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Abbott’s ‘Jobs and Growth’ a Sham.

Employment figures for August released on Thursday show an economy that has already changed down to first gear, on the verge of slipping into neutral, then slowly and inevitably grinding into reverse.

Unemployment decreased as did the unemployment rate but it was all due to a decline in the participation rate, i.e. unemployment was supplanted by a sense of futility on the part of job seekers as a result of the weak employment growth.

During the 2013 election campaign, Tony Abbott promised, if elected, he would create 2 million new jobs over the next decade. At the time, it seemed an overly ambitious target and if he were to achieve it, the economy would have undergone a demand side resurgence.

I doubt anyone actually believed he could deliver on that promise. There was no plan, no broad insight, no mechanism, just some vague promises that business would be so pleased at the prospect of a Coalition government they would unleash a torrent of expansion plans and growth would go through the roof.

sol In its 2013 Real Solutions Plan, the Coalition actually promised one million new jobs in the first five years and two million over ten years. While that sounds impressive, a comparison with the nation’s performance over the ten years prior, i.e. from 2003 to 2013, demonstrates how mean and tricky politicians are. Nobody did the maths at the time but someone should have.

Over that previous decade our employment grew by 2.06 million. Abbott and the Coalition were actually promising something less than what had already been achieved. Employment grew by 21.8% 2003 to 2013. If Abbott keeps his promise, employment only needs to grow 17.5% in the decade 2013 to 2023.

Which means that promise was utterly worthless. Promising 2 million new jobs was saying that we should lower our expectations because there will be no real increase beyond the level that was already being achieved at the time. That is quite distinct from the expectation of a Coalition led expansion of the labour market which is what they were alluding to.

As things stand today, the chances of employment growing 17.5% by 2023 without a stimulus to the economy is, on the face of it, remote. In the first two years of Abbott’s government, some 313,000 new jobs were created.

That puts them somewhat behind target with no visible plan beyond the odd three word slogan and some stupid reference about being on a credible path back to surplus. Yet this was the government’s great achievement nominated by Minister for Trade and Investment Andrew Robb on Insiders last Sunday.

As at September 2013 there were 11,452,000 people employed. As at August 2015, there were 11,765,00 people employed. However, unemployment as at September 2013 was 5.8% whereas today, it is 6.2%. The difficulty for the government is that the population has increased proportionately higher than the increase in employment, thus increasing the unemployment rate. Did they think about that when making the original promise? I doubt it.

job In short, we are not growing at a rate that will bring unemployment down. Which means creating 313,000 jobs in the past two years is a fail, not something to shout about. And if that trend continues, after five years the Coalition’s promise of 1 million new jobs will fall short by 218,000. As for the 2 million in ten years’ time, let’s not even bother going there.

There is only one way to stop the decline and that is by stimulus measures that involve deficit spending. This is clearly counter to Liberal Party ideology. They simply won’t do it. Nor will they come down hard on tax expenditures such as superannuation concessions, mining subsidies or negative gearing.

Their answer is to lower personal income tax for the wealthy, increase the GST and continue to attack the living standards of the most vulnerable, while the teenage labour market in particular, continues to go backward. Surely we have reached the point where it must be obvious to everyone that all the rhetoric about the economy being on the right track is just utter rubbish.

Surely it is time to demand the Prime Minister and his cabinet explain their three word slogans and unchallenged scripted statements in greater detail so that we may assess their “two years of great government” more objectively.

14 comments

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  1. Neil of Sydney

    However, unemployment as at September 2013 was 5.8% whereas today, it is 6.2%

    Yes and in 2007 it was 4.3%.

    Too funny. Name me one Labor govt that has ever reduced the unemployment rate. And the answer is – none.

    And there never will be. Everything the ALP does increases unemployment.

  2. Kaye Lee

    “As at September 2013 there were 11,470,000 people employed.”

    That figure is incorrect John.

    Trend
    Employed persons 11,647,000 (Aug 2013) 11,646,800 (Sept 2013)

    Seasonally Adjusted
    Employed persons 11,636, 700 (Aug 2013) 11,645,800 (Sept 2013)

    http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6202.0Main+Features1Sep%202013?OpenDocument

    The figure for August 2015 of 11,765,400 people is the trend figure so, using trend figure for Sept 2013, there have been 118,600 jobs created, not 300,000.

  3. stephentardrew

    Dogmatists have no explanation they only have hardened beliefs founded in completely discredited neo-con supply side economic principles. Ayn Rand and religious ideology deeply embedded in their fossilised brains that brook no criticism no matter what the evidence demonstrates.

    Abbott’s little fishing trip into stop the boats, the carbon tax and mining tax were hilarious because they were actuality austerity measures that literally shrunk the economy and made things worse. So the bad shit is the good shit and the good shit is more of the same. The big bad debt was just brushed aside with alacrity as if Sales was speaking to the hand and the facts no more than an inconvenience to be ignored.

    And we are expecting what? Common sense; logic; structural reform; growth strategies; employment programs; yet all we got was the pseudo fabricated success of their failures.

    He even makes that numerically challenged fool Eleventy look somewhat less irrational if that were possible.

    Heavens help us. Is no one going to save us from these fools.

  4. Kaye Lee

    Hmmm…interesting stuff going on at the ABS. The Labour force survey for July 2015 has entirely different figures for what is shown in the August 2015

    The August figures show

    Trend
    Employed persons (‘000) 11 750.1 (July 2015) 11 765.4 (Aug 2015)

    http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0

    But July figures show trend figure for July was 11 797.3

    http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/457B9966615CE8FDCA257EBB0021B757?opendocument

    The things that make you go hmmmmmm

  5. Anomander

    Oh Neai, you’re such a card!

    The acronym ‘GFC’ simply doesn’t register in your consciousness does it?

  6. kizhmet

    @ Kaye Lee – ummm. So which July figure is correct?? They fudged (oops, corrected) the July figures in August to make it look like 16k jobs created rather than 32k less employed, or am I misreading the figures?

  7. Kaye Lee

    I just rang the ABS. This month they went through a revision of the figures for the preceding 25 months, something they will be doing quarterly.

    Trend figure for Sept 2013 is now 11,452,500 revised down from 11,646,800

    Seasonally adjusted figure for July 2015 changed from 11,810,700 to 11,758,300.

    How are we to infer anything about job creation when their figures change by so much?

  8. Kaye Lee

    This is getting interesting…

    This ‘rebenchmarking’ only started in February 2015. Apparently it updates resident population and net migration figures and then, every three months, goes back and revises employment estimates for the previous 25 months. They say it will have a negligible effect but as we can see it can make a difference of 52,400 to the month before and the change gets amplified the further you go back.

    http://www.abs.gov.au/AUSSTATS/abs@.nsf/Previousproducts/6202.0Main%20Features4Feb%202015?opendocument&tabname=Summary&prodno=6202.0&issue=Feb%202015&num=&view=

  9. John Kelly

    Thanks Kaye. I have reverted to the figures you have given, which approximate the original figures I had. Staff cutbacks at the ABS are making this exercise a nightmare. Fortunately the percentages don’t change dramatically. We will just have to ring the ABS each time we do something like this.

  10. Diane

    But what you’re all missing is he didn’t actually say the jobs would be Australian jobs! His advisor suggested to a Cruise Liner boss that they sack all the Aussie staff and replace them with overseas workers – hence new jobs created. He’s created Border Farce, and re-advertised the Disability Commission Board Members’ jobs, so does this count as creating more jobs? If it weren’t all so sad, it would be funny!

  11. John Kelly

    And, when his colleagues dump him in a few weeks time, will his replacement be counted as a new job?

  12. Pingback: Abbott’s ‘Jobs and Growth’ a Sham. | THE VIEW FROM MY GARDEN

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