AFTER a decade of hard-nosed economic structural reform, the Labor Party is returning to its traditions as the party with heart.
In the 1980s, under then-Treasurer and now-Prime Minister Paul Keating, Australia saw inflation slashed, productivity increased, and padded industries streamlined.
But the process to make Australia internationally competitive resulted in an 11 percent unemployment rate, with a third of that being long-term unemployment.
The government released its new economic policy, the White Paper on Industry and Employment, Wednesday. It not only tackles long-term unemployment but lays out a blueprint for a sustainable economic recovery. The aim is to cut the unemployment rate to 5 percent by 2001.
The centerpiece is a A$6.5 billion (US$4.6 billion) plan to get the jobless back to work. One major component is a Jobs Compact, which promises the offer of a job for six to 12 months or a place in a labor market program for anyone who has been unemployed for more than 18 months. It also greatly expands the number of places in a program that pays employers subsidies for hiring the long-term unemployed.
It adds a stick as well as a carrot: Those who refuse the offer of a job will be removed from the dole.
The other major piece of the White Paper is a special Training Wage that is lower than the official ``award'' wage levels set by a central commission. Employers can now hire unemployed workers at these lower wages in return for providing guaranteed training.
While this represents a break with traditional Labor policy, which has always resisted any moves to lower wages, the labor movement has given its support to the White Paper. ``The key elements are about jobs, skills, and opportunities for the disadvantaged, especially the long-term unemployed, to compete and participate in society on an equal footing,'' said Martin Ferguson, head of the Australian Council of Trade Unions.
Other facets of the White Paper include a new youth-training allowance to replace the dole for those under 18, changes in social security to allow the unemployed to earn more money before their benefits are reduced, more assistance to families with children, and more money for regional and industry development.
Employers are reluctant to hire the long-term unemployed because of the perception that they have lost skills and the motivation to work. A recent survey of employers found that 60 percent would not take on long-term unemployed people even if they were offered a subsidy. ``We don't see this as long-term, real solution to unem- ployment. The microeconomic reforms seem to have gone to the back burner [recently],'' says Ivan Dennison of the Business Council of Australia. He says that what is really needed are more tax incentives to give Australia the investment climate that will create jobs.
Mr. Dennison and other leaders do applaud the halting of a scheme that forced businesses to spend 1.5 percent of their payrolls on training.
Opposition leader John Hewson says mere training and short-term jobs are not enough. ``What we really should be doing is creating long-term jobs into which these people can go when they're adequately trained and able to enter the workforce,'' he says.
The White Paper does not indicate how the spending will be funded. The last time the government issued a White Paper was in 1945. Then, Prime Minister Ben Chifley promised full employment to the nation. Faced with a different set of political and economic realities, Mr. Keating is not promising quite the same thing today.
``If we do want to reach the point where we can say that every Australian who wants a job can have one, it will require a conscious and concerted national effort,'' Keating says.
``So we don't say that this White Paper will wipe away the problem at a stroke, but we do say that Australia will not leave people neglected and forgotten.''