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Electorate talk - the Mini-Budget



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PRIME MINISTER

FOR MEDIA 27 MAY 1979

. ELECTORATE TALK .

The package of economic measures announced by the Government demonstrate in the plainest possible way our commitment to responsible economic management. They dispel any doubts some may have had about our absolute determination to keep up

the fight against inflation. That fight will go on relentlessly.

They demonstrate again that we will not use popularity polls as the yardstick for our decisions. We were not elected to be popular, we were elected to do a job and we are doing that job.

The men and women of Australia have sent us twice to Canberra to restore responsibility and integrity to the management of the nation’s affairs. . . .

Above all, the Treasurer's statement is an unequivocal declaration of a Government wedded to a policy of budgetary and fiscal restraint. It is a declaration of a Government determined to use the taxpayer's dollars with care and responsibility.

The community can be certain of this Government's resolve to , keep spending under control, to keep fighting inflation, to foster economic ..activity that will provide lasting jobs, and to keep taxes at the lowest possible levels.

The decisions to cut heavily into Government spending and to . announce other revenue raising measures were difficult ones. They were taken only after hundreds of hours of examination of proposals and options. But in the final reckoning we had to take

decisions that cut the deficit back. . . .

A high deficit means new inflationary pressures. We weren't prepared to wear that. It would mean the shattering of business confidence inside and outside Australia. That would be disastrous for growth and development arid for new jobs. Therefore, the Government had to take decisions on taxation and other revenue matters. ■ - ; . \ ; ί . . .

Our political opponents will attempt to confuse and mislead the community over the nature of our taxation measures. Let me make the single utterly undeniable point. There will be no .alteration in the take-home pay of wage and salary earners as a result of our decisions.

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In the August Budget the Government will announce decisions on the future of full tax indexation and the tax surcharge. It was not possible to take final decisions in these key areas until revenues become more certain. The only responsible course was to delay that decision until the August Budget because then we will have the full revenue .

figures for the present year which provides the base for the next year.

This decision in no way detracts from this Government's record of tax reform. Under Labor the wage earner on $10,000 was penalised with a marginal tax rate of 45 cents in the dollar. The wage earner on $16,000 was hit with a massive 55 cents

in the dollar. .

Under our tax reforms, the taxpayer earning $10,000 pays, at a marginal rate, which is over 10 cents in the dollar less than Labor's rates.and does so right on up to $16,600.

Thursday's announcement does, not alter this in any way. In addition, up to 500,000 Australians now no longer have to pay income tax at all because we lifted Labor's tax threshold. That meant that under Labor you started to pay tax at a much

lower income than you do under our Government.

All told, it means that Australians are paying $3,000 million less in tax than they would have if Labor's tax scales still applied.

We have been able to introduce these tax reforms because we control increases in Government spending. In Labor's three years Government spending increased by a massive 115 percent. In contrast in our first year the increase was 10 percent, 11 percent in the next year and this year the growth is estimated at about 8h percent, the lowest increase for ten years.

Australians rightly look to their Government for sound economic management. They look to a Government to act with courage and , determination and the record shows that our.willingness to take tough decisions is paying off. . . . .

That is not to underestimate the problems. The. world oil shortage is having an impact on international trade and economic activity. There has been a substantial upwards movement in interest rates overseas and that must have some impact within Australia. There is continuing agitation for higher wages in Australia. Higher prices for beef, other rural products and for metals are good news for the producers but these have an adverse effect on prices. They are adding to inflationary pressures . within Australia. These pressures are recognised. They are being dealt with by the Government. . . .

As a Government we have shown that we are determined to make . responsible, and if necessary, tough and seemingly unpopular . decisions. But we do this because we know the decisions are right for Australia. That's what we were put there to do - — to take the right course for all the people of -this nation.

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