Aust. inflation rate over 12 per cent

Press, 26 October 1982, Page 1

Aust. inflation rate over 12 per cent

NZPA Canberra Australia's inflation rate has risen to 12.3 per. cent — its highest level in five years — setting back prospects of a cut in home interest rates and hopes for an early economic recovery. The Federal Statistician said Australia’s consumer price index rose by 3.5 per .cent in the September quarter — a result that the Federal Treasurer, Mr John. Howard, said was both surprising and “very disturbing.” Mr Howard said the increase reflected “excessive" wage rises, state budget decisions and state charges. But he- conceded that Federal Budget measures had also been registered in the September quarter rise. The Opposition’s economics spokesman, Mr Ralph Willis, said Australia’s inflation was now higher than it was in 1975 when the Fraser Government took office and asserted that it would fight inflation first. Unemployment had doubled in that time. Mr Willis said.

“Much of the September quarter increase is Govern-

ment induced,” Mr Willis said. Increased health insurance and hospital charges, sharp increases in excise on beer and cigarettes, and higher electricity and telephone charges were all due to Federal Government policies. “Fraser has been fighting inflation by raising prices,” Mr Willis said. Mr Howard said sharp rises in state governmentadministered charges such as petrol prices, electricity charges, and hospital charges had been a significant factor in the September quarter result. The September quarter rise shocked Australian business and union leaders as well as the Government. One business leader said Australia’s return to high inflation rates, at- a time when inflation was generally falling overseas, could affect the views that foreign investors had of Australia’s prospects. The secretary of the Australian Council of Trade Unions, Mr Peter Nolan said the latest figures showed that the Government needed

to adopt an alternative economic strategy. He called for talks on a prices and incomes arrangement. However, Mr Nolan said unions would continue to seek cost-of-living pay rises in the meantime, Mr Howard said, “The latest increase provides no justification for further wage increases, which would only take us further up the inflationary spiral." The Treasurer said Australia’s wages had grown by 3 or 4 per cent more than inflation last year, while wage settlements in West Germany, the United States, and the United Kingdom had all been about or below the inflation rates of those coun-1 tries. “As a result, Australia’s inflation rate is now very seriously out of line with inflation rates abroad.” Mr Howard said. Australia’s inflation rate had been accelerating, while that of other countries had been falling. “It is vital that we act to restrain inflation if we are to restore economic activity and employment levels in Australia.” Mr Howard said.