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Employment trends down as recession grinds on



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S M edia R elease

17 January 1991

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EMPLOYMENT TRENDS DOWN AS RECESSION GRINDS ON.

There is no joy for Australians in today's statistical releases.

The trend estimates of employment continued to fall in December 1990 for all categories except female part-time workers where slow growth continues.

The figures for the month of December appear to be influenced by special regional factors. Thus the uptick in seasonally adjusted employment for December was mainly concentrated in New South Wales but the unemployment rate there rose as the participation

rate rose. But in Victoria employment fell further but

unemployment fell sharply as the rate of participation decreased.

Seasonal adjustment factors are also more important than usual at this time of year and it is important to recall that the

unadjusted level of unemployment rose 75,100 in December to be 202,700 above December 1989.

Meanwhile the job vacancies and average overtime hours worked fell sharply in November 1990. The number of job vacancies is down a massive 45.6 per cent on November 1989 to be at the lowest level since May 1984.

Trend estimates show Retail Turnover continuing to slow in November 1990. The year on year trend growth in turnover is now down to 3.4 per cent (negative in real terms) from 8.7 per cent in December 1989.

Taken together the figures suggest that the current recession will be drawn out over a long period rather than the relatively short sharp downturn in 1982/83.

Recovery from the 1982/83 recession was assisted by the end of the drought, a pick up in activity in the major industrial

countries and a quickly instituted wage/price freeze by the Coalition Government then in power.

No such assistance is currently in sight. Indeed, the impact of the slowdown in world growth already underway and any additional impact from the Gulf conflict is yet to be felt. The full impact of the rural crisis is also yet to be felt in domestic demand.

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These factors highlight the continuing need for the Government to re-balance its economic policies by bringing down a Federation Budget designed to cut back spending throughout the public sector and a reshaping of the taxation system to put in place incentives

for Australians to work harder and smarter, to save and invest and to export.

As a matter of urgency the Government should make the legal and institutional changes necessary to facilitate a genuine move towards enterprise bargaining so that pay can be linked to productivity and performance.

Urgent action must also be put in train with the many micro­ economic reforms which have been identified by the Opposition, business groups, and official agencies.

This policy package, which will have the support of the

Coalition, will make room for further sustainable reductions in interest rates and establish the conditions for a gradual restoration of the competitiveness of our industries.

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For further information contact 06 - 277 4022.