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Tuesday, 19 September 1972
Page: 1524

Mr HAMER (ISAACS, VICTORIA) - Can the Minister for Labour and National Service say whether it is a fact that one of the causes of the current level of unemployment is the excessive cost of labour in some areas of employment?

Mr LYNCH - The simple fact is that the present stubborn nature of the return

In the employment market is a derivative of the lack of confidence which has existed in the community, particularly the lack of business confidence but also the lack of confidence on the part of consumers in their spending patterns. This lack of confidence can be attributable partly, as the honourable gentleman suggests, to what can be described as the 2 major running sores in the Australian economy - industrial unrest and, secondly and more particularly, the high cost of labour. During the calendar year 1971 average weekly earnings increased by 12.5 per cent as against a price increase, measured by the consumer price index, of 6 per cent and a productivity long-term growth of 2.6 per cent. It is self-evident that in circumstances of this type many businessmen will seek to prune their labour budget simply because of the high cost of labour. There is no doubt that one of the influences on the level of unemployment at present is the fact that labour is tending to price itself out of the labour market.

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