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Thursday, 6 December 1973
Page: 4373

Mr SINCLAIR (NEW ENGLAND, NEW SOUTH WALES) - I ask the Prime Minister whether he seeks a Yes vote at Saturday's referendum in order to transfer powers to the Federal Parliament in order to contain inflation or for some other reason. Does he assert and maintain that all economists, as he told the House a while ago, believe that the Parliament should have power over prices and incomes? I ask the Prime Minister whether he is aware of this statement by Professor Michael Parkin, a visiting research economist with the Reserve Bank:

I don't believe it's sensible to attempt to control inflation by using either direct controls on prices, or wages, or both; both these policies are fundamentally misguided and are- going to miss the central problem. Therefore, I hope that the referendum in December, both parts of it, are not carried.

Mr SPEAKER -The honourable gentleman is quoting from a newspaper. I ask him to put his question.

Mr SINCLAIR - I ask the Prime Minister: In view of Professor Parkin's statement, will he acknowledge that all economists do not believe Parliament should have these powers and, in fact, some advocate a No vote on both the prices and the incomes questions on Saturday?

Mr WHITLAM - The Deputy Leader of the Country Party, like the Leader of the Country Party, selects what passages suit him from speeches or comments made by economists. I well remember Professor Michael Parkin's comments about the causes of inflation in Australia. He said that if our predecessor - the Liberal-Country Party Government - last year had revalued the Australian dollar and if it had made an across the board tariff cut, as the present Government has done, inflation would be much less than it is now. He said, furthermore, that if the Liberal and Country parties had been returned to government a year ago and had continued their policies of shelving, because of their internal differences, any matters concerning tariffs or revaluation inflation in Australia now would be at the rate of 20 per cent. I certainly studied what Professor Parkin said all over. The honourable gentleman quite misrepresents him.

After the honourable gentleman's Leader asked me another selective partial question 1 went out and got a note from Professor Gruen. He stated to me:

A prices and incomes policy has been proposed and supported by many economists including myself, primarily for 2 purposes. First, they have been proposed as a means of controlling or reducing monopoly power in the economy. Secondly, price and incomes policies have a role to play in temporarily containing inflationary price and cost pressures whilst more conventional fiscal and monetary anti-inflationary weapons are being given a chance to act more slowly but more permanently.

It is no surprise to the public in general that the leaders of the Country Party should be resisting prices and incomes powers being reposed in the national Parliament because they do not want monopoly power in Australia to be controlled or reduced. Of course, they would see no purpose in using a prices and incomes policy as a temporary measure until anti-inflationary weapons, which they themselves refused to use, took full effect. I happened to notice in a Queensland newspaper today a big advertisement inserted by the Toowoomba Foundary Pty Ltd - a company which produces agricultural implements and is one of the companies which have exploited the primary producer for decades. It is no wonder that companies such as that oppose the national

Parliament having the power to pass laws on prices. A Country Party Premier, of course, will do nothing to protect country producers. In fact, he shields those manufacturers, such as the Toowoomba Foundary Pty Ltd, which have exploited primary producers for decades.

My view is and always has been that the Australian Parliament should have the concurrent power with the States to pass laws with respect to prices and incomes, as it always has had the concurrent power with the States to pass laws with respect to taxation, bounties, borrowings, currency, coinage, legal tender, banking and insurance. How can there be any such nonsense, except from honourable members opposite, suggesting that the national Parliament should not have these other concurrent economic powers over prices and incomes? Nobody would suggest that the 7 Australian governments could ever effectively get together to pass laws on the matters I have just quoted from the Constitution. Our predecessors sought the collaboration of the State governments on trade practices over the last 12 years, but they never got it. If anything is to be done about prices and incomes policies in this country, it will be done on the initiative of the national Parliament, armed by the Australian people with the necessary contemporary economic power.

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