TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer
Doorstop

Melbourne
Thursday, 11April 2002
12.20 pm

SUBJECTS: March Labour Force

TREASURER:

Well I think today’s employment figures will be welcomed by all Australians

because they show that there was an increase of 21,000 jobs in the month of

March and I think more importantly in the first three months of this year, employment

has increased by 105,000 jobs. So that shows that there has been a continuing

strength in the employment market and unemployment has now dropped to 6.3 per

cent.

Australia continues to shrug off the world downturn which I think is a great

credit to the businesses in Australia that have shown great faith and great

confidence in our economic prospects.

The tax reforms I think have been critical to Australia’s success, having cut

company tax, having abolished wholesale sales tax, having cut capital gains

tax and given all businesses the opportunity to claim back embedded taxes through

the GST system has certainly helped business.

But if you look over three months, because these figures come and go a bit,

but if you look over three months to see 105,000 new jobs created in the Australian

economy, and with business sentiment strong, that is pretty good for future

months. And I think all Australians will be pleased to see that Australia has

shrugged off the world downturn. We are leading the world in terms of growth

and we are now beginning to see a dividend in relation to employment outcomes.

JOURNALIST:

Are the figures going to put pressure on interest rates?

TREASURER:

I think that we all welcome these figures because they are good job opportunities.

Undoubtedly business has been profiting from low interest rates and from tax

cuts. That has been a big part of the story. But this is the kind of growth

that you would want to see in your employment markets. I don’t think anybody

will look at these figures and say that they are bad figures. I think it would

be impossible to put a bad shine on them. They are good steady growth. 21,000

in the month of March but more importantly 105,000 new jobs over three months.

JOURNALIST:

Do you think that the Reserve Bank might think these figures are a little bit

too good and tweak interest rates?

TREASURER:

I think that all observers would agree with my assessment, these are welcome

figures. And I think for Australians who have come through a world downturn,

the events of September the 11^th, rising oil prices, to know that

the Australian economy is still on track, still growing and producing jobs,

I think they will find that reassuring. And I would say to business that this

is a good time for additional investment. And it is a good time for putting

additional employees on. And I am pleased that business sentiment is high and

I hope that continues.

JOURNALIST:

Reports that the Government plans to cut the Jobs Network by $100 million,

do these figures indicate perhaps there is room to cut these sort of programs?

TREASURER:

Well I am not commenting on any Budget speculation. I have been through six

Budgets and I am gearing up for the seventh and I have seen a lot of speculation

over the years some of it is right and some of it is wrong. But the moment I

start engaging in speculation is the moment when we will lose all surprise on

Budget night. And I am sure you wouldn’t want me to do that. I am sure you are

looking forward to an exciting night as I am.

JOURNALIST:

A lot of this employment depends on the performance of the building industry.

But with this new crisis about insurance, isn’t there a danger in all this?

TREASURER:

Well, I hope that the problems in the insurance industry are sorted out. I

see that the State Governments are announcing that they intend to take action

to secure the home building warranty insurance business. And I welcome that.

I would encourage them to do it. Look, the building industry has been a big

part of Australia’s success over the last years. No doubt about that. All time

low interest rates, First Home Owners’ Housing Grant that kept the Australian

economy strong while the world, most of the world went into recession. That

will come off. You can’t sustain record levels of building investment for ever.

But, what will take its place I believe is business investment. Business investment

is now looking strong. And as I said earlier, I think this is a good time for

business investment. I think just as the economy has shrugged off the American

downturn and the Japanese recession, and the events of September the 11^th,

now business can look down, and I think you can see down the track very good

investment opportunities and I would encourage business investment and I believe

that that will be taking the slack in relation to the housing cycle.

JOURNALIST:

Mr Costello do you have any concerns about any of the leading indicators, because

the ANZ job ads have been weak in the last two months?

TREASURER:

I think the ANZ itself said that they were having problems with seasonal adjustment

because Easter fell in March of this year. And, if you actually look at the

outcome for the labour force, this is an actual outcome, it is a pretty good

indication that there has been strength. And as I said earlier, look, these

figures vary from month to month. I have never got too carried away with one

month’s labour force. But what I would point to is that if you look over the

three months January, February and March, you are seeing sustained employment

growth. I think that is the most significant thing. 105,000 new jobs in the

course of 2002. And that is a pretty good sign. You think, this is an economy

which has come through an American downturn, a Japanese recession, the events

of September the 11^th, Ansett and at the end of the day, in the first

three months of this year, 105,000 new jobs. That is pretty good.

JOURNALIST:

Will that be sustained over the, this current quarter, that kind of jobs growth?

TREASURER:

Well, as I say, it will bounce around from month to month. But you are beginning

to see I think employment starting to track up again. That is a good sign. That

is more job opportunities. I certainly hope it continues. Yes I do.

Okay, thanks.