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"Crean"Esian Economics



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rCREAN" E S XAN ECONOMICS

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39/74 ;

19/3/1974

¥iiat a black prospect for Australiaί The Treasurer, Mr, Crean,

admitted today inflation, tax hikes and higher interest rates are

the three cornerstones of Labor Government economic policy.

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Thxs is the prospect which the Australian community can expect as

the price of letting government expenditure run riot.

The Treasurer is an accountant and yet in his brief time he has

failed to exert even elementary control over the economy.

As an example, there is his reply to the question I asked him in

the House today.

I asked ~

"Does the Treasurer accept that there are three ways in which there

can be a redirection of resources toward the public sector, that is

by inflation, by higher taxes or by higher interest rates ... will

the Treasurer say which of the three -· or if all three, to what

extent each - will be used to achieve this redirection?"

Mr. Crean answered that all three will be used. He intends to use

inflation, higher taxes, and higher interest rates in combination to

expand government spending. He attempted to suggest that in using

these methods he would be following tradition. He concluded his

statement by saying that he would follow the course of prudence to a

greater degree than the previous government. Overseeing an inflation

rate of 1 3 .2.% and doing nothing about it is neither prudence nor in

the tradition of previous governments.

The economy of this country is not a football match where the highest

rate of inflation wins the match.

In government we would attack inflation not make it a cornerstone

of policy. We would cut government spending and interest rates,

re-structure the tax scales and call a national conference between

the Federal and State governments, employers and unions to achieve

cooperative restraint in wage and price setting behaviour.

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