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Monday, 25 February 1985
Page: 116

Senator WALSH —Senator Button, in answering a question from Senator Dame Margaret Guilfoyle last Friday, indicated that I may add some further information to that supplied by Senator Button. I do not have anything significant to add because the essential point was made by Senator Button, that being that the principles of the wages accord require that the movement in the consumer price index within the last six months be taken into account. In the present national wage case, the movement in the CPI over the last six months was 2.7 per cent. Over the previous 12 months, because of the Medicare effect, it was 2.6 per cent. The Government considered which figure should be presented. A decision was made, given that the principles required the CPI movement of the previous six months to be taken into account, that that is what the Government would do. I understand that it appears to be somewhat incongruous that over the previous 12 months the CPI increase was a marginally lower figure.

Senator Dame Margaret Guilfoyle-Last Friday I also asked whether the Government's decision reflected the fact that there has been a decline in the dollar and a rapid increase in the money supply. I asked whether the Government took that into account when it made its decision to support the 2.7 per cent application in the national wage case.

Senator WALSH —I am not sure how much I should be disclosing about discussions which took place within the Government. However, the principal reason as I assessed it, and, indeed, probably the only reason, was that the principles required a certain form of adjustment. At the time those principles were established I expect that it was not foreseen that the situation which has arisen in the last 12 months would in fact arise, that is, that in some six-monthly period the CPI would actually fall.