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Monday, 16 June 2003
Page: 16392


Mrs DRAPER (2:40 PM) —My question is addressed to the Treasurer. Would the Treasurer update the House on the state of business and consumer confidence? What are the factors helping to sustain confidence in the Australian economy?


Mr COSTELLO (Treasurer) —I thank the honourable member for Makin for her question and her interest in economic policy. The recent NAB monthly business survey showed that, notwithstanding a very difficult international situation, business conditions rose by one point in May to an index of plus seven per cent. In addition to that, consumer confidence remains sound. The Westpac Melbourne Institute has indicated that consumer confidence is around 10 per cent above its long-term average, at 110. Last week, when the House was not sitting, the May labour force statistics showed that, for the month of May, employment grew by 29,000 people; unemployment fell by 10,200; most of the job creation was in the full-time sector; and unemployment fell to six per cent. For the first time in a very long period of time, the Australian unemployment rate stands below that of the United States. The United States has a much more flexible labour market than Australia. It is generally assumed that that probably gives the US a two per cent edge against the Australian unemployment figures at the same point in a cycle. The fact that Australian unemployment is now lower than the United States, notwithstanding that structural inhibition we have in Australia, is indicative of the fact that the cycle has been much stronger here in Australia.

What could be done to create further job growth here in Australia? First of all, there is the issue of labour market reform. If the Senate would get out of the way—if it would pass labour market reform—more Australians could have jobs. That would be great for young Australians and home buyers. If the Senate would get out of the way, we could pass the government's budget changes in relation to the Pharmaceutical Benefits Scheme and disability support pension. We could also heighten work incentives and start reforming the welfare system if the Senate would get out of the way and allow the government to get on with restoring economic confidence. Again, this would be one of the great things that would help sustain the Australian economy.

Notwithstanding that, in the midst of a very difficult international environment—a US recession, a downturn in Europe, the Japanese recession and SARS—the worst drought in 100 years and Senate obstructionism, this government has laid down a strong economic program that has kept more Australians in jobs than would otherwise be the case. It has kept lower interest rates than would otherwise be the case. It has allowed young Australians to buy houses, which otherwise would not have been the case. These are the pay-offs from good economic management, all of which have been opposed by the Labor Party. The best thing the Labor Party could do for economic management in this country is to get out of the way and let the government get on with the job.