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Wednesday, 26 April 1972
Page: 1976

Mr KELLY (WAKEFIELD, SOUTH AUSTRALIA) - I ask the Prime Minister a question. The Prime Minister will have heard of, or seen by way of Press reports, a statement by Archbishop Loane yesterday in which he blamed the Government for the twin evils of inflation and unemployment. Will the Prime Minister inform Archbishop Loane that although Australia's performance is not perfect it can safely be claimed that we have done better than almost any country in the Western world in attacking these twin problems which are indeed endemic to all democratic systems? Would he also inform the Archbishop that a prelate lecturing politicians because of the presence of these twin economic evils is similar to politicians criticising prelates for the continued presence of sin,which has been around the place for even longer and seems to be growing even faster?

Mr McMAHON - I know that the House and particularly the honourable gentleman will forgive me for not replying to thelast part of that question. I say that because the Archbishop is well and favourably known to me and I regard him as a personal friend. If I may answer in substance the 2 questions asked, it is obvious to me that the Archbishop does not have a very great knowledge of the problems associated with inflation or for that matter unemployment. As to inflation it should be known, as I am sure it is well known by the House, that fundamentally or basically the problem is due to wage and income causes and certainly is not due to excessive demand. Action the Government has taken to try to rein in inflationary pressures due to wage causes includes, wherever we have had a right of audience, appearing before the Commonwealth Conciliation and Arbitration Commission and the Public Service Arbitrator. We have taken action in terms of productivity to restore the investment allowance and we have taken action to boost the research and development allowances. On the tariff front, a matter of long term concern, the Minister for Trade and Industry made a statement relating to unused preferences and the Government is examining in detail the problem associated with restrictive practices reforms. In other words, over a very wide area we are watching the problem and taking whatever action we can. If there are excessive wage increases beyond productivity limits there is an in-built pressure and no-one can overcome that problem.

As to the problem of unemployment, it should be well known that in a monetary field over the Christmas period we took off as many monetary restraints as was practicable. Following the Premiers Conference a large amount of money was injected into the income stream. At the same time the Government made a big increase in the unemployment benefit and provided funds to reduce unemployment in country areas. Recently in this House my colleague the Treasurer made a statement relating to the economy. That statement was fundamentally directed towards increasing demand and stimulating growth in employment and therefore reducing unemployment. I shall make certain that His Grace the Archbishop is informed of what the Government has done and that he has every opportunity to form a better view. As to the second part of the honourable gentleman's question on Australia's performance, I agree with the sentiments he expressed.

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