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Less employment: higher budget deficit coming up

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

SMF 47/92


The fall of 18,500 in the number of people employed in April compared with March, reflects collapsed investment and continuing lack of confidence in the Government.

The falling trend in full-time employment shows that many people are hanging on to their jobs by dropping back to three and four day weeks. This underemployment masks the extent of damage to individuals and the community being done by Labor's recession.

More people have given up looking for work because they regard the outlook under Labor as hopeless. This trend is reflected in a fall in the participation rate from 63.0% to 62.7%. It is only this fall in the participation rate which has marginally lowered the unemployment rate, from 10.5% to 10.4%.

As an indicator of the underlying rate of unemployment, the number of Jobsearch and Newstart (unemployment benefit) recipients has increased by a further 8,195, to 826,297. This staggering level is 34% higher than a year ago and double the number of two years ago.

With Budget expenditure running higher than previously forecast and revenue falling short of target, it is urgent that the Government announce the next (third) revision of its original Budget deficit estimate. In light of current trends the deficit for 1991-92 will be well over $7 billion, and the starting point deficit for 1992-93 well over the $8 billion forecast in the Government's One Nation/One Job statement.

The inevitable consequence of this continual blow-out in the Budget deficit flowing from the Government's incompetence in economic management will be higher interest rates.

Canberra 7 May 1992

Further information: Senator Jim Short, 06-277 3119