PRIME MINISTER 7/
COMMONWEALTH OFFER TO THE STATES OF FINANCIAL
ASSISTANCE FOR THE RELIEF OF NON-METROPOLITAN
UNEMPLOYMENT
Statement by the Prime Minister, Mr William McMahon
The Prime Minister said today that following fruitful
discussions between Commonwealth and State officials, which ' e had
proposed in his letter to the Premiers on 1 December, he hae now
written to the Premiers putting the Government's offer in fi... l form.
The Government's view is that the arrangements which have
been developed for the administration of Commonwealth funds provided
to the States for the relief of unemployment under the schemes of
drought assistance should serve broadly as a model for the scheme now
proposed. In particular, it was envisaged that in the pr%( ent case,
funds would be provided in the form of advances paid monthl. y.
As to the types of work to be undertaken, thie Prime
Minister said that the Gov'rnment sees this as a matter which the States
are well equipped to determine, but recognises a need to enchasise
labour-intensive activities, of as productive a kind as possble.
There are, however, limits to the oronortion of expenditure which could
usefully be devoted to labour costs. Thus, in all the circumstances,
the Government would now be prepared to regard it as appropriate if up
to one-third of the funds provided over the balance of this financial
year was, on average over all the projects undertaken, devoted to
expenditure on other than labour costs.
As to the kind of labour to be employed, the Prime
Minister continued, the Government believes this also to be a matter
for each State to decide in the light of its own particular requirements
and priorities. Iowever, the Government believes that as far
as possible, those employed sh uld have been registered for employment
with the Commonwealth Employment Service, and envisaged that the
Department of Labour and National Ser-ice would be closely associated
with the scheme. The rrime Minister then referred to the question of the
amount and distribution of the funds which the Government is now
offering on a firm basis to the States.
In approaching this question, the Government had
commenced from the figure of $ 2 million a month which, as the Prime
Minister had said in his statement to the House of Representatives, was
the order of cost which the Government had in mind. At the same time, / 2
in the light of various complexitites associated with the working out
of the detailed application of the scheme, the Government had not had
a closed mind on the matter of the funds to be provided. For example,
the decision to increase the proportion of the total funds which might
be applied to expenditure on other than labour costs was a factor which
had been taken into ,-ount in determining the Government's final
position. Another important consideration in this respect has arisen
out of the consideration of how the total funds should be distributed
between the States. This is, of course, a very complex matter. In
eaching the position finally adopted, the Government had sought to
take into account, as far as possible, the particular problems and
needs of the unemployment situation in the non-metropolitan areas of
each State. While any pattern of distribution arrived at must
ecessarily be open to debate, that now proposed is, in the Government's
iew, the most equitable which could be devised in all the circumstances.
Against that background, the Gover. nment has offered to the
States grants of $ 2.25 million a month, and is willing to apply that
figure as from 1 December last. The total amount of grants payab: le to
all the States during the balance of this financial year woul-. herefore,
bc. $ 15.75 million, distributed as follows millic.
New South ' Tales 6.065
Victoria 3.54;
Queensland 3.15
South Australia 0.. 94:
Western Australia l. lf(
Tasmania 0.865
15.75C
The Government intends that the scheme will :.. j: ct
to review, within six months or so before 30 June 1l972);-i t'. he
light of the then prevailing conditions.
The Prime Minister emphasised that, on the assumption
that it can be put into gear immediately, the Government is prepared to
base the scheme as from 1 December last and, on that basis, the amount
available to each State would be as indicated. He concluded by saying
that, so far as the Government was concerned, the States would be free
to put work in hand immediately.
CANBERRA, 12 December 1971
A 1