN US AS THERE W IL L BE PLENTY

OF OPPORTUNITIES FOR C R IT IC IS M AND AS T IM E GOES

BY THE ADHERENCE BY THE OPPOSITION TO A CONSISTENT

P O S ITIO N W IL L PRODUCE MAJOR DEFINABLE DIFFERENCES

BETWEEN THE GOVERNMENT AND THE O P P O S ITIO N .

.......................................................................... .........

MOREOVER, C R IT IC IS M IS A L L THE MORE CREDIBLE I F I T

IS BASED UPON AN ASSESSMENT OF THE M ERITS OF GOVERNMENT

D E C ISIO N S AS D IS T IN C T FROM A B E L IE F THAT EVERYTHING

THE GOVERNMENT DOES SHOULD BE OPPOSED AND C R IT IC IS E D .

MR HAWKE HAS HAD A LOT OF LUCK WITH THE ECONOMY. -

THE BREAKING OF THE DROUGHT AND THE B E N E F IC IA L EFFECTS

OF THE WAGES PAUSE - PARTICULARLY ON THE IN F L A T IO N

RATE - HAVE BOTH WORKED ENORMOUSLY TO THE GOVERNMENT'S

ADVANTAGE,

THE LANGUAGE OF T H IS GOVERNMENT SO FAR HAS BEEN THE

LANGUAGE OF ECONOMIC MODERATION, ALTHOUGH IN A

NUMBER OF AREAS SUCH AS THE PROPOSED AMENDMENTS TO

THE TRADE PRACTICES ACT WHICH D IS P LA Y A GROSS B IA S

AGAINST BUSINESS AND TOWARDS THE TRADE UNION

MOVEMENT, THERE IS SOME EVIDENCE OF A LABOR

GOVERNMENT REVERTING TO TYPE,

5A.

THE PRIME M INISTER HAS ADOPTED THE TA C TIC OF

CLAIMING CREDIT FOR A LL OF THE GOOD THINGS

WHICH HAVE OCCURRED SINCE HE CAME TO POWER,

HE IS NO DOUBT CONSCIOUS OF THE MAXIM THAT

IF SOMETHING GOOD HAPPENS WHILE YOU ARE IN

GOVERNMENT YOU W ILL RECEIVE THE C R ED IT,

T H IS IS A GREAT STRATEGY IN THE SHORT TERM.

IT MAKES THINGS MORE D IF F IC U L T FOR THE

GOVERNMENT'S OPPONENTS,

HOWEVER; MR HAWKE APPEARS TO HAVE FORGOTTEN

THE OTHER PART OF THE MAXIM AND THAT IS

IF THINGS GO WRONG WHILE YOU ARE IN

GOVERNMENT YOU W ILL GET THE BLAME,

6.

THE GOVERNMENT THAT CLAIMS THE CREDIT FOR A L L ECONOMIC

SUCCESSES MUST ALSO FACE THE PROSPECT FOR CARRYING THE

CAN FOR ANY ECONOMIC FA ILURE, NO MATTER HOW TENUOUS THE

CAUSAL L IN K IN BOTH CASES, ·

THE GOVERNMENT'S PRESENT CLAIMS ABOUT ECONOMIC RECOVERY

W IL L HAUNT I T WHEN THINGS START TO GO WRONG - AND ITS

OWN P O LIC IE S ARE SUCH THAT T H IS W ILL ULTIMATELY HAPPEN.

Un e m p l o y m e n t a n d i n t e r e s t r a t e s w i l l b o t h r i s e n e x t

YEAR; HAVING CLAIMED THE CREDIT FOR T H IS YEAR'S

REDUCTIONS THERE WILL BE NO EXCUSES AV A ILA B LE TO THE

GOVERNMENT WHEN THEY R IS E ,

T H IS IS PARTICULARLY SO AS ITS OWN P O L IC IE S ARE WORKING

TO BRING ABOUT HIGHER UNEMPLOYMENT AND HIGHER INTEREST

RATES - AND IF THE P O LIC IE S BREAK DOWN AS THE PRICES

AND INCOMES ACCORD IS L IK E L Y TO DO, THEN THINGS W ILL

BE EVEN WORSE. "

T H IS IS NOT JUST THE CANTANKEROUS C R IT IC IS M OF A

CARPING OPPOSITION. RESPECTED ECONOMIC COMMENTATORS

L IK E MAX CORDEN IN LAST WEEK'S F IN A N C IA L REVIEW HAVE

POINTED TO THE MADNESS OF FULL WAGE INDEXATION WHILE

THE SUPPRESSED ECONOMIC PROJECTIONS OF THE DEPARTMENT

OF PRIME MINISTER AND CABIN E T, BACKED UP BY THE

DEPARTMENT OF EMPLOYMENT AND INDU STR IAL RELATIO NS,

HAVE DRAMATISED THE NEXUS BETWEEN R IS IN G WAGE COSTS

AND R IS IN G UNEMPLOYMENT.

7,

THE TREASURY ITSELF HAS PUBLICLY WARNED OF THE "GRAVE

r i s k s " in v o l v e d i n an e x c e s s i v e p u b l i c s e c t o r b o r r o w in g

REQUIREMENT (NOW THE LARGEST FOR.A QUARTER OF A CENTURY)

IN THE EVENT OF ANY PICK-UP IN PRIVATE SECTOR A C T IV IT Y ,

T H IS IS NOT TO SAY THAT THERE HAS BEEN NO GOOD NEWS

ON THE ECONOMIC FRONT, BUT IT IS IMPORTANT TO EXAMINE

VERY CLOSELY WHAT THAT NEWS REALLY MEANS,, PARTICULARLY

THE RECENT IMPROVEMENTS IN GUP, UNEMPLOYMENT AND IN

HOUSING THAT HAVE RECEIVED SUCH DRAMATIC HEADLINES

IN RECENT DAYS,

GUP

THE SEPTEMBER QUARTER'S REAL R ISE IN GUP (SEASONALLY

ADJUSTED) TO HAS BEEN EMBRACED BY MR HAWKE AND

MR KEATING AS EVIDENCE OF THE GOVERNMENT'S SUCCESS

ON THE ECONOMIC FRONT,

THAT IS AT BEST A BRAVE THING TO DO AND AT WORST A

FOOLISH ONE, FOR THE MAIN THING THE FIGURES DO IS TO

d e m o n s t r a t e A u s t r a l i a ' s e no rm ous d e p e n d e n c e on t h e

FARM SECTORj UNLESS THE GOVERNMENT REALLY IS CLAIMING

THE CREDIT FOR THE RAIN,» THEN IT HAS L IT T L E TO

CONGRATULATE ITSELF ABOUT,

8.

THE RECORD 4 3 , 2 * REAL R IS E (SEASONALLY ADJUSTED) IN

GROSS FARM PRODUCT IN SEPTEMBER QUARTER, RESULTING

FROM THE BREAKING OF THE DROUGHT, DIRECTLY ACCOUNTS

FOR JUST UNDER HALF THE TOTAL R IS E IN GDP OF 4 . 4 a

IN THE SEPTEMBER QUARTER,

I T HAS ALSO BEEN A FACTOR IN THE RECOVERY IN EXPORT

INCOME WHICH RECORDED THE FIR S T QUARTERLY R IS E FOR

1 2 MONTHS.

WITHOUT THE FARM RECOVERY, GDP WOULD HAVE RISEN BY

ONLY 2 ,2 % , THE SAME REAL RISE (SEASONALLY ADJUSTED)

THAT TOOK PLACE IN THE DECEMBER QUARTER OF 1 9 8 0 , WHEN

PRIVATE SECTOR A C T IV IT Y PLAYED A FAR MORE S IG N IF IC A N T

ROLE.

IT IS A MATTER OF CONTINUING CONCERN THAT THE LARGEST

SINGLE CONTRIBUTION TO A C T IV IT Y IN THE SEPTEMBER

QUARTER, AFTER EXCLUDING THE RURAL SECTOR, CAME FROM

GOVERNMENT CONSUMPTION EXPENDITURE WHICH TOTALLED 1.5%

IN REAL TERMS, SO ACCOUNTING FOR MORE THAN TWO-THIRDS

OF THE NON-FARM GDP GROWTH AND INDICATING THAT THERE

IS NO SIG N IFIC A N T RECOVERY IN THE PRIVATE SECTOR YET

EVIDENT IN THE NATIONAL INCOME FIGURES, '

9,

T H IS IS CLEAR FROM THE CONTINUING FALL IN PRIVATE

SECTOR GROSS FIXED CAPITAL EXPENDITURE, DOWN

IN REAL TERMS (SEASONALLY ADJUSTED) WHICH TOOK PLACE

DESPITE A WELCOME 1 ,/% RECOVERY IN PRIVATE DWELLING

EXPENDITURE, '·

AS A RESULT OF T H IS , PRIVATE SECTOR C A P ITA L EXPENDITURE

HAD A NEGATIVE IMPACT OF ON A C T IV IT Y IN SEPTEMBER

QUARTER WHICH, FORTUNATELY, WAS ALMOST OFFSET BY THE

P IC K -U P OF 1,3% IN NON-FARM STOCKS AS THE COMBINATION

OF LOWER INTEREST RATES AND HOPES OF ECONOMIC RECOVERY

ENCOURAGED BUSINESSES TO END THE STOCK RUNDOWN OF

RECENT TIMES,

WE ALL HOPE THAT THE RISE IN PRIVATE NON-FARM STOCKS

DOES REPRESENT A CORRECT EXPECTATION BY THE PRIVATE

SECTOR THAT BUSINESS W ILL PICK UP - BUT T H IS IS A

NOTORIOUSLY DANGEROUS PEG ON WHICH TO HANG SO-CALLED

"PROOF" OF ECONOMIC RECOVERY,

EMPLOYMENT

THE WELCOME INCREASE IN THE NUMBER OF PEOPLE AT WORK

IN RECENT MONTHS AND THE CONSEQUENTIAL FALL IN UNEMPLOYMENT

DOES NOT DETRACT IN ANY WAY FROM THE LONG TERM THREAT

OF HIGHER UNEMPLOYMENT OUTLINED IN RECENT ECONOMIC PROJECTIONS,

10,

THE GOVERNMENT'S RECENT ACTIONS, PARTICULARLY IN

PREMATURELY ENDING THE CONDITIONS THAT HELPED

GENERATE THESE IMPROVEMENTS, SUCH AS THE WAGE

PAUSE, COMBINED WITH NO PRICE CONTROL OR SURVEILLANCE,

W IL L INEVITABLY ADVERSELY AFFECT EMPLOYMENT GROWTH,

THE IMPACT OF THE RECENT 4,3% FULL INDEXATION RISE

WAS NOT REFLECTED IN THE NOVEMBER FIGURES, BUT I T

W IL L CERTAINLY AFFECT THE CAPACITY OF EMPLOYERS TO

TAKE ON THE SCHOOL LEAVERS WHO ARE NOW BEGINNING TO "

FLOOD ON TO THE LABOUR MARKET,

THE GOVERNMENT'S PRICES AND INCOMES ACCORD, WHICH

HAS REPLACED THE WAGE PAUSE, CANNOT BE CREDITED

WITH HAVING ANY B E N E F IC IA L IMPACT ON THE NOVEMBER

EMPLOYMENT RESULT; NOT ONLY HAD IT OPERATED FOR

ONLY A SHORT T IM E , BUT IT S LONGER TERM IMPACT AND

IT S VERY SURVIVAL ARE BOTH OPEN TO QUESTION,

ONE KEY ELEMENT IN THE ACCORD IS THE PRICES SURVEILLANCE

AUTHORITY B I L L PRESENTLY BEFORE THE PARLIAMENT WHICH

IS SUPPOSED TO RESTRAIN PRICE RISES BUT WHICH THE ACTU

CLAIMS IS SO INEFFECTIVE THAT IT HAS THREATENED TO

DESTROY THE ACCORD UNLESS THE SURVEILLANCE AUTHORITY

IS STRENGTHENED.

11,

I F T H IS B I L L REALLY IS INEFFECTUAL THEN I T IS A SHAH

AND SHOULD NOT HAVE BEEN INTRODUCED; IF IT IS MADE

E F FEC TIV E/ THEN IT IS A DISASTER THAT W IL L LEAD TO

GREATER UNEMPLOYMENT - AND SHOULD NOT HAVE BEEN

INTRODUCED, ,

AS THE SYDNEY MORNING HERALD CORRECTLY NOTED IN AN

E D IT O R IA L LAST WEEK/ THE ACTU (OR THE GOVERNMENT FOR

THAT MATTER) CANNOT DENY THE NEXUS THAT EXISTS BETWEEN

PRICES/ PROFITS AND EMPLOYMENT, .

IF T H IS B I L L REDUCES P R O F IT A B IL IT Y / IT W IL L ALSO REDUCE

THE CAPACITY OF EMPLOYERS TO TAKE ON MORE WORKERS,

PRICE RISES DO NOT COST JO BS/ BUT PRICE CUTS DO,

I F AUSTRALIANS GENUINELY WANT TO SEE A REDUCTION IN

THE NUMBER OF UNEMPLOYED/ THEN THERE IS NO ALTERNATIVE

TO FOREGOING THEIR CLAIMS TO FULL WAGE INDEXATION

U N TIL THE ECONOMY CAN AFFORD IT - AND THAT APPEARS

TO BE SOME TIME OFF. -

THE GOVERNMENT'S DETERMINATION TO SUPPORT FULL WAGE

INDEXATION AND EVEN TO SEEK TO SUPPLEMENT I T BY

SUGGESTING A WAY THAT THE BU ILD IN G UNIONS COULD GET

AROUND THE AGREEMENT NOT TO SEEK A D D ITIO N AL BENEFITS

FOR TWO YEARS, MEANS THAT THE GOVERNMENT HAS RENDERED

THEIR P O L IT IC A L COMMITMENT ON UNEMPLOYMENT IMPOSSIBLE

TO ACHIEVE.

12.

WHAT THEY ARE DOING IN THE WAGES AREA IS PERMANENTLY

AT ODDS WITH THEIR COMMITMENT TO REDUCE UNEMPLOYMENT,

NINE MONTHS IN OPPOSITION HAVE ONLY STRENGTHENED THE

VIEW I HAD IN GOVERNMENT, THAT IF THERE WERE TO BE

AMY SIZABLE REDUCTION IN UNEMPLOYMENT; THOSE IN JOBS

WOULD HAVE TO FOREGO AT LEAST SOME OF THEIR

EXPECTATION OF FUTURE WAGE RISES FOR SOME TIM E ,

THE GOVERNMENT'S DECISION TO RETURN TO FULL WAGE

INDEXATION WAS AIMED AT BUYING INDUSTRIAL PEACE AT

A PRICE THAT, IN ECONOMIC AND P O L IT IC A L TERMS IS FAR

TOO HIGH " AND THE BIGGEST COST W IL L BE IN WORSE

UNEMPLOYMENT.

HOUSING

THE GREATEST STIMULUS TO THE S IG N IF IC A N T IMPROVEMENT

IN HOUSING HAS BEEN FROM REDUCTIONS IN INTEREST

RATES,

GOVERNMENT POLICY HAS HAD NO INFLUENCE WHATSOEVER IN

REDUCING INTEREST RATES (UNLESS THE GOVERNMENT WISHES

TO CLAIM THE CREDIT FOR THE REDUCED LEVEL OF PRIVATE

SECTOR INVESTMENT WHICH HAS HAD SUCH A DEPRESSING

IMPACT ON THE DEMAND FOR MONEY),

THE RECESSION AND REDUCTIONS IN OVERSEAS INTEREST

RATES, ALONG WITH THE FREEING OF THE MARKET THAT

" TOOK PLACE UNDER THE PREVIOUS GOVERNMENT, HAVE BEEN

THE CAUSES OF THE INTEREST RATE REDUCTIONS OF 1 9 8 3 ,

WITH THE ONLY GOVERNMENTAL INFLUENCE BEING THE , -

ENORMOUS LEVEL OF PUBLIC SECTOR BORROWING RESULTING

FROM THE GOVERNMENT'S EXCESSIVE D E F I C I T .

T H A T, I F AN YTH IN G , MAY HAVE L IM I T E D THE EXTENT OF

THE INTEREST RATE FALL THAT COULD HAVE TAKEN PLACE,

W HILE I T IS TRUE THAT SOME G O V ER N M E N T.P O LIC IE S , SUCH

AS THE DEPO SIT ASSISTANCE SCHEME, HAVE PROVIDED THE "

INDUSTRY WITH A STIM ULUS, I T SHOULD BE RECOGNISED

THAT THE THRUST OF THE GOVERNMENT'S HOUSING P O L IC IE S

HAS BEEN TO REDIRECT RESOURCES FROM THE P R IV A TE SECTOR

TO THE P U BLIC SECTOR THROUGH THE STATE HOUSING

A U T H O R IT IE S , T H IS SWITCH WAS ANNOUNCED I N THE

MAY M IN I-B U D G E T ,

SO THE REAL CRUNCH FOR THE GOVERNMENT'S HOUSING

P O L IC IE S W IL L COME WHEN INTEREST RATES R I S E , AS

I S IN E V IT A B L E WHEN THE HOPED FOR INCREASE IN BUSINESS

DEMAND FOR FUNDS RESULTING FROM ECONOMIC RECOVERY

BEGINS TO C O LLID E WITH THE ENORMOUS P U B L IC SECTOR

BORROWING REQUIREMENT THAT EMERGES FROM B I G D E F I C I T S -

AND T H IS W IL L OCCUR, I B E L IE V E , TOWARDS THE END OF

NEXT YEAR.

14.

THE IMPACT OF GOVERNMENT POLICY ON PRIVATE SECTOR

HOUSING, HOWEVER, EXTENDS FAR BEYOND ITS HOUSING AND .

INTEREST RATES P O L IC IE S . FOR EXAMPLE, LOCKING SO

MANY PEOPLE INTO HIGH UNEMPLOYMENT THROUGH IT S HIGH

WAGE P O LIC IE S REDUCES THE POTENTIAL MARKET FOR HOME

OWNERSHIP.

WHILE THE GOVERNMENT'S SOLUTION TO T H IS PROBLEM

APPEARS TO BE TO DIVERT MONEY OUT OF ITS ASSISTANCE

TO THE PRIVATE SECTOR INTO THE PUBLIC SECTOR, THROUGH

STATE WELFARE HOUSING AU TH O R ITIE S , THE O P P O S IT IO N 'S

POLICY IS AIMED AT GENERATING PRIVATE HOME OWNERSHIP,

PARTICULARLY AMONG LOW INCOME EARNERS,

BUT THERE IS NO DOUBT THAT THE CO-OPERATIVE HOUSING

SO CIETIES PROVIDE A METHOD OF MEETING T H IS OBJECTIVE

THAT IS FAR MORE SATISFACTORY IN TERMS OF LIB E R A L

PARTY PHILOSOPHY THAN SIMPLY ENCOURAGING THE GROWTH

OF THE PUBLIC SECTOR INTO AREAS THAT COULD BE COVERED

BY APPROPRIATE ASSISTANCE TO PRIVATE HOME OWNERS,

THERE W ILL ALWAYS BE A NEED FOR PUBLIC SECTOR HOUSING

BUT THE OPPOSITION PREFERENCE FOR PROVIDING HOME OWNERSHIP

IS EVIDENT FROM THE RECORD OF R IS IN G HOME OWNERSHIP

DURING ITS PERIOD IN GOVERNMENT.

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