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Liberal-Country Parties' Economic Strategy

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74/148 28 August 1974

The Liberal and Cxrtmtrf'Parties have- presented a clear and fully-argu.eH economic strategy for-nrcrre than a year now. It is the only c o h e r e n t w o r k a b l e economic prescription offered in the political sphere.

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.EED I 1

It is this s There must be general cuts in personal income ΕΞΞλΞΙ) tax of a significant size. I have proposed that the total | _ j —u-J involved should be at least $600 million this financial year. I

There must be an across-the-board pruning of the rate of growth of government spending. p c=*~73

These actions by the national government will provide the (H^e ) government leadership for a policy of cominunity-wide restraint kmj-J through a national conference of unions, employers and governments.

Without restraint in taxation and government spending, there can be no leadership and incentive to induce restraint in prices and wages.

The Labor government is continuing to play dangerous games with Australia’s economic future.

In the past few days we have seen a lacklustre statement by the Prime Minister, taking a^policy line which was contradicted less than 24 hours later by the Reserve Bank in its Annual Report.

We hear that, for the first time in 10 years, the Treasury will not publish its annual statement on the Australian economy, on the pitiful excuse that the Treasury does not have time to write it. The fact is that the Treasury could put the report

together in a matter of hours on the basis of the work it has already done.

The latest in the toxrrent of contradictory leaks from the Government about its so-called Budget strategy is that there may be a significant general tax cut.

Tax cuts must be part of a general economic strategy of restraint. To reduce taxation in the Budget by hundreds of millions without compensating restraint in the rate of growth of Government spending would be the height of economic insanity.

Such a combination of tax cuts and rapidly increasing government spending would lay the basis for an acceleration in inflation that would make the past ί8 months appear taime by comparison.

It is only a fortnight since the Labor Caucus adopted a paper by the Deputy Prime Minister describing such a course as naive, ineffective and inflationary;