One of the Labor government's major problems was financing its programme of sweeping reforms. In the early period of its administration, it attempted to do this through increased government spending. Despite the inflationary trend, the Treasury had advised that the economy could sustain such outlays, if restrained. Soon after the initial budget had put this policy into action, inflation began to accelerate and the economy needed to be dampened by decreased government spending and heavier personal taxation. As inflation increased, unions demanded wage increases at a record rate and, crippled by diminishing profits, the private sector began slowing down.
Unemployment reached the highest levels since the 1930's depression and the government was forced to cut back the spending on its reformist programmes and concentrate on reviving the private sector.
Hence Pickering's cartoon of Whitlam atop an elephant appeared in the Sydney Morning Herald, in 1975...
The words underneath read "Just keep telling yourself you're better off..... I do."
