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Substantial cuts in personal income and direct taxes should be govt's basic objective in framing next budget



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Leader of the Opposition

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STATEMENT BY BILL H A Y D E N , MP

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Substantial cuts in personal income and indirect taxes should be the Government’s basic objective in framing the forthcoming Budget.

It’s purpose should be to stimulate consumer spending, not to allow it to remain depressed.

Instead, Mr Fraser, Mr Howard and Mr Lynch are signalling further harsh measures which, if implemented, must again undercut economic recovery.

Signs of this have been apparent recently in several key indicators.

Any growth in consumer spending seems to have come to a dead stop, and the indications of increased manufacturing output therefore threaten to increase stocks but not overall economic activity.

Australia is now confronted by 10 to 11 percent inflation by the end of the year unless there is a marked change in economic policy.

The Government's difficulties are being compounded by Mr Fraser's contradictory fiddling with interest rates. He is defying economic logic by trying to force interest rates down as well as money supply. · w

This contradiction is about to be illustrated by the collapse of the Government's money supply strategy following the mishandling of advance payments to wheatgrowers. Mr Fraser's clumsy intervention in this issue now makes higher interest rates inevitable.

On top of this, the Government faces a $1000 million revenue gap in the next Budget which can only be bridged by breaking promises or raising taxes. -

Yet all Mr Fraser and Mr Howard are doing is looking for scapegoats. As the failure of their policies becomes more obvious they are seeking to blame it on others.

The Government itself must accept the responsibility to set the economy on a new course which will ensure sustained recovery and reduced unemployment.

It must redefine its objectives on employment, inflation, money supply and interest rates. It must ensure that the next Budget provides the necessary controlled stimulus for proper recovery which Mr Fraser keeps premising but never delivers.

CANBERRA April 9, 1979