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Boom economy: PM labours the point Michelle Grattan
February 2, 2011

AUSTRALIA must get many more people into the labour force or working more, Julia Gillard has said.

In her first economic speech of 2011, the Prime Minister said: ”To the maximum extent possible, I want to ensure that every Australian who can work, does work.

”I want to ensure that the incentives of work always outweigh the attractions of staying on welfare”.

Advertisement: Story continues below With Australia now technically at full employment and the mining boom creating a skills shortage that will affect the rest of the economy, Ms Gillard said up to 2 million working-age Australians were not in the full-time workforce or registered for work.

The government looked ”with particular care and concern” at this large number. Of the 2 million, about 800,000 were in part-time jobs but wanted to work more. Another 800,000 were outside the labour market, including discouraged job seekers. Also, many thousands on disability pensions might have some capacity to work.

”We know that not all of them can work right away. Many of them will need re-skilling; the right mix of incentives; help to overcome ill-health or meet family responsibilities,” she said.

”But we do want them to re-engage with the workforce and gain the benefits that come from having a job – increased income, social engagement and friendship, self-esteem and well-being.”

The government would this year continue to improve incentives for potential workers to rejoin the labour market, while also investing in the support needed to increase their skills and job readiness.

But it would not lose sight of the need for compassion and understanding of individual circumstances, she said.

Increasing participation in the workforce will be a theme of the May budget, with Treasurer Wayne Swan saying last week it would focus on making sure the Australian economy, already stretched by the boom and now the reconstruction effort, could get the people it needs.

Opposition Leader Tony Abbott last week said the government should reform the income tax system to encourage participation.

Ms Gillard told a CEDA lunch in Melbourne the biggest challenge arising from the mining boom was the shortage of skills.

”After three decades when unemployment was our major problem, we now face shortages of labour … we need more workers – for today and tomorrow,” she said.

Ms Gillard stressed her determination to put a price on carbon, which she described as a fundamental structural reform as significant in our own time as the reforms of the Hawke-Keating government a generation ago.

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