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Budget predictions Macquarie Broadcast

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EMBARGO; 6„ 30 P.M.


Good evening. Last week the Federal Cabinet began framing the pre-election Budget. Looming over the planning for this Budget is the disastrous result of the last Budget. As a direct result of that Budget registered unemployment has stuck for months around the hundred thousand mark - the highest since 1963, and the worst for mid-year since 19&1 . And of course, the figure of registered unemployed understates real unemployment by many thousands. Yet in spite of this, in spite of the pitiful rate of economic

growth of less than three per cent, prices continue to rise. Last week's official figure of six per cent is bad enough, but every housewife knows that the official figures tell only part of the story.

We're told to expect a very generous Budget, and of course it should be. The paradox is that this will be a lavish budget precisely because the last one was so b ad. It works this ways Because of the huge unemployment, because of the very sluggish

state of the whole economy, the Commonwealth can afford to spend very heavily without automatically contributing to inflation this year.

So Blind Freddie could frame a popular Budget this year.

But the important thing is that the Budget should not be just popular in the following three months, but constructive and meaningful to Australia in the long-term. If bad management last year provides the opportunity for good measures this year, then

the challenge to those drawing up the Budget becomes all the greater. The opportunities presented by the mistakes of the past should not be frittered away. Mr. McMahon and Mr. Snedden have the chance to make this year's Budget a truly constructive work, a permanent

contribution to Australia's future.

It's not just a matter of undoing some of the harm done by last year's Budget. I don't suppose it's even possible to compensate a man or his family for the personal damage inflicted by being thrown out of work for months - by going on the dole. And it's not going to be easy - even in their lifetime - for thousands of young Australians to recover the ground they've lost over the last year

~ the jobs they didn't want but had to take, or the year back at school because there were no jobs available.

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The immediate economic problem is to put the unemployed back to work. The best and quickest way to do this would be for every pensioner and every unemployed to receive an immediate cash payment of, say, $100. These are the people who have to spend all they

receive simply to keep going. A payment of the kind I now suggest - indeed I urged it last February - would not be an in-built inflationary force. It would provide an immediate but once-for-all boost.

What’s needed in the Budget is a real re-construction, a permanent investment in the public sector τ in schools, hospitals, social welfare - in rebuilding our cities, in modernising the public transport system. Such measures would not only take up some of the

economic slack, but would be a lasting contribution to the nation’s welfare.

Good night.