Today’s sharp fall in unemployment was welcomed news, even if it was very unexpected.
So unexpected in fact that the Prime Minister chose time do his media events this morning, before the release of the data at 11.30am. Perhaps I’m too cynical.
Politicians, bureaucrats and the market all expected the 7.5 per cent rate to rise. Instead, it dramatically fell to 6.8 per cent. In the times in which we are living, the more good news the better!
But before we get into all the reasons that’s great news, lets get the bad news out of the way first. Later this month Job Keeper payments will come down, and next year they will cease altogether. There are three million Australians relying on these payments to keep their jobs, so the obvious risk is that when they come down or get pulled away entirely, many more people will join the unemployment queues.
That is why Treasury has forecast unemployment to hit double figures in the months ahead.
The other bad news is that almost 70 per cent of the jobs created are only part time, so underemployment continues to be a problem. This is something that few ideas have yet been raised to address.
Victoria only increase
But let’s get back to the good news. Victoria was the only state or territory where unemployment increased, and even then it didn’t go up all that much. Which is surprising given the lockdown.
Now that the virus is coming back under control in Victoria, there is good reason to hope unemployment may start falling too.
It already fell dramatically in states like NSW, Queensland and WA. In the Northern Territory it plummeted, from 7.5 per cent to just 4.2 per cent.
These numbers tell us that our economy is more resilient than many thought. Surprisingly, despite domestic travel restrictions. And new jobs are surfacing in an economy adapting to the new coronavirus reality.
Chance to defy expectations
So let’s hope the government provides the necessary tax and regulatory environment to continue to facilitate that adaptation. And as long as borders safely open up the economy just might defy expectations and start growing sooner, helping to lift Australia out of recession.
When we look around the rest of the world, Australia is clearly doing better than most. Indeed just across the ditch New Zealand’s economy contracted by over 12 per cent, an unwanted record.
Closer to home, there is no getting away from the need to have a serious debate around the timing of JobKeeper payments being removed. Because if it is true that when unemployment goes up it usually takes a long time to bring it back down, the likely spike in the post-JobKeeper era will be significant.
And long lasting, if history is any guide.
Peter van Onselen is a professor of politics and public policy at the University of Western Australia and Griffith University.
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