Major jobs boost in Australia’s Covid recovery

The federal government is forecasting a significant increase in the number of Aussies in work over the next four years.

One million jobs will be created over the next four years, according to the federal budget update which forecasts a rapid recovery from the Covid crisis.

As revealed by the Herald Sun last week, Thursday’s budget update will confirm Australia’s unemployment rate is due to be locked below 5 per cent next year for only the second time in half a century.

But with high inflation and skilled migrants now returning, Josh Frydenberg is yet to explain whether the government expects the tight labour market will finally lead to strong pay rises for workers.

The budget update will show more than 13.8 million people are expected to be employed by June 2025, an increase of 150,000 on the budget released in May.

The unemployment rate is tipped to reach 4.5 per cent by the middle of next year before falling to 4.25 per cent in 2023 — the lowest level since 2008, before the Global Financial Crisis, and only the second time it would be sustained below 5 per cent since the 1970s.

“While we have avoided the scarring of the labour market that was characteristic of the 1980s and 1990s recessions, there are still many more new jobs to create,” the Treasurer said.

“We have the economic plan to do this with the Treasury estimating around a million new jobs to be created over the next four years.”

“We have been working to a clear fiscal strategy to drive down the unemployment rate to historically low levels as we emerge from the greatest economic shock since the Great Depression.”

Recent Treasury analysis showed 350,000 jobs were created from the start of the September until the end of October as lengthy lockdowns ended in Victoria in New South Wales.

The government now expects the employment-to-population ratio to reach a record high of 63.1 per cent next year, compared to 61.5 per cent when the Coalition came to power in 2013.

Once the unemployment rate is sustained below 5 per cent, Mr Frydenberg has promised to shift to the next stage of budget repair, including tightening spending.

In a pre-budget update with the Herald Sun, he sidestepped questions whether cuts would be made after next year’s election, saying the government’s track record was to “increase funding for critical services while at the same time providing tax relief”.

Thursday’s update will also show the cost of the National Disability Insurance Scheme will soar by another $26bn over the next four years, meaning the commonwealth will be spending almost $30bn annually on the scheme by 2025.