Australia’s unemployment rate down as push for Newstart allowance rise continues
Australia’s unemployment rate is down again as Treasurer Josh Frydenberg heads to G20 finance talks, and the government is being pushed to raise the Newstart allowance. VOTE, HAVE YOUR SAY
Economy
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New figures have revealed Australia’s unemployment rate following news of slowing economic growth.
The Australian Bureau of Statistics (ABS) released its September labour force figures today which showed an unemployment rate of 5.2 per cent down from 5.3 per cent.
The number of employed persons rose by a net 14,700 to 12.93 million during the month, according to the ABS, with a 26,200 increase in people with full-time work and an 11,400 decrease in people with part-time work.
Ernst and Young Oceania key economist Jo Masters told Sky News the labour market was a “lagging indicator of growth”.
“I wouldn't get too excited that we’re shifting away from the trend that we’ve seen over the last six months or so that’s been a gradual increase in the unemployment rate,” she said.
“We’re continuing to see the unemployment rate reflect different rates of economic growth which is what you would expect.”
Most economists had expected the unemployment rate to remain unchanged and the Australian dollar ticked 0.4 per cent higher against the greenback to 67.84 US cents at 1140 AEDT.
The Minister for Employment, Skills, Small and Family Business, Michaelia Cash today praised the news.
“We now have almost 13 million Australias in work, that is a record,” she said.
“For 36 months - every single month - for three years, the Australian economy has now generated jobs.”
Shadow Employment Minister Brendan O’Connor is expected to make a statement later today.
The news comes as the International Monetary Fund predicts Australia’s economy to grow at 1.7 per cent in 2019, down from a predicted 2.1 per cent.
Global growth for 2019 is down to 3 per cent, from a predicted 3.2 per cent.
Treasurer Josh Frydenberg said Australia was not immune from “global economic headwinds”.
“It’s now more important than ever that we stay the course with considered, disciplined and responsible economic management.”
MORRISON DODGES QT DEBATE
Labor and the LNP have come to blows in Question Time over the slowing economy with repeated calls for a debate knocked back by Prime Minister Scott Morrison.
It was Groundhog Day in the House of Representatives with Labor leader Anthony Albanese trying and failing to initiate a debate during yesterday’s Question Time as well.
Mr Morrison today repeatedly refused to indulge Albanese in a debate about the state of the economy before the Labor leader unsuccessfully sought to suspend the session.
Albanese used every single one of his questions to request a debate.
“Yesterday the Prime Minister refused to debate the economy in this House,” Mr Albanese said.
“Will he debate today whether the IMF (International Monetary Fund) was wrong to downgrade Australia’s economic growth forecast?”
Mr Morrison responded that the forecast review was a “normal process” before boasting about the latest Australian Bureau of Statistics data which noted a lowered unemployment rate of 5.2 per cent.
In response to another debate request Morrison said: “I’m interested in the jobs of Australians”.
He later went on the accuse Albanese of “throwing a tantrum”.
The IMF report has dogged the Federal Government over the past two days with the relatively positive ABS labour force data released today doing little to get Albanese off its case.
CALLS TO RAISE NEWSTART ALLOWANCE
The first victims of Australia’s slashed economic growth predictions will be “unemployed young people” according to Labor amid calls to increase welfare payments to stimulate the economy.
The International Monetary Fund’s World Economic Outlook, released yesterday, predicted Australia to grow at 1.7 per cent in 2019, down from a predicted 2.1 per cent.
Global growth for 2019 is down to 3 per cent, from a predicted 3.2 per cent.
Treasurer Josh Frydenberg travelled to Washington D.C. last night for the annual meetings of the World Bank and IMF, as well as the G20 Finance Ministers and Central Bank Governors meetings.
Labor MP Tanya Plibersek this morning told Sky News: “The real world impact of this is really concerning”.
“The first to feel it will be unemployed young people,” she said.
“We already have parts of the country like Coffs Harbour where nearly one in four young people is without work.
“When you look at countries like Greece and Italy during the global financial crisis they had 30, 40, 50 per cent youth unemployment.
“That really hasn’t recovered to the degree you’d wanted to and yet now Australia’s economy is predicted to grow slower, then Italy, Greece, the US and so on.”
Plibersek said among bringing forward tax cuts and infrastructure spending, there was a “strong economic argument” to increase the Newstart Allowance.
“We’ve seen from business groups, from the Reserve Bank, from a lot of conservative commentators an understanding that an increase in Newstart wouldn’t just make a huge difference to those people who are really struggling to afford the basics of life … but it would make a difference to our economy as well,” she said.
AUSTRALIA VICTIM OF UNCERTAIN TIMES
The Federal Government defended Australia’s slashed growth predictions during an intense in yesterday’s Question Time which was overrun by debate about the latest IMF report.
The two major parties have engaged in political tit-for-tat over the IMF report for most the day with Labor repeatedly saying the economy is “floundering”.
Labor leader Anthony Albanese kicked off the session by asking Mr Morrison why the IMF had revised Australia’s growth predictions.
“The revision by the IMF overnight reflects the uncertainty of the times in which we live,” Mr Morrison replied.
“We have been fashioning budgets for years to deal with the increasing uncertainty in the global economic climate.”
Throughout Question Time, Mr Morrison repeatedly talked up a number of initiatives including a $100bn infrastructure plan and lower taxes.
Mr Frydenberg mirrored his leader when asked by Labor MP Jim Chalmers why Australia’s growth downgrade was “four times worse than for other advanced economies”.
“The fact of the matter is, the Australian economy continues to grow and as the Prime Minister has indicated, the IMF’s projections of Australia’s growth is second only to the United States from G7 countries,” Mr Frydenberg said.
Labor unsuccessfully sought to move a motion condemning the government’s economic management.
GREECE COMPARISON ‘PATHETIC, SHAMEFUL’
Mr Frydenberg said Australia was not immune from “global economic headwinds”.
“The IMF report today confirms that the global economy faces real challenges with a synchronised slow down taking place,” Mr Frydenberg said.
“It’s now more important than ever that we stay the course with considered, disciplined and responsible economic management.”
He said Shadow Treasurer Jim Chalmers’ focus on the IMF’s revelation that the growth downgrade was more severe than Greece’s was “pathetic, reckless, shameful,”
“Greece has an unemployment rate of 20 per cent. Greece has a debt to GDP ratio of around 200 per cent.
“In fact, the Greek economy is 23 per cent smaller since the GFC (Global Financial Crisis), whereas the Australian economy is 33 per cent greater since the GFC.”
Chalmers has called on the Morrison Government to take “responsibility for an economy which is floundering on their watch”.
‘Floundering’ has proven to be Chalmers’ word of the day. In one press conference this morning he used the word no less than eight times in reference to the economy.
Frydenberg reminded Australians they are in the 29th consecutive year of economic growth — a feat no other country has matched.
“But we do face headwinds with the IMF World Economic Outlook confirming that global economic growth has slowed with ‘rising trade and geopolitical tensions taking a toll on business confidence, investment decisions, and global trade’,” he said.
“The IMF forecast Australia to grow faster than any G7 economy over the next two years except the United States.
“But the international challenges are a stark reminder of why we must stick to our economic plan, which will deliver lower taxes so Australians can keep more of what they earn.”
The IMF also predicts Australia’s economy will grow 2.3 per cent in 2020 — down from a predicted 2.7 per cent in the April forecasts.
Australia is not a part of the G7, but is a part of the OECD.
When compared with the 34 best nations for economy growth Australia ranks in 19th place, according to The Guardian.
Former treasurer Peter Costello said monetary policy has “run its race”.
“Whether the cash rate is .75 per cent, whether its .5 per cent, whether it goes lower than that. I just don’t think there’s much stimulation left in monetary policy,” he said today.
Costello said he believed further rate cuts wouldn’t make a difference.
Chalmers said the drop in Australia’s growth forecast was a sign the economy was flagging.
“(It) is larger than the downgrade to global growth and four times as large as those for the euro area and advanced economies as a whole,” he said.
He noted the IMF had also called on countries including Australia to provide fiscal stimulus and invest in infrastructure to support the economy and improve productivity.
Australia has so far been a big winner of the global slowdown sparked by the US and China’s trade war, with China spending on infrastructure and buying raw materials from Australia.
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But the IMF warned against relying on interest rate cuts to boost economies, and argued for government to spend some money.
“Monetary policy cannot be the only game in town and should be coupled with fiscal support where fiscal space is available,” the report said.
Chalmers said the updated forecasts made a mockery of Frydenberg’s claims that the government has the right policy settings for the economy.
During Question Time yesterday, Chalmers asked Prime Minister Scott Morrison about the country’s economic growth to which he replied Australia was the “second highest” of the G7 countries.
Morrison said his government took to the election: “a plan to lower taxes, to ensure that we are cutting the cost of doing business in this country … developing new export markets and that we are investing in the infrastructure that Australia needs to grow.”
He then took the opportunity to slam the opposition being consumed by their “climate change fight club”.
“The thing they have forgotten about climate fight club is you are not supposed to talk about it. They can’t help talking about it,” Morrison said.
Morrison boasted that 1.4 million jobs had been created under this government, but a new Anglicare report has shown for some vulnerable groups, getting a job is harder than ever.
The report shows older, younger and disabled workers are competing against five other applicants for every low-skilled vacant job in Australia.
Unemployed jobseekers who already face barriers to enter the workforce are competing against at least five other applicants for every low-skilled vacant job in Australia.
A further 1.16 million people are underemployed and looking for more hours or vacant full-time jobs.
Anglicare’s Jobs Availability Snapshot shows workers without qualifications or work experience, or who have other barriers to working, are struggling the most as they try to get into the workforce.
“Our system is failing those who need the most help to find work,” Anglicare’s Kasy Chambers said today.
“These might be people with disabilities, who didn’t finish Year 12, or older workers who lost their jobs later in life.
“Our research shows that at least five of these jobseekers are competing for each job at their level.
“There aren’t enough jobs at this skill level to meet demand in any part of the country.”
Jobs they’re competing for include cleaners, laundry workers, office administration, farm work, food preparation, labouring and sales work.