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Blewett confirms shonky budget strategy

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John Hewson Leader of the O pposition M e d i a Re l e a s e

231/92 9 August


On Channel 9's Sunday program today the Minister for Social Security Mr Blewett made two striking admissions.

Firstly, he confirmed that the Government will sell off some of Australia's prime assets to fund labour market programmes. He said that if the Left succeeds in blocking the Qantas sale then it will affect programmes in the labour market area. On Friday

night, the NSW Left voted overwhelmingly to oppose the Qantas sale, demonstrating how internal political division threatens to further weaken the Government's already debilitated Budget


He then refused to rule out a rise in the Medicare levy.

The Government's inability to carry out genuine fiscal reform is a clear contrast to the strategy set out in Fightback! The Coalition's asset sales will be used solely to pay off public debt and making some small one-off expenditures, reducing the

interest burden for future generations of taxpayers. There will also be a net decrease in taxes under the Coalition, with large tax cuts financed by the GST and cuts in government expenditure.

The Government's approach offers no long term benefits. The assets will be sold, and the money quickly dissipated on labour market programmes that will most likely treat symptoms not causes. Even worse, while the sale of airlines is a one-off cash

injection, the magnitude of Australia's long-term unemployment problem'means that any programmes are.likely to require on-going funding. Or are the Government's programmes just an election stunt soon to be forgotten?

Furthermore, the current depressed international aviation market and severe financial and debt problems within Qantas suggests that the asset sale proceeds may not be that large, leading to more unfunded spending.

While the Government's labour market programmes, subject to an ACTU veto, are likely to get some people temporarily off the dole queues and into training programmes, there is no substitute for the creation of genuine job opportunities. The Government's

approach will actually destroy jobs in the long run. Their unfunded spending will boost interest rates and lead to higher taxes - the expected rise in the Medicare levy being the first instalment.



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The correct approach is Fightback!, a co-ordinated programme for sustainable economic growth with lower business costs and labour market initiatives such as Austrain and the youth training wage which get people into real jobs.