Palmer gloomy about jobless

Press, 12 July 1988, Page 1

Palmer gloomy about jobless

By

BRENDON BURNS,

political reporter

Unemployment reaching 150,000 — or 11.2 per cent of the work force — was possible by the end of the year, said the Deputy Prime Minister, Mr Palmer, yesterday.

The admission came as Mr Palmer spoke of the need for more economic confidence, which he said' would be provided by the July 28 Budget. He rejected suggestions of a “Black Budget, ’’ while suggesting that the announcement on Thursday of the latest inflation figure would show a good result. Mr Palmer, speaking after yesterday’s Cabinet meeting, said a discussion on the economy had been held by Ministers. He was not happy with the present level of unemployment — 106,000 at the end of May, or 7.9 per cent of the work force. Such a pool of unemployed provided clear economic signals, including one for this year’s wage round, he said. “Jobs are really more important than wage increases this year, and that applies in the State sector as much as anywhere else,” said Mr Palmer. Some forecasts suggest 150,000 people could be unemployed by the end of the year. Mr Palmer did not rule this out.

“I accept that is possible. I

don’t like it and I don’t want it.” Low inflation and interest rates would provide the economic climate for employment, and there were good signs, he said. The Government expected to see inflation fall further this week, with the announcement of the June quarter Consumers’ Price Index. This measured 1.8 per cent in the March quarter, and 9 per cent in the year to March. Financial market sources are

predicting the June quarter result to be between 0.6 per cent and 1 per cent. “We expect the C.P.I. will be a good one. I’m not going to put a figure on it,” said Mr Palmer. There was every reason to be confident about the economy, particularly after the Budget decisions taken by the Cabinet. ; ’ New Zealand has been going through a recession, but it was important not to over-react, he said.

- ,“I have little doubt that this is a Budget which will fuel economic confidence.”

Descriptions of the July 28 financial statement as a “Black Budget” were to be absolutely rejected.

It should not be viewed with some feeling of doom because its policy purpose was to foster economic confidence.

Along with declining inflation and interest rates, this would help create jobs, said Mr Palmer. “It won’t happen overnight. There are lags involved; we accept that.” Some new employment measures would be announced by the Government in coming months, but Mr Palmer said there would be no big U-turn on employment policy to create jobs.

There were no short-term cures for unemployment, he said.