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Transcript of interview with Frank Kelly: 'PM' Program: 2 May 1994: White Paper on unemployment and growth



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Leader of the Opposition

4 May 1994 REF: TRANSCR\al\wh\js

TRANSCRIPT O F INTERVIEW JO H N HEW SON MP FRANK KELLY, "PM" PROGRAM

E & Ο E - PROOF COPY ONLY

SUBJECTS: White Paper on Unemployment and Growth

Well the Opposition Leader, Dr John Hewson is unimpressed with the White Paper. He says the Government created the unemployment problem, has thrown a surprising amount of money at it today, but cant solve it.

Dr Hewson is speaking here to Fran Kelly.

Kelly:

John Hewson, in your eyes then, it's not a document to be proud of? You dont think much of the White Paper?

Hewson:

Well we agree with the objective which is dealing with a massive problem of unemployment, particularly long term unemployment. But this is a problem the Government created and they would now have us believe that they can solve it by

throwing buckets of money at it.

Kelly:

Isnt it time to stop looking at that, though, whether or not that's true, isn't the reality now there's a million people out of work and something needs to be done?

Hewson:

It certainly needs to be done. If that's the case, why are they waiting so long? Why

Parliament House, Canberra, A.C.T. 2600 Phone 2774022

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have they waited all this time since the last e le c tio n .................

Kelly:

... But isn't (inaudible) ...

Hewson:

I mean, I agree it's important, but they haven't done anything about it and they cant because they arent prepared to change policies - the policies that actually created the unemployment in the first place.

Kelly:

Given that it is important then, are you saying now that the White Paper actually isnt doing anything about solving the problem?

Hewson:

I d o nt think it solves the problem to any significant extent. I think it's biggest effect is to shuffle the level of the unemployed, particularly the long term unemployed, and some of them will get an opportunity to go into an employment experience for six or nine months, but there's no guarantee there'll be a job there when they come out of that experience. And that's really what we should be doing is creating long term jobs. And the only way you'll do that is to go back and change the policies that created the

problem in the first place, and that's tax policies, expenditure policies, industry policies, and particularly industrial relations policies.

Kelly:

Haven't we learnt from last recessions though, that the problem is that when an economy to grow, when you get the policies right and everything is moving in the right direction, if you have a glut of people that have been unemployed for a long time, they're an unskilled workforce, that messes up the economic progress. So we have to really target this glut of long term unemployed people d o nt we?

Hewson:

I agree that the problem is very significant. I actually pointed it out before the last election and was told I was being alarmist. And I see that in solving that problem, in dealing with it, you are going to have to spend some money on training to get those people up to speed, to get them back into the workforce.

You've also got to have training wages as the Government has finally recognised in order to do that.

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But you still have to do one more thing, and that's actually to create the jobs or generate the jobs they would go to. And the only way you are going to do that, is really either deal with all the imposts that increase the cost of employing people like payroll tax and the Superannuation Guarantee levy and so on. Or most importantly, generate a proper investment climate in Australia so that the investment takes place in Australia, particularly in small business because that's in the end, where the jobs are going to come from.

Kelly:

Hasn't the Government gone some way in doing that in this Paper? It's removed the imposts of the Training Guarantee Levy? You'd have to support that?

Hewson:

We do. But it's only temporary.

Kelly:

It's also looked at trying to streamline the processes that businesses in the regions and industry everywhere has to go through in order to maximise exports?

Hewson:

But that's tinkering. If you want to create a genuine investment climate in this country you have to go back into the basic problems - policy areas that have created the problem of unemployment. And it's the industrial relations policy which has made us one of the most inflexible labour markets in the world. The micro reform process has

completely stalled so there are major cost disadvantages being imposed on industry as a result.

We've got a Budget coming up next week. They should do everything to make sure there's no increase in interest rates out of that Budget or no increase in taxes on business out of that Budget which would only further make it difficult to employ more people. And, of course, you can go through the other areas of policy - industry policy

and so on - where they need a complete review.

And until the Government is prepared to admit the magnitude of those past failures and to shift policy so that they don't repeat those mistakes, but actually do something about creating jobs, then the unemployment problem will stick.

And the OECD recently said that unemployment would stick above 10% with the sort of policies that are being run in Australia.

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Kelly:

So there's nothing to praise in the White Paper?

Hewson:

Well, we welcome some changes. Yes I welcome the temporary suspension of the training levy. I thought that was very important. I would dump it permanently. I think that the Parenting Allowance is a good idea. It's a direction in which we've got to go. It's been a major failing of our system. The revamp of the CES which is something we

called for before the last election - a very important change.

Kelly:

Do you feel like they've taken up quite a few of your ideas?

Hewson:

Yes, the Training Wage which they mocked us about for quite some time. It's nice to see they finally recognise the error of their ways in that regard.

So, yes, there are a number of things in there we welcome. And as I say, there has to be some money to be spent on the problem. But the real issue is making sure that you create the jobs.

I notice the Prime Minister talked about training people and giving them all sorts of experiences. He didn't talk about giving them a job. And that is really what it's all about - creating or generating long term jobs into which these people can go when they're

adequately trained and are able to re-enter the workforce.

Kelly:

John Hewson, thank you.

Hewson:

Thank you.

Ends.