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Consumer Demand

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E L E C T E D .


PRESS STATEMENT NO. 609 3 December 1975


Mr Fraser has claimed that there is excess capacity . in the private sector. What this means is that consumer demand is not at present adequate to induce firms to fully utilize their existing plant and equipment.

Labor's Budget - the Hayden strategy - recognises this fact* Labor's plan was to rekindle consumer confidence - to stimulate consumer demand.

. .ยท This will take up the slack. Only then will output rise to the limits made possible by existing capital equipment. Only then will investors voluntarily commit themselves . to new plant and equipment. .

' Recovery is not caused by a revival of investment. Consumer demand is king in our economy. .

. Hence Labor's plan.

A revival of demand will lead utlimately to a revival in investment activity. Hence our reduction in company tax rates; hence our introduction of accelerated depreciation.

Labor's plan is to make investment more profitable . in the context of the impending consumer revival.

That revival will emerge from:

1. Revived consumer confidence .

2. Revived consumer take home pay - a result of Labor's new tax plans

3. Revived consumer prosperity - a result of the Hayden plan to put a floor under unemployment.