Press statements and conferences

Start Date
01 January 1960
End Date
31 December 1961
Notes
The National Library of Australia is using this item to test handwritten text recognition in Trove
Physical Context
MS 4936-Papers of Sir Robert Menzies/Class. Consignment received 1993/File 42
View Finding Aid

Text

ECONOMIC SURVEY  

 

STATEMENT BY THE PRIME MINISTER  

Strict Embargo; not for broadcasting, Cabling or publication  

before midnight on Sunday, 21st February, I960.  

Last week Cabinet made general survey of the Australian economy.  

This is something we do at fairly frequent intervals. The previous occasion  

was just before Christmas. We always have before us great deal of  

information on employment,, production, consumption and investment expendi-  

ture,, costs and prices, external trade and payments, monetary conditions  

and so on: After studying all these factors, we consider what, if anything,  

the Government should do to influence the situation in one way or another.  

We find good deal in our current position that is favourable  

and encouraging. The employment situation is particularly strong.  

Industrial production continues to rise. Although there has been drought  

in South Australia and some other areas, rural output will, as whole, be  

quite high. We are having good export year. It looks as though the  

total value of exports will be well above Â£900 million. More imports are  

coming in and helping to increase the supply of goods and materials.  

But there are other tendencies which are perturbing. The most  

serious of these is the rise in costs and prices. In some degree this has  

been going on for considerable time, but in recent months it has become  

faster and it is now decidedly too fast. Our aim we believe the aim of  

everyone and not only of the Government must be to slow it down and  

bring it to halt. We say that unequivocally, because we reject the  

view that rise in prices and costs is harmless so long as it keeps within  

"reasonable" limits. We believe that, on all counts, we are better off  

with stable level of prices and costs.  

The rise in prices which has occurred has been due principally to  

causes within our own economy. For long time past, import prices have  

been virtually stable. Export prices, it is true, have risen during recent  

months and this has probably helped to raise the local price of some  

articles. But in the main it has been process of adding, one on top of  

the other, great many particular increases in wages, profit margins,  

charges and the like, some large, some small, but all contributing to  

general upward movement that has grown faster as it has gone on.  

Some people describe recent developments as costs inflation in  

contrast to so-called demand inflation.  

But demand has had its influence as well as costs. Up till  

few months ago it was possible to say that overall supply and demand were  

more or less balanced. Both were increasing but apparently at about the  

same pace. More recently, however, it has become evident that, although  

supplies Ä…re still increasing, demand has started to race ahead.  

Various factors have contributed to this the rise in export income,  

public authority spending, private capital expenditures, capital inflow  

and so on. The combined effect of all these is now capped by the wages  

and margins decisions. The Basic Wage increase is estimated to add Â£65  

million to total wages and salaries; the margins decision further  

amount not far short of Â£100 million. These increases both add to wage  

costs in practically all industries and trades. They also add to  

demand for goods and services of most kinds.  

Along with this rising trend in costs and prices and in demand,  

there has also been growth in the liquidity of banking and monetary  

conditions. It is of course product of some of the factors which have  

caused incomes and expenditure to rise, and its effect is to assist and  

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