0
Put away the champagne Malcolm, things aren't as rosy as you pretend (Image screenshot video @TurnbullMalcolm)

Malcolm Turnbull ought not be so braggy. Australia’s jobs and growth situation is nowhere near as strong as he wants voters to believe.

In response to Thursday’s jobs figures, Prime Minister Turnbull claimed:

"There are one million more Australians in work than there were when we were elected."

That is true. But it slides over the fact the adult population has increased by 1.4 million. One million jobs are not enough.

Global growth surge ignored

Turnbull further claimed:

"Every lever of policy put in place by the Government is pulling in the direction of more economic growth, more jobs and better jobs."

That is simply not true, unless Australia’s economy is viewed in complete isolation from the rest of the world. This, unfortunately, is precisely what many politicians and mainstream media commentators routinely do.

Most of what passes for economic analysis in Australia glosses over the fact that the world has been in an extraordinary upswing in investment, trade, profits and jobs for the last four years. Australia is one of few developed countries not surfing this impressive wave.

The latest figures on annual growth in gross domestic product (GDP) show Australia travelling at just 2.4% through 2017. That is below the 2.8% achieved in 2010 and nowhere near the 3.3% of 2011. In those years, Australia was near the top of the world.

Now, at just 2.4% during this global boom, Australia’s growth ranks 126th in the world. That’s well below Uganda, Bangladesh, East Timor and Zimbabwe.

More comparable are the 35 wealthy capitalist countries in the Organisation for Economic Cooperation and Development (OECD). Australia had close to the highest GDP growth among OECD countries through the global financial crisis (GFC) from 2008 to 2013. Australia has now plummeted to 21st.

Global jobs surge also ignored

Thursday’s jobless rate was 5.6%. Exactly the same as in April 2013, a few months before the Coalition won office. So there has been no change over those five years, April to April.

New Zealand, in contrast, has progressed from 5.7 to 4.4%. The United Kingdom has improved from 7.8 to 4.2%. Ireland has slashed its jobless from 14.5 to 5.9%. Poland has gone from 14.0% down to 6.6%.

All well-managed countries have reduced their rates dramatically from 2013 levels. The average jobless rate among the 35 OECD countries was 9.4% in April 2013. Australia then was way below that average at 5.6%. The average now is 6.4%, only a fraction of a point above Australia’s recurrent 5.6%.

In terms of OECD ranking on jobless rates, Australia has fallen from eighth in 2013 – behind Switzerland, South Korea, Norway, Japan, Mexico, Germany and Iceland – down to 17th today.

On the global table, Australia’s ranking has now collapsed to 72nd. That is also, incidentally, well behind Uganda, Bangladesh, East Timor and Zimbabwe.

Where should Australia be?

If Australia still ranked eighth in the OECD, the jobless rate would be between Israel in seventh spot on 3.6% and South Korea, currently eighth on 3.8%. That is not a ridiculous proposition. The U.S. tumbled from 7.6 to 3.9% since 2013. Germany reduced its jobless from 5.3 to 3.4%. If those juggernauts can reduce the jobless to 4.0% or below, so could Australia. (In fact, Australia did get the rate down to 4.0% in the early months of the Rudd Government, just before the GFC whacked the whole world.)

Had Australia maintained its position through the current boom, the rate would be 3.7% instead of 5.6%. That translates – using simple algebra – to having only 490,000 jobless people instead of the 741,000 now. It represents 12,752,000 people actually in work instead of just 12,501,000 now.

Mr Turnbull’s break-even point, therefore, if he wants to claim the Coalition has maintained employment relative to comparable countries, is 12,752,000 people employed. Above that, he can assert he has improved Australia’s standing. Below that, he must accept that he has allowed Australia’s employment fortunes to slip.
At just 12,501,000 people in jobs, he has, in fact, facilitated a dramatic slide.

Depressing data overall

This is confirmed by other inconvenient facts in Thursday’s numbers:

  • 741,000 Australians still have no job at all. That’s 36,400 more than six months ago. It is 43,600 more than when the Coalition took office in 2013.
  • The percentage of all workers with full-time jobs has fallen to 68.34%, only just above the all-time low of 67.72% recorded in January last year.
  • Youth unemployment increased in April to 12.6%. That makes 25 consecutive months above 12.0% since Turnbull became PM.

Hence it is quite false to claim that the Government has implemented ‘the right economic policy settings’ to boost jobs and growth.

Nor is it the case, as Turnbull tries to claim, that the latest jobs numbers are ‘an excellent outcome for Australian families’.

Unless, of course, he is comparing Australia with Uganda, Bangladesh, East Timor and Zimbabwe.

You can follow Alan Austin on Twitter @AlanAustin001.

Creative Commons Licence
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License

Monthly Donation

$

Single Donation

$

Facts matter. Subscribe to IA.

 

Share this article:   

0

Join the conversation Comments Policy

comments powered by Disqus


Irenas Bookkeeping Services, Your XERO + MYOB Cloud Accounting Specialist