Employment

Abstract

In this area, the overall fiscal policy stance is planned to remain restrictive. The case for maintaining such a stance remains essentially an act of faith rather than being based on any firm evidence of success to date, especially in terms of achieving a reduction in the level of unemployment. Without doubt the direct effects on employment of the government’s plans will be negative; job losses from cuts in public-sector establishments are expected to be 70 000 and 76 000 in supplying industries. A major problem is that while expenditure cuts have an immediate and direct effect on the level of public-sector employment (as well as in those sectors supplying the public sector with goods and services), any stimulus to the private sector is at best likely to provide alternative employment only after a considerable lag. This problem is exacerbated since the present institutional framework cannot meet a significant transfer of demand from public to private sectors in areas such as education and health. A major section of the chapter is devoted to the various special employment and training measures (SEMs). While a strong case can be made for their expansion, there are numerous other expenditure programmes which also act in support of employment. Ideally these should be considered on a par with the SEMs.