Faster growth, but high unemployment expected
NZPA Sydney! A more stable economic: environment, and the pros-i pect of much stronger! growth in Australia this,' year, but continuing high! unemployment is expected) by the National Bank of! Australasia, Ltd. The bank forecasts an in-! crease of about 4 per cent ini real gross domestic product), in 1978 compared with an! estimated rise of 1.3 per) cent in 1977. “We have seen during the) past year a significant irn-i provement in the rate of inflation, a slowdown in wages growth, and an upsurge in private business in-1 vestment. “Some redressing of the; previous distortions in the!: share of national income l
! accruing to individuals, and, :business has taken place,! land, more recently, con-; isumers and businesses have! 'expressed more confidence: concerning the future,” the ibank says. However, it is expected I that unemployment will continue to fall, but remain at ! an historically high level for I a number of years. “In part, this reflects the) ; magnitude of the numbers; ; unemployed, but equally the; 'more gradual upturn in the' I current business cycle when) ' comparedjvith past recovery) phases. “In no way should the! | community accept these high) ; levels of unemployment as a) ; permanent fact of life,” it I says. 1 It is essential that policies!
,be directed towards main- ; taining a competitive envi- : ronment, conducive to the .' creation of job opportunities Iwithin the private sector. It is critical that capital investment be encouraged, and accordingly the 40 per cent investment allowance should be extended beyond the present expiry date of June 1978. ; “Some initial substitution iof capital for labour is to be ) expected, but investment; •will lead to greater produc- ; tivity efficiency, improved' (technology and the creation lof new’ jobs. ! “This is important for a ) country such as Australia ; which traditionally has a' 'high cost-structure within; ' its manufacturing industries,” the bank says.
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Press, 15 April 1978, Page 19
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309Faster growth, but high unemployment expected Press, 15 April 1978, Page 19
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