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Thursday, 9 December 1976
Page: 3571

Mr HAYDEN (OXLEY, QUEENSLAND) - Does the Treasurer recollect saying in this House 3 months ago- on 7 Septemberthat devaluation of the Australian dollar would cause higher unemployment? Does he also recollect saying in this House last Tuesday that the devaluation of this week will restore balance between economic sectors? Does he recognise that those 2 statements taken in conjunction indicate a belief on the part of the Treasurer that a balanced economy requires much higher unemployment? I ask him: How much higher?

Mr LYNCH - How ironic it is that the honourable gentleman, who has been responsible for much of the speculation that took place before the decision and which in fact led to the decision, ought to assume some position of probing in this House. Let me go on the record again as saying that the honourable gentleman more than virtually any other man in this country must accept responsibility for recent events during the period from September to when the decision was made. He is one who ought to have known better and who I believe does know better, but he is prepared to sacrifice a sense of national responsibility for purely party political reasons.

The honourable gentleman asked me about 2 statements. The first was a statement issued by me some months ago, with consistent statements by me, by the Prime Minister and by other senior ministers since our return to Government, about the impact of a devaluation decision. What the honourable gentleman conveniently overlooks is that all the statements which were made up to the time of the decision to devalue, and the statements on devaluation as a matter of Government policy, were made without any reference whatsoever to offsetting anti-inflationary measures. That was a consistent line. No one on this side of the House has sought to deny that the decision to devalue has some inflationary consequence. But I say to the honourable gentleman that, unlike the decision taken by him and his colleagues, this Government has taken a series of offsetting measures which are designed to protect the community against the inflationary consequence of the decision. The honourable gentleman went on to seek from me some estimate of the precise figure of inflation.

Mr Hayden - I raise a point of order, Mr Speaker. I asked the Treasurer to quantify the level of unemployment that he projected would follow a devaluation. Once again, he is confused on this issue.

Mr SPEAKER -There is no point of order. The answer needs to be relevant to the question and I rule that the answer is relevant.

Mr LYNCH - I find it a matter of classic irony that the honourable gentleman should seek in this House precision in areas in which he refused consistently, time after time, as Treasurer to elucidate in this House. I can recall the honourable gentleman refusing to indicate the size of the Budget deficit to the nearest $ 1,000m. That is the record of the honourable gentleman. I have no doubt that he did that because he sought to cover up the fact, as this Government discovered when it came into office, that the deficit was running at about $4 billion. The honourable gentleman talks in this House about unemployment and inflation. One thing that is a matter of record is what occurred during the past 3 years. The Opposition created the legacy of tragedy in both unemployment and inflation. The honourable gentleman, from his own experience, will know that it is not possible at this time to quantify the levels of unemployment or inflation that might follow from devaluation.

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