Recent soft labour force data, which has seen jobs growth slump, led by falling full-time jobs:
And declining rates of labour force participation:
Has prompted the Coalition Government to concede that it has inhereted a “soft labour market” and declare that it will arrest the slide by delivering a “powerhouse economy” that will produce 1 million jobs over five years and 2 million jobs over 10 years:
“The Coalition will create a diverse powerhouse economy that will create one million jobs over the next five years and two million jobs over the coming decade,” Senator Abetz said…
Senator Abetz said other Coalition initiatives to generate employment included its plan to abolish the carbon tax and providing financial incentives for employers to hire long-term unemployed and older jobseekers.
While the promise to deliver 1 million jobs in its first five years in office – or around 16,670 jobs per month – sounds impressive, in actual fact it isn’t.
In the five years since September 2008 – a period that included the fallout from the Global Financial Crisis (GFC) – Australia still managed to generate some 726,000 jobs, or some 12,100 jobs per month (see below chart).
Moreover, the promised 1 million jobs – or roughly 16,670 jobs per month – would also be below the 17,900 jobs per month created in the decade to September 2013, which also included the fallout from the GFC.
It must also be remembered that this level of jobs creation would also be off a much bigger base than was experienced previously. To illustrate, the 2,145,100 jobs created since September 2003 was on a starting jobs base of 9,500,800, representing jobs growth of 22.6%. If an Abbott Government achieved its 1 million jobs target from now, it would represent jobs growth of only 8.6% on a starting base of 11,645,000 jobs.
Further, Australia’s population is currently growing very strongly, which (other things equal) means that employment must grow more quickly in order to absorb the additional workers (see next chart).
Clearly, this is a low-ball promise from the Government.
