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Friday, 13 September 1985
Page: 533

Senator MESSNER —My question is addressed to the Minister for Finance. Has the Minister noted the release of the Australian Bureau of Statistics figures indicating that manufacturing costs rose by 12.8 per cent in the year ended 30 June 1985, more than double the consumer price index rate? Has he further noted the ominous increase of 19.3 per cent in the cost of imported materials which represents a significant proportion of input costs for manufacturing, no doubt due now and in the future to the continuing collapse of the Australian dollar since February? Is the Government concerned at the resumption of the fall of the Australian dollar which presages a continuance of inflationary pressures on manufacturing costs and consequently leads to loss of jobs? In light of the Government's cave-in to the Australian Council of Trade Unions on wage discounting last week, what measures does the Government have in mind to minimise the compounding effect of these disastrous foreshadowed cost increases for manufacturing?

Senator WALSH —I had not noted the specific ABS figure to which Senator Messner referred. I am willing-possibly recklessly-to accept that what he said is, in fact, correct and that the ABS has reported those sorts of figures, stating principally that manufacturing costs rose by 12 per cent in the year ended June 1985. Of course, a major contributor to any such rise would have been the increase in inputs to manufacturing which are imported and, therefore, directly associated with the devaluation of the dollar. I understand that the same survey stated that the manufacturing cost increases are presently slowing. As to the 12 per cent, I draw Senator Messner's attention to the fact that in the last two years of the Fraser Government wages costs were increasing by 13 and 14 per cent because we had a wages explosion triggered off by the Fraser Government's first disastrous experiment with deregulating the labour market in May 1981. One would have thought that the Bourbons of the Liberal Party, as has been observed before-even given that they are Bourbons-would have learnt something from the 1981 and 1982 wages explosion which was triggered off by their first flirtation with a deregulated labour market.

What Senator Messner calls the cave-in to the ACTU is, in fact, an agreement between the Government and the ACTU which cements for another two years the wages accord which has reduced the growth of money wages by 50 per cent from the rates which prevailed in the halcyon days of regulation of the former Governments. I note also that Senator Messner and the other economic quislings in the Opposition persist in attempting to sabotage the Australian economy by saying that the value of the dollar will continue to fall. That is one of the fashions set by the former Liberal Party Government during the 1983 election campaign which, one would have hoped, the Liberal Party would now have abandoned under its new leadership. The Liberal Party should cease its persistent attempts to undermine our growth rate and to sabotage the Australian economy by continually foreasting that interest rates will go up and the value of the dollar will go down.

Senator MESSNER —Mr President, I ask a supplementary question. Are we to understand from the Minister's reply that, in fact, this means of controlling the rising costs to manufacturing because of the falling value of the dollar will be again to approach the trade union movement to seek to have wages further discounted for the effect of devaluation, perhaps during the latter part of next year?

Senator WALSH —I do find this sort of question from people like Senator Messner and the other economic quislings rather tiresome. The fact is that real unit labour costs are lower now than they have been at any time since 1970-71. I point out to Senator Messner that this is contained in the Budget Papers, if he would like to look it up. I cannot give him the exact page, but if he telephones my office, it probably can. Real unit labour costs are lower than they have been at any time since the discredited former Fraser Government was in office and Mr Howard was Treasurer. The figure varies compared with the figure in any particular year during the five years when Mr Howard was Treasurer. But it varies between, from memory, something like 5 per cent and 7 per cent. Real labour unit costs are between 5 per cent and 7 per cent lower under the policies of this Government, thanks to the wages accord, than they were at any time when Mr Howard was Treasurer.