TREASURER:
Today’s unemployment figures show that unemployment remains at 5.8 per cent which is the lowest since January of 1990, and even better news today was the fact that for the month of September, 14,000 new jobs were created in Australia and 43,000 new full-time jobs. When you think of all of the challenges we have been through over the course of the year - American downturn, SARS, war, drought - the fact that the economy kept growing and has produced more jobs is really remarkable. But it is great news for Australians that there were more job opportunities than ever before in September, and the object of economic policy is to provide opportunity for people, job opportunities, and those job opportunities are now better than they have been since 1990. This is the end result of strong economic policy, and this is the benefit – more job opportunities for more Australians with the lowest unemployment rate for 13 years.
JOURNALIST:
How much lower can it go?
TREASURER:
Well, I said last month that when it dipped below 6 per cent, that you could have a statistical factor in there, and you could still have statistical factors in there. I think unemployment is around 6 per cent, but it could go lower if we can continue to grow the Australian economy, if we have measures passed in the Senate to change our welfare system and our labour force system, we could bring it down, yes we could. And this is my message to the Opposition, start passing changes to industrial relations, start changing, start passing those changes to welfare reform, because if we could do that and keep the economy growing, we could take unemployment lower. It is the lowest in 13 years, and we could take it lower still.
JOURNALIST:
By how much? How low could it go?
TREASURER:
That just depends how much of the Government’s program can we get through the Senate. The more of the program, if Labor would cease its obstructionism, the lower it would go.
JOURNALIST:
Will the economy rebound in the third quarter Treasurer?
TREASURER:
Well, the third quarter is finished, and as you know it was a difficult quarter. It was a difficult quarter on the trade front, because we are still suffering from drought, the world economy was weak, but I expect that the trade performance will pick up into the fourth quarter, and into early next year, and that will strengthen our external situation. The story of the Australian economy has really been a story of strong domestic economy, buffeted by a weak world economy, and I think as the world starts to pick up in the fourth quarter of this year and the first quarter of next year, that will swing back in our favour.
JOURNALIST:
Is the unemployment level getting to the stage now where it is going to start to put upward pressure on wages, do you think?
TREASURER:
I don’t think so. Look, one of the successes about getting more people into jobs is that wage demands have been moderate because inflation has been low. People don’t have to chase wages to keep up with inflation. Inflation is low, we have entrenched low inflation. Wage growth has been moderate, and therefore with the growing economy we have had more job opportunities. If wage demands were to be set off now, all it would do would be cost those job opportunities. We want the job opportunities to continue.
JOURNALIST:
Do you think that interest rates will be brought forward, interest rate rises will be brought forward with the evidence of a strong employment market?
TREASURER:
Well, I think that this is the object of economic policy, to create more job opportunities for Australians, and I don’t think we should try and focus on negatives. Our monetary policy, our budget policy, our tax policy, our structural policy, all created towards this end, directed towards this end, and that is creating jobs.
JOURNALIST:
We are creeping up on a 70 cent dollar though, aren’t we?
TREASURER:
Well, the Australian dollar over the course of this year, has appreciated by about 20 per cent against the US dollar, and about 14 per cent on a trade weighted basis. That’s a very steep rise, and that is one of the factors that has worked against our exporters. We don’t have as competitive a position for our exporters as we had say, a year or two years ago. Part of the story, of course, is that the US dollar is falling, but the Australian dollar has also appreciated on a trade weighted basis, and that is making things less competitive for our exporters.
JOURNALIST:
Can I ask you whether 800 members in the branch of Wentworth is within the spirit of Liberal Party rules?
TREASURER:
I am not about to give rulings here, and it is not my job to give rulings, but I always think that in relation to party affairs, it is not just the letter of the law, it is the spirit of the law. And you don’t want people to think that large influxes have led to different outcomes. I think the letter and the spirit is that amongst the party members who have been party members, with rules the same for everybody, it is merit that determines these things, and that is the outcome that you want.
JOURNALIST:
On medical indemnity, would the Government consider assuming liability for negligence claims after a 6 year statute of limitation?
TREASURER:
Well, let me make this clear, the Government has assumed liability for claims against the doctors. When the doctors’ insurance company couldn’t meet the claims, the Commonwealth stepped in on behalf of the doctors and took over their liability. Now, we have put in place a proposal which over time, will give the doctors the ability to, through the levy, to make good the taxpayer rescue. Now, there has been a lot of discussion about amounts, but as Tony Abbott said the other day, he has given a moratorium in relation to that recovery. But I want to make this point, that the Government didn’t create this problem, the doctors had an insurance company, their insurance company was unable to meet its financial obligations, and it was owned by the doctors. The Government stepped in to help the doctors because their insurance company couldn’t meet its just obligations. We have also engaged in a very large effort to get the States to change the laws to make it easier for doctors in future, so the Commonwealth Government has really acted quite significantly in relation to this matter.
JOURNALIST:
And has done enough?
TREASURER:
Well, it is very, very significantly, and I think that from time to time you hear the AMA say that they have been subject to a tax. This is not a tax, this is their insurance company which the taxpayer has bailed out. It was run by doctors, for doctors, to make provision for claims against doctors, and the taxpayer bailed it out. And over a period of time we have put in place an orderly workout for that particular insurer.
JOURNALIST:
Will the economy grow in the third quarter at a stronger pace than we saw in the second quarter?
TREASURER:
Well, I will tell you when I get the National Accounts. Thank you very much.