TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Doorstop Interview

Treasury Place, Melbourne

Thursday, 8 July 2004

12 noon

SUBJECTS: June Labour Force figures, Budget, election

TREASURER:

Well, today’s unemployment rate for the month of June was slightly higher

than last month at 5.6 per cent, represents the tenth month in a row where unemployment

has been below 6 per cent, the longest run below 6 per cent since monthly records

commenced in 1978. And interestingly enough there appears to be a shift over

recent times in the labour market from part-time to full-time employment, and

in fact in today’s figures you saw an increase of some 43,000 jobs, full-time

jobs, whilst there was a decrease of part-time jobs – let me give the correct

figure – there was an increase of 39,000 full-time jobs whilst there was a decrease

of 43,000 part-time jobs. So whilst there was an overall decline in jobs, there

was an increase in full-time jobs. And in fact we have seen that happen over

the course of the last year where there have been some 200,000 new jobs created

in Australia, but they have all been full-time jobs. That is there appears to

have been a big shift from part-time to full-time employment. That is evidence

of strong growth in the labour market and what we see from forward indicators

is that jobs growth should continue, this is consistent with consumer confidence,

strong jobs growth, low interest rates, good consumer confidence, good prospects

for the Australian economy.

JOURNALIST:

Are you disappointed though that the overall figure is negative?

TREASURER:

Well, what the figures today show is that there was growth of 39,000 full-time

jobs and a loss of 43,000 part-time jobs, so, what we are seeing, I think, is

a move out of part-time into full-time job creation and I actually think that

is a good thing.

JOURNALIST:

There is still more people unemployed though.

TREASURER:

The unemployment rate is 5.6 per cent which is slightly higher than the 5.5

per cent in May, but these figures bounce around incredibly as I have said over

and over again, the fact that we now have been below 6 per cent for 10 months

in a row, which is equal to the only time that has occurred since 1978, since

monthly records came in, I think is testament to the strength of the Australian

labour market.

JOURNALIST:

Do you think it will get to 5 per cent?

TREASURER:

I don’t think we will get down to 5 per cent until such time as we are

able to implement structural reforms, I think if we could get unfair dismissal

law improvements through the Senate, if Labor would stop blocking the further

measures we have to improve Australia’s labour market, yes, I think unemployment

could get down to 5 per cent. But whilst you have the Labor Party blocking reform

in the Senate, it is going to be very difficult to make that.

JOURNALIST:

So is this as fas as we can go without those structural changes?

TREASURER:

Nobody thought we would get below 6 per cent without structural changes, the

fact that we have now been below 6 per cent for more than, for 10 months in

a row, indicates that perhaps our targets weren’t ambitious enough, and

I think we should continue to try and get unemployment lower in Australia. I

will just make the point, it would be easier if we could get structural reforms,

if the Labor Party would cease its blocking strategy in the Australian Senate,

unemployment could go lower in this country.

JOURNALIST:

Earlier this week you did say that there was a softening, signs of softening

in the Australian economy, surely this is a pointer to that?

TREASURER:

Oh no, I indicated earlier that I thought that consumption would soften over

the course of the year and I, our forecasts are that it will, but a 5.6 per

cent unemployment rate is something that we wouldn’t have imagined possible

in Australia two years ago. I don’t think anybody would say a 5.6 per

cent unemployment rate was a softening, in fact it was seriously being said

three or four years ago that unemployment in Australia couldn’t go below

the sixes and the sevens, the fact that we are at 5.6 per cent, the fact that

we have been there for 10 months in a row, the fact that that is the longest

run below 6 per cent since we started keeping monthly records in 1978 indicates

how much progress we have made. Having said that, we don’t want to rest

on our laurels, if we could take unemployment lower in this country, we should

try and do so.

JOURNALIST:

So this blip up today is consistent with your targets?

TREASURER:

It is very much in line with the Budget forecasts, but you will see unemployment

rates bounce around from time to time. The important thing is the trend and

a trend of ten months below six per cent is very significant for Australia,

as I said, we started taking monthly unemployment data in 1978, there has only

been one other occasion, back in the very early 80’s, nearly 25 years

ago, where we have had unemployment below 6 per cent for ten months in a row,

and if unemployment is still below 6 per cent next month, it would be the longest

period of sustained unemployment below 6 per cent ever recorded in Australia

since we began the monthly figures in 1978, 26 years ago.

JOURNALIST:

So to borrow a phrase that the trend is our friend?

TREASURER:

Well, the trend is one I think that Australians will welcome, which is healthy

job opportunities.

JOURNALIST:

But Mr Costello, are you disappointed that the workplace participation rate

remained unchanged?

TREASURER:

Well, I think the workforce participation rate may well rise in years to come

and we would welcome that, we are actually trying to encourage more people to

go into the labour market, many of our budget measures were designed to assist

particularly mothers to get back into the workforce, many of our retirement

measures are designed to encourage older workers to stay in the workforce, you

know, people who are not yet of retirement age at 65 and I think we would like

to see the participation rate rise over the years to come. But that is a structural

thing, that is going to take some time.

JOURNALIST:

How do you respond to Access Economics criticisms that the Budget leaves the

cupboard so bare that you are going to have to put up taxes or reduce spending

in four years?

TREASURER:

Well, what the name of the chap that said that?

JOURNALIST:

Rumbens, Access Economics.

TREASURER:

Rumbens, I have not heard of Mr Rumbens.

JOURNALIST:

So you don’t place any credence in his criticism that the cupboard is

bare?

TREASURER:

Well, I don’t think Mr Rumbens is an astute observer of the Australian

economic scene and I don’t think he is a well-known commentator and I

thought it was probably a piece of writing which was designed to get publicity

for Access Economics actually.

JOURNALIST:

The Prime Minister is unveiling his fourth term agenda today. Do you think

that that means, do you think he will be here for the full fourth term?

TREASURER:

Well, we are running for an election and it is a question of whether or not

the Australian public re-elects the Government…

JOURNALIST:

And…

TREASURER:

…whether we will be there.

JOURNALIST:

…if they do, do you believe that the Prime Minister will be there for

the full fourth term?

TREASURER:

Well, let’s see, our faith lies in the hands of the Australian public

at the next election, we don’t take anything for granted.

JOURNALIST:

If you do get re-elected and the Prime Minister isn’t there for the

full fourth term, do you commit to the same agenda that he unveils today?

TREASURER:

Let’s go to the election. Thank you.