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Wednesday, 1 December 1971
Page: 3899

Mr ANTHONY (Richmond) (Minister for Trade and Industry) - We have just heard the honourable member for Cunningham (Mr Connor). He made the classic remark that he was not a calamity howler. I would hate to hear him when he is making a miserable speech because that was one of the most snivelling speeches I have heard in this House. In fact, 1 do not think it would be possible for him to see the bright side of anything, even on the best of occasions.

One of the most interesting things about this debate is the revelation of the Australian Labor Party's new interest in economic affairs. It is just over 2 weeks since the Labor Party's high-powered $20,000 midterm election campaign ended. No doubt most honourable members have forgotten about it. Therefore, I think I should remind honourable members of the subjects covered in that campaign. They were industrial affairs - 1 am sure the Labor Party has not forgotten about that one; defence; immigration - the honourable member lor Grayndler (Mr Daly) would not have forgotten that one; cities and decentralisation; education; and health. But not a word was spoken about primary industry. It is most notable that not one Opposition speaker has this afternoon gone into details of the economic problems of the rural sector of the community. They have practically ignored the subject. But is it any wonder? What could they say? Which Labor viewpoint could they give? lt is most significant to note that there was no reference in that campaign to the management of the national economy.

Apparently there has been such a tremendous change in the last 2 weeks as to warrant the serious action which the Opposition has taken against the Government today. The Opposition has charged the Government with the mismanagement of the economy. I think it is most important to understand what we are talking about in this debate. We are not talking about an economy that is in bad shape. We are not talking about an economy in which there is little growth. We are not talking about an economy in which unemployment is rife. Wc are not talking about an economy marked by balance of payments problems. We are talking about an economy which is, and which is recognised around the world as being, of great strength. We all know that the maintenance of a fine balance in national economies has proved to be extremely difficult in the advanced nations. No country in the world has found it easy to control inflationary pressures. Despite this basic difficulty, Australia and this Government have had an outstanding economic record for many years.

No-one denies that there have been developments this year which have given us cause for concern. The rate of price increase, which is largely due to wage rises, is higher than we would like. There has been an increase in unemployment. Conditions in the rural sector, as a result of reasons largely beyond our control, are a cause for serious concern. But I do not believe that anyone will deny that the Australian economy is basically a sound one - one of the soundest in the world. For many years employment has been maintained at extremely high levels by world standards; in fact; at a level considered to be full employment by any developed country. In the 10 years to 1970 the rate of growth of consumer prices averaged only 2.5 per cent a year, which is a better record than that of almost all other advanced countries. Our overseas reserves are at a record level.

The Government has shown that it is quick to act when it believes that action is necessary. In February we reduced planned Government expenditure. We curtailed the growth of the Public Service and suspended the special .investment allowance for manufacturing industry. We have continued our restraining monetary policy. With our fiscal policy this year we have budgeted for a surplus to forestall what appeared to be a threatening boom in demand, which would add to inflationary pressures. At the same time, in response to the difficulties of the rural sector, we have found a record $560m for direct and indirect assistance to that sector.

I come back again to the inescapable and undeniable fact that the economy is basically sound. There is an extremely high rate of capital inflow which, although it is attacked by the Opposition as something it would stop completely, is an indication of confidence and faith in the economy by those who look at it from outside. There has been a strong trade surplus so far this year. This has led to an extremely strong balance of payments position, with our overseas reserves standing at a record level of $2,626m. The latest national accounts figures are reassuring. For example, the gross national product rose 3.5 per cent in the September quarter over the June quarter. Non-farm output rose 4 per cent in the same period, showing a good recovery from the subdued 1 per cent increase in the June quarter. Nothing I have said, however, evades the fact that there are areas of the domestic economy at which we must look very carefully to determine whether existing policies are adequate. The upward pressure on wages continues. There is also the claim which is to be heard early next year for a $12.50 a week increase in the national wage. The rate of growth of prices is still too high. That is causing serious concern, particularly in a rural sector dependent on overseas markets and returns beyond the farmers' control. The manufacturing sector is finding it increasingly difficult to cope with the upward pressure on costs. 1 believe we need to look carefully and continuously at the high rate of capital inflow and its effect on the economy. We need to understand the implications of the level of unemployment in the rural areas, which could well have very serious social effects. In the search for a means of providing greater stability in the rural areas, I believe wc must attach far greater importance to the policies of decentralisation. In decentralisation we can look forward to a soundly based and longer term instrument of rural strength and stability. In the manufacturing area, I believe we must be careful that industry is not unnecessarily inhibited in taking advantage of modern equipment and techniques which will allow it to continue improving its productivity. I believe that we must when we are looking at the problems of primary producers give consideration to their special needs, particularly in relation to the period of repayment of finance. Those are some of the important matters which the Government must, and does, continually keep under scrutiny. lt is very easy to create an atmosphere of emotion about the economy, particularly when people are prepared to inject a feeling of panic into the employment situation. Any degree of unemployment is a serious matter for the unemployed and, of course, it must be very seriously regarded by any government. But, although a government must be concerned about the feelings and positions of people as individuals, it must be also very concerned about the overall management of the national economy. It must do everything in its power to maintain the very fine balance I spoke about earlier, lt must not be panicked by a highly charged emotional debate into measures which could jeopardise the economy's fundamental strength. lt must accept criticism on particular and limited aspects of the economic situation. And it will accept this criticism if it knows that its management is producing overall a sound economic situation. The Government will continue to act on the domestic front as economic conditions demand. But it will avoid action which would produce violent swings in the economy. In fact, precipitate action could create even bigger problems for exporters, lt is important that ail sectors of the Australian community recognise the need for restraint and cooperation if the existing basic soundness of the economy is not to be undermined.

On the international scene, Mr Deputy Speaker, it is true that there have been some worrying developments in trade. These are to a large degree outside the control of the Government. First, there are the possible adverse effects on some of our traditional exports following the enlargement of the European Economic Community. Here again, over the past decade the Government has been active and has worked in co-operation with marketing boards and individual traders to reduce substantially our dependence on the British market. The British market now takes only 11 per cent of our exports, compared with 24 per cent 10 years ago. If you were to accept the remarks of the honourable member for Lalor (Dr J. F. Cairns) this afternoon you would believe that nothing had been done. This diversification effort will be pursued, and over the coming months and years there will be continuing discussions on a commodity by commodity basis with Britain, and with the EEC itself, on the means to achieve minimum disruption of our existing trade.

Second, there is the continuing currency crisis. Fortunately the major trading nations have not retaliated against the United States for its corrective measures taken in August. At the General Agreement on Tariffs and Trade meeting in Geneva last week, I gained a strong impression that their apprehension about the currency situation will ensure that good sense will prevail among the nations and sensible policies will emerge. We all hope that the current meeting in Rome of the Group of Ten will see a clear advance towards a satisfactory outcome of the present crisis. At the GATT meeting there was also clear evidence of a greater willingness to tackle the problems of international trade in agricultural commodities.

The proposal which I put forward on behalf of Australia for the establishment of an expert group to seek means of agricultural trade liberalisation was very well received, and attracted strong support. It was opposed only by the EEC, Britain and Ireland. This opposition prevented GATT accepting the proposal on this occasion. However, our proposal is still very much an issue and the Council of GATT will keep it under close examination. Australia will certainly continue to seek this objective. The meeting agreed that every opportunity of making progress towards trade liberalistion should be pursued, in both the industrial and the agricultural areas. The contracting parties to GATT also agreed that it was their intention to pursue in GATT a new, major initiative for dealing with longer-term trade problems as soon as this was feasible.

Mr Deputy Speaker,returning to the domestic scene, it is true that the outlook for wool at the moment is extremely serious. But the Government has acted quickly and positively. It provided urgent relief to the industry and to the country communities depending on wool by underwriting the average return at 36c per lb, and has acted in a number of other ways. It is very encouraging to see the industry grappling with its problems and I can assure the industry that we are ready and anxious to work with it in the search for solutions to its difficulties.

In any consideration of the difficulties of the rural sector of the economy, we should not let the wool situation blind us to the strength of other commodities. We have just seen a record sales effort by the Australian Wheat Board. The sugar industry is in a sound position, with good prices and a record harvest this year. There is a strong world demand for beef, and export sales for both beef and mutton are at very high levels. There are promising new markets for coarse grains, especially sorghum and barley. There is a secure domestic market at payable prices for tobacco. Prices for major dairy products are at record high levels. We are all well aware of the enormous progress and prospects of minerals and metals, exports of which have increased 7 times in the last 10 years.

Mr Deputy Speaker,it is completely wrong to suggest that the Australian economy is not sound and strong. If this is the claim of the Opposition in this debate, it is doing a disservice to this House and to this nation. Nothing can be more disruptive of economic confidence than the sort of doubt fostered by this motion. I believe the Australian people will base their judgment not on fear, but on fact. I believe they will look to the Government to react and respond according to economic circumstances, and not according to the kind of doubt which this motion seeks to create.

No one denies that there are limited areas in which the high gloss on our economy may need a little polishing to restore the sheen we are used to seeing. The Government is aware of this. It has acted and will act as necessary to keep the economy at the pitch that has been maintained for so many years under this Government - one of the strongest and soundest economies in the whole world.

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