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Tuesday, 13 November 1973
Page: 3200

Mr DEPUTY SPEAKER (Mr Scholes (CORIO, VICTORIA) - Order! The Minister has spoken in the debate, and I suggest that he allow the honourable member to continue.

Mr NIXON - The Minister may clarify that position. He certainly did not make clear which Dr Jonson he was quoting. The whole of his speech heaped confusion on confusion. He cited the Reserve Bank's annual report but ignored entirely that section of the report which said:

There is scope for further tightening in financial conditions but the gathering strength of private demand suggests it would not be prudent and probably not sufficient to rely only on monetary policy to achieve the desired restraints.

The simple fact is that the Government's policies so far have failed. The best means of describing the Government's failure comes from a piece of doggerel that I read at the weekend. I would like to read it for the edification of honourable members. It says:

Prime Minister Gough and his missus

Through Asia were explaining their thesis.

As through Asia they trot

They both forgot

Australia was falling to pieces.

That piece of doggerel would be quite funny if it did not so truly reflect the serious situation in Australia. Every day headlines appear in the newspapers describing the seriousness of the situation. We have just heard the Minister for Social Security confusing himself and finally sitting down after 10 minutes of lengthy verbiage, having ignored the headlines that appeared this morning in the 'Age' newspaper - 'Inflation near crisis: experts'. An article by Tony Thomas stated:

Australia's inflationary pressure is building up to crisis proportions. This is the consensus of 3 separate economic forecasts released yesterday by business consultants.

The points are taken from November bulletins of the Syntec research group in Melbourne, management consultants W. D. Scott and Co.-

Mr Reynolds - Oh yes!

Mr NIXON - The honourable member may interject and sneer if he likes, but it so happens that the Scott report of last year was one of the reports which the shadow Treasurer of the day, now the Treasurer (Mr Crean), used to quote as the Holy Bible because it was critical of the previous Government's performance. Now because it is saying something critical of his own Government the Treasurer is sitting on the front bench sneering his head off. The article continued:

.   . and business forecasters Philip Shrapnel and Co.

The Syntec bulletin said: 'Within the existing long term interest rate structure, Syntec believes the Government and its advisers are now bent on bringing about a real money crunch before the end of this financial year - even to the point of seeing a rash of bankruptcies thrown up in the process, preferably in land development.'

W.   D. Scott headlined its November newsletter: Inflation rate to speed up, not slow down.'

It described demand pressures as 'rocketing' and said the credit squeeze alone would be unable to check the inflationary spending spree. Excess demand was now so severe that an acceleration of inflation was almost inevitable in the next 4 to 6 months.

Shrapnel's 'economic outlook' said that even apart from food prices, 'inflationary pressures are really building up in the economy'. Imports would give only slight relief, and the Government was doing virtually nothing about cost inflation or restraint of its own spending.

All in all inflation is going to get worse before it gets better.

He then went on to say, in effect, that this could prove to be a headache for the Government. I think that is the understatement of the year. The Government has failed miserably with its policy. The article from which I have just quoted has been stated in differing forms by differing authors for months, and the Government has failed to heed the message. There has been scarcely a reliable economist, banker, industrialist or businessman who has not pressed the same view. The simple fact is that the Government, from its inception, treated the economy as a plaything. As the position has worsened it has taken a number of actions that have proved to be selective by nature and a total failure in application. No government can keep on restating the actions it has taken and be convincing if the actions have failed. The actions which the Government has taken have failed.

The credibility of this Government is damaged because each ad hoc action has been greeted with large headlines as the cure for the inflationary problems, and each action has done nothing but selectively hurt a section of people and industry, and assist the others to profiteer. The first revaluation of the Australian dollar by 7.05 per cent last December was an example. It was stated to be a wonder stroke and an example of the Prime Minister's new personal mastery of economics. Yet all it did was to cost exporters $200m and to fatten the profits of importers. Any unbiased study of the evidence given before the Joint Committee on Prices will show that only in rare cases was the lower price passed on to the consumer. I do not treat the honourable member for Adelaide (Mr Hurford) as being an unbiased student, either. Since then we have had a 25 per cent tariff cut, which again failed to halt the rate of inflation but has done selective damage to industry. We then had a second revaluation which again has cost exporters dearly and has done nothing to halt the rate of inflation.

The Minister for Social Security was keen to quote Dr Porter. The question was asked concerning him this morning and there have been quotes all day of this great Dr Porter. The sheer nonsense of Dr Porter's position is shown by the failure of the Government to halt inflation by revaluation. To argue simply that revaluation months earlier would have cured the present Government's hangovers is sheer nonsense. It is economic stupidity. Having taken these steps the Government either argues that the problem is world wide and beyond its control, or it is because of the high price of meat and vegetables that inflation is soaring. Two points need to be made about that. Firstly, as proven by the evidence given to the sub-Committee of the Joint Committee on Prices which was inquiring into meat prices, the price of meat has only once again reached a point of equilibrium with average weekly earnings compared with the situation 10 years ago, proving only that farmers have been receiving too little for their product in past years. Secondly, while great criticisms were' made about the original Meat Board report to the Government the Government members on the Committee, including the Member for Adelaide and particularly the member for Eden-Monaro (Mr Whan), who represents a rural electorate, recommended a heavy export tax on meat, but the Government accepted the minority report, fortunately, and did nothing. Now the Treasurer complains bitterly about the high price of meat and its effect on the consumer price index. He is the Treasurer who sat at the same table and made the decision to do nothing - such hyprocrisy. The real illness in the economy stems from the Government's own actions and rapid expansion of the Public Service, particularly in the top echelons, combined with the jobsfortheboys mentality. This position was aggravated yesterday by the appointment of Mick Young at $17,000 a year plus expenses. I believe this to be the most outrageous, unethical and indeed immoral appointment in this nation's history, an appointment not for governmental purposes but purely for party political purposes at the taxpayers' expense. It is setting a bad example in national leadership.

The Government then introduced a Budget that was infamous for its attack on country people and almost without exception was seen by economists and writers as expansionary and inflationary. It has been quite apparent that the Government intends to use inflation to finance its own program. That was made clear by the Prime Minister in his policy speech. Regretfully his lack of economic knowledge has placed the Prime Minister in the position of not recognising the outflow of his own words. This ignorance on his part has added fuel to the Government's present dilemma. Government policies have forced inflation to almost the highest. level in history. The Government is the pacemaker of inflation and has not bothered to look at the bad example it is setting. With individual Ministers supporting the strikes which are being held across the nation, the implementation of a 35-hour working week and attacks on many sections of industry, it is no wonder that there is turmoil in the electorate.

Instead of setting a good example by curbing its own excesses the Government has turned its attack to the private sector. Part of this attack has been by an increase in interest rates to a level never before seen in this country. Who in this House does not remember the promises made by the Australian Labor Party when in Opposition and its statement that it was a low interest Party. In fact, the Minister for Immigration (Mr Grassby) stomped around the countryside promising loans totalling $50m at 3 per cent interest to farmers. Who will ever forget that? Certainly not the farmers. They will not forget it. They will take advantage of the next poll to show their disapproval of the Minister for Immigration. The fact of the matter is that the Government's policies have failed badly. What it needs to do is call a conference with the Premiers. It should settle down and seek solutions to its multiplicity of problems. It should work out a policy in full instead of persisting with ad hoc solutions to the situation that we are going through at the present time.

Mr DEPUTY SPEAKER (Mr Scholes - Order! The honourable member's time has expired.

Sitting suspended from LI to 2.15 p.m.

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