FOR PRESS 5 DECEMBER 1977
UNEMPLOYMENT FORECASTS
The unemployment forecast prepared within the Department
of Employment and Industrial Relations leaked to the press
tonight was dated 23 August 1977.
This forecast forms part of an internal confidential Departme-tal
working document which was put together without the complete
knowledge of the backup Budget documents and of important development
since then.
The forecast is therefore outdated and misleading for the
following reasons:
. It does not-take full account of the Budget.
It takes no account of the low C. P. I. increase of
2 percent in the September quarter. Indeed, the
document from which the figures have been selectively
leaked assumed the September quarter C. P. I. increase woul
be greater than that in each of the two preceding
quarters. The forecast also takes no account of the good
September quarter growth in the Gross Domestic Product,
as revealed in last week's quarterly National
Accounts. These accounts confirmed the improvement in
the trade account with an expansion of 5.3 percent in
exports and decline of 6 percent in imports. / 2
It also takes no account of the important decline in
interest rates and of the Government's policy
( following the Budget and the September quarter C. P. I.)
to keep interest rates falling.
It does not take account of recent statistics showing
a strong increase in both actual capital expenditure
In the September quarter and expected capital
expenditure for the December half-year.
In addition to the foregoing factors, it has been known that
an election would have to be held within 12 months.
Once it is clear that the Government's policies will be
continued as will be confirmed on Saturday additional
confidence will assist the pace of economic recovery.
This will then be followed by a December quarter C. P. I. which partly
because of the Government's policy in keeping down State and
Commonwealth indirect taxes and charges will show one of the
lowest increases for many years for that period. This will
reinforce the recovery in economic activity.
Hence, these forecasts, like those of the ANZ Bank,
have been surpassed by a series of important developments and
Government initiatives since they were prepared.