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Shadow Minister criticises the Government's policy settings following a fall in full-time employment for the month of October

RICHARD PALFREYMAN: Well, do these latest figures give only cold comfort to the Opposition? Their spokesman on employment, Dr David Kemp, has also joined Kevin Wilde.

KEVIN WILDE: Dr Kemp, do you agree that the trend figures are the ones that we should be concentrating on, and they illustrate that jobs growth has been consistent, and certainly isn't too fast at the moment?

DAVID KEMP: Well, there certainly is jobs growth occurring at the moment, despite the fact that the number of people in employment in this particular month have fallen. There's a volatility in the figures there, and one of the interesting features of that volatility this month is that participation is also down. There are fewer people looking for work. Now that's against the trend and that is most unlikely to continue. There is a huge unmet demand for work in the community, and I believe we're going to see the trend in the participation rate rising in the future, rather than falling.

KEVIN WILDE: Do you believe that we will be able to sustain the strong employment growth that we've had since the start of this financial year?

DAVID KEMP: Well, I think what's really worrying in listening to the Minister is the unreality of the claims that are actually being made at the moment. The Minister is saying that the policy settings are right when there is growing anxiety within the Government and, indeed, within the wider community that the Prime Minister's refusal to bring the deficit under control and the growing reliance on interest rates, which is exactly the scenario we had before the '88, '89 recession began.

The sustainability of the present growth, I think, has to be seriously called into question because of the Government's failure to face up to some of the realities. The higher interest rates are already leading to higher wage claims. Higher wage claims are feeding through into the system are certainly going to be slowing employment growth in the future. And so it is important that we don't just look at the month-to-month figures, but look at the substance of policy, and that isn't good news.

KEVIN WILDE: Turning to the average weekly earnings figures, do you detect there a movement in an increase, really, that may not be sustainable in wages, even though some of those claims clearly will have a large productivity element to them?

DAVID KEMP: Well, it's interesting that there has been that level of wages growth, and as the reliance on interest rates continues - and we heard your independent commentator say that the Reserve Bank would possibly be looking at further interest rate rises early in the new year - this is going to put very great pressure on wages, and those claims are already beginning to come through.

The other weakness in the situation that has been created now is the lack of investment over a very long time. And although investment is beginning to recover, as we see the economy moving at the rate that it is at the moment, we're going to run into capacity constraints and that in turn is going to affect exports and the balance of payments.

So, there are a number of weaknesses here in the economic situation, which really call into question the unrealistic rhetoric that we're hearing from the Government at the moment. And until it takes a more responsible attitude to its own financing and budgeting, scepticism in the community can only continue to grow.

KEVIN WILDE: Dr Kemp, thanks for your time.