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Thursday, 17 May 1973
Page: 2285

Mr WILLIS (Gellibrand) - When this debate was interrupted last night I was making the point that when world prices are accelerating the only realistic way to stop a similar acceleration of domestic prices in a particular country is to take action which puts a restraining pressure on prices. Such pressure can be achieved in a number of ways. Firstly, it can be achieved by appreciating our currency when our balance of payments position is very favourable. Such action reduces the price of imports on the local market and so helps to offset the most important way in which inflation is transmitted from overseas. The Reserve Bank of Australia in its last annual report recognised that this was the case, and of course one of the first acts of the Labor Government was to appreciate the Australian dollar. A second way is to put pressure on prices to ensure that the business environment is competitive, and it is the intention of the Government to change radically the Trade Practices Act to bring about this situation. Thirdly, we can eliminate unused tariff, and in this connection the Tariff Board is conducting a review of tariff levels to determine where excessive protection exists, but this unfortunately is a long term project and will take some time to conclude.

Another way to put restraining pressure on prices is to do what this Bill is intended to do, that is, to establish price regulating machinery. In a situation of intensive world inflation such a method as this is essential if we are to protect ourselves against that inflation. In theory at least, revaluation should be an effective weapon in this regard, but other factors are involved as well in anti-inflation policy in determining the desirabiliy of revaluation; so its use is likely to be limited. Elimination of excess tariff and a removal of restrictive trade practices, though important, would have only a once and for all effect in combating a virulent world inflation. The only way to put a continuing and effective restraining pressure on prices is to establish a price regulating body such as the prices justification tribunal proposed in this Bill. Those who oppose such a measure should realise that what they are saying, in effect, is that Australia should simply inflate along with the general level of inflation in the rest of the world.

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