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Tuesday, 9 November 1976
Page: 2438

Mr WENTWORTH - I direct a question to the Treasurer. I draw his attention to calculations which have been made recently to the effect that had it not been for the cuts in fares in New South Wales, the cost of living in Australia in the last September quarter would have risen by 2.5 per cent in place of the 2.2 per cent which actually occurred. Does this suggest that there may be some more effective ways of fighting inflation than the negative policy of restriction? For instance, what about cutting taxes and charges in order to reduce price increases? Would he discuss this matter with his Treasury officials, who admittedly are somewhat slow on the uptake, to see whether some more effective policy can be devised to meet any inflationary tendencies in the economy?

Mr LYNCH - I pay tribute to the robustness of the honourable gentleman's views on the matter of inflation. Certainly, he has every opportunity on this side of the House to ask me any question which happens to occur to him. I am very well aware of the views of the honourable gentleman on this question. I want to say to him quite clearly without any sense of qualification that the views of this Administration in terms of economic policy are not negative. In fact, those views have the endorsement of every major international economic forum which I have attended since I took over as Treasurer of this Administration.

Mr Hurford - That is not true.

Mr LYNCH - I include, despite the fact that the honourable gentleman is shaking his head, the Organisation for Economic Co-operation and Development conference in May of this year and more recently the International Monetary Fund World Bank meeting in Manila. The Government has no intention of qualifying the essential thrust of the economic policies which it has pursued since coming to power and which we clearly foreshadowed during the course of the election campaign. The Government does not intend at this stage to provide tax relief or to move in any other direction which the honourable gentleman has put down. I make it very clear to the House that part of the reason the monetary package was brought down in Canberra on Sunday night was a reflection of the fact that we intend to remain with the monetary policy which was set out in the Budget documents. So far as what the honourable gentleman says to me is concerned, I would have hoped that instead of endeavouring- I say this with a sense of respect to a very old and distinguished colleague- to second guess -

Opposition members interjecting-

Mr LYNCH - Honourable members opposite may draw marginal comfort from what has been said. That is their judgment and they can remain with it. Instead of seeking to qualify the reasons why the consumer price index has fallen, I would have hoped that honourable members in all sections of the House, whether in Government or in Opposition, would have been prepared to be encouraged by the fact that over the last 3 quarters the consumer price index has shown a significant fall. I would hope that all of us, whatever our views about the economy may be, might have drawn a sense of confidence from a Government that believes that inflation is the number one priority and whose policies are seen to be working. This is so whether one takes the consumer price index or looks at the price index of materials used in house building. They rose by 2.5 per cent in the September quarter compared with 4.6 per cent in the June quarter and 3.3 per cent in the September quarter of 1975. 1 have to say to the honourable gentleman that regardless of what my advisers say to me I reject what he has put forward.

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