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Wednesday, 18 February 1987
Page: 242

Mr PUNCH —Will the Minister for Employment and Industrial Relations inform the House of Australia's record of growth in employment and the importance of trade union co-operation in maintaining high rates of employment growth?

Mr WILLIS —I am pleased to respond to the honourable member because the employment record of this Government is one which is enviable. In the 3 3/4 years that we have been in office, from April 1983 to January 1987, there has been a growth in jobs of 727,000, or 11 1/2 per cent. That is a very large increase in employment and I advise honourable members that three-quarters of those jobs have been in the private sector. The extent of that achievement can be really ascertained only by comparisons with that of the previous Government and those of other countries in the Western developed world.

In its first 3 3/4 years in office the Fraser Government had employment growth, not of 11 1/2 per cent, but of 2.4 per cent. In the same period, up until January of this year, we have had 11 1/2 per cent growth. In the whole period of office of the Fraser Government employment grew by 5.7 per cent, which is about half of what it has grown under this Government in about half the period that the Fraser Government was in office. Obviously, that comparison demonstrates convincingly what a tremendous record this Government has on employment growth.

When compared with other countries, we see that in the past three years-1984, 1985 and 1986-Australia's growth in employment has been faster than that of any other Organisation for Economic Co-operation and Development country. In 1984 only the United States had a faster rate of growth in employment. In 1985 we had the fastest, and in 1986 the OECD estimates are that we will be shown to have had the highest in that year. That, of course, is a tremendous record both by comparison with the previous Government and with other countries.

It must be recognised that such an achievement is really impressive when one bears in mind that over the last two years we have been battling the dramatic decline in the terms of trade-the worst we have had since the 1930s-which has forced us into a period of lower growth and, obviously, of decline in the rate of growth in employment. Nevertheless we still had that tremendous outcome.

A crucial element in that achievement has been the co-operation that we have received from the trade union movement in relation to wage outcomes, which has meant a decline in the real level of wages. That, of course, is not an easy thing for trade union officials to do, but they have done it in the interests of the nation and in the interests of the employment prospects of their members and future members. That has been something which has been crucial to the achievement of the employment outcome that I have mentioned.

Such wage restraint continues to be essential, because the fact is that the adjustment process, which this nation is going through as a result of that dramatic decline in the terms of trade, is far from over and it remains crucially important that the restraint in wage outcomes, which has been demonstrated over the last three or four years, is continued while that adjustment is taking place.

This is not to say that we need a wage freeze, as the Opposition advocates. We do not need a wage freeze. We know that the Opposition advocates tax cuts for the rich and substantial real wage cuts for wage and salary earners. We do not need a wages freeze which would dramatically reduce the living standards of wage and salary earner households in this country, but we need a continuance of a balanced wages policy, one which keeps our wages growth at broadly the rate of growth of our major trading partners. If that does not happen and we have a wages outcome substantially beyond that, we run the risk of a very substantial recession. Those are the economic realities.

The wages policy being pursued by the Government at present strikes the appropriate balance. What we have advocated in the national wage case is a balanced approach to wages policy. If an outcome broadly of that kind is achieved we can continue to have growth in the economy, growth in employment, albeit less than it was in the first couple of years, and a continuance of making the necessary adjustments to the economy. If that wage restraint does not continue, the prospects are that we must look at the real possibility of a recession. Trade union leaders who are making statements at present about the future of wages policy would do well to bear those facts in mind.