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Commonwealth Parliament Offices, 70 Phillip Street, Sydney, Tuesday 5 August 1997, 4.00pm: transcript of doorstop [Cabinet meeting on employment]

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JOURNALIST: What's Cabinet done on unemployment Treasurer?

TREASURER: Cabinet's had some very useful discussions today about employment and the necessary policy measures that need to be put in place to increase employment in Australia and we've reaffirmed the importance of economic growth and getting in place the right conditions for economic growth, for a low inflation, low interest rate growth climate, the importance of getting industrial relations right and the importance of having the right incentives between wages and welfare. In relation to particular programs options on effective delivery in relation to programs will have some further work and some further consideration. But all in all, it's been a useful, constructive discussion.

JOURNALIST: There's a suggestion that you'll change the industrial relations laws as a result of your discussion?

TREASURER: No, the Cabinet reaffirmed the importance that industrial relations improvement have for employment. If you've got a more flexible system, employers find it easier to create jobs. And so, we've reaffirmed the importance of having a flexible industrial relations system which will allow more jobs to be created. We've put in place measures to improve industrial relations. They are just coming on stream this year and we're going to evaluate their success but important changes are already in place and we're going to make sure they're given every opportunity to work.

JOURNALIST: Didn't Professor Sloan want you to go further?

TREASURER: Oh well look we had a number of presentations from a number of different people. Everybody's got their own views but the fact that individuals have particular views doesn't mean it's endorsed by the Cabinet. The position of the Cabinet and the Government is economic growth, industrial relations, improvements in the interaction between work and welfare such as the Work-for-the-dole scheme, and important initiatives in training and apprenticeships. And we think this is a very important part of creating employment, getting back to the apprenticeship systems which we are doing with our modern apprenticeship and training system.

JOURNALIST: How do you think you'll get the confidence that's required for growth Treasurer?

TREASURER: Oh well look all the indications are that growth throughout 1997 is going to be pretty strong by world standards. We're forecasting three and three quarter which is higher than Europe or America. So it's strong growth out there. But you've got good inflation prospects, good interest rate prospects. What we've got to do I think is make sure, not only we get growth up but we keep it up. And what people want to see is long sustained growth. We're not interested in the five minutes of growth, five minutes of recession anymore. We want long sustained growth. And that's what out economic strategy is directed towards producing.

JOURNALIST: Is the Government only aiming to find work for 400,000 unemployed?

TREASURER: No, it is the Government's aim to create an economy which is strong and vibrant and creates jobs for all who want to work. And it also is to create a climate where the incentives are right so that all the incentives are towards work. Now, one of the really important initiatives that we're putting in place over the next two months is going to be the Work-for-the-Dole scheme which says that for somebody who is receiving a benefit from society should be making a contribution back to society. And we are now inundated with people who want to set up the Work-for-the-Dole schemes and they're going to be set up on a pilot basis over the next two months. That gives us the opportunity to see how they work and whether they can be expanded. But it's new, it's fresh, it's exciting, it's never been done before in Australia and it's an opportunity to try and get the interaction between work and welfare right.

JOURNALIST: If all that Cabinet did was reaffirm current policy, what was the point of the exercise?

TREASURER: We, in the Cabinet discuss all aspects of policy from time to time. We have done it in relation to health. We've done it in relation to industry. We do it in relation to the economy. We've had discussions today in relation to employment. But the reason we do it is that we always make sure that we're up to date with the freshest thinking.

JOURNALIST: Did Cabinet discuss lowering minimum wages?

TREASURER: The Cabinet, that's not a policy of this Government to lower minimum wages. We won't be doing that. We've made it clear over the course of the last eighteen months that our industrial relations legislation puts in place a safety net, a minimum, and we're happy with how that's operating. As I said earlier, we'll give those industrial relations changes an opportunity to work and we will assess over the course of this year how they're working in practice.

JOURNALIST: Did Cabinet react to Professor Sloan's comments that unemployment won't drop below 8% and could hit 12% if Wall Street comes down?

TREASURER: Oh well I see that she's said that. Obviously it's not something that many people would agree with and certainly not our view.

JOURNALIST: Do you think that the High Court decision should be used as an opportunity to completely rejig the sales tax system?

TREASURER: Well as I made it clear earlier on this afternoon, it's State business franchise fees that have been struck down as unconstitutional. That will affect State revenues. Now obviously the States are going to want to be put in a position where their revenue is protected. We have had discussions with the States. We have said to the States that if they want to request assistance from the Commonwealth, we give them assistance on the basis that revenues are not increased and prices are not increased. And we will not be increasing any Commonwealth excises. We want to make that clear. We do not want to increase Commonwealth excises. If the States say to the Commonwealth, "we want to continue the State excises, will you help us do that?" We will stand ready to respond. But it's their decision. It's their excises. No Commonwealth revenue has been struck down or found to be unconstitutional. Only the State revenues that have been down or found to be unconstitutional.

- - JOURNALIST: Treasurer do you expect unemployment to rise...

TREASURER: We expect over the course of this year, unemployment to fall. And I expect that by the end of this financial year, we'll see it around or a little below the 8% mark. As the economy picks up throughout the course of this year employment outcomes will improve. A number of indicators that are showing that opportunities are increasing and it's very much part of our policy to get better employment outcomes by the end of the year.

Thank you very much.