The government’s been caught trying to fudge the numbers to make its job target look good. It’s cheap politics but the targets weren’t even that ambitious to begin with, and a cyclical recovery should mean that they’re easily achieved.
During the election, the Coalition pledged to create a million jobs over 5 years.
It’s a cute pledge. By the time the next election rolls around it will still be too early to tell if they came good on their promise or not. By the election after that, it’s ancient history.
So you get to trumpet around some impressive numbers, with no responsibility to make them happen.
I guess that’s politics.
But bluff and bluster aside, The Australian revealed during the week that the Abbott Government has sought to massage the Department of Employment’s employment projections so that they make it look like the Government had succeeded in its million jobs target.
From The Australian:
Ministerial advisers encouraged federal officials to “massage” their economic forecasts to match Tony Abbott’s vow to create one million jobs over the next five years…
Asking department experts to adjust their figures, the advisers to Employment Minister Eric Abetz sought to add 160,000 jobs to the projections due this week…
The exchanges, revealed to The Australian, highlight the government’s anxiety about jobs growth as it fights off Labor attacks over layoffs at big companies including Qantas, Ford, General Motors Holden and Toyota…
The labour market analysts dumped their original projections for 838,100 new jobs over the next five years and replaced it with the higher figure suggested by the minister’s adviser, Josh Manuatu.
Ok. It’s one thing to be making pie in the sky promises that you’re not willing to take any responsibility for. It’s another thing altogether thing altogether to be messing with the projections and forecasts of federal agencies.
Because unlike promises, people actually use these numbers. Industry factors them into their decision making. Other federal agencies build plans around them.
Messing with them just to make yourself look good is pretty weak.
Where are the adults we were promised?
Because the other thing to note is that a million jobs over 5 years might sound impressive, but it’s not actually that great.
It’s actually below par.
A million jobs – or roughly 16,670 jobs per month – would be below the 17,200 jobs per month created in the decade to February 2014. And that included the grim labour market days of the GFC.
And remember that the country is getting bigger. To keep the unemployment rate constant, which is arguably more important, we need this monthly job creation rate to be going up, not going down.
As the population grows we need to create more jobs to keep pace.
To make the point, the 2 million plus jobs created over the past ten years amounted to a 22% increase in the number of jobs. 2 million jobs over the next ten years is just 9%.
So a million jobs is just a promise to underperform. It’s impressive sound-byte politics, but nothing more.
And despite the vain fussing around trying to massage the Department of Employment’s numbers, the economy (and not the government) should deliver on those lofty targets pretty comfortably.
UBS were out in the week revising up their projections for the labour market. Basically, they see cyclical strength in the economy continuing to drive employment growth, and the unemployment rate remaining around where it is through the rest of the year.
An unemployment rate that’s neither going up nor down might not sound that impressive. But when you remember unemployment is still just 6% (a European finance minister’s wet dream), it’s not bad at all.
UBS reckon that all the leading indicators of employment are pointing to a strong year and are, “signalling a turn-around in job creation over the months ahead.” Like this chart of job ads, solidly on the rise:
But with so many high-profile job losses – from Holden to Qantas – it’s a fair question to ask, where will the new jobs come from?
They look at the recent recovery and note that much of it has been in the public-dominated sectors, but there have also been gains in cyclical sectors like manufacturing, construction, finance and real estate (though there’s been weakness in retail which has off set a lot of this.)
But UBS do a ‘bottom-up’ analysis (taking leading indicators for specific industries, and summing all the industry outlooks together):
“We find a ‘bottom-up’ analysis can easily locate the 170k jobs (14k per month) needed to deliver the almost 1½% y/y growth to stabilise unemployment at 6%. Indeed, our relatively simple analysis identifies a potential 240k jobs (20k pm or 2% y/y) which could lower unemployment to 5½% by early 2015.”
Not bad. So within the year, we could potentially be back to adding 240k jobs a year, and driving the unemployment rate back down towards 5.5%.
(This would, by the way, be a big boost to consumer spending, and greater confidence flows very directly into house prices.)
And what’s 240k a year over 5 years?
1.2 million.
The government has set itself some low-bar goals and is on track to achieve them.
Can’t wait to hear all about that.
Nathan says
Governments don’t create jobs. (except for largely unproductive or counter productive public servants). Private industry and investment create (real) jobs. The best thing govt. can do is get out of the way, remove useless activity and investment destroying regulations and allow the free market to do what it does best. Allocate resources to the most productive and rewarding industries and opportunities. Asking govt’s to create jobs is inviting waste.
Alex says
Nice joke there Nathan. That’s why the rich get richer and don’t share thier wealth. Ceos get bigger pay rises every year amounting to hundreds of workers gaining an incrememtal payrise that actually gets spent back in the economy?
Andrew says
Precisely
Andrew says
Precisely Nathan…
Nothing wrong with people making money Alex…. they pay the taxes that allow lazy public servants.
Anth says
Only a healthy middle class can create jobs.
An obscenely wealthy man can only wear so many clothes, eat so many lunches out, etc, etc…
While a economically sound middle class however needs to buy a lot of clothes, a lot more lunches, etc, etc…
Just sayin’
Carol says
Exactly Andrew,
nothing wrong with people making money as these people making money are also re-investing into the growth of their businesses which, in turn, results in more employment opportunities and the cycle of economic growth begins, When industry and business are over-taxe and, are continually a target for quick money grabbers then it becomes increasingly difficult to justify build a business.
Debbe says
Why is it that the Opposition can’t see these numbers, and really put it out there in all the media formats for all Aussies to see, then they would realise Abbott is not promising anything for them at all.
Why does it seem to only be the ‘get ahead’ types that come across this essential information? How much better off would everyone be if the truth was out there for all to debate, and, if the government is really responsible for creating jobs (hahaha great laugh), then they could be made to made improvements and goals that matter, not just ‘numbers chatter’.
Thanks for putting some of the truth out there for more to learn about.
Andrew says
The opposition do the same
ian says
Nice comment Nathan – you are spot on. Alex you have no idea. Its interesting that the Australian newspaper points out labor is attacking the liberals over job losses at all the car manufacturers – the losses are a result of years of labor policies -not 5 minutes of liberal leadership. Jon – stick to working on wealth creation strategies for people – not politics. All sides manipulate/distort numbers and statistics to suit their own purposes – and journalists only print that which is sensationalist or negative or what they think will sell newspapers. We can go to the polls in a few years time then judge all parties on what they have done or achieved – but at least give the new leaders a chance.
Eileen says
Nathan, I couldn’t have put it anymore succinctly myself! Everything you say is true. Ian, you’re correct………..there are lies, damn lies and statistics!
Alex, WE are the government, they don’t have any money, it’s our money they’re playing with! They’re only there to administer payments for public services, anything else, (ie; pink batts schemes, new (smaller) halls for schools etc) are simply popularity contests with the voters.
Like Nathan said, Governments should get out of the way, personally I’d sack all the state governments tomorrow! Local and Federal tiers are all that’s needed.
Debbe, the reason the ‘get ahead’ types find out all this information is precisely that……..they want to GET AHEAD! If you don’t educate yourself, who will? There’s plenty of books on the subject in the libraries and free seminars if you sign up for them. I’ve learnt a lot from listening to the radio also. Lots of free advice, if you want to phone in with your questions.
I migrated to this beautiful country with $240 in my pocket and I’ve done well from it. If you want to sit back and whinge, then go for it. I worked hard and took chances and they paid off. I suspect most of the people on this site did the same.
I don’t expect a pension when I turn 65 or 70 or any other age, as the way things are going there won’t be any money there for me. You should be happy people look after themselves, then the government will have more money to look after you.
raymond says
There might be a job surge for a spilt second in time but a lot of jobs are going to be lost in WA, as the previous incompetent government being the Labor Party politicians introduced some brain dead legislation with the Greens as there cohorts.
The effects from the Mining Tax & the Carbon Tax are also coming home to roost.
The Mining Tax was a blatant money grab from WA as all the tax raised came from WA.
The Carbon Tax is costing this Country far more than any benefit it receives out of it.
Spain went green overnight with there agenda, a 120,000 small businesses went to wall overnight and they have a 24% unemployment rate.
So all you socialists, greenies etc go and get some sort of intelligence and have a good think when you go to the polls in future.
I have been on this planet for 63 years and since I can remember not one Labor Government has achieved a SURPLUS WHAT SO EVER in there tenure of office.
j
Tom says
Does anybody know how many jobs were created in the last five years of the previous Government?
Not only are there “lies and statistics”, There are part-time & full-time jobs. Maybe, like farmers with their “Dry sheep equivalents” for assessing stocking rates, we should be looking for figures showing “Full-time equivalents” when assessing the employment figures.
Eleni says
Nice one Eileen. I feel the same way.