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Wednesday, 29 August 1973
Page: 583

Mr DEPUTY SPEAKER (Mr Duthie (WILMOT, TASMANIA) - (Before I call the honourable member for Eden-Monaro I warn the members of the Country Party who have been interjecting that if they do not quieten down they may be out of the House. I call the honourable member for Eden-Monaro.

Mr WHAN - With the strong growth and the high level of employment in the current Australian economy the last thing we can afford is a rigid unchanging industrial structure held fossilised by subsidies and tariffs. Contrast the present economy with that of the previous Government. Under that Government not only inflation but also unemployment were its tools of economic management. Again, profits before people. In strong growth conditions bottle necks develop in supplies and prices rise to adjust to demand.

One danger in this situation is that resources will be attracted into luxury areas. It is clear that some shortages will develop in the building sector, for example in the coming year and as the honourable member for Melbourne maintained last night the construction of office blocks may be a luxury we cannot afford this year. It is interesting to speculate on the effects that a shortage of building resources could have on the Budget deficit. Clearly it is essential to supplement domestic supplies with imports and the special report on this subject which is incorporated in the Budget is of obvious importance. Where pricing rigidities exist in the market much thought must be given to increasing imports and perhaps even to subsidising imports in order to provide competition. One area in which such a tactic could perhaps prove profitable is in the area of importing petrol in order to bring the price down. This principle of substituting the commodity on the market is in general what the land commission will do in regard to land sales.

It is ironic that the Leader of the Opposition calls this a 'socialist budget'. Let us take him at his word and consider the 2 elements that are clearly displayed in the Budget. The first is a major and genuine response to social need. The low income, under-privileged, defenceless sections of the community are provided for in this Budget. It is the response of a government with a social conscience. This is indeed socialism in this sense of the word and may the country at large hear the Opposition condemn the motives behind this Budget.

The second aspect of this Budget is that it assumes that a productive economy is one that is free of restraints, that misallocates resources and enables a country to forgo a well educated mobile labour force which removes competitive pressures in the pricing mechanism and which provides a supply of materials to meet the legitimate demands of the community at large. The Leader of the Opposition questioned these assumptions in his speech last night. He condemned the Government for acting on these assumptions. He wants his supporters in industry to be protected from the cold hard reality of business life. For what other purpose are these assistances given to industry if not to protect it from the cold hard reality of a competitive business life? What other purpose do they serve?

A major factor influencing price rises since December has been a rapid rise in food prices, in particular meat. The meat index has risen from 119.4 in December to 144.0 in the June quarter. Industry leaders have not served the Australian meat producers well by responding to this situation with banal slogans. We have been told that the Australian consumer has eaten cheap meat and now must pay. How absurd! How can the housewife pay more for meat when she does not have any more money to go around? Any clear thinking industrial leader should realise that as the price of red meat rises the demand for red meat will fall. People will find alternatives - pork, poultry, and fish. Once the market is established for alternative meats it will be hard to win back the market for red meat. The real question industry leaders should be asking in the interests of the meat producer is just how important is the domestic market to the industry.

Will industry leaders jeopardise the future market share of a short term pricing situation or will they take a longer term view of the market in order to preserve a large component of it for the meat producers? This short term view of price rises is the very basis of inflation. Without co-operation between all sections of the community and without people involved in production and in the market place taking a long term view, no government would ever have the power to control inflation. To talk about an income-prices policy is to deny the fact that in order to control inflation and to run an income-prices policy the Government needs this essential cooperation. An income-prices policy without such co-operation simply bottles up demand and pressures as did controls during the last War - which are released as soon as the controls are lifted. There is no long term solution in an income-prices policy for its own sake without the co-operation and without getting to the core of the matter, namely, increased supplies where supplies are short. In any growth situation, of course, this will happen. Without these increased supplies the inflation ary pressures will continue. It is up to industry and producers in Australia, whose long term interests are at stake, to realise that if they are to keep a share of the domestic market they need to increase supplies on that market through their own voluntary industry effort. I commend this, a far sighted Budget, to the House. It is a Budget which lays the foundations for social reform which will bring to Australia for the first time a proper civilised response to the needs of our people.

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