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An SGL of 4 per cent would cost 80,000 jobs

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A superannuation guarantee levy of 4 per cent would lead to 80,000 lost jobs.

That's how many jobs would be lost if the Government's deal with the Democrats over the SGL goes ahead - according to economic modelling conducted by the Coalition.

Yesterday, the Democrats were opposed to the Government's plans to introduce a super levy of 5 per cent because they thought the levy would threaten 100,000 jobs.

Today, the Democrats seem prepared to agree to a superficial compromise with the Government that will threaten 80,000 jobs.

In essence, the Democrats are saying they're prepared to block the super levy to protect 100,000 jobs, but they're not prepared to block the levy to protect 80,000 jobs.

That just doesn't make sense.

The new estimate that a 4 per cent levy would cost 80,000 jobs is based on exactly the same methodology that produced earlier estimates that a 5 per cent levy would result in 100,000 job losses - the very estimates that provoked Democrat concern over the SGL in the first place.

The Coalition has prepared the estimates on the job losses that would result from an SGL of 4 per cent by using the historical relationship between wage costs and employment implicit in the Access Economics Murphy Model of the Australian economy.

The modelling relied on the Treasury's own estimate of the wage equivalent impact of the SGL

The Government's attempts to placate the Democrats with a reduction in the initial impact of the SGL from 5 to 4 per cent is superficial to say the least.

Whether the levy is introduced at 5 per cent or at 4 per cent, the added cost to business that goes hand-in-hand with the SGL will cost people jobs.

All the Government has offered is a cosmetic modification.

The G overnment's deal fails to grapple with the basic problem that's been at the heart of the SGL from the very outset; that is, that the levy will dramatically increase labour costs at a time when the Australian economy is suffering from the worst recession in 60 years, when nearly a million Australians are out of work, and one in three young people cant get a job.

The only way the Democrats can protect Australian jobs is to oppose the SGL outright.

16 June 1992 Melbourne

Contact: David Turnbull (06) 277 4277 D101/92