INFLATION IN AUSTRALIA

Ashburton Guardian, Volume 70, Issue 129, 16 March 1950, Page 5

INFLATION IN AUSTRALIA

‘CANNOT BE HALTED OVERNIGHT’ CANBERRA, March 15. The Prime Minister (Mr R. G. Menzies), speaking in the Federal Housd of challenged the Labour Party to say whether it would co-operate in the task of “putting the value back in. the Australian £.” Mr Menzies claimed that his Government: Jiaid. inherited a seriously -unbalanced economy, and that since 1946 prices had been rising by 1 to 15 per cent, a year as a result of increased purchasing power and inadequate production. Australia’s national income was £1,900,000,000, of which *£1,500,000,000 was spent on commodities. To cover an average price increase of 10 per cent, a year, a subsidy of £150,000,000 would be needed in the first year and more in subsequent years. Imports of basic materials would only be a temporary measure to assist production, not to compete with local industries. At least 1,000,000 tons of coal, as well as iron) steel, and ' building materials, would be imported into Australia this year. This would absorb purchasing power, but would not add to the burden on manpower. Steel and some building materials would bo admitted duty free.. “Inflation cannot be halted overnight,^”*added Mr Menzies'. “Never was there a more puerile suggestion than one I have heard: ‘What have you done to-night that to-morrow will stop inflation?’ Inflation is a dynamic process. The process of years cannot bd reversed in a fqw weeks.”