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Tuesday, 9 November 1976
Page: 2434

Mr BRYANT (WILLS, VICTORIA) - I direct my question to the Treasurer who is reported to have said that the rate of growth in money and credit has been excessive, creating an upward pressure on prices. What evidence is there that the growth m the volume of money and credit in this situation can be equated to the inflation rate in a period when obviously there is consumer resistance and unused capacity in industry? Will he have tables prepared for the House setting out the factual experience from which his policies are derived?

Mr LYNCH - I will give consideration to what tables may be made available to the House as sought by the honourable member. That information will be provided, after consideration, if the details are available.

Dr J F Cairns (LALOR, VICTORIA) -You -

Mr LYNCH - The honourable gentleman is interjecting. He was, after all, one Minister in this House who printed more money than any Federal Treasurer in Australian history. I find it somewhat ironic that the Opposition should be questioning this aspect of economic policy because its bona fides are shot full of holes. After all the Australian Labor Party in power in 1974 unleashed a credit squeeze that pushed the economy to the depths of recession and put some thousands of Australian workers on the dole. That squeeze, applied during 1974, was far more severe than on any other occasion in which the growth of money supply had been curtailed as a consequence of government policy. I refer, for example, to 1961, 1965 and 1970. That is quite apart from the inflationary consequences of the money printing process, something which one honourable gentleman who interjected employed during his period of Federal Treasurer. As for the facts sought by the honourable gentleman, as I said on Sunday night loans in the September quarter by banks and major non-bank institutions rose at an annual rate of around 20 per cent. The honourable gentleman does not need to be an economic genius to see the nexus between the rate of growth in money supply and the inflationary consequences of an overrapid growth which is beyond the needs of companies to finance expansion and investment.

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