SA’s unemployment rate drops to 7.3 per cent but remains worst in the nation

SOUTH Australia’s unemployment rate has fallen to 7.3 per cent in new figures released today, but remains the highest in the nation by a clear margin and well above the Australian average.

• South Australia’s jobless hits 18-year peak
• Predicted jobs growth slashed in SA’s Midyear Budget Review
• SA jobs outlook ‘better than expected’

SOUTH Australia’s unemployment rate has fallen to 7.3 per cent in new figures released today, but remains the highest in the nation by a clear margin and well above the Australian average.

The Australian Bureau of Statistics this morning released its monthly update, which shows SA’s seasonally-adjusted unemployment rate is 7.3 per cent, compared to 7.6 per cent in October and 8.2 per cent back in June.

The latest trend figure, which smooths out volatile monthly fluctuations, is down from 7.6 per cent to 7.5 per cent.

The national average seasonally adjusted unemployment rate is 5.8 per cent.

The next worst states after SA are WA and Tasmania, at 6.6 per cent in seasonally adjusted terms.

The best result was for NSW, which recorded a 5.2 per cent seasonal unemployment rate.

Last month, the number of unemployed South Australians hit an 18-year peak of 69,700 and the number who had jobs but needed more hours reached a record high of 84,000.

On Monday, Treasurer Tom Koutsantonis released a Midyear Budget Review which slashed expectations for jobs growth in the current financial year from 1 per cent to 0.25 per cent.

It included a $355 million surplus, largely driven by a huge and unexpected dividend from the Motor Accident Commission which improved the bottom line by $403.5 million.

The review also projects growing surpluses over the four years of the Budget estimates, which Mr Koutsantonis said would give the Government capacity to invest in economic growth.

“I don’t think, with unemployment at our level, that any Treasurer can celebrate,” he said.

“We’re making SA the lowest-cost jurisdiction in the country to do business.

“We’ve provided a balanced Budget with surpluses.

“Now is exactly the time to have capacity in our budgets so that if we do need to make decisions to invest in the economy, we can.

“What the surpluses are there for is the headwinds that we are facing.”

The Budget also brought forward cuts to business property sales taxes, immediately cutting the stamp duty rate by a third before it is completely abolished on July 1, 2018.

Mr Koutsantonis estimates this will save more than $181,000 on a $10 million sale.

The Opposition last month released its own $480 million jobs stimulus package.

Opposition Leader Steven Marshall said more must be done to stimulate an ailing economy, in a package which included immediately reversing increases to the Emergency Services Levy and bringing forward the business stamp duty cuts.

“This Government said it was going to create jobs with the Budget. Less than six months in, they’ve had to admit their policy settings are completely and utterly wrong,” Mr Marshall said.

“Despite the employment forecast being slashed, they’ve provided no useful stimulus.”

Mr Marshall said the decline in state-based tax revenue was symptomatic of a stalling economy and a failure to effectively stimulate growth would further dampen future returns.

Gross state product is forecast to grow 1.5 per cent this year, almost half the national average, and remain around that level until 2019. Inflation is expect to hover at about 2 per cent.

The SA Centre for Economic Studies today released a new study which indicated the modest expansion of the state economy was failing to translate into equivalent jobs growth.

The Centre’s executive director Michael O’Neil said there were “mixed signals coming from the state economy recently, with labour market data painting a much more grim picture”.

“Positive signs include solid growth in household and public sector consumption expenditure,” he said.

“Residential construction in South Australia has also been quite strong over the past year.

“We’ve forecast overall employment to increase modestly over the next three years, roughly in line with the gradual increase in the state’s population.

“We anticipate the strongest growth in exports in the near future to come from agriculture and education. “The unemployment rate should decline over the next two years, which would be welcome news.”

That analysis runs counter to the predictions of other economists and business groups, who fear the state’s unemployment rate will push toward 10 per cent as the car sector shuts down.