TREASURER:
Well, today's unemployment figure of 5.8 per cent is the lowest unemployment rate in Australia since January of 1990. It is the lowest rate in 13 years and we saw in the month, 80,000 new jobs created, 63,000 full-time jobs, and even on quite strong participation rates, a fall in unemployment below 6 per cent to 5.8. And we haven't seen that since Paul Keating's recession of 1990. This is the object of economic policy, to grow an economy so that people get job opportunities. And what makes this quite remarkable, is, it has come at a time when the international environment is so weak, when we have had an American recession, when we have had the worst drought in a hundred years, when we have had the SARS virus affecting our tourist trade. And it indicates that the domestic economy in Australia is very strong. We have seen that in relation to retail trade, we have seen it in relation to the consumer confidence figures that came out yesterday, showing consumer confidence was 16 per cent above its long term average. We have seen it in relation to business confidence that notwithstanding, this is the remarkable thing, notwithstanding a very difficult environment which is as bad as we have had in decades, the Aussie consumer has been confident, supported by low interest rates. Consumer confidence has been up supported by tax cuts, 80,000 jobs came about in the month and unemployment is now at 13 year lows.
Now these figures bounce around a lot - let me be the first to say that - but the thing you can take away from these figures, is that in the midst of that very difficult international climate, the good news is more Australians had jobs...
JOURNALIST:
Where to from here? How low can it go?
TREASURER:
Well, you look back for a short period of time, in the very late 80s, we were below 6 per cent, and then if you want to go back further than that, you would have to go back to 1981 to see Australia below 6 per cent. Now, I think we could lock unemployment in below 6 per cent if we could get our industrial relations policy through the Senate. If we were to reform the Australian system of industrial relations we could lock these sorts of figures in. And again I call on the Opposition in the Senate to pass those reforms. Now, let's really make a concerted effort to lock in low unemployment in this country. We have got a historic opportunity here, and if Australia grabs it we can go to territory we haven't been in for a long time.
JOURNALIST:
But without Senate reforms Treasurer, (inaudible) saying it is unlikely that the rate would stay below 6 per cent for any length of the time.
TREASURER:
Well, these figures will bounce around. Look, I think last month you looked at a figure that said 50,000 job losses, this month, 80,000 job gains. In reality that doesn't happen from month to month. I have always pointed out in relation to the Labour Force that it bounces around. But the thing you can take away from this, is, that this is a 6-per-cent-below, in the most difficult trading conditions that we have had in decades. And if you can do that in the kind of trading conditions we have had in the last quarter and are going through in this quarter, imagine if all those things turned in our favour. Imagine if the drought turns, and imagine if the world economy turns, and hopefully the SARS virus is turning, that will give you cyclical improvement. But the thing we wait for, we yearn for in Australia is the structural change, the labour market change. We would have an opportunity in a generation to lock in low unemployment if we could get our policy through the Senate.
JOURNALIST:
Are there any implications for inflation Treasurer, with these figures?
TREASURER:
I don't think that I see any implications for inflation, no, and I think inflation expectations are quite low.
JOURNALIST:
Do you see...
JOURNALIST:
Does this give the Reserve Bank more scope for considering an interest rate rise?
TREASURER:
The picture of the Australian economy which I have been painting for some time now, is a domestic economy which just defies international negativity. You have got an international situation which is as bad as it has been. And here we are on September the 11th, two years after the worst terrorist outrage we have seen, we are one year after the Bali Bombing, we have been through a war in Iraq, we have had a new virus discovered, we have got a weak world economy. And yet the Australian consumer is confident, optimistic, supported by low interest rates and tax cuts. And isn't that great news, that in the midst if all of those challenges, it has managed to create more job opportunities for people in Australia.
JOURNALIST:
So do you think the next movement in rates will be up or down Treasurer?
TREASURER:
Well, I mean do you expect me to answer your questions.
JOURNALIST:
With so many positive, with so much positive news about the economy though?
TREASURER:
Well let me ask you, any other questions?
JOURNALIST:
Are Australian consumers too confident though as lending figures out today that show more rises in personal debt, do you think that we do have to slow down a little?
TREASURER:
Well, Australian consumers are confident we know that. We saw that in the consumer sentiment survey yesterday, but there are reasons for that confidence. One is that there are more job opportunities than there has even been in Australia. You would expect them to be confident. The confidence survey is the other side of these unemployment figures. They are also enjoying the lowest interest rates in 30 years, so there are reasons for that as well. The only thing I would say is this, that confidence at this time, remarkable as it is, has actually been good for the Australian economy because it has kept domestic strength at a time of international weakness. And what we look forward to is a turn in the international conditions.
JOURNALIST:
Are you surprised at the resilience of the Australian economy and are you willing to declare it unbeatable?
TREASURER:
This is remarkable resilience. This is extraordinary resilience. At a time of such international difficulty the Australian consumer is confident and that has kept the economy going and keeping the economy going has created the jobs which has contributed to the confidence. So, the circle has gone round, and it has been a positive circle all round for Australia, and you know, this is what economic policy is about. At the end of the day when you hear people talking about growing an economy, remember at the end of the day, the object is to give people job opportunities, the kind of opportunities we are seeing at the moment.
JOURNALIST:
Have you decided on a date yet for MYEFO, and with the way the economy is going at the moment are you expecting to upwardly revise your forecast on economic growth in the coming year?
TREASURER:
Well bear in mind this, that the actual outcome for the last financial year was a little weaker than we forecast. It came in at 2.7, we forecast 3 in average terms. You see, you have got two factors going on here. You have got enormous domestic resilience and international weakness. As I said at the time of the National Accounts, all of that growth, that domestic growth which contributed 1.5 per cent to GDP in the quarter, was taken away by the international economy. So when we are looking at growth forecasts we have to take both of those factors in. One working incredibly well for us, one working against us.
JOURNALIST:
Your dollar ran up on this data Treasurer, is the Australian dollar continuing to be a hurdle for our exporters in the third quarter?
TREASURER:
Well, I said when the dollar was going through a period of weakness two years ago, that there was a super-competitive exchange rate, it was great for our exporters, that no longer applies. That is an added difficulty for them. Add to that difficulty, the fact that the world is weak, there is not as much demand for their products, that is making life more difficult for them. But the good news, is, for the agricultural exporters in particular, the factor that was even worse than both of those - drought - could be turning. I am not going to proclaim the end of the drought, but I am going to say, that it is a little more positive than it has been for the last 12 months. OK thanks.