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Pre-Election Economic and Fiscal Outlook (PEFO): Unemployment Benefits



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PRESS RELEASE

Pre-Election Economic and Fiscal Outlook (PEFO)

Unemployment Benefits

This is to clear up a misinterpretation in some areas of the media of the parameter variation for unemployment benefits in 1998-99, published in Table 3 of PEFO issued yesterday.

The revised Treasury parameter for unemployment to be around 8 per cent by the June quarter 1999 increased unemployment beneficiaries by 23,000 for 1998-99. This accounts for $174 million of the unemployment benefits parameter of $396 million in 1998-99 in PEFO.

The unemployment benefits parameter also includes a technical adjustment for those unemployed persons previously receiving Youth Training Allowance, and who now receive Youth Allowance. These persons are included under the parameter for unemployment benefits, which accounts for $243 million of the $396 million in Table 3. Other minor technical factors account for a negative adjustment of $21 million.

In essence, the technical adjustment for the Youth Training Allowance results in a higher than otherwise parameter variation for unemployment benefits and is offset by a lower than otherwise variation in programme specific parameters in Table 3 for 1998­ 99.

It is simply wrong to conclude from PEFO that unemployment beneficiaries are forecast to rise by any more than implied by the Treasury parameter - that is, by any more than 23,000. Claims to the contrary misinterpret the data in PEFO.

Peter J. Boxall Secretary 9 September 1998

Newlands Street Parkes ACT · Telephone 02 6263 2111· Facsimile 02 6273 3021 · Internet www.dofa.gov.au