As Australia’s economy continues to decline relative to the rest of the world, the latest area of failure is jobs. Alan Austin reports.
LAST WEEK'S FIGURES from the Australian Bureau of Statistics (ABS) show Australia’s jobless rate has snuck up to 5.32%. That’s up from 4.98% last December and 5.25% in June.
Matching this with the same numbers for all 36 wealthy members of the Organisation for Economic Cooperation and Development (OECD) shows Australia now ranks a miserable 21st in this group. That is the lowest ranking since records have been kept.
This is a particularly disturbing outcome as the Coalition has repeatedly claimed that its priorities in economic management are “jobs and growth”.
The World Bank’s Databank helps us see how Australia’s employment patterns have changed over recent decades. When data was first published for most countries, between 1989 and 1992, Australia had high unemployment relative to the rest of the world.
When the Hawke Government came to office in 1983, the jobless rate was 10.15%, having risen during the Fraser Coalition period from below 6.0% as Malcolm Fraser’s hapless Treasurer John Howard completely lost control of the economy.
Soon after Bob Hawke’s Treasurer Paul Keating set about righting the economic ship, the jobless rate fell, leaving double digits in November 1983 and falling below 6.0% again for a brief period in late 1989.
For most of the Hawke-Keating years, Australia ranked 18th or 19th in the OECD. Australia then rose through the rankings as Keating’s profound economic reforms took effect.
By 2000, Australia’s ranking had lifted to 17th. It then rose to 13th from 2004 to 2006. By the end of the Howard Government, the jobless rate had tumbled to 4.33%, which ranked a creditable 12th out of the 36 OECD economies.
Then came a brief interregnum, for less than a year, when Labor managed the economy during a period of global growth. The jobless rate fell even further, down to 3.98% in February 2008, the lowest since records began in the 1970s. For all of calendar 2008, the jobless rate averaged just 4.24%, which ranked 11th in the OECD.
Then came the devastation of the global financial crisis (GFC) which whacked every developed economy, sending growth plummeting and unemployment soaring — except in Australia. After an initial hit, with the jobless rate blowing out to 5.96% in mid-2009, the Rudd Government’s rapid stimulus response stabilised the economy.
Australia’s jobless rate did not go above 6.0% in through the GFC, although it exceeded 10.0% in Italy, Poland, Chile, Hungary, Turkey and Slovakia, rose above 15% in Estonia, Ireland, Latvia and Lithuania and topped 20% in Spain and Greece.
So, although the jobless rate rose slightly, Australia’s global ranking improved markedly, settling at eighth for the four years between 2009 to 2012. That is where Australia should still sit today, with its economy recession-proofed by the Hawke-Keating-Howard administrations and modernised through the Rudd-Gillard period.
Since the 2013 election of the Abbott Government, however, Australia’s economy has deteriorated markedly across the board. By the end of 2014, after the first failed Coalition budget, Australia’s jobless rate had risen to 6.10% and OECD ranking had slipped back to 11th. By December 2015, with the global boom well underway, the rate had improved slightly to 5.73%, but the ranking had tumbled to 13th.
At the end of 2016, the ranking was 14th, then at the end of the next two years, down to 18th. Now, on this week’s ABS figures, the jobless rate is 5.32%, which ranks 21st in the OECD. That is the lowest ranking since the World Bank and tradingeconomics.com began providing data in the 1980s.
Australians looking for work climbed to 726,100 in October, the highest in 18 months. The number of underemployed rose to 1,163,200, the second-highest ever, beaten only by the August total.
The number of workers aged 15 to 24 now unemployed is 275,500, the highest in 20 months. The youth jobless rate is now 12.4% which ranks 20th in the OECD. This is also the lowest ranking on record.
Retirees forced back to work
The number of workers above the retirement age having to go back to work, according to the ABS, has risen markedly over the last two years. In September 2017, only 190,600 people over 65, or 12.8% of that age bracket, had to work. The rest could enjoy their hobbies or the grandchildren. One year later, that increased to 211,100, which was 13.9% of over-65s. In September this year, the number was 237,100 and the percentage up to 14.4.
228,000 more jobless under the Coalition
Between 2009 and 2013, Australia’s economy was the world’s stand-out overall, despite the jobless rate only ranking eighth in the OECD. Since the 2013 change of government, policy reversals have resulted in 726,100 jobless people which ranks, as shown above, 21st in the OECD.
If Australia had not suffered those disastrous policy changes and the ranking was still eighth, then the jobless rate would be 3.65%. That is between the USA and Norway which are currently ranked eight and nine. This represents just 498,000 people out of work, a difference of more than 228,000 people. That is the cost of Coalition policies today.
Broken Coalition commitments
In his Budget speech in May, Treasurer Josh Frydenberg made these six claims:
- “Mr Speaker, six years ago when we came to government the economy was weakening, unemployment was rising and the budget was deteriorating.”
- “Since then, we have made the right choices...”
- “...and our economic plan is working.”
- “The Australian people can trust that: under the Coalition, the economy will always be stronger...”
- “Under the Coalition, there will always be more jobs and lower taxes.”
- “Mr Speaker, tonight we have set the course for an even better and brighter Australia.”
Last week’s ABS jobs data add to the already overwhelming evidence that none of those six propositions is true.
You can follow Alan Austin on Twitter @AlanAustin001.
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