Infrastructure Spending and Unemployment: Government Responsibility for Growth and Jobs.

The article presents information on infrastructure spending and unemployment in Australia. The Australian government's policy package had several components. The first was a recognition that high economic growth was required if significant inroads into unemployment were to be achieved. Given the government's beliefs about the likely outcomes for labour productivity and the labour force participation rate, it was thought that a real growth rate of 4.8 per cent would be required to achieve the target unemployment rate of 5 per cent by 2001. The Green Paper and the subsequent White Paper were pretty vague as to exactly how such a long stretch of high economic growth was to be achieved, placing a lot of faith on microeconomic reform and improving the quality of labour through training reform. However, it was also recognised that high growth by itself was not sufficient, and that a policy of active labour market programs directed at the long-term unemployed and those at high risk' of becoming long-term unemployed would be necessary to reduce long-term unemployment. The Job Compact was an extensive raft of active labour market programs which included an expanded wage subsidy scheme, training programs and case management of the chronically unemployed and which placed an obligation on targeted individuals to participate in the scheme to retain unemployment benefits.