Labour Force, Alan Cadman, Tax Cuts, Labour Supply, LPG, Ethanol – Doorstop Interview, Senate Alcove, Parliament House

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2003-04 Mid-Year Economic and Fiscal Outlook
December 8, 2003
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December 12, 2003
2003-04 Mid-Year Economic and Fiscal Outlook
December 8, 2003
Australian Competition Tribunal Appointments
December 12, 2003

Labour Force, Alan Cadman, Tax Cuts, Labour Supply, LPG, Ethanol – Doorstop Interview, Senate Alcove, Parliament House


Senate Alcove Courtyard
Parliament House

Thursday, 11 December 2003
12.15 pm


SUBJECTS: Labour Force, Alan Cadman, Tax Cuts, Labour Supply, LPG, Ethanol


Well, employment increased by around 20,000 jobs in the month of November and

increased by about 28,000 full-time jobs, in the month of November, confirming

the unemployment rate down at 5.6 per cent, which is as low as it has been in

the last 22 years. As you look back over the last three months, the job creation

in Australia has been around 90,000 jobs.

Now, that is a pretty strong result. I have said on numbers of occasions, that

with the unemployment going well below 6 per cent you could expect it to move

around a bit, but we have now been below 6 per cent for three months. And I

think particularly pleasing was that the teenage unemployment rate fell to a

13 year low in Australia on the back of the November figures.

So, that indicates that these are the best employment opportunities for teenagers

since the recession of 1990, there is strong jobs growth going on in the economy,

and people are getting opportunities which are as good as they have had for

22 years, and I think all Australians will welcome those figures.


But unemployment at 5.6 per cent, same as last month, has it bottomed?


Well, I have been saying for some time that it moves around, what appears from

these figures is that it does seem to have moved below 6 per cent. Now, that

doesn’t mean it won’t continue bouncing around, but to have moved

below 6 per cent and to have stayed below 6 per cent for three months, does

indicate to us that employment prospects have really brightened and as I said,

they are as good as they have been for 22 years.


So, do you believe that an unemployment rate with a 5 per cent, a 5 at the

start, could now become a permanent feature of the Labour market?


Well, I would like it to be, I can’t guarantee that it will always stay

below 6 per cent because you get seasonal factors and bouncing around. But I

would like unemployment to remain below 6 per cent and I think if we had labour

market reform, we reformed our welfare system, we could take it down and keep

it down.


There appears to be a trend more to, an increase in the number of full-time

jobs, what do you attribute that to?


I think it is really a strong economy Dennis, the fact that we have now had

the Australian economy growing for a long period of time, we have had corporate

profitability as high as it has ever been in Australia, we have low inflation,

and as a consequence of that I think people are creating jobs, and full-time

jobs and the number of full-time jobs that have been created in the last three

months, this is full-time jobs, 91,000. That is full-time jobs in the last three

months. That is pretty significant job creation. Now, it can bounce around,

but the pleasing thing about these figures is that it is three months in a row,



Treasurer, would you use these figures to encourage those on the fringes of

the labour market to get involved and try and look for a job where they might

not have in the past?


I would actually, I would say to people who are not working – and I think the

number of unemployed has actually fallen to a new low – I would say to those

people who are not working, there are more jobs out there than there have been

for 22 years. And now is the time to look for a job, and I would encourage you

to go out and to try your hand, and there are much better opportunities out

there then there have been for a couple of decades.


Do you think the marginal tax rates are a problem as a transition from welfare

to work?


I think that you have always got to keep an eye on both your tax systems and

your welfare systems to make sure that they don’t discourage people, and

welfare reform is something that this government has been very actively engaged

in. We have proposals as we speak which are in the Senate in relation to these

matters, and we are working on them.


What do you think about Mr Cadman’s proposals for tax cuts for families?




Mr Cadman’s proposals for tax cuts for families.


Well, you know, people are looking at all sorts of options. I believe we should

keep taxes as low as we can possibly keep them. Now, I will point out, and I

have pointed out before, that with the Family Tax Payments, for a single income

family, with a child under five, you don’t start paying tax until you

go above $30,000, and with two children you don’t start paying tax until

you go above $40,000. So, the Family Tax reforms that we have put in place,

and that increases with each additional child, so for the single income family,

depending on the number of children, you, because of our reforms, you don’t

pay tax, until quite a high threshold.


Are you still committed to bringing down the top rate?


Look, I have said so many times that I have lost count, not the top rate, I

have said so many times that I have lost count, that the threshold, I believe,

cuts in too low. And we had a proposal to increase that threshold to $75,000.

I am on the record all over the place supporting that.


And you are going to put it up again.


We went to an election, we won an election, we put it into the Parliament,

and it was defeated. Now, what more can I do Michelle? You figure out a way

to break the deadlock in the Senate and come back and ask me that question.

What more can I do? We went to an election, we won an election on that, and

we kept our promise, and we put it into the Parliament. Now, the new Leader

of the Labor Party, I believe, is going to change the Labor Party’s policy

on that, and I look forward to an unequivocal statement from him.


Can our exporters prosper if the dollar keeps rising?


Well, look, the fact that the dollar is at the levels it is now, is making

it harder for our exporters. And it would be better for our exporters if, what

I used to call the super-competitive exchange rate was still in place. So that

is making it harder for them, yes it is. Something is going their way though,

the global pick-up is meaning more demand for some of our traditional exports

like minerals, and the climatic pick-up is meaning that traditional exporters

like agriculture have product. So, something is going their way, but another

thing is not going their way.


With jobs growth like this Treasurer, what is your outlook for inflation?


Well, we put our outlook for inflation in the Mid-Year Review, and that was

released this week, I think. So, it hasn’t changed in the last 48 hours.


So you still…


I can’t remember what day, I think it was Monday, wasn’t it?


Do you still see it as benign?


Well, it is as I saw it on Monday, nothing has changed in the last 48 hours.


Back to the Labour Force, the Reserve Bank and the (inaudible) are worried

about labour shortages developing in some skilled trades, and your, Kevin Andrews

department has a long list of trades where there are shortages now. Is the Government

going to take another look at what it can do to speed up the supply of skilled

tradesmen, tradespeople?


Well, we are looking at certain measures in the immigration area, we are looking

at certain measures in the training area to try and boost the supply of people

with skills. There are some labour shortages in Australia, if you speak to,

for example, horticulture, they say that there are shortages. That is seasonal

work admittedly, but they do say that there are shortages in those areas. But

having said all of that, I would rather have the problem of labour shortages

than over supply.


Is that a Budget process decision, or is that outside the budget process?


Well, that’s all I can say, I mean, if you want more detail on what Kevin

Andrews is doing, ask Kevin.


Treasurer, do you expect to have the new fuel excise regime dealt with by Christmas?


I don’t know. I am not handling that.


Can you say what is holding it up?


No, it is not my Department, so…


But it is a Treasury issue though, isn’t it?


…no there is an inter-departmental committee which is being run out of

the Prime Minister’s Department as you know, so it is a matter for that

inter-departmental committee.


So is the ethanol submission coming from the Prime Minister next week, not

from you?


No, I don’t deal with ethanol, never have.


So it will be coming from the Prime Minister?


Well, I don’t know who it is coming from, but I know it is not coming

from me.


Shouldn’t you have had a look at it by now?


No Michelle, I don’t think so, I don’t think the Cabinet papers

have been circulated yet, strange as it may seem.


It does seem a bit strange. So can it be decided on next week then?


Of course. We can actually work weekends, we can read papers on the weekends,

you know…


Are you supportive…


…we don’t work a 35 hour week, you know, some of us work six and

seven days a week, of course we can.


Would you be supportive of a substantial discounted excise rate for ethanol

into the long term?


Look, if I have some views on that I will make them known in the appropriate

forums, as it turns out. Thank you very much for your time.