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Wednesday, 25 September 1974
Page: 1380

Senator TOWNLEY (TASMANIA) -Is the Minister representing the Treasurer able yet to anticipate what inflationary effect will follow the devaluation of the Australian dollar? In other words, what extra percentage of inflation, over and above the 20 per cent increase that we already anticipate, can we now expect following this move to devalue the Australian dollar?

Senator WRIEDT - In answer to a question earlier today I indicated that one cannot make such calculations. One must assume that as a result of the devaluation there will be some slight upward movement in the prices of imported goods. Of course, it only serves to highlight and emphasise the wisdom of the Government's decision of 18 months ago to revalue the dollar in order to arrest the inflationary trends which were already in the economy then.

Senator Webster - What a lot of rubbish.

Senator WRIEDT - If it is a lot of rot, I do not know why the government of which Senator Webster was a supporter did not accept the advice of the Reserve Bank of Australia, 12 months before his Government was defeated, to revalue the Australian dollar then. His Government would not have had the backbone to do what we have done now, any more than it had it then. I refer especially to the Australian Country Party. A slight upward movement in the prices of imported goods is a fact of life which we must accept as part of the decision to devalue. On the advice available to me I understand that the effect will be no more than marginal.

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