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Thursday, 29 March 1973
Page: 850

Mr JAMES (HUNTER, NEW SOUTH WALES) - Did the Acting Treasurer note the comments reported in the Press this morning, attributed to Professor Paul Samuelson, that there had been greater economic growth in Australia under the previous Government? Is this true? How will Australia fare, in his opinion, under the new Government?

Dr Klugman - It will take until lunch time to tell.

Mr HAYDEN - I can assure the honour, able member for Prospect that it will not take until lunch time to indicate what I have to say. An hour would be sufficient. The proof of the pudding will be in the eating, and we are in the process of providing that right now. Our first task as Government has been to lift the economy back on to its feet after its having been flattened by the economic policies of the previous Government. There are clear indications that we are being quite successful in this endeavour. The only area where we should like to see more response is that of private investment. My own feeling is that the response will be forthcoming fairly soon. I should imagine that the Treasurer will be thinking in the terms of a second stage of economic strategy when he will be handling a very buoyant expanding economy in the second part of this financial year. That is my reply to the last point that was raised quite fortuitously by the honourable member for Hunter.

Quite providentially as I was walking out of my office to come to the chamber for question time I noticed a copy of the Organisation for Economic Co-operation and Development economic survey on Australia. I thought I would bring it with me to read. Fortuitously, as the honourable member for Hunter was asking his question, my eye lighted on page 22.

Mr WHITLAM - He gave you the reference.

Mr HAYDEN - You are giving me away. Page 22 refers to economic growth in Australia. Perhaps this section of the report might help to explain how Professor Samuelson was unfortunately misled. It states:

On a per capita basis, Australia's performance appears much less impressive.

In the report it was pointed out earlier that on an aggregate basis Australia's economy seemed to have some impact about it. The report continues:

The high growth of total real GDP was thus more a reflection of relatively rapid growth of population rather than of output per bead.

Among many comments which one could use from a selection in the report to show that Professor Samuelson has misunderstood the Australian situation, I quote this passage:

Throughout the period 19S0-1970 Australia had one of the highest investment ratios of all OECD countries. In terms of growth of output per head of population, this high rate of capital formation appears to have yielded a low return . . .

There are many reasons for this state of affairs and they are largely related to the inefficiency and I would say the reckless irresponsibility with which economic resources have been allocated in the Australian economy. I hope we will move quite quickly to rectify these things in the interests of sound, meaningful, real economic growth rates to achieve real improvements in productivity which were in fact not achieved in the past. I sincerely hope that Professor Samuelson's views on that subject were not infected by those people described by the Minister for Minerals and Energy yesterday as hillbillies.

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