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Monday, 25 February 1985
Page: 95

Mr HOWARD —My question is addressed to the Prime Minister. Is it a fact that any benefit to the competitive positions of Australian industries from the recent depreciation of the Australian dollar will be irretrievably lost if resultant cost increases are passed on by means of full wage indexation? Will the Government therefore argue at future national wage case hearings before the Australian Conciliation and Arbitration Commission that increases should be discounted to take into account the effect of that depreciation on the consumer price index?

Mr HAWKE —I am indebted to the honourable member for his question. He raised a matter of importance and I want to treat it with the seriousness which it deserves. I am glad that contained in the question is the acknowledgement that any sensible understanding of what has been happening to the level of the Australian dollar has to recognise that there are some minuses and some pluses. The honourable member's question acknowledges that, with the decline in the value of the dollar, there are some advantages in terms of increased competitiveness. It is a valid question for the honourable member to ask what is the relationship between that and the approach that the wage fixing authorities will take. I simply want to say to the honourable member that the Government is yet to finalise its position in these matters. I do not believe that in this case it is appropriate that we should potentially undermine the very substantial adherence that there has been to the prices and incomes accord.

I know that there are differences between the honourable member and this side of the House as to the efficacy of the prices and incomes accord. At the start of this Parliament, I simply want to put firmly on record again our belief that the prices and incomes accord and the substantial adherence to that accord by the overwhelming majority of the trade union movement in this country have been centrally important in the significant economic recovery that has been made. So when one looks at a question such as this, which has been raised by the honourable member and which may have some superficial attraction about it-I accept the way in which the honourable member puts it-nevertheless, one has to put against that the importance, in our judgment, of ensuring adherence to the accord. We are not going to do anything to jeopardise that. We will, in drawing up our final position for the Commission, take those things into account.