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Thursday, 5 May 1994
Page: 332

Senator SHORT —My question is directed to the Leader of the Government in the Senate. I refer the minister to the scenarios for unemployment and economic growth produced in the government's green paper called Restoring Full Employment which showed that Australia would require a high growth scenario of 4 3/4 per cent each year to reduce the unemployment rate to five per cent by the year 2001 targeted in yesterday's white paper. Is the minister aware that Australia achieved growth of this magnitude only three times in the last decade of Labor administration? Will the minister confirm that the government does require at least 4 3/4 per cent growth each year to the year 2001 to achieve its employment and funding objectives? Does the government expect to achieve this growth rate for each of the next six years without exception, particularly given that yesterday's white paper provided nothing of substance to increase economic growth?

Senator GARETH EVANS —As to the last point about providing nothing of substance to increase economic growth, I do not know whether Senator Short wants me to repeat the whole litany again. I will need to remind him that the investment incentives that are spelt out in elaborate detail in this paper relate to pool development funds, infrastructure bonds, capital works, regional headquarters programs, reductions in business administration costs and the export incentives that are laid out in the improvement to the extension of EMDG and ITES schemes, and the new networks that are created overseas. The further micro-economic reforms that will be continuing, and all the rest of the things that have been done over the last decade—none of which the opposition was able to do in government—will contribute to a growth environment, and will do so in ways that add additional growth to that which we have been able to achieve in these conditions before the white paper.

  The new elements in the growth equation include the efforts that are now going to be made—and made successfully—to bring into the labour market a whole heap of people who previously looked like being permanently excluded from it. Improving the supply in that sense increases demand over time. There is a macro-economic linkage between creating the conditions for people to participate and that in turn generating real jobs, because of the available skills that they represent and the way in which their incomes, bit by bit, feed back into the economy and create the conditions for new growth. All of that is there.

  We are presently achieving a growth rate of significantly over four per cent. We got four per cent in the last year, and this year is looking better than that. The regional average growth rate, excluding Japan and the whole east Asian region, is of the order of seven per cent. It is the most dynamic growth area in the world—right to our north. We are very much integrated and locked into that particular area.

  We are superbly poised to take advantage of our position. We were able to achieve, even with the difficulties through the 1980s, growth rates well over four per cent. There is every reason to expect that growth rates of the order of magnitude that Senator Short is talking about are in fact achievable.

  What we have said in the white paper and in the accompanying documentation and statements is that we expect to be able to achieve, by the year 2001, 1 1/2 million jobs more than are presently in existence, with an unemployment rate of five per cent within our grasp. Whether we will precisely get to five per cent at that particular moment or whether it will be a little further delayed, it is impossible at this stage to predict. Of course, it is the case that getting that order of magnitude of job growth will depend on a high order of magnitude of GDP growth. It will depend on high GDP growth well into the four to five per cent range.

Senator Harradine —Part-time, casual jobs; no full-time jobs.

Senator GARETH EVANS —Well, Senator Harradine, jobs are jobs and they are all making a contribution. The participation rate is infinitely higher than it used to be when these sorts of jobs statistics were thrown around as casually as they are now being by those opposite about those percentages. Many more people want access to the work force, but many more people want access to the work force on a part-time or casual basis. It is not the case that everyone seeking a job is seeking a full-time job. They are real jobs. Those casual and part-time jobs are just as real in a family context or in the context of the circumstances of particular individuals. One way or another we believe that it is perfectly realistic and reasonable to expect to achieve the kinds of targets that I have just referred to.

Senator SHORT —Mr President, I ask a supplementary question. In that cornucopia of rhetoric that we have just heard I did not detect answers to either of my two key questions, so I shall repeat them. Will the minister confirm that the government requires at least 4 3/4per cent growth each year to the year 2000 to achieve its employment and funding objectives? That is the key question. Supplementary and additional to that is whether the government expects to achieve that growth rate for each of the next six years without exception.

Senator GARETH EVANS —The precise growth rate that one needs over a period of time to achieve a particular target rate of employment depends on a whole series of assumptions, not all of which can be pinned down obviously with absolute confidence this far in advance. That is just a truism; it is the state of play. Whether we will need 4 3/4 per cent, less than that or more than that will depend on assumptions and possible changing patterns and participation rates and other things over time. I do not intend to hang my hat on any particular arithmetical equation. All I am saying is that I fully accept that growth rates in the range of four per cent plus will be necessary to achieve the kind of employment out-turn targets that we have identified. But we are confident on all the evidence we have at the moment, and on present knowledge and understanding of the way these new policy initiatives will work, that we can meet that objective of 1 1/2 million more jobs and an unemployment rate of five per cent being within our grasp.