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Thursday, 10 November 1983
Page: 2583

Mr CONNOLLY —I draw the attention of the Minister for Employment and Industrial Relations to the ominous increase in average weekly earnings reported today for the September quarter of 2.1 per cent, some three times the rise for the June quarter. This took place before the Government formally ended the previous Government's successful wage pause and the awarding of the 4.3 per cent wage rise. Can the Minister advise the House of his Department's estimates for the rise in AWE for the December quarter and for the 12 months to December? By how much will this exceed the forecast levels for our major trading partners? To what extent will this reduce the capacity of Australian industry to compete and to employ more Australian workers? By how much does he expect average weekly earnings to exceed the 1983-84 projection of 5.5 per cent contained in projection A presented to the Economic Summit Conference which involved an increase in unemployment of 80,000 this financial year alone?

Mr WILLIS —I have seen the preliminary average weekly earnings figures for the September quarter which came out today. The increase in respect of full time adults for that quarter is one per cent, not the figure of over 2 per cent which the honourable member cited. The fact is that those figures do not necessarily reflect total increases in actual wages paid. They can be affected by the number of hours worked. As they are earnings figures, they can be affected by increases in the amount of ordinary time worked or the amount of overtime worked. I understand from a preliminary analysis that there is some reason to believe that that could be at least part of the explanation for the increase of one per cent in the September quarter at a time when we have had a zero increase in award rates.

I believe the concerns of the honourable member are somewhat exaggerated. We do not expect to see a blow-out in average weekly earnings this year. The Budget forecast, as I recall it, was for an increase in earnings of the order of 7 1/2 per cent, and we expect that to be adhered to. The increase in award wages this year will be of the order of 4 1/2 per cent and next year, on our estimates to this stage, will be of the order of 5 1/2 per cent. Those increases, along with the associated increases in earnings which will be slightly in excess of that, will be compatible with continued economic recovery, a continued increase in employment and a substantial decline in the rate of inflation. Those are the forecasts which are important to this Parliament and to this nation. There is no doubt that we are looking at substantial declines in the level of wage increases and in the level of inflation compared with what we have experienced in the past . Those two factors are certainly compatible with this Government's economic forecasts in respect of total economic growth-in the order of 5 per cent to 6 per cent this year-and employment growth-in the order of 1 1/2 per cent at least .

Since the question encompassed employment, may I say that today's figures are certainly encouraging to the Government as they show a continuance of the upward movement in employment. The strong growth in employment which occurred last month has been sustained this month and expanded, with employment on a seasonally adjusted basis up by another 4,000. Over the last six months employment on a seasonally adjusted basis has increased by 82,000. Those employment increases do not appear to have slackened off as a result of the national wage increase in September.

The Deputy Leader of the Opposition and the honourable member for Balaclava have said in their employment Press releases in the last couple of months that, come the national wage decision and the introduction of a system of wage indexation, disaster will occur on the employment front. There is no comfort for them in the figures that came out today in that regard. On the contrary, they show a continued strengthening on the employment front. On the unemployment front, we see for the first time since this Government came to office that unemployment has fallen below 700,000. It is now below 10 per cent for the first time, having declined from 10.3 per cent to 9.9 per cent.

Those are encouraging developments. We are not saying at this stage that they demonstrate that unemployment is on a continuing downward path. What happens in that regard will be affected not only by what happens with regard to employment growth but also by what happens with regard to labour force participation rates; that is, the proportion of the working age population who decide to seek work. If that figure picks up considerably, if more of those people who have not been seeking work start to do so, we will not make great progress against unemployment this year. But the trends are encouraging. It would now appear that the developments in respect of employment and unemployment this year might well be more optimistic than our Budget forecasts.