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Wednesday, 13 October 1971
Page: 2242

Mr WHITLAM - Has the Prime Minister observed that, despite his telephone conversation 5 weeks ago with the chief economist of W. D. Scott and Co., that firm remains unrepentant in its views on the economy? Does its Economic Advisory Service predict in its latest bulletin that the actual figure for - unemployment in January will be 140,000, whereas last January the actual figure, including school leavers, was 89,000? Does he agree with the service that the direct reason for this situation is that demand is insufficient to fully employ our resources'? If so, will he take corrective action immediately as the service recommends or will he wait until March when it foresees that, otherwise, a mini-Budget will be necessary?

Mr McMAHON - It is obvious that the honourable gentleman has read with great care the advice tendered to him by Mr Fred Brenchley of the 'Financial Review' and has asked him to become a little more up to date with his economic knowledge than he has ever been before. Referring to the articles of W. D. Scott and Co., I have not read the last article. I have not had the time to do so and, in fact, I found the last few articles not very interesting or informative. What I have found is that they do change a little and that at least two that I have read in recent weeks have followed very closely the Government's analysis of the position. What I have said in this House, and I have been stressing this point of view since March of this year, is that 1 have bad some feeling that demand is not increasing as rapidly perhaps as might be expected. But I have also pointed out that the potential for demand is extremely great because we find that personal savings have increased by over 64 per cent as compared with last year.

I draw attention to the distinction between deposits in the savings banks and personal savings. Deposits in the savings banks have fallen slightly, but the potential demand including disposable incomes is enormously high. This therefore creates great difficulties so far as potential inflationary pressures are concerned. I think it must be taken without any doubt that the greatest problem we face today is inflationary pressure. If the honourable gentleman in his new wish to find approval from the women of this country asks them what they regard as being the very critical issue he will find that they regard inflation as one of the greatest problems we have to face - one which the Government is facing but with very little or no help from the Opposition.

As to the last part of the honourable gentleman's question, I would like to remind him that we will have entering the work force over the Christmas period this year about 180,000 people including school leavers and also those from tertiary education institutions. Therefore it will not be practicable to say what the number of registrants for employment for the JanuaryFebruary period might be. We certainly expect a larger number of school leavers than ever before to be registering with the Department of Labour and National Service. But again I emphasise this point to the House and to the Australian nation: We have a twofold objective of full and effective employment together with national development, but at the same time we want to do the maximum in the interests of the Australian people to try to control inflationary pressures. The first objective has priority with us, and we have taken up a flexible position. The Budget gives us ample opportunity for flexibility if we consider it to be necessary. I personally will be watching the figures, and when I feel that the moment has come for something to be done, as in the case of the nursing homes, I will be only too anxious to take action.

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