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Thursday, 16 December 1993
Page: 4823


Senator DEVEREUX —My question is addressed to the Minister representing the Treasurer. Media reporting of the green paper on restoring full employment seems to have simplified, at the urging of the opposition, the key issue as being whether or not there should be a tax levy to fund certain measures to reduce unemployment. Does this miss the key point of both the green paper and the government's approach? Is the real challenge facing Australia a question of whether or not to impose a tax levy, or does the government perceive a more fundamental challenge?


Senator McMULLAN —This question follows well from the first one because it does raise the proper priorities that we should be considering in dealing with the issue of unemployment. There is an obsession broadly in Australia, and certainly amongst the opposition, with the issue of taxation. Taxation, while an important measure, is a second order issue in what we are talking about here.

  The green paper's purpose is both social and economic. Its purpose is to inform us all about the dimensions of the social and economic problem of unemployment—and we have to remember that it is both those things. If we seek to have a purely economic solution, we will fail to deal with the social consequences of what is taking place.

  There is a simple way to make that point clear. I used one example yesterday for Senator Boswell; let me try another today. Even if we achieve what the green paper says is possible and necessary, which is growth in the order of 4.5 per cent to 5 per cent per year, further measures would still be necessary to ensure that the long-term unemployed have a fair go in sharing in the benefits of this growth.

  So there are at least two things that we have to deal with—and I am sorry if dealing with two things at the same time is too hard for some people. We have to have policies to get the rate of growth that will generate the jobs; that is a necessary condition to deal with the problem of unemployment. In 1983 to 1990, Australia had the highest rate of jobs growth in the OECD, but it was not sufficient to get down the long-term unemployed as much as we would have wished. It went down, but not as much as we would wish. It is necessary, as we recover from this recession and go for more growth, to ensure that those people do not become marginalised and excluded from our society and the economic processes within it.

  That is why the key proposal in the green paper, in my view—and I think in the government's view overall—is the job compact. We have to look at the merits of it. I am not saying that everything in it is right or whatever. I am saying that that is the key concept, not some second order tax question about how we fund it. The job compact proposed in the green paper is a fundamental element in achieving this.

  What we need to do and what those concerned with constructive contribution to the public policy debate should be doing—and what many citizens are doing, but not the opposition—is say, `What are the merits of the job compact proposal, the proposal to ensure that the long-term unemployed get at least some work for six or nine months and the opportunity to do more?'. If it is our view that this is something that needs to be done, then of course the questions of how it is funded become central. But we have to get to the first step first. Let us deal with this profound social and economic question at its core first and get to the tax question, if it ever arises, when we get to the issue of what it is that we want to do.

  The second flaw has been the view that there has been no benefit from the labour market programs already pursued by the government. It is quite clear that all of them—jobstart, job clubs, jobtrain—have all substantially improved the chances of the long-term unemployed securing and holding employment. So there is a basis there of labour market programs that have had successes of between 33 per cent and 50 per cent and in some instances, with jobstart, doubling the chances of the long-term unemployed securing and holding employment. So there is a base of successful labour market programs there on the existing policy.

  The jobs compact is a very interesting proposal to build on that basis. I would urge citizens who want to make a positive contribution to this debate, instead of just going off on a tax tangent, to focus on that to see if that is the appropriate priority. We then will have a public policy debate about whether something needs to be done to fund it and, if so, what.