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Wednesday, 22 August 1973
Page: 194

Mr LYNCH (FLINDERS, VICTORIA) - Will the Treasurer explain to the House why the Government in its first Budget has ignored Australia's central economic problem, that of inflation? Will the honourable gentleman further explain why he failed in the Budget context to give a detailed outline of the Government's proposals to deal effectively with this problem? Wild the honourable gentleman, against the context of the ineffectual anti-inflationary nature of the Prices Justification Tribunal, the Joint Parliamentary Committee on Prices and the recent tariff cuts, outline to this House the positive steps which he now intends to take to control Australia's soaring inflation?

Mr CREAN - As I have said on many occasions in this House, inflation is not a peculiarly Australian disease that commenced at midnight on 2 December. It is something that prevailed in 1971 at 7 per cent, in 1972 at nearly 8 per cent, and is currently running, according to how you do your arithmetic, at something over 8i per cent.

Mr Nixon - Come on.

Mr CREAN - I was never so simple in my approach as to think only of things quarter by quarter. I had hoped that last night I demonstrated that occasionally things have to be thought of beyond the span of a year. However, I must say that I admire the zeal with which members of the current Opposition, who were in government for over 20 years, now want to approach the problems of inflation. They will have an opportunity next week in the debate on the Budget to indicate how they will co-operate in solving the problems of inflation. Meanwhile I simply put that there has to be a lot more thinking out of the implications, that public spending is not worse than private spending, and in the finish it is-

Mr Sinclair - But socialism-

Mr Hayden - Ask the Opposition what it would cut back on.

Mr CREAN - I am coming to that. In the finish it is the aggregate that is important and what this Budget does deliberately is to shift the balance in the direction of more public spending which will go on welfare, health, housing and other sorts of things, and less on private spending. As I pointed out last night, we seem to have a greater ability to make motor cars than to provide roads, and to improve other forms of transport. We are running our building industry really beyond the capacity of the resources at the moment. At present houses are built and are not sewered. Here at least is a chance to begin to grapple with our problems. _

The Budget is fairly limited in itself as to what it can do about inflation because of the rigidity of what we inherited in previous expenditures. The degree of mobility possible in any one year is limited. I simply ask those people who suggest that something ought to have been done - and if they will explain to me what it is I am prepared to listen - what they would have reduced had they been framing the document. I will be interested to hear the learned replies. At least those people will have a week to consider them. Meanwhile I simply repeat that inflation is not peculiar to Australia. Some of its causes are international and some are national. It is not only wages that are responsible for it. I simply say to those on the Australian Country Party side that after all, one way of getting higher incomes for farmers is to pay higher prices for meat, and at least one has to have a sense of equity about the causes of these things.

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