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Thursday, 9 December 1971
Page: 4412


Mr BARNARD (Bass) - I move the following amendment to the motion that the House take note of the paper:

That the following words be added to the motion: aird urges the Government to initiate immediate discussions with the States so that the first grants under this programme can be made before Christmas and further urges the Government, at the some time, to confer with the Slates to ensure the resumption of the rural reconstruction scheme now halted by lack of finance in the various Slates. The House regrets that the Government has not made provision to extend unemployment assistance to alleviate problems of growing unemployment in metropolitan areas with particular emphasis on. the problems and placement of school leavers which can be accentuated as a result of poor employment conditions in the country areas'.

A week ago the Prime Minister (Mr McMahon) announced in the Parliament a programme to make money available to the Slates for the relief of unemployment in non-metropolitan areas. The Prime Minister in announcing the grants made the point that much of this nonmetropolitan unemployment is of a structural kind. For this reason it required specific rather than general economic measures to deal with it. Undoubtedly, this is correct. Brit the Prime Minister ignored the fact that these pockets of structural unemployment feel in heightened form the impact of general economic measures to reduce demand across the board. This sort of structural unemployment does nol respond to broad economic stimulus. But it would be foolish to argue from this that these pockets of rural unemployment do not feel the impact of general economic measures to dampen the economy and reduce demand. The unfortunate people in rural areas are in the invidious position of feeling chill winds from both structural unemployment and the general reduction in economic activity. They are cushioned only against the beneficial effects of a revival in economic activity produced by broad economic policy. For this reason it is unfortunate that the Government should have delayed for so long in applying these grants.

The Prime Minister implied that structural unemployment in rural industries is a new phenomenon, that it has emerged in -dramatic form only since the last Budget and that the Government had acted swiftly to crush it. This interpretation just does not square with the facts. Unemployment of this sort has been a factor for several years. It is part of much broader social and economic changes in country areas which have occurred in the past 10 years. The scope of these basic changes is beyond this debate, but a majority of small country centres have been so affected that even a small change in the composition of the work force spreads hardship in the community. These changes may take the form of minor changes in the policy of a State Government or a commercial firm, for example a decision to concentrate staff at a larger centre. More sweeping changes may result from important switches in Commonwealth Government policy.

An example is the proposed reorganisation of postal services throughout the Commonwealth; this may involve the transfer of only a few personnel and families but it can have a serious impact on economic activity in a small community. These changes of the past few years have increased the difficulties caused by the structural changes in world markets and the Australian rural industries.

Now the general downturn in employment and economic activity flowing from deliberate budgetary policy have added to economic hardship in non-rural communities. lt is difficult to assess the full magnitude of this sort of unemployment because figures on the size of the work force !n rural centres are hard to get. The monthly statistics issued by the Department of Labour and National Service give the raw figures in important rural subdivisions for registered unemployed, registered vacancies and recipients of unemployment benefit, lt does not give any estimate of the size of the work force in these subdivisions. The latest work force figures available from the Department arc estimates made at the end of the 1969-70 financial year. It is possible from these to get an idea' of unemployment in key rural centres. Using the September unemployment figures and these work force estimates, unemployment in Dubbo was 2.62 per cent, in Ballarat 2.29 per cent, in Bendigo 1.84 per cent, and Toowoomba 1.78 percent.

Admittedly these examples are somewhat crude but they do give an indication of how unemployment in major regional centres is considerably above the long term national average on which the Treasurer (Mr Snedden) relies. With this sort of structural unempoyment the first drift is to the major provincial centres. When unemployment builds up in these centres, as it clearly has in the 4 centres I have cited, the next drift is to the major cities. This adds to the pressures on employment in the metropolitan centres. For- this reason remedial action to curb structural unemployment in the country has the effect of alleviating unemployment and economic hardship in the cities. lt is not possible to divide unemployment into separate compartments as implied in the Prime Minister's statement. This brings me to the first point contained in the amendment moved by the Opposition. It is designed to clear away the deliberate vagueness which the Government has encouraged ' about the time scale of this programme of grants. These grants cannot be regarded as a measure to stimulate economic activity in areas affected by structural unemployment. At best it is a relief measure in the form of a holding operation to prevent further deterioration in these areas. The money will go via the States to local government authorities for public works. The point that concerns the Opposition is the lapse of time before the impact of this spending is felt in the communities the grants have been designed to help.

The time scale outlined by the Prime Minister is extremely unsatisfactory. He said that the Government envisaged an arrangement providing for grants for employmen creating activities to be made to' the States for the period up to 30th June 1973 subject to review after the end of the 1971-72 financial year. However, legislation for the grants will not be introduced until the autumn session of Parliament which begins on 22nd February. In the interim, temporary arrangements would be made for financing the scheme. It is the duty of the Government to spell out clearly this extremely vague : pledge of temporary financing. Does it mean that the Commonwealth will underwrite- advance grants made to the States? Alternatively, is it intended to divert some of the funds made available to the States for the rural reconstruction scheme to relief of rural unemployment? If either of these courses is intended by the Government, there has been no sign of action by any of the State governments to get the scheme going. The State Premiers are not to blame for this; presumably they are still waiting for the Commonwealth to elaborate on its proposals.

The overwhelming impression to be got from the way the Government has approached this relief measures is that it does not regard them as a matter of urgency. If the Government wanted to get legislation through the Parliament to get this scheme going before the end of the sesson it could have done so. It would have had the full co-operation of the Opposition in securing the passing of the enabling Bills through the Parliament. In marked contrast to the speed with which legislation to assist the wool industry was drafted and shepherded through the Parliament by the Government, there is a complete lack of urgency about getting this scheme to work. Unless there is evidence of a much greater will on the part of the Government to get the States moving, it will be months before any benefit is felt from these relief grants. At the earliest, legislation to authorise, the grants to the States will not clear the Parliament until March.

By the time unemployment in rural areas is assessed by the States and the grants transmitted to local government bodies, it will be near the end of the financial year. On the time scale indicated by the Prime Minister, it will be at least 6 months before this so called emergency assistance is transmitted to areas of need. The programme will then be subject to the review referred to in the Prime Minister's statement* This is hardly evidence of swift, decisive and humane action to bolster communities afflicted by rural unemployment.' For this reason the Opposition has moved that the House urges on the. Government the importance of getting down with the States to the task of assessing structural unemployment, selecting the areas of greatest, need and getting the first grants out before the end of the year. Unless this is done this relief scheme .will have no impact whatsoever on the crucial January and February period when '...... of thousands of school leavers will be looking for jobs. All school leavers will be feeling the crunch of a tighter economy. The plight of country children leaving school will be particularly acute because of the structural unemployment outlined in the Prime Minister's statement.

In summary, millions of dollars have been made available in recent months to assist the wool industry. The honourable member for Dawson (Dr Patterson) has made the point repeatedly that most of this assistance is not going to the country areas where its need is most vital. Far too much of this assistance has gone back to the finance companies and pastoral companies in the cities. Assistance has gone to wealthy graziers at the expense of the small growers who are in greatest need. But assistance by the Government in this form was promptly accepted and translated rapidly into effective action. When a measure is introduced to provide employment for rural workers caught through no fault of their own in the massive restructuring of the rural industries and the rural community, the Government's response is contemptibly lethargic.

There are 2 other points in the Opposition's amendment which 1 want to refer to briefly before they are treated in greater detail by my colleagues. The first is the need for consultations with the States on getting the rural reconstruction scheme into effective operation. Honourable members will recall that under this scheme $10Om was to be allocated to the States over 4 years for rural reconstruction. This assistance was allocated for debt reconstruction, for building up farms into economic holdings, and for rehabilitation of those forced off the land. It is not possible to assess the overall impact of the scheme because of the time lag between approval of reconstruction plans and the spending of assistance provided. Quite obviously there are difficulties between the Commonwealth, and the States in the implementation of the scheme. There are difficulties in the interest rates applied by the Commonwealth; the rate for farm build-up is 6i per cent compared with 4 per cent for debt reconstruction. This means that debt reconstruction is much more attractive and is favoured by rural producers.

However, the Commonwealth wants an approximately equal allocation of funds between debt reconstruction and farm build-up. Applications from farmers have shown that this is not feasible and that most want debt reconstruction assistance. For example, only 9 per cent of applications for assistance under the scheme in Victoria and New South Wales have been for farm build-up. Because of Commonwealth policy these States have had to reject many applicants seeking debt reconstruction assistance. These are matters which must be sorted out between the Commonwealth and the States so full benefit is derived from these rural reconstruction measures. Under the terms of the Act a review of the scheme is to take place in time to allow any changes to be brought into operation by 1st July 1972. This review should be undertaken immediately to allow funds allocated for farm build-up to be redirected towards debt reconstruction in accordance with the relative demands for these 2 types of assistance.

The final point which I earlier referred to indirectly was the growth of unemployment in metropolitan areas. This is relevant to the Prime Minister's statement because metropolitan and non-metropolitan unemployment cannot be separated into 2 distinct spheres. There is a constant process of movement of labour between the two. Many workers will .not linger in depressed rural areas if they see any chance of getting a job in the city. The creation of extra employment in the country must ease the strains on the labour market in the cities. Growing unemployment in the cities is a problem which has not been recognised by the Government. On the evidence of those receiving unemployment benefit, basic unemployment is increasing much faster in the cities than in the country. These statistics are important because they indicate the gut element of unemployment which is not reflected in these figures.

Registration of unemployed and job vacancies gives a measure of the buoyancy or otherwise of the labour market. The numbers getting unemployment benefits indicates the extent of economic hardship flowing from a tight labour market. If the numbers drawing the benefit are compared, it becomes clear that in all States except South Australia and Tasmania, metroplitan unemployment is rising much faster than non-metropolitan unemployment.

Looking at these figures for the end of October 1971 and comparing them with the end of October 1970, in New South Wales those on benefits increased by 115 per cent in metropolitan areas and 53 per cent in non-metropolitan areas. In Victoria the increases were 185 per cent and 101 per cent; in Queensland 93 per cent and minus 1 per cent; and in Western Australia 242 per cent and 92 per cent. This shows quite dramatically that hard-core unemployment is rising much more rapidly in the major cities than in the country. In Tasmania the increase is much the same for metropolitan and non-metropolitan areas at 153 per cent and 160 per cent. In South Australia, the increase is the lowest in Australia for metropolitan areas; it is 33 per cent compared with 91 per cent for non-metropolitan areas.







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