Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant or accept liability for the accuracy or usefulness of the transcripts. These are copied directly from the broadcaster's website.
Govt not changing jobs forecast, despite wors -

View in ParlViewView other Segments

Govt not changing jobs forecast, despite worsening economy

The World Today - Friday, 13 March , 2009 12:20:00

Reporter: Lyndal Curtis

TANYA NOLAN: As more Australians find themselves out of work, the Federal Government has
acknowledged that people being forced back into the job market may well find there's not a job for
them.

Both sides of politics have been promising that jobs are their priority. With official figures
showing unemployment is rising, the Government isn't yet ready to say if the jobless rate will head
higher than its official forecasts.

Chief political correspondent Lyndal Curtis reports.

LYNDAL CURTIS: Unemployment is now over five per cent but Ministers Gillard, Albanese and Swan
aren't prepared to say if it will go over the seven per cent forecast by mid next year.

JULIE GILLARD: These are tough days, Virginia, there is no doubt about that and we have been very
clear with the Australian public.

ANTHONY ALBANESE: What we are factoring in is doing everything that we can to stop any job loss.

WAYNE SWAN: New forecasts will come naturally as they always do in the budget.

REPORTER: You'll have to revise them upwards - the unemployment figures?

WAYNE SWAN: Well, new forecasts will be in the budget.

LYNDAL CURTIS: Mr Swan is in England for a G20 finance ministers meeting. While he's away Lindsay
Tanner is the Acting Treasurer and he says rising unemployment is a sign of the economy getting
sicker.

LINDSAY TANNER: These figures do show that the economy is deteriorating in the face of very
powerful negative pressures from the global recession.

LYNDAL CURTIS: The Government was even getting a helping hand today from the shadow treasurer Joe
Hockey who was putting the unemployment figures in some perspective.

JOE HOCKEY: And these are concerning figures, but you know what Koshie, when we were elected in
1996 the unemployment rate was 8.4 per cent. So you can get it down, you can make it better; 5.2
per cent is terrible for those that have lost their jobs but Australia started in a very good
position going into this downturn.

LYNDAL CURTIS: The figures show a shift to part-time work and a rise in the number of people
looking for jobs.

Mr Tanner acknowledges that people may be being forced back into the workforce only to find the
jobs aren't there.

LINDSAY TANNER: I suspect that that's true, that there will be some people who, because of their
partner either losing their job or losing overtime, losing work opportunities who are being forced
back into the labour force.

LYNDAL CURTIS: The Opposition's embarked on a strategy this week to try to pin some of the blame
for the worsening economy on the Government, rather than solely on the global gloomy outlook.

It spent yesterday dubbing the situation 'Rudd's recession' and Mr Hockey was keeping that up
today.

JOE HOCKEY: This Government, the Rudd Government has made this the Rudd recession. They have made
it worse.

LYNDAL CURTIS: Mr Tanner says the Government will be judged by its actions.

LINDSAY TANNER: There is no doubt that's true. The way we respond to these challenges will
ultimately be central to how the community judges our performance as a Government and that's fair
enough. That's exactly as it should be.

LYNDAL CURTIS: But the Deputy Prime Minister Julia Gillard is still putting the case that things
would have been worse if the Government hadn't acted.

JULIA GILLARD: The situation would be worse without economic stimulus and the Government moved
quickly to inject stimulus into our economy.

LYNDAL CURTIS: Now Joe Hockey is trying to get in that game as well.

JOE HOCKEY: We would be in a better position today when seven out of our trading partners are in
recession or depression, if the Coalition had have been sending a message of hope and providing
confidence, particularly to small business, that things can get better.

LYNDAL CURTIS: Mr Tanner is in the midst of putting together May's Budget and he says there will be
difficult choices to be made.

LINDSAY TANNER: The overall picture for setting the Budget has changed very significantly, put a
lot of pressure on things that we might otherwise be moving to do, new things. So it's going to be
a tough set of decisions we face.

LYNDAL CURTIS: He's also keeping his eye on how governments around the world go about raising
money.

International economists are warning that developing countries in particular face troubles funding
deficits because of the number of countries issuing bonds.

Mr Tanner says it's certainly possible the extraordinary circumstances will distort the usual flows
of money.

LINDSAY TANNER: Ultimately it will be countries that have got big budget deficits and precarious
finances that will probably have the greatest difficulty. That's always going to be the case when
you have got a major global contraction.

But the real issue here is the huge budget deficit in the United States and the extraordinary
imbalances in finances in the United States. That's been very much at the centre of this global
economic collapse. So the United States has got a big challenge in front of it to get these things
under control.

LYNDAL CURTIS: Is there a prospect that troubles in the bond market, the tightening of credit we've
seen could affect countries like Australia?

LINDSAY TANNER: Look, I don't believe so and we've of course now entered into a position where we
will be raising further government debt.

There is another side of this equation which we shouldn't forget of course and that is that
investors are increasing their investment in bond markets because they are retreating to safety or
the so-called flight to quality, so it is a very mixed picture.

But I don't believe that Australia will encounter these kinds of problems but it's one of the
issues that obviously we have to bear in mind as we are forced to increase our borrowings because
of the budget deficits that have been brought about by an extraordinary drop in projected tax
revenues because of the global recession. So it is a concern that we have to keep an eye on but I
don't believe that we are at any serious risk of encountering those problems.

TANYA NOLAN: The Acting Treasurer Lindsay Tanner ending that report from Lyndal Curtis.