Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Hansard source

This budget, the first Rudd-Swan budget, came as a shock to a great many Australians, not least because of the tax increases but also because of the unemployment forecast in this budget. We have certainly not seen unemployment forecast in a budget for many years. My focus this morning is on why Treasury forecasts of a significant worsening in employment growth and unemployment are not reflected in the department’s plan for 2008-09. Specifically, the budget’s labour market forecasts show unemployment growth halving from 2.5 per cent to 1.25 per cent in 2008-09 and unemployment increasing from four per cent to 4.75 per cent by June 2009 and show that the halving of employment growth will result in 134,000 jobs being lost or not created within the next 12 months.

Funding for the Newstart allowance increases by over $800 million in these papers for 2008-09, so my questions to the minister are as follows. Does the minister stand by the forecast of the employment growth halving and unemployment increasing in the budget? Are these forecasts likely? Assuming so, why has the funding for Job Network been reduced? Why does the department’s brochure on the future of employment services in Australia say that Job Network is ‘no longer suited to a labour market characterised by lower unemployment’ when in fact Treasury is forecasting unemployment to rise? Does the minister agree that many, perhaps most, of the people who will lose their jobs or be affected by reduced jobs growth will have work skills and experience by virtue of the fact that they are currently in employment? Why, then, has the government signalled its intention to shift resources away from the people most likely to be affected by the worsening labour market? This intention is clear from the budget papers, which indicate that significant increases in expenditure on other programs are estimated to achieve worse results than in 2007-08. In particular, employment assistance has a 17 per cent increase in its budget, resulting in a nine per cent to 10 per cent reduction in the use of the Disability Employment Network and other disability services. Rehabilitation services have an 18 per cent increase in their budget, resulting in a 12.5 per cent reduction in commencements. Why is the government proceeding with its planned changes in these programs when they increase costs and make things worse?

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