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Wednesday, 5 December 1973
Page: 4298

Mr EDWARDS (Berowra) - It is something of an irony that the Minister for Secondary Industry (Mr Enderby), who preceded me in the debate, talked about the economy being in a mess at the time when the Australian Labor Party took over government. It is the mess that the economy is in now that this debate is all about - a mess that exists after 12 months of Labor Government rule.

Mr Whittorn - It is a mess the Government created.

Mr EDWARDS - As my colleague says, the Government created the mess. There are shortages of steel affecting the building and consumer durables industries. There are shortages of cement, consumer durables of all sorts, including furniture, and food products. My colleague, the Leader of the Australian Country Party (Mr Anthony), has stressed the position. It is a situation which the Minister almost accurately described. He said that it is one of too much money chasing too few goods. It is too much demand chasing too few goods that is the cause of the trouble. Money is one thing; it is when it is exercised as demand that it starts to cause the sorts of trouble about which we are talking today. It shows up in a fundamental shortage of labour. It is true that some of the present problems are due to power shortages in New South Wales and Victoria, which in one State at least were fostered by a Minister of this Government, and an enlarged incidence of industrial unrest, absenteeism and labour turnover, all of which contribute to the present situation. They all reflect basically the situation of too much demand chasing too few goods, showing up in a dominating shortage of labour.

One statistic bears eloquent testimony to the whole tale. At the end of October the number registered for employment was just short of 60,000, which is one per cent of the work force, and employment vacancies numbered 86,000, which is way above the number of unemployed. The Minister referred to the situation that existed 12 months ago, when there were higher levels of unemployment. I do not like high levels of unemployment, but inflation rates of 14 per cent per annum are also a great social and economic evil. Let me add, without time to elaborate, that the unemployment at that time was by no means due to the Budget to which the Minister referred.

The Minister said that under the Labor Government production performance, albeit there are shortages, has been great stuff. We have had increases in many items. I think he said that we have had increases as large as 20 per cent in many items. That is true. I might say, though, that to achieve it all the stops have been pulled out. There has been a record increase in the work force, especially in the number of married women in employment. In the month of August there was an increase equivalent to an annual rate, I believe, of the order of 8.2 per cent; and overtime is right up. But that is the end of that road. The stops are all out. The expansion rate of the production performance which has been recorded until just recently cannot possibly continue. That applies to the short run. In the short run that sort of expansion of the labour force is not possible. It applies even more importantly to the medium run and the longer run, because so many of the actions of this Government have created uncertainty and an uncertain basis on which to plan. Investment in productive equipment, which is the long term basis of increased supplies, is inhibited and is not proceeding as it should. So, in the future the situation of shortage that we now have can only get worse.

The position is that demand is way out in front; hence the shortages that plague and disrupt us. This position is due to the policies of the Government. The Government has taken a few steps. It has cut tariffs by 25 per cent. The Minister talked about courage. What hypocrisy! He himself stressed the shortages of available supplies in the world and the virtual inability to obtain goods from overseas. In that situation this courageous Government cut tariffs by 25 per cent. It has raised interest rates to the highest level on record - that has been a great performance by this Government! But its free spending from the very time it took office, superimposed on the recovery which was then under way at an appropriate rate, plus the Government's recent Budget - irresponsible, dishonest and inflationary as it was - which provided a stimulus to spending superimposed on the resurgent private sector, have contributed to the present situation. So when this Government says that it has done all it can to contain inflation it deludes itself and it deludes the Australian public. Its policies to control inflation amount to a nimble footed but pointless operation with one foot hard on the accelerator and the other administering some light but ineffectual jabs on the brake.

I would like to say more about what the Government should do but in the time available let me say one thing that it ought not to do. In this situation the Government now seeks from the people powers to bring in price control. It also talks about incomes control but we would not see any of that even if the people of Australia chose to confer the power on the Government. It is a cruel delusion that the Government would foist on the Australian people that in these circumstances price control is a solution to our problems.

Mr Whittorn - It is a cruel Government.

Mr EDWARDS - It is a cruel Government, as my colleague says. To think that in this situation of excess demand chasing goods already in short supply you can cure anything by imposing price control is a delusion that this Government has led the people of Australia to accept. We heard calm words to a different effect from the Treasurer (Mr Crean) in this House yesterday but that is what the people of Australia expect - a panacea for these problems. In fact, the effect will only be the creation of a vast bureaucracy to run it and to create worse shortages, blackmarkets and all the difficulties that go with them. The only solution is that this Government should adopt proper policies to bring demand and the supply of goods back into balance. Then and only then will the Government not frustrate the social and economic policies that it seeks to implement.

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