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Tuesday, 14 October 1975
Page: 2094

Mr Garland asked the Treasurer, upon notice:

(1)   Was he consulted before the Postmaster-General agreed to the postal rate charges.

(2)   Upon what economic principle is the Government operating with relation to increased postal and telecommunication charges, when increasing charges to cover increased costs, mainly wages, will be immediately transmitted into the Consumer Price Index, then into wages via the wage indexation pledge, and consequently lead to further demands for higher charges because of increased wage costs in the Australian Postal Commission and the Australian Telecommunications Commission.

(3)   Is it a fact that this is completing a futile inflationary circle.

Mr Hayden - The answer to the honourable member's question is as follows:

(   1 ) The proposed increases were considered by Cabinet as a whole.

(2)   and (3) The basic principle is that consumers should meet the cost of goods and services provided for them. If there had been no increases in charges, the Government would have been called upon to provide substantial subsidies to postal and telecommunications services. These subsidies would have had to be financed either by adding to the Budget deficit or by raising additional taxation revenue. Either course would have had adverse implications for inflation and economic recovery. The implications of these increased charges for wages and prices must be seen in the light of Budget policy as a whole.

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