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Monday, 9 May 1994
Page: 397


Senator HILL —My question is directed to the Leader of the Government in the Senate. I refer to the minister's statement in the Senate last Thursday that the white paper on employment was `creating real jobs'. I ask the minister whether he stands by that statement in light of the frank admission by his colleague Senator Cook, who apparently cannot be with us today—


Senator Ian Macdonald —That is why.


Senator HILL —That might be why. On Business Sunday Senator Cook said, `We are not trying to create jobs. What we are doing is training people to be able to fill the jobs when they become available.'


Senator GARETH EVANS —It depends upon which particular aspect of this one is choosing to emphasise. The truth of the matter remains that the job training aspect of the white paper—the jobs compact—is not simply a social justice and an equity provision; it is about creating a larger pool of skilled and capable people which will in turn constitute an economic incentive for businesses to create jobs that they would not otherwise create in the absence of such a large pool of skilled and trained personnel. It does have an economic rationale. I am sure that anything that Senator Cook said was not meant to cut across in any way that particular economic reality.

  It is the case that having a larger pool of trained and skilled people is also helpful in dealing with the inflationary implications of bottlenecks that might otherwise develop through labour shortages in particular sectors as the economy recovers. So it has a macro-economic implication. As I said last week, it is also the case that, as bit by bit those in this larger pool of trained and skilled people come into the work force, the incomes that they are generating and the production that they are engaging in will have macro-economic implications and create the possibility of others benefiting from their presence in the work force through in effect new kinds of demand being created. So, in all those ways there is a macro-economic and job creation impact of the training program; and that remains, from an economist's point of view and from a good public policy point of view, one of the major rationales for this particular white paper.


Senator HILL —Mr President, I ask a supplementary question. I think the minister is accepting what Senator Cook said: that the purpose of the white paper was not to create jobs, but that there will be some macro-economic effect flowing from the creation of subsidised jobs that will in turn produce new jobs. I therefore ask the minister: what is the government's calculation of how many jobs, other than subsidised jobs, will be created as a result of the white paper?


Senator GARETH EVANS —As we all said last week, and as is clear in the text of the white paper, the basic target is to get to an unemployment rate of five per cent by the turn of the century. That is an ambitious goal, but it is a worthy one and we believe it is an achievable one. The number of jobs needed to achieve a five per cent unemployment rate by the turn of the century depends on a whole range of assumptions about employment growth which, in turn, depends on judgments made about the relative growth of national income and also productivity. The extent to which employment growth translates into lower unemployment rates depends in addition on the size of the labour force and the labour force participation rate.

  Every one of those variables that I have just sketched is one that is capable of operating within quite a broad band of actual numerical outcomes. Which particular combination of outcomes exists in relation to each one of those variables will determine the actual number of new jobs that are created as we rise to meet that particular target. It could be anywhere in the range from as few as 1 1/4 million, 1.3 million jobs to of the order of two million jobs. That is an explanation of why some of those assessments are variable.