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Wednesday, 21 November 1973
Page: 3659

Mr KERIN (Macarthur) - In the few minutes available to me on the adjournment debate I want to speak on matters relating to economics and business. Prior to last Saturday's New South Wales election the Australian Country Party candidate for the seat of South Coast inserted in a local newspaper an advertisement which stated:

Render your protest. The Labor Government in Canberra is crippling your district, your job, your future and your business.

Significantly, as at 20 November 1973 he had received 1,371 votes out of 20,358 voters en rolled. But he was only repeating the statements of his leaders, and tonight I wish to take the opportunity to rebut some of those statements. I do not wish to raise again in any great detail th: debate on the revaluations and the tariff cuts that the Country Party opposed so much, but I would point out that in opposing tariff cuts the Country Party was cutting directly against the rural sector, as the cost of tariff subsidisation is borne largely by the exporting sector.

The benefits of revaluation were stressed in the Treasury publication entitled "The Australian Economy' of August 1973. It stated:

While a strong growth in exports adds to gross domestic product and therefore to the potential for a higher standard of living, this potential will not be realised if the receipts from export sales - which involve a transfer of Australian resources to the rest of the world - are not used to finance a higher level of imported supplies. In short, production for export is a means to an end rather than an end in itself.

Continuing current account surpluses when reserves are already excessive are not only wasteful of resources that could be used to meet internal demands. By adding to domestic liquidity they can, in conjunction with capital inflow, pose considerable problems for ' economic management.

That Australia had a high level of international reserves compared with other countries, even in 1970, is clearly illustrated by referring to a table which was prepared for me by the Parliamentary Library Legislative Research Service. It shows Australian international reserves as a proportion of annual imports. The annual average for the 5 years ending June 1969 was 46 per cent. It was 43 per cent for the year ending June 1970, 60 per cent for the year ending June 1971, 99 per cent for the year ending June 1972, and 114 per cent for the year ending June 1973. This sort of excess of reserves and the effect that it had has recently been enlarged on by Dr Porter. Reference to this matter was made in a debate in this House last week. But even in May 1973 Dr Porter estimated that this excessiveness led to a total speculative inflow of $ 1,500m for the period from January 1971 to September 1972. This implies that about 43 per cent of net apparent capital inflow during this period was based on speculation and that the Australian dollar would have to be revalued.

I return to the statement by the Country Party candidate in the seat of South Coast at last Saturday's New South Wales election. The fact is that the business and rural sectors are undergoing an almost unprecedented boom with record profit levels. Gloom mongering and fear have become the only tactic of Opposition parties, and their negative approach is somewhat summed up by their advocacy of a no' vote to both the prices and incomes referendums. Recently I asked the Parliamen tary Library to prepare a list of the profits of companies by sectors.

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