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Wednesday, 20 August 1980
Page: 517

Mr CHAPMAN (Kingston) - I am amazed that the honourable member for Port Adelaide (Mr Young) could get his tongue around such a word. He amazes me. What we have heard from the honourable member for Port Adelaide and his colleague, the honourable member for Lalor (Mr Barry Jones), today is not only a further farrago of abuse in relation to the Government's policies in the area of employment but also an abuse of statistics. They have been used as the drunk uses a lamp post - more for support than for illumination.

The honourable member for Port Adelaide asserted that there were fewer people employed in the private sector now than some four years ago. Of course, what he failed to tell us was that during the period the Labor Government was in office and, more especially, between August 1974 and August 1 975, some 1 55,000 jobs were destroyed in the private sector as a direct result of the policies pursued by the Whitlam Labor Government. The Fraser Government, when it came to office, had to restore those jobs and rebuild employment generally in the private sector. Hence his abuse of statistics.

Of course, what is really important is not what happened three or four years ago or what has happened over the intervening period but what is happening here and now in Australia and what we have seen happen over the last 12 months. The facts are that over the last 12 months we have seen a growth in employment of 175,000 people compared with a growth' of about 1 86,000 over the whole of the previous five years. That clearly demonstrates the success of the Government's approach to economic management and long term job creation in the private sector, as against the short term approach that the Opposition would have used.

The proposals put forward by the Australian Labor Party for government job creation give full vent to its socialist intentions, supposedly to solve the problem of unemployment by more government intervention and increased government spending.

Whenever there is a problem to be solved in our community, the Labor Party uses it as an excuse for more government intervention, for more government control over the lives of people and for further destruction of individual freedom. Of course, it always dresses this up as being well intentioned. But apart from the fact that, in most instances, government intervention to solve a problem is not the best solution, the Labor Party is really motivated by the desire to centralise power and to centralise government control. This is reflected especially in its proposals for so-called government job creation.

The proposals that were put forward in March and which have been promoted ever since by the Leader of the Opposition (Mr Hayden), the honourable member for Port Adelaide and today by the honourable member for Lalor they claim would create 100,000 jobs at a full year cost of $330m. Back in 1974-75 when the Labor Party was last in office, its economic management and the same basic economic policy and proposals it has put forward again this year led to a decline of 155,000 jobs in private sector employment. It spent nearly $200m over a 1 5 month period on the Regional Employment Development scheme before it finally abandoned it in its last Budget before it went out of office. Under the RED scheme in mid- 1975, public sector employment reached its peak of 32,000 jobs. No one who seriously examines the proposals put forward by the honourable member for Port Adelaide can possibly believe that the costing is realistic.

The simplistic reasoning underlying the Labor Party's proposals is that all wage subsidy and public employment programs create jobs. It is assumed that if a person who is unemployed is placed on a public sector job creation program or is taken on by the private sector through a wage subsidy, he or she will represent an additional employed person. No account is taken of the complexity of the economic system and the likelihood that the financing of the worker on the job creation project will result in a diversion of funds from elsewhere which will put someone else's job at risk. Nor is it apparently realised that the job creation project may result in reduced spending elsewhere or a reduction in the demand for capital or labour from some other area or that the output produced by that subsidised worker may be competitive with and therefore substituted for the output of an unsubsidised worker.

Then we get to the real costs of the proposed program of the Labor Party. The real cost is not $330m as it would have us believe but something nearer $ 1,000m a year. Apart from the wages of those involved- those for whom the jobs are being created - there are considerable additional costs of administration, materials and equipment and, of course, higher wage related expenses such as workers' compensation. If we once again compare the estimate of cost given by the Labor Party for its current proposals against the real cost of its previous RED scheme, it becomes obvious that the estimates are far too small. So the program is far more costly than has been estimated by the

Labor Party. It is just not telling the truth again in this instance.

What we need to recognise is the effects that this massive increase in government spending would have, either on the deficit or on increased taxation. If the Labor Party does not increase taxation and fund such a project purely by increasing the deficit, a deficit which the present Fraser Government has fought hard and successfully to reduce to restore economic stability to this country, with that increased deficit we would see increased inflation and increased interest rates which would destroy the hard won recovery of this Government. So that would destroy more jobs eventually than would be created in the short term through the job creation project. Of course, if the Labor Party decided, on the other hand, to increase taxation, that would take money out of the pockets of people, money which they would spend on consumer goods or other activities and which would, therefore, create jobs in the private sector. Not having that money to spend, those goods and services will not be demanded and so those jobs in that private sector will be destroyed. Once again, the long term effect of this job creation program would be to destroy more jobs than it would create.

Mr Barry Jones (LALOR, VICTORIA) - What do you think the recipients would do with it? Send it abroad? What do you think they are going to do with the money when they get it in their hands?

Mr CHAPMAN - The honourable member for Lalor just does not understand that if we increase inflation and interest rates by increasing the deficit, the effect of that will far outweigh any money that is put into the hands of unemployed people through the job creation program, as 1 have just explained. The honourable member needs to take a few lessons in basic economics.

Dr Edwards - They cannot afford to employ kids.

Mr CHAPMAN - Of course they cannot afford to employ people. These criticisms are made, not only on the basis of experience here in Australia, but also overseas where job creation projects have been experimented with in Great Britain, Sweden and other countries. In each case, research now being made available by the Organisation for Economic Co-operation and Development shows that those job creation programs have been detrimental to long term job growth in those countries and have destroyed the potential for economic growth. This is evident in the case of the Temporary Employment Subsidy Scheme in the United Kingdom. That is a specific example. Of course, the key factor about such proposals is that they are merely a temporary treatment of the symptoms. They completely ignore the underlying causes of unemployment. To the great credit of the present Government, it has given attention to these underlying causes.

The other thing we need to remember in relation to long term job creation is the threat which is posed by the unrealistic attitude which has been adopted by trade union leaders and foisted on their members. The potential for longer term job creation is jeopardised by the currency given to the economic madness that every wage earner is entitled to the benefits of collective bargaining, work value wage hikes, indexation and productivity increases and a shorter working week all added together. To argue in this way is to raise the expectations of the Australian wage earner beyond what is an economic reality. The economy does not have the capacity to pay and those in the end who do pay are the unemployed. The president of the Australian Council of Trade Unions, Mr Hawke, the would-be member for Wills, made a great song and dance in his Boyer lectures about the problems of unemployment.

Dr Edwards - The Leader of the Opposition.

Mr CHAPMAN - Well, he is the would-be Leader of the Opposition. But all such concern evaporates when the ACTU argues its case before the Australian Conciliation and Arbitration Commission. Without exception, under the presidency of Mr Hawke, the union movement has persistently demanded more and more for its members ignoring, in the process, those who are unemployed and the way in which such demands have the potential to create further unemployment. It seems that there is nobody so forgotten by his trade union than the person who is no longer a union member because he is out of a job. There is nobody so unknown by the unions as he who has never been a union member because he has never had a job.

It is no longer valid to imagine that economic growth will occur independently of what the trade union movement does. Of course, the Australian Labor Party claims a special relationship with trade unions. If it has that special relationship - I do not believe it has; it was demonstrated not to be in existence the last time we saw Labor in office - then surely it ought to use that special relationship to influence the trade union movement to adopt a more moderate approach and thereby contribute to an improved employment situation in the longer term. The only approach that can be adopted is that which has been adopted by the Government over the last five years - to ensure that there is a sound economic policy, and to adopt training programs to assist those who are unemployed. Those programs have been detailed today by the Minister for Employment and Youth Affairs (Mr Viner), and on that basis we can expect a significant improvement in employment. Such improvement has occurred in the last 12 months and will continue in the decade of the 1980s.

Mr DEPUTY SPEAKER -Order! The honourable member's time has expired. The discussion is concluded.

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