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Monday, 2 December 1985
Page: 2649

Senator MICHAEL BAUME —I refer the Minister for Industry, Technology and Commerce to the forecast by the Treasurer that Australia's inflation rate will fall next year which is in conflict with the criteria on which the Government's recent Forward Estimates were based. This was that the conventional measure of the underlying inflation rate will be 7 per cent next year representing no reduction whatsoever from the Budget forecast of 7 per cent for the implicit price deflater for non-farm gross domestic product for the current financial year. In view of this conflict and of the even worse 2.6 per cent quarterly underlying inflation rate revealed so far this financial year in the national accounts for the September quarter alone, does the Minister still expect the underlying inflation rate to fall next year? How long will it take for the effective protection given by devaluation to Australian business against foreign competitors to be wiped out by Australia's inflation rate which now ranges between double and treble that of our major trading partners?

Senator BUTTON —It has always been said that the effects of devaluation would wash through the system by the end of calendar year 1986. Senator Baume has confused the Treasurer's statement of, I think, Sunday on the declining inflation rate next year-I think he was talking about the latter portion of next year which is consistent with what he said on other occasions-with the Forward Estimates figures. That confusion reflects more on Senator Baume than on the Treasurer. I will look at the Treasurer's remarks, ask him about the matter and give Senator Baume an answer as soon as possible.