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Tag Archives: ABS

Unemployment down, but recovery still way off: ACTU

Any cries from the Morrison government championing the gains in unemployment figures being tied to a greater economic outlook has a premature ring to it, Australia’s union movement said on Thursday.

As the nation’s unemployment figures fell by 0.2 per cent to 6.6 per cent for the month of December, according to the Australian Bureau of Statistics (ABS), the Australian Council of Trade Unions (ACTU) said that despite 50,000 people returning to work in 2020’s final month, 900,000 people are still looking for work with another 1.2 million being in search of more hours.

“The recovery means nothing for the more than two million workers who are still looking for a job or for more hours, this government is leaving millions of people behind,” said Michele O’Neil, the ACTU’s president.

“We have heard a lot about economic recovery, but for many Australians this is still completely out of reach,” O’Neil added.

The ACTU’s general assessments are shared by Labor MP Brendan O’Connor, the shadow minister for employment.

“Labor welcomes any additional job to the labour market,” O’Connor said on a doorstop interview in Melbourne on Thursday.

“It’s really important now, at a time when many Australians are finding it very difficult to find work or to find enough work, that we see opportunities in the labour market, and there’s been some modest signs of that.

“But there’s still a very long way to go,” he added.

The hurdles which the government has yet to clear consist mainly of the unemployment rate and a state of wage growth having been stagnant under seven years of consecutive LNP governments.

“There’s over 15 percent of Australians that are either looking for more work, or looking for any work and not being able to find it. And that needs to be therefore the goal of the government to look after those workers who are underemployed, unemployed, and also deal with the persistent low wage growth,” O’Connor said.

“We have people even when they are employed are finding it difficult to make ends meet, because of the very, very low wage growth,” he added.

And the solutions to those issues are not simple ones, either, according to O’Connor – especially when the Morrison government continues to stand by its failed and doomed initiatives with blind faith.

“What we’ve seen from this government is it’s very happy to help some, but not help everyone,” O’Connor said.

For example, the JobMaker initiative announced by the government last year was to help people recover after the end of JobKeeper. However, no worker over the age of 35 will be provided any support in looking for work, now or indeed when JobKeeper ends” at the end of March, O’Connor added.

Both O’Connor and O’Neil share the similar view that one stopgap for the economy lies within the JobKeeper and JobSeeker subsidies: extend them beyond their current planned March 31 expiry dates.

“For those hundreds of thousands of Australians that are reliant on JobKeeper, for those thousands and thousands of businesses that are reliant on JobKeeper, they have only ten more weeks before that support ends,” O’Connor said.

“And so it’s Labor’s view, and others for that matter, that there may well be many Australians that will find themselves unemployed at the end of JobKeeper, and we advise the government to properly consider extending JobKeeper for those sectors of the economy that have still been very hard hit as a result of this pandemic,” he added.

“Many sectors still badly affected by the pandemic, such as tourism, aviation and universities, are being left struggling and without support,” said O’Neil.

Further to these points, O’Neil says that the current government lacks vision to fix the economic problems brought on by the multiple crises of the global COVID-19 pandemic and a resulting once-in-a-generation national recession that Australia still finds itself in the grips of, despite recent modest gains.

“A genuine recovery from the pandemic and the associated recession requires sector support, job creation and wage growth.

“It is more important than ever for the government to look after working people, not set them back by cutting JobSeeker payments and ending JobKeeper,” added O’Neil.

“The federal government needs to do more,” O’Connor concurred.

Employment minister Michaelia Cash, whose shortcomings to adapt JobActive since February have been exposed (Photo from abc.net.au)

O’Connor also points out a significant statistical shift in existing employment advocacy programs which the government and its employment minister Michaelia Cash has failed to address in adapting its programs to the changes within rising unemployment numbers and the jobs culture as a whole.

O’Connor singled out the JobActive program, citing that it has doubled in size – from 700,000 users to 1.4 million – since February and pre-pandemic times.

“There’s been no proper examination of the effectiveness and efficacy of the Jobactive program. That needs to be attended to and examined by the government,” O’Connor said.

“But what that really says is there are many, many Australians whilst they are employed, they’re not employed with sufficient hours so they are still engaged with employment services seeking to find new work, more work, so that they can make ends meet,” he added.

O’Neil and the ACTU, meanwhile, point out that the dichotomy of the Morrison government languishing in a still-struggling economy amid cutting the JobKeeper and JobSeeker subsidies and pushing its proposed industrial relations reform legislation possesses counter-productive effects towards backing its ultimate claims that the economy is recovering.

“The Morrison government’s plans to cut income support and introduce industrial relations legislation which cuts workers’ pay and conditions will worsen unemployment, increase insecure work and further drive down wage growth,” O’Neil warned.

 

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Now is not the time for subsidy cuts, says ACTU

The timing of cuts to government welfare subsidy programs such as JobSeeker and JobKeeper still lacks an appropriate nature at the start of 2021 as the Australian economy still lags in times of a recession, the Australian Council of Trade Unions (ACTU) said in its New Year’s message.

Addressing the nation’s workforce, and speaking specifically to the plight of the unemployed, under-employed and those labouring in insecure jobs, Scott Connolly, the ACTU’s assistant secretary, said that while unemployment rates remain high, the Morrison government going ahead with its cuts to subsidy packages takes much-needed money out of the hands of those who can best boost the nation’s flagging economy.

Initially lauded for introducing subsidies to help the suddenly-unemployed when the COVID-19 pandemic was declared in March, the government under Prime Minister Scott Morrison and federal treasurer Josh Frydenberg has proceeded to slash JobSeeker recipients’ coronavirus subsidy from its original $550 per fortnight to complement the old NewStart base rate of $559.00 per fortnight, to $250 per fortnight as of 25 September to $150 per fortnight effective their first full fortnightly reporting interval in 2021.

Connolly cites that living on an average of $51.20 per day after the most recent cut leaves JobSeeker recipients struggling even further to spend money on life’s necessities of rent, bills, and groceries, let alone anything beyond them.

“After a year spent battling bushfires and surviving a pandemic, the last thing Australians should have to worry about now is how they will pay their bills or put food on the table,” Connolly said on Friday.

The JobKeeper subsidy is also meeting the government’s machete chops, to the tune of $100 per fortnight, taking it to $1000 per fortnight for workers that had performed part- or full-time positions, or $650 per fortnight for those working under 20 hours per week.

And Connolly stresses that the cuts add up, especially for those who had been used to the struggles of their normal everyday lives.

“For many Australians, the JobKeeper coronavirus supplement meant that for the first time, they were able to eat three meals a day, or purchase much-needed medications,” Connolly said.

“To take that away from them now as this difficult year draws to a close is both callous and heartbreaking,” he added.

As reported by the Australian Bureau of Statistics (ABS) last month in its November figures, the national unemployment rate continues to hover at 6.8 per cent – which represents an improvement of 0.2 per cent from October as workers who were put aside by their employers at the start of the pandemic returned to their duties represented a portion of those responsible for the improved numbers.

However, as the union movement and the Australian workforce continue to struggle with the impact of the current state of unemployed and under-employed as well as those embroiled in a spate of insecure jobs, Connolly also cites the recent resurgence of positive COVID-19 cases in New South Wales and Victoria as another factor as to why Morrison and Frydenberg would have been justified to delay the current round of cuts.

In fact, Connolly and the ACTU claim that the failure to even consider this action revealed a lack of proper initiative on the part of the government.

“With COVID-19 resurging in NSW and the national economic crisis far from over, cutting economic support to millions of struggling Australians is also an extremely irresponsible act,” Connolly said.

Bill Shorten, the former leader of the Labor party now serving Anthony Albanese’s shadow government as its minister for government services, concurs that the timing is poor to go ahead with the scheduled cuts.

“The government should reconsider it,” Shorten told Nine’s Today program on December 29.

“We are not out of the woods yet with this pandemic and the economic effects. They are reverberating around the economy, especially in regional towns and suburbs where there are a lot of casual workers who have bourne the biggest brunt.

“For the less well off, we shouldn’t be cutting their circumstances at this point in time,” Shorten added.

Youth unemployment remains another factor which the unions and government figures alike are grappling with, as the recent round of cuts will likely hit workers aged 16-to-24 years of age even worse.

According to the ABS in its November statistics on employment, youth unemployment currently sits at 15.6 per cent – and noting a 12-month increase of 4.1 per cent over the year before – and while that figure calculates to more than double of the national general rate of unemployment, fears abound of what impact that may have on the economy.

Especially when disabling demographics of people who are otherwise motivated to spend money to inspire a struggling economy.

“Cutting the rates of JobKeeper and JobSeeker is only going to worsen the impact of the coronavirus crisis on young workers and our community. We need jobs, not cuts,” Young Workers Centre manager Arian McVeigh said back in September, when the first cuts to JobSeeker and JobKeeper were on the eve of occurring.

 

Arian McVeigh, manager of the Young Workers Centre, who warned about the impact of JobSeeker and JobKeeper cuts back in September (Photo from abc.net.au)

 

Moreover, when the initial JobSeeker and JobKeeper cuts took effect, it was forecast to stifle the Australian economy by $31.2 billion according to a joint report from economics analysis firm Deloitte and the Australian Council of Social Services (ACOSS) – and while real figures to confirm the degree of impact have yet to be released, agreements range widely outside of government figures which confirm that consumers lack the confidence to spend money.

Advocates for the “Raise The Rate For Good” hashtag trending across social media would claim that a move to raising the old NewStart rate permanently – which has not occurred since 1994 – would help restore that confidence.

And while the ACTU has pushed for that payment to resemble the original JobSeeker amount, Labor ministers such as Shorten and Linda Burney, the ALP’s shadow minister for families and social services, have vowed to attack the issue when Parliament sits for the first time in 2021 next month before the current rate of JobSeeker and JobKeeper subsidies are set to expire at the end of March.

“Around two million Australians will be impacted by the government’s scheduled cut to the coronavirus supplement next March,” Burney said last month when announcing a similar bill to the upper house.

“Returning unemployment support to the old base rate places millions of Australians at risk of hardship and jeopardises local jobs,” added Burney.

 

Also by William Olson:

Qantas workers cannot be denied sick leave, says ACTU

MYEFO missing points on long-term recovery: ACTU

ASIO bill reforms aren’t enough, say MEAA and Greens

Insecure work inquiry forthcoming: Tony Burke

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MYEFO missing points on long-term recovery: ACTU

Unemployment numbers were reported to have improved on Thursday while federal Treasurer Josh Frydenberg claimed that Australia’s economy was rebounding – but the Australian Council of Trade Unions (ACTU) sent out a message of its own: increase wages and help the insecure workforce, and the nation can be guided out of recession.

As the Australian Bureau of Statistics (ABS) was reporting two divergent numbers relating to the nation’s employment figures – unemployment had improved by 0.2 per cent to 6.8 per cent for the month of November, but also noted that underemployment figures had improved by 1.0 per cent to 9.4 per cent – Michele O’Neil, the ACTU’s president, insisted that wage growth was the best way to ensure a faster and stronger economic recovery.

And as O’Neil’s comments come in the wake of Thursday’s Mid-Year Economic and Fiscal Outlook (MYEFO) presentation update by Frydenberg and Simon Birmingham, the government’s minister for finance, she pointed out that the government’s update lends very little hope for those who had sacrificed close to a year of their working lives in 2020.

“The government had an opportunity to show that they do really care about the future of so many unemployed and underemployed Australians, but failed to deliver that today,” said O’Neil.

“We must not forget that 2.2 million Australians will be facing the end of the year with no job or not enough hours, and the government’s mid-year economic statement does not deal with this fundamental issue,” she added.

The ACTU also advised that the nation’s under-employment figures come with a caveat: while it is encouraging that people are returning to work, the government, as well as the ABS, defines anyone who works as little as an hour per week as being employed.

It also said that any current signs of recovery out of a once-in-a-generation recession possess a shaky foundation – of that recovery being quite fragile, warning that the jobless rate could possibly return to COVID-level rates without the proper vision and leadership to create jobs and increase wages.

“They had an opportunity today to redirect unspent JobKeeper to reverse the cut in payments coming at Christmas and to fund programs that would deliver decent secure jobs that help rebuild our economy, but have shirked that responsibility,” said O’Neil.

“Further, there is no plan to lift wages which have now seen eight years of low growth including the lowest on record – and we know that unless workers have confidence to spend the economy will suffer. Instead, the Morrison government has introduced industrial relations legislation which will cut workers take-home pay,” O’Neil added.

Meanwhile, both Frydenberg and Birmingham used the occasion of the MYEFO to thump the collective chest of the Morrison government, claiming that economic recovery is underway.

“Today’s [federal] budget update confirms Australia’s economy is rebounding strongly,” Frydenberg said.

“The updated numbers are encouraging and better than what was expected at budget just ten weeks ago,” the Treasurer added.

“This Budget update tells a story of resilience, of recovery and of Australians getting back to work. Stronger business and consumer confidence means more Australians are in jobs [and] there are fewer demands on government programs and stronger than expected revenue,” said Birmingham, who has forecast that the budget deficit is expected to be $24 billion less than previously anticipated.

“These forecasts, along with the other economic forecasts, stand Australia in incredibly good stead, relative to many other comparable nations. In summary, Australia’s economic and fiscal strength enabled us to enter the COVID-19 crisis with resilience,” added Birmingham.

O’Neil also put the government’s figures – which also included a line from Frydenberg saying it could take up to four years to return the unemployment rate to pre-pandemic levels – in a perspective, that revenue numbers over deficits wouldn’t be possible without tax-related incentives to businesses.

And she feels that a long-term plan for growing the economy, raising wages for all workers, and jobs-based growth has been lost in the government’s feel-good messages.

“The government has chosen the ‘low road’ recovery, with un-tied tax cuts to big business, and failed to deliver a nation-building approach to job growth,” O’Neil said.

Previously, the ACTU had called for the Morrison government to adopt and implement its National Economic Recovery Plan (NERP), a jobs-based economic recovery blueprint geared towards getting Australia out of recession, on several occasions since unveiling it in July.

Areas such as creating more secure jobs, extending childcare and early learning free of charge, investing in job-training facilities and programs, such as the TAFE system, investing in the nation’s university system, and placing a focus on jobs and investment in the manufacturing sector, were among the items on that blueprint.

But as wage growth has stagnated under successive LNP governments since 2013, the view of O’Neil and the ACTU which holds that area as the most critical means of pushing economic recovery is shared by Brendan O’Connor, Labor’s shadow minister for employment and industry.

 

Shadow employment minister Brendan O’Connor, spruiking direct action to combat a jobs crisis (Photo from TWU Vic/Tas)

 

“If the economy was as strong as the Treasurer claims, there wouldn’t still be a million Australians stuck in the jobless queues, 1.4 million workers underemployed and more left out and left behind in this recovery,” O’Connor said earlier in the week.

“While too many Australians and communities are hurting, the Liberals and Nationals are reverting to form and using the pandemic as an excuse to cut workers’ pay, cut super and strip protections from borrowers,” added O’Connor, who earlier in the month announced on behalf of the ALP what it calls a Pandemic Recovery Jobs and Industry Taskforce.

As the ALP’s initiative could be viewed as a complement to the ACTU’s NERP blueprint, O’Connor says it runs counter to what the Morrison government has been alleged to be doing in the heart of a jobs and economic crisis – leaving people to go at it in a survival-of-the-fittest regimen.

“The Taskforce will travel around the country – particularly to outer-metropolitan, regional and rural areas – to hear from employees, employers, unions, industry bodies, academics and experts about what is needed to best respond to the Morrison recession,” O’Connor said.

 

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What economic plan?

By Ken Wolff

Prime Minister Malcolm Turnbull declared that GDP growth of 3.1%, reported by the ABS on 1 June, showed that his plan for the economy was on track:

You cannot succeed without a clear economic plan. Everything we have is encouraging companies to invest, to employ.

So far so good.

This confirms the direction we are leading the country in, in terms of our economic plan, but there is much more work to do.

[from The Guardian’s live election blog on 1 June]

But did he read the fine print?

As reported by the ABC:

However, while the headline number was strong, it was driven by a rise in output, while the prices Australia got for its exports continued to fall relative to imports.

That saw the terms of trade decline another 1.9 per cent in the quarter, and 11.5 per cent over the past year, which in turn saw the real net national disposable income rise by just 0.2 per cent over the quarter and plunge 1.3 per cent over the past year.

The ABS describes this number as “a broader measure of the change in national economic well-being” and the fall in this figure indicates declining purchasing power for Australian households.

That was picked up by Labor’s Chris Bowen:

Beneath the headline figure, we know there is an economy struggling with falling demand and falling income growth. In these figures today we see the eighth consecutive decline in nominal income: living standards.

Michael Janda, the ABC’s business reporter explained that ‘real’ GDP only measures how much we have produced in goods and services. It is ‘nominal’ GDP that actually gives a measure of the value of those goods and services. As an example, the current GDP figure includes a surge in iron ore and LNG exports but we are getting less dollars for these exports than we did before:

This measure is far more important for households, businesses and governments as it better reflects how much income, profits and revenue they are getting …

Despite that, the initial reaction in the markets was that the Australian dollar rose as overseas financial markets focused only on the headline figure, as that is taken as a global and uniform indicator, but our local share market fell.

Weakness in the economy has been repeated in other recent data from the ABS.

Although the government liked to claim some success for unemployment remaining at 5.7% in April, other labour force figures associated with the release of that data showed:

  • the headline figure of 10,800 jobs created actually included the loss of 9,300 full-time positions but an increase of 20,200 part-time jobs
  • monthly hours worked in all jobs decreased 17.9 million hours to 1,613.8 million hours, the fourth consecutive decrease (the first time that had happened in three years) and a cumulative decrease of 1.0% since December 2015.

The ABC reported:

Paul Dale from Capital Economics observed that full-time employment has not increased at all over the past three months and that the average number of hours worked per employee per month is at a record low.

“In other words, the quality of the jobs being generated is deteriorating and the amount of work being done is falling,” he wrote in a note on the data.

The April figures reflected similar declines in March when 34,900 part-time jobs were created but 8,800 full-time positions lost, resulting in a loss of 17.5 million hours worked.

It also followed the Wage Price Index for March (released on 18 May) which showed a rise of 0.4%: ‘the lowest rate of wages growth recorded since the start of the series in 1997’ the ABS noted in its commentary.

The Business Indicators for March, released on 30 May, showed the trend estimate for company gross operating profits fell by 3.1% in the quarter, or 4.7% seasonally adjusted: mining fell 9.6% seasonally adjusted; manufacturing 14.5%; and electricity, gas, water and waste services fell 5.6%. There were minor improvements in construction and retail, with both growing by 0.6%. The biggest loss in seasonally adjusted profit estimates was for financial and insurance services which fell by 69.4%.

Those indicators are not good news for the government. Less hours worked translates to lower PAYG income tax revenue and the company profit estimates also indicate lower company tax revenue.

Business investment in the March quarter, as reported by the ABS on 26 May, was down 2.8% for the quarter and down 15.4% over the year. Expectations for future investment in 2016‒17 showed some signs of improvement but, in dollar terms, would still remain below the investment in 2015‒16.

While the trade deficit improved marginally in the March quarter (as compared to the December quarter) the fall in prices for our exports meant that we were still running up foreign debt — now a record $1.03 trillion, or two-thirds of our total GDP. While that is not government debt, it does leave our companies vulnerable to changes in international conditions, particularly increases on the currently low international interest rates. And, of course, if companies (including banks) are hit with higher borrowing costs for overseas loans or refinancing, that will be passed on to consumers in Australia which, in turn, could lead to lower domestic demand and more headwinds for our economy.

Some of this is not supposed to happen, according to economic theory. As a CBA analyst said of the figures:

Today’s figures confirm that the Australian economy finds itself with a unique set of circumstances that will continue to perplex policymakers and complicate the interest rate outlook.

GDP growth is running at an above trend pace and the unemployment rate has been declining. In isolation two highly desirable outcomes. But wages growth is at its lowest level since the 1990s recession and consumer inflation has been falling. On the surface, these four outcomes occurring simultaneously is bizarre. [emphases in original]

[from the Canberra Times ‘Markets Live’ blog on 1 June]

It does go on to suggest that the ‘anomaly’ can be explained by the negative terms-of-trade, soft domestic demand and historically high under-employment, which means there is spare capacity in the labour market.

Most analysts were predicting that GDP growth would come in at 2.8%, so an actual increase of 3.1% was a ‘pleasant’ surprise. Normally such an increase in GDP would be welcome and would indicate a robust economy but all the other data show that the increase in GDP is not being reflected in other improvements, like full-time employment, wages, even business investment, and so is not being reflected in improvements in our standard of living which it normally would.

Of course, Turnbull and Morrison give the figures a positive spin and also offer the line that only their approach will help overcome the poorer aspects but in a report in The Guardian on 1 June, the Council of Small Business Australia estimated that only 4.6% of small businesses would take advantage of the Turnbull/Morrison company tax cut to reinvest and expand their operations. The Council suggested that the instant asset write-off was a better mechanism to encourage expansion — the government is keeping the $20,000 asset write-off until 30 June 2018, instead of ending on 30 June 2017, and will expand it to businesses with a turnover of up to $10 million (currently $2 million).

Also, Goldman Sachs, at which Turnbull was chairman and managing director in Australia between 1997 and 2001, found that 60% of the benefit of Turnbull’s company tax cut would flow to foreign investors, 10% to domestic investors, and only 30% would boost the Australian economy.

Turnbull’s and Morrison’s plan to boost the economy is under pressure. The impact of the tax cut is being questioned, not by Labor but by people in the market that it is aimed at. The economic indicators are mixed but more heavily negative and the benefits of economic growth are not being seen. So where is the economic plan to turn this around and ensure that people actually benefit from an increase in GDP growth? All the growth Turnbull and Morrison promise from their tax cuts and innovation agenda will mean nothing unless they can turn around the other indicators and growth actually provides benefits for all.

The fact is their plan isn’t working and isn’t a plan that will benefit all Australians through a rising standard of living. It is time they found another plan!

What do you think?

How can Turnbull claim his plan will boost the economy in the face of the economic indicators?

If his plan does not lift our standard of living, is it worth the paper it is written on?

Will Turnbull’s blindness as regards social policy come back to bite him?

 

This article was originally published on TPS Extra.

 

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Don’t open the champagne just yet

Today saw the release of what, at first glance, seem promising improvements in employment in Australia.

The headlines are saying that unemployment has dropped from 6.2% to 5.9%. Supposedly 58,600 jobs were created in October, 40,000 of them full time, with monthly hours worked increasing by 19.1 million hours.

Those are, of course, the seasonally adjusted estimates, which are subject to a great deal of volatility. Trend estimates are considered the best indicators of the underlying behaviour in the labour market.

If we refer to the trend estimates we get a slightly different story which shows the unemployment rate remaining steady at 6.1% with 18,800 jobs created and monthly hours worked increasing by 5.7 million hours.

Since October 2014, trend employment has increased by 260,500 persons, while the civilian population aged 15 years and over grew by 288,200 persons over the same period, so job growth has fallen short of population growth by some 27,700.

The Labour Force Survey is based on a sample of about 26,000 dwellings and covers approximately 0.32% of the civilian population of Australia aged 15 years and over. Extrapolating from these figures is therefore subject to sampling variability.

The ABS acknowledges this and publishes, under the heading sampling error, a 95% confidence interval ie there is a 95% chance that the true value of the estimate lies within that interval. These figures highlight just how wrong the headline figures could be.

We can be 95% sure that employment went up by somewhere between 400 and 116,800 in October. That’s a hell of a range, 58,600 +/- 58,200, and there’s a 5% chance that the real figure lies outside even that very large spread.

Likewise for the number of unemployed people. We can be 95% sure that it ranged anywhere from decreasing by 71,600 during that month to increasing by 4,800: 33,400 +/- 38,200. The unemployment rate could be anywhere between 5.5% and 6.3%.

So when you see Scott Morrison and Michaelia Cash preening at the various press conferences today, keep in mind that these figures are likely statistical noise with trend figures presenting a different picture. I hope the trend will eventually bear out these improvements but I certainly wouldn’t put money on it.