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Tuesday, 14 December 1982
Page: 3531

Question No. 5361

Mrs Darling asked the Treasurer, upon notice, on 19 October 1982:

(1) Has his attention been drawn to a report in Brisbane's Courier Mail of 12 October 1982 in which he is reported as saying, during an address to the Annual Conference of the National Readymix Concrete Association of Australia in Sydney on 11 October 1982, that a change in the Government's present economic policies would be a mistake because he believed in achieving lasting economic growth in Australia; if so, is there substance in the report.

(2) What statistical evidence can be produced to show that the Government's economic policies are achieving lasting economic growth.

Mr Howard — The answer to the honourable member's question is as follows:

(1) I am aware of the report in the Brisbane Courier Mail of 12 October 1982 last referring to my address to the Annual Conference of the Readymix Concrete Association on 11 October 1982.

During that speech I stated that those calling for a policy change were not talking about a mere fine tuning of present policies, but rather a major change towards what they choose to describe as expansionary policies. I noted-as I have on numerous occasions-that such a change of policy would inevitably be inflationary at a time when our inflation rate is already much too high and well above that of our major trading partners. I went on to say:

'A change in economic policy at present would inevitably delay in my view a resumption of economic growth. If we were now to adopt policies which produced a rise in inflation and inflationary expectations this would result in Australia not being in a position to take full advantage of world economic recovery when it comes.

The essential policy objective in Australia at present must be to ensure that when there is a resumption of economic growth around the world we are in a position to take advantage of it and to share in it.'

(2) In the three years 1979 to 1981 economic growth in Australia was stronger, and our inflation rate lower, than the average rates for all OECD members. Statistical evidence of this comparatively favourable performance can be found in Tables R1 and R10 at pages 142 and 151 and Tables 1 and 2 on page 14 of the OECD Economic Outlook Number 31 published in July 1982. The basis for that achievement is to be found largely in the consistent, anti-inflationary policy stance of earlier years.

Governments do not, of course, have complete control over economic events and cannot bear sole responsibility for economic outcomes. During 1982 excessive domestic wage increases, combined with a further deterioration in economic activity overseas and, in recent months, the increasingly grave drought in the rural sector, combined to substantially dampen domestic activity.