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Thursday, 30 September 1971
Page: 1725

Mr WHITTORN (BALACLAVA, VICTORIA) - I address a question to the Prime Minister. Because of the regular and high increases in wages granted by the Commonwealth Conciliation and Arbitration Commission and those granted unilaterally by individual firms, how can the Government maintain its constantly avowed policy of full employment?

Mr McMAHON - The economic objectives of the Government remain as they have been for many years. That is, we believe in a high rate of economic growth and progress and full employment. And we want, as far as it is practicable, to maintain stability in our foreign exchanges and prices. Naturally enough in circumstances such as exist at present when wages are rising at a rate of about 10 per cent per annum and productivity at the average rate of 2i per cent per annum we must expect a very substantial increase in inflationary forces and consequently some inconsistency between the objectives we are trying to achieve. Nonetheless, I believe that the decision in the recent carpenters' case was one that must have caused a great deal of difficulty to the members of the Conciliation and Arbitration Commission because they had to consider the precedent of the decision of Mr Commissioner Hood in the metal trades case. It would have been very difficult not to concede the same amount of increase to the carpenters as was granted in the metal trades award. So I understand the reason for the decision.

Nonetheless, I think it wise that I should point out that the members of the Commission specifically drew attention to the fact that it was a difficult decision, but that if and when a national wage case came on they would have to take into consideration the increases that had already been granted. They also mentioned that they hoped there would be no flow on because that could not be justified by the decision dr the rationale for the decision that they had given. But I point out to honourable gentleman - because I had expected questions on this subject in the House this week especially from the Opposition, but have not received them - that all the recent statistics that we have received indicate that the Government's strategy at the time of its Budget is turning out to be successful. 1 can illustrate by figures which indicate that this is the position. The figures for housing have risen by something of the order of 13 per cent as compared with last year. There has been a very substantial increase in production, particularly in household goods or consumer durables and about 47,000 motor vehicles have been registered. All these figures are satisfactory and fit in with what the Government expected and hoped might in fact occur. I also point out that the potential for demand - this is the really, crucial question that faces us in an inflationary situation - still continues to increase, because personal savings were at a very high level and subscriptions to Commonwealth loans were exceptionally good. Consequently, if the psychology can improve - this is all that is necessary - we can get rapid increase in the one area where it is not quite as high as the Government could wish, namely, in consumption expenditure. Nonetheless, having said this, I point out that what we on the Government side have been saying at least since March of this year is turning out to be true and that those who cry wolf and try to create an impression that something unfortunate is occurring have turned out to be wrong. I hope that the figures that emerge in the future will be a further justification of the Government's policy.

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