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Labour force figures necessitate major budget revision



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Senator ¬ęTim Short Shadow M inister for Finance and Shadow Minister Assisting the Leader on Commonwealth/State Relations

SMF 29/91

LABOUR FORCE FIGURES NECESSITATE MAJOR BUDGET REVISION

The seasonally adjusted number of unemployed persons in March was the highest ever recorded by the ABS survey - 777,100.

At 9.2%, the toll of the engineered recession continues to

escalate cruelly and dramatically.

There is now every likelihood that recorded unemployment will top 10% in the coming months.

The rate in Queensland (10.2%) and Western Australia (10.3%) has already in March leaped to beyond this milestone figure. Only in New South Wales is the rate now below 9%.

These figures severely underestimate the real unemployment situation, particularly for women. The Chief Executive of the National Australia Bank, Don Argus, said today that unemployment in the private sector is already 10%. This figure is surely

conservative.

The sharp (0.4%) drop in the participation rate in March is

further indication of an understatement of the real unemployment situation. Thousands of people are losing their jobs and simply disappearing from the available workforce.

Even on the recorded figures, however, unemployment has increased by a staggering 260,000, or 50%, in the last 12 months.

The further employment outlook is bleak. Investment, production and import figures indicate that demand will continue depressed. The ACM/State Bank NSW March quarter survey has predicted another 113,000 people would lose their jobs over the next 12 months.

The number of unemployment benefit recipients rose again, by 16,000, in March to a total of 596,890. The cost in human

hardship of this figure - 52% higher than a year ago - is

immense.

So too will be its impact on both the current Budget and the

1991-92 Budget.

Even if the number of unemployment benefit recipients does not increase over the next three months - a highly conservative assumption - outlays on unemployment benefits in 1990-91 will exceed Budget estimates by $450 - 500 million.

The full year Budget impact in 1991-92 of unemployment benefit

COMMONWEALTH PARLIAMENTARY LIBRARY MIC AH

recipients at the current level would exceed $1 billion.

These figures relate only to unemployment benefits outlays. They ignore the other major implications for the Budget of falling income tax and indirect revenues.

Today's labour force figures make it more imperative than ever that the Government revise its now totally discredited 1990-91 Budget assumptions and forecasts, and its forward estimates for 1991-92. Following these revisions the Government must

immediately move to introduce a mini-Budget.

The prospects of this happening, however, appear slight. This deeply divided and leaderless Government is as out of ideas as there are Australians out of jobs as a result of its calamitous economic mismanagement, misjudgment and incompetence.

Contact: Senator Short

Canberra (06)277-3119

11 April 1991