Unemployment is unacceptably high in New Zealand. Although it is now falling sharply, on the latest figures 8.4 percent of the reported labour force is still without employment. Adding those who would return to the labour force if job prospects were brighter and workers who would prefer to work longer hours yields a degree of under-utilisation in the labour market which is both economically wasteful and socially damaging. Persistent unemployment, particularly where joblessness is concentrated among certain groups in society, may lead to the emergence of a permanent underclass in society and a situation where unemployment appears to be transmitted from generation to generation.

Nonetheless, unemployment is essentially a political choice, a point made by the Secretary of the Australian Treasury, Mr Ted Evans, in 1993. On the face of it, this proposition may seem difficult to accept. After all, in all developed economies around the world, unemployment is, to varying degrees, a problem. The reverse proposition is something along the following lines: "that unemployment is an international phenomenon of essentially unknown origin and unknown cure". This latter proposition is firmly rejected in this Report.