The disparities are also marked at State level. The March labour force figures showed that NSW posted unemployment of 6 per cent, South Australia 7.9 per cent and Tasmania 8.9 per cent. Mr Evans's second point to the financial markets conference was that labour market inflexibility had contributed to the overall unemployment rate. Mr Buchanan argued that a number of industrialised countries had recently achieved much lower unemployment levels with more regulated labour market systems than Australia's. He cites Norway, Denmark and The Netherlands, which all have unemployment below 5 per cent.
Economists are divided.
Thirdly, Mr Evans said there was scope for further growth in output, which would lead to continued falls in unemployment if the present approach to economic management continued. Credit Suisse Asset Management economist and labour market specialist Mr Barry Hughes believes that if Australia's annual economic growth rate is allowed to run above 4 per cent for the next 18 months, then unemployed should reach the lows achieved in the late 1980s. But according to Mr Hughes, monetary policy will be crucial in determining whether this is allowed to happen. However, with inflation threatening to blow out because of the GST and the dollar wallowing below US60c, low rates are no certainty. Interest rates have increased a full percentage point since November, and are set to rise further according to many pundits, which may interrupt the downward trend in unemployment.