Mr MARTIN FERGUSON —My question is to the Prime Minister. Isn't it the case that today's economic data, showing growth running at a pathetic 2.4 per cent, is little more than half the level needed to even begin making inroads into unemployment? Doesn't it mean the unemployment outlook is bleak under your government? When will you start to show leadership by creating jobs and getting the unemployment rate down, including the youth unemployment rate that has grown by two per cent in your first 12 months of government?

Mr HOWARD —Both the Treasurer and I have had something to say objectively and, I think, very accurately about the message that comes out of the national accounts. It is clear, if you analyse the national accounts and you make allowances—as the Treasurer quite rightly did in his answer—for the impact of the change in the area of stocks and put that to one side, you can see some very, very positive signs.

You can see that net exports made a very strong contribution. The figures do confirm that consumer demand is picking up, and there is plenty of evidence around—including the most recent approvals figures—showing that the housing sector is beginning to experience quite a firm recovery. There is certainly some very bright news so far as the resource sector is concerned.

It is true, as the honourable gentleman knows, that unemployment in this country remains too high. It is also true that high unemployment did not arrive on 2 March 1996. It is true, as the honourable gentleman knows, that high unemployment has been a feature of the Australian economic and political landscape for some time. In fact it reached more than 11 per cent when the honourable gentleman ran the ACTU and Kim Beazley was the employment minister. I do not think anybody who thinks about the unemployment problem should gainsay those undeniable facts.

You need higher levels of economic growth in this country—nobody denies that—over a sustained period of time. You also need structural changes to the labour market, which have been begun by this government, the quality and breadth of which are now starting to filter through the business community.

Some of the early critics of the Workplace Relations Act, some of those people who said that it did not go far enough, are now beginning to acknowledge the contribution that it will make to freeing the Australian labour market. Only on Monday I had a lengthy meeting with a very representative group of Australian businessmen and women, and the point was made at that gathering that many of the benefits of that act, after a period of five or six months of operation, are now becoming apparent.

I might remind the House, remind the Australian people, remind the workers of Australia and remind the employers of Aus tralia that the Australian Labor Party did everything it could to stop that act coming into force. The Australian Labor Party did everything it could to frustrate the coming into force of that legislation—as the Labor Party has done everything it can to frustrate the modifications that have already been made to the unfair dismissal laws and the further modifications that will be made in accordance with the announcement that I made at the time of the small business statement.

Unemployment remains a significant economic and political challenge. In the 14 months that I have been Prime Minister, I have never gainsaid that fact. Until the goal that all of us have of a significant reduction in unemployment is reached, it will continue to have that high priority and major preoccupation with my government.

In order to reduce unemployment in a sustained way over a long period of time you need higher growth, you need an infinitely more flexibility labour market and you also need taxation reform. One of the things that will help reduce unemployment in this country is the bringing about of taxation reform. That, of course, almost ineluctably brings me again to the Deputy Leader of the Opposition. The Deputy Leader of the Opposition was asked a question when he arrived this morning.

Mr McMullan —Mr Speaker, I raise a point of order.

Mr Howard —I would be taking a point of order if I were you too.

Mr McMullan —Yes, you would because you would wish to point out, as I wish to, that this section of the answer is clearly not relevant. Raising taxes as a reform question on the matter of jobs fails to take into account the fact that countries without a GST, like the United States, have half the rate of unemployment of countries with one.

Mr SPEAKER —We are not going to debate the issue. I thank you for your point of order. The question centres on jobs creation and the prevailing economic environment with a particular emphasis on youth employment. The Prime Minister's answer is in order.

Mr HOWARD —I have said repeatedly that one of the criteria against which sensible tax reform in Australia has to be judged is whether it creates jobs. If we are interested in the long term and serious about creating jobs in this country we ought to ask ourselves whether or not the present taxation system promotes the creation of jobs. I think it is perfectly relevant to a question about jobs.

Of course, I am therefore brought, ineluctably, to the Deputy Leader of the Opposition, who had this to say this morning:

How many hookers or drug peddlers are going to sit around filling out their 15 per cent VAT forms? How many blokes with the lawn-mower in the back of the ute are going to be accommodating the tax system?

That is a fascinating answer because not only has he used some rather crass examples but he completely demonstrates his utter ignorance of how the tax system works. Of course people who are into tax evasion do not sit around filling out their tax forms, whether they are VAT forms, GST forms, income tax forms or sales tax forms.

The point I would simply make is that all of the people engaged in the three professional categories to which you referred in your answer, Deputy Leader of the Opposition, do not sit around filling out forms. I will tell you what they do do: they do go and buy restaurant meals, and they do go and purchase all sorts of other goods and services. In the process of doing so, they will incur a taxation liability. All I can say to the member for Werriwa is that, if you are trying to get an intelligent debate going on taxation reform in your party, give the Deputy Leader of the Opposition a very wide berth indeed.